Federal Reserve Bulletin, 1977-12
DECEMBER 1977 FEDERAL RESERVE BULLETIN Industrial Production Developments Foreign Exchange Operations: Interim Report Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
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NUMBER 12 • VOLUME 63 • DECEMBER 1977 FEDERAL RESERVE BULLETIN Board of Governors of the Federal Reserve System Washington, D.C. PUBLICATIONS COMMITTEE Stephen H. Axilrod • Joseph R. Coyne • John M. Denkler • Janet O. Hart John D. Hawke, Jr. • James L. Kichline • Edwin M. Truman Richard H. Puckett, Staff Director The Federal Reserve BULLETIN is issued monthly under the direction of the staff publications committee. This committee is responsible for opinions expressed except in official statements and signed articles. Direction for the art work is provided by Mack R. Rowe. Editorial support is furnished by the Economic Editing Unit headed by Elizabeth B. Sette. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Table of Contents 1035 INDUSTRIAL PRODUCTION legislation contained in two bills before the Subcommittee on Domes- DEVELOPMENTS tic Monetary Policy of the Committee Industrial production during 1977 on Banking, Finance and Urban increased almost as much as in the Affairs, U.S. House of Representaprevious year, and growth during the tives, November 17, 1977. The first first half again exceeded that in the bill would require the Federal Open second half. The increase in industrial Market Committee to maintain deoutput since the recession low in tailed minutes of its meetings and to March 1975 had been comparable to release those minutes to the public the average of the increases following 3 years later. The second bill would other post-World-War-II recessions, require that verbatim transcripts be but over the past year the increase kept of all meetings of the boards of had been larger than in comparable directors of the 12 Federal Reserve periods in the other expansions. Banks. 1045 STAFF ECONOMIC STUDIES 1053 Philip E. Cold well, Member, Board Summary of "Structure and Per- of Governors of the Federal Reserve formance Studies in Banking: A Sum- System, discusses the reasons for the mary and Evaluation" finds a statisti- Board's opposition to H.R. 2176, a cally significant relationship between bill that would provide for an audit of bank market structure and bank the Federal Reserve System, the Fedperformance in a review of 39 studies eral Deposit Insurance Corporation, made over the past 18 years. and the Office of the Comptroller of the Currency, by the Comptroller General of the United States, before 1047 TREASURY AND FEDERAL RESERVE the Committee on Governmental Af- FOREIGN EXCHANGE OPERATIONS fairs, U.S. Senate, November 29, Interim report for August through 1977. October 1977 points out that, although trading conditions tended to 1058 RECORD OF POLICY ACTIONS OF THE settle down in August and most of FEDERAL OPEN MARKET COMMITTEE September, market participants re- At its meeting held on October mained cautious in anticipation of 17-18, 1977, the Federal Open Marpossible actions to deal with diverket Committee reviewed its longergent economic performances in sevrun ranges for growth in the monetary eral countries. aggregates. For the period from the third quarter of 1977 to the third 1050 STATEMENTS TO CONGRESS quarter of 1978, the Committee de- Arthur F. Burns, Chairman of the cided to retain the existing range for Board of Governors of the Federal M-1 and to reduce both the upper and Reserve System, presents the objec- lower limits of the ranges for M-2 and tions of the System to proposed M-3 by Vi of a percentage point. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Thus, the ranges were 4 to 6V2 per discussed various consumer- and cent for M-1, 6V2 to 9 per cent for creditor-related interests. M-2, and 8 to per cent for M-3. The Board has approved an inquiry For the period immediately ahead, to determine the extent to which conthe Committee decided that opera- sumers are exercising certain rights tions should be directed toward main- under the Equal Credit Opportunity taining prevailing money market and the Fair Credit Billing Acts and conditions, as represented by a the cost to creditors of compliance weekly-average Federal funds rate of with those laws. about 6V2 per cent. However, the Two new Board publications are members agreed that the operational now available for sale: Annual Staobjective for the weekly-average Fedtistical Digest, 1972-76, and Induseral funds rate should be varied in an trial Production—1976 Edition. orderly fashion within a range of 6V4 to 63A per cent if the annual rates Three State banks were admitted of growth in Af-1 and M-2 over the to membership in the Federal Re- October-November period should ap- serve System. pear to approach or move beyond the limits of the following ranges: 3 to 8 per cent for M-1 and 5Vi to 9Vz 1133 INDUSTRIAL PRODUCTION per cent for M-2. Output increased 0.5 per cent in November. 1076 LAW DEPARTMENT A1 FINANCIAL AND BUSINESS STATISTICS Amendments to the Federal Re- A3 Domestic Financial Statistics serve Act and to Regulations M and Q; various bank holding company A46 Domestic Nonfinancial Statistics orders. A54 International Statistics 1131 ANNOUNCEMENTS A70 BOARD OF GOVERNORS AND STAFF Regulation Q (Interest on Deposits) has been amended to lower the min- A72 OPEN MARKET COMMITTEE AND imum rate of interest to be paid on ADVISORY COUNCILS a loan secured by a depositor's time or savings deposit at a member bank. A73 FEDERAL RESERVE BANKS, (See Law Department.) BRANCHES, AND OFFICES The Board has proposed an amendment to Regulation Z (Truth in A74 FEDERAL RESERVE BOARD Lending) regarding open-end credit PUBLICATIONS lines secured by an interest in a consumer's home. It also has proposed A79 INDEX TO STATISTICAL TABLES for comment an interpretation of Regulation A (Extensions of Credit A81 INDEX TO VOLUME 63 by Federal Reserve Banks) that would extend the kinds of bankers A92 MAP OF FEDERAL RESERVE SYSTEM acceptances eligible for discount by Reserve Banks. INSIDE BACK COVER: The Consumer Advisory Council Guide to Tabular Presentation met on December 8, 1977, and and Statistical Releases Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Industrial Production Developments Prepared in the Business Conditions Section, little since spring, were at a level close to their Division of Research and Statistics. historical average (Chart 1). The growth in output of home goods during From the closing months of 1976 through 1977 1977 was led by large gains in appliances, total industrial production increased by about furniture, and carpeting. The more moderate 6 per cent, just a little less than during the growth in output of consumer nondurable previous year. Increases in production of goods reflected some sluggishness in retail home goods, business equipment, and con- sales of apparel, general merchandise, and struction supplies were appreciable, and ad- food during the spring and summer and the vances in output of consumer nondurable continued caution of businessmen in acgoods and energy materials were modest; cumulating inventories of these products. meanwhile production of defense and space The better-than-average performance of equipment changed relatively little. business equipment production during 1977 The rate of recovery and expansion in in- reflected substantial increases in output of dustrial output since the recession low in building and mining, transit, manufacturing, March 1975 has been comparable to the aver- and commercial equipment; output of power age of the increases following other post- and farm equipment increased more moder- World-War-II recessions, and the upswing has ately during the year. Prior to 1977, produclasted longer. However, the recovery followed tion of business equipment had risen more the most severe of the six postwar recessions, slowly from the recession low than in other and after 32 months of substantial but uneven postwar recoveries; not until the spring of 1977 advance, total output of the Nation's manufac- did it recover its 1974 peak, and at year-end turing plants, mines, and utilities at the year- it was just a little above that peak. end was still only modestly above levels In contrast to the performance of business reached in 1973-74. And over-all capacity equipment output, production of defense and utilization rates, which had changed relatively space equipment has risen only slightly during 1. Industrial production and capacity utilization Ratio scale, 1967 =100 Ratio scale, 1967=100 Capacity utilization in manufacturing I 1973 1975 1977 Seasonally adjusted; latest data, November. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1036 Federal Reserve Bulletin • December 1977 1977. In fact, since late 1970 it has changed could have led to cumulative declines in outrelatively little on average from a level more put. This apparent balance in the economy is than a fourth below the peak in 1968. consistent with, and has in fact tended to Output of intermediate products—those foster, continued moderate industrial growth. items used by businesses other than manufacturing, mining, and utilities—has increased a CONSUMER GOODS little less rapidly than total industrial production since the end of 1976. But substantial Production of consumer goods during 1977 strength has been concentrated in production rose at about a 4 per cent rate—close to its of construction supplies, which in turn has long-term growth rate. By year-end, output been associated in large part with increased of these goods was more than 9 per cent above activity in residential building. Output of busiits peak in late 1973, a considerably better ness supplies has risen at a modest pace. performance than for total industrial produc- Materials production during 1977 increased, tion. on the average, a trifle more than total indus- By early 1976—only about a year after its trial output, but at the end of the year it was trough—output of consumer goods had reonly about 3 Vx per cent above its pre-recession gained its 1973 peak. However, the 16 per cent high. Growth in production of materials by growth from the trough was about twice as U.S. businesses during 1977, as well as in fast as that in real consumer expenditures for 1976, has been tempered by both the congoods (Chart 2), and growth in production tinued cautious approach to inventory rebuildweakened progressively in the second and ing and the worldwide availability of supplies, third quarters of 1976 as consumer spending reflecting the sluggish recovery in many induson goods slowed and businesses adjusted trial nations. production to keep inventories lean. Large increases occurred during 1977 in Production gains accelerated later as sales production of both durable and nondurable picked up strongly in late 1976 and continued a goods materials. Output of energy materials, vigorous uptrend into the spring of 1977. in contrast, increased only a little. Production However, over the next 6 months retail sales of nondurable materials at the end of 1977 had in real terms were sluggish, and production increased to a level moderately above the again slowed. From the spring of 1976 until the pre-recession peak in 1974, while output of end of 1977, the rise in industrial output of durable materials had just regained its 1973 consumer goods, at about a 4Vi per cent peak in November. Domestic production of annual rate, was about in line with the growth energy materials, which include mainly the in real consumer spending for goods. mining of fuels and electric power for industrial use, has grown relatively little in recent years, despite increases in energy prices and DURABLE GOODS in oil- and gas-well drilling activity. This lack of growth reflects largely the increased im- The growth in production of consumer durable ports of crude oil and petroleum products. goods in 1977 was marked by considerable The growth in industrial production during unevenness that was related in large measure 1977 exceeded somewhat that in real final to swings in auto output. Large increases in sales of goods, and inventories were accumu- output of appliances, furniture, and carpeting, lated by businesses at a moderate rate. At as noted earlier, accounted for much of the year-end the industrial sector appeared to be expansion in production of consumer durable free of major production imbalances. This goods. Production of automotive products situation appears to have resulted in part from rose sharply early in the year from the closing temporary slowdowns in production that months of 1976; but at year-end output was cut avoided the kinds of major distortions that sharply in response to weakening sales. Over Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Industrial Production Developments 1037 2. Consumer goods Ratio scale, 1967=100 Seasonally adjusted. Left panel: Latest data, Q3. Personal gross-value weighted for comparison with expenditures. Right consumption expenditures for goods, in 1972 dollars, from the panel: Value-added weighted indexes. Latest data, November, national income accounts, U.S. Dept.' of Commerce. Production is all, output of consumer durable goods rose at of a strike, manufacturers increased producan annual rate of nearly 6 per cent from the tion of autos sharply so as to replenish stocks. final months of 1976 to the end of 1977—about However, output was cut in early 1977 by equal to the rise in industrial production as a weather-induced shortages of fuels and matewhole. rials. It picked up again in the spring and an end-of-model-year surge in production of 1977 AUTOMOTIVE PRODUCTS. Much of the models raised assemblies to a new high in volatility in output of consumer durable goods July; auto output then leveled off a little below during the second half of 1976 and throughout that high. During the fall and early winter, 1977 reflected developments in production of however, production of 1978 U.S.-model auautomotive products, a grouping that includes tomobiles exceeded sales, and downward adautomobiles, utility vehicles, and auto parts justments were made in assemblies at yearand allied goods. Production of these products end. rose at a sharp but uneven pace from mid-1975 Production of small cars has been expanding until near the end of 1977. The index for autos faster than that of other models since the in November 1977 exceeded that for the year beginning of 1970 (Chart 3). The share of small 1973 by nearly 7 per cent, whereas the rate of cars in total auto production increased dramatcar assemblies in November 1977, at a 9.1- ically from 7 per cent in 1967 to 43 per cent in million-unit annual rate, was below the 9.7 1975; then in 1977 it dropped back to 34 per million total for the year 1973. This apparent cent as consumer preference again shifted disparity reflects an adjustment to assembly somewhat to larger cars. At the beginning of counts to allow for quality changes that have the fourth quarter almost all of the larger-car taken place, such as improved designs that plants were running second shifts; in aim toward greater fuel efficiency, better November, however, with sales weaker, proemission controls, greater safety, and lower duction schedules were reduced. maintenance costs. Such quality changes are In the spring of 1977, after the President's counted as increased production because they energy message, some of the demand for autos are considered to represent an improved shifted to foreign cars, which have a better product. record for fuel efficiency than do small domes- At the end of 1976, following the settlement tic cars. As a result, the share of the car Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1038 Federal Reserve Bulletin • December 1977 3. Production of autos and utility vehicles output of home goods followed a reduced rate of output in the second half of 1976. Despite Ratio scale, 1967=100 the increase in 1977, production of home goods by the year-end had only reattained the peak level reached in 1973. Output of home appliances, air conditioners, and TV sets rose by about one-fifth during the first 6 months of 1977; about half of that amount represents a recovery from declining production over the latter half of 1976. Since mid-1977 output of these products has increased only slightly further, and at year-end it was still below the high reached in 1973. This longer-term weakness has reflected for the most part a sluggishness in output of air conditioners and TV sets. Production of furniture and carpeting rose appreciably during 1977 and at year-end had surpassed its 1973 peak. NONDURABLE GOODS Output of consumer nondurable goods increased much more slowly during 1977—3 per 1973 1975 1977 cent—than production of durable goods (Chart Utility vehicles—all built on truck chassis—include the con- 2). Even so, at year-end such production exsumer share of light-duty trucks and vans, recreational vehicles, ceeded its pre-recession high by a relatively and motor homes. Seasonally adjusted. Latest data, November for autos; September for utility vehicles. larger amount than did consumer durable goods output. Production of consumer nondumarket accounted for by imported models rose rable goods—which had declined and recovfrom 17 per cent in the first quarter of 1977 to ered more sharply than in other postwar 21 per cent in the third quarter. The foreign car cycles—reached its earlier peak by the fall of share declined somewhat in the fall when 1975, well ahead of production of other major stocks of some models were in short supply. types of goods. Despite the increased share of the car mar- Consumer spending for nondurable goods in ket captured by foreign cars, U.S.-made small real terms, after a strong rise in late 1976, cars also have improved their position; by late changed relatively little during the first three November their share was 31 per cent. U.S.- quarters of 1977. Reflecting this pattern of made small cars may take an even larger share developments with a lag, output of nondurable of total sales because provisions of the Energy consumer goods rose at a 7 per cent annual Policy and Conservation Act of 1975 require rate in the 6 months ending April 1977 and that each auto company obtain an average gas then slowed to a 2% per cent rate over the rest mileage of 18 miles per gallon for its 1978 of the year. Swings in output of foods and model cars. some consumer chemical products, such as drugs and medicines, were mainly responsible HOME GOODS. Production of home goods for these variations. Output of clothing and during 1977 increased quite sharply—by about some nonfood staples, such as consumer 8V2 per cent—reflecting large gains for paper products, changed relatively little durappliances, furniture, and carpeting, as- ing 1977. The lack of growth in clothing output sociated in part with the substantial increase in appears in part to have reflected import comresidential construction activity. This rise in petition. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Industrial Production Developments 1039 Production of consumer energy products 1. Recoveries in production of business rose sharply in early 1977 during the extremely equipment cold winter. When temperatures became more Per cent normal, output of consumer energy products resumed about the same rate of growth as Recession period 1 year after trough 2 years after trough before the energy crisis induced by the Middle 1948-49 29.8 55.1 East oil embargo in late 1973. Output of con- 1953-54 18.9 32.4 1957-58 21.7 21.7 sumer energy products since the spring of 1974 1960—61 10.2 14.3 1970-71 14.5 31.1 has increased at about a 3!^ per cent annual 1974-75 7.0 17.1 rate, down significantly from the rate of growth prior to the energy crisis. and a moderately large rise in output of commercial equipment (Chart 5). Output of building and mining equipment has grown very rapidly throughout the 1970's. BUSINESS E Q U I P M E NT During the 1974-75 recession it declined rela- Business equipment was a major contributor tively little and the drop was short-lived. Proto the expansion of total industrial production duction of construction equipment was reduring 1977. In the first 2 years following the duced following the major cyclical decline in April 1975 low, recovery in this sector had nonresidential construction activity that had been slow in comparison with most other begun in 1974, but output of mining equipment post-World-War-II business cycles (Table 1). held up through 1975. In 1976 investment by From that April low until the fall of 1976, such the mining industry weakened, but there was production rose at an annual rate of only 6 an increase in output of oil field equipment and per cent. After that the pace of the recovery oil- and gas-well drilling activity, which restepped up sharply, and from late 1976 sulted in a rise in output of the combined through the first half of 1977 production rose building and mining equipment group. Producat an annual rate of 11 per cent before slowing tion of building and mining equipment rose considerably in the second half. During the very sharply in late 1976 and through July expansion from late 1976, there have been 1977, but weakened after that (Table 2). rapid increases in production of building and mining, transit, and manufacturing equipment 2. Production of business equipment 4. Business equipment Percentage change in 1977; seasonally adjusted annual rates Billions of 1972 dollars January to July to Series July November' Total 12.9 3.8 Industrial 14.8 5.3 Building and mining 26.3 - 7.7 Manufacturing 12.4 16.9 Power 5.5 1.7 Commercial, transit, farm .... 11.0 2.7 Commercial 7.1 9.0 Transit 25.6 -8.9 Farm 3.0 'Estimated. Output of transit equipment began to rise sharply in March 1977, thus ending 2 years of relatively modest growth, but the sharp rise appears to have abated late in the fall. Much of Net exports based on data from the U.S. Bureau of the Census, this rapid growth reflected large increases in deflated by F.R. Production, gross value at seasonally adjusted production of trucks and buses, and in early annual rates. Latest data, Q3. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1040 Federal Reserve Bulletin • December 1977 5. Components of business equipment Ratio scale, output, 1967-100 1971 " 1973 ' 1975 ~ * 1977 1971 1973 1975 1977 Seasonally adjusted. Latest data. November except for farm (October). November 1977 combined truck and bus pro- plans for only moderate increases in capital duction surpassed the record 1973 output of spending in 1978. 3.0 million units. Some of the record output of Output of commercial equipment—which trucks represents increased demand for includes fixtures and equipment used in comlighter-weight trucks, many of which are for mercial enterprises, offices, and the service personal use. industry, and also scientific and medical Output of manufacturing equipment picked instruments—increased IVi per cent during up in 1977 from its previously sluggish rate of 1977 following a 12 per cent rise during 1976. growth. In the initial 2 years of this recovery, Despite these increases, however, production such output climbed 15 per cent, whereas on in that sector at the end of 1977 was only average it had grown about 25 per cent in the modestly above its peak in 1974. first 2 years of each of the other expansions Production of farm equipment rose on balsince 1954. At the end of 1977, production of ance during the first 7 months of 1977. But manufacturing equipment had just surpassed after this modest rise output declined, due in the peak reached in the third quarter of large part to the substantial erosion in farm 1974. Some of the output of such equipment in incomes. recent years reflects purchases that have been Since 1975, domestic orders have provided used for pollution abatement rather than for the stimulus for increased production of expansion of capacity. In part, this explains business equipment. Prior to the 1974-75 the relatively slow rates of growth of man- recession, production for export had contribufacturing capacity in the 1970's. uted significantly to the large increase in such Production of power equipment rose only output. In mid-1975 exports of business modestly during 1977. As in 1976, such pro- equipment turned down, and between the duction has been influenced by the extraordi- third quarter of 1976 and the third quarter of nary rise in energy prices, which has slowed 1977 they declined 3 per cent in real terms. the growth in the quantity of electricity con- Despite substantial growth in 1977, expensumed by the public, and by a scaling down of ditures by U.S. businesses for fixed investexpansion plans by public utilities. At the end ment, measured in real terms, have not yet of 1977 power equipment production was still reached the levels attained before the 1974-75 about 5 per cent below its 1974 peak. Data on recession. Business decisions on fixed capital capital appropriations by utilities indicate outlays have been influenced by the lack of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Industrial Production Developments 1041 pressure on capacity utilization. Operating than the growth in output of products (Chart 6). rates in manufacturing and in materials pro- This relatively rapid growth for materials, ducing industries—after rising a little further however, followed several months of little early in 1977—have been almost unchanged, change, in part because of readily available on average. These rates are below those that supplies from abroad and policies to avoid in the past were associated with large ad- excessive inventory accumulation. vances in investment and in production of Production of materials is generally subject manufacturing equipment. The lack of pressure to greater cyclical variability than production on capacity, as indicated by these utilization of products. From the 1975 cyclical trough rates, reflects in part the worldwide ready through August 1976, domestic production of availability of supplies—particularly of mate- materials rose by 23 per cent; at the same time rials. imports of materials increased. During this Toward the end of 1977 surveys of busi- period stocks of materials were accumulated nesses on their plans for fixed investment at a pace that proved to be excessive when expenditures indicated modest increases in growth in output of final products slowed in outlays in 1978. Orders received by manufac- the summer and early fall of 1976. turers for business equipment have risen at a Consequently, growth in production of mamoderate pace during 1977, and contracts for terials was eased and inventories were recommercial and industrial building also have duced. For some types of materials the risen, although not at a steady pace. In addi- cutbacks in production were quite large. Outtion, business liquidity has improved substan- put of primary nonferrous metals, excluding tially, and it appears to be adequate to support aluminum, and of manmade fabrics fell about further expansion in investment. one-tenth between August 1976 and early 1977, and iron and steel production fell about one-fifth. After inventories had been pared, MATERIALS production of materials rose sharply through Production of materials for further industrial June 1977. processing increased about 6V2 per cent during The impact of available capacity worldwide 1977. This rate, which exceeded the long-term for the production of materials has had a average rate of growth, was somewhat more profound effect on domestic output of these 6. Materials production and related developments Ratio scale 1967=100 1967=100 Billions of 1972 dollars Per cent OUTPUT TRADE UTILIZATION RATE Nondurable Imports 1967-76 Exports average Import and export data, annual rates, in 1972 dollars, based on Seasonally adjusted. Latest data, Q3 except foT utilization data from the U.S. Bureau of the Census deflated by F.R. (November). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1042 Federal Reserve Bulletin • December 1977 3. Industrial materials: Output and capacity utilization Output, percentage change Capacity utilization, to 1977Q3 from— per cent 1973-74 1976 1977 1973 1967-76 1977 Group peak Q3 Q21 high average Q3 Total 1.8 4.3 1.5 93.1 85.4 82.4 Durable goods -.9 4.0 2.7 92.5 82.1 79.2 Basic metal -16.5 -6.9 -22.3 97.7 85.5 75.2 Nondurable goods 5.5 5.7 94.6 87.8 86.4 Textile, paper, and chemical .. 4.5 5.7 -1.2 94.5 87.3 85.2 Textile -7.6 -2.3 5.5 94.4 87.1 78.9 Paper .1 3.7 4.2 100.5 93.4 89.7 Chemical 7.1 8.8 -4.1 93.8 85.4 85.8 Energy .1 3.2 2.6 94.6 90.7 85.0 Compound annual rates. NOTE.—All data are seasonally adjusted. items. Economic growth in the United States ready availability. For most of 1977 the capacincreased briskly in the first half of 1977, but ity utilization rate for materials has been runindustrial production in other major industrial ning at 82 or 83 per cent—near the long-term countries of the world changed little or de- average, and more than 10 percentage points clined. Capacity utilization rates in other below the 1973 high (Table 3). Durable goods major industrial countries remained at rela- materials and textile materials have operated at tively low levels, and intense international less than 80 per cent of capacity during most of competition for markets developed, particu- 1977, although such rates for both were rising larly in such materials as steel, zinc, copper, at year-end—the latter to more than 80 per and manmade fibers. Competitively priced cent. In recent months lead times for ordering imports of these materials entered the United and delivering have shortened, and inventory States in increasing volume while U.S. exports accumulation of materials has been about in of materials changed little. line with output of products. The availability of foreign materials—often at discount prices—in combination with the slower over-all economic growth in the third quarter of 1977 tended to weaken the demand E N E R GY M A T E R I A LS for some domestically produced materials, A ND P R O D U C TS and to have an adverse effect on production, employment, and profits in a few industries. Total domestic output of energy during 1977 Output of materials grew at an annual rate of changed relatively little, on balance, after the only 3 per cent between July and November of weather-induced sharp step-up in the rate of 1977, and in the latter month materials produc- output at the end of 1976. Since the fall of tion was only about 3 per cent above its late 1976 output of energy products—comprising 1973 high. In these circumstances, however, such items as gasoline, electricity, gas, and users of industrial materials have been able to other fuels for nonindustrial consumption— operate more economically. and of energy materials—primarily coal, crude Current capacity utilization rates for mate- oil, natural gas, and converted fuel materials rials production reflect the very marked for industrial use—has risen 3 per cent. For change in the supply situation as compared energy materials, this moderate increase rewith the 1973-74 period, when speculative flects inclusion of newly available Alaskan hoarding of materials tended to reduce their oil and increased production of coal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Industrial Production Developments 1043 Conservation efforts of governments, busi- 8. Production of primary energy nesses, and individuals have resulted in con- Ratio scale, 1967=100 siderable savings of energy. Industrial consumption of energy has declined appreciably in recent years. Conservation in other sectors of the economy—residential, commercial, and transportation—however, has not been so dramatic, and total U.S. consumption of energy has been rising. Relative to output, the decline in use of energy by industry in recent years has been dramatic (Chart 7). From the first quarter of 1974 to the third quarter of 1977, total industrial use of energy declined nearly 12 per cent. Some of the savings resulted from more efficient energy management and control measures taken after the oil embargo, such as improved boiler efficiency, recovery and S = strike. Seasonally adjusted. Latest data: coal, November; reuse of waste heat or steam, and comcrude oil, October; hydro, etc., September; and gas, August. puterized monitoring and control systems to start and stop energy consuming equipment. Other savings have been achieved through improvements in production technology. Then as a result of the mid-1977 opening of the Alaskan pipeline, production rose 4.9 per cent between May and October. Production of 7. Industrial use of energy natural gas has been declining in recent years; from August 1973 to July 1977 it fell by almost 12 per cent. Steam plants fueled in large part by coal and to a lesser extent by oil or gas produced about three-fourths of the total electric power generated in 1977. The remaining quarter of electric power production was by hydroelectric and nuclear generation. Output of nuclear power has been rising, and in the second quarter of 1977 it represented more than 12 per cent of the total power generated. The percentage of Index for industrial use of energy represents total amount used by power production from gas-fired steam generthe industrial sector minus fuels consumed by the energy-producing ation has been declining steadily in the last few industries. Estimated by F.R. from BTU-weighted indexes for production adjusted for net imports and changes in stocks. Sea- years. sonally adjusted. Latest data, Q3. The Nation's supply of domestic energy U.S. imports of crude oil have risen sharply over the next decade depends to a large extent since 1973, and in the third quarter of 1977, at on coal production. In contrast to the declina record pace of 6.9 million barrels per day, ing trends in oil and gas, production of coal they accounted for 46 per cent of total new has been rising over the past decade. During supplies of crude oil (Table 4). Despite in- 1977 output of coal continued to trend upward creased drilling activity, domestic production until near the end of the year, despite the of crude oil declined more than 13 per cent effects of the extremely cold weather in Janubetween January 1974 and May 1977 (Chart 8). ary, the rain storms and flooding in Ap- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1044 Federal Reserve Bulletin • December 1977 4. Domestic production and imports of crude oil Millions of barrels per day Domestic production IImmppoorrttss aass aa ppeerrcceennttaaggee PPeerriioodd Alaska and All IImmppoorrttss ooff ttoottaall California other Total ssuupppplliieess 1972 1.150 8.291 9.441 2.216 19.0 1973 1.119 8.089 9.208 3.244 26.1 1974 1.078 7.696 8.774 3.477 28.3 1975 1.073 7.302 8.375 4.105 32.9 1976—Q1 .... 1.070 7.124 8.194 4.514 35.5 Q2 .... 1.021 7.110 8.131 5.027 38.2 Q3 .... 1.064 7.057 8.121 5.741 41.4 Q4 .... 1.106 6.927 8.033 5.858 42.2 1977—Q1 .... 1.127 6.833 7.960 6.524 45.0 Q2 .... 1.237 6.791 8.028 6.719 45.6 Q31 • • • 1,666 6,579 8,245 6,884 45.5 *F.R. staff estimates. NOTE.—Data from Bureau of Mines, Monthly Petroleum Statement; Federal Energy Administration, monthly Petroleum Statistics Report. palachia in April, and wildcat strikes in August refined petroleum products and gas depends in which nearly one-third of the Nation's coal on the conversion to coal as an industrial fuel. miners were idled. At the year-end, coal pro- However, new environmental standards, duction was again sharply reduced by an even materials-handling difficulties, and technologbroader coal strike than the earlier one. ical problems in producing coal-based syn- To a large extent, success in reducing the thetic fuels have contributed to slow progress Nation's reliance on imported crude oil and in this conversion. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1045 Staff Economic Studies The research staffs of the Board of Governors In all cases the analyses and conclusions set of the Federal Reserve System and of the forth are those of the authors and do not Federal Reserve Banks undertake studies that necessarily indicate concurrence by the Board cover a wide range of economic and financial of Governors, by the Federal Reserve Banks, subjects, and other staff members prepare or by the members of their staffs. papers related to such subjects. In some in- Single copies of the full text of each of the stances the Federal Reserve System finances studies or papers summarized in the BULLEsimilar studies by members of the academic TIN are available in mimeographed form. The profession. list of Federal Reserve Board publications at From time to time the results of studies that the back of each BULLETIN includes a sepaare of general interest to the economics pro- rate section entitled ''Staff Economic Studies'1 fession and to others are summarized—or they that enumerates the papers prepared on these may be printed in full—in this section of the studies for which copies are currently available Federal Reserve BULLETIN. in mimeographed form. STUDY SUMMARY STRUCTURE AND PERFORMANCE STUDIES IN BANKING: A SUMMARY AND EVALUATION STEPHEN A. RHOADES—Staff, Board of Governors Prepared as a staff paper in the fall of 1977 Research into the relationship between the Of the 39 studies of the S-P relationship market structure in which banks operate and published since 1959, 30 found a statistically the operational performance of those banks significant relationship between bank market has accelerated in recent years. Underlying structure and bank performance. Of the 9 this research on the relationship between mar- studies that did not find such a relationship, 7 ket structure and performance (the S-P rela- focused upon the individual bank rather than tionship) is the hypothesis that the way in on the market as the unit of observation. Many which a market for banks' services is struc- of the studies using interest rates (price) as a tured will influence the conduct of banks in the performance measure did not account for market and, ultimately, the profits and price costs and thus contain a serious shortcoming. performance of these banks. This paper, And all of the studies investigate a hypothesis which summarizes and evaluates studies of that pertains to a long-run equilibrium situathe S-P relationship that have been made over tion in a short-run context. the past 18 years, should prove useful to both This review finds that market structure bank regulators and researchers in the field of clearly affects price and profit performance in bank regulation. commercial banking, although the effect is Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1046 Federal Reserve Bulletin • December 1977 quantitatively small. More conclusive findings some interest rates may distort the market may emerge by pursuing three avenues of effects on performance; and (3) refinement, research: (1) investigation for the existence of development, and incorporation into models nonlinearity or discontinuity in S-P relation- for empirical studies hypotheses that take into ships; (2) investigation of nonprice dimensions account nonprofit objectives of bank operaof performance, since legal restrictions on tions. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1047 Treasury and Federal Reserve Foreign Exchange Operations: Interim Report This interim report, covering the period Au- negotiations to liberalize trade in world margust through October 1977, is the tenth of a kets, and economic recovery abroad were series providing information on Treasury and appropriate for adjusting imbalances in the System foreign exchange operations to sup- international economy. Indeed, economic plement the regular series of semiannual re- growth was failing to live up to expectations in ports that are usually issued each March and industrial countries with strong trade September. It was prepared by Alan R. surpluses. In response, the governments of Holmes, Manager, System Open Market Ac- Japan and Germany reviewed official policies count, and Executive Vice President in charge to consider means of bringing their respective of the Foreign Function of the Federal Re- economies closer to their growth targets for serve Bank of New York, and Scott E. Pardee, the year. Under these circumstances market Deputy Manager for Foreign Operations of expectations were that interest rates abroad the System Open Market Account and Vice would remain steady or even decline. President in the Foreign Function of the Fed- Meanwhile, in view of a sharp rise in the eral Reserve Bank of New York. monetary aggregates, interest rates in the United States advanced in early August and, if After the severe tensions of early summer in anything, were expected to rise further over the exchanges, trading conditions tended to the near term. Thus the dollar firmed against settle down during August and most of Sep- many major currencies. With the dollar adtember. Nevertheless market participants re- vancing, the Federal Reserve was able to buy mained cautious in anticipation of possible German marks in the market and from correactions to deal with divergent economic per- spondents in order to repay the full $35.4 milformances in several countries. lion of swap indebtedness to the German With regard to the United States, concern Federal Bank incurred in July and to rebuild over the implications of the trade deficit (then working balances. running at an annual rate of $30 billion), and Thereafter, dollar rates held fairly steady how the United States would reduce it, had led over the next several weeks. On August 24 to heavy selling pressure on the dollar and a when the New York market became briefly decline in dollar exchange rates in July. But by unsettled ahead of the release of U.S. trade early August the U.S. authorities had pro- figures for July, the Federal Reserve intervided strong reassurances that a generalized vened and sold $8 million equivalent of marks decline in dollar rates was not an objective of out of balances. Otherwise, with the markets U.S. policy. Officials stressed that the deficit generally more settled, the System refrained reflected our increasing dependence on from intervention through late September. foreign sources of petroleum and the more In some exchange markets, however, the rapid expansion of the U.S. economy relative dollar remained on offer. The pound sterling, to the growth performances of the other major in particular, was in strong demand as a result industrialized countries. of the swing toward surplus in the United The administration emphasized that its en- Kingdom's current account, an influx of funds ergy proposals then before the Congress, into British securities, and the expectation Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1048 Federal Reserve Bulletin • December 1977 Foreign exchange operations: over the medium term and as not likely to gen- Summary, July 31-October 31, 1977 erate an early trade adjustment. These developments reinforced market pessimism over the Millions of dollars equivalent outlook for the U.S. trade account and for the Type of transaction Transactions with dollar in general. German Federal Bank Market conditions started to deteriorate dur- Reciprocal currency arrangements ing the meetings of the International Monetary Commitments outstanding, July 31, 19771 35.4 Fund (IMF) and the World Bank in Washington Drawings or repayments (-) Aug. 1-Oct. 31, 19772 ( 181.1 on September 25-30. As financial officials Commitments outstanding, 1-35.4 Oct. 31, 19772 181.1 gathered for the meetings, the discussions quickly centered on the slow economic growth Transactions with Swiss National Bank of countries with current-account surpluses. In Special swap arrangements3 the course of these talks, it was generally ac- Commitments outstanding, cepted that there was a need for greater July 31, 1977 705.4 Repayments, Aug. 1-Oct. 31, 1977 . -139.7 growth in those countries and that the U.S. Commitments outstanding, Oct. 31,1977 565.7 trade deficit would remain large until a strong energy program was adopted and as long as U.S. Treasury securities (foreign currency series)3 the U.S. economy continued to expand faster Commitments outstanding, July 31, 1977 1,341.5 than those abroad. Issues, or redemptions (-) Aug. 1-Oct. 31, 1977 -89.7 The Japanese, in particular, were urged by Commitments outstanding, other governments to find a means of generat- Oct. 31,1977 1,251.8 ing more growth at home and reducing their JData are on a value-date basis. huge trade surplus—which was running at a 2Data include transactions executed in late October for value after the reporting period. $17 billion annual rate. Following open discus- 3Data are on a transaction-date basis. sion of Japanese policy, heavy demand for that sooner or later the U.K. authorities Japanese yen erupted in late September, drivwould allow the pound to rise. The Bank of ing up the yen rate. England continued to buy dollars in volume The rise of the yen against the dollar had a in order to keep sterling from rising on an spillover effect in other markets, and the doleffective trade-weigh ted basis, and it permit- lar also came on offer against most other ted further declines in British short-term inter- currencies. As in the other periods of exest rates. Other currencies, which a year be- change-market tensions, the Swiss franc fore had also been under selling pressure, such was also bid up sharply, and the German mark as the Italian lira and the French franc, re- began to rise as well. In the case of sterling, mained firm. In addition the Swiss franc began the Bank of England again intervened to hold to be bid up once again not only against the the effective exchange rate within narrow dollar but also against other European curren- limits. But the sterling counterpart to the Bank cies. of England's dollar purchases became so great During September there were signs in the as to threaten to undermine domestic monetary United States of some slowing in the pace of objectives, and the British authorities ultiexpansion, but the growth of the monetary mately permitted the pound to float more aggregates remained uncomfortably strong. At freely. the same time the administration's energy With exchange markets increasingly disorproposals ran into difficulties in the Congress, derly in the wake of IMF-World Bank meetand representatives of several industries ings, central banks intervened more heavily. stepped up their efforts to obtain protection The German Federal Bank bought sizable against foreign competition. Abroad, several amounts of dollars to stabilize trading condigovernments announced new measures to tions in Frankfurt. In New York the Federal stimulate their economies. But these measures Reserve intervened on each trading day bewere seen in the market as taking effect only tween September 30 and October 4 and sold Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Foreign Exchange Operations 1049 $80.7 million equivalent of marks. Of this German mark, 6 per cent against sterling, 7 per amount, $35.8 million equivalent was drawn cent against the Japanese yen, and 8 per cent on the swap line with the German Federal against the Swiss franc. The only major cur- Bank and the remainder was financed from rencies that declined against the U.S. dollar balances. were the Canadian dollar, which fell 3LA per Although these operations helped to settle cent on balance, and the Swedish krona, trading conditions temporarily, the dollar re- which dropped a net IVi per cent following its mained vulnerable as market sentiment turned withdrawal from the European "snake" arincreasingly bearish. Traders ignored funda- rangement in August. mental factors that would normally favor the In operations during the period, the Federal dollar. These included release of statistics Reserve sold $236.8 million equivalent of showing that the U.S. economic expansion marks during the period, financing these sales remained solidly based, evidence that our in- out of balances and with drawings of $181.1 flation rate was still one of the lowest among million equivalent under the swap line with the the major industrialized countries, and a German Federal Bank. These drawings refurther rise in U.S. short-term interest rates. In mained outstanding at the close of the period. this atmosphere, trading in dollars frequently During periods of dollar buoyancy, the System became one way and exchange rates moved bought $79.5 million equivalent of marks in the abruptly. To the extent that the dollar sud- market and from correspondents in order to denly came on offer in other markets, the repay $35.4 million of swap drawings incurred respective central banks intervened to counter in July. the disorder. In addition, the Federal Reserve and the When trading conditions became unsettled U.S. Treasury continued to make progress in in New York, the Federal Reserve countered repaying Swiss franc indebtedness to the the disorder with occasionally sizable sales of Swiss National Bank. The Federal Reserve German marks. Over the 14 trading days liquidated $139.7 million equivalent of special spanning October 12 through 31, the Federal swap debt with the Swiss central bank, leaving Reserve intervened on 5 days, selling a total of $565.7 million equivalent of indebtedness still $148 million equivalent of marks. Of this outstanding as of October 31. These repayamount, $145.4 million of marks was drawn on ments were financed with francs purchased the swap line with the German Federal Bank directly from the Swiss National Bank mainly and the remainder was financed out of bal- against dollars but also against marks and ances. This intervention in marks was accom- French francs. The U.S. Treasury's Exchange panied by sales of Swiss francs in New York Stabilization Fund used Swiss francs puron behalf of the Swiss National Bank, which chased directly from the Swiss Central Bank to also continued to intervene in the Zurich mar- repay $89.7 million equivalent of francket. denominated securities, leaving $1,251.8 mil- Over the 3 months August-October, the lion equivalent of these obligations outstanddollar declined a net 2 per cent against the ing as of October 31. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1050 Statements to Congress Statement by Arthur F. Burns, Chairman, sacrificing other important values. Insufficient Board of Governors of the Federal Reserve attention is being paid to the legitimate needs System, before the Subcommittee on Domestic of Government officials to deliberate on com- Monetary Policy of the Committee on Bank- plex and sensitive matters of public imporing, Finance and Urban Affairs, U.S. House tance without the constraints and inhibitions of Representatives, November 17, 1977. caused by subjecting every phase of the deliberative process to public observation. As a I am pleased to present the views of the result, we are in danger of losing one of the Federal Reserve System on H.R. 9465 and most prized values of a collegial body— H.R. 9589. The first of these bills would require namely, the opportunity to discuss and dethe Federal Open Market Committee (FOMC) bate, to exchange views, to explore ideas, to to maintain detailed minutes of its meetings persuade and argue and cajole and chide, and to release those minutes to the public 3 without having to weigh the impact of every years after each meeting. The second bill spoken word on the Congress or on the genwould require that verbatim transcripts be eral public. kept of all meetings of the boards of directors H.R. 9589 would require verbatim transcripof the 12 Federal Reserve Banks. It provides tion of all meetings of Reserve Bank boards of further that the transcripts are to be submitted directors. In so doing, it would impose disabilto the ''appropriate committees of the Con- ities on bodies that at present are able to gress" without deletion, and to the general deliberate and discuss their important duties public with certain permitted deletions, 1 year without inhibition. Indeed, this bill would reafter the date of each such meeting. quire far more extensive disclosure by the Before presenting our specific views on Reserve Banks than present law requires of these two proposals, I want to comment on the the Board of Governors or, as far as I know, of ongoing trend toward public disclosure. Now- any Federal agency or instrumentality. No adays, there appears to be great currency to demonstration has been made that either the the notion that public confidence in our Gov- Congress or the public has any need for legisernment will be enhanced, and the quality of lation of such sweeping scope. Neither I nor decision-making may itself be improved, by my colleagues can find benefits to the public in exposing to public scrutiny nearly every detail such a measure that would even remotely of the governmental decision-making process. offset its destructive effects on full and frank We do not share this view. discussion. There is, of course, some value in allowing Our objections to this proposal were set the public to witness agency proceedings at forth in detail in a letter that came before your first hand. To the extent that the public's parent committee in July of this year, when unfamiliarity with the workings of Government the same proposal was offered as an amendfosters distrust, certainly we should all make ment to H.R. 8094, the Federal Reserve Rean effort to help to educate the public and to form Act. I respectfully request, Mr. Chairdispel the fear that actions taken in informal or man, that the entire text of that letter be executive sessions may somehow be tainted. received- as an appendix to this statement But in our zeal to achieve this result through (August 1977 BULLETIN pp. 717-21). sweeping disclosure, we run a grave risk of Let me now summarize the principal points Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Statements to Congress 1051 made in the July letter: First, H.R. 9589 con- important information about current economic templates the regular distribution of the entire and financial conditions in their own busitranscript of Reserve Bank board meetings to nesses and communities. Furthermore, many dozens of members of the Congress and their of them are skilled and experienced managers, staffs. This would be followed by deliberation and their frank assessments of Reserve Bank and voting on the public release of previously procedures and personnel, as well as their withheld portions of the transcripts. Under recommendations for improvement, have such procedures, there clearly would be a made a great contribution to the Federal Reserious risk of unauthorized disclosure of serve System. To require these men and highly sensitive information involving banks, women to speak for a public record when their customers, and security markets. acting as Reserve Bank directors—a burden Second, even in the absence of unau- they do not have in their own board rooms and thorized disclosures, the bill fails to provide businesses—will tend to discourage free disfor the withholding of discussion of problem cussion and in the long run will impair the banks, of litigation or lawyer-client communi- Federal Reserve's ability to attract outstandcations, of trade and financial data furnished ing individuals to serve as directors. As a to the Reserve Bank in confidence by private consequence, the efficiency of Reserve Banks firms, of discount rate changes or other con- and the quality of their services to commercial cerns of monetary policy, of possible criminal banks and to the general public would probacharges or other enforcement action against bly deteriorate. individuals or financial institutions, or of other As members of this subcommittee know, matters the disclosure of which could ad- the Federal Reserve has tried to be' construcversely affect markets or constitute an inva- tively responsive to recent requests for inforsion of personal privacy. mation about board meetings of the Federal Third, by requiring the creation of a ver- Reserve Banks. This information was origibatim record of deliberations the bill could nally sought to determine whether the Federal impair the ability of a Reserve Bank to take Reserve is controlled by corporate and bankeffective action when civil litigation against ing groups through their representation on the Bank could be anticipated. Since such Federal Reserve Bank directorates. To deal transcripts might have to be produced in litiga- with this question, we turned over to your tion, directors would be seriously inhibited in parent committee last December a tremendous discussing the strengths and weaknesses of volume of Reserve Bank board minutes. Sigvarious actions open to them. nificantly, no evidence whatsoever was Fourth, the administrative burden on both brought forth from examination of the minutes the Congress and the Federal Reserve Banks to support the claim originally advanced as the would be staggering. Well over 400 board reason for a need to examine the minutes. meetings would have to be recorded each Instead, various unrelated charges were made year, transcripts would have to be made, against the Federal Reserve System—based reviewed, corrected, and duplicated by the upon information selectively culled from the banks, and then the members and staffs of minutes we had forwarded. various committees of the Congress would We have carefully reviewed the excerpts have to screen the transcripts again in order to cited as support for these new claims, and I determine whether additional material should want to state categorically that the minutes be released. do not justify any of the assertions of impro- Finally, and most important of all, a tran- priety that have been made. The minutes do script requirement would have a stifling effect not establish unlawful or improper "lobbyupon deliberations among Reserve Bank di- ing"; they do not disclose Federal Reserve rectors and upon the flow of information encouragement of credit allocation; they do within the Federal Reserve System. Our di- not support the cruel attack made on the rectors are frequently a valuable source of integrity of one of our most distinguished Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1052 Federal Reserve Bulletin • December 1977 Reserve Bank directors; and they do not re- monthly meeting the much shorter record of veal misuses of Reserve Bank funds for gifts policy actions—a record that reflects the or loans. Committee's discussion of the economic out- Over the years, the Federal Reserve has look and its deliberations on open market furnished the Congress with a vast amount of policy. After much thought, the Committee information about the operations of the Fed- decided to reduce from 45 days to about 30 eral Reserve System, and we will continue to days the time for release of the record of do so in the future. We feel sure, however, policy actions and to include in that record an that the legitimate needs of the Congress for expanded and more systematic account of the information to perform its oversight respon- views expressed by its members. The new sibilities can be met in a far more constructive policy record does not attribute individual manner than that proposed by this bill, and we opinions to Committee members by name; but urge you not to approve this proposal. the record always reports the votes of the Let me now turn to H.R. 9465, which would members by name and their accountability is require the Federal Open Market Committee thus preserved. In connection with this new to maintain detailed minutes and to release practice, the Committee decided to disconthem to the public after 3 years. This bill is tinue the detailed memoranda of discussion, clearly motivated by a concern for the inter- recognizing the much more limited audience ests of scholars and others who may have for this document. occasion to do historical research in the area While the FOMC's new procedure affords of monetary policy. This is a concern with the public much more information on a current which many of us have great sympathy. Even basis about policy actions than under prior though there is substantial expense involved in practice, it admittedly does not preserve a maintaining such minutes, and the potential historical record as detailed as that contained audience appears very small, a detailed record in the earlier memoranda of discussion. H.R. of proceedings could on balance be useful, 9465 would propose to remedy this by requirprovided important needs of the FOMC were ing, in effect, a return to the earlier practice. accommodated. Some background is neces- In addition, it would require that the minutes sary to put this proposal in perspective. be made public 3 years after each meeting. For many years the FOMC kept very As I have indicated, we are sympathetic to lengthy minutes—referred to as "memoranda the concerns that underlie this proposal, and of discussion"—of each of its meetings. These we are reluctant to oppose it. However, we memoranda, which often ran as much as 100 believe there are three shortcomings in the bill pages in length, set forth in detail the views as it is presently drafted. First, no provision is expressed by each member of the FOMC at made for exclusion of material that may be each meeting, attributing those views to the embarrassing to foreign governments or inmember by name. The memoranda of discus- stitutions. Second, 3 years is not a sufficiently sion of the FOMC meetings held in any one long period to avoid the inhibiting effects that year were released to the general public 5 may derive from the anticipated release of the years after the end of that year. In the views expressed at FOMC meetings. If this FOMC's judgment, this policy of delayed re- proposal were to be adopted, we would lease gave strong assurance that the disclosure strongly prefer a return to the prior practice of of the memoranda would not affect security releasing the memoranda with a 5-year lag. markets and that it would not impair the Third, and most important, the bill does not willingness of its members to speak freely address the possibility that the FOMC might about sensitive matters of current concern. be compelled under the Freedom of Informa- Last year the FOMC re-examined the prac- tion Act to make public all or significant tice of keeping these very detailed minutes of portions of the memoranda more promptly its meetings, and at the same time reviewed its than the specified period, whether it be 3 or 5 practice of releasing 45 days after each years. In the absence of express statutory Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Statements to Congress 1053 protection against premature disclosure of the to enable this or any other committee of the memoranda, we would feel compelled to ob- Congress to perform its responsibilities. Howject to a proposal for returning to the practice ever, since our day-to-day work, and that of of keeping extensively detailed minutes of the 12 Federal Reserve Banks, involves us in FOMC meetings. matters of the greatest sensitivity, we urge this In closing, let me again assure the commit- committee not to approve any additional protee that we will cooperate fully with any posal for public disclosure in the absence of a reasonable requests for information necessary strong showing of public benefit. • Statement by Philip E. Coldwell, Member, of this monetary policy exemption was Board of Governors of the Federal Reserve granted by the House of Representatives with System before the Committee on Govern- some reluctance and with an indication that it mental Affairs, U.S. Senate, November 29, would be reconsidered in the near future. In 1977. any event, we are concerned that GAO involvement in the System's other functions I am pleased to present the views of the Board could influence the operational policy enviof Governors of the Federal Reserve System ronment within which monetary policy must on H.R. 2176, a bill that would provide for an be developed. audit of the Federal Reserve System, the Fed- Second, the Federal Reserve System is alederal Deposit Insurance Corporation (FDIC), ready subject to extensive audit. The Federal and the Office of the Comptroller of the Reserve Banks, which account for almost 95 Currency by the Comptroller General of the per cent of the expenditures of the System, are United States. For a number of reasons, the audited by the Board of Governors, pursuant Federal Reserve opposes enactment of this to an express requirement in Section 21 of the legislation, as it has numerous similar propo- Federal Reserve Act that states, "The Board of sals relating to a General Accounting Office Governors of the Federal Reserve System (GAO) audit of the Federal Reserve over the shall, at least once each year, order an examilast 25 years. nation of each Federal reserve bank. ..." The First, we are concerned that audit authority Board itself is audited annually by a leading would constitute an initial significant step to- firm of certified public accountants. ward compromising the ability of the Federal Third, the System's cautious stewardship of Reserve System to render objective indepen- its funds and its record of sharp increases in dent judgments on monetary policy determina- productivity suggest no need for an efficiency tions. The present exclusion of the Federal audit. Reserve from customary appropriations and Fourth, we are convinced that a regular auditing procedures recognizes the special audit by the GAO would be likely to have an political vulnerability of a central bank be- adverse impact on the effectiveness of bank cause of the opposition that may be generated regulation and would impede the essential when it imposes monetary restraint. We ap- freedom of communication between bankers preciate the fact that H. R. 2176 provides that and bank examiners in the examination procthe audit shall not include "deliberations, de- ess. Moreover, it would raise the dangerous cisions, and actions on monetary policy mat- possibility of unauthorized disclosure of ters, including discount window operations, highly sensitive information about individual reserves of member banks, securities credit, banks and their customers and could therefore interest on deposits, and open market opera- have serious adverse effects upon individual tions." However, we are aware that the scope persons and institutions. We cannot empha- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1054 Federal Reserve Bulletin • December 1977 size too strongly the damage that GAO access a system of member bank reserve accounts. to bank examination reports could have on the Fourth, the Federal Reserve is charged with bank examination process. the responsibility for writing and enforcing We are aware that the Federal Deposit a variety of other regulations, including margin Insurance Corporation and the Office of the requirements, consumer credit regulations, Comptroller of the Currency are in general and the definitions of demand and time support of H.R. 2176. However, these other deposits. agencies are structurally and functionally dif- Finally, the Federal Reserve conducts a ferent from the Federal Reserve. The Comp- group of support operations such as collecting troller, of course, charters banks, and the economic statistics needed for monetary policy FDIC insures banks. But beyond these re- deliberations, data processing, communicasponsibilities their functions are generally lim- tions, protection, and other housekeeping ited to the supervision and regulation of matters. banks. Their financial transactions are audited Although it is possible to categorize Federal by the GAO, but the scope of their internal Reserve operations into a number of service audit functions is considerably narrower. areas, there is a considerable overlap between Their operations are primarily centered in and areas, and the lines of demarcation are fredirected from Washington. The Federal Re- quently indistinct. While H.R. 2176 attempts serve's organization is less centralized and has to screen out direct monetary policy surveilinternal audit staffs in each of the 12 districts. lance, it does not remove the indirect impacts. While the bank regulatory functions of the The indirect ties of the other functions of the Federal Reserve are similar to those per- Federal Reserve to monetary policy are reformed by other agencies, the Federal Reserve flected in both the actual changes in operaperforms many unique functions that support tions and the operational policies of the Sysand are closely linked to broad monetary tem. policy implementation. In the payments mechanism function, which First, there are several operations that are includes check clearing and electronic funds direct instruments for the implementation of transfers, there are numerous operating monetary policy, such as open market op- policies that the Federal Reserve establishes erations and administration of the discount to assure the efficiency and effectiveness of the window, for which the scope of GAO audit Nation's payments system. One such policy authority has been limited. is a requirement that banks pay for checks Second, a large number of operations are drawn on them on the day of receipt, which is performed by the Federal Reserve as fiscal immediate in the case of financial center banks agent of the United States. These include and a 1- or 2-day deferment schedule for issuing, redeeming, and servicing savings country banks. This requirement assures that bonds and Treasury, government agency, and commercial check float, which is a component international agency securities; collecting, of the money supply, is predictable and conmaintaining accounts for, and maintaining col- trollable within reasonable limits. In addition, lateral for Federal taxes; clearing Government we have pursued a restriction on the clearance checks; and maintaining accounts for the of nonpar checks, which has resulted in the Treasury. gradual elimination of nonpar banks. Similarly, A third group of operations provides ser- we have promoted a regional check-procvices to the public and to financial institutions. essing program, which has resulted in addi- These include operations in and regulation of tional processing centers to provide overnight the commercial check-clearing system, a dis- clearing of checks; we have encouraged the tribution system for all currency and coin development of automated clearing houses to supplies, a nationwide network for electronic reduce the paper burden and to promote the transfers of funds and Treasury securities, and long-run efficiency of the payments system; Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Statements to Congress 1055 and we have cooperated with the Treasury in we at the Federal Reserve have also been the development of a Government check trun- interested in the long-run implications upon cation program, which will eventually elimi- the efficiency of the Government securities nate the shipping costs associated with the market. This, of course, is of great importance handling of large volumes of Government to the implementation of monetary policy, and checks. again, the flexibility to effectuate the policies We must assume that the GAO would wish that we have followed in this area has been a to devote attention to our payments mecha- major contributing factor to its success. nism operations since they comprise almost 40 Our policies with respect to the collection of per cent of our costs. Thus, the GAO might ex- banking and other financial statistics are depect to review the cost effectiveness and public signed to enhance the flow of information for purposes of our policies in this area. Short-run monetary policy decisions. The cost effectivecost effectiveness might be improved by pol- ness of our large data collection effort is not icy changes, but such changes could be disrup- always obvious to outside observers, but it is tive to financial markets and impair our ability our judgment that this information is essential to conduct monetary policy. The implementa- to the decisions made by the Federal Open tion of monetary policy relies heavily upon the Market Committee and is necessary to evalucertainty and speed of financial flows and the ate the results of our past actions. This area safety and soundness of the banking system. provides an illustration of why we believe that Indeed, these are the basic purposes of the a GAO operational or efficiency-type audit, System's activities and the objectives of its even though not intended to involve the moneprimary operational functions. Thus pressure tary policy field, is not likely to avoid it. to change policies without full understanding of Thus, while we recognize and appreciate the Federal Reserve's objectives in promoting that this bill has included limits on GAO audit and maintaining an efficient payments mecha- authority over monetary policy operations, nism could be quite counterproductive. Free- nearly all Federal Reserve operations have dom to establish and maintain such policies is some ultimate relationship to monetary policy. therefore of great importance in the long run to Therefore, the probability exists that any our monetary policy responsibilities. In fact, GAO audit may impinge on policy matters and the legislative history in the House of Repre- the execution of monetary policy operations. sentatives appears to give some recognition to We believe the System should have the freethis point. dom to develop and implement its own proce- The same reasoning applies to the opera- dures without the inhibiting presence of GAO tions that we perform for the Treasury as its and that any GAO audit could ultimately be fiscal agent. We have sought ways of improv- used to infringe upon monetary policy iming the efficiency of these operations, and such plementation, however carefully such audit improvements have resulted in substantial authority may be circumscribed. savings to the Treasury and thus to every If a GAO audit is not intended to influence taxpayer. We have cooperated with the Trea- monetary policy, is its purpose to verify statissury in developing an elaborate computer- tical data and financial information presently based, book-entry system for Government se- available to the Congress? If so, such audits curities that has virtually eliminated the need will be a very expensive and redundant procefor definitive securities. We are now cooperat- dure since an extensive and effective system ing with the Treasury in a new system of of audits already exists. The effectiveness of accounting for Treasury tax and loan accounts, our existing system of audits and examinations which will result in substantially increased has been recognized by the Congress, GAO, earnings on the Treasury's cash balances. and independent certified public accountant While these developments have had as their firms. primary objective the reduction of costs, Let me briefly describe the coverage now Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1056 Federal Reserve Bulletin • December 1977 provided. The audit program established ing of new equipment. This is only one of a within the Federal Reserve System is com- number of areas in which our audit standards prehensive and incorporates a series of con- meet or exceed the GAO's requirements for trols coupled with a number of checks and other agencies. balances. First, the General Auditor of each If the focus of the GAO audit is neither to Reserve Bank accomplishes an internal audit influence monetary policy nor to verify statisof all operations at least annually. Each Gen- tical data and financial information, is it to eral Auditor is adminstratively independent of evaluate the efficiency of Federal Reserve Bank management and reports his findings operations? Information provided by our exdirectly to the district's board of directors. pense accounting system provides far more Second, the staff of the Board of Governors detail than could be generated by a GAO examines each Reserve Bank annually in ac- audit. The Board uses this information on a cordance with the Federal Reserve Act, in- continuing basis to measure the operational cluding confirmation of each asset and liability efficiency of the Reserve Banks and branches. account as well as determining compliance The performance record of the Federal Rewith procedures established by the Bank itself serve System over the past few years strongly and by the Federal Reserve System as a suggests the high degree of success the System whole. The Board's staff also accomplishes a has achieved through its internal efforts to series of reviews to determine the effectiveness improve operational efficiency. Since 1974 and efficiency of Bank operations, including employment in the Federal Reserve Banks has the internal audit function. been reduced by 10 per cent even though the Each year the results of the staffs examina- volume of operations performed by the Systions and reviews in each district are dis- tem has increased by 24 per cent. Our weighted cussed individually in executive session with unit cost of clearing checks, processing the Board of Governors. Subsequently, a currency and coin, issuing and redeeming Board official briefs the board of directors of Treasury and other Government agency secueach district on the condition of operations. In rities, and performing all other measurable addition, an independent certified public ac- output activities has increased by about 1 per countant firm is engaged to evaluate the cent per year over the 3-year period from 1974 examination and review procedures used by through 1977 as projected. If unit costs are the Board staff. Representatives of this firm adjusted for higher prices paid for resources— accompany the examination and review teams that is for inflation—real unit costs have to various offices on a random basis and declined by about 7 per cent per year. As provide the Board of Governors with an an- reflected in the budgets of the Reserve Banks, nual report of the evaluations. This report is in a further decline is expected in 1978. turn transmitted to the Congress. While output per hour increased by more A specific example will illustrate the depth of than 10 per cent in 1976 and is projected to the audit coverage we now provide as com- increase at similar rates in 1977 and 1978, pared with the GAO's. The Comptroller Gene- some of these gains have been achieved ral recently distributed a report to the heads of through substitution of capital for labor. In an all executive departments recommending in- effort to adjust our productivity gains for this creased audit attention to the use of computers substitution, the Board's staff has made estiin Government. The document set forth the mates of changes in total factor productivity. GAO's standards in this field. The Federal Changes in total factor productivity measure Reserve System was able to show that it the increase in output against the increase in provides more than required by GAO stanall resource inputs, including both capital and dards in terms of auditing of computer applicalabor. tions, review of the efficiency of computer Since 1974 the System's total factor producusage, and controls over leasing and purchastivity has increased considerably more than Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Statements to Congress 1057 estimates for the private sector. In these past 4 audit review by the General Accounting Ofyears the Board of Governors and the Federal fice. Reserve Banks have stressed the promotion of In our opinion recent experience establishes policies designed to improve operational effi- that there are effective means by which the ciency. Through these efforts, we have Congress can perform oversight responbrought about increases in our total factor sibilities in these areas without devoting subproductivity averaging 7.7 per cent per year stantial additional resources of the magnitude through the budget year 1978. At the same that would be required for a GAO audit. Over time, we have tightened policies regarding the past 2Vi years, there have been quarterly allowable expenses of the Reserve Banks. The hearings on the conduct of monetary policy Board's staff reviews, as the GAO would, the held by the banking committees, which have legitimacy and reasonableness of all discre- proved to be a workable and productive way tionary expenditures. Thus, an efficiency of informing the Congress about the course of audit is already ongoing, and further efforts monetary policy. These hearings originally along these lines seem clearly unnecessary. held pursuant to H. Con. Res. 133 have now We do not suggest that the Federal Reserve been made a part of permanent law by Public is or should be beyond the scope of congres- Law 95-188 of November 16, 1977. sional oversight or that it should not be held The Board has proposed that regular overaccountable to the Congress for its expendi- sight hearings be conducted by the appropriate tures. The Federal Reserve System was committees of the Congress on the condition created by the Congress, and the Congress has of the banking system. One such hearing has the authority to change any aspect of the been held before the Senate Committee on central bank's responsibilities. We are con- Banking, Housing and Urban Affairs at which cerned, however, that by significantly altering considerable documentation was made availone of the primary protections to Federal able. The Board has also presented testimony Reserve independence—the authority to es- to the same Senate Committee this year on the tablish its own budget and audit its 1977 budget of the Federal Reserve System. expenditures—the Congress may, without in- We understand that the Committee found tending to do so, and notwithstanding the these hearings to be a useful and productive exemptions in the legislation, profoundly means of oversight, and, if so, we are prepared change the concept of an independent mone- to repeat them annually. tary authority that has served the country well Before the Congress takes such a drastic for over 60 years. step as that contemplated by H.R. 2176, we We believe that oversight, including criti- urge that oversight hearings be held on the cisms and suggestions for improvement of the Board's performance of its other statutory Federal Reserve's operations with respect to duties, including its duty as auditor of the the payments mechanism, bank examination Federal Reserve Banks. If such hearings, in and supervision, and other significant func- conjunction with those on the banking system tions should be performed as a matter of and budgets, fail to satisfy the Congress, then policy review by the Congress and not as an it could always return to legislation. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1058 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON OCTOBER 17-18, 1977 1. Domestic Policy Directive The information reviewed at this meeting suggested that growth in real output of goods and services in the third quarter had slowed from the pace in the second quarter, estimated by the Commerce Department to have been at an annual rate of 6.2 per cent. The rise in average prices—as measured by the fixed-weighted price index for gross domestic business product—appeared to have moderated appreciably from that of the second quarter, estimated to have been at an annual rate of 7.5 per cent. Staff projections suggested that growth in real GNP would pick up in the fourth quarter and would continue at a moderate, although slightly diminishing, pace in 1978. It was also expected that the rate of increase in prices, while less than that in the first half of 1977, would remain high. According to staff estimates, the third-quarter slowing of growth in real GNP was attributable mainly to a reduction in the rate of business inventory accumulation, following a large increase in the second quarter, as businesses attempted to prevent an excessive build-up of stocks. It was estimated that growth in final sales of goods and services in real terms had been about the same in the third quarter as in the second. Staff projections of growth in real GNP over the year ahead reflected expectations that expansion in business capital outlays would be sustained; that increases in State and local government purchases of goods and services would remain large, in part because of the stimulus of increased Federal public works and job-related programs; and that growth in consumer spending would be moderate. It was still anticipated that the expansion in residential construction activity would taper off as the period progressed and that exports of goods and services would continue to exceed imports by a sizable, but not an increasing, amount. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Record of Policy Actions of FOMC 1059 In September industrial production expanded 0.4 per cent, returning to the level reached in July. About one-third of the September rise was attributable to gains in copper and coal mining following the end of strikes, but small increases in output were widespread. Production of steel declined, and automobile assemblies were about unchanged at a relatively high rate. From the second quarter to the third, total industrial production advanced 1.2 per cent, about half as much as from the first quarter to the second. Capacity utilization in manufacturing in September remained at the August level of 82.9 per cent. In the materials-producing industries, utilization changed little, and at 82.8 per cent for both September and the third quarter as a whole, it remained appreciably lower than at the comparable stage of other recent business expansions. Total nonfarm payroll employment expanded substantially in September, reflecting in large part continuation of strong growth in the service-producing sector—specifically, in services, retail trade, and State and local government. Payroll employment in manufacturing increased too, recovering most of the decrease of August, but the length of the average workweek of production workers declined for the third consecutive month—reaching 40.0 hours, compared with 40.5 in June. Total employment, as measured by the survey of households, also increased substantially in September. The civilian labor force rose somewhat less than total employment, as a sizable increase in the number of women in the labor force was offset in part by decreases in the number of adult men and of teenagers, and the unemployment rate edged down 0.2 of a percentage point to 6.9 per cent. From April through September the unemployment rate had fluctuated between 6.9 and 7.1 per cent. The size of the gain in employment in September suggested an increase in the pace of expansion in wage and salary disbursements. In August such disbursements had increased little. The dollar value of retail sales had declined 1.2 per cent in September, according to the advance report, after having increased 2.3 per cent over the preceding 2 months. From the second quarter to the third the value of sales had risen 0.3 per cent, considerably less than the rise from the first quarter to the second and, most likely, less than the increase in average prices of the goods and services sold. Unit sales of new autos—domestic and foreign Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1060 Federal Reserve Bulletin • December 1977 models—declined more than 10 per cent, but the weakness may have been caused by the lateness of the changeover to 1978 models for some domestic makes and by reduced inventories of both foreign cars and 1977 domestic models. Expansion in the book value of business inventories accelerated in August, after having slowed sharply further in July, but it was still slightly less rapid than the monthly-average rise in the first half of 1977. The build-up of stocks at retail stores was somewhat faster than in July and considerably more rapid than the average increase during the preceding 6 months, reflecting exceptionally high rates of accumulation both at durable goods stores other than automobile dealerships and at nondurable goods stores. In manufacturing, on the other hand, accumulation slowed further in August; in both durable goods and nondurable goods industries, the rate of accumulation was less than that over the first 6 months of the year. As had been reported before the September meeting of the Committee, private housing starts were at an annual rate of slightly more than 2.0 million units in August, almost as much as in July. The average for the 2 months was 7 per cent above the average for the second quarter, reflecting in large part gains in starts of multifamily units. The latest Department of Commerce survey of business plans, taken in late July and August and published in early September, suggested that spending for plant and equipment would be 13.3 per cent greater in 1977 than in 1976. The survey implied somewhat less expansion in spending in the second half of the year than in the first half. Manufacturers' new orders for nondefense capital goods picked up somewhat in August after having declined sharply in July; the average for the 2 months was well below that for the second quarter and about equal to that for the first quarter. However, the machinery component of such orders—generally a better indicator of underlying trends in demand for business equipment—was at an appreciably higher rate in July-August than in the second quarter. Over-all shipments of nondefense capital goods continued to expand in August, and unfilled orders for such goods edged down. Contract awards for commercial and industrial buildings—measured in terms of floor space—rose sharply in August, and the July-August average was about 8 per cent above the average for the second quarter. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Record of Policy Actions of FOMC 1061 The index of average hourly earnings for private nonfarm production workers advanced at a moderate pace in September. Over the first 9 months of 1977 the index had risen at an annual rate of about 7 per cent, the same as the increase over the 12 months of 1976. The wholesale price index for all commodities, which had declined in June and then had shown little change in July and August, rose moderately in September. Average prices of farm products and foods changed little following 3 months of large decreases, and prices of industrial commodities rose more than in the immediately preceding months. Among industrial commodities, sizable increases were recorded for lumber and wood products, certain fuels, some types of machinery, and roofing and insulation materials. The consumer price index in August, as in July, rose considerably less than in any month of the first half of 1977. Retail prices of foods changed little over the July-August period, after having risen about 6V2 per cent over the preceding 6 months. The increase in prices of nonfood commodities was relatively small in September for the third consecutive month, and the rise in prices of services was significantly less than the average increase in the preceding 7 months. In foreign exchange markets, pressure on the dollar emerged at the end of September—following 2 months of recovery from the depreciation that had occurred in early summer—in reaction mainly to statements by U.S. Government officials concerning the large deficits in both foreign trade and the current accounts that were in prospect for 1977 and were projected for 1978. From late September to mid-October the trade-weighted average value of the dollar depreciated about IV2 per cent, reflecting declines against all major currencies except the Canadian dollar; the largest declines were against the Japanese yen and the Swiss franc. Over the period, moreover, foreign central banks intervened in the exchange markets to purchase a substantial amount of dollars. The U.S. foreign trade deficit widened in August. The monthlyaverage deficit for July and August was somewhat greater than that for the second quarter. At U.S. commercial banks, growth in total credit was small in September following substantial expansion in the preceding 2 months. In September bank holdings of U.S. Treasury securities declined considerably further. Total loans expanded, but by less than in July and August. Real estate loans continued to grow at a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1062 Federal Reserve Bulletin • December 1977 rapid pace, but business loans increased less than in any month earlier in the year. The small increase in business loans at banks in September was accompanied by a decrease of about the same amount in the outstanding volume of commercial paper issued by nonfinancial corporations. For the third quarter as a whole, business credit expansion through these two sources slowed to an annual rate of 6 per cent—the lowest since the summer of 1976. The narrowly defined money stock (M-l) grew at an annual rate of 7% per cent in September, up from the August pace of 5Vi per cent. Data for early October suggested further acceleration. M-1 grew at an annual rate of 9LA per cent from the second quarter to the third, and by about LLA per cent from the third quarter of 1976 to the third quarter of 1977. Growth in the more broadly defined measures of money, M-2 and M-3, also stepped up in September—to annual rates of 8 and 12 per cent, respectively, from rates of about 6V2 and MV2 per cent in August. These more rapid rates resulted almost entirely from the acceleration of expansion in the demand deposit and currency components common to all three measures of money. Expansion in the time and savings deposit component of M-2 changed little in September from the reduced rate of August; and inflows of deposits at nonbank thrift institutions, included in M-3, remained near the strong pace of August. From the third quarter of 1976 to the third quarter of 1977, M-2 and M-3 grew about 11 and 12Vz per cent, respectively. At its September meeting the Committee had decided that during the September-October period growth in M-l and M-2 within ranges of 2 to 7 per cent and 4 to 8 per cent, respectively, would be appropriate. The Committee had established 6 to 6V2 per cent as the range for variation in the weekly-average Federal funds rate for the period until the next meeting. The 6Va per cent midpoint of the range was slightly above the rate of 6Vs per cent prevailing in the days just before that meeting. The Committee had agreed that if growth rates in the aggregates over the 2-month period appeared to be deviating significantly from the midpoints of their ranges, the operational objective for the weekly-average Federal funds rate should be modified in an orderly fashion within its indicated range. In accordance with the Committee's decision, the Manager of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Record of Policy Actions of FOMC 1063 System Open Market Account began immediately after the September meeting to seek bank reserve conditions consistent with a Federal funds rate of around 6V4 per cent. Data that were becoming available at the same time suggested that over the September-October period M-l and M-2 would grow at rates at or above the upper limits of the ranges specified by the Committee, and the estimates of these growth rates were raised further on the basis of the data that became available in subsequent weeks. Therefore, the Manager sought a gradual firming in the Federal funds rate to 6V2 per cent, the upper limit of its specified range. In the three business days prior to this meeting of the Committee, the funds rate averaged 6V2 per cent. Interest rates in securities markets also rose during the intermeeting period. Increases ranged from 30 to 65 basis points in markets for short-term securities and up to 20 basis points in markets for long-term instruments. Major banks raised the rate on loans to prime business borrowers from 7V4 to IV2 per cent. As market rates of interest rose, member bank borrowings at Federal Reserve Banks expanded. In the 5 days preceding the Committee meeting, borrowings averaged nearly $1.6 billion, up from a daily average of $337 million in the statement week ending September 14. Stock prices drifted down further over the inter-meeting period, and several major indexes of stock prices reached their lowest levels since the end of 1975. The reduced prices of common stocks, in combination with a record number of dividend increases announced so far this year, raised the average yield of dividends to an unusually high level by historical standards. The U.S. Treasury raised $3.3 billion of new money during the inter-meeting period. For the third quarter as a whole, its cash borrowing totaled $17 billion—excluding $2.5 billion of temporary borrowing from the Federal Reserve System at the end of the quarter. Of the $17 billion, $2.8 billion was provided through sales of special nonmarketable Treasury securities to State and local governments that were making temporary investments of the proceeds from advance refundings. Gross offerings of new bonds by State and local governments remained substantial in September, reflecting a continued large volume of advance refundings. Primarily because of such refundings, State and local government offerings of long-term securities in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1064 Federal Reserve Bulletin • December 1977 the first 9 months of 1977 exceeded the record volume of sales in all of 1976. Gross public offerings of corporate bonds remained strong both in September and in the third quarter as a whole. Total external financing by nonfinancial corporations in the third quarter appeared to have been substantially greater than the gap between capital outlays and internally generated funds. In those circumstances, such a large volume of financing suggested that some firms were encouraged by the levels of prevailing yields to borrow in advance of their current needs. The proceeds of such borrowings may have been used to enlarge holdings of liquid assets as well as to reduce short-term debt. Growth in mortgage credit in September apparently remained near the strong pace registered earlier in the third quarter. Expansion in mortgage loans at commercial banks slightly exceeded the sizable July-August average, and new issues of GNMA-guaranteed, mortgage-backed securities were down only moderately from the August record volume. At savings and loan associations, outstanding mortgage loan commitments had risen appreciably in August to a new record level. At the same time, inflows of funds to these institutions during September were apparently sufficient to permit them to acquire a sizable volume of spot loans in addition to financing takedowns of outstanding mortgage commitments. In the Committee's discussion of the economic situation, the members agreed that the expansion in activity was likely to continue for some time to come. They differed, however, in their assessments of the prospective vigor of the expansion. Most indicated no disagreement with the staff projections suggesting that growth in real GNP would pick up in the fourth quarter and would continue at a moderate—if slightly diminishing—pace in 1978, although the view was expressed that uncertainties about the current situation and outlook had increased in recent months. One of the members suggested that the private economy had demonstrated great vitality since the start of the current business upswing, as evidenced by growth of nearly 7 million persons in total employment. He believed that the expansion could well pick up speed again if the tax proposals being developed by the administration were practical and included, in particular, measures designed to foster a higher rate of business capital expenditures. Another member who regarded the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Record of Policy Actions of FOMC 1065 staff projections as reasonable nevertheless thought that any deviation was more likely to be in the direction of shortfalls. A third member felt that the economy had not displayed any significant weaknesses and that its performance was likely to be as favorable as, or more favorable than, that projected by the staff. On the other hand, several members felt that the performance of the economy was likely to be less favorable than projected and, consequently, that there might be little further progress in reducing the rate of unemployment from its high level. One of these members observed that the projections for a number of sectors of activity appeared to be on the high side and that shortfalls were likely to occur in at least some cases. Another of these members suggested, however, that a rate of growth in real GNP of less than 5 per cent—which was being widely forecast on the assumption of the existing fiscal policy—was likely to lead to some new measures of fiscal stimulus, although uncertainty existed about the amount of time required to legislate new measures and about their probable effectiveness. Another member expressed the view that, compared with the staff projections, growth was likely to be weaker in the fourth quarter of 1977, to be stronger in the first half of 1978, and to be weaker again in the second half of 1978. Members differed somewhat in their appraisals of the outlook for major categories of expenditures. With respect to business fixed investment, little disagreement was expressed with the staff projection that expansion would be sustained over the year ahead. It was observed that new orders for machinery had been strong; that a revival in large-scale industrial and commercial building projects had begun earlier this year; and that new businesses were being formed at an increasing rate. However, the view was also expressed that business confidence had deteriorated somewhat—owing to the rather indifferent performance of profits, to the decline in stock prices, and to widespread uncertainty concerning a number of Government policies—and it was noted that some private surveys of plans for 1978 did not suggest any great strength in business capital spending. Concerning inventories, it was observed that businesses were likely to continue pursuing conservative policies, that the recent increase in stocks at retail stores had occurred as sales had leveled off, and that any appreciable increase in inventory investment in the period ahead might reflect involuntary accumulation and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1066 Federal Reserve Bulletin • December 1977 thus be indicative of weakness rather than strength in the over-all situation. Several members expressed skepticism concerning the staff projection of some further expansion in housing starts from recent levels and of somewhat higher starts in 1978 as a whole than in 1977. In that connection, it was suggested that starts might be limited by supplies of insulating and other building materials as much as by any easing in demands. On the other hand, the view was expressed that certain factors affecting starts of multifamily units had become more favorable and that increases in such starts might sustain the total, although it was recognized that on the average less construction activity was involved in multifamily than in single-family units. With respect to financing, it was observed that the availability of funds for mortgages remained good. Moreover, it was suggested that thrift institutions apparently had become less exposed than in the past to diversions in savings flows in response to higher market rates of interest, mainly reflecting a lengthening in the maturity structure of their liabilities. A few members viewed the staff projection of moderate growth in real consumer spending as optimistic. One of these expressed doubt that purchases of new automobiles would increase further from the advanced rate of the past year or so. Another observed that expansion in disposable income was likely to fall short of that required to validate the projection, especially if, as widely expected, the savings rate recovered from the reduced levels of recent quarters. Some members expressed doubt about the expansion in exports projected for the year ahead, which was large enough in real terms to offset the projected rise in imports; thus they viewed the foreign trade sector as a source of weakness in prospects for growth in total real GNP. Concern was also expressed that at some point continuation of a large current-account deficit could have adverse psychological effects in exchange markets, although it was recognized that the deficit could be financed without repercussions—especially if relative interest rates remained favorable and price performance in the United States did not deteriorate. One member suggested that even if interest rate relationships were not especially favorable, capital might still flow in because of improving profits of U.S. enterprises. It was suggested that the performance of prices could be some- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Record of Policy Actions of FOMC 1067 what better than that portrayed by the staff projection. Specifically, it was thought that further improvement in supplies of foodstuffs might result in continued downward pressure on prices, and that worldwide demands for industrial raw materials were unlikely to be strong enough to drive their prices up to any significant degree. It was also noted, however, that the underlying rate of inflation remained high and that the rate of increase in unit labor costs in the private business sector of the economy was unlikely to be reduced in the coming year. One member indicated concern about the structural inflation that appeared to have a life of its own; he referred specifically to the increase in the salary structure for Federal employees that had taken effect in early October, to recent increases in wage rates in the private sector, to pending legislation raising the minimum wage, and to pressures for import quotas. The judgment was expressed that the administration apparently was not being effective in pursuing its anti-inflation policy. Finally in the discussion of the economic situation, it was reported that declines in prices of agricultural commodities had led to declines in prices of farmland in a few States for the first time in many years. It was noted, moreover, that banks were finding it necessary to restructure an increasing number of loans to finance agricultural operations because of the farmers' inability to repay them on time. At this meeting the Committee reviewed its 12-month ranges for growth in the monetary aggregates. At its July meeting the Committee had specified the following ranges for growth over the period from the second quarter of 1977 to the second quarter of 1978: M-l, 4 to 6V2 per cent; M-2, 7 to 9Vi per cent; and M-3, SV2 to 11 per cent. The associated range for growth in commercial bank credit was 7 to 10 per cent. The ranges being considered at this meeting were for the period from the third quarter of 1977 to the third quarter of 1978. In the discussion of the appropriate ranges for growth in the monetary aggregates over the year ahead, it was suggested that the Committee make clear its continuing determination to bring the ranges down gradually to levels compatible with general price stability, while at the same time assuring that growth in the aggregates would be sufficient to facilitate an orderly expansion of economic activity. In such a framework it was further suggested that the Committee indicate that its basic goal was to contribute to the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1068 Federal Reserve Bulletin • December 1977 satisfactory performance of the economy and that it would not sacrifice or compromise that goal in the interest of seeking to attain pre-determined rates of monetary growth. In the discussion, attention was drawn to the behavior of the monetary aggregates and to certain developments in financial markets. Specifically, it was noted that over the year from the third quarter of 1976 to the third quarter of 1977 growth in M-l had exceeded by a sizable margin the upper limit of the range that the Committee had set at its meeting in early November 1976, whereas on other recent occasions when the Committee had reconsidered its longer-run ranges it could look back to periods of a year when growth in M-l had fallen within, or below the lower limit of, its range. Growth in M-2 and M-3 over the year to the third quarter of 1977 also had exceeded the upper limits of the ranges adopted in early November 1976, and growth in all three aggregates over the period had exceeded their longer-run ranges for the first time since the Committee had begun to adopt such ranges. However, it was also noted that, although growth in M-l had been at a faster rate in the first 9 months of 1977 than during 1976, growth in M-2 and M-3 had been slower; and that M-l had begun to grow rapidly only over the two most recent quarters. With respect to financial market developments, it was noted that short-term interest rates in general had risen about 200 basis points since the beginning of the year—with a substantial part of that rise having occurred in the third quarter. However, it was pointed out, long-term rates had not changed much on balance since the beginning of the year, although they had increased somewhat in recent weeks. Also, the decline in stock prices was interpreted as signaling that investors were uneasy about the profitability of corporations and about the performance of the economy. Uncertainty was expressed about the underlying causes of the expansion of the demand for money (narrowly defined) in the second and third quarters and about the implications of that expansion for policy. It was suggested that various changes in financial technology that had been resulting in substitution of income-earning deposits for demand deposits had become less powerful and, consequently, that increasing demands for transactions balances in the latest two quarters had had a greater effect on growth in M-l. One member suggested that the demand for money had also been raised recently Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Record of Policy Actions of FOMC 1069 by increased uncertainty of various kinds—about conditions in the job market, about prices of securities, about foreign exchange rates, and about other elements in the economic situation—and that this had contributed to the apparent decline in the income velocity of M-1 in the third quarter. In his view, however, the decline in velocity more fundamentally reflected the sluggishness of economic expansion in the third quarter, and a pick-up in the pace of expansion once again might be accompanied by a sharp rise in velocity. Because of the uncertainty about the underlying causes of the recent expansion in the demand forM-1 and about the prospects for its velocity, some members indicated that they now had less confidence in the behavior of the monetary aggregates as guides to monetary policy than they might have had earlier. It was felt, moreover, that those uncertainties made it particularly important to emphasize that the Committee's basic goal was to contribute to the satisfactory performance of the economy rather than to pursue pre-determined rates of monetary growth. In commenting on the ranges for growth in the monetary aggregates over the period from the third quarter of 1977 to the third quarter of 1978, most members concurred in the view that the objective of continuing the gradual process of bringing the longerrun ranges for growth in the monetary aggregates down to rates compatible with general price stability would best be served at this time by retaining the existing range of 4 to (ML per cent forM-1 and making some reduction in the ranges for M-2 and M-3. Proposals to achieve the latter included reducing the upper limits of the ranges by Vi of a percentage point, reducing the lower as well as the upper limits by that amount, and reducing both limits by 1 percentage point. In support of the proposal to make some downward adjustment in the ranges for M-2 and M-3, several members observed that the rise in short-term interest rates that had already occurred would tend to reduce flows of funds into time and savings deposits (exclusive of money market CD's), so in the period ahead growth in M-2 and M-3 was likely to slow in relation to growth in M-l. However, it was expected that flows into the thrift accounts would still be substantial and would be consonant with the maintenance of a high rate of residential construction activity. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1070 Federal Reserve Bulletin • December 1977 Several reasons were advanced for retaining the existing range for M-l. It was suggested that any change in that range at this time would imply a degree of knowledge that, in view of the changes that were taking place in the demand for money, was not present. The observation was also made that until it became clear that the recent slowing in economic growth would not proceed further, the Committee should avoid making any change in the range for M-l that might be construed as a measure of tightening. One member expressed the view that if changes in financial technology were in fact having less effect on the demand for money than they had for some time, the existing range for M-l now would represent a somewhat more restrictive policy than it had before. And it was suggested that any reduction in the upper limit of the range for M-l following the excessive rates of growth over the past two quarters might be interpreted as implying an aggressive policy for the short run or as implying policy objectives that were not attainable. Some sentiment was expressed for reducing the upper limit of the range for M-l by Vi of a percentage point. It was suggested that, in view of the magnitude of recent "overshoots" in growth of M-l, such a reduction would underscore the System's determination to work gradually toward a rate of growth consistent with general price stability and thus might have a positive effect on economic activity by tending to encourage business and consumer spending. Two members advocated some widening of the longer-run range for M-l because of uncertainty about changes in the demand for money and, thus, about the income velocity ofM-1; it was noted that at times in the past the Committee had adopted ranges as wide as 3 percentage points. One of these members expressed the view that even if the rise in velocity picked up again in the period ahead, it was unlikely to be as rapid as it had been earlier, and he recommended raising the upper limit of the range for M-l by VI of a percentage point. At the same time, he recommended a reduction of a full percentage point in the lower limit of the range. The other member advocated an increase of VI of a percentage point in the upper limit of the range for M-l and no change in the lower limit; he also advocated a widening of the ranges for M-2 and M-3. At the conclusion of its discussion the Committee decided to retain the existing range for M-1 and to reduce both the upper and lower limits of the ranges for M-2 and M-3 by V2 of a percentage Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Record of Policy Actions of FOMC 1071 point. Thus the new ranges, which applied to the period from the third quarter of 1977 to the third quarter of 1978, were 4 to 6V2 per cent for M-l, 6V2 to 9 per cent for M-2, and 8 to \W2 per cent for M-3. The associated range for growth in commercial bank credit was 7 to 10 per cent. It was agreed that the longer-run ranges, as well as the particular aggregates for which such ranges were specified, would be subject to review and modification at subsequent meetings. It was also understood that short-run factors might cause growth rates from month to month to fall outside the ranges contemplated for the year ahead. The Committee adopted the following ranges for rates of growth in monetary aggregates for the period from the third quarter of 1977 to the third quarter of 1978: M-1,4 to 6V2 per cent; M-2, 6V2 to 9 per cent; and M-3, 8 to 10*i per cent. Votes for this action: Messrs. Burns, Volcker, Coldwell, Gardner, Guffey, Jackson, Lilly, Mayo, Morris, Partee, and Roos. Vote against this action: Mr. Wallich. Mr. Wallich dissented from this action because—believing that abnormal gains in the income velocity of M-l had come to an end, at least temporarily—he preferred to raise the upper limit of the range for M-l to 7 per cent. At the same time, he would have widened the range by reducing the lower limit to 3 per cent. As to policy for the period immediately ahead, members of the Committee were in relatively close agreement with respect to their preferences for ranges of growth for the monetary aggregates over the October-November period. Most of them favored ranges of 3 to 8 per cent and 5V2 to 9Vz per cent for the annual rates of growth in M-l and M-2, respectively. A few members indicated that slightly lower growth ranges would also be acceptable. Somewhat greater differences of view were expressed concerning the Federal funds rate. A number of members favored directing operations initially toward maintaining the current rate of around 6V2 per cent, but some preferred to raise the rate to around 6% per cent and one felt that a prompt move to 6% per cent was needed. Differing views were also indicated with regard to the amount of leeway that should be provided in conducting operations during the inter-meeting period as new information became available on the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1072 Federal Reserve Bulletin • December 1977 performance of the monetary aggregates. The members were agreed that little or no decline in the Federal funds rate should be contemplated under foreseeable circumstances, but views were divided with respect to the upper limit that should be set for the rate; several members recommended a ceiling of 63A per cent while others preferred a ceiling of 7 per cent. Some members in favor of the lower ceiling indicated that they would be prepared to accept a higher rate if the performance of the economy and the monetary aggregates during the inter-meeting period differed significantly from their expectations. A majority of the members were in favor of giving greater weight than usual to money market conditions in conducting open market operations in the period until the next meeting. In that connection some cited the uncertain implications of the growth of the monetary aggregates in recent months. However, a number of members expressed a preference for continuing to have operating decisions in the period ahead based primarily on the behavior of the monetary aggregates; in their view such operations should be adjusted promptly if the aggregates appeared to be deviating significantly from the midpoints of the specified ranges. At the conclusion of the discussion the Committee decided that operations in the period immediately ahead should be directed toward maintaining prevailing money market conditions, as represented by a weekly-average Federal funds rate of about 6V2 per cent. However, the members agreed that if growth in the aggregates should appear to approach or move beyond the limits of their specified ranges, the operational objective for the weekly-average Federal funds rate should be varied in an orderly fashion within a range of 6V4 to 6% per cent. With respect to the annual rates of growth in M-l and M-2 over the October-November period, the Committee specified ranges of 3 to 8 per cent and 5Vz to Wi per cent, respectively. It was also agreed that in assessing the behavior of the aggregates, the Manager should give approximately equal weight to the behavior of M-l and M-2. As customary, it was understood that the Chairman might call upon the Committee to consider the need for supplementary instructions before the next scheduled meeting if significant inconsistencies appeared to be developing among the Committee's various objectives. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Record of Policy Actions of FOMC 1073 The following domestic policy directive was issued to the Federal Reserve Bank of New York: The information reviewed at this meeting suggests that growth in real output of goods and services slowed in the third quarter, mainly because of a reduction in the rate of inventory accumulation. In September industrial production expanded, returning to about the level reached in July, and employment increased substantially. The unemployment rate edged down to 6.9 per cent, but remained near the level prevailing since April. The dollar value of total retail sales declined after having risen appreciably in July and August. The wholesale price index for all commodities, which had declined on balance since May, advanced in September; average prices of farm products and foods changed little following 3 months of sharp decreases, and average prices of industrial commodities rose more than in the immediately preceding months. So far this year the index of average hourly earnings has advanced at about the same pace as it had on the average during 1976. Pressure on the dollar in foreign exchange markets emerged at the end of September, and the dollar has declined against most major foreign currencies and particularly against the Japanese yen. In August the U.S. foreign trade deficit widened; the July-August average was somewhat above the second-quarter rate. M-1 and M-2 expanded somewhat more in September than in August, and increased substantially further in early October. Inflows to banks of time and savings deposits increased little in September from the reduced rate in August, while inflows to nonbank thrift institutions remained strong. Short-term interest rates have risen further in recent weeks, and yields on longer-term market securities have increased. In light of the foregoing developments, it is the policy of the Federal Open Market Committee to foster bank reserve and other financial conditions that will encourage continued economic expansion and help resist inflationary pressures, while contributing to a sustainable pattern of international transactions. Growth of M-l, M-2, and M-3 within ranges of 4 to 6V2 per cent, 6V2 to 9 per cent, and 8 to \0V2 per cent, respectively, from the third quarter of 1977 to the third quarter of 1978 appears to be consistent with these objectives. These ranges are subject to reconsideration at any time as conditions warrant. At this time, the Committee seeks to maintain about the prevailing money market conditions during the period immediately ahead, provided that monetary aggregates appear to be growing at approximately the rates currently expected, which are believed to be on a path reasonably consistent with the longer-run ranges for monetary aggregates cited in the preceding paragraph. Specifically, the Committee seeks to maintain the weekly-average Federal funds rate at about Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1074 Federal Reserve Bulletin • December 1977 6V2 per cent, so long as M-l and M-2 appear to be growing over the October-November period at annual rates within ranges of 3 to 8 per cent and 5V£ to W2 per cent, respectively. If, giving approximately equal weight to M-l and M-2, it appears that growth rates over the 2-month period are approaching or moving beyond the limits of the indicated ranges, the operational objective for the weekly-average Federal funds rate shall be modified in an orderly fashion within a range of 6V4 to 63A per cent. If it appears during the period before the next meeting that the operating constraints specified above are proving to be significantly inconsistent, the Manager is promptly to notify the Chairman who will then decide whether the situation calls for supplementary instructions from the Committee. Votes for this action: Messrs. Burns, Volcker, Cold well, Gardner, Guffey, Jackson, Lilly, Mayo, Partee, Roos, and Wallich. Vote against this action: Mr. Morris. Mr. Morris dissented from this action because he was convinced that the Committee should take more aggressive action to curb excessive growth in the monetary aggregates, which in his opinion would not be conducive to a healthy, long-term expansion in the economy. He also believed that short-term interest rates could rise somewhat further without significantly damaging short-term prospects for economic activity. 2. Authorization for Domestic Open Market Operations Committee members voted to reduce from $3 billion to $2 billion the limit on Federal Reserve Bank holdings of special short-term certificates of indebtedness purchased directly from the Treasury, specified in paragraph 2 of the authorization for domestic open market operations, effective immediately. Votes for this action: Messrs. Burns, Volcker, Coldwell, Gardner, Guffey, Jackson, Lilly, Mayo, Morris, Partee, Roos, and Wallich. Votes against this action: None. This action was taken on the recommendation of Chairman Burns. On September 30, 1977, when the temporary debt ceiling was due to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Record of Policy Actions of FOMC 1075 expire at midnight, Committee members had voted to raise the limit on System holdings of directly purchased certificates of indebtedness from $2 billion to $3 billion, and the Treasury had issued a $2.5 billion certificate to the Federal Reserve Bank of New York. The Treasury had retired the certificate on October 4, following approval of legislation increasing the debt ceiling, and the need for the higher limit had passed. Records of policy actions taken by the Federal Open Market Committee at each meeting, in the form in which they will appear in the Board's Annual Report, are released about a month after the meeting and are subsequently published in the BULLETIN. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1076 Law Department Statutes, regulations, interpretations, and decisions LEGISLATION ENACTED the Federal Open Market Committee determine that they cannot or should not be achieved because of changing AN ACT conditions." To extend the authority for the flexible regulation of BOARD OF DIRECTORS OF FEDERAL RESERVE BANKS interest rates on deposits and accounts in depository SEC. 203. The following paragraphs of section 4 of the institutions, to promote the accountability of the Federal Federal Reserve Act are amended: Reserve System, and for other purposes. (a) the tenth paragraph by inserting after the comma the following: "without discrimination on the basis of race, Be it enacted by the Senate and House of Representa- creed, color, sex, or national origin,". tives of the United States of America in Congress assem- (b) the eleventh paragraph by striking all after "membled, bers," and substituting "who shall represent the public and shall be elected without discrimination on the basis of race, creed, color, sex, or national origin, and with due TITLE I—REGULATION OF INTEREST RATES but not exclusive consideration to the interests of agriculture, commerce, industry, services, labor, and consum- SEC. 101. Section 7 of the Act of September 21, 1966 ers.". (Public Law 89-597), is amended by striking out "Decem- (c) the twelfth paragraph by inserting immediately after ber 15, 1977" and inserting in lieu thereof "December 15, the first sentence thereof the following sentence: "They 1978". shall be elected to represent the public, without discrimination on the basis of race, creed, color, sex, or national origin, and with due but not exclusive consideration to the TITLE II— interests of agriculture, commerce, industry, services, AMENDMENTS TO THE FEDERAL RESERVE ACT labor, and consumers.". SEC. 201. This title may be cited as the "Federal Reserve SENATE CONFIRMATION OF CHAIRMAN AND Reform Act of 1977". VICE CHAIRMAN OF BOARD OF GOVERNORS SEC. 204. (a) The third sentence of the second paragraph CONGRESSIONAL-FEDERAL RESERVE DIALOG ON of section 10 of the Federal Reserve Act (12 U.S.C. 242) is MONETARY POLICY amended to read as follows: "Of the persons thus ap- SEC. 202. Insert a new section 2A immediately after pointed, one shall be designated by the President, by and section 2 of the Federal Reserve Act to read as follows: with the advice and consent of the Senate, to serve as Chairman of the Board for a term of four years, and one "GENERAL POLICY: CONGRESSIONAL REVIEW shall be designated by the President, by and with the consent of the Senate, to serve as Vice Chairman of the "SEC. 2A. The Board of Governors of the Federal Re- Board for a term of four years.". serve System and the Federal Open Market Committee (b) The amendment made by subsection (a) takes effect shall maintain long run growth of the monetary and credit on January 1, 1979, and applies to individuals who are aggregates commensurate with the economy's long run designated by the President on or after such date to serve potential to increase production, so as to promote effec- as Chairman or Vice Chairman of the Board of Governors tively the goals of maximum employment, stable prices, of the Federal Reserve System. and moderate long-term interest rates. The Board of Governors shall consult with Congress at semiannual CONFLICTS OF INTEREST hearings before the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Bank- SEC. 205. (a) Subsection 208(a) of title 18, United States ing, Finance and Urban Affairs of the House of Represen- Code, is amended by adding "a Federal Reserve bank tatives about the Board of Governors' and the Federal director, officer, or employee," immediately before "or Open Market Committee's objectives and plans with of the District of Columbia". respect to the ranges of growth or diminution of monetary (b) Subsection 208(b) of title 18, United States Code, is and credit aggregates for the upcoming twelve months, amended by adding the following new sentence at the end taking account of past and prospective developments in thereof: "In the case of class A and B directors of Federal production, employment, and prices. Nothing in this Act Reserve banks, the Board of Governors of the Federal shall be interpreted to require that such ranges of growth Reserve System shall be the Government official responor diminution be achieved if the Board of Governors and sible for appointment.". Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1077 REFERENCES TO FEDERAL RESERVE ACT PARAGRAPHS notified by the Board disapproves the application in writing within this period, the Board shall forthwith give SEC. 206. References in this title to paragraphs of the written notice of that fact to the applicant. Within three Federal Reserve Act refer to the paragraphs as designated days after giving such notice to the applicant, the Board in the compilation of the Federal Reserve Act as amended shall notify in writing the applicant and the disapproving through 1974, compiled under the direction of the Board authority of the date for commencement of a hearing by it of Governors of the Federal Reserve System in its legal on such application. Any such hearing shall be comdivision. menced not less than ten nor more than thirty days after the Board has given written notice to the applicant of the TITLE III—AMENDMENTS TO action of the disapproving authority. The length of any THE BANK HOLDING COMPANY ACT OF 1956 such hearing shall be determined by the Board, but it shall afford all interested parties a reasonable opportunity to SEC. 301. (a) Section 3(a) of the Bank Holding Company testify at such hearing. At the conclusion thereof, the Act of 1956 (12 U.S.C. 1842(a)) is amended by inserting Board shall, by order, grant or deny the application on the after the second sentence the following new sentence: basis of the record made at such hearing. In the event of "The Board is authorized upon application by a bank to the failure of the Board to act on any application for extend, from time to time for not more than one year at a approval under this section within the ninety-one-day time, the two-year period referred to above for disposing period which begins on the date of submission to the of any shares acquired by a bank in the regular course of Board of the complete record on that application, the securing or collecting a debt previously contracted in good application shall be deemed to have been granted. Notfaith, if, in the Board's judgment, such an extension would withstanding any other provision of this subsection, if the not be detrimental to the public interest, but no such Board finds that it must act immediately on any applicaextension shall in the aggregate exceed three years.". tion for approval under this section in order to prevent the probable failure of a bank or bank holding company (b) Section 2(a)(5)(D) of such Act (12 U.S.C. involved in a proposed acquisition, merger, or consolida- 1841(a)(5)(D)) is amended by adding at the end thereof the tion transaction, the Board may dispense with the notice following new sentence: "The Board is authorized upon requirements of this subsection, and if notice is given, the application by a company to extend, from time to time for Board may request that the views and recommendations not more than one year at a time, the two-year period of the Comptroller of the Currency or the State supervireferred to herein for disposing of any shares acquired by sory authority, as the case may be, be submitted ima company in the regular course of securing or collecting a mediately in any form or by any means acceptable to the debt previously contracted in good faith, if, in the Board's Board. If the Board has found pursuant to this subsection judgment, such an extension would not be detrimental to either that an emergency exists requiring expeditious the pyblic interest, but no such extension shall in the action or that it must act immediately to prevent probable aggregate exceed three years.". failure, the Board may grant or deny any such application (c) Section 4(c)(2) of the Bank Holding Company Act of without a hearing notwithstanding any recommended 1956, as amended (12 U.S.C. 1843(c)(2)), is amended by disapproval by the appropriate supervisory authority.". striking out "shares acquired by a bank in satisfaction of a debt previously contracted in good faith, but such bank shall dispose of such shares within a period of two years" SEC. 303. Section 11(b) of the Bank Holding Company Act and inserting in lieu thereof the following: "shares ac- of 1966 (12 U.S.C. 1849) is amended to read as follows: quired by a bank holding company or any of its sub- "(b) The Board shall immediately notify the Attorney sidiaries in satisfaction of a debt previously contracted in General of any approval by it pursuant to section 3 of a good faith, but such shares shall be disposed of within a proposed acquisition, merger, or consolidation transacperiod of two years". tion. If the Board has found that it must act immediately in order to prevent the probable failure of a bank or bank SEC. 302. Section 3(b) of the Bank Holding Company Act holding company involved in any such transaction, the of 1956 (12 U.S.C. 1842) is amended to read as follows: transaction may be consummated immediately upon ap- "(b) Upon receiving from a company any application proval by the Board. If the Board has advised the Compfor approval under this section, the Board shall give notice troller of the Currency or the State supervisory authorto the Comptroller of the Currency, if the applicant ity, as the case may be, of the existence of an emergency company or any bank the voting shares or assets of which requiring expeditious action and has required the submisare sought to be acquired is a national banking association sion of views and recommendations within ten days, the or a District bank, or to the appropriate supervisory transaction may not be consummated before the fifth authority of the interested State, if the applicant company cMendar day after the date of approval by the Board. In all or any bank the voting shares or assets of which are other cases, the transaction may not be consummated sought to be acquired is a State bank, in order to provide before the thirtieth calendar day after the date of approval for the submission of the views and recommendations of by the Board. Any action brought under the antitrust laws the Comptroller of the Currency or the State supervisory arising out of an acquisition, merger, or consolidation authority, as the case may be. The views and recom- transaction approved under section 3 shall be commenced mendations shall be submitted within thirty calendar days prior to the earliest time under this subsection at which of the date on which notice is given, or within ten calendar the transaction approval under section 3 might be condays of such date if the Board advises the Comptroller of summated. The commencement of such an action shall the Currency or the State supervisory authority that an stay the effectiveness of the Board's approval unless the emergency exists requiring expeditious action. If the court shall otherwise specifically order. In any such thirty-day notice period applies and if the Comptroller of action, the court shall review de novo the issues prethe Currency or the State supervisory authority so sented. In any judicial proceeding attacking any acquisi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1078 Federal Reserve Bulletin • December 1977 tion, merger, or consolidation transaction approved pur- SECTION 217.5— suant to section 3 on the ground that such transaction WITHDRAWAL OF SAVINGS DEPOSITS alone and of itself constituted a violation of any antitrust laws other than section 2 of the Act of July 2, 1890 (section 2 of the Sherman Antitrust Act, 15 U.S.C. 2), the standards applied by the court shall be identical with those that the Board is directed to apply under section 3 of this (b) LOANS ON SECURITY OF SAVINGS DE- Act. Upon the consummation of an acquisition, merger, POSITS. If it is the practice of a member bank to or consolidation transaction approved under section 3 in require notice of withdrawal of a savings deposit, compliance with this Act and after the termination of any antitrust litigation commenced within the period pre- such bank may make loans to a depositor upon the scribed in this section, or upon the termination of such security of such deposit, but the rate of interest on period if no such litigation is commenced therein, the such loans shall not be less than 1 per cent per transaction may not thereafter be attacked in any judicial annum in excess of the rate of interest paid on proceeding on the ground that it alone and of itself such deposit. constituted a violation of any antitrust laws other than section 2 of the Act of July 2, 1890 (section 2 of the Sherman Antitrust Act, 15 U.S.C. 2), but nothing in this Act shall exempt any bank holding company involved in such a transaction from complying with the antitrust laws RULES REGARDING after the consummation of such transaction.". DELEGATION OF AUTHORITY The Board of Governors has delegated to the FOREIGN ACTIVITIES Director of the Division of Supervision and Regula- OF NATIONAL BANKS tion the authority to approve a State member bank's proposed subordinated debt issue as an The Board of Governors has amended its Regulaaddition to the bank's capital. tion M to reduce from four to one per cent the Effective November 16, 1977, paragraph 265.2(c) balances that member banks must maintain as reis amended by adding subparagraph (25) to read as serves against their foreign branch deposits based on follows: the daily average credit outstanding from their foreign branches to United States residents. Effective December 1, 1977, section 213.7(b) of Regulation M is amended by deleting the number SECTION 265.2—SPECIFIC FUNCTIONS "4" that appears immediately before the words DELEGATED TO BOARD EMPLOYEES 4'per cent", and substituting therefor the word AND TO FEDERAL RESERVE BANKS "one." * * * ** INTEREST ON DEPOSITS (c) THE DIRECTOR OF THE DIVISION OF BANKING SUPERVISION AND REGULA- The Board of Governors has approved an TION (or in the Director's absence, the Acting amendment of its Regulation Q concerning loans Director) is authorized: upon the security of a depositor's time and savings * * * ** deposits. (25) To approve a State member bank's proposed Effective November 23, 1977, sections 217.4(f) subordinated debt issue as an addition to the bank's and 217.5(b) are amended as follows: capital structure if all of the following conditions are met: SECTION 217.4—PAYMENT OF (i) The terms of the proposed debt issue satisfy TIME DEPOSITS BEFORE MATURITY the requirements of §§ 204. l(f)(3)(i) and 217.1 (f)(3)(i) of this Part (Regulations D and Q) and the Board's guideline criteria for approval of subor- (f) LOANS UPON SECURITY OF TIME DE- dinated debt as an addition to capital. POSITS. A member bank may make a loan to the (ii) The appropriate Reserve Bank recommends depositor upon the security of his time deposit approval. provided that the rate of interest on such loan (iii) No significant policy issue is raised by the shall not be less than 1 per cent per annum proposed issue as to which the Board has not in excess of the rate of interest on the time deposit. expressed its view. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1079 BANK HOLDING COMPANY AND BANK MERGER ORDERS ISSUED BY THE BOARD OF GOVERNORS ORDERS UNDER SECTION 3 meaningful competition would be eliminated as a result of the proposal. On the basis of the facts of OF BANK HOLDING COMPANY ACT record, the Board concludes that competitive considerations are consistent with approval of the Banco Exterior de Espana, S.A., application. Madrid, Spain The financial and managerial resources and future prospects of Applicant and Bank are con- Order Approving sidered generally satisfactory and consistent with Formation of Bank Holding Company approval of this application. Considerations relating to the convenience and needs of the community to Banco Exterior de Espana, S.A., Madrid, Spain, be served are also consistent with approval. Applihas applied for the Board's approval under section cant plans to expand Bank's services in the area of 3(a)(1) of the Bank Holding Company Act (12 foreign trade financing, and to expand Bank's ser- U.S.C. § 1842(a)(1)) of formation of a bank holding vices to the market's Spanish-speaking community company through acquisition of 98.02 per cent of the by providing customers with an institution at which voting shares of Century National Bank and Trust both Spanish and English will be spoken. It is the Company ("Bank"), New York, New York. These Board's judgment that the proposed acquisition shares are now held by the Federal Deposit Insurwould be in the public interest and that the applicaance Corporation, which conditionally accepted tion should be approved. Applicant's purchase bid at a public sale held July Applicant does not engage directly in any non- 28, 1977. banking activity in the United States, but two Notice of the application, affording opportunity wholly-owned subsidiaries of Applicant engage in for interested persons to submit comments and activities in the United States that are not permissiviews, has been given in accordance with section ble for foreign bank holding companies.3 Under 3(b) of the Act. The time for filing comments and section 4(a)(2) of the Act, Applicant must dispose of views has expired, and the Board has considered its shares of these companies in excess of five the application and all comments received in light of per cent within two years after it becomes a bank the factors set forth in section 3(c) of the Act (12 holding company, and Applicant has committed to U.S.C. § 1842(c)). do so. Applicant, a Spanish bank with total assets of On the basis of the record, the application is approximately $3.3 billion and total deposits of approved for the reasons summarized above. The approximately $2.2 billion, is the eighth largest bank in Spain.1 A majority of its shares are owned transaction shall not be made before the thirtieth calendar day following the effective date of this by the Spanish Government, and Applicant's bank- Order, or later than three months after the effective ing activities are principally directed toward the date of this Order unless such period is extended for promotion of foreign trade. Applicant has 181 good cause by the Board or by the Federal Reserve branches within Spain and has interests in banks Bank of New York pursuant to delegated authority. and financially related companies organized and By order of the Board of Governors, effective operating in several foreign countries. November 2, 1977. Bank is the 79th largest of 123 banking organizations in the Metropolitan New York market,2 and holds deposits of approximately $33 million, or .02 percent of the total deposits in commercial banks in Voting for this action: Chairman Burns and Governors the market. Applicant does not now operate in the Gardner, Wallich, Coldwell, Jackson, Partee, and Lilly. relevant market, and it does not appear that any (Signed) ROBERT E. MATTHEWS, [SEAL] Assistant Secretary of the Board. banking data are as of December 31, 1976. 2The Metropolitan New York market consists of the five boroughs of New York City, plus Nassau, Putnam, Rockland, and Westchester Counties, and western Suffolk County, all in New interchange Commercial Corporation, New York, New York, York State, as well as the northern two-thirds of Bergen County imports a variety of goods produced in Spain, and 46 West 55th and eastern Hudson County in New Jersey, and southwestern Street Corporation, New York, New York, owns and manages the Fairfield County in Connecticut. office building occupied by Interchange Commercial Corporation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1080 Federal Reserve Bulletin • December 1977 Bancorporation of Montana, and Bank are considered satisfactory. In this re- Great Falls, Montana gard, the Board notes that although Applicant's issue of $3.3 million in convertible debentures has Order Approving Acquisition of Bank previously been characterized as debt,2 other facts of record, including the fact that conversion has Bancorporation of Montana, Great Falls, Mon- already begun, cause the Board to conclude that the tana, a bank holding company within the meaning equity characteristics of the debentures are suffiof the Bank Holding Company Act, has applied for ciently favorable to conclude that conversion is the Board's approval under § 3(a)(3) of the Act (12 likely over an extended period. This factor, along U.S.C. § 1842(a)(3)) to acquire 100 per cent (less with the tax benefits resulting from the deductibility directors' qualifying shares) of the voting shares of of interest on the debentures indicates that con- Bank of Montana, Helena, Montana ("Bank"). siderations relating to banking factors are consist- Notice of the application, affording opportunity ent with approval of the application. for interested persons to submit comments and While there is no evidence in the record to views, has been given in accordance with § 3(b) of indicate that the banking needs of the Helena the Act. The time for filing comments and views has community are not being met, Applicant will proexpired, and the Board has considered the applica- vide for Bank and its customers such services as tion and all comments received in light of the unified account statements, trust services, and exfactors set forth in § 3(c) of the Act (12 U.S.C. panded credit card services. Accordingly, con- § 1842(c)). siderations relating to the convenience and needs of Applicant, the third largest banking organization the community to be served lend some weight in Montana, controls thirteen banks with deposits toward approval of the application. It is the Board's of $190 million, representing approximately 5.9 per judgment that the proposed acquisition is in the cent of the total commercial bank deposits in Mon- public interest and that the application should be tana.1 Acquisition of Bank ($12.0 million in de- approved. posits) will increase Applicant's share of deposits On the basis of the record, the application is by only 0.4 per cent and its ranking statewide will approved for the reasons summarized above. The remain unchanged. transaction shall not be made (a) before the thirtieth Bank is the fourth largest in size of six banks in day following the effective date of this Order or (b) the Helena banking market holding 7.2 per cent of later than three months after the effective date of market deposits. The two largest banks in the this Order, unless such period is extended for good relevant market are subsidiary banks of the two cause by the Board, or by the Federal Reserve largest bank holding companies in Minnesota and Bank of Minneapolis pursuant to delegated authorhold, collectively, 75.6 per cent of the total deposits ity. in commercial banks in the market. There are no By order of the Board of Governors, effective subsidiary banks of Applicant presently competing November 29, 1977. in the relevant market, the nearest subsidiary bank being 63 miles from the Helena banking market. Thus, consummation of this proposal would not result in the elimination of a significant amount of existing competition. In view of the relatively small Voting for this action: Vice Chairman Gardner and Governors Wallich, Coldwell, Jackson, and Partee. Premarket share held by Bank as well as its absolute sent and abstaining: Governor Lilly. Absent and not size, consummation would not appear to foreclose voting: Chairman Burns. the development of a significant amount of potential competition. Accordingly, based on the above and other facts of record, the Board has determined that competitive considerations are consistent with ap- (Signed) CRIFFITH L. GARWOOD, proval of the application. [SEAL] Deputy Secretary of the Board. The financial and managerial resources and future prospects of Applicant, its subsidiary banks, 2The Board denied Applicant's original application to acquire Bank, 1977 Federal Reserve BULLETIN 402. The key factor on Unless otherwise indicated, all banking data are as of March which denial was based was an unacceptably high debt to equity 31, 1977, but reflect structural changes through August 31, 1977. ratio. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1081 Capitol Bancorporation, imately 250 firms that provide similar computer Boston, Massachusetts services in the Boston banking market. As of December 31, 1976, Company has total assets of Order Approving Acquisition approximately $36,000 and recently has operated of Certain Assets of Key Entry, Inc. at a loss. It does not appear, based upon the facts of record, that the acquisition of certain assets of Capitol Bancorporation, Boston, Massachusetts, Company by Applicant would have any adverse a bank holding company within the meaning of the effect on competition in any relevant area. Neither Bank Holding Company Act, has applied for the Applicant nor its subsidiary presently engages in Board's approval, under § 4(c)(8) of the Act (12 the same activities as Company. Nor is there any U.S.C. § 1843(c)(8)) and § 225.4(b)(2) of the Board's evidence indicating that the acquisition of certain Regulation Y (12 C.F.R. § 225.4(b)(2)), to acquire assets of Company would lead to an undue concertain assets of Key Entry, Inc., Boston, Mas- centration of resources, unfair competition, conflicts sachusetts ("Company"). Applicant proposes to of interests, unsound banking practices, or other form a new wholly-owned subsidiary to assume the adverse effects. name and other assets of Key Entry, Inc. That new Applicant has committed to inject additional capsubsidiary would engage in the preparation and ital into Company. Therefore, consummation of the maintenance of payroll data, including employee proposed acquisition should enable Company to tax withholding and job cost data, the processing of become a more viable competitor, as well as ensure data concerning accounts receivable and payable, continued service to Company's current customers. as well as processing of rejected MICR encoded Based upon the foregoing and other condebit and credit items for Applicant's subsidiary siderations reflected in the record, the Board has bank.1 Such activities have been determined by the determined that the balance of the public interest Board to be closely related to banking (12 C.F.R. factors the Board is required to consider under § 225.4(a)(8)). § 4(c)(8) is favorable. Accordingly, the application is Notice of the application, affording opportunity hereby approved. This determination is subject to for interested persons to submit comments and the conditions set forth in § 225.4(c) of Regulation Y views on the public interest factors, has been duly and to the Board's authority to require such modifipublished (42 Fed. Reg. 47258 (1977)). The time for cation or termination of the activities of a holding filing comments and views has expired, and the company or any of its subsidiaries as the Board Board has considered the application and all com- finds necessary to assure compliance with the proments received in the light of the public interest visions and purposes of the Act and the Board's factors, set forth in § 4(c)(8) of the Act (12 U.S.C. regulations and orders issued thereunder, or to § 1843(c)(8)). prevent evasion thereof. Applicant is the 21st largest among 79 commer- The transaction shall be made not later than three cial banking organizations in the Boston banking months after the effective date of this Order, unless market2 and controls one bank with total deposits such period is extended for good cause by the of approximately $55.8 million, representing .49 per Board or by the Federal Reserve Bank of Boston. cent of total deposits in commercial banks in that By order of the Board of Governors, effective market.3 Applicant proposes to acquire the name, November 21, 1977. program rights, customer lists and certain contracts of Company, which is one of the smallest of approxapplicant's new subsidiary will not engage in computer processing of demand deposit account, savings account, or install- Voting for this action: Vice Chairman Gardner and ment loan information for Applicant's subsidiary bank in the Governors Wallich, Cold well, and Lilly. Absent and not immediate future, but may apply to expand into such activities voting: Chairman Burns and Governors Jackson and pursuant to section 225.4(b)(1) of Regulation Y. Although Key Partee. Entry, Inc. has previously engaged in general keypunching operations and list maintenance activities, Applicant's new subsidiary would not engage in such activities (other than keypunching activities necessary to perform the data processing activities described in the text) as they are not limited to banking, financial, or economic data. 2The Boston banking market is approximated by the Boston (Signed) GRIFFITH L. GARWOOD, Ranally Metro Area. 3All banking data are as of June 30, 1976. [SEAL] Deputy Secretary of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1082 Federal Reserve Bulletin • December 1977 Chickasha Bancshares, Inc., considerations of the instant proposal are consist- Chickasha, Oklahoma ent with approval of the application. The Board has indicated on previous occasions Order Denying that a holding company should constitute a source Formation of Bank Holding Company of financial and managerial strength to its subsidiary bank(s), and that the Board will closely Chickasha Bancshares, Inc., Chickasha, Ok- examine the condition of an applicant in each case lahoma, has applied for the Board's approval under with this consideration in mind.3 Having examined § 3(a)(1) of the Bank Holding Company Act (12 such factors in light of the record in the application, U.S.C. § 1842(a)(1)) of formation of a bank holding the Board concludes that the record presents adcompany by acquiring 85 per cent of the voting verse considerations as they relate to the applicant shares of Chickasha Bank & Trust Company, bank holding company that warrant denial of the Chickasha, Oklahoma ("Bank"). proposal to place the ownership of Bank into corpo- Notice of the application, affording opportunity rate form. for interested persons to submit comments and Applicant's President, who serves as Chairman views, has been given in accordance with § 3(b) of of the Board of Bank, is also Chairman and the the Act. The time for filing comments and views has principal shareholder of Verden Bank. In addition, a expired, and the Board has considered the applica- director of Applicant and Bank also serves as a tion and all comments received in light of the director and Vice President of Verden Bank.4 Apfactors set forth in § 3(c) of the Act (12 U.S.C. plicant's principals have controlled Verden Bank § 1842(c)). since 1966 and under their direction the operations Applicant, a nonoperating corporation with no and overall position of Verden Bank have declined subsidiaries, was organized for the purpose of be- somewhat in recent years. From the record, it coming a bank holding company through the acqui- appears that these results are due in part to certain sition of Bank ($13.4 million in deposits).1 Upon policies and practices of Applicant's principals. acquisition of Bank, Applicant would control one of Furthermore, the overall operations of Bank, which the smaller banking organizations in the State of began operations in 1973 under the direction of Oklahoma and approximately 0.12 per cent of total Applicant's principals, are such that they do not deposits of commercial banks in the State. support a finding that Applicant's principals have Bank is the third largest of eight banking organi- demonstrated a history of satisfactory managerial zations in the relevant banking market,2 and con- performance that would warrant a favorable finding trols 10.6 per cent of total market deposits. Two of by the Board with respect to Applicant's and the principals of Applicant and Bank are also prin- Bank's managerial resources.5 Inasmuch as no cipals of The Bank of Verden, Verden, Oklahoma ("Verden Bank"), which has deposits of $5.7 million and, with 4.5 per cent of the total market 3The Bank Holding Company Act requires that the Board, in deposits, is the sixth largest bank in the relevant acting on an application to acquire a bank, inquire into the banking market. While Bank and Verden Bank are financial and managerial resources of an applicant. While this each located in the relevant market, it is noted that proposal involves the transfer of the ownership of Bank from individuals to a corporation owned by essentially the same indi- Bank was formed de novo by Applicant's principals viduals, the Act requires that before an organization is permitted in 1973 and their interest in Verden Bank dates back to become a bank holding company and thus obtain the benefits associated with the holding company structure, it must secure the to 1966. It appears that there is no meaningful Board's approval. Section 3(c) of the Act provides that the Board competition between such institutions. Moreover, must, in every case, consider, among other things, the financial inasmuch as the proposed transaction involves the and managerial resources of both the applicant company and the bank to be acquired. The Board's action in this case is based on a transfer of ownership of Bank from individuals to a consideration of such factors. corporation owned by the same individuals, it ap- 4The Board has previously indicated that, in considering an pears that consummation of this proposal would application involving a bank whose principals control another bank, it should look beyond the bank that is the subject of the have no adverse effect upon existing or potential application and analyze the financial and managerial resources of competition, nor would it further an undue concen- the other bank. (See e.g., Board's Order dated January 15, 1974, tration of banking resources in the relevant market. denying the formation of a bank holding company by BHCo, Inc., Hardin, Montana, 60 Federal Reserve BULLETIN 123 (1974).) Accordingly, the Board concludes that competitive 5The Board has previously stated that it believes that it is reasonable to expect an applicant to demonstrate a record of satisfactory managerial performance. (See Board's Order dated *A11 banking data are as of December 31, 1976. November 3, 1977, denying the formation of a bank holding 2The relevant banking market is approximated by Grady company by Republic Bancorporation, Inc., Englewood, Colo- County, Oklahoma. rado.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1083 management changes are contemplated by Appli- and Bank. Such adverse factors are not outweighed cant and consummation of this proposal would by any procompetitive effects or by benefits that perpetuate present management's control of Bank, would result in better serving the convenience and the Board is of the view that the record indicates needs of the community. Accordingly, it is the managerial factors should be regarded as an ad- Board's judgment that approval of the application verse consideration. would not be in the public interest and that the With regard to financial considerations, the application should be denied. Board notes that Applicant would incur a sizable On the basis of the facts of record, the application debt in connection with the proposed acquisition of is denied for the reasons summarized above. Bank's shares. Applicant proposes to service this By order of the Board of Governors, effective debt over a 12-year period through dividends to be November 21, 1977. declared by Bank and tax benefits to be derived from filing consolidated tax returns. The projected Voting for this action: Vice Chairman Gardner and Governors Wallich, Coldwell, and Lilly. Absent and not earnings for Bank contained in the application are voting: Chairman Burns and Governors Jackson and substantially greater than Bank has generally en- Partee. joyed in the past. Applicant has projected average earnings for Bank of 1.09 per cent over the next (Signed) GRIFFITH L. GARWOOD, twelve years, whereas Bank's earnings since its [SEAL] Deputy Secretary of the Board. formation in 1973 have averaged .42 per cent of assets, and its highest earnings were .79 per cent in 1976. In addition, the asset growth projected for Bank is much less than Bank has actually experi- Citizens Bancorp, Inc., enced in recent years. Applicant has projected asset Hartford City, Indiana growth for Bank of 8.4 per cent, whereas Bank assets have grown at an average annual rate of 33.6 Order Denying per cent since 1973. In light of Bank's past perform- Formation of Bank Holding Company ance, it is the Board's view that it is unlikely that Bank's actual earnings will be sufficient to enable Citizens Bancorp, Inc., Hartford City, Indiana, Applicant to service its debt while maintaining has applied for the Board's approval under § 3(a)(1) adequate capital at Bank as well as affording Appliof the Bank Holding Company Act (12 U.S.C. cant the flexibility to meet any unforeseen problems that might arise at Bank.6 In sum, the Board cannot § 1842(a)(1)) of formation of a bank holding company by acquiring 80 per cent or more of the voting conclude at this time that Applicant's overall finanshares of The Citizens State Bank, Hartford City, cial plan is one that would enable it to serve as a Indiana ("Bank"). source of strength to Bank or that would enhance Notice of the application, affording opportunity Bank's prospects. Therefore, the Board concludes for interested persons to submit comments and that considerations relating to financial resources views, has been given in accordance with § 3(b) of and future prospects of bank weigh against apthe Act. The time for filing comments and views has proval of this application. expired, and the Board has considered the applica- No significant changes in Bank's operations or in tion and all comments received in light of the the services offered to customers are anticipated to factors set forth in § 3(c) of the Act (12 U.S.C. follow from consummation of the proposed acquisi- § 1842(c)). tion. Consequently, convenience and needs factors Applicant is a non-operating company organized lend no weight toward approval of this application. for the purpose of becoming a bank holding com- On the basis of the circumstances concerning this pany by acquiring Bank ($27.5 million in deposits).1 application, the Board concludes that the banking Upon acquisition of Bank, Applicant would control considerations involved in this proposal present adthe 165th largest commercial banking organization verse factors bearing upon the financial and manin the State of Indiana and approximately 0.2 per agerial resources and future prospects of Applicant cent of total deposits in commercial banks in the State. 6Applicant has indicated that, if Bank's asset growth exceeded expectations, additional capital could be injected into Bank through subordinated capital notes. However, any such borrowing XA11 banking data are as of December 31, 1976, and reflect bank would further increase the demand on Bank's earnings and would holding company formations and acquisitions approved as of tend to offset any benefits of such capital contribution. September 30, 1977. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1084 Federal Reserve Bulletin • December 1977 Bank is the largest of five commercial banks application should be denied since approval of this located in the Hartford City banking market2 and proposal would serve to perpetuate a significantly controls approximately 36 per cent of the total adverse competitive situation. commercial bank deposits in the market. In analyz- Here a proposed acquisition involves an indiing the competitive effects of this proposal, it is vidual's use of a holding company structure to necessary to consider the fact that Applicant's acquire control of an existing bank that is a direct principal, who owns over 69 per cent of Bank's competitor of another bank under the control of outstanding voting shares, also owns a controlling that same individual. Acquisition of control of Bank stock interest (over 51 per cent) in a second bank, and Dunkirk Bank by Applicant's principal resulted First State Bank of Dunkirk, Dunkirk, Indiana in his control of approximately 50 per cent of ("Dunkirk Bank"), which is also located in the deposits in commercial banks in the relevant mar- Hartford City banking market. Dunkirk Bank, the ket,4 and substantially lessened competition befifth largest bank ($10.5 million in deposits) in the tween the two banks and was anticompetitive in its relevant market, controls approximately 14 per cent inception, a factor that Board and the U.S. Deof deposits in the market. In addition to his stock partment of Justice have regarded as significant and ownership interests, Applicant's principal serves as relevant to a consideration of the competitive aspresident and a director of each of the banks. pects of an acquisition.5 Section 3 (c) of the Bank Holding Company Act The subject proposal presents a situation where precludes the Board from approving any proposed the holding company form is being used to aid, acquisition by a bank holding company that (1) further, and perpetuate an anticompetitive arwould result in a monopoly or be in furtherance of rangement. While denial of this proposal might not any combination to monopolize or attempt to immediately alter the anticompetitive relationship monopolize a banking market, or that (2) may existing between these two banking organizations, substantially lessen competition or tend to create a a denial would strengthen the prospect that Bank monopoly or be in restraint of trade in any banking and Dunkirk Bank would become independent and market (unless the anticompetitive effects are competing organizations in the future.6 On the clearly outweighed by the convenience and needs other hand, approval would solidify and strengthen of the community). These competitive standards, the common ownership of the two banks and would although not identical to the standards in the Sher- eliminate or significantly diminish the likelihood of man and Clayton Antitrust Acts (15U.S.C.§§ 1,2 disaffiliation of the bank and deconcentration of the and 18), are derived from those acts.3 Upon appli- market.7 cation of the competitive standards of § 3(c) of the Act to the facts of record, the Board concludes that 4The Supreme Court condemned a combination resulting in the control of a similar market share in United States v. First National substantial existing competition between Bank and Bank of Lexington, 376 U.S. 665 (1964). There, the Court found Dunkirk Bank was eliminated when Applicant's "an unreasonable restraint of trade in violation of section 1 of the Sherman Act" where a combination of two banks resulted in principal, who had controlled Bank since 1965, control of approximately 52 per cent of deposits in commercial acquired control of Dunkirk Bank in 1973. In light banks in the relevant market. of the structure of the Hartford City banking market 5SQQ First Bancorp, Inc.!The Athens National Bank, 58 Federal Reserve BULLETIN 578 (1972); also the Board's Order in Mahaska and the market shares of the organizations in- Investment Company, Oskaloosa, Iowa (63 Federal Reserve BULvolved, the Board is of the opinion that the current LETIN 579 (1977)), where the Board denied an application for approval of formation of a bank holding company because a prior purchase by applicant's principals had previously eliminated sub- 2The relevant geographic market for purposes of analyzing the stantial competition between two banks. competitive effects of the proposed transaction is approximated 6In enacting the Bank Holding Company Act, Congress intenby Blackford County, the western edge of Jay County, which tionally chose not to regulate ownership and transfer of bank stock includes the town of Dunkirk, and the southeastern portion of by and between individuals. This was based upon recognition of Grant County, which includes the town of Upland. the fact that corporate ownership provides a permanent control Applicant has urged that the relevant market be defined as vehicle whereas ownership by an individual will terminate upon Blackford County, eastern Grant County, western Jay County his death and be transferred to others. See, e.g., S. Rep. No. 1095, (including the town of Portland) and northern Delaware County 84th Congress, 1st Sess. 7 (1955). (including the city of Muncie). The Federal Reserve Bank of 7The effect of a proposed acquisition on the degree of concen- Chicago and Board staff have made a thorough review and tration in a relevant market, including the preservation of the analysis of the definition of the relevant market. As a result of this possibility of deconcentration, is significant. See United States v. review and its analysis of all the facts of record, including Philadelphia National Bank, 374 U.S. 321, 365 n.42. commuting data, consumer trade information and communications Applicant's principal has indicated an intention to dispose of his patterns, the Board has concluded that the appropriate market for holdings in Dunkirk Bank at some future date. However, the analyzing the competitive effects of the subject proposal is approx- proposed termination of his interests in Dunkirk Bank is subject to imated by the tri-county area described herein. various price, time, and market limitations and is viewed as too 3See United States v. Citizens and Southern National Bank, 422 vague and uncertain to overcome the anticompetitive arrangement U.S. 86, 105 (1975). that now exists. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1085 The Board has carefully considered the opinion tive effects. Accordingly, under the standards set of the court in First Lincolnwood Corp. v. Board of forth in the Bank Holding Company Act, the propo- Governors of the Federal Reserve System, 560 F.2d sal may not be approved unless the adverse com- 258 (7th Cir. 1977) and its rationale that, "in order petitive factors are clearly outweighed by other to be grounds for disapproval, the condition or public interest considerations reflected in the rectendency deemed not to be in the public interest ord. In this case, the Board finds the adverse must be caused or enhanced by the proposed trans- competitive aspects are clearly not outweighed. action," and concludes that the First Lincolnwood The financial and managerial resources and fudecision does not preclude Board denial of Appli- ture prospects of Applicant, which are entirely cant's proposed acquisition. First, the First Lin- dependent upon those of Bank, are considered colnwood case relates to aspects other than com- satisfactory and generally consistent with approval petitive factors. An extension of that case to pre- of the subject application. Therefore, conclude denials on anticompetitive grounds is clearly siderations relating to banking factors are consisnot warranted. Both the First Lincolnwood opinion tent with approval. No significant changes in and the Bank Holding Company Act emphasize the Bank's operations or in the services offered to significance of competitive aspects in relation to customers of Bank are expected to follow from bank holding company acquisitions and of the consummation of the proposed acquisition. Con- Board's role in evaluating competitive factors. In sequently, convenience and needs factors are conthe words of the Court, "considerable deference sistent with, but lend no weight toward, approval. must be accorded to a determination by the Board Accordingly, it is the Board's judgment that apthat a particular acquisition will have an anticom- proval of this application would not be in the public petitive tendency proscribed in [12 U.S.C. § 1842 interest and that the application should be denied. (c)(1) or (2)]" 560 F.2d at 260. Secondly, in this On the basis of the facts of record, and in light of case (unlike the situation found by the Court in the factors set forth in § 3(c) of the Act, it is the First Lincolnwood), consummation of the proposed Board's judgment that consummation of the propotransaction would enhance and further an anticom- sal to form a bank holding company would not be in petitive arrangement because the acquisition would the public interest and that the application should diminish or foreclose the possibility of deconcentra- be, and is hereby, denied for the reasons sumtion and increased competition through disaffilia- marized herein. tion of the banks now controlled and majority- By order of the Board of Governors, effective owned by an individual. Moreover, if the First November 18, 1977. Lincolnwood decision were extended to prohibit the Board from denying a bank holding company Voting for this action: Vice Chairman Gardner and formation such as the one under consideration here, Governors Wallich, Cold well, Jackson, Partee, and Lilly. evasion of the Bank Holding Company Act would Absent and not voting: Chairman Burns. be facilitated and encouraged. An approval in the (Signed) GRIFFITH L. GARWOOD, circumstances here would condone an acquisition [SEAL] Deputy Secretary of the Board. of two banks competing in the same market by individuals who would then be free to transfer both banks to a bank holding company. To state it somewhat differently, an applicant bank holding The First Glenrock Corporation, company could, simply be having the acquisition Glenrock, Wyoming made in the first instance by an applicant's principals as individuals, acquire competing banks under Order Approving circumstances that would not normally receive Retention and Acquisition Board approval. To tolerate and encourage such of Stock Interests in Bank maneuverings serves to undermine the basic policy of the Act and the competitive standards provided The First Glenrock Corporation, Glenrock, in § 3(c) of the Act, the application and regulation of Wyoming ("Applicant"), a bank holding company which have been entrusted by Congress to the within the meaning of the Bank Holding Company Board. Act ("Act"), has applied for the Board's approval On the basis of the foregoing and all the facts of under § 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to record, the Board concludes that approval of this retain 48.97 per cent of the voting shares of First application would have significant adverse competi- National Bank of Glenrock, Glenrock, Wyoming Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1086 Federal Reserve Bulletin • December 1977 ("Bank"). Applicant is also applying to acquire an Applicant and Bank are considered generally satisadditional 15.52 per cent of the voting shares of factory. In making its analysis of Applicant's man- Bank. agerial resources, the Board notes that the subject Notice of the application, affording opportunity application includes an after-the-fact request for the for interested persons to submit comments and Board's approval to retain Bank shares acquired in views, has been given in accordance with § 3(b) of violation of the Act. Upon examination of all the the Act. The time for filing comments and views has facts and circumstances surrounding the acquisition expired, and the Board has considered the applica- of Bank's shares without prior Board approval, it tion and all comments received, in light of the appears that denial of the application is not warfactors set forth in § 3(c) of the Act (12 U.S.C. ranted. In acting upon the application, the Board § 1842(c)). has taken into consideration the fact that Applicant Applicant is a one-bank holding company by has taken steps to conform its operations to the Act virtue of its ownership since June 1968 of 38.8 per by promptly filing the subject application. In addicent of the outstanding voting shares of Bank.1 tion, Applicant's management has taken steps to During the period June 1974 through March 1975, insure that violations will not occur in the future, Applicant's principal and sole shareholder ac- including the initiation of an affirmative program quired, as agent for Applicant, 3,899 voting shares under the direction of an individual responsible for of Bank. In June 1976, Applicant's principal ac- ensuring that Applicant's management is aware of quired an additional 1,978 voting shares of Bank its responsibilities under the Bank Holding Compursuant to a capital stock increase, again acting in pany Act.4 The Board expects that these actions the capacity of agent for Applicant. With respect to will assist Applicant in avoiding any future violathese stock acquisitions, Applicant assumed liabil- tions. Upon consideration of the above and other ity for the associated acquisition debt and its books information in the record evidencing Applicant's reflected Applicant as having acquired the stock. intent to comply with the requirements of the Act, These acquisitions were made without the Board's and all the circumstances surrounding the subject prior approval. Applicant now seeks the Board's stock acquisitions made without the required prior approval to retain these shares, which comprise approval of the Board, the Board has determined 48.97 per cent of the voting shares of Bank, and to that the circumstances of the above violations do acquire an additional 15,52 per cent of the voting not warrant denial of the application. With respect shares of Bank presently held by Applicant's princi- to its other operations and the operations of Bank, pal and members of his immediate family. Applicant's managerial resources are regarded as Bank ($6.2 million in deposits) controls 0.3 per generally satisfactory. Accordingly, considerations cent of the total commercial bank deposits in relating to banking factors are consistent with ap- Wyoming and is the 65th largest of 78 commercial proval. banks in the State.2 Bank is the smallest of eight Although there are no immediate changes conbanking organizations located in the relevant bank- templated in the services or facilities of Bank as a ing market,3 controlling 1.4 per cent of market result of the retention and acquisition of additional deposits. Since Applicant already controls Bank voting shares, considerations relating to the conand since the proposal involves the retention of venience and needs of the community to be served shares already acquired by Applicant and the ac- are consistent with approval of the application. quisition of shares currently held by Applicant's Therefore, it is the Board's judgment that the principal and members of his immediate family, it proposed transaction is consistent with the public does not appear that Applicant's retention and interest and that the application should be apacquisition of Bank's shares would have any ad- proved. verse effect on existing competition, or increase the On the basis of the record, the application is concentration of banking resources. Thus, competi- approved for the reasons summarized above. The tive considerations are consistent with approval of transaction shall not be made (a) before the thirtieth the application. calendar day following the effective date of this The financial resources and future prospects of Order or (b) later than three months after the effective date of this Order, unless such period is xBy virtue of a capital stock increase in June 1976, Applicant's 38.8 per cent ownership interest in Bank was reduced to 32.3 per cent. 2A11 banking data are as of December 31, 1976. 4Applicant's management also proposes to make adjusting en- 3The relevant banking market is approximated by Converse and tries upon its books and financial records of the transactions Natrona Counties, Wyoming. resulting in the violations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1087 extended for good cause by the Board or the Acquisition of Bank would increase Applicant's Federal Reserve Bank of Kansas City. share of commercial bank deposits in the State only By order of the Board of Governors, effective slightly and would not have a significant effect upon November 28, 1977. the concentration of banking resources in Massachusetts. Voting for this action: Vice Chairman Gardner and Bank, the seventy-fifth largest bank in the State, Governors Wallich, Cold well, Jackson, Partee, and Lilly. controls total deposits of $25.4 million representing Absent and not voting: Chairman Burns. 2.6 per cent of the total deposits in commercial (Signed) GRIFFITH L. GARWOOD, banking institutions in the relevant market,3 and is [SEAL] Deputy Secretary of the Board. the fifth largest of eight commercial banks in the Worcester banking market. Three of Bank's five offices are located in the Worcester banking market and two are located on the western edges of the Boston and Providence banking markets, respectively. The closest office of Bank to a subsidiary of Applicant is 17 miles away. Applicant has no offices First National Boston Corporation, located in the Worcester banking market. Boston, Massachusetts In its earlier Order denying Applicant's proposal to acquire Bank,4 the Board concluded that com- Order Approving Acquisition of Bank petitive considerations lent some weight toward First National Boston Corporation, Boston, denial of the application. In arriving at that conclu- Massachusetts, a bank holding company within the sion, the Board noted in particular that Applicant's meaning of the Bank Holding Company Act, has lead bank derived some business from the Worcesapplied for the Board's approval under § 3(a)(3) of ter market and that Applicant was a likely entrant the Act (12 U.S.C. § 1842(a)(3)) to acquire all of the into that market. In connection with this proposal, voting shares of the successor by merger to the competitive facts of which remain essentially Blackstone Valley National Bank, Northbridge, the same, it is the Board's view that such con- Massachusetts ("Bank"). The bank into which siderations, when viewed in light of the facts in the Bank is to be merged has no significance except as record, discussed more fully below, are not so a means to facilitate the acquisition of the voting serious as to warrant denial of this application. shares of Bank. Accordingly, the proposed acquisi- In the context of this proposal, the Board regards tion of shares of the successor organization is the financial and managerial resources of Applicant treated herein as the proposed acquisition of the and its subsidiaries as generally satisfactory and shares of Bank.1 their future prospects as favorable. In its Order Notice of the application, affording opportunity denying the earlier proposal of Applicant to acquire for interested persons to submit comments and Bank, the Board expressed the view that Applicant views, has been given in accordance with § 3(b) of should direct its financial and managerial resources the Act. The time for filing comments and views has toward its existing structure.5 That proposal conexpired, and the Board has considered the applica- templated a cash purchase of Bank's shares, tion and all comments received in light of the whereas the instant application contemplates an factors set forth in § 3(c) of the Act (12 U.S.C. § exchange of Applicant's shares for those of Bank. 1842(c)). Applicant's financial resources have improved Applicant, the largest commercial banking or- somewhat since that application was denied and ganization in Massachusetts, controls five banks future prospects appear favorable. The financial with aggregate domestic deposits of approximately and managerial resources and future prospects of $3 billion,2 representing 21.2 per cent of the total Bank, absent consummation of the proposed acdomestic deposits in commercial banks in the State. 3The relevant banking market is approximated by the Worcester applicant first filed an application with the Board for permis- Ranally Metro Area, which is comprised of the city of Worcester sion to acquire Bank in July, 1974, but later withdrew that and 26 towns in Worcester County. application. Applicant subsequently resubmitted an application to 4See the Board's Order of March 18, 1976 denying the applicaacquire Bank and that proposal was denied by the Board in March, tion of First National Boston Corporation to acquire Blackstone 1976. Applicant modified that proposal and resubmitted the instant Valley National Bank, Northbridge, Massachusetts. 62 Federal application, which was accepted by the Board on August 12, 1977. Reserve BULLETIN 372 (1976). 2A11 banking data are as of December 31, 1976. 5Ibid. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1088 Federal Reserve Bulletin • December 1977 quisition, are not now entirely satisfactory but can By order of the Board of Governors, effective be expected to improve as a result of Bank's affilia- November 10, 1977. tion with Applicant. Applicant has committed that upon consummation of the acquisition, it would Voting for this action: Vice Chairman Gardner and Governors Wallich, Cold well, Jackson, Partee, and Lilly. make a contribution of $1 million to increase Absent and not voting: Chairman Burns. Bafik's equity capital and would provide Bank with managerial assistance.6 Accordingly, the financial (Signed) GRIFFITH L. GARWOOD, and managerial factors, as they relate to the effect [SEAL] Deputy Secretary of the Board. of this proposal upon Bank, lend some weight toward approval of the application.7 Affiliation with Applicant would also enable Bank to offer new and expanded services to Bank's Hawkeye Bancorporation, customers. Applicant has stated that following con- Des Moines, Iowa summation of the proposed acquisition, Bank would make available to its customers services Order Approving Acquisition of Bank such as long-term certificates of deposit, Saturday banking, overdraft checking, Individual Retirement Hawkeye Bancorporation, Des Moines, Iowa, a Accounts, investment management services, per- bank holding company within the meaning of the sonal financial planning, and personal trust ser- Bank Holding Company Act, has applied for the vices. Applicant has also proposed to expand auto Board's approval under § 3(a)(3) of the Act (12 loan and Master Charge services at Bank. Enabling U.S.C. § 1842(a)(3)) to acquire indirectly 98.3 per Bank's customers to obtain additional and ex- cent of the voting shares of Morningside State panded services through Bank should result in Bank, Sioux City, Iowa ("Bank"), through the Bank becoming a more attractive banking alterna- acquisition of 60 per cent or more of the voting tive and a stronger competitor in the relevant shares of Morningside Development Company, banking market. In view of the foregoing and other Sioux City, Iowa ("Development"). facts of record, considerations relating to the con- Notice of the application, affording opportunity venience and needs of the community to be served for interested persons to submit comments and lend some weight toward approval of the applica- views, has been given in accordance with § 3(b) of tion and, considered together with the beneficial the Act. The time for filing comments and views has effects on financial and managerial factors dis- expired, and the Board has considered the applicacussed above, outweigh any adverse competitive tion and all comments received, including those effects that might result from consummation of the submitted by the Iowa Department of Banking, in proposal. Accordingly, it is the Board's judgment light of the factors set forth in § 3(c) of the Act (12 that approval of the application would be in the U.S.C. § 1842(c)). public interest and that the application should be Applicant, the third largest banking organization approved. in Iowa, controls 16 banks with aggregate deposits On the basis of the record, the application is of approximately $538 million, representing 4.1 per approved for the reasons summarized above. The cent of total deposits in commercial banks in Iowa.1 transaction shall not be made (a) before the thirtieth Acquisition of Bank, with deposits of $14.6 million, calendar day following the effective date of this would increase Applicant's share of commercial Order or (b) later than three months after the bank deposits in Iowa by only one-tenth of 1 per effective date of this Order, unless such period is cent and would not have an appreciable effect upon extended for good cause by the Board, or by the the concentration of banking resources in the State. Federal Reserve Bank of Boston pursuant to dele- Bank is the sixth largest of 10 commercial bankgated authority. ing organizations in the relevant banking market2 and controls 2.5 per cent of deposits in commercial 6Applicant has indicated that at least one senior banking officer banks in the market. None of Applicant's subof Applicant's lead bank, First National Bank of Boston, Boston, sidiary banks competes in the relevant banking Massachusetts, would join the board of directors and the execumarket, and Applicant's nearest subsidiary bank is tive committee of Bank following consummation of the proposal. 7The Board will continue to observe closely the effects of Applicant's expansion program upon Applicant's managerial and financial resources. Since year-end 1972, Applicant has acquired xUnless otherwise indicated, banking data are as of December four banking subsidiaries and has twice refiled an application to 31, 1976. acquire Bank. In addition, Applicant has expanded its nonbanking 2The relevant banking market is approximated by the Sioux activities on a broad front, both in the United States and abroad. City, Iowa, RMA. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1089 located 75 miles from Bank. While Applicant The Board has previously stated that bank holdcould establish a de novo bank in the relevant bank- ing companies should not enter into relationships, ing market, the Board regards Applicant's proposed such as the transaction described above, that exacquisition of Bank as a foothold entry into that ceed the scope of § 225.4(a)(12) of Regulation Y, market. Accordingly, consummation of the pro- particularly where the bank holding company conposal would not eliminate any existing competition templates acquisition of the client bank.4 However, or foreclose the development of significant potential the Board has scrutinized the circumstances of competition, nor would it increase the concentra- Applicant's involvement with Bank, including the tion of banking resources in the relevant banking financial and managerial resources of Bank, the fact market. Therefore, the Board concludes that the that Applicant acted after consulting with the Fedproposed acquisition of Bank by Applicant would eral Reserve Bank of Chicago, and the fact that not have any significantly adverse effects on com- Applicant voluntarily terminated the consulting petition. agreement when advised of the violation, and has The financial and managerial resources of Appli- concluded that the facts surrounding Applicant's cant and its subsidiaries are regarded as satisfac- involvement with Bank do not in and of themselves tory. As a result of consummation of this proposal, warrant denial of the subject application. Accord- Bank's financial and managerial resources and fu- ingly, the Board has proceeded to consider the ture prospects should be improved significantly. subject application on its merits and, on that basis, Accordingly, considerations relating to banking fac- concludes that approval of the proposal would be in tors lend some weight toward approval of the the public interest and that the application should application. While no immediate changes in Bank's be approved. services are contemplated, the proposal would en- On the basis of the record, the application is hance Bank's overall ability to serve its customers approved for the reasons summarized above. The and the community. In addition, the availability of transaction shall not be made (a) before the thirtieth Applicant's resources to Bank will increase Bank's calendar day following the effective date of this internal efficiency, thereby increasing the quality of Order or (b) later than three months after the its services to its customers. Therefore, con- effective date of this Order, unless such period is siderations relating to convenience and needs of the extended for good cause by the Board or by the community to be served are consistent with, and Federal Reserve Bank of Chicago pursuant to delelend weight toward, approval of the application. gated authority. In the course of its consideration of the subject By order of the Board of Governors, effective application, the Board has also noted the existence November 9, 1977. of a management agreement between Applicant and Bank pursuant to which Applicant furnished to Bank the services of an experienced bank manager, an employee of Applicant who was the president of one of its subsidiary banks, to assume the duties of chairman and chief executive officer of Bank. Voting for this action: Vice Chairman Gardner and While providing management consulting services to Governors Wallich, Cold well, Jackson, Partee, and Lilly. Absent and not voting: Chairman Burns. unaffiliated banks has been determined by the Board to be closely related to banking and a per- (Signed) GRIFFITH L. GARWOOD, missible activity for bank holding companies under [SEAL] Deputy Secretary of the Board. § 4(c)(8) of the Act and § 225.4(a)(12) of the Board's Regulation Y, Applicant has not obtained the Board's approval to engage in that activity. Even if Applicant had obtained the Board's approval to consulting] bank holding companies are not authorized to perform provide management consulting services to unaf- tasks or operations or provide services to client banks either on a filiated banks, it appears that Applicant may have daily or continuing basis, except as shall be necessary to instruct the client bank on how to perform such services for itself." been providing Bank with services on a daily or (Emphasis added) continuing basis contrary to the proscription con- 4In the Board's view an application involving a violation such as tained in Regulation Y.3 that described above may reflect so adversely on management as to warrant denial of the application. See Order dated July 28,1976, approving application of Indian Head Banks, Inc., Nashua, New Hampshire, to acquire Community National Bank of Rochester, 3Footnote 9 to § 225.4(a)(12) of Regulation Y provides in Rochester, New Hampshire (62 Federal Reserve BULLETIN 699 pertinent part: "In performing this activity [bank management (1976)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1090 Federal Reserve Bulletin • December 1977 The Marine Corporation, ket.3 Although the acquisition would result in the Milwaukee, Wisconsin elimination of some existing competition within the Milwaukee banking market, the overall effect on Order Approving Acquisition of Bank competition would not be sufficiently adverse to warrant denial. Among the factors limiting the The Marine Corporation, Milwaukee, Wisconsin, slightly adverse effect on existing competition are a bank holding company within the meaning of the Bank's relatively small size and the presence of Bank Holding Company Act, has applied for the numerous alternative banking organizations in the Board's approval under § 3(a)(3) of the Act (12 market. Accordingly, based on the above and other U.S.C. § 1842 (a)(3)) to acquire 98.5 per cent or facts of record, the Board concludes that the promore of the shares of the American Kettle Moraine posed acquisition of Bank by Applicant would not Bank, Delafield, Wisconsin. have significant adverse effects on competition. Notice of the application, affording opportunity The financial and managerial resources and fufor interested persons to submit comments and ture prospects of Applicant and its subsidiary banks views, has been given in accordance with § 3(b) of are regarded as generally satisfactory and consisthe Act. The time for filing comments and views has tent with approval, as are those of Bank in light of expired, and the Board has considered the applica- Applicant's proposal and intention to inject a tion and all the comments received including those minimum of $350,000 of additional capital into Bank of the Wisconsin Commissioner of Banking, Hart- upon approval of the application. Therefore, conland National Bank, Hartland, Wisconsin, Dous- siderations relating to banking factors are consisman State Bank, Dousman, Wisconsin and tent with approval of the application. Affiliation Waukesha State Bank, Waukesha, Wisconsin, in with Applicant will allow Bank to use Applicant's light of the factor set forth in § 3(c) of the Act (12 financial and managerial resources to strengthen and U.S.C. § 1842(c)). expand the services provided by Bank, including Applicant controls sixteen banks with total de- expansion of Bank's consumer instalment lending, posits of $1.06 billion, representing approximately commercial lending, and real estate financing. Ac- 6.4 per cent of the total deposits in commercial cordingly, considerations relating to the convebanks in Wisconsin,1 and thereby ranks as the third nience and needs of the community to be served are largest commercial banking organization in the consistent with, and lend weight toward approval. State. Acquisition of Bank ($23.6 million in de- The Board has received comments in opposition posits) would increase Applicant's share of deposits to the subject application relating to the competitive statewide by 0.1 per cent and thus would have no effects of the subject proposal from Hartland Naappreciable effect upon the concentration of bank- tional Bank, Hartland, Wisconsin, Dousman State ing resources in Wisconsin. Bank, Dousman, Wisconsin, and Waukesha State Applicant is the third largest commercial banking Bank, Waukesha, Wisconsin ("Protestants").4 Proorganization in the Milwaukee banking market.2 Its testants assert that, should the application be apnine subsidiary banks located in the market hold proved, it will result in the concentration of banking total deposits of $740.1 million, representing 13.5 resources within the Milwaukee market, eventually per cent of total deposits in commercial banks in the resulting in "oligopolistic or monopolistic pracmarket. Bank is the 31st largest of 58 commercial tices." Protestants contend that the purchase of banking organizations in the Milwaukee banking Bank by Applicant will have a significant antimarket, controlling only 0.4 per cent of total market competitive effect and suggest that competition deposits. Consummation of the proposal would would be promoted if the five offices of Bank were have little effect on overall market concentration sold to independent bankers. Protestants base their and would only increase Applicant's market share argument for denial of the subject application upon from 13.5 to 13.9 per cent. Applicant would remain Applicant's size; alleged service area overlap bethe third largest banking organization in the mar- 3The four largest banking organizations in the market currently control 66.2 per cent of market deposits. Consummation of this *A11 banking data are as of .December 31, 1976. proposal would increase that combined share to 66.6 per cent. 2The relevant market in which to assess the competitive ef- 4Hartland National Bank (deposits of $6.8 million) controls fects of the proposal is the Milwaukee banking market, approx- 0.12 per cent of commercial bank deposits in the Milwaukee imated by the Milwaukee Ranally Metro Area ("RMA"). The banking market; Dousman State Bank (deposits of $4.6 million) Milwaukee RMA is comprised of all of Milwaukee County and controls 0.08 per cent of commercial bank deposits in the market; portions of Waukesha, Jefferson, Washington, Walworth, Racine, and Waukesha State Bank (deposits of $62.4 million) controls and Ozaukee Counties. 1.14 per cent of commercial bank deposits in the market. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1091 tween Bank and Applicant's subsidiaries, Marine its assertions. Indeed, the record indicates that National Bank of Waukesha, Waukesha, Wisconsin there was a highly competitive bidding process, and Waukesha County Marine Bank, Pewaukee, resulting in the acceptance of the highest bid, which Wisconsin; recent acquisitions in Protestants' trade was submitted by Applicant. area by bank holding companies; and the asserted Upon consideration of the comments of the Proadverse impact of the proposal upon the concentra- testants and the responses of the Applicant thereto, tion of banking resources within the relevant mar- the Board finds that there is some merit in Protesket. Two of the three Protestants also assert that the tants' view that consummation of the proposal may bidding on Bank was conducted so as not to afford result in some anti-competitive effects; however, as other potential bidders fair opportunity to bid and discussed above, in view of Bank's relatively small that such assertedly unfair bidding procedures size, and the presence of alternative banking orarose out of the role of Marine National Exchange ganizations, both independent and bank holding Bank of Milwaukee, Milwaukee, Wisconsin company-owned, such anti-competitive effects ("Marine Bank"), as an owner of the shares of would be only slight. It is the Board's judgment that Bank subsequent to a foreclosure proceeding. Fi- these anti-competitive effects are not significant nally, Protestants contend that Applicant's winning and are clearly outweighed in the public interest by bid for Bank's shares was higher than merited and considerations relating to the convenience and represents a purchase of "monopoly power" in the needs of the community to be served. Therefore , on relevant banking market. the basis of the record, the application is approved Applicant has responded to the Protestants' for the reasons summarized above. The transaction views by asserting there is little existing competi- shall not be made (a) before the thirtieth calendar tion between Bank and Applicant's subsidiaries. day following the effective date of this Order or (b) Applicant notes that the Milwaukee market is un- later than three months after the effective date of dergoing rapid growth and that within the last seven this Order, unless such period is extended for good years at least three de novo independent banks have cause by the Board, or by the Federal Reserve been formed in the immediate Waukesha County Bank of Chicago pursuant to delegated authority.5 area surrounding Bank. Applicant states that the By order of the Board of Governors, effective competitive effects of acquiring Bank, which was November 2, 1977. formerly owned by a bank holding company for seven years, will not be significantly anticompetitive and in support of this assertion notes Voting for this action: Vice Chairman Gardner and that there are other bank holding companies and Governors Wallich, Jackson, Partee, and Lilly. Voting against this action: Governor Coldwell. Absent and not many independent banks in the area of sufficient voting: Chairman Burns. size to compete successfully with Applicant. Applicant asserts that bidding for the Bank was (Signed) ROBERT E. MATTHEWS, fair and that the amount paid for shares was a direct [SEAL] Assistant Secretary of the Board. result of the highly competitive atmosphere of the bidding. Marine Bank and the Aid Association for Lutherans, Appleton, Wisconsin ("AAL"), a fraternal life insurance society unaffiliated with Appli- Dissenting Statement of Governor Coldwell cant, currently hold the shares of Bank formerly owned by American Bankshares Corporation, Mil- As noted in the majority's opinion, the instant waukee, Wisconsin ("ABC"), a now-defunct bank proposal involves the acquisition of a bank in the holding company. The shares were acquired on Milwaukee banking market by the third largest December 11, 1975 by Marine Bank and AAL as the banking organization in the market, The Marine result of foreclosure on a loan to ABC from AAL in Corporation. Where a banking organization is alwhich Marine Bank had been a 30 per cent partici- ready represented in the market, a horizontal acpant and for which the shares of Bank served as quisition such as the one proposed here results in collateral. Applicant asserts that since AAL owns some elimination of existing competition. approximately 70 per cent of the shares of Bank, it (Applicant) was not in a position to influence the outcome of the bidding. Applicant has submitted a 5In any event, it appears that Marine Bank, under § 3(a) of the complete record of the bidding process, in connec- Act, must divest its interest in the shares of Bank no later than tion with the application, which appears to support December 11, 1977. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1092 Federal Reserve Bulletin • December 1977 In view of the absolute size of The Marine During the processing of the application, MNC Corporation and its position in the market, it is my transmitted to the Board copies of the pleadings and opinion that the effects of the proposal on existing supporting materials filed in the case of Kelley v. competition are adverse. The Bank Holding Com- Michigan National Corporation (E.D. Mich., Civil pany Act requires the Board to deny the proposed Action No. 77-1240, filed May 19, 1977), which horizontal acquisition unless its anticompetitive ef- raised a question relevant to the MNC proposal fects are outweighed by other factors in the record. pending before the Board. In that action, the Com- It appears to me that the other factors are not suffi- missioner of the Financial Institutions Bureau cient to outweigh the anticompetitive effects pre- ("Commissioner") and the Attorney General of the sent in this proposal. Therefore, I would deny this State of Michigan contend that all of MNC's subapplication. sidiary banks, by virtue of the establishment and operation of an "accommodation transaction services" ("ATS") program and their operation in a "unitary" fashion, constitute branches of one another in violation of the provisions of the Na- Michigan National Corporation, tional Bank Act (12 U.S.C. § 36(c)).2 Under the Bloomfield Hills, Michigan ATS program, a customer of an MNC subsidiary bank may effect a deposit to, or withdrawal from, Order for Oral Presentation the customer's checking or savings account, or may make a payment to the customer's bank on an Michigan National Corporation, Bloomfield instalment loan or mortgage, at any office of Hills, Michigan ("MNC"), a bank holding company another MNC subsidiary bank.3 Neither the Comwithin the meaning of the Bank Holding Company missioner, the Attorney General, nor any compet- Act ("the Act") and the parent holding company ing bank had previously complained of the program for some 15 national banks located in the State of to the Board.4 Michigan,1 has applied to the Board of Governors By letter dated July 14, 1977, the Board's staff of the Federal Reserve System ("Board") for apinformed the Commissioner, the Attorney General, proval under § 3(a)(3) of the Act (12 U.S.C. MNC and the Comptroller that, on the basis of the § 1842(a)(3)) to acquire all of the voting shares (less United States Supreme Court's decision in Whitney directors' qualifying shares) of Michigan National National Bank in Jefferson Parish v. Bank of New Bank-Sterling, Sterling Heights, Michigan Orleans & Trust Company, 379 U.S. 411 (1965), the ("Bank"), a proposed new bank. Board would consider the branch banking issue On March 24, 1977, notice of the application was raised by the ATS program in connection with given to the Comptroller of the Currency ("Comp- MNC's pending application to acquire Bank. Board troller"), as required by § 3(b) of the Act, and to staff invited the Attorney General, the Commisthe Commissioner of the Financial Institutions sioner, MNC and the Comptroller to submit com- Bureau of the State of Michigan, the Federal Dements, evidence or argument regarding the branch posit Insurance Corporation and the U.S. Departbanking issue. MNC was also requested to supply ment of Justice. Notice of the application also was certain detailed information on the program. On published in the Federal Register on April 8, 1977, August 5, 1977, MNC supplied the Board with to afford opportunity for interested persons to factual details on the ATS program and a legal brief submit comments and views (42 Fed. Reg. 19152 on the branch banking issue. (1977)). The time for comment expired without any protest or adverse comment being filed against the 212 U.S.C. § 36(c) authorizes national bnaks to "establish and application. operate" branches generally to the extent allowed State-chartered banks under State law. 3On July 15, 1977, the U.S. District Court for the Eastern District *By Order dated August 3, 1972, the Board approved the of Michigan issued a preliminary injunction enjoining MNC and its formation of MNC as a multi-bank holding company through the subsidiary banks from expanding the ATS program either geoacquisition of the voting shares of each of five operating banks graphically or functionally and from advertising or publicizing the located in Michigan, including Michigan National Bank, Lansing, availability of such services at MNC's subsidiary banks. MNC has Michigan, and Michigan Bank, N.A., Detroit, Michigan (58 Fed- informed the Board that the ATS program will be instituted at eral Reserve BULLETIN 804 (1972)). The formation of MNC Bank, at the option of Bank's management, if and when legally represented essentially a corporate reorganization inasmuch as the permissible. five banks had been affiliated for several years through common 4The record indicates that the ATS program has been in effect at ownership by ten families and by profit sharing trusts established MNC subsidiary banks since 1972 and that the Comptroller's at each of the five banks. The reorganization was made possible by office has been aware of the program at least since 1973. However, the repeal in 1971 of a Michigan law that had prevented corporate the program was not brought to the Board's attention prior to the ownership and control of a Michigan bank. instant proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1093 In early August the Board received comments names of MNC's subsidiary banks, common adverwith respect to the branch banking issue from tising, interlocking officers and directors, cencertain protestants, namely, the Michigan Associa- tralized marketing, data processing, purchasing and tion of Community Bankers ("MACB"), the Inde- trust operations, common banking forms, logogram pendent Bankers Association of America and stationery, correspondent relationships, loan ("IBAA"), the Central State Bank of Beulah, participation policies, an alleged public perception Michigan ("Central"), and the Peoples State Bank of there being only one 'Michigan National Bank" of Williamston, Michigan ("Peoples").5 On Sep- operating throughout the State, and MNC's altember 16, 1977, the Commissioner and the Attor- legedly pervasive and uniform control of its subney General submitted written comments on the sidiary banks. branch banking issue. The State and the other MNC contends that the operation of the ATS protestants6 requested that the Board disapprove program among MNC subsidiary banks does not MNC's proposed acquisition of Bank and that the constitute branch banking but is merely an exten- Board require MNC to discontinue the ATS pro- sion of traditional correspondent banking services gram. MNC has been furnished copies of all mate- and relationships8 and is the functional equivalent rials submitted to the Board and, in accordance of such banking services as wire transfers of funds with established Board policy, has been afforded available to large commercial customers, automated the opportunity to respond to all such submissions. clearing house operations and direct deposit payroll MNC has responded at length to the submissions of services. MNC further contends that, since no all protestants. MNC subsidiary bank is established or operated by The State and the other protestants contend that any other MNC subsidiary bank, no MNC subthe establishment and operation of the ATS pro- sidiary bank may be viewed as a branch of any gram by MNC's subsidiary banks in and of itself other subsidiary bank under the National Bank Act. constitute a violation of the National Bank Act (12 MNC maintains that it is a "traditionally recog- U.S.C. § 36(c)). The rationale of their position is nized" bank holding company; that each of its that, since under the ATS program each MNC subsidiary banks has a valid and separate corporate subsidiary bank provides banking services of the existence; that each was so licensed by the Comptype described in the Federal definition of troller and is so operated; and that the relation- "branch" (12 U.S.C. § 36(f))7 to customers of other ships among MNC's subsidiary banks are those MNC subsidiary banks, every MNC subsidiary inherent and usual in a bank holding company bank is a "branch" of each of the other MNC system and authorized under the Bank Holding banks. The State and the protestants additionally Company Act. MNC claims that the separate corcontend that MNC's subsidiary banks operate in a porate existence of an MNC subsidiary bank may "unitary fashion" as de facto branches of one not be disregarded or its "corporate veil" pierced another and constitute a "statewide branch banking except upon a showing of fraud or sham. system." In support of the claim of de facto branch- The Board has given careful consideration to the ing, the State and the other protestants rely upon facts alleged and to all arguments and comments the ATS program coupled with the similarity in presented by the participants in this matter. While the Board has on numerous occasions considered allegations of branch banking in the context of the 5The Massachusetts Independent Bankers Association bank holding company structure,9 the Board has ("MIBA") also filed comments on the branch banking issue. By letter, dated August 11, 1977, the Board requested MIBA to state not previously considered such a question in a any grounds for standing it might have to protest MNC's applica- situation where ATS-type services were offered. tion. MIBA has not responded to the Board's inquiry. 6There is a question whether the protestants IBAA, MACB, The ATS issue brought before the Board in the Central and Peoples have standing as parties in interest under pending proposal is one of first impression and a § 105 of the Act (12 U.S.C. § 1850), to protest MNC's application to decision on that issue may have significant and acquire Bank. The Board will permit these protestants to make submissions of argument and relevant facts in order that the Board may be fully informed with respect to the branch banking issue raised by the ATS program. The Board cautions, however, that this grant of permission for such limited participation is not 8In this regard, MNC has stated that its subsidiary banks are intended as a determination that any such participant would have prepared to provide the ATS system to any bank in Michigan upon legal standing to participants as a formal party in this proceeding or payment of reasonable compensation. to obtain judicial review of a Board decision in this matter. 9See, e.g., Commerce Bancshares, Inc., Kansas City, Missouri, 712 U.S.C. § 36(f) defines the term branch "to include any to acquire Commerce Bank of Grandview, N.A., Grandview, branch bank, branch office, branch agency, additional office, or Missouri, 62 Federal Reserve BULLETIN 368 (1976), affd. sub nom. any branch place of business ... at which deposits are received, or Grandview Bank & Trust v. Board of Governors, 550 F. 2d 415 checks paid, or money lent." (8th Cir. 1977), cert denied 46 U.S.L.W. 3202 (October 4, 1977). 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1094 Federal Reserve Bulletin • December 1977 widespread implications for the conduct of business between 20th and 21st Streets, Washington, D.C. by bank holding companies and commercial Such presentation shall consist of presentations of banks.10 The issue is, therefore, of concern to the statements in either oral or written form, together Board in its administration of the Act and its with supporting or supplementary written submisregulation of bank holding companies. For this sions. reason, the Board has concluded that an oral pre- It is further ordered that the issue upon which sentation on the issue raised by the ATS program evidence and argument will be received at the oral would be desirable. presentation ordered herein is whether the estab- The Board intends that all participants shall have lishment and operation of the ATS system among a full opportunity to present their positions and MNC's subsidiary banks, in particular as it is arguments and to provide relevant facts with re- proposed to be established and operated at Bank, spect to this issue. At the same time, the Board constitute a violation of 12 U.S.C. § 36(c).12 recognizes that MNC is entitled to a prompt deci- Any person desiring to appear at the oral presension on its application, and the Board intends that tation to present testimony, evidence, argument or the oral presentation shall proceed in an expedi- otherwise participate in the proceeding shall file tious and orderly fashion without undue delay. The with the Secretary of the Board of Governors of the Board believes that the voluminous written materi- Federal Reserve System, Washington, D.C., 20551, als already furnished by MNC and the State of Mich- on or before November 15, 1977, a written request igan and the other protestants delineate respective containing a statement of the extent of participation positions and the issues for decision. These submis- desired and the general nature of any testimony or sions together with the opportunity that will be evidence to be presented. afforded at an oral presentation to supplement the By Order of the Board of Governors, effective record with additional facts and argument should November 1, 1977. provide a fully adequate record for Board consideration and decision on the issues raised in this matter. Accordingly, the Board declines to grant at Voting for this action: Chairman Burns and Governors Gardner, Wallich, Partee, and Lilly. Absent and not this time the requests of the State and the other voting: Governors Coldwell and Jackson. protestants for a formal hearing of the type described in the Board's Rules of Practice for Formal (Signed) THEODORE E. ALLISON, Hearings (12 C.F.R. Part 263).11 [SEAL] Secretary of the Board. Accordingly, it is hereby ordered that, pursuant to § 262.3(g)(3) of the Board's Rules of Procedure (12 C.F.R. § 262.3(g)(3)(1977)), a public oral presen- National City Corporation, tation be held with respect to the branch banking Cleveland, Ohio issue that has been raised in connection with the application by MNC to acquire Michigan National Order Approving Acquisition of Bank Bank-Sterling. The presentation shall be held before available members of the Board commencing National City Corporation, Cleveland, Ohio, a at 10 a.m. on November 29, 1977, in Conference bank holding company within the meaning of the Room E, Terrence Level of the William McChes- Bank Holding Company Act, has applied for the ney Martin Building, located on C Street, N.W. Board's approval under § 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to acquire 100 per cent (less 10Under the protestants' rationale, it appears that an arrange- directors' qualifying shares) of the voting shares of ment substantially identical to the ATS program entered into be- the successor by merger to The First National tween independent financial institutions neither of which is a sub- Bank, Dayton, Ohio, in Dayton, Ohio ("Bank"). sidiary of the same bank holding company would nevertheless contravene branch banking laws. The bank into which Bank is to be merged has no nThe Act does not require a hearing on an application under § 3 significance except as a means to facilitate the unless within a specified time period the Comptroller of the acquisition of the voting shares of Bank. Accord- Currency (if the transaction involves a national bank) or the appropriate State banking supervisor (if the transaction involves a State chartered bank) recommends to the Board disapproval of the application. (12 U.S.C. § 1842(b)) No such recommendation for disapproval was filed in this case and, therefore, no hearing is required. Northwest Bancorporation v. Board of Governors, 303 F. 12The Board's jurisdiction to consider this issue derives from its 2d 832,843 (8th Cir. 1962). Of course, under its Rules of Procedure supervisory and regulatory authority over bank holding com- (12 CFR § 262.3(g)), the Board may grant a hearing, either formal panies. Accordingly, MNC's role, if any, in the ATS program or informal, if the Board determines that such action is desirable. should be clearly delineated by the participants. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1095 ingly, the proposed acquisition of shares of the Since Applicant is not currently represented in successor organization is treated herein as the the Dayton market, consummation of the proposed proposed acquisition of shares of Bank. acquisition would not increase deposit concentra- Notice of the application, affording opportunity tion. Although Applicant would appear to be capafor interested persons to submit comments and ble of de novo entry into the Dayton market based on views, has been given in accordance with § 3(b) of strong financial and managerial resources and rethe Act. The time for filing comments and views has cent de novo experiences, it does not appear that expired, and the Board has considered the applica- the Dayton market is attractive for de novo entry. tion and all comments received in light of the In recent years, population, employment, personal factors set forth in § 3(c) of the Act (12 U.S.C. and per capita income and retail sales have ex- § 1842(c)). panded at a slower rate in the Dayton Standard Applicant, the third largest banking organization Metropolitan Statistical Area ("SMSA") than in in Ohio, controls six banks with aggregate deposits most of the other major Ohio SMS As and in the of $1.7 billion, representing 5.3 per cent of total State as a whole. Between 1970 and 1975, total deposits in commercial banks in the State.1 Acqui- population in Dayton actually declined. sition of Bank, which holds deposits of $312.9 In addition to the economic environment, the million, would increase Applicant's share of total banking environment also indicates that the Dayton deposits in commercial banks in the State by 0.95 market remains relatively unattractive for de novo per cent.2 entry. Deposit growth for banks in the Dayton As of June 30, 1976, Bank was the second largest SMSA was 7 percentage points below the average of 25 banks in the relevant geographic market.3 Its deposit increase in all Ohio banks between 1971 and $306.2 million in deposits represents 18.2 per cent 1976. In addition, the ratio of deposits to banking cf market deposits. The largest bank in the market offices for the Dayton market is only $13 million as holds 34.1 per cent of market deposits. The third compared to $15 million throughout Ohio. Further, and fourth largest banks in the market hold, respec- the performances of recent de novo entries into the tively, 17.4 per cent and 5.3 per cent of market Dayton market would tend to discourage additional deposits. No other bank in the market holds greater de novo entry. Hence, on the basis of economic and than 4 per cent of market deposits with the market banking factors, the Dayton market does not, at this shares of each of the remaining 21 banks ranging time, appear to be attractive to de novo entry. from 0.2 to 3.3 per cent. The possibility does exist that Applicant could The nearest office of a subsidiary of Applicant is gain entry into the Dayton market by foothold located approximately 136 miles northeast of one of acquisition of one of the many smaller banks in that Bank's 18 offices. Bank derives 0.26 per cent of its market. However, the prime bank candidates for total deposits and 0.08 per cent of its loans from such acquisition have either announced plans to areas served by Applicant's subsidiary banks. Con- merge with other banking organizations or are so versely, none of Applicant's banking subsidiaries small and geographically removed from downtown derives more than 0.11 per cent of its deposits or Dayton as to make them unattractive foothold 0.44 per cent of its loans from Bank's service area. acquisitions. In addition, any acquisitions in other In addition, only one of Applicant's nonbank sub- than the Montgomery County portion of the Dayton sidiaries derives any business from Bank's service banking market would not enable Applicant to area and the amount of such business is minimal. branch into Montgomery County or the City of Thus, consummation of Applicant's proposal would Dayton because of Ohio's home county branching not have any significant adverse effects on existing laws. Therefore, it appears that foothold entry is competition within the relevant market. not a vaiable alternative for Applicant. In summary, given the relative unattractiveness of the Dayton Unless otherwise indicated, all banking data are as of March market for de novo entry and the apparent un- 31,1977, and reflect bank holding company formations and acquisi- availability of possible foothold acquisitions, contions through September 30, 1977. 2In addition to Applicant's banking subsidiaries, Applicant has summation of the instant proposal would apear to five nonbank subsidiaries that engage in mortgage banking, auto have only a slightly adverse effect, if any, on dealer financing, commercial paper, real estate investment, and potential competition in the Dayton market. reinsurance activities. 3The relevant geographic market is the Dayton Banking market, The financial and managerial resources and fuwhich includes all of Montgomery, Greene and Miami counties, ture prospects of Applicant, its subsidiaries, and Bethel and Mad River Townships in western Clark County, and Bank are regarded as satisfactory and lend weight Clear Creek, Wayne and Massie Townships in northern Warren County. toward approval of the proposal. 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1096 Federal Reserve Bulletin • December 1977 affiliation with Applicant, Bank would be able to Board's Rules of Procedure (12 C.F.R. § 262.3(g) offer additional services to its customers, including (5)). By Order of August 29, 1977 (63 Fed. an expansion of residential mortgage loans at more Res. Bull. 852 (1977)), the Board granted Applicompetitive interest rates, floating interest rates on cant's request for reconsideration of that proposal. commercial mortgage loans, industrial revenue Notice of the Board's action granting reconfinancing, and expanded trust services. These con- sideration and affording opportunity for interested siderations relating to the convenience and needs of persons to submit comments and views has been the community to be served lend weight toward given in accordance with § 3(b) of the Act. The time approval of the application and, in the Board's for filing comments and views has expired, and the judgment, are sufficient to outweigh any slight Board has considered the application and all comadverse competitive effects that might result from ments received in light of the factors set forth in consummation of the proposal. It is the Board's § 3(c) of the Act (12 U.S.C. § 1842(c)). judgment that approval of the application would be Applicant is the largest banking organization in in the public interest and that the application should Iowa and controls 7 banks with aggregate deposits be approved. of $757 million, representing approximately 5.8 per On the basis of the record, the application is cent of the total deposits in commercial banks in approved for the reasons summarized above. The Iowa.1 In addition to its holdings in Iowa, Applicant transaction shall not be made (a) before the thirtieth also controls 82 banks in six nearby states with total calendar day following the effective date of this deposits of approximately $6.7 billion.2 Acquisition Order or (b) later than three months after the of Bank, which holds $66.1 million in deposits, effective date of this Order, unless such period is would increase Applicant's share of deposits in extended for good cause by the Board, or by the commercial banks in Iowa by 0.5 per cent.3 Federal Reserve Bank of Cleveland pursuant to Bank is located in the Fort Dodge banking market, delegated authority. which is approximated by Webster County plus By order of the Board of Governors, effective Cedar and Reading townships in adjoining Calhoun November 16, 1977. County. Applicant's banking subsidiary closest to Bank is located in Des Moines, Iowa, 87 miles from Voting for this action: Chairman Burns and Governors Bank, and there is currently no meaningful compe- Gardner, Wallich, Cold well, Jackson, Partee, and Lilly. tition between Bank and any of Applicant's banking (Signed) GRIFFITH L. GARWOOD, subsidiaries. Accordingly, no significant existing [SEAL] Deputy Secretary of the Board. competition would be eliminated between Bank and any of Applicant's subsidiary banks upon consummation of this proposal. In its Order of May 2, 1977, denying this application, the Board concluded that the fort Dodge banking market was attractive for de novo entry; Northwest Bancorporation, that Applicant was a likely de novo entrant; and Minneapolis, Minnesota that Applicant's acquisition of Bank would probably deter other banking organizations from attempt- Order Approving Acquisition of Bank ing de novo entry into the Fort Dodge market. Applicant has submitted new evidence intended to Northwest Bancorporation, Minneapolis, Min- refute each of these conclusions. On the basis of the nesota ("Applicant"), a bank holding company information provided by Applicant and a field study within the meaning of the Bank Holding Company conducted by the Federal Reserve Bank of Min- Act, has applied for the Board's approval under neapolis, the Board has determined that the Fort Dodge market is relatively unattractive for de novo § 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to entry and that any anticompetitive effects asacquire 90 percent or more of the voting shares of sociated with the proposal are slight. First National Bank, Fort Dodge, Iowa, in Fort Dodge, Iowa ("Bank"). The Board's original decision that the market was By Order of May 2, 1977, the Board denied attractive for de novo entry was based in part on Applicant's application to acquire shares of Bank (63 Fed. Res. Bull. 585 (1977)). Thereafter, Appli- !As of March 31, 1977. cant filed a request for reconsideration of the 2As of December 31, 1976. Board's Order pursuant to section 262.3(g)(5) of the 3As of December 31, 1976. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1097 census data for the decade ending in 1970, which Federal Reserve Bank of Minneapolis pursuant to showed an increase in Webster County's popula- delegated authority. tion over that period. More recent information By order of the Board of Governors, effective provided by Applicant, however, suggests that November 21, 1977. Webster County's population decreased 2.8 per cent in the period 1970-1975. In its Order of May 2, 1977, the Board indicated its view that future eco- Voting for this action: Vice Chairman Gardner and Governors Coldwell, Jackson, and Partee. Voting against nomic growth in the market seemed likely. The this action: Governor Wallich. Abstaining: Governor Board noted, for example, the establishment of a Lilly. Absent and not voting: Chairman Burns. new industrial park in Fort Dodge. It appears, however, on the basis of new information provided by Applicant, that many of the construction projects (Signed) GRIFFITH L. GARWOOD, currently in progress in the market may not have as [SEALI Deputy Secretary of the Board significant an impact on the local economy as it first appeared. The recently established industrial park in Fort Dodge, for example, has encountered diffi- Dissenting Statement of Governor Wallich culty in attracting occupants. Accordingly, the Board concludes that the Fort Dodge banking mar- I would deny the application of Northwest Bancorket may properly be characterized as relatively unat- poration to acquire First National Bank, Fort tractive for de novo entry and that, consequently, Dodge, Iowa ("Bank") for the reasons set forth in Applicant may not be deemed a probable de novo my Dissenting Statements in the recent Texas entrant into the market were this application to be Commerce Bancshares, Inc., First City Bancorpodenied. It therefore appears that consummation of ration of Texas, Inc., and DETROITBANK decithe proposed acquisition would not have a substan- sions.1 tial adverse effect on potential competition and, on My dissent here is again prompted by what I balance, any anticompetitive effects associated perceive to be adverse effects on potential competiwith the proposal now appear to be slight. tion. Bank is the largest of eight commercial bank- The financial and managerial resources and fu- ing organizations in the highly concentrated Fort ture prospects of Applicant and its subsidiary banks Dodge banking market, holding approximately 30 are regarded as generally satisfactory, while those per cent of the commercial bank deposits in the of Bank are regarded as satisfactory. The proposed market. The three largest banks in the market transaction is expected to produce several benefits control approximately 85 per cent of market deto the convenience and needs of the communities to posits. Northwest is one of the most likely potential be served. Such benefits include the expansion of entrants into the market in view of its great financial Bank's trust services, increased agricultural lend- resources and its history of expansion. As the ing, introduction of twenty-four hour automatic Board noted in its original Order denying this teller machines, and lower interest rates on some application (63 Fed. Res. Bull. 585 (1977)), Northloans. In its Order of May 2, the Board found that west's total multi-state deposits are approximately these benefits were insufficient to outweigh the ten times larger than the second largest Iowa bank substantially adverse competitive effects then ex- holding company. I believe competition generated pected to result from the transaction. These factors by having such an organization "waiting in the are sufficient, however, to outweigh clearly the wings" of the Fort Dodge market is a significant slightly adverse competitive effects that the Board benefit for that market. The elimination of such a now finds. Therefore, it is the Board's judgment benefit should be balanced by a procompetitive that consummation of the proposed acquisition force, such as Northwest's de novo or foothold would be in the public interest and that the applica- entry into the Fort Dodge market. tion should be approved. On the basis of the record, the application is ^ee the Dissenting Statements accompanying the Board Orders approved for the reasons summarized above. The approving the applications of Texas Commerce Bancshares, Inc., Houston, Texas, to merge with The BanCapital Financial Corpotransaction shall not be made (a) before the thirtieth ration, Austin, Texas (63 Federal Reserve BULLETIN 500 (1977)), calendar day following the effective date of this First City Bancorporation of Texas, Inc., Houston, Texas, to Order or (b) later than three months after the acquire City National Bank of Austin, Austin, Texas (63 Federal Reserve BULLETIN 674 (1977)), and DETROITBANK Corporaeffective date of this Order, unless such period is tion, Detroit, Michigan to acquire Lake Shore Financial Corporaextended for good cause by the Board or by the tion, Muskegon, Michigan (63 Federal Reserve BULLETIN (1977)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1098 Federal Reserve Bulletin • December 1977 The benefits that the majority finds to be con- million in deposits).1 Upon acquisition of Bank, venience and needs of the community to be served Applicant would control the 102nd largest banking are insufficient to outweigh the adverse competitive organization in the State of Colorado and approxieffects associated with this proposal in my view. mately 0.2 per cent of total deposits in commercial Moreover, such benefits also could be created banks in the State. through de novo entry, a fact that further reduces Bank is one of the smaller banks located in the their significance in this case. Denver banking market,2 and holds approximately The Board has now rendered such decisions as .35 per cent of the total commercial bank deposits this in three states, Texas, Michigan, and Iowa. in the market. Inasmuch as the proposed transac- Each of these states has relatively low levels of tion involves the transfer of ownership of Bank overall concentration, thereby suggesting that the from individuals to a corporation owned by the majority's view may not be one of general applica- same individuals, and since Applicant has no subbility. I continue to be quite concerned, however, sidiaries and engages in no activities, consummathat the majority's decisions may encourage bank tion of the proposal would not have any adverse holding companies to eschew de novo or foothold effect upon existing or potential competition nor entry into highly concentrated markets in the belief would it increase the concentration of banking that the Board will approve less procompetitive resources in the Denver banking market. Thus, the means of entry. The net result of the majority's Board concludes that competitive considerations of decisions would appear to be a significant diminu- the instant proposal are consistent with approval. tion of the possibility that local markets such as The Board has indicated on previous occasions Fort Dodge will become less concentrated in the that a holding company should constitute a source future coupled with an increase in the statewide of financial and managerial strength to its subconcentration ratios of those states that are pres- sidiary bank(s), and that the Board will closely ently relatively unconcentrated. examine the condition of an applicant in each case Since I can not regard either of these results as with this consideration in mind.3 Having examined being desirable, I would deny this application. such factors in light of the record in this application, the Board concludes that the record presents adverse considerations as they relate to the applicant bank holding company that warrant denial of the proposal to place the ownership of Bank into corporate form. Republic Bancorporation, Inc., Applicant's principal and members of his family Englewood, Colorado are Bank's principal shareholders, having acquired Order Denying control of Bank in May 1976 in apparent anticipation of later placing the ownership of Bank into a Formation of Bank Holding Company corporation. Bank's operations have shown improvement over the last year under the direction of Republic Bancorporation, Inc., Englewood, Colapplicant's principal. However, this principal also orado, has applied for the Board's approval under controlled another bank holding company since § 3(a)(1) of the Bank Holding Company Act (12 U.S.C. § 1842 (a)(1)) of formation of a bank holding company by acquiring 99 per cent (or more) of the Unless otherwise indicated, all banking data are as of Decemvoting shares of Republic National Bank of Engleber 31, 1976. wood, Colorado ("Bank"). 2The Denver banking market is approximated by Denver, Notice of the application, affording opportunity Adams, Arapahoe and Jefferson Counties and the city of Broomfield in Boulder County, Colorado. for interested persons to submit comments and 3The Bank Holding Company Act requires that the Board, in views, has been given in accordance with § 3(b) of acting on an application to acquire a bank, inquire into the the Act. The time for filing comments and views has financial and managerial resources of an applicant. While this proposal involves the transfer of the ownership of Bank from expired, and the Board has considered the applicaindividuals to a corporation owned by essentially the same indition and all comments received in light of the viduals, the Act requires that before an organization is permitted factors set forth in § 3(c) of the Act (12 U.S.C. to become a bank holding company and thus obtain the benefits associated with the holding company structure, it must secure the § 1842(c)). Board's approval. Section 3(c) of the Act provides that the Board Applicant is a nonoperating corporation or- must, in every case, consider, among other things, the financial and managerial resources of both the applicant company and the ganized for the purpose of becoming a bank holding bank to be acquired. The Board's action in this case is based on a company through the acquisition of Bank ($16.7 consideration of such factors. 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Law Department 1099 May 1974.4 The operations of that bank holding the Board does not view Applicant's overall financompany have fallen short of that expected by the cial plan as one that would enable it to serve as a Board at the time of its approval, and the record source of strength to Bank or one that would indicates that these results are attributable in part to enhance Bank's prospects, the Board concludes certain practices of the principal.5 These facts pre- that considerations relating to financial resources clude managerial factors giving weight toward ap- and future prospects weigh against approval of this proval of this application. application. With respect to financial considerations, the Over the past year, Bank has expanded the Board notes that Applicant would incur a sizable services provided to Bank's commercial customers. debt in connection with the proposed acquisition of No other significant changes in Bank's operations Bank's shares, as well as mortgage debt in connec- or in the services offered to customers are anticition with the purchase of Bank's building and land pated to follow from consummation of the proposed from a partnership composed of Applicant's princi- acquisition. Thus, while convenience and needs pals. Applicant proposes to service its acquisition factors are consistent with approval of this prodebt over a 12-year period through dividends to be posal, they are not sufficient, in the Board's view, to declared by Bank and the tax benefits associated outweigh the other adverse findings with respect to with the holding company structure. The mortgage the proposal. debt will be serviced over a 25 year period through On the basis of the circumstances concerning this rental income paid by Bank. application, the Board concludes that the banking The projected earnings for Bank contained in the considerations involved in this proposal present application are substantially greater than Bank has adverse factors bearing upon the financial and generally enjoyed in the past, despite some recent managerial resources and future prospects of Apimprovement in Bank's earnings. In addition, Ap- plicant and Bank. Such adverse factors are not plicant's projected earnings for Bank greatly ex- outweighed by any procompetitive effects or by ceed the average earnings of other banks of compa- benefits that would result in better serving the rable size in the area. Based on a review of more convenience and needs of the community. Accordrealistic projections, derived from past perform- ingly, it is the Board's judgment that approval of the ance and data from area banks, it is unlikely that application would not be in the public interest and Bank's actual earnings will be sufficient to enable that the application should be denied. Applicant to service its debt while maintaining a On the basis of the facts of record, the application adequate capital at Bank, and to have the flexibility is denied for the reasons summarized above. to meet any unexpected problems that might arise By order of the Board of Governors, effective at Bank. In this connection, the Board also notes November 3, 1977. that the record indicates that the other holding company in which Applicant's principal has been involved has not attained the debt retirement schedule set forth in its application. Inasmuch as Voting for this action: Vice Chairman Gardner and Governors Wallich, Coldwell, Jackson, Partee, and Lilly. Absent and not voting: Chairman Burns. 4The Board has previously stated that in considering an application involving a bank that is a part of a chain of one-bank holding companies, it should look beyond the bank that is the subject of the application and analyze the financial and managerial resources of the other banks that are part of the chain. (See Board's Order dated June 14, 1976 denying the formation of a bank holding company by Nebraska Banco, Inc., Ord, Nebraska, 62 Federal Reserve BULLETIN 638 (1976)). 5The Board believes that it is reasonable to expect an applicant to demonstrate some history of satisfactory managerial performance. Otherwise, an applicant's management could take temporary steps to improve the earnings and operations of a prospective subsidiary bank for the sole purpose of securing the Board's approval of the proposal, and, after the transaction is approved (Signed) ROBERT E. MATTHEWS, and consummated, revert to its previous management practices to the detriment of its subsidiary bank. [SEAL] Assistant Secretary of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1100 Federal Reserve Bulletin • December 1977 ORDERS UNDER SECTION 4 State.2 Bank is located in the Quad Cities banking OF BANK HOLDING COMPANY ACT market3 and has $11.6 million in consumer finance receivables, which represent less than 1 per cent of River Cities Investment Co.; the total receivables in the State and 6.7 per cent of Investment Management, Inc., the total consumer finance receivables held by Bettendorf, Iowa commercial banks in the relevant market. Lloyd's Plan's only office operates in the Quad Order Approving Retention of Lloyd's Plan, Inc. Cities market and has total receivables of $1.3 and Determination Regarding (< Grandfather million, representing less than 0.1 per cent of total receivables in Iowa and 0.7 per cent of the total Privileges consumer finance receivables held by commercial banks in the quad Cities market. Lloyd's Plan's River Cities Investment Co. and Investment market share would rank it 24th among the com- Management, Inc., both of Bettendorf, Iowa (hereinafter jointly referred to as "Applicant"),1 mercial banks in the relevant product market. There are over 175 competitors in the Quad Cities are bank holding companies within the meaning of consumer finance market, including 28 consumer the Bank Holding Company Act, and have applied finance companies (among which are five of the ten for the Board's approval, under section 4(c)(8) of largest in the country), 27 commercial banks and the Act (12 U.S.C. § 1843(c)(8)) and section over 125 credit unions. 225.4(b)(2) of the Board's Regulation Y (12 CFR § 225.4(b)(2)) to retain fifty per cent of the voting Lloyd's Plan's de novo entry into the market in shares of Lloyd's Plan, Inc., Davenport, Iowa, a April 1973 added an additional competitor and company organized on April 23, 1973, at which time eliminated no existing competition. Thus, it appears Investment Management, Inc., acquired a 50 per there were no significant adverse competitive efcent interest without the Board's prior approval as fects at the time Lloyd's Plan entered the market. required by section 4 of the Act and section 225.4(a) With respect to present competitive effects, Bank of the Board's Regulation Y. Lloyd's Plan is a and Lloyd's Plan presently compete directly in the company that engages in the activities of a con- market; however, in light of the numerous alternasumer finance company, operates as an industrial tive sources of consumer finance credit available in loan company in the manner authorized by the the market and the relative size and market shares State of Iowa, and acts as an insurance agent or of Lloyd's Plan and Bank, it does not appear that broker with respect to the sale of credit life and approval of Applicant's retention of Lloyd's Plan credit accident and health insurance directly related would have any significant adverse effects on existto extensions of credit by Lloyd's Plan. Such ing or potential competition in the consumer fiactivities have been determined by the Board to be nance market. Due to the nature of Lloyd's Plan's closely related to banking (12 CFR §§ 225.4(a)(1), insurance activities, which are limited to acting as (2) and (9)(ii)). agent in the sale of credit insurance related to loans Notice of the applications, affording opportunity it originates, it does not appear that Applicant's for interested persons to submit comments and retention of Lloyd's Plan would have any signifiviews on the public interest factors, has been duly cant adverse competitive effects in this area. Retenpublished (42 Federal Register 34555). The time for tion of Lloyd's Plan, on the other hand, would filing comments and views has expired, and the provide benefits to the public by offering a con- Board has considered the applications and all com- tinued and additional convenient source of conments received in light of the public interest factors sumer finance credit in the Quad Cities market. set forth in § 4(c)(8) of the Act. Moreover, there is no evidence in the record indi- Applicant controls one bank, Northwest Bank & cating that retention would result in any undue Trust Company, Davenport, Iowa ("Bank"), the concentration of resources, unfair competition, 21st largest commercial bank in Iowa, with deposits conflicts of interests, unsound banking practices or of $73.9 million, representing approximately 0.6 per other adverse effects on the public interest. cent of the total commercial bank deposits in the 2A11 data are as of December 31, 1976, with the exception of *River Cities Investment Co. is a bank holding company by Statewide consumer finance receivables data which are as of virtue of its ownership, since January 1964, of over 98 per cent of December 31, 1975. the outstanding Class A and Class B shares of Investment Man- 3The Quad Cities banking market, which is the Davenport, agement, Inc., which acquired 55.75 per cent of the outstanding Iowa/Rock Island, Illinois RMA, approximates the Quad Cities voting stock in Northwest Bank & Trust Company on November consumer finance market, and is the relevant market for analyzing 6, 1963. the competitive effects of the retention application. 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Law Department 1101 As indicated above, the subject applications are ness. As a general insurance agency, Applicant has an after-the-fact request for the Board's approval to been engaged in the sale as agent of ordinary life, engage in activities that were commenced in viola- term life, credit life and disability, and accident and tion of the Board's Regulation Y. Upon examina- health insurance. Most of the insurance is directly tion of all the facts and circumstances surrounding related to extensions of credit by Applicant's subthe acquisition of Lloyd's Plan's shares without sidiary bank. On the basis of the facts before the prior Board approval, it appears that the violation Board, it appears that the volume, scope and nature does not warrant denial of these applications. In of the activities of Applicant do not indicate an acting upon the applications the Board has taken undue concentration of resources, nor is there any into consideration the fact that Applicant has taken evidence before the Board of decreased or unfair steps to conform its operations to the Act by filing competition, conflicts of interests, or unsound the subject applications. In addition, Applicant's banking practices. management has sought to prevent violations from There appears to be no reason to require Applioccurring in the future, including the initiation of an cant to terminate its nonbanking activities. It is the affirmative program under the direction of one of its Board's judgment that at this time termination of officers to ensure that the management of Appli- the "grandfather" privileges of Applicant is not cant's subsidiaries is aware of its responsibilities necessary in order to prevent an undue concentraunder the Bank Holding Company Act. The Board tion of resources, decreased or unfair competition, expects that these actions will assist Applicant in conflicts of interests or unsound banking practices. avoiding a recurrence of similar violations. In con- However, this determination is not authority to sideration of the above and other information in the enter into any activity that Applicant was not record evidencing Applicant's intent to comply engaged in on June 30, 1968, and continuously with the requirements of the Bank Holding Com- thereafter, or any activity that is not the subject of pany Act, the Board has determined that the cir- this determination. A significant alteration in the cumstances of the above violation do not warrant nature or extent of Applicant's activities, or a denial of the applications. change in location thereof (significantly different In connection with its consideration of the appli- from any described in this determination) will be cations, the Board has also reviewed, pursuant to cause for a reevaluation by the Board of Appli- § 4(a)(2) of the Act, the "grandfather" privileges of cant's activities under the provision of § 4(a)(2) of Applicant, a "company covered in 1970" as that the Act. Such an alteration or change may result in term is defined in the Act.4 Under § 4(a)(2) of the a finding that "grandfather" privileges should be Act, the Board may terminate such "grandfather" terminated in order to prevent an undue concentraprivileges if the Board determines, having due tion of resources or any of the other evils designated regard to the purposes of the Act, that such action in the Act. No merger, consolidation, acquisition of is necessary to prevent undue concentration of assets (other than in the ordinary course of busiresources, decreased or unfair competition, con- ness), and no acquisition of any interest in a going flicts of interests, or unsound banking practices. concern, to which the Applicant or any nonbank Accordingly, the Board has reviewed the activities subsidiary thereof is a party, may be consummated of Applicant for the purposes of determining without prior approval of the Board. Further, the whether the combination of banking and nonbank- provision of any credit, property, or service by the ing interests in Applicant's holding company sys- Applicant or any subsidiary thereof shall not be tem would be likely to have an adverse effect on the subject to any condition which, if imposed by a public interest. Notice of the Board's proposed bank, would constitute an unlawful tie-in arrangereview of the "grandfather" privileges of Applicant ment under section 106 of the Bank Holding Comand an opportunity for interested persons to submit pany Act Amendments of 1970. comments and views or request a hearing was given In making its determination herein, the Board (42 Federal Register 55924). The time for filing also finds that combining Bank with Applicant's comments, views, and requests has expired, and existing nonbanking activities would not have an none has been received. adverse effect upon the public interest at this time. Since January 1964, Applicant has been continu- However, the determination herein does not preously engaged in a general insurance agency busi- clude a later review by the Board of Applicant's nonbanking activities, and a future determination by the Board in favor of termination of "grand- 4Investment Management has been continuously engaged in general insurance agency activities since prior to June 30, 1968. father" benefits of Applicant. This determination is Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1102 Federal Reserve Bulletin • December 1977 subject to the Board's authority to require such with extensions of credit by FFC.1 Such activities modification or termination of the activities of have been determined by the Board to be closely Applicant or any of its nonbanking subsidiaries as related to banking (12 C.F.R. § 225.4(a)(1) and the Board finds necessary to assure compliance (9)(ii». with the provisions and purposes of the Act and the Notice of the application, affording opportunity Board's regulations and orders issued thereunder, for interested persons to submit comments and or to prevent evasions thereof. views on the public interest factors, has been duly Based upon the foregoing and other con- published (42 Fed. Reg. 46085 (1977)). The time for siderations reflected in the record, the Board has filing comments and views has expired, and the determined that the balance of the public interest Board has considered the application and all comfactors the Board is required to consider under ments received in the light of the public interest § 4(c)(8) is favorable. Accordingly, the applications factors set forth in § 4(c)(8) of the Act (12 U.S.C. are hereby approved. This determination is subject § 1843(c)(8)). to the conditions set forth in section 225.4(c) of Applicant controls Douglas National Bank, Regulation Y and to the Board's authority to re- Roseburg, Oregon, which ranks third among four quire such modification or termination of the ac- commercial banks in the relevant market2 with total tivities of a holding company or any of its sub- deposits of $42.6 million, representing 21.4 per cent sidiaries as the Board finds necessary to assure of deposits in commercial banks in the market.3 compliance with the provisions and purposes of the FFC, which holds total assets of approximately Act and the Board's regulations and orders issued $364 thousand, operates a single consumer finance thereunder, or to prevent evasion thereof. office in Roseburg, Oregon, less than one mile from By order of the Board of Governors, effective the main office of Douglas National Bank. Appli- November 7, 1977. cant and FFC compete for the origination of consumer loans in the Roseburg market. Applicant is the third largest of twelve lenders in the market Voting for this action: Chairman Burns and Governors with approximately $7.6 million in consumer loans Gardner, Coldwell, Jackson, Partee, and Lilly. Absent representing 19.9 per cent of the total consumer and not voting: Governor Wallich. loans outstanding in the market. FFC ranks twelfth in the market with $348 thousand of consumer loans outstanding, a market share of approximately 0.8 per cent. Thus, approval of the proposed acquisition (Signed) THEODORE E. ALLISON, would increase Applicant's share of the total con- [SEAL] Secretary of the Board. sumer loan market slightly to 20.7 per cent. Eleven independent originators of consumer loans would remain in the market. FFC has not been an aggressive competitor in the market. Between 1972 and 1976, the amount of its receivables decreased by 18 per cent, while those of all the other firms in the market increased by United Bancorp, approximately 67 per cent. In view of the insubstan- Roseburg, Oregon *FFC sells subordinated debentures as a convenience to its Order Approving customers who wish to invest their interest. As of April 30, 1977, Acquisition of Family Finance Corporation the outstanding amount of these debentures was $150 thousand, representing approximately 41 per cent of FFC's total assets. At maturity, the debentures become redeemable by the holder United Bancorp, Roseburg, Oregon, a bank holdsemiannually. Approximately 60 per cent of the outstanding ing company within the meaning of the Bank Hold- debentures have matured, and have not been redeemed. FFC has ing Company Act, has applied for the Board's not actively marketed debentures since 1974, and Applicant has indicated that, upon consummation of the proposed acquisition, approval, under § 4(c)(8) of the Act (12 U.S.C. FFC will cease to issue new debentures. On the basis of all the § 1843(c)(8)) and § 225.4(b)(2) of the Board's Regu- facts of record, the Board has determined that the affiliation of Applicant's member bank subsidiary with FFC by virtue of lation Y (12 C.F.R. § 225.4(b)(2)), to acquire Family consummation of the proposed acquisition would not violate Finance Corporation, Roseburg, Oregon ("FFC"), section 20 of the Glass-Steagall Act (12 U.S.C. § 377). a company that engages in the activities of making 2The Roseburg banking market is approximated by Douglas County west of the Coast range, excluding the city of Reedsport consumer and personal loans and acting as agent for on the Pacific Coast. credit health and credit life insurance in connection 3Banking data are as of December 31, 1976. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1103 tial increase in Applicant's market share, the com- ORDERS UNDER SECTION 2(g)(3) petitive structure of consumer finance lending in OF BANK HOLDING COMPANY ACT the Roseburg market and the lack of competitive effectiveness on the part of FFC, it appears that Redwood Bancorp, consummation of the proposal would not have any San Francisco, California significant adverse effects on existing competition in the relevant market area. Furthermore, there is Order Granting no evidence in the record that indicates that con- Determination Under Bank Holding Company Act summation of the proposed transaction would result in undue concentration of resources, unfair Redwood Bancorp, San Francisco, California competition, conflicts of interests, unsound bank- 0'Redwood"), a bank holding company within the ing practices, or other effects that would be adverse meaning of § 2(a) of the Bank Holding Company to the public interest. Act of 1956, as amended ("Act") (12 U.S.C. Acquisition of FFC by Applicant would provide § 1841(a)), has requested a determination by the additional managerial and financial support for Board, pursuant to § 2(g)(3) of the Act (12 U.S.C. FFC's operations and facilitate expansion of the §1841(g)(3)), that Redwood is not in fact capable of number and types of loans that FFC makes avail- controlling Bowest, Inc., Los Angeles, California able to its customers. Accordingly, it appears that ("Bowest"), a wholly-owned subsidiary of the the proposed acquisition would produce benefits to Bowery Savings Bank, New York, New York, the public that are consistent with and lend weight notwithstanding indebtedness incurred by Bowest toward approval of the application. to Redwood in connection with Bowest's purchase Based upon the foregoing and other con- from Redwood of all of the shares of National siderations reflected in the record, the Board has Mortgage Insurance Agency, Inc., Tucson, Aridetermined in accordance with § 4(c)(8) of the Act zona, National Insurance Agency, Inc., Salt Lake that Applicant's acquisition of FFC can reasonably City, Utah, West Coast Security Agency, Inc., San be expected to produce benefits to the public that Francisco, California (hereinafter collectively reoutweigh possible adverse effects. Accordingly, the ferred to as the "Agencies"), that were whollyapplication is hereby approved. This determination owned subsidiaries of Redwood. Redwood further is subject to the conditions set forth in § 225.4(c) of asks that it be determined that it is not in fact Regulation Y and to the Board's authority to re- capable of controlling the Agencies which it sold to quire such modification or termination of the ac- Bowest. tivities of a holding company or any of its sub- Under the provisions of § 2(g)(3) of the Act, sidiaries as the Board finds necessary to assure shares transferred after January 1, 1966, by any compliance with the provisions and purposes of the bank holding company to a transferee that is in- Act and the Board's regulations and orders issued debted to the transferor or has one or more officers, thereunder, or to prevent evasion thereof. directors, trustees, or beneficiaries in common with The transaction shall be made not later than three or subject to control by the transferor, are deemed months after the effective date of this Order, unless to be indirectly owned or controlled by the transsuch period is extended for good cause by the feror unless the Board, after opportunity for hear- Board or by the Federal Reserve Bank of San ing, determines that the transferor is not in fact Francisco. capable of controlling the transferee. By order of the Board of Governors, effective Redwood has submitted to the Board evidence to November 21, 1977. support its contention that Redwood is not in fact capable of controlling Bowest and the Agencies. Notice of an opportunity for hearing with respect to Redwood's request for a determination under § 2(g)(3) was published in the Federal Register (40 Voting for this action: Vice Chairman Gardner and Governors Wallich, Coldwell, and Lilly. Absent and not Fed. Reg. 52440). The time provided for requesting voting; Chairman Burns and Governors Jackson and a hearing has expired. No such request has been Partee. received by the Board, nor has any evidence been received to show that Redwood is in fact capable of controlling Bowest or the Agencies. (Signed) GRIFFITH L. GARWOOD, It is hereby determined that Redwood is not in [SEAL] Deputy Secretary of the Board. fact capable of controlling Bowest or the Agencies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1104 Federal Reserve Bulletin • December 1977 This determination is based upon the evidence of Texas subsidiary, and C.F. Opel, Inc., were inrecord in this matter, including (1) a certified copy debted to a subsidiary of Trans Texas at the time of of a resolution passed by the Board of Directors of transfer. Redwood to the effect that Redwood does not in Under the provisions of section 2(g)(3) of the Act, any way exercise control over Bo west or the Agen- shares transferred after January 1, 1966, by any cies; and evidence establishing (2) the fact that, bank holding company to a transferee that is inexcept for the purchase of the Agencies' stock from debted to the transferor are deemed to be indirectly Redwood and the resulting indebtedness, Bowest owned or controlled by the transferor unless the has no present or past relationship with Redwood, Board, after opportunity for hearing, determines other than that Bowest services a small portion of that the transferor is not in fact capable of controlthe mortgage loan portfolio of Redwood Bank, San ling the transferee. Francisco, California, a subsidiary of Redwood; (3) Notice of an opportunity for hearing with respect the fact that Bowest's indebtedness to Redwood in to Trans Texas' request for a determination under connection with the purchase of the Agencies is a section 2(g)(3) was published in the Federal Regispromissory note for the sum of $3,000 secured by ter (42 Fed. Reg. 27297(1977)). The time provided neither the shares of the Agencies nor the shares of for requesting a hearing has expired. No such Bowest or any related company; (4) the fact that request has been received by the Board, nor has there are no directors, officers, or employees that any evidence been received to show that Trans are common to both Redwood and Bowest; and Texas is in fact capable of controlling Mr. Opel or (5) the fact that Bowest is a subsidiary of Bowery C.F. Opel, Inc. Savings Bank, New York, New York, a substantial It is hereby determined that Trans Texas is not, firm independent of Redwood. in fact, capable of controlling Mr. Opel or C.F. Accordingly, it is ordered, that the request of Opel, Inc. This determination is based upon the Redwood for a determination pursuant § 2(g)(3) be evidence of record in this matter, including that and hereby is granted. Any material change in the establishing the following facts. facts or circumstances relied upon by the Board in Mr. Opel paid cash for the shares of C.F. Opel, making this determination or any material breach of and the only indebtedness of Mr. Opel or C.F. any of the commitments upon which the Board Opel, Inc., to Trans Texas or its subsidiaries at the based its decision could result in the Board recon- time of the transaction and currently is routine sidering the determination made herein. installment loan and credit card indebtedness to By order of the Board of Governors, acting bank subsidiaries of Trans Texas, which debt is through its General Counsel, pursuant to delegated unrelated to the stock transaction. The amount of authority (12 CFR § 265.2(b)), effective November debt owed by C.F. Opel to Trans Texas or its 7, 1977. subsidiaries at the time of the transfer was substan- (Signed) ROBERT E. MATTHEWS, tially less than the purchase price of the shares. The [SEAL] Assistant Secretary of the Board. net worth of both Mr. Opel and C.F. Opel, Inc., is substantially more than the existing unrelated debt. Trans Texas does not own, control, or hold a security interest in voting securities of C.F. Opel, Trans Texas Bancorporation, Inc. Inc. All parties have stated under oath that no El Paso, Texas control agreement or understanding existed at the Trans Texas Bancorporation, Inc., ("Trans time of transfer or currently exist and there are no Texas"), a bank holding company within the mean- director, officer, or employee interlocks between ing of § 2(a) of the Bank Holding Company Act of Trans Texas and its subsidiaries with C.F. Opel, 1956, as amended (12 U.S.C. § 1841, et seq.) (the Inc. Accordingly, it is ordered that the request of "Act") by virtue of its ownership of controlling Trans Texas Bancorporation, Inc., El Paso, Texas, interests in several banks, has requested a determi- for a determination pursuant to section 2(g)(3) be nation pursuant to the provisions of section 2(g)(3) and hereby is granted. This determination is based of the Act that neither Trans Texas nor any of its upon the representation made to the Board by affiliates or subsidiaries is capable of controlling Trans Texas and Mr. Opel and C.F. Opel, Inc. In Mr. Charles Frederick Opel or C.F. Opel, Inc., the event the Board should hereafter determine that both of El Paso, Texas, notwithstanding the fact facts material to this determination are otherwise that Mr. Opel, who purchased shares of C.F. Opel, than as represented, or that Trans Texas, Mr. Opel, Inc., from El Paso International Company, a Trans or C.F. Opel, Inc., has failed to disclose to the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1105 Board other material facts, this determination may shares, of Heritage Bank of Whitefish Bay (forbe revoked, and any change in the facts and cir- merly Whitefish Bay Bank & Trust Co.), Whitefish cumstances relied upon by the Board in making this Bay, Wisconsin ("Bank"). Between March 1965 determination could result in the Board reconsider- and April 1968, Jacobus acquired ownership and ing the determination made herein. control of 205,584 shares of common stock, repre- By order of the Board of Governors, acting senting 73.3 per cent of the outstanding common through its General Counsel, pursuant to dele- stock, of Inland. On April 29, 1968 Jacobus acgated authority (12 CFR § 265.2(b)(1)), effective quired 7,500 shares of $6.50 Preferred Stock ("Pre- November 9, 1977. ferred Stock"), representing 100 per cent of the outstanding Preferred Stock, of Inland in exchange (Signed) GRIFFITH L. GARWOOD, for the 48,000 shares of Bank. Jacobus sold 5,000 [SEAL] Deputy Secretary of the Board. shares of Preferred Stock to the Harriet G. Jacobus Trust on July 15, 1969 for cash. On August 9, 1971 Jacobus received 21,738 shares of Inland common stock in exchange for 2,500 shares of Preferred Stock.2 On June 29, 1972 Jacobus received 113,661 shares of common stock of Inland in a corporate PRIOR CERTIFICATION PURSUANT TO THE recapitalization in which three shares of Inland common stock were issued for every two shares of BANK HOLDING COMPANY TAX ACT OF 1976 Inland common stock then outstanding.3 The Jacobus Company, 3. Jacobus became a bank holding company on Wauwatosa, Wisconsin December 31, 1970, as a result of the 1970 Amendments to the BHC Act, by virtue of its direct [Docket No. TCR 76-138] ownership and control at that time of more than 25 per cent of the outstanding voting shares of Inland The Jacobus Company, Wauwatosa, Wisconsin and by virtue of its indirect ownership and control ("Jacobus"), has requested a prior certification at that time, through Inland, of more than 25 per pursuant to § 1101(b) of the Internal Revenue Code cent of the outstanding voting shares of Bank, and it (the "Code"), as amended by § 2(a) of the Bank registered as such with the Board on September 1, Holding Company Tax Act of 1976 (the "Tax 1971.4 Jacobus would have been a bank holding Act"), that its proposed divestiture of all of the company on July 7, 1970 if the BHC Act Amend- 340,983 shares of common stock (the "Inland Shares") of Inland Heritage Corporation, (formerly 2 Under subsection (c) of § 1101 of the Code, property ac- Inland Financial Corporation) Milwaukee, Wisconquired after July 7, 1970 generally does not qualify for the sin ("Inland"), presently held by Jacobus, through tax benefits of § 1101(b) when distributed by an otherwise the pro rata distribution of such shares to the qualified bank holding company. However, where such property was acquired by a qualified bank holding company in a transaction holders of common stock of Jacobus, is necessary in which gain was not recognized under § 305(a) of the Code, then or appropriate to effectuate the policies of the Bank § 1101(b) is applicable. Jacobus had indicated that for accounting and tax purposes, this exchange of Inland Preferred Stock for Holding Company Act (12 U.S.C. § 1841 et seq.) Inland common stock was treated as a recapitalization under ("BHC Act"). § 368(a)(1)(E) of the Code. Accordingly, even though the 21,738 In connection with this request, the following shares of Inland common stock were acquired by Jacobus after July 7, 1970, those shares would nevertheless qualify as property information is deemed relevant, for purposes of eligible for the tax benefits provided in § 1101(b) of the Code, by issuing the requested certification:1 virtue of § 1101(c), if the Inland shares were in fact received in a 1. Jacobus is a corporation organized on May 24, transaction described in § 368(a)(1)(E) of the Code in which no gain was recognized. 1924 under the laws of the State of Wisconsin. 3 Jacobus has indicated that pursuant to § 305(a) of the Code, no Inland is a corporation organized on October 6, gain was recognized as a result of the June 29, 1972 recapitalization. Accordingly, even though this 113,661 Inland shares of 1964 under the laws of the State of Wisconsin. common stock were acquired by Jacobus after July 7, 1970, they 2. Between April 1966 and July 1967 Jacobus would nevertheless qualify as property eligible for the tax benefits acquired ownership and control of 48,000 shares, provided by § 1101(b) of the Code by virtue of § 1101(c) of the Code, if the Inland shares were in fact received in a transaction representing 80 per cent of the outstanding voting described in § 368(a)(1)(E) of the Code in which no gain was recognized. 4 Inland similarly became a bank holding company on Decem- 1 This information derives from Jacobus' correspondence with ber 31, 1970, as a result of the 1970 Amendments to the BHC Act, the Board concerning its request for this certification, Jacobus' by virtue of its direct ownership and control of more than 25 per and Inland's Registration Statements filed with the Board pur- cent of the outstanding voting shares of Bank, and it registered as suant to the BHC Act, and other records of the Board. such with the Board on June 17, 1971. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1106 Federal Reserve Bulletin • December 1977 ments of 1970 had been in effect on such date, by tions and commitments made to the Board by virtue of its direct and indirect ownership and Jacobus and upon the facts set forth above. In the control on that date of more than 25 per cent of the event the Board should determine that facts mateoutstanding voting shares of Inland and Bank, rial to this certification are otherwise than as reprerespectively. Jacobus presently owns and controls sented by Jacobus, or that Jacobus has failed to 42 per cent of the outstanding voting shares of disclose to the Board other material facts or to Inland. fulfill any commitments made to the Board in 4. Jacobus holds property acquired by it on or connection herewith, it may revoke this certificabefore July 7, 1970, the disposition of which would tion. be necessary or appropriate to effectuate section 4 By order of the board of Governors, acting of the BHC Act if Jacobus were to continue to be a through its General Counsel, pursuant to delebank holding company beyond December 31, 1980, gated authority (12 CFR 265.2(b)(3)), effective which property is "prohibited property" within the November 10, 1977. meaning of section 1103(c) of the Code. 5. On December 14, 1971, in connection with an (Signed) GRIFFITH L. GARWOOD, application by Inland to acquire an additional bank, [SEAL] Deputy Secretary of the Board. Jacobus made a commitment to the Board that it would divest ownership and control of all of its Inland shares within 90 days of the effective date of legislation providing for nonrecognition of gain on divestitures required as a result of the BHC Act Amendments of 1970. The Board has relied on this commitment by Jacobus in approving applications by Inland to acquire additional banks. Accordingly, ORDER RELATING TO CONTROL OVER Jacobus must divest its shares of Inland by Decem- FINANCIAL GENERAL BANKSHARES, INC. ber 31, 1977. In addition, Jacobus and Inland have committed to the Board that no person holding an International Bank, office or position (including an advisory or honor- Washington, D. C. ary position) with Jacobus or any of its subsidiaries as a director, policy-making employee or consul- As a result of the 1966 Amendments to the Bank tant, or who performs (directly, or through an Holding Company Act (12 U.S.C.§ 1841 et seq.) agent, representative or nominee) functions compa- (the "Act"), International Bank, Washington, rable to those normally associated with such office D. C. ("IB") took certain steps in December 1966 or position, will hold any such office or position or for the ostensible purpose of terminating its control perform any such function with Inland or any of its of Financial General Bankshares, Inc., Washingsubsidiaries. Jacobus and Inland have further ton, D. C. ("FG"), a registered bank holding comcommitted that all such interlocking relationships pany, and thereby terminating IB's own status as a presently existing between Jacobus and Inland and bank holding company. On August 1, 1974, the their respective subsidiaries will be terminated. Board made a determination1 pursuant to sections On the basis of the foregoing information, it is 2(a)(2)(A) and (B), 2(d), and 2(g)(1) and (3) of the hereby certified that: Act that, notwithstanding its alleged divestiture of (A) Jacobus is a qualified bank holding corpora- control of FG, IB still directly and indirectly contion, within the meaning of subsection (b) of section trolled FG (the "Count I" determination). In addi- 1103 of the Code, and satisfies the requirements of tion, the Board made a preliminary determination that subsection; under section 2(a)(2)(C) of the Act and section (B) the shares of Inland that Jacobus proposes to 225.2(c) of the Board's Regulation Y (12 CFR distribute to its shareholders are all of the property § 225.2(c)) that IB exercised a controlling influence by reason of which Jacobus controls (within the over the management and policies of FG (the meaning of § 2(a) of the BHC Act) a bank or a bank "Count II" determination). holding company; and IB requested a hearing to contest both the Count (C) the distribution of such shares is necessary I and Count II determinations, and on October 4, or appropriate to effectuate the policies of the BHC 1974, the Board ordered that a public hearing be Act. held before an Administrative Law Judge.2 In its This certification is based upon the representa- hearing order, the Board set forth certain specific Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1107 questions to be considered at the hearing relating to summarizes the principal findings and sets forth the the existence of a control relationship between IB Board's conclusions of law and the reasoning unand FG. In addition, the Board directed the Ad- derlying those conclusions. ministrative Law Judge to recommend whether the Count I determination should be set aside and I. History of the IB-FG Relationship. whether the Count II determination should become final. IB is a diversified holding company, formed in FG and Financial International Corporation 1920, that has engaged through subsidiaries and ("FIC") were permitted to intervene in the pro- affiliates in a variety of financial and nonfinancial ceeding, and extensive prehearing discovery was activities, including commercial banking, consumer conducted between October 1974 and February credit financing, casualty and life insurance under- 1977. On February 10, 1977, formal hearings com- writing, lease financing, and both heavy and light menced before the Administrative Law Judge. manufacturing. In addition, IB owns a large modern After all the evidence had been presented, the office building in Washington, D. C.6 parties jointly requested the Board to dispense with At all times relevant to this case FG has held the requirement for a recommended decision by the controlling interests in more than two banks, and at Administrative Law Judge. On March 10, 1977, the present it controls 15 banks.7 However, FG did not Board granted this motion and directed that the register as a bank holding company following the record be certified to the Board not later than April passage of the Bank Holding Company Act because 30, 1977, together with briefs, proposed findings of FG qualified for an exclusion from the Act's definifact and conclusions of law, and a statement of the tion of a "bank holding company" by reason of its issues for decision by the Board. affiliation with The Equity Corporation, a regis- The record was subsequently certified to the tered investment company subject to the Invest- Board in accordance with the March 10 Order. ment Company Act of 1940.8 Although IB was not Among the issues certified was the question itself either a registered investment company or an whether this proceeding had become "moot" by affiliate of a registered investment company, it reason of a proposed sale by IB of its stock in FG. claimed to be entitled to the benefits of the exemp- On May 20, 1977, the Board ordered that the record tion enjoyed by its subsidiary, FG, and did not be reopened for further proceedings with respect to register as a bank holding company.9 IB's claim questions arising from the sale. The supplemental was contested by the Board, but before the issue record developed on this question was sub- was resolved it became academic when, on July 1, sequently certified to the Board and the record in 1966, Congress amended the Act to repeal the this proceeding was closed.3 As supplemented,4 the investment company exemption. FG and IB thus record indicates that on April 29, 1977, IB sold all of both became clearly subject to the Act. the 1,204,231 shares of FG common stock owned Following the 1966 Amendments to the Act, FG by it of record, representing 22.2 per cent of the registered with the Board as a bank holding comoutstanding voting shares of FG, to a group of 26 pany and IB acknowledged its status as a bank investors represented by J. William Middendorf, II holding company by virtue of its control of 32 per (the "Middendorf Group").5 cent of FG's voting common stock. However, in a In light of the present state of the record the November 9, 1966 letter to the Federal Reserve Board believes the principal questions before it may Bank of Richmond, IB announced that it had be broadly stated as follows: "adopted a policy that International Bank shall 1. Was IB's purported divestiture of FG in De- cease to be a bank holding company prior to cember 1966 effective to terminate IB's control of December 31, 1966."10 Purportedly in furtherance FG? of that policy IB took the following steps in late 2. If IB failed to make an effective divestiture in 1966: December 1966, what action, if any, should the 1. IB reduced its nominal ownership of FG com- Board take to assure that the control relationship mon stock to below 25 per cent of FG's outstanding between IB and FG will be completely terminated voting shares by transferring approximately 8.2 per and will not be reestablished? cent of FG's voting common stock to Financial The Board has considered the entire record of International Corporation (a newly created this proceeding and has set forth in an appendix to wholly-owned IB subsidiary having no other assets) this Order its findings of fact, which are incorpo- in exchange for all of FIC's stock. The FIC shares rated herein by reference. The following discussion were then distributed to IB shareholders on a pro Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1108 Federal Reserve Bulletin • December 1977 rata basis.11 (This transaction is referred to herein corporate reorganizations as follows: (1) IB's preas the "FIC Spin-off.") vious holding of approximately 32 per cent of FG's 2. IB granted FIC, without consideration, an voting common stock was divided so that FIC, a irrevocable proxy to vote, and a right of first refusal new company formed by IB and having identical on, an additional 7.4 per cent of FG's voting stockholders as IB, took over 8 per cent and IB common stock.12 As a result of this action, IB and continued to hold 24 per cent, and (2) FG's non- FIC each had the right to vote 16 per cent of FG's banking activities were taken over almost entirely voting common stock. by IB. 3. FIC assumed $1,500,000 (approximately 25 per cent) of IB's long term debt, for which all of II. IB s Control Relationship With FG After 1966. FIC's FG shares were pledged as security. By cross We now turn to the question whether IB's purguarantees, IB and FIC remained contingently liable on each other's shares of the long-term debt.13 ported divestiture of FG in December 1966, through the FIC Spin-off, was effective to terminate IB's 4. IB informed the Board that at the time of and control of FG. Under section 2(a)(2) of the Act, as subsequent to the transfer of the FG stock to FIC, presently in effect, such control could exist if it there would be no director or officer interlocks between IB and FIC.14 were found (A) that IB directly or indirectly, or acting through one or more other persons, owned or 5. All nominal officer interlocks, and all but two controlled 25 per cent or more of FG's voting director interlocks (George Olmsted and William L. common stock, (B) that IB in any manner con- Cobb), between IB and FG were eliminated. Altrolled the election of a majority of FG's directors, though Olmsted continued as Chairman of the or (C) that IB directly or indirectly exercised a Board of FG, the FG by-laws were amended on controlling influence over FG's management or November 2, 1966, to provide that the Chairman would not be an officer.15 policies. In addition, IB could be deemed to have controlled FG during this period if the transaction While the 1966 Amendments allowed FG until by which IB effected the FIC Spin-off in December December 31, 1978, to separate its banking and 1966 gave rise to a presumption under section nonbanking interests, on December 15, 1967 FG 2(g)(3) of the Act that IB continued to control FIC's adopted a plan for the divestiture of its insurance, FG shares and that presumption was not overcome merchant banking, and industrial subsidiaries. To in an appropriate manner. carry out the plan, FG created Financial Security Corporation ("FSC") as a wholly-owned FG sub- In considering these issues the Board recognizes sidiary, and, on October 28, 1968, following FG's that section 2(a)(2) of the Act as it was in effect in transfer of substantially all of its interest in the December 1966 did not expressly define "control" nonbank subsidiaries to FSC in exchange for all of to include either ownership or control of stock FSC's stock, FG distributed the stock of FSC pro "acting through" others or the exercise of a "conrata to FG shareholders. Shortly after the distribu- trolling influence." The principal issue before the tion FSC was merged into IB. Thus, IB ended up Board, however, is whether IB made an effective owning all of the nonbanking assets divested by FG divestiture of FG in 1966, and the Board's conthrough the FSC spin-off, and FG's other share- sideration of that issue is not limited to the technical holders ended up holding IB stock in lieu of their legal question whether IB's relationship with FG pro rata interest in FG's former nonbanking as- after 1966 constituted statutory control. Section sets.16 5(b) of the Act authorizes the Board to issue orders After the spin-off of FSC, FG's only remaining to carry out the purposes and prevent evasions of impermissible properties were its real estate man- the Act. If IB's direction of FG's business after 1966 agement and finance subsidiaries. In December was so extensive as to support the conclusion that 1974, FG transferred certain of these prohibited IB was continuing to engage in the banking business assets into Financial Mortgage and Realty Corpora- through FG, the Board could conclude, even in the tion ("FMRC"), a wholly-owned subsidiary of FG, absence of a "controlling influence" test of control, and, as it had in the case of FSC, distributed the that the purported divestiture was ineffective and stock of FMRC pro rata to FG shareholders.17 could order appropriate relief. Facts that would In summary, in order to comply with the re- support control findings under sections 2(a)(2)(A) quirements imposed upon them by the 1966 and (C) as amended in 1970 would, in the Board's Amendments to the Act, IB and FG rearranged judgment, also support the conclusion that the their respective holdings in a complex series of purported divestiture in December 1966 was not Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1109 effective to terminate IB's engagement in the busi- example: in 1969, senior officers of IB formed a ness of banking through FG. new subsidiary of FIC and arranged to have FIC The Board has concluded, based upon the evi- dispose of the subsidiary in order to avoid reguladence of record, that continuously after December tion of FIC under the Investment Company Act of 13, 1966, IB was in control of FG within the 1940; in 1970 and 1971 senior officers of IB directed meaning of the definitions of control set forth in a change in FIC's investment policy and developed sections 2(a)(2)(A) and (B) of the Act, as well as by a plan to convert FIC into a mutual fund; in 1971 operation of the presumption of continued control and 1972 IB's senior vice president negotiated the in section 2(g)(3) of the Act. In addition, IB's refinancing of FIC's long-term debt; IB caused FIC domination of FG after 1966 was such that, when to attempt to register as a bank holding company in section 2(a)(2)(C) was added to the Act in 1970, IB 1973 in an effort to resolve IB's problems with the was in control of FG within that clefinition as well. Board under the Act—indeed, IB personnel even Accordingly, the Board finds that the purported prepared FIC's Form F.R. Y-5 Registration Statedivestiture of FG by IB in 1966 was ineffective. ment and signed the name of an FIC official to that Form; IB personnel approved FIC bills, including A. IB Directly or Indirectly Owned or Controlled routine items, for payment; and IB officers initiated More Than 25 Per Cent of FG's Voting Common FIC's decision to liquidate the company after IB Stock. had decided to dispose of its holdings of FG during the course of this proceeding. While IB has purportedly avoided having any overlap of officers or Prior to December 13, 1966, IB was by its own directors with FIC, that policy has extended only to admission a bank holding company because of its nominal office holders; the people who have acdirect ownership of 32 per cent of FG's voting tually run FIC have been IB officers, directors, and common stock. IB has contended that when it employees. In fact, FIC has had only one employee transferred 8.4 per cent of FG's voting common of its own, and he spent less than one day a month stock to FIC and distributed the stock of FIC to IB on FIC business.20 shareholders, it ceased to be a bank holding company. The Board rejects this contention on two FIC argues that the Board should not disregard grounds: First, we find that FIC has at all times its "separate" identity and "pierce the corporate during its existence served as the alter ego of IB, veil." However, it is well established that the and even though IB itself has not owned any FIC separate existence of a corporation will be disrestock since December 13, 1966, IB has nonetheless garded when it is "essential to the end that some so dominated this vehicle it created for the sole accepted public policy may be defended or uppurpose of relieving IB from regulation under the held." Anderson v. Abbott, 321 U.S. 349, 362 Act that FIC should be deemed to be indistinguish- (1944). FIC itself recognizes this legal principle and able from IB for purposes of the Act. Second, even relies on the expression of the principle in Burrows if FIC were not viewed as an alter ego of IB, IB Motor Co. v. Davis, 76 A.2d 163, 165 (D.C. Mun. clearly has controlled FIC by virtue of its exercise Ct. App. 1950): of a controlling influence over FIC and by virtue of Before a corporate entity can be disregarded and IB's ability to control the election of FIC's di- the acts and obligations of a corporation can legally rectors. Finally, because of interlocking relation- be recognized as those of particular persons, or ships between IB and the controlling shareholder of vice versa, it must appear that the corporation is FIC, IB has since 1966 been presumed by law to not only controlled by those persons, but also that the separateness of the persons and the corporation control FIC. FIC is thus a subsidiary of IB within has ceased and the facts must be such that an the meaning of sections 2(d)(2) and 2(d)(3) of the adherence to the fiction of the separate existence of Act,18 and FIC's holdings of FG stock must be the corporation would sanction a fraud or promote attributed to IB.19 injustice. The facts upon which the Board bases these conclusions are set forth in Findings 37 through 49. The Board believes that to treat FIC as a separate Principal among these facts are the following: FIC's entity would promote evasion of the Bank Holding sole purpose for existing was to serve as a reposi- Company Act. Congress intended in the Act to tory for FG stock that IB could no longer hold. IB require a separation in fact of the banking and directors and senior officers have at all times cho- nonbanking activities of holding companies. If the sen the officers and directors of FIC. IB has con- Board were to recognize FIC as a separate entity, it trolled FIC's principal business decisions. For would, in effect, be ruling that the requirements of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1110 Federal Reserve Bulletin • December 1977 the Act can be satisfied by the formalistic re- served, and continues to serve, as a director or arrangement of holdings in a manner that does not trustee: Iowa Capital Corporation and International change actual control relationships at all.21 Such a Capital Corporation, which are personal holding ruling would nullify a fundamental purpose of the companies of Olmsted, and The George Olmsted Act. Congress expressly empowered the Board to Foundation, a charitable foundation established by issue such "orders as may be necessary to . . . pre- him. These three companies together received vent evasions" of the Act, and the grant of that 41.78 per cent of FIC's shares in the Spin-off 23 and authority sustains our conclusion that we should in Olmsted personally received an additional 7.7 per this order disregard FIC's nominal "separateness" cent.24 Because of Olmsted's interlocking service for purposes of determining IB's status under the between these companies and IB, all of the FIC Act.22 shares distributed to the companies, and to him If the separate identity of FIC is disregarded, and personally,25 were presumed, by virtue of section its holdings of FG stock are attributed to IB, IB 2(g)(3) of the Act, to remain under IB's control. must be deemed to have continued to own or Since well over 25 per cent of FIC's shares fell control more than 25 per cent of FG's stock after subject to this presumption, FIC, by operation of the FIC Spin-off, and therefore to have continued law, continued to be a subsidiary of IB, and the 8.4 to be a bank holding company after December 1966. per cent of FG held by FIC was thus deemed by As an alternative basis for the conclusion that section 2(g)(1) of the Act to be indirectly controlled FIC's interest in FG should be attributed to IB, the by IB.2,i Board has concluded, upon essentially the same IB has contended that control of both FIC and IB facts as support our "alter ego" finding, that FIC rests with George Olmsted as an individual, and has continued to be a "subsidiary" of IB—at all that IB itself can neither control Olmsted nor contimes since the FIC Spin-off, within the meaning of trol FIC through Olmsted. The Board rejects this section 2(d)(2) of the Act, and since 1970, within the contention. While Olmsted has indeed played a meaning of section 2(d)(3)—because it controlled dominant role in the affairs of both IB and FIC, the the election of FIC's directors, and because it both record establishes convincingly that the control of had the power to exercise and in fact exercised a FIC was carried out by IB in its corporate capacity controlling influence over the management and and by Olmsted and other IB officials acting as policies of FIC. officers of IB. This is not a case in which a single Finally, the Board finds that the FIC Spin-off individual has elected, for tax or estate planning gave rise to a statutory presumption that IB con- purposes, to use a closely held corporation as a tinued to control the FG shares held by FIC. vehicle for holding shares of a business of which he Section 2(g)(3) of the Act provides that is sole owner. IB and FIC were both widely held shares transferred after January 1, 1966, by any public companies. FIC's affairs were manipulated bank holding company (or by any company which, not to serve independent personal purposes of but for such transfer, would be a bank holding Olmsted, but to serve IB's corporate purposes. company) directly or indirectly to any transferee Furthermore, even though he personally controlled that . . . has one or more officers, directors, trusalmost 50 per cent of IB's stock, Olmsted, as an tees, or beneficiaries in common with or subject to control by the transferor, shall be deemed to be officer and director of a publicly held company, had indirectly owned or controlled by the trans- significant fiduciary responsibilities to IB and its feror. . . . minority shareholders. He was not free, as the This presumption is self-executing; it arises au- controlling shareholder of FIC, for example, to tomatically when the requisite facts are present; it conduct the affairs of FIC in a manner antithetical imposes a legal obligation upon a company to which to the interests of IB shareholders—particularly in it applies to continue to act as a bank holding light of the fact that FIC was literally created out of company subject to the Act; and it remains in effect IB assets and had a complete identity of shareunless and until the Board determines, after oppor- holders with IB at the time of the FIC Spin-off. tunity for hearing, "that the transferor is not in fact Indeed, under these circumstances Olmsted may capable of controlling the transferee." have had an affirmative obligation to conduct the Among the IB shareholders who received shares affairs of FIC for the benefit of IB shareholders. of FIC at the time of the FIC Spin-off were George Because of this fiduciary obligation to IB and its Olmsted, who was then Board Chairman, Chief shareholders, Olmsted may in a sense be viewed as Executive Officer and President of IB, as well as having himself been subject to the "control" of IB. three companies on whose boards George Olmsted At the least, this relationship and these obligations Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1111 support the conclusion that IB was "acting before and after those companies were spun-off.37 through" Olmsted to control FIC.27 8. IB officers and directors served on the boards of directors of FG subsidiary banks. At this time, B. IB Controlled the Election of FG's Directors. IB is represented on the board of each of the eight largest FG banks, whose combined assets represent Section 2(a)(2)(B) of the Act provides that a over 88 per cent of all FG bank assets.38 company may be deemed to be a bank holding 9. IB maintained control and surveillance over company if it "controls in any manner the election FG through joint meetings between their nominal of a majority of the directors" of a bank or another officials, through the operation of various formal bank holding company. We find that even after IB's and informal groups, and through the proximity of purported divestiture of a portion of its FG stock, the IB and FG executive offices.39 IB did in fact thereafter control the election of a 10. Ownership of FG's voting stock other than majority of the FG directors, principally through that held by IB and FIC, was widely dispersed. As IB's control over FG management itself. The facts of March 13, 1974, only 26 persons other than IB upon which this conclusion is based may be sum- and FIC were known to have owned as much as 0.1 marized as follows: per cent of the FG stock, and four of these stock- In about 1958 IB obtained an interest in FG that holders were IB directors or IB subsidiaries.40 gave IB effective working control of FG.28 After the IB's actual control of the FG management en- FIC Spin-off in December 1966 only two IB di- abled IB to select, and IB in fact selected, the rectors sat on the FG board of directors, and no management slate of nominees for the FG board of person holding a title as an officer of IB also served directors. In light of IB's position as the dominant as an officer of FG. However, the elimination of FG stockholder, nomination was always tannominal interlocks among officers and the reduc- tamount to election.41 IB thus controlled the election of interlocking directors resulted in no signifi- tion of FG directors. Exercise of this control is cant change in IB's actual participation in and evidenced by the history of the FG board of dicontrol over the FG management. As IB's Presi- rectors since 1966. In April 1966, at a time when IB dent stated in 1973, the FIC Spin-off changed only concededly controlled FG, the FG board had 11 the formal structure; "Nothing else changed."29 members.42 Between 1966 and August 1974, when This characterization is borne out by the record: this proceeding was initiated, nine additional per- 1. Olmsted, IB's Chairman and President, con- sons were elected to the FG board to fill vacancies. tinued as the de facto chief executive officer of Six of these individuals were asked to join the FG FG.30 board either by IB's chief executive officer or by an 2. William L. Cobb, FG's President and nominal IB director.43 Thus, while only four persons who chief executive officer until July 1, 1974, served as a served on the FG board in 1966 were members in de facto officer of IB until at least September 1, August 1974, IB's control of FG through IB's 1976.31 selection of a majority of FG's board membership 3. R. Sherrard Elliot, Jr., Hugh McNaughton and was not diluted during that period. Howard Hussing functioned as nominal and de Further proof of IB's ability to select the FG facto senior officers of both IB and FG after 1966.32 board members is found in the facts surrounding 4. Guy Martin, whose law firm was counsel to IB's 1977 sale of FG stock to the Middendorf both IB and FG, was involved in the management Group. Olmsted, on behalf of IB, conducted the of both companies and served on the IB Board of negotiations leading to that sale.44 Middendorf Directors, while his law partner, Allen Whitfield, wanted a majority of the nominees for election as continued as an FG director.33 directors at the annual meeting of FG shareholders 5. William J. Schuiling, FG's nominal President to be held in June 1977 to be persons selected by from June 1974 to June 1976 (and an officer of FG or Middendorf. Olmsted and Middendorf reached a subsidiary bank of FG since 1963), and Donald L. agreement that the slate would consist of 21 per- Jenkins, FG's nominal Secretary until 1975, per- sons, 13 to be chosen by Middendorf and eight formed valuable services for IB.34 existing FG directors, four of whom were kept on at 6. Significant FG decisions made since 1966 were Olmsted's request. As an express condition of the made by officials of IB,35 and no significant FG closing on IB's sale of the stock to the Middendorf decision since 1964 was made without George Olm- Group, FG was required to designate a slate of sted's advice and concurrence.30 nominees so chosen, and this condition was fulfilled 7. IB controlled companies spun-off by FG both one week after the Olmsted-Middendorf agreement Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1112 Federal Reserve Bulletin • December 1977 when the FG board designated the nominees cho- All parties to this proceeding have stipulated to sen by Olmsted and Middendorf.45 The Board finds facts that establish the applicability of this prethis to be compelling proof that the interest in FG sumption.49 Controlled by IB after December 1966 continued to Section 225.2(b)(3) of Regulation Y provides that: carry with it the power to select the FG directors. A company that enters into any agreement . . . Again IB contends that these facts at most sup- with (another) company . . . such as a management port the conclusion that George Olmsted as an contract, pursuant to which the company or any of its subsidiaries exercises significant influence with individual, rather than IB as a company, controlled FG.4(i However, IB is a broadly held public com- respect to the management or overall operations of the . . . other company presumably controls such pany, a substantial portion of whose assets were . . . other company. committed to ownership of FG stock, and it was by virtue of IB's ownership of FG stock that Olmsted At all relevant times after the FIC Spin-off, Finanbecame FG's chief executive officer.47 Olmsted's cial Services, Inc. ("FSI"), at first a wholly-owned exercise of influence in the affairs of FG, such as in subsidiary of FG, provided management services to connection with the 1977 Annual Meeting, was both IB and FG under a written contract. In July frequently to advance IB's corporate interests. 1969, FSI was transferred to IB. IB personnel were Moreover, IB officers and directors other than nominally paid their salaries by FSI, which in turn Olmsted continued to be active in the management billed IB for its allocated share of each employee's of FG after the purported divestiture in 1966, and salary. When IB personnel rendered services to their actions were plainly taken on behalf of IB, not FG, they did so as nominal "employees" of FSI.50 Olmsted. Thus, while Olmsted may personally hold The Board finds that the FSI-FG contract was a controlling stock interest in IB, IB's control of FG a management contract covered by section must be viewed as "company" control, covered by 225.2(b)(3) of Regulation Y, and that IB, through its the Act, rather than control by an individual acting subsidiary FSI, exercised significant influence over solely in his individual capacity. the management and operations of FG by reason of this relationship. C. IB Exercised a Controlling Influence Over FG. The rebuttable presumptions of control in Regulation Y may be overcome if it appears that the The findings that support the foregoing conclucompany to which a presumption applies is not in sions as to IB's control relationship with FG also fact capable of controlling the other company. In compel the conclusion that IB exercised a controlthe present case no such showing was made by IB ling influence over the management and policies of or FG. On the contrary, the evidence establishes FG, within the meaning of § 2(a)(2)(C) of the Act as that IB has in fact controlled FG. The presumptions amended in 1970. The record of this case is replete give added weight to our ultimate conclusion and with evidence of IB's pervasive and determinative are an independent basis for holding that IB is a influence over important decisions of FG. If the bank holding company.51 obvious facts were not sufficient to compel this In summary, the Board concludes on the basis of conclusion, the admission of IB's president that the entire record of this proceeding (1) that the "nothing else changed" in the IB-FG relationship steps taken by IB beginning in 1966 by which IB after the FIC Spin-off makes this conclusion unpurported to terminate its admitted control over FG avoidable.48 were not effective, (2) that IB continued after 1966 The conclusion that IB has exercised a controlto control more than 25 per cent of the shares of FG ling influence over FG is buttressed by two regulaand to control the election of a majority of the tory presumptions that are applicable. directors of FG, (3) that IB has exercised a control- Section 225.2(b)(2) of Regulation Y provides that: ling influence over the management and policies of FG, and (4) that IB continued after 1966 to be a A company that owns . . . more than 5 per cent bank holding company with regard to FG, in violaof any class of voting securities of a . . . company tion of the Act. In light of these conclusions, the . . . presumably controls that . . . other company Board has decided that the determinations set forth if additional voting securities are owned (or) conin its Order of August 1, 1974, based on sections trolled ... by individuals . . . who are directors, 2(a)(2)(A) and (B), 2(d) and 2(g)(1) and (3) of the Act (or) officers of the company . . . and, together with should not be set aside, and that its preliminary the company's securities, aggregate 25 per cent or more of any class of voting securities of that . . . determination under section 2(a)(2)(C) should beother company. come final.52 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1113 III. Termination of the IB-FG Control Relationship cumvent the requirements of the Act, sterner proand Prevention Against Re establishment. tective measures may also be required. The Board fully recognizes that one of the main Having determined that IB continued to control bases for IB's control position—namely, its direct FG after December 1966, in violation of the Act, ownership of a 22.2 per cent block of FG's voting notwithstanding IB's purported divestiture of con- stock—has been eliminated by virtue of the sale of trol through the FIC Spin-off, we now consider that stock to the Middendorf Group. While that sale what action, if any, should be taken to assure that undoubtedly goes a long way toward terminating this unlawful control relationship will be completely the illegal control relationship, the Board's Count I terminated and will not be reestablished. and Count II control determinations, as well as its In considering this question, two aspects of the control findings on the record in this proceeding, IB-FG relationship are of particular significance: were based upon additional factors apart from this First, even though it controlled only about one- stock ownership, a significant number of which third of FG's voting common stock, IB's actual continue to exist. The Board believes that where, as working control of FG was pervasive. IB, acting here, it has made control findings based upon a through its own major shareholder and other IB number of relationships among several companies it officials, was able to dominate FG's board of di- may insist upon the cessation of all of those relarectors, select FG's principal officers and em- tionships, without weighing the relative contribuployees, and direct FG's corporate actions and tion of each to the overall finding of control. To do policies. Second, IB's conduct over the past 11 otherwise would, in effect, require the Board to years evidences a clear and determined intention to litigate a whole sequence of control cases as the evade the Act. Through a series of purported dives- parties reshuffled relationships, perhaps dropping titures, carried out by essentially meaningless one or two at a time, or dropping some and reestabchanges in corporate form, and through conceal- lishing others, in an effort to slip just below the ment from public view of the facts relating to IB's threshold of illegality while maintaining as many of domination of FG while maintaining publicly the the old ties as possible. Such an approach would pretense that FG was merely an "investment" of not only severely protract proceedings such as this, IB, IB has succeeded for more than a decade in but would allow a foundation for reestablishment of retaining unified control of a banking and industrial the control relationship to remain in place. empire that Congress decreed in 1966 should be The record in this case indicates that a number of split up. significant relationships between IB and FG have In the Board's judgment, these factors call not not yet been terminated: only for measures that will assure that the control 1. FIC still owns 7.9 per cent of the voting relationship will be completely terminated, but also common stock of FG.54 for protective conditions that will prevent the rees- 2. Insurance company subsidiaries of IB still own tablishment of such a relationship. For this reason 1.5 per cent of FG's voting common stock.55 we reject the contention that the case has become 3. Financial Mortgage and Realty Corporation, "moot" by reason of IB's sale of its directly-owned an IB affiliate whose board consists almost entirely FG stock. Where a company is required to ter- of IB officers and directors, owns 3 per cent of FG's minate a long-standing and pervasive control voting common stock.5" relationship—particularly one maintained in viola- 4. Eight members of FG's board of directors are tion of the Act—the Board believes it appropriate to persons who served in that capacity prior to the require that all direct and indirect ownership or purchase by the Middendorf Group and who were control of voting stock be divested and that inter- permitted to continue to hold such office by reason locking management relationships between the two of Olmsted's agreement with Middendorf.57 companies come to an end. So long as the divesting 5.IB officers and directors continue to serve on company maintains an economic interest or stock the boards of a number of FG's subsidiary banks.58 ownership in the divested company the incentive 6. George Olmsted was employed by FG in remains to attempt to influence the management September 1975 as Coordinator of Policy and Planand policies of the divested company, and so long ning, until at least September 30, 1978, "to assist in as management interlocks continue the divesting the formulation and execution of the Company's company has available to it a means by which to long-term objectives." In addition, he serves as exert such influence.53 Where, as here, the divest- consultant to FG under a life-time contract.59 ing company has evidenced a disposition to cir- 7. Mr. Middendorf, the new Chairman and Chief Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1114 Federal Reserve Bulletin • December 1977 Executive Officer of FG, continues to receive ad- controlling, directly or indirectly or through one or vice from Mr. Olmsted concerning FG business and more other persons, 25 per cent or more of a class has stated that he intends to continue to consult of voting securities of a company, or (c) a partner, Olmsted regarding FG matters."0 member of the immediate family, agent, representa- 8. IB and FG continue to maintain their corporate tive or nominee of any person, described in (a) or headquarters in the Olmsted Building in Washing- (b), holds any such office or position or performs ton, D. C.<J1 any such functions with the other company. 9. IB and FG continue to participate jointly in the 3. FG shall not permit George Olmsted, nor any FG Group Employee Retirement Plan, the adminis- partner, member of his immediate family, agent, trative committee of which includes four IB of- representative or nominee of George Olmsted to act ficers.(;2 for or on behalf of FG in any capacity or hold any The Board recognizes that certain of these rela- office or position in FG of a sort specified in tionships will be altered in the relatively near fu- paragraph 2(a) above. ture. FIC is in the process of liquidation, and its FG 4. All interlocking relationships between IB and stock will also be sold or distributed to FIC share- FMRC shall be terminated no later than January 31, holders/13 In addition, IB and FG have given assur- 1978, unless by that time FMRC shall have divested ances that remaining management interlocks be- direct and indirect ownership and control of all tween IB and FG subsidiary banks will end when shares of stock of FG. the banks have their next regular annual meet- 5. No director, officer, employee or agent of FG ings.'54 shall communicate in any manner with any officer, However, as noted above, where the Board has director, trustee, policy-making employee, agent or found, on the basis of a number of connections representative of IB, FIC, FMRC, Iowa Capital between two companies, that an unlawful control Corporation, International Capital Corporation, relationship has existed between those companies, The George Olmsted Foundation, or George Olmit may, pursuant to its authority under section 5(b) sted, concerning any matter relating to the manof the Act and in order to assure that the control agement, policies or operations of FG, except in the relationship has been fully terminated, require that same manner and under the same circumstances as all of those connections be severed. In addition, such communications are made publicly to all under the same authority, it may impose protective shareholders of FG. conditions and requirements to assure that the 6. IB and FIC shall not hereafter, alone or unlawful relationship will not be reinstated. Ac- acting through one or more other persons, dicordingly, in view of its findings and conclusions in rectly or indirectly acquire, retain, exercise or this matter the Board hereby orders as follows: attempt to exercise control, or any controlling 1. IB and FIC shall, within 90 days, divest direct influence over the management or policies of FG. and indirect ownership and control of all shares of 7. FG and each of its subsidiaries shall each, stock of FG now owned or controlled by them, and within 45 days, provide the Board with a certified shall not reacquire any such shares without the copy of a resolution adopted by its board of diprior written approval of the Board. rectors, in form satisfactory to the General Counsel 2. All interlocking relationships between FG, on of the Board of Governors, to the effect that IB does the one hand, and IB, FIC, FMRC, Iowa Capital not control or exercise a controlling influence over Corporation, International Capital Corporation, or the management or policies of such company or The George Olmsted Foundation, on the other bank, and that such company or bank will not hand, shall be terminated no later than January 31, hereafter agree to, acquiesce in or permit the acqui- 1978, and no such relationship shall hereafter be sition, retention or exercise of control or any concreated without the prior written approval of the trolling influence over it by IB. Board. An "interlocking relationship" shall be 8. All loan, deposit and other banking or trust deemed to exist between two companies65 if (a) a relationships between FG, on one hand, and IB, person holding an office or position (including an FMRC, Iowa Capital Corporation, International advisory or honorary position) with a company as Capital Corporation, The George Olmsted Foundaan officer, director, trustee, policy-making em- tion or George Olmsted, on the other hand, shall be ployee or consultant, or who performs (directly, or entered into and maintained on substantially the through an agent, representative or nominee) func- same terms and conditions as those prevailing at tions comparable to those normally associated with that time for comparable transactions with other such office or position, or (b) a person owning or persons. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1115 9. IB, FIC and FG shall take all steps necessary established a factual basis for that claim. 10BX 1, November 9, 1966 letter. to carry out this Order and shall submit such "Findings 3, 28. reports under oath, in writing or otherwise, as the 12Finding 28. General Counsel of the Board or the Federal Rel*Id. 14Id. serve Bank of Richmond may require to insure 15Findings 9, 10, 12 and 28. compliance with the terms of this Order. 16Finding 30. By reason of FG's distribution of FSC, IB and 10. At such time as the General Counsel of the FIC, as FG shareholders, received about 23 per cent and 8 per cent, respectively, of the stock of FSC. Board shall determine in writing that the affirmative 17Finding 33. As a result of this distribution FIC received about actions required to be taken under this Order have 11 per cent of FMRC's stock. 18The Board's hearing Order of October 4, 1974, set as one of been taken, IB shall be deemed to have ceased the issues to be adjudicated in this case the question whether FIC being a bank holding company.66 is a "subsidiary" of IB within the meaning of § 2(d) of the Act. The By order of the Board of Governors, effective parties have stipulated that among the issues before the Board are the questions whether IB has controlled the election of FIC's November 25, 1977. directors and has exercised a controlling influence over FIC's management or policies. 19Section 2(g)(1) of the Act provides that shares controlled by a subsidiary shall be deemed to be controlled by the parent. 20Finding 24. Voting for this action: Chairman Burns and Governors 21The Board does not mean to suggest that a spin-off will in Wallich, Coldwell, Jackson, and Lilly. Absent and not every case be an unacceptable method of effecting a required voting: Governors Gardner and Partee. divestiture. On the contrary, Congress has recognized in the tax relief measures it has adopted in connection with the Bank Holding Company Act that divestitures may be accomplished through such distributions. The Board must nevertheless be assured that such a distribution—which is likely to result in an enduring identity of shareholders between the divesting company (Signed) THEODORE E. ALLISON, and the divested company—will in fact terminate all control [SEAL] Secretary of the Board. relationships between the two companies. 220ur decision to treat FIC as IB's alter ego is supported by cases in other areas of the law. "A very numerous and growing class of cases wherein the corporate entity is disregarded is that wherein it is so organized and controlled, and its affairs are so conducted, as to make it merely an instrumentality, agency, conduit or adjunct of another corporation." W. Fletcher, Cyclopedia of the Law of Private Corporations § 43 (rev. perm. ed. 1974). See also Leach Co. v. General Sani-Can Mfg. Corp., 393 F.2d 183 (7th Cir. 1968),NLRB v. Patterson Menhaden Corp., 389 F.2d 701 (5th Cir. 1968); Ohio Tank Car Co. v. Keith Ry. Equip. FOOTNOTES Co., 148 F.2d 4 (7th Cir.), cert, denied, 326 U.S. 730 (1945). 23Finding 79, Stipulations Nos. 1 and 2. *39 Federal Register 29054. 24Id.; BX 1656; BX 1657. 239 Federal Register 36059. 25The Board has repeatedly held that the section 2(g)(3) pre- 3Citations in this Order will be principally to the Board's sumption arises with respect to shares transferred by a bank findings of fact ("Findings") and to Board Exhibits ("BX") and holding company to a transferee who himself is an officer or IB Exhibits ("IBX") in evidence. director of the transferor. That is, the presumption is not limited to 40n September 16, 1977, FIC and Board Counsel jointly moved transfers to companies having an officer or director in common to reopen the record for the purpose of furnishing certain informa- with the transferor. See Moody Foundation, 33 Federal Register tion about the liquidation of FIC. That motion is hereby granted. 866 (1968); Mercantile National Corporation, 40 Federal Register 5Finding 35. The Board has not had occasion to consider, and 24771 (1975). expresses no opinion on, the question whether the Middendorf 26As we have noted, the presumption of continued control in Group constitutes a "company" within the meaning of the Act. section 2(g)(3) is self-executing, and the burden was on IB to 6Finding 1; BX 1609; BX 1678. request a Board order overcoming the presumption. No such 7Finding 2. request was made prior to the initiation of this proceeding, nor was 8Section 2(a) of the Original Act provided that any order entered. 27Because of the disposition made in this Order, the Board need no company shall be a bank holding company which is not reach the question whether IB has carried its burden under § registered under the Investment Company Act of 1940, and 2(g)(3) of overcoming the presumption of continued control of was so registered prior to May 15, 1955 (or which is FIC. affiliated with any such company in such manner as to 28In 1963, when IB owned about 17 per cent of FG's common constitute an affiliated company within the meaning of stock and The Equity Corporation owned about 15.9 per cent, the such Act, unless such company (or such affiliated com- SEC determined that IB controlled FG within the meaning of § pany), as the case may be, directly owns 25 per centum 2(a)(9) of the Investment Company Act of 1940. (41 S.E.C. 521) or more of the voting shares of each of two or more That conclusion rested on several factors: IB was the single largest banks. . . . shareholder of FG; six of the 10 FG directors were also directors Since FG's control of its subsidiary banks was held indirectly, of IB, and three of those six were the principal FG officers; most through subsidiaries, it did not, therefore, "directly own" 25 per FG officers held identical offices with IB; IB officers and directors cent of two or more banks. Thus, its affiliation with The Equity served as directors of FG subsidiaries; IB actively engaged itself in Corporation made FG eligible for this exemption. FG's operations; FG's second largest shareholder, Equity Corpo- 9At one point during 1966 IB asserted that it was itself an ration, was not represented on the FG board and did not have any affiliate of another registered investment company, but it never interlocking officers despite its ownership of almost 16 per cent of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1116 Federal Reserve Bulletin • December 1977 FG's voting securities. Finding 27. determination was based were erroneous; second, IB has volun- 29Finding 49. tarily waived a recommended decision by an independent Ad- 30Findings 11, 50. ministrative Law Judge; and third, a majority of the present Board 3bindings 13, 51. took office well after the Count I determination was made, and 32Findings 15, 16, 17, 52, 53. thus did not participate in the action constituting the alleged 33Finding 55. "prejudgment." 34Findings 56, 57. IB has also claimed that the Administrative Law Judge erred in 35Findings 58-63. not requiring production of certain Board records sought by IB 36Finding 50. consisting of confidential portions of examination reports and 37Findings 30-34. internal staff recommendations, drafts, legal opinions and 38Findings 64-66. analyses. No showing has been made that the Law Judge abused 39Findings 27, 66-68. his discretion or that any party has been prejudiced by the lack of 40Although at sometime after March 1974 two persons acquired access to these materials. Furthermore, the Board notes that IB blocks of FG stock amounting to approximately 6 per cent and 8 brought a Freedom of Information Act suit to obtain these per cent, respectively, of the total outstanding, IB continued to documents, but dismissed that action voluntarily in January 1977, own the largest block, and the IB-FIC block was at least 3-Vi times before the hearing in this case commenced. The Board finds no as large as the next largest block. merit in this claim of error. 41Courts have repeatedly found that "power to control through Finally, IB has suggested that the Board is "estopped" from the election of directors may exist where a large block of shares, now finding that the FIC Spin-off was not effective to terminate even though a minority, is owned by one group and the remaining IB's control of FG. The Board rejects this contention. The record shares are widely scattered." Gottesman v. General Motors shows that IB did not disclose all of the facts relating to this Corp., 279 F.Supp. 361, 368 (S.D.N.Y. 1967) (23%); See also transaction. In particular, IB implicitly represented that FIC Essex Universal Corp. v. Yates, 305 F.2d 572 (2d Cir. 1962) would be a bona fide corporation with an actual existence separate (28.3%); American Gas & Electric Co. v. SEC, 134 F.2d 633 (D.C. and distinct from IB, when in fact FIC was never so operated. Cir. 1943) (17.5%); Morgan Stanley & Co., Inc. v. SEC, 126 F.2d Moreover, the record indicates that IB was cautioned by the 325, 328 (2d Cir. 1942) (19.6%); Koppers United Co. v. SEC, 138 Board staff, and itself recognized, that the Board as such had not F.2d 577 (D.C. Cir. 1943) (14.6%); Berle, "Control" in Corporate taken a position on the effectiveness of the purported divestiture. Law, 58 Colum. L. Rev. 1212 (1958). (See IBX 5, BX 2, Heller Dep. pp. 218-19). 42BX 1751. 53IB has shown a particular facility for exercising a control 43Finding 72. relationship with respect to another company in which it owns less 44IBX 53, page 1. than a 25 per cent voting interest. For example, in 1971 an IB 45Finding 73; BX 1753, April 29, 1977, page 4. official stated that IB could control a bank holding company with 46IB Brief at pages 25-37. as little as 10 per cent ownership (BX 474), and IB claimed the 4701msted has not personally owned as much as 1 per cent of ability to exercise "significant influence" over the operations of a FG's stock at any time since February 1, 1966. He did not become manufacturing company with ownership of as little as 10 per cent FG's Chief Executive Officer until after IB required its FG stock of the company's voting stock (BX 475). IB's president told a in 1958, and he ceased being a member of the FG board in 1977 group of security analysts in 1972 that with IB's "style of when IB sold its FG stock. operation," under which it placed its nominees on key committees 48Finding 49. of another company, it could control that company with as little as ^Stipulation No. 17. 20 per cent (BX 476, page 10). 50Findings 4, 75. The various limits fixed in the Act for stock ownership that may 51IB contends that the Board lacks power to promulgate such exist without Board approval—such as the 25 per cent limit on the regulatory presumptions. We disagree. Section 5(b) of the Act ownership of bank shares, in § 2(a)(2)(A), and the 5 per cent limits empowers the Board "to issue such regulations and orders as may on a holding company's ownership of bank and nonbank shares, in be necessary to enable it to administer and carry out the provi- § 3(a)(3) and § 4(c)(6)—are not determinative tests of the comsions of [the Act] and prevent evasions thereof," and this provides pleteness of a required divestiture, particularly where actual ample legal basis for these provisions of Regulation Y. A similar working control, or a "controlling influence" relationship, has argument was made in an attack upon a portion of the Board's existed. The Board's authority under § 5(b) of the Act to issue Regulation Z, under the Truth in Lending Act, which conclusively orders necessary to carry out the purposes and prevent evasions presumed that a credit transaction was involved where payments of the Act allows it, in order to assure that a control relationship were made in four or more installments. This regulatory presump- will be fully terminated and will not be reestablished, to require tion, which had been promulgated by the Board under a broad the disposition of holdings that might otherwise have been permisrulemaking power similar to that in § 5(b) of the Act, was upheld sible absent the control relationship. by the Supreme Court in Mourning v. Family Publications, Inc., 54Finding 7. 411 U.S. 356 (1973). 55Finding 6. 52IB has argued that the Board's Count I determination im- 56Findings 8, 34. properly prejudged the issues to be decided in this case on the "Finding 73. record made at the hearing. This contention is without merit. 58Finding 64. There was no requirement for a hearing prior to the issuance of the 59Finding 77. Court I determination. Indeed, that determination was based at ™Id. least in part upon a self-executing statutory presumption that 61 Finding 2. deemed IB to control FG as a matter of law. A principal purpose of 62Finding 78. the hearing ordered in this case was to determine whether the 63IBX 65. On September 13, 1977, FIC's shareholders adopted a Count I determination should be set aside. The claim of "pre- plan of liquidation and FIC filed a certificate of dissolution in judgment," therefore, can carry no more weight here than in any Delaware. Any shares of FG that remain owned by FIC after case in which an agency is asked to reconsider a decision it has sufficient assets are sold to pay FIC's debts will be distributed pro made. The Board's decision on the question whether to set aside rata to FIC shareholders. the Court I determination has been based solely upon the record 64IBX 62. compiled before the Administrative Law Judge, and no presump- 65For purposes of this order, references to any company shall be tive weight has been accorded the original determination. The deemed to include all subsidiaries of such company. practical effect, therefore, is as if the Board were making the 66Nothing in this Order should be deemed to constitute approval Court I determination de novo on the basis of this record. by the Board of, or acquiescence in, any action taken by IB, either Several other facts should also be noted: First, IB has not before or after the FIC Spin-off, that would not be permissible for shown that any of the material facts upon which the Count I a bank holding company. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1117 APPENDIX FIC's headquarters are designated as 1701 Penn- TO ORDER RELATING TO CONTROL OVER sylvania Avenue, N.W., the company has no actual FINANCIAL GENERAL BANKSHARES, INC. offices. (Lee deposition page 15). On June 10, 1977, the FIC Board of Directors voted to adopt and International Bank approve a plan of complete liquidation and dissolution approved by the FIC shareholders on Findings of Fact* November 30, 1976, with certain modifications. (BX 1744, Exhibit B; BX 1754, June 10, 1977, page 1. International Bank ("IB"), an Arizona corpo- 2). ration formed in 1920, is headquartered in the 4. Financial Services, Inc. ("FSI") is a District District of Columbia. IB is a holding company of Columbia corporation 100% owned by IB. (BX divided into seven major operating groups: Interna- 1653, page 38). In July 1969, FSI was transferred tional, Banking, Casualty Insurance, Life Insur- from FG to IB because FSI "belonged in the IB ance, Industrial, Finance and Leasing and Invest- side". (BX 1749, September 19, 1969, page 4; Elliot ments. (BX 1609; BX 1750, May 21, 1976, page 2). February 18, 1976 deposition pages 30-31; see also The two domestic assets described by IB as "in- finding 30). There is no evidence of any actual vestments" are: (a) Financial General Bankshares, consideration passing from IB to FG for FSI. FSI's Inc. (until April 29, 1970, the company's name was sole function is to provide services to companies Financial General Corporation), and (b) a wholly- within the "IB family" on a breakeven basis. (BX owned office building located at 1701 Pennsylvania 480, pages 1, 5 and Addenda; McNaughton Febru- Avenue, N.W., Washington, D.C. (BX 1678, pages ary 3, 1976 deposition pages 12-13). FSI has never 16-17). entered into a management contract with any cor- 2. Financial General Bankshares, Inc. ("FG"), poration not "subsidiary to or affiliated with the is a Virginia Corporation headquartered in the [IB/FG] group corporations." (Cramer deposition IB-owned building (1701 Pennsylvania Avenue, page 34). The services provided by FSI include, N.W.). FG is a bank holding company registered inter alia: under the Bank Holding Company Act (the "Act"), § 1(a) "Such executive officers as the Board of with stockholdings in 15 banks. Of those 15 banks, Directors of such Group Corporation [the corpora- FG's voting common stock ownership exceeds 50% tion receiving the services] shall determine it rein 13 banks and is over 25% in the other two banks. quires for the adequate conduct of its business; (BX 1723, pages 8-9; BX 1753, July 22, 1976, pages § 1(b) "Corporate secretarial and financial service 1-2; BX 1698, front cover). FG has at all times since and officers and personnel in connection therewith; 1959 owned or controlled more than 25% of the § 1(c) "Accounting personnel and services and outstanding voting shares of two or more banks. consultation and advice on all accounting, invest- (BX 1679, page 12). FG also holds 96% of the voting ment and research matters; common stock of National Mortgage Corporation §l(n) "Consultation and advice with respect to and 69% of the voting common stock of H. G. management problems." Smithy Company, which it must divest by Decem- (BX480). ber 31, 1978, pursuant to the 1966 Amendments to 5. By 1958 IB had acquired working control of the Act. (IBX 31, page 21, Note (1), third para- FG through its acquisition of approximately 17% of graph). FG presently is negotiating the sale of its the FG voting common stock. (Olmsted deposition interest in H. G. Smithy. (BX 1753, February 18, pages 4-10; Martin deposition pages 191-195). By 1977, page 7). 1966, IB owned approximately 31.6% of FG. (BX 1, 3. Financial International Corporation ("FIC") page 2 of the November 9, 1966 letter). On is a Delaware corporation headquartered in the November 15, 1966, IB transferred 300,000 shares IB-owned office building at 1701 Pennsylvania (8.2%) of its FG voting common stock to FIC, Avenue, N.W. FIC was formed by IB in 1966 for thereby reducing its direct ownership in FG to less the sole purpose of holding certain FG shares. (BX than 25% of the voting common stock. (BX 3). 1734, front cover; BX 1754, FIC Articles of Incor- After November 15, 1966, and until April 29, 1977, poration; Olmsted deposition, page 16; Elliot Feb- IB's ownership of the FG voting common stock ruary 18, 1976 deposition, pages 47-48). Although ranged between 22.2% and 23.6%. (BX 1681, page 1; BX 1683, page 1; BX 1704, page 3; BX 1705, page * The following abbreviations appear in the citations: "BX"— Board Exhibit; "IBX"—International Bank Exhibit. 3; BX 1706, page 2; BX 1707, page 2; BX 1708, page Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1118 Federal Reserve Bulletin • December 1977 2; BX 1709, page 2; BX 1710, page 2; BX 1711, page 11. Although George Olmsted has not been a 1; BX 1712, page 1; IBX 54, page 1). On April 29, nominal officer of FG since November 1966, he did 1977, IB sold all of the FG shares registered in its in fact function as FG's "Chief Executive Officer" name. (IBX 54, page 1). after that time. (See Finding 50). 6. Since June 20, 1969, five insurance companies 12. William L. Cobb has worked with George controlled by IB (Hawkeye Security, Northeastern, Olmsted since 1935. (Cobb deposition pages 3,7).In United Security, First Reinsurance, and United 1947 Olmsted and Cobb became associated with the Services Life) have owned between 1.1% and 1.7% Equity Corporation, which then controlled FG. of the FG voting common stock. (BX 1637, pages {Id., page 4). When Olmsted acquired control of IB, C-13, D-12, E-16; BX 1639, pages F-10, G-7, H-9; Cobb became a director and member of the IB BX 1708, page 4; RX 1709, page 4; BX 1710, page 4; Executive Committee. (Stipulation No. 10). When BX 1711, page 3; BX 1652, page D-10; BX 1712, IB gained control of FG, Cobb became Vice Presipage 3; IBX 54, page 3). Those companies currently dent and a director of FG. (Cobb deposition pages own 1.5% of the FG voting common stock. (IBX 54, 5, 10-11). In 1965, Cobb was elected FG's President page 3). and in 1966, he became the nominal Chief Execu- 7. Since November 15, 1966, FIC has owned tive Officer; he ceased serving in both positions in between 7.9% and 8.6% of the FG voting common June 1974. (Stipulation No. 16). Cobb was chosen stock (Finding 5; BX 1703, page 3; BX 1704, page 3; FG President even though he had no prior banking BX 1705, page 3; BX 1706, page 2; BX 1707, page 2; experience. (Cobb deposition pages 6-17). His prior BX 1708, page 2; BX 1709, page 2; BX 1710, page 2; FG responsibility had been in insurance. {Id., pages BX 1711, page 1;BX 1712, page 1;IBX 54, page 3). 12-13). FIC currently owns 7.9% of the FG voting common 13. Although William L. Cobb resigned from the stock. (BX 54, page 3). IB Executive Committee in October 1966, he con- 8. Since late 1974, Financial Mortgage and Re- tinued as IB director (BX 1749, October 21, 1966, alty Corporation ("FMRC") has owned approxi- page 2; Stipulation No. 16), and in fact continued to mately 3% of the FG voting common stock. (BX serve as the "number two man" in both IB and FG. 1745, page 3; BX 1746, page 1; IBX 54, page 3). (Finding 51). 9. George Olmsted has served as Chairman of 14. Josef S. Tressler has served as IB Vice the Board and Chief Executive Officer of IB since President from May 1970, until May 1972, Execu- 1954. (BX 1668, page 2; BX 1750, May 21, 1976, tive Vice President from May 1972, until May 1974, page 2). He joined the FG Board in 1948 (BX 1712, and President and Chief Operating Officer since page 2) and in 1958, soon after IB gained control of May 1974. He has been a member of the IB Board FG (see Finding 5), Olmsted became FG's President since February 1972. (Stipulation No. 16). Prior to and Chief Executive Officer. (Cobb deposition becoming an IB officer, in 1970, Tressler was pages 5, 10-11). When William L. Cobb became FG associated with three insurance companies— President in 1965, Olmsted continued as the Chief Hawkeye Security, United Security, and Executive Officer. (Cobb deposition page 12). Northeastern—which were acquired by IB in 1969 10. When FG amended its by-laws in November following their 1968 spin-off from FG. (Tressler 1966, to provide that "the Chairman of the Board February 9, 1976 deposition pages 12-13; see Findwill not be an officer of the Corporation and will not ing 30). have any duties or responsibilities except to preside 15. W. Hugh McNaughton, currently IB Senior at meetings of the Board of Directors", Olmsted Vice President-Financial, has been employed by IB continued in that position, but purported to cease since June 1, 1957, McNaughton served as IB acting as FG's "Chief Executive Officer". (BX Treasurer until approximately February 1962, when 1751, November 2, 1966, pages 2-4, attached letter he became Vice President-Financial; he was elected dated October 21, 1966). In October 1975, Olmsted to his present position in May 1974. (McNaughton entered into a three-year contract with FG where- February 3, 1976 deposition pages 3-5; Stipulation by, for $270,000 payable in three installments, he No. 16). McNaughton served as Vice President of became FG's Coordinator of Policy and Planning. FG from 1962 until December 1966. (McNaughton (BX 1753, October 3, 1975, pages 3-4). In 1976, February 3, 1976 deposition page 7; Stipulation No. Olmsted resigned as Chairman of the FG Board, but 16). was elected as Chairman of the FG Executive 16. Howard Hussing served as IB's Secretary Committee. (BX 1751, October 21, 1966, page 6; from approximately 1956 until May 1970, when he BX 1753, May 21, 1976, pages 2, 3). became Vice President and Secretary, a position he Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1119 continues to hold. (Hussing February 12, 1976 until June 1977, he was President and nominal Chief deposition page 4; Stipulation No. 16). From ap- Executive Officer. Johnson also served as Presiproximately 1960 until December 1966, Hussing dent and a director of FIC from October 1973, to served as FG's nominal Secretary. (Hussing Febru- May 1977. (Stipulation No. 16; BX 1753, May 21, ary 12, 1976 deposition page 5; Stipulation No. 16). 1976, page 4; June 20, 1977, page 3; BX 1754, May He served as FG's Secretary in fact until Jack 20, 1977, pages 2-3). Beddow became FG's Secretary in 1975. (See Find- 22. Donald L. Jenkins joined FG in 1945 (Jenkins ing 53). deposition page 5), served as FG's Secretary and 17. R. Sherrard Elliot, Jr. was Executive Vice Treasurer from December 1966, until May 1969, President of both IB and FG until July 31, 1966. and as Vice President and Secretary from May (Stipulation No. 16). On that day he resigned from 1969, until December 1974. Jenkins also served as both positions (BX 1749, September 16, 1966, page FIC Secretary from September 1969, until May 5; BX 1751, July 28, 1966, page 2), but entered into 1972, and as a director of that corporation from a consulting contract with both companies under December 1969, until April 1972. (Stipulation No. which his duties were substantially the same as 16). those he had as Executive Vice President of IB 23. H. Paul Mount, currently President and and FG. Elliot continued to work full-time at IB and Chief Executive Officer of the Arlington Trust FG until the end of 1973. (Elliot February 18, 1976 Company, an FG subsidiary bank, served as FIC's deposition pages 8, 23, 41-42; Olmsted deposition nominal President from April 1966, until May 1967, pages 345-346). and from April 1972, until October 1973, and as an 18. Guy Martin has served as IB's counsel and a FIC director from November 1966, until April 1967, member of the IB Board since 1952, and as a and from April 1972, until May 1977. (Stipulation member of the IB Executive Committee since at No. 16; Mount deposition page 3; BX 1754, May 20, least 1966. (Martin deposition pages 3-4; BX 1656, 1977, pages 2-3). page 4; BX 1657, page 2; BX 1658, page 2; BX 1659, 24. Donald W. Lee, Comptroller of the Arlington page 4; BX 1662, page 3; BX 1663, page 3; BX 1664, Trust Company since 1972, has served as FIC's page 3; BX 1665, page 2; BX 1666, page 2; BX 1667, nominal Secretary and Treasurer since May 1972. page 2; BX 1668, page 2). George Olmsted, IB's (Stipulation No. 16; Lee deposition page 5). Lee, Chief Executive Officer, views Martin as the the only salaried officer or employee of FIC, "senior staff man on the legal side." (Olmsted spends, on the average, one day each month on FIC deposition pages 196-197; see also Finding 55). business. (Lee deposition pages 9, 19-20). 19. Phillip L. Green became IB and FG Assistant 25. Prior to 1966, FG was an "affiliate" of the Treasurer in April 1962, and IB and FG Treasurer in Equity Corporation, a registered investment com- December 1964. (Green deposition page 3). In De- pany, and did not directly own more than one bank, cember 1966 he purported to resign as FG's Trea- and therefore was not covered by the Bank Holding surer. (BX 1751, December 16, 1966, page 7). In Company Act definition of a bank holding comfact he served as FG Treasurer until at least June pany. (BX 1679, pages 4-5 ["status under Bank 1968. (Finding 54). Holding Company Act of 1956"]; 12 U.S.C. 1841 20. William J. Schuiling joined FG in 1963 as (a)(2) prior to the 1966 Amendments). IB claimed President of the Bank of Commerce (NY), an FG that it was entitled to exemption from registration subsidiary bank. (Schuiling deposition page 4). He as a bank holding company because either it or its served as FG Vice President from September 1967, subsidiary FG was an affiliate of an investment through May 1970, as Senior Vice President from company. (BX 1, page 1 of the November 9, 1966 May 1970, through December \91\, and as Presi- letter; BX 2000, page 5). dent and nominal Chief Executive Officer from 26. In 1966, when the investment company June 1974, through May 1976. Schuiling was an FG exemption was removed from the Act,- FG regisdirector from December 1973, until June 1977. tered as a bank holding company. (BX 1679, page 4, (Stipulation No. 16; BX 1753, June 17, 1977, page second paragraph). Under the 1966 Amendments, 5). In addition, Schuiling has served as Vice Presi- FG has until December 1978, to divest its nondent (since May 1972) and a director (since August banking assets. (12 U.S.C. 1843(a)(2)). 1971) of FIC. (Stipulation N 16). 27. In 1963, in proceedings before the SEC, IB 21. Harold K. Johnson became an FG director in sought to establish that it controlled FG within the April 1970. In 1974, he became Vice Chairman of meaning of the Investment Company Act of 1940. the FG Board of Directors, and from July 1976, (BX 1624, transcript of SEC proceeding 812-1372, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1120 Federal Reserve Bulletin • December 1977 In the matter of International Bank). George Olm- 8.2% of the outstanding voting common stock of sted, who was Chief Executive Officer of both IB FG) into FIC, a wholly-owned IB subsidiary with and FG in 1963, testified that: no other assets, in exchange for all of FIC's stock, A. The location of the offices of FG and its and on December 13, 1966, distributed the FIC subsidiaries in the same building as IB enables IB to shares to the IB shareholders (BX's 1,3,4; Finding exercise more effective control over those com- 3); (b) IB granted FIC a proxy to vote, and a right of panies (SEC Tr. 24, 29-30). first refusal on, an additional 7.4% of the FG voting B. George Olmsted frequently meets with the common stock IB retained (BX 4; Olmsted deposiexecutives of these companies, to discuss their tion page 135); (c) termination of all but two dioperations. These meetings include Management rector interlocks and all formal officer interlocks Council meetings, which are attended by the chief between IB and FG (BX1); (d) FIC became primaroperating officers of all the related corporations. In ily liable on $1,500,000 (approximately 25%) of IB's addition, the IB banking group has two series of long-term debt; FIC's FG shares were pledged as meetings: (a) FG Advisory Council, for the bank security for FIC's portion of this debt, and by Presidents; and (b) FG Operations Committee, for cross-guarantees, IB and FIC remained continthe bank operating officers. Each of these groups gently liable on each other's share of this long-term meets twice a year. (SEC Tr. 24-25). debt (BX 3, K3.1; BX 1749, November 4, 1966, C. The President or senior executives of the pages 2-3; McNaughton February 3, 1976 deposicompanies controlled by IB consult with George tion page 80); and (e) IB informed the Federal Olmsted (a) before making a major change in finan- Reserve Board that all IB-FIC director and officer cial policy, (b) before selecting their own succes- interlocks were terminated prior to November 9, sors or other senior executives of the company, and 1966 (BX 1, page 6 of the November 9, 1966 letter). (c) to inform him regularly of the business de- IB disclosed its plan to the Board in a letter dated velopments in the company. (SEC Tr. 28-29). November 9, 1966. (BX 1). That letter stated that D. In the formation of IB's policy, one of the IB believed the plan, when consummated, would functions of directors and officers of IB who are terminate IB's status as a bank holding company. appointed to the board of directors of subsidiaries Although IB's counsel had been advised by the and affiliates of IB is to exercise control over those Board staff that a formal opinion should be sought if companies. (SEC Tr. 33). IB wanted to know the Board's position, IB did not E. At the meetings of the IB Board of Directors, request a Board opinion. (Heller deposition pages the Board receives reports of the operations of the 218-219). The Federal Reserve Bank of Richmond underlying companies. These reports are presented replied to IB's counsel, stating: "the absence of any by the officers of those companies. Following such comments or questions by either the Board of presentations, the Board discusses and formulates Governors or by this Bank should not be construed the policy of IB as it applies to these companies, as approval of the proposed transaction described and forwards these views to the companies. (SEC in the letter or concurrence in the opinions or Tr. 33-34). conclusions with respect to the Bank Holding Com- F. It is IB's policy to keep the number of "IB" pany Act expressed therein." (IBX 5). and "FG" directors on the Boards of commercial 29. A February 15, 1967, IB internal memoranbanks at the smallest number possible. (SEC Tr. dum prepared by IB's counsel (Olmsted deposition 66). pages 247-248; December 20, 1976, Prehearing Tr. On May 15, 1963, the SEC found that IB con- 29-33) referred to the substance of the IB-FIC trolled FG and that the Equity Corporation, al- relationship and stated that "The Staff of the Board though a substantial investor in FG (15.9% of the of Governors has not taken a formal position on FG voting common stock vs. IB's 17.14%) exer- these matters nor has it indicated complete comcised no control over FG. (BX 1623, SEC File No. pliance therewith will necessarily insure that 812-1561, May 15, 1963). neither International Bank nor Financial Interna- 28. When the Act was amended in 1966 to elimi- tional Corporation will be a bank holding company nate the investment company affiliation exemption, as defined in the Bank Holding Company Act of IB admitted that it was a bank holding company. 1956, as amended. The personnel relationships are However, it adopted a plan by which it intended to merely one factor in the overall question of direct or close its status as such. The principal elements of indirect control of Financial General and/or its subsidiaries." (BX 2). this plan were as follows: (a) IB transferred 300,000 shares of FG voting common stock (approximately 30. On December 15, 1967, the FG Board of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1121 Directors adopted a plan for divestiture of FG's FMRC, IB has at all times since December 1966, insurance, merchant banking, and industrial sub- controlled that company. Since 1966, George Olmsidiaries. FG formed Financial Security Corpora- sted has served as Chairman of the Board, and a tion ("FSC"), gave that company 95% of the voting majority of the directors have been IB directors or common stock of the subsidiaries to be divested, officers. (Stipulation No. 16). Four of the five and in October 1968, distributed the stock of FSC to current directors (Martin, Avery, Conway, and the FG shareholders. IB thus became a 23% Olmsted) are IB officers or directors, and the fifth shareholder in FSC and FIC became an 8% (George Olmsted, Jr.) is the son of IB's Chairman shareholder. (BX 1751, December 15, 1967, pages and Chief Executive Officer. (Id.). In October 1974, 8-10; June 28, 1968, pages 1-3; BX 1748, page 4; while FMRC was still wholly-owned by FG, IB Findings 5, 7). Two days after the distribution, IB personnel replaced FG personnel as officers of announced that it was considering the acquisition of FMRC. (BX 441; Stipulation No. 16). one of FSC's subsidiaries. By January 1969, IB and 35. On April 29, 1977, IB sold 1,204,231 shares of FSC were discussing the possibility of a merger. In FG voting common stock (22.2% of the FG vote) to March 1969, the two companies entered into a a group of 26 purchasers represented by J. William merger agreement, which was consummated on Middendorf, II. None of the purchasers bought as June 20, 1969. Five days later, IB acquired from FG much as 5% of the FG common stock, and only two the minority interest in the FSC companies that FG purchasers own more than 2% of the FG common had retained. (BX 428; BX 429; BX 1638, page 68; stock. (IBX 50; IBX 54, pages 1-2). BX 1749, June 25, 1969, pages 4-5). 36. Some time after March 1974, B. F. Saul and 31. While the transactions presented in Finding Eugene Casey each acquired FG stock representing 30 were portrayed as a series of arms-length discus- more than 5% of the FG vote. Casey now owns sions between IB and FSC, they merely reflected approximately 8% of the vote and B. F. Saul owns an IB/FG decision, made in 1966, that all assets approximately 7%. (BX 1520, page 1; BX 1521, divested by FG as a result of the 1966 Amendments page 5; BX 1525, page 2; BX 1712, page 2; IBX 54, to the Act would be merged into IB. (Martin page 3; IBX 49, page 2). deposition pages 88-89; Elliot February 18, 1976 37. IB directors and senior officers have at all deposition page 33; BX 64, page 1; BX 430, page 7; times controlled the selection of FIC's directors Olmsted deposition page 164; BX's 431-437; and officers. Guy Martin and George Olmsted dis- McNaughton August 16, 1976 deposition, pages cussed the selection of each of the FIC Presidents. 152-155). (Martin deposition page 152). Olmsted asked Paul 32. IB officers and directors prepared the min- Mount to serve as FIC's "caretaker President" utes of the first FSC Board of Directors meeting during 1972-1973, and in 1973 decided that Harold and decided whether a discussion of FSC's basic K. Johnson should replace Mount. (Mount deposipolicy should be included in those minutes. These tion page 8; Olmsted deposition pages 19, 142; IB personnel were involved because they were "the Martin deposition page 153; Johnson deposition people who were the most familiar with the many pages 15-17, 32-33). Johnson's assumption of the problems involved . . ." (BX's 438, 439; Cobb FIC Presidency was part of an arrangement, deposition page 74). worked out by Olmsted and Martin, by which 33. After the 1969 FSC spin-off, FG's only "pro- Johnson became associated with FG. (Johnson dehibited properties" were its interests in National position pages 15-17, 32-33; BX 1754, October 30, Mortgage Corporation and the H. G. Smithy Com- 1973, page 4). In 1971, Josef Tressler, with assistpany. FG placed certain of the assets of these ance from Olmsted, Martin and Hugh r companies into FMRC and on December 20, 1974, McNaughton, picked the FIC director slate. (BX 5, distributed FMRC to the FG shareholders on a pro page 2; BX 6; Tressler February 9, 1976 deposition, rata basis. (BX 1688, page 2; BX 1753, October 8, page 91; BX 7; BX 1754, February 19, 1971, page 5; 1974, pages 5-6; BX 1745). Thus, IB owned approx- August 26, 1971, page 3; September 24, 1971). In imately 23%, and FIC owned approximately 8%, of other years, Martin and Tressler discussed the FMRC. (BX 1745, pages 1-2). In January and selection of FIC's directors and officers. (Martin February 1976, IB sold its FMRC shares. (Stipula- deposition pages 145-146, 152-153). In 1973, Olmtion No. 12). sted and Hussing worked together in selecting 34. Although IB owned no FMRC stock before FIC's directors and officers (BX 8, page 1 (hand- December 20, 1974 and after February 1976, and written note by Betty Bagger, Olmsted's personal never owned more than approximately 23% of secretary), page 2 (Olmsted handwritten note); Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1122 Federal Reserve Bulletin • December 1977 Olmsted deposition page 109; BX 9; BX 1754, involvement by Guy Martin and other IB officers, February 23, 1973, pages 2-3). the FIC Board of Directors formally ratified Tres- 38. When FG spun off the FSC voting common sler's recommendations. (BX 17; BX 1754, Februstock, FIC received approximately 8% of those ary 19, 1971, pages 2-4). Thereafter, Tressler, Olmshares (Finding 30) and, because it thereupon sted, McNaughton, and William Cramer prepared owned more than 5% of the voting common stock of the 1971 FIC proxy materials and in August the two different companies, registered with the SEC shareholders approved Tressler's recomunder the Investment Company Act of 1940. (BX mendations. One day before the shareholder vote, 1726). IB then caused FIC to form Security Interna- in anticipation of that vote, Tressler sent Donald tional Corporation ("SIC") and to place its FSC Jenkins (then FIC's nominal Secretary) the letter to shares in SIC because IB did not want FIC to be sent over Jenkins' signature to FIC shareremain registered under the Investment Company holders. (BX's 18 (see page 2, memo from William Act. (BX 1754, February 19, 1969, page 3; Martin A. Doying), 19; Tressler February 9, 1976 deposideposition pages 119, 120, 125; BX 10; BX 1754, tion, page 102; BX 1754, August 26, 1971, pages June 25, 1969, page 1). Work relating to the forma- 3-5). tion of SIC and the attempted de-registration of FIC 41. In 1969, Hugh McNaughton and R. Sherrard was performed by George Olmsted, Guy Martin, Elliot, acting on behalf of FIC, travelled to Hugh McNaughton, and Howard Hussing. (BX 10 Hartford, Connecticut and Springfield, Mas- (handwritten notes by Betty Bagger); Martin depo- sachusetts to meet with FIC's lenders and to "dissition page 123). IB exercised complete control cuss FIC long-term debt and other plans." (BX's over SIC both before and after that corporation was 20, 21; McNaughton August 16, 1976 deposition spun off by FIC. The only directors and officers of pages 38, 42; Elliot February 18, 1976 deposition SIC during its existence were Hugh McNaughton, page 49). In 1971-1972, McNaughton initiated and Howard Hussing, Ridgway Espy, F. Anthony accomplished a refinancing of FIC's debt. How- Guida, and William M. Cramer, all of whom were ever, he sought to create an appearance of in- IB officers. (Stipulations 9 and 16). volvement by FIC's nominal officers (for "legalis- 39. During 1970, Josef Tressler and other IB tic" reasons). (BX 23; BX 1754, December 17, officers, acting at the request of George Olmsted, 1971, pages 2-4; BX's 24-28; McNaughton August undertook an investigation of the legal, financial 16, 1976 deposition, pages 87-88). and operational aspects of converting FIC into a 42. In 1973, IB developed a scheme whereby IB mutual fund. (Olmsted deposition page 77; Tressler would grant FIC and "an appropriate third party" February 9, 1976 deposition pages 29, 32, 56). After proxies to vote sufficient FG shares to reduce IB's the FIC Board authorized a study of the possibility direct vote in FG to below 5%. (BX 1750, August of conversion (BX 1754, September 18, 1970, page 30, 1973, page 4; November 19, 1973, pages 2-3; BX 6), Tressler conducted extensive research on the 1754, October 30, 1973, pages 2-3; December 14, subject, discussed it with others, and prepared a 1973, page 2). No consideration was to flow from written report for Olmsted. (BX 5). When the FIC to IB for the proxy. (BX 11, page 3). The real decision was made not to convert FIC into a mutual purpose for the proposal was to create another fund, Olmsted asked Tressler, "If not mutual fund, argument by which IB might avoid registration how do we best employ these idle assets?" (BX 16; under the Act. (Fischer deposition, page 11). Tressler February 9, 1976 deposition, page 47; BX 43. In 1973, IB caused FIC to prepare and file 5, page 1, handwritten note at top right corner; Federal Reserve Form F.R.Y.-5, a bank holding Olmsted deposition page 76). In October 1970, company registration statement "in an effort to Tressler suggested that FIC might become a resolve . . . International Bank's problems" under closed-end dual purpose mutual fund; Olmsted di- the Act. (BX 1754, October 30, 1973, page 3; BX 12; rected him to pursue that idea (BX 13; see also Fischer deposition page 14). This form was pre- BX's 14 and 15; Olmsted deposition pages 53-54; pared solely by IB personnel, primarily William BX 1754, December 18, 1970, page 2). There is no Cramer; FIC's officers had no role. Cramer signed evidence that any of FIC's nominal officers had any the name of Donald Lee, FIC's nominal role in considering these proposals. Secretary/Treasurer, to the form, and it was not 40. In January 1971, Josef Tressler recommended until after the F.R.Y.-5 was sent to Richmond that to George Olmsted that (a) FIC have a reverse Lee learned of the form's existence. (Martin depostock split, and (b) FIC change its investment sition page 161; BX 12, page 15; BX 12, letter of policy. (BX 16). After further work by Tressler and November 6, 1973; Lee deposition pages 19-20, 45, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1123 47-48). nominees were "interested persons"—Alice Olm- 44. Since 1966, IB officers and directors have sted Burt, Harvey H. Fischer, and Harold K. approved numerous FIC bills for payment. In 1972, Johnson. (BX 1742, page 3, note *). Thus, 6 of the Paul Mount, FIC's nominal President, turned to 10 nominees were "interested persons". FIC's George Olmsted for guidance concerning FIC's 1974 proxy statement—the first proxy statement to legal expenses; Olmsted in turn asked Hugh disclose that certain nominees were "interested McNaughton for his help. (BX 32; Olmsted deposi- persons"—was prepared by William Cramer, IB's tion page 102). In 1973, Mount again turned to Assistant Secretary, and Guy Martin's (an IB di- Olmsted, stating that "enlightening is what we rector) law firm and listed only eight management [FIC] need, General, and I know you are the man, director nominees—Beck, Gram, and Moore were or know the man who can help us." (BX 33). After not included; Milton Drewer, President of an FG- Guy Martin and William McAnallen (then head of owned bank, was a new nominee (BX 1742; BX the FSI Tax Department) became involved, the 1054; Lee deposition pages 59-60; Stipulation No. problem was solved. (BX 1754, August 30, 1973). 16). On June 7, 1974, more than one month after the All FIC bills in evidence were approved by one or annual meeting, and at a time when he was no more IB officers or directors; only five were also longer on the FIC Board, Gram was sent a "unaniapproved by an FIC officer. (BX's 33-53; Hussing mous consent" form by Donald Lee, FIC's Secre- February 12, 1976, deposition pages 33-36; Green tary. This form was dated April 2, 1974, and listed deposition pages 80-85; Cobb deposition pages as management's nominees for director the eight 292-294, 297). individuals named in the proxy statement and al- 45. On May 26, 1976, IB announced that it would ready elected at the annual meeting. Gram signed reduce its holdings in FG to below 5% of the FG the consent form and returned it to Lee, stating that voting common stock. (BX 488). Four months later, "this was an amazing situation because I did not the FIC Board adopted a "Plan of Complete Liq- even know I had been dropped from the Board." uidation and Dissolution." (BX 1754, September (BX 1607; BX 1754, February 22, 1974, last page). 24, 1976). The FIC Board purportedly acted be- Gram has no idea why he was dropped. (Gram cause it had determined that liquidation would be deposition pages 29-32). In fact, Gram was drop- "advisable and in the best interest of the Company ped, upon the advice of Martin's law firm, because and its stockholders" (id.; although in 1972 the FIC he was a stockbroker. (Lee deposition pages 57-58). Board rejected a stockholder suggestion that the Beck was also dropped upon the advice of Martin's company liquidate (BX 1754, September 15, 1972, law firm. (Id.). page 2) even though FIC was then, as it was in 1976, 47. Of the 12 FIC directors elected for the first an inferior vehicle for investing in FG. (BX 5, page time since December 1, 1966 (excluding FG Bank 1, paragraph A.l). The idea for FIC's liquidation Advisory Council chairmen, who automatically beoriginated with George Olmsted; Olmsted and Guy came FIC directors until April, 1972), IB officers or Martin presented the plan to the FIC Board. (Mar- directors were involved in the selection of the tin deposition pages 162, 170; Lee deposition pages following 9: (a) John Beck—William Schuiling and 37-38). Guy Martin discussed Beck's service as a director 46. At the Feburary 22, 1974, meeting of the FIC (Martin deposition page 39); (b) Alice Olmsted Board, the directors fixed the number of directors Burt—George Olmsted asked her to join the FIC to be elected at the April 23, 1974, stockholders Board (Burt deposition pages 6-7); (c) Paul P. meeting at 10, and by separate resolution nomi- Collis—William Cobb asked him to serve with FIC nated 10 people, including John Beck, Harvey (Collis deposition pages 11-12); (d) Harvey H. Gram, and James Moore (each of whom were then Fischer—asked by Olmsted to become a director directors). (BX 1754, February 22, 1974, pages 2-3). (Fischer deposition page 5); (e) Harvey B. Gram, Beck, Gram, and Moore were "interested persons" Jr.—either George Olmsted or Guy Martin asked within the meaning of § 2(a)(19) of the Investment him to join the FIC Board (Gram deposition page Company Act of 1940, as amended—Beck, a 12); (f) Donald L. Jenkins—asked by Cobb to member of the law firm of Frost & Towers, was an become a director (Jenkins deposition page 44); (g) attorney for FIC (BX 1741, page 2; BX 1754, FIC Harold K. Johnson—Olmsted and Martin chose Minutes December 14, 1973, pages 2-3); Gram was Johnson as a director (Finding 37); (h) James A. a stockbroker (BX 1741, page 3); Moore was a Moore—Cobb and Martin discussed his service as a member of Guy Martin's law firm, which also director (Martin deposition pages 52-53); (i) William served as FIC counsel (BX 1051). Three other J. Schuiling—Martin, Olmsted and Cobb discussed Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1124 Federal Reserve Bulletin • December 1977 his service as a director (Martin deposition page pages 17-18, 23; see also BX's 105, 106; Schuiling 53). deposition page 188). Harold Johnson stated that 48. FIC's management annually proposes a slate he, Olmsted, and Schuiling comprised the "team of directors to be elected by the stockholders. Since that looks at policy issues or directions as they December 1, 1966, all management nominees have come up." (Johnson deposition pages 59-60). By been elected. (BX 1754, April 25, 1967, pages 2-3; Olmsted's own admission, prior to October 3, 1975 April 23, 1968, pages 2-3; April 22, 1969, pages 2-3; (when he "resigned" from FG and became Coor- August 26, 1971, pages 2-3; April 25, 1972, pages dinator of Policy and Planning) he was "an execu- 2-3; May 15, 1973, pages 2-3; April 23, 1974, pages tive, a responsible officer of the organization [FG]. 2-3; April 22, 1975, pages 2-3; April 27, 1976, pages I had the command responsibility''. (emphasis ad- 2-3). ded). (Olmsted deposition pages 411-412). After 49 Statements by Josef Tressler in 1971 and 1973 1975, Olmsted continued to be active in FG's indicate that the 1966 change in IB's holdings of FG affairs. (Mount deposition pages 60-61). did not alter the substance of the IB-FG relation- 51. Prior to the 1966 reorganization, Willian Cobb ship: was "the number two man in both International "About the only changes [resulting from the 1966 Bank and Financial General." (Olmsted deposition legislation] are that Congress is happier (at least we page 191). Although Cobb resigned from the IB hope Mr. Patman is) [and] the Federal Reserve and Executive Committee in October 1966 (see Finding other governmental agencies are viewing Financial 13), he continued to function as a de facto officer of General as a truly registered bank holding com- IB. He served on the IB Board's Finance Commitpany. . ." tee from 1966 to 1972, served as an officer of the IB "Actually our [IB's] subsidiaries and present man- insurance companies and, in his own words, "furagement have been the same for many more years nished advice to the International Bank. I still do. I than [during 1970-1973], however, a 1966 amend- will continue to." (Cobb deposition pages 4-5, ment to the Bank Holding Company Act required 32-35, 173, 247-248, 250-255; BX 108; Stipulations us to change our structure. Nothing else changed." No. 7 and No. 16; BX;s 1749 and 1950, Minutes of (Emphasis added). Annual Meetings of IB Board of Directors, 1966- (BX 471, 473. See also BX 472, Tressler's revised 1972). From 1970 to 1975, between 31% and 38% of revised version of his comments in BX 471). Cobb's salary was paid by the IB insurance com- 50. Although George Olmsted purported to resign pany subsidiaries. (BX's 540-564). as FG's Chief Executive Officer in November 1966, 52. Although Hugh McNaughton resigned as a he was the chief executive officer in fact until April nominal FG officer in 1966 (see Finding 15), he 29, 1977. In December 1966, it was Olmsted who continued to function thereafter as an FG officer in invited Arleigh Burke to join the FG Board. (BX fact. During 1967 and 1968, McNaughton spent 66). In 1967, James Bancroft, then President of more than one-half his time on FG business. FG's Banking Division, indicated that he was not (BX's 526-535). William Cobb often consulted convinced that Olmsted had in fact ceased to serve McNaughton on FG's financing matters, as did as FG's Chief Executive Officer. (BX's 1, 67; other FG officers and directors (Cobb deposition Martin deposition pages 218-220). William Cobb, pages 188-189, 202-203; McNaughton February 3, FG's President from 1965 until June 1974, fre- 1976 deposition page 115; McNaughton August 16, quently consulted with Olmsted on major decisions; 1976 deposition pages 128-131; BX's 110-113 he could recall no instances where FG acted con- (McNaughton handwriting stipulated), 114-121). trary to Olmsted's wishes. (Cobb deposition pages 53. From 1966 until 1975, Howard Hussing 15, 135; BX 68, page 1, handwritten notes on the functioned as de facto Secretary of FG. During that left side of the page stipulated to be those of Cobb time, more than one-half, and often as much as and Olmsted). William Schuiling, Donald Jenkins, 80%, of his time was spent on the affairs of FG, its and Paul Collis (FG officers) and Lloyd Bauman (an subsidiaries, and (after 1969, when FSC was FG director) viewed Olmsted as the senior FG merged into IB) its former subsidiaries. (BX's 520officer (BX's 69-104; Jenkins deposition page 52; 564). Until Jack Beddow became FG Secretary in Olmsted deposition pages 533-534; Collis deposi- 1975, Hussing was responsible for all aspects of the tion pages 131-134; Bauman deposition pages 32-33; FG Secretary job. (Hussing February 12, 1976 Collis deposition page 129). Schuiling testified that deposition pages 8-11, 95-97, 126, 135-137; BX's FG made no significant decisions since 1964 with- 122-166 (handwriting stipulated to be Hussing's)). out first consulting Olmsted. (Schuiling deposition 54. Phillip L. Green resigned as FG Treasurer in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1125 December 1966 (Stipulation No. 16), but his 1966- banks. (BX 308; Jenkins deposition pages 123-124). 1968 salary allocations indicate that his IB-FG Jenkins also encouraged the FG banks to utilize the workload remained relatively unchanged as a result services IB companies could provide to banks. of his resignation. (BX's 522-534). Green performed (BX's 309-311 (the handwritten note on the October numerous tasks on behalf of FG after 1966. (BX's 15 letter is stipulated to be Olmsted's); Jenkins 167-254; Green deposition pages 37-38, 51-52). He deposition pages 148-152). was viewed by Donald Jenkins, FG's nominal Trea- 58. From 1966 until 1970, the four individuals at surer, and Paul Collis, FG's Assistant Treasurer, as FG responsible for supervising FG bank acquisithe de facto FG Treasurer. (Jenkins deposition page tions were George Olmsted, William Cobb, William 144; Collis deposition page 57). James Best, IB's Schuiling, and Donald Jenkins. (Olmsted deposition Assistant Treasurer in 1967, also performed numer- page 324). However, it was Olmsted who made the ous FG-related tasks. (Green deposition page 24; final decision concerning each proposal. The evi- BX's 255-268; Best deposition page 43). dence concerning FG's attempts to acquire the 55. Guy Martin has consulted with FG manage- First National Bank of Norfolk, The First National ment concerning the selection of FG directors and Bank in Harrisonburg, Bank of Hampton Roads, FG Presidents and has worked with George Olm- and other banks confirms this. (BX's 312, 313; BX sted in selecting senior officers of IB and FG 314; BX 315; Schuiling deposition pages 100-102; (Martin deposition pages 3-4, 21, 36-37, 60-61, 63, BX 316; BX 317 (Olmsted's handwriting on page 1); 196-197; Johnson deposition pages 19-20). Martin's BX 318; Schuiling deposition pages 102-111; BX's law partner, Allen Whitfield, has been an FG di- 319, 320; BX 321; BX 322; BX 323 (handwriting on rector since 1958. (BX 1712, page 2). pages 1 and 5 is Olmsted's; that on pages 2 and 3 is 56. William Schuiling, who was FG's primary Schuiling's); BX 324; Schuiling deposition pages banking expert (Schuiling deposition pages 4, 11- 103-104; BX 325 (Olmsted's handwriting); BX's 12), was called upon by IB whenever his banking 326-330; BX 331; BX's 332, 333; Schuiling deposiexpertise was needed. In 1970, he was asked to tion pages 125-127, 187-188; BX's 334-342). develop a banking program that would aid IB and a 59. George Olmsted also controlled FG's postcompany IB wanted to acquire. (BX 269; Schuiling 1966 decisions concerning bank divestitures. (BX deposition pages 46-48). Also in 1970, he presented 343; Cobb deposition pages 154-159; BX 334; Olman IB claim for compensation to a senior official at sted deposition pages 315-316). In 1974, when FG the Agency for International Development. (BX prepared a "Statement of Basic Policy" that called 270; Schuiling deposition pages 49-51). In 1973, for FG to concentrate its bank holdings in "Region Hugh McNaughton sought and received Schuiling's A" (Maryland, Virginia, and D.C.), Olmsted dicaid in forming a bank for IB in the Bahamas. (BX's tated the terms of the final draft, which was then 271, 272). Beginning in 1971, Schuiling aided IB in approved by the FG Board. (BX's 345-347 (handits investment in the Peoples Bank of the Virgin written note on page 2 of BX 347 is stipulated to be Islands. (BX's 270-304; Schuiling deposition pages Olmsted's); Schuiling deposition pages 28-29; BX 132-133). In 1975, at Tressler's request, Schuiling 1753, May 2, 1975, page 2, attachment; BX 349). hired an IB officer whose position had been termi- Justin Bowersock, an FG director, testified that nated by IB, and helped draft an agreement by "George Olmsted has been of extraordinary value which IB was to sell its 367,000 warrants to pur- in the very handsome sales that have been made of chase common stock of Central National the three or four banks that have been sold [since Bankshares, and Iowa bank holding company. (BX May, 1975] ..." and that Omsted could be a "key 1750, February 21, 1975, pages 2-3; BX 305; Schuil- figure" in future sales. (Bowersock deposition page ing deposition page 68; BX 1753, May 16, 1975, 71; see also Mount deposition pages 58-59). pages 2-3; BX 306). 60. In 1969, 1970, and 1971, when FG wanted to 57. In his role as FG's liaison with its banks, pay off its lines of credit with two New York banks Donald Jenkins provided valuable assistance to IB. for 60 days (as was required by the New York In 1969, at the request of George Olmsted, he banks), FG's officers turned to Hugh McNaughton, contacted the chief executive officers of the FG who in turn enlisted the assistance of Sherrard banks to recruit bank officers for positions in IB's Elliot, Fred Lininger (an IB Vice President), and "off-shore" banks. (BX 307; Jenkins deposition the International Trust Company of Liberia pages 121-122). He assisted IB by attempting to ("ITCL"; an IB subsidiary). McNaughton hanrelocate within the FG system those former FG dled all phases of the 1969-1971 "rollovers". FG officers who had taken positions in the IB off-shore officers were involved only to the extent that their Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1126 Federal Reserve Bulletin • December 1977 signatures were needed on the various documents. have been active in the business affairs of those (BX 350; McNaughton October 15, 1976 deposition banks. George Olmsted has involved himself in the pages 203-220; BX's 351-361; BX's 362-381). important business activities of Union First, Ar- 61. In 1975, a dispute arose between IB and FG lington Trust, and Bank of Commerce. (Bowersock over the amount of compensation FG should re- deposition page 76; BX's 386-411; Tressler Februceive from IB as a result of an IRS assessment ary 9, 1976 deposition pages 315-316; Mount depoagainst FG based upon errors in tax returns filed by sition pages 35-37). Since joining the Alexandria the former FG subsidiaries which were merged into National Bank ("ANB") Board in 1969, Tressler IB in 1969. (BX 382). Three officers, two from IB has served on several of the Board's committees, and one from FG, were appointed by Olmsted, participated in the formation of ANB's Advisory Schuiling, and Johnson to work out a compromise. Board, advised ANB's President on several mat- (BX 382; McNaughton August 16, 1976 deposition ters, and worked closely with ANB and FB in page 54). A compromise was reached (BX 382), but considering a merger between ANB and Arlington was not immediately accepted by FG. (Schuiling Trust Company. (BX's 412-419; Tressler February deposition page 147). When Jack Beddow, FG's 9, 1976 deposition pages 286-287; Tressler Septem- Secretary, suggested arbitration (BX 383; Schuiling ber 7, 1976 deposition pages 13, 17-21, 26-27, 38). deposition pages 148-151; McNaughton August 16, Even after Hugh McNaughton resigned from three 1976 deposition page 64), McNaughton told Olm- Virginia bank boards, he continued to be concerned sted that he opposed this route. (BX 383, page 4 with the activities of those banks, and with FG (Olmsted's handwritten note), page 7; McNaughton banking activity in Virginia. (McNaughton Febru- August 16, 1976 deposition page 66). After Olmsted ary 3, 1976 deposition page 56; BX's 420-425; told Schuiling that he and Tressler agreed with Olmsted, Jr. deposition pages 35-37). Since 1968, McNaughton, FG accepted the compromise posi- McNaughton has served on the American National tion without arbitration. (BX 383, page 1 (handwrit- Bank board; he has been a member of the Executen notes by Olmsted and Tressler); Olmsted depo- tive and Loan Committees. (McNaughton February sition page 424; Schuiling deposition pages 146-147, 3, 1976 deposition pages 63-66). 155; McNaughton August 16, 1976 deposition pages 66. Until 1974, one device by which IB super- 71-72). vised FG banks was through the FG Bank Directors 62. In 1969, George Olmsted located purchasers Council, which was established in 1967 when Olmfor the FSC shares the Equity Corporation had sted asked Schuiling to keep him alert to any received from FG. (BX 384; Olmsted deposition problems in the FG banks. (BX's 426, 427). At this pages 435-436). Olmsted agreed to find a purchaser group's meetings, IB officers received detailed refor those FSC shares should the FSC purchasers ports on the operation of each FG bank. (Collis wish to sell at a later date. (Id.). deposition pages 56, 60; Jenkins deposition pages 63. In 1970, when two purchasers exercised their 86-87; Stipulation No. 5). option to sell and Olmsted could find no pur- 67. Senior IB officers monitored the operations of chasers, he caused his controlled partnership, FG and the FG subsidiaries through the meetings of Amicitia & Co., to purchase the shares. (BX 1642, several other formal groups. Management Council page A10; BX 1640, page F7, Note B; McNaughton meetings, held immediately prior to the quarterly February 3, 1976 deposition pages 181-206; Olm- board meetings of IB, FG, and their subsidiaries, sted deposition page 436). The purchase was fi- consisted of detailed reports on two or three IB or nanced through a complex series of transactions. FG subsidiaries and general reports on all IB/FG (Id.). The net effect was that three FG subsidiary companies. The Council has been chaired by both banks were used by IB and Olmsted to help finance IB and FG officers. (Tressler February 9, 1976 the 1970 re-purchase of the FSC shares from the deposition pages 226-227; Cobb deposition pages 1969 purchasers. 308-311; BX's 442-444, 489-501; Stipulation No. 64. Since December 1966, IB officers or directors 16). "Staff meetings", attended by the senior core have served on the boards of a majority of the FG of the IB and FG management, were used to subsidiary banks. (See Stipulation No. 15). As of facilitate communication within the IB-FG organi- December 31, 1975, an IB officer or director served zation. (BX's 502-519; Collis deposition pages on the board of each of the eight largest FG banks, 65-66, 69; Olmsted deposition page 449; Cobb dewhich accounted for 88.9% of FG's bank assets. position pages 302-303; Jenkins deposition pages (Stipulation No. 15; BX 1723, pages 8, 9). 141-143). Advisory Council meetings, held twice 65. IB officers serving as directors of FG banks each year and attended by the presidents of the FG Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1127 banks and senior officers of IB and FG, have been Board by George Olmsted, Guy Martin, or William used by IB as a forum for selling IB's services to the L. Cobb or were suggested as Board members by FG banks. (Olmsted deposition page 337; Jenkins one of those three. (Finding 50 [Burke]; Johnson deposition pages 127-129; BX's 446-453; deposition page 14; Martin deposition pages 21-24 McNaughton February 3, 1976 deposition pages [Donohue];Id., pages 36-37 [Schuiling]; Bowersock 72-73). The FG Operations Committee served as an deposition page 56; Mount deposition page 55); one operations-level counterpart to the Advisory Coun- (James Lemon) went on to fill the "Johnstoncil. (Jenkins deposition pages 138-139, 141; Olmsted Lemon" seat on the FG Board (Martin deposition deposition page 380; BX's 454-457). In 1970, the pages 27-29); and one (Orval Cook) was on the FG IB/FG Public Relations Committee was estab- Board for only six months (Stipulation No. 16). lished; its members included representatives from 73. During the negotiations leading to the sale of both IB and FG, with Tressler serving as Chairman IB's block of FG stock to a group of investors and liaison for both IB and FG with outside public represented by J. William Middendorf, II, Middenrelations firms and securities analysts. (Tressler dorf told Omsted that he wanted a majority of the February 9, 1976 deposition pages 113-121, 147-150; persons on the slate of nominees presented to the BX's 460-470; Cobb deposition pages 276-278). 1977 FG shareholders meeting to be new persons 68. In addition to the structured committee meet- chosen by Middendorf. (June 21, 1977 Hearing Tr. ings attended by IB and FG senior officers, these pages 70-71). He also wanted to retain four specific officers communicated with each other on a daily existing directors. (IBX 52, page 3). Olmsted asked basis. Until late 1976, IB and FG executive offices Middendorf to retain an additional four of the were both located on the 12th floor of 1701 Penn- existing directors, to which Middendorf agreed. sylvania Avenue. IB and FG officers ate lunch (Id.). together in the 12th floor executive dining room. 74. Since February 15, 1966, George Olmsted has These lunches served as a forum for discussions of owned between .86% and .95% of the FG voting IB/FG business. (Stipulation No. 14; Olmsted, Jr. common stock. (BX 1702, page 3; BX 1703, page 4; deposition pages 28-31; Guida deposition page 68). BX 1704, page 4; BX 1705, page 3; BX 1706, page 3; 69. As of March 13, 1974, only 26 persons other BX 1707, page 3; BX 1708, page 3; BX 1709, page 3; than IB and FIC are known to have owned as much BX 1710, page 2; BX 1711, page 2; BX 1712, page as 0.1% of the FG stock. Four of these stockholders 2). were IB directors or IB subsidiaries. (BX's 1520, 75. Since at least 1966 IB and FSI have been 1522). parties to a management contract, and until March 70. At all annual meetings since January 1, 1966, 1, 1977, FG was a party to that contract. (BX 480; FG has prepared a "management slate" of di- IBX 54, page 10). The FSI contract required FSI to rectors. These nominees have, without exception, provide certain management services to FG. (Findbeen elected by the FG stockholders. (BX's 1751 ing 4). All IB officers receive their salary from FSI. through 1753, FG Minutes of Annual Stockholder (Stipulation No. 13). Thus, the services provided to Meetings: April 27, 1966, pages 2-4; April 26, 1967, FG by IB officers (see Findings 50, 52-54) may de pages 2-3; April 24, 1968, pages 2-3; April 23, 1969, deemed to be provided pursuant to the FG-FSI pages 2-3; April 29, 1970, pages 2-4; April 28, 1971, management contract. pages 2-3; April 26, 1972, pages 2-3; April 25, 1973, 76. J. William Middendorf, II holds proxies on pages 2-4; April 24, 1974, pages 2-4; April 30, 1975, FG stock owned by certain of the purchasers from pages 3-4; April 28, 1976, pages 3-4; June 17, 1977). IB (covering approximately 16.3% of the vote), on 71. Interational Bank and Financial International FG stock owned by the IB insurance company Corporation have always voted their FG shares in subsidiaries and FMRC (covering an aggregate of the same way. (BX's 1751-1753, FG Minutes of 244,218 shares of FG voting common stock, or Annual Stockholder Meetings: April 26, 1967; April 4.5% of the vote), on the FG shares owned by 24, 1968; April 23, 1969; April 29, 1970; April 28, Eugene Casey (covering 8.6% of the vote) and on a 1971; April 26, 1972; April 25, 1973; April 24, 1974; majority of the FIC shares. (IBX 54, pages 1-3). The April 30, 1975; April 28, 1976). proxies given by the purchasers from IB expire on 72. Of the nine men who joined the FG Board of various dates between September 30, 1977 and June Directors from December 1966 until August 1974, 30, 1980. (IBX 61, Exhibit H). Those given by the six (Arleigh Burke, Harold Johnson, F. Joseph IB insurance subsidiaries expire on September 30, Donohue, William Schuiling, Justin Bowersock, 1977. (IBX 61, Exhibit D). That given by FMRC and Paul Mount) were either asked to join the expires on June 30, 1979. (Id., Exhibit F). 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1128 Federal Reserve Bulletin • December 1977 given by the FIC shareholders expire on April 30, page 3). On June 20, 1977, the FG Board of Di- 1979 and June 30, 1979. (Id., Exhibit E). All of the rectors established the Administrative Committee above proxies were given without consideration. of that plan. That committee includes four IB (June 21, 1977 Hearing Tr. page 49; June 28, 1977 officers—Tressler, McNaughton, Hussing, and hearing Tr. pages 358-359). Cramer. (BX 1753, June 20, 1977, page 6). 77. George Olmsted has been retained by FG as 79. On December 13, 1966, at a time when IB Coordinator of Policy and Planning to assist in the admitted that it was a bank holding company with formation and execution of FG's long-term objec- respect to FG, IB transferred its FIC stock to the IB tives. Olmsted is committed to provide services to shareholders. George Olmsted received 7.72% of FG in this capacity until September 30, 1978. Olm- the FIC stock. Three IB shareholders—Iowa Capisted is also party to a retirement contract with FG tal Corporation, International Capital Corporation, pursuant to which he is required to act as an and the George Olmsted Foundation ("TGOF")— independent consultant to FG and is required to received an aggregate of 41.78% of the FIC stock. hold himself available to consult and advise the These three entities have at all times since 1966, officers, directors, and other representatives of FG. and until at least April, 1975, owned more than 25% (IBX 54, page 8, note (5)). Olmsted has advised of the FIC common stock, the only voting stock of Middendorf, FG's Chief Executive Officer, that he FIC. (BX 1724, FIC Form 10, page 1, item 2(a); intends to continue to make himself available to the BX's 1735 through 1743, FIC proxy statements). FG management. (June 29, 1977 Hearing Tr. pages Since December 1, 1966, George Olmsted has 416-417). He has in fact given advice to Middendorf owned all of the voting stock of both the Iowa and Middendorf has stated that he intends to con- Capital Corporation and the International Capital tinue to consult with George Olmsted. (Id., pages Corporation. In addition, since December 1, 1966, 413-417). George Olmsted has been a director of both the 78. On December 10, 1976, the IB Board of Iowa Capital Corporation and the International Directors voted to continue that company's partici- Capital Corporation. Finally, George Olmsted has pation in the Financial General Group Employee been a director of The George Olmsted Foundation Retirement Plan. (BX 1750, December 10, 1976, since December 1, 1966. (Stipulations 1 and 2). ORDER APPROVED UNDER BANK HOLDING COMPANY ACT By the Board of Governors During November 1977, the Board of Governors approved the applications listed below. Copies of the order are available upon request to Publications Services, Division of Administration Services, Board of Governors of the Federal Reserve System, Washington, D.C. 2055. Section 3 Board action (effective Applicant Bank(s) date) Allied Bancshares, Inc., Addicks Bank, Addicks; American 11/3/77 Houston, Texas National Bank, Humble; The First National Bank of Newton, Newton; Hillcroft Bank, Houston; Gulf Coast State Bank, Winnie, all located in Texas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Law Department 1129 Central State Bancshares, Webb City Bank, Webb City, 11/16/77 Inc., Nevada, Missouri Missouri Deport Bancshares, Inc., First National Bank of Deport, 11/17/77 Deport, Texas Deport, Texas First Douglas BanCorpo- First National Bank and Trust 11/28/77 ration, Inc., Tuscola, Company of Tuscola, Tuscola, Illinois Illinois First National Fairbury The First National Bank of 11/25/77 Corporation, Lincoln, Fairbury, Fairbury, Nebraska Nebraska Gilman Investment Co., Citizens Savings Bank, Gilman, 11/25/77 Gibson, Iowa Iowa Royal Trustco Limited, Royal Trust Bank Corp., Miami, 11/14/77 Ottawa, Ontario, Florida Canada Tipton Bancorporation, Inc. First National Bank, Tipton, 11/11/77 Tipton, Oklahoma Oklahoma Section 4 Board action Nonbanking company (effective Applicant (or activity) date) Southwest Florida Banks, Inc. Credit related insurance 11/7/77 Fort Myers, Florida activities By Federal Reserve Banks During November 1977, applications were approved by the Federal Reserve Banks as listed below. Copies of the orders are available upon request to the Reserve Banks. Section 3 Reserve Effective Applicant Bank(s) Bank date Huntington Bancshares, Inc., The Franklin National Bank, Cleveland 11/14/77 Columbus, Ohio Franklin, Ohio Midwest Bancorporation The Village Bank of Aurora, Cleveland 11/22/77 (of Ohio), Inc., Aurora, Ohio Cleveland, Ohio County National Bancor- Bank of Louisiana, Louisiana, St. Louis 11/15/77 poration, Clayton, Missouri Missouri Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1130 Federal Reserve Bulletin • December 1977 PENDING CASES INVOLVING THE BOARD OF GOVERNORS* Central Bank v. Board of Governors, filed Octo- Memphis Trust Company v. Board of Governors, ber 1977, U.S.C.A. for the District of Columbia. filed February 1976, U.S.D.C. for the Western Plaza Bank of West Port v. Board of Governors, District of Tennessee. filed September 1977, U.S.C.A. for the Eighth First Lincolnwood Corporation v. Board of Gov- Circuit. ernors, filed February 1976, U.S.C.A. for the First State Bank of Abilene, Texas v. Board of Seventh Circuit. Governors, filed August 1977, U.S.C.A. for the Roberts Farms, Inc. v. Comptroller of the Cur- District of Columbia. rency, et. al., filed November 1975, U.S.D.C. for BankAmerica Corporation v. Board of Gover- the Southern District of California. nors, filed May 1977, U.S.D.C. for the Northern Florida Association of Insurance Agents, Inc. v. District of California. Board of Governors, and National Association of BankAmerica Corporation v. Board of Gover- Insurance Agents, Inc. v. Board of Governors, filed nors, filed May 1977, U.S.C.A. for the Ninth Cir- August 1975, actions consolidated in U.S.C.A. for cuit. the Fifth Circuit, First Security Corporation v. Board of Gover- t David R. Merrill, et al. v. Federal Open Market nors, filed March 1977, U.S.C.A. for the Tenth Committee of the Federal Reserve System, filed Circuit. May 1975, U.S.D.C. for the District of Columbia. Farmers State Bank of Crosby v. Board of Gov- Louis J. Roussel v. Board of Governors, filed ernors, filed January 1977, U.S.C.A. for the Eighth April 1975, U.S.D.C. for the Eastern District of Circuit. Louisiana. National Automobile Dealers Association, Inc. Georgia Association of Insurance Agents, et. al. v. Board of Governors, filed November 1976, v. Board of Governors, filed October 1974, U.S.C.A. for the District of Columbia. U.S.C.A. for the Fifth Circuit. First Security Corporation v. Board of Gover- Alabama Association of Insurance Agents, et al. nors, filed August 1976, U.S.C.A. for the Tenth v. Board of Governors, filed July 1974, U.S.C.A. Circuit. for the Fifth Circuit. Central Wisconsin Bankshares, Inc. v. Board of Bankers Trust New York Corporation v. Board of Governors, filed June 1976, U.S.C.A. for the Governors, filed May 1973, U.S.C.A. for the Sec- Seventh Circuit. ond Circuit. National Urban League, et al. v. Office of the Comptroller of the Currency, et al., filed April 1976, U.S.D.C. for the District of Columbia Circuit. Farmers & Merchants Bank of Las Cruces, New Mexico v. Board of Governors, filed April 1976, U.S.C.A. for the District of Columbia Circuit. Association of Bank Travel Bureaus, Inc. v. This list of pending cases does not include suits against the Federal Reserve Banks in which the Board of Governors is not Board of Governors, filed February 1976, U.S.C.A. named a party. for the Seventh Circuit. tThe Board of Governors is not named as a party in this action. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1131 Announcements REGULATION Q: Amendment by Federal Reserve Banks) that would extend the kinds of bankers acceptances eligible for discount The Board of Governors of the Federal Reserve by Federal Reserve Banks. The Board requested System announced that it had lowered the minimum comment by February 1, 1978. rate of interest that must be paid on a loan secured by a depositor's time or savings deposit at a member bank. MEETING OF Regulation Q (Interest on Deposits) had required CONSUMER ADVISORY COUNCIL that the interest rate on loans, using as collateral a time deposit or a savings deposit for which prior The Board of Governors has announced that the notice of withdrawal is required, could not be less Federal Reserve System's Consumer Advisory than 2 per cent above the rate being paid on the Council met on December 8, 1977. deposit. The Council advises the Board on the exercise of Effective November 23, 1977, Regulation Q was responsibilities with respect to consumer credit amended to provide that the minimum rate such laws and regulations. The Council is headed by borrowers must pay is 1 per cent above the rate Mrs. Leonor Sullivan, former House Member from being paid on the deposit. Missouri, who sponsored much of the consumer A minimum borrowing rate is set on such loans to credit protection legislation passed by the Congress avoid the use of loans to, in effect, withdraw time in the last decade. Most such legislation directed deposits before maturity without incurring the penthe Federal Reserve Board to write regulations for alty for early withdrawal (loss of 90 days' interest putting the laws into effect. and reduction of interest on the amount withdrawn At the December meeting the Council discussed to the passbook rate—5 per cent at commercial the newest consumer-related legislation, the Combanks—for the period of time that the amount was munity Reinvestment Act. The Council disheld in the time deposit). cussed (1) the report of its task force on the The reduced minimum applies to future interest Council's organization and procedures and (2) repayments on outstanding loans, as well as to new sults of a survey, sponsored by the Federal bank loans. regulatory agencies, of consumer awareness of The Federal Deposit Insurance Corporation is rights and responsibilities under consumer credit expected to take similar action in the near future protection laws. with respect to the financial institutions that it On December 13, the Board of Governors made a supervises. further announcement that the Consumer Advisory Council would continue under its present leadership and that eight members whose terms were to expire PROPOSED AMENDMENT at the end of 1977 have accepted reappointment. AND INTERPRETATION The Board of Governors has issued for comment a CREDIT RIGHTS OF CONSUMERS: proposed amendment to its Regulation Z (Truth in Inquiry Lending) concerning the right of consumers to be notified that they may cancel open-end credit plans The Board of Governors on November 16, 1977, within 3 days if their home is pledged as security. approved an inquiry to determine the extent to The Board requested comment by February 1, which consumers are exercising certain rights 1978. under the Equal Credit Opportunity and the Fair The Board also proposed for comment an in- Credit Billing Acts, and the cost to creditors of terpretation of Regulation A (Extensions of Credit compliance with those laws. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1132 Federal Reserve Bulletin • December 1977 The inquiry will attempt to assess the use the the work required to put together consistent and public is making of the following rights and also detailed series of statistics for the areas covered. the corresponding costs to creditors: Another function is to provide several special tables 1. Under the Equal Credit Opportunity Act and that for many years had appeared in the BULLETIN. the Board's Regulation B: Data for those tables now appear only in the Digest, —The right to a separate credit history for as do data for certain other series that are no longer married persons. available in the BULLETIN. —Notification by creditors of specific reasons This issue of the Digest generally covers the for denial of credit. period 1972-76. Weekly data are shown only for 2. Under the Fair Credit Billing Act and the 1976 unless otherwise noted. Domestic nonfinancial Board's Regulation Z; series included are those for which the Board of —The rights under the provisions establishing Governors is the primary source. a procedure for resolving billing disputes. Copies of the Digest are available from Publica- The sample will be taken from a representative tions Services, Division of Administrative Services, cross section of creditors that are subject to the two Board of Governors of the Federal Reserve Sysstatutes and whose customers represent a cross tem, Washington, D.C. 20551. The price is $10.00 section of the incomes of credit-card users. per copy. Information received will help the Board and the Industrial Production—1976 Edition (304 pages) Congress to assess the effectiveness of these re- contains descriptive material; weights; classificaquirements. It will also indicate whether the Board tion; sources of underlying data; and statistical should be given greater latitude with regard to the tables showing the total index from 1919 through frequency and timing of notices and to whom they 1975 and data for component indexes as far back should be sent. as available. The price is $4.50 per copy; in Information will be solicited from four major quantities of 10 or more sent to one address, retailers that extend credit (Sears, J. C. Penney, $4.00 each. Federated Department Stores, and Aldens); three A 9-track, 1600 BPI, standard-label computer bank-card issuers (Bank of America, Maryland tape containing the statistical tables from 1919 until National Bank, and First National Bank of June 1977 is also available for $60.00. Copies of the Chicago); one travel and entertainment card issuer publication and/or tape may be obtained from Pub- (American Express); and one oil company card lications Services, Division of Administrative Serissuer (Shell Oil Company). vices, Board of Governors of the Federal Reserve The questions to be asked have been examined by System, Washington, D.C. 20551. Remittances payseveral representative creditors. They have told able to the order of the Board of Governors should the Board that they regard the questions as being accompany all requests. fair and capable of eliciting meaningful responses. Responses to the inquiry will be open to the public. SYSTEM MEMBERSHIP: Admission of State Banks The following banks were admitted to membership in the Federal Reserve System during the period November 16, 1977, through December 15, 1977: TWO NEW BOARD PUBLICATIONS Alabama The Annual Statistical Digest, 1972-76, is designed Brewton First Progressive Bank to be a convenient source of economic, and espe- Missouri cially financial, data for a broad range of users. Its Maryland Heights Manchester main function is to provide sufficient historical data Bank of West County for tables in the statistical section of the Federal Utah Reserve BULLETIN in order to reduce drastically Salt Lake County Heritage Bank & Trust Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
1133 Industrial Production Released for publication December 14 gains occurred in November in output of chemical materials. Coal production declined slightly, but it Industrial production increased by an estimated 0.5 remained close to the production index's record per cent in November to 139.7 per cent of the 1967 high set in October when a December strike seemed average, following gains of 0.3 and 0.4 per cent in likely. October and September, respectively. Increases in output were widespread among nonautomotive products and materials. Industrial production was Seasonally adjusted, ratio scale, 1967=100 6.2 per cent higher in November than a year earlier. _— MATERIALS CAPACITY 1 ^ -—" Output of consumer goods declined slightly in ^-OU M T AT P E U R T I ALS - 1 X November as gains in the output of home goods and ~ I \JT | nondurable goods failed to offset a decline of more -r-v^ PRODUCTS ,\ ' 1 OUTPUT L ll _ than 4 per cent in auto production, partly because __ MATERIALS: Nondurable of brief strikes. Assembly schedules for December have been reduced by the industry in response to 1 4 / ' /v_ Energy r the slowdown of car sales in November. Output of | \ / Durable 1V'l I business equipment increased 0.3 per cent in - BUSINESS November—the same as in the preceding month; SUPPLIES^ •— there were substantial gains in output of both - /p manufacturing and commercial equipment, but t/1 production of transit equipment declined. Output of - 1 C SU O P N P S L T I R E U S C ! TION j intermediate products increased strongly, with a 1967= large gain in production of construction supplies. - MANUFACTURI N N o G n : d urable Output of both durable goods and nondurable goods materials rose sharply in November, as en- - ergy materials increased moderately. Production of Durable basic metals materials rose, but raw steel production declined for the third successive month. Large F.R. indexes, seasonally adjusted. Latest figures: November. *Auto sales and stocks include imports. Seasonally adjusted, 1967 = 100 PPeerr cceenntt cchhaannggeess ffrroomm—— IInndduussttrriiaall pprroodduuccttiioonn 1977 Aug. Sept. Oct.p Nov.4, Month ago Year ago Q2 to Q3 Total 138.1 138.6 139.0 139.7 .5 6.2 1.1 Products, total 138.4 138.8 138.9 139.4 .4 6.2 1.5 Final products 136.3 136.8 136.9 137.0 .1 6.0 1.4 Consumer goods 144.7 144.9 145.5 145.4 -.1 5.1 1.2 Durable goods 154.7 155.8 157.9 155.9 -1.3 8.5 2.0 Nondurable goods 140.6 140.6 140.5 141.2 .5 3.7 .9 Business equipment 151.1 152.2 152.6 153.0 .3 9.2 1.9 Intermediate products 146.1 146.4 146.8 148.0 .8 6.5 2.0 Construction supplies 141.7 143.3 144.1 145.6 1.0 7.2 2.5 Materials 137.6 138.2 139.1 140.1 .7 6.2 .4 p Preliminary. " Estimated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Al Financial and Business Statistics CONTENTS DOMESTIC FINANCIAL STATISTICS WEEKLY REPORTING COMMERCIAL BANKS A3 Monetary aggregates and interest rates Assets and Liabilities of— A4 Factors affecting member bank reserves A20 All reporting banks A5 Reserves and borrowings of member A21 Banks in New York City banks A22 Banks outside New York City A6 Federal funds transactions of money A23 Balance sheet memoranda market banks A24 Commercial and industrial loans A25 Gross demand deposits of individuals, POLICY INSTRUMENTS partnerships, and corporations A8 Federal Reserve Bank interest rates A9 Member bank reserve requirements FINANCIAL MARKETS A10 Maximum interest rates payable on A25 Commercial paper and bankers time and savings deposits at Federally acceptances outstanding insured institutions A26 Prime rate charged by banks on A10 Margin requirements short-term business loans A11 Federal Reserve open market A26 Terms of lending at commercial banks transactions A27 Interest rates in money and capital markets FEDERAL RESERVE BANKS A28 Stock market—Selected statistics A12 Condition and F.R. note statements A13 Maturity distribution of loan and A29 Savings institutions—Selected assets security holdings and liabilities FEDERAL FINANCE MONETARY AND CREDIT AGGREGATES A30 Federal fiscal and financing operations A13 Bank debits and deposit turnover A14 Money stock measures and components A31 U.S. Budget receipts and outlays A15 Aggregate reserves and deposits of A32 Federal debt subject to statutory member banks limitation A15 Loans and investments of all A32 Gross public debt of U.S. Treasury— commercial banks Types and ownership A33 U.S. Government marketable securities—Ownership, by maturity COMMERCIAL BANK ASSETS AND LIABILITIES A34 U.S. Government securities dealers— A16 Last-Wednesday-of-month series Transactions, positions, and financing A17 Call-date series A35 Federal and Federally sponsored credit A18 Detailed balance sheet, Mar. 31, 1977 agencies—Debt outstanding Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
2 Federal Reserve Bulletin • December 1977 SECURITIES MARKETS AND INTERNATIONAL STATISTICS CORPORATE FINANCE A54 U.S. international transactions— A36 New security issues—State and local Summary government and corporate A55 U.S. foreign trade A37 Corporate securities—Net change in A55 U.S. reserve assets amounts outstanding A56 Selected U.S. liabilities to foreigners A37 Open-end investment companies—Net and to foreign official institutions sales and asset position A38 Corporate profits and their distribution REPORTED BY BANKS IN THE UNITED STATES: A38 Nonfinancial corporations—Assets and A57 Short-term liabilities to foreigners liabilities A59 Long-term liabilities to foreigners A38 Business expenditures on new plant A60 Short-term claims on foreigners and equipment A61 Long-term claims on foreigners A39 Domestic finance companies—Assets and liabilities; business credit A62 Foreign branches of U.S. banks— Balance sheet data REAL ESTATE A40 Mortgage markets SECURITIES HOLDINGS AND TRANSACTIONS A41 Mortgage debt outstanding A64 Marketable U.S. Treasury bonds and notes—Foreign holdings and CONSUMER INSTALMENT CREDIT transactions A42 Total outstanding and net change A64 Foreign official accounts A43 Extensions and liquidations A65 Foreign transactions in securities FLOW OF FUNDS REPORTED BY NONBANKING CONCERNS IN THE UNITED STATES: A44 Funds raised in U.S. credit markets A45 Direct and indirect sources of funds to A66 Short-term liabilities to and claims on credit markets foreigners A67 Long-term liabilities to and claims on DOMESTIC NONFINANCIAL STATISTICS foreigners A46 Nonfinancial business activity— INTEREST AND EXCHANGE RATES Selected measures A46 Output, capacity, and capacity A68 Discount rates of foreign central banks utilization A68 Foreign short-term interest rates A47 Labor force, employment, and A68 Foreign exchange rates unemployment A48 Industrial production—Indexes and SPECIAL TABLE gross value A50 Housing and construction A69 Sales, revenue, profits, and dividends A51 Consumer and wholesale prices of large manufacturing corporations A52 Gross national product and income A53 Personal income and saving INSIDE BACK COVER Guide to Tabular Presentation and Statistical Releases Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Domestic Financial Statistics A3 1.10 MONETARY AGGREGATES AND INTEREST RATES 1976 1977 1977 Item Q4 Ql Q2 Q3 June July Aug. Sept. Oct. Monetary and credit aggregates (annual rates of change, seasonally adjusted in per cent)12 Member bank reserves 1 Total 4.4 2.7 3.0 9.0 4.8 16.9 9.8 -.5 9.1 2 Required 4.0 3.0 3.5 8.6 6.9 12.5 12.5 -.8 3 Nonborrowed 4.8 2.6 1.9 3.4 2.9 14.9 -15.4 14.6 -14.1 Concepts of money 1 4 M-l 6.5 4.2 8.4 9.3 4.5 18.3 5.9 7.3 12.0 5 M-2 12.5 9.9 9.2 10.3 8.1 16.6 6.4 7.9 10.1 6 M-3 14.4 11.3 10.0 '12.4 9.8 16.1 Ml.5 '12.3 12.4 Time and savings deposits Commercial banks: 7 Total 12.2 12.5 8.3 10.0 13.2 11.0 6.9 7.6 14.6 8 Other than large CD's 17.1 14.0 9.8 '10.9 10.7 15.4 r6.8 '8.6 8.6 9 Thrift institutions 2 17.3 13.4 11.2 '15.5 12.2 15.5 18.4 '12.3 12.4 10 Total loans and investments at commercial banks 3 10.8 8.8 11.9 9.4 8.9 9.3 12.3 3.7 13.6 1976 1977 1977 Q4 Ql Q2 Q3 July Aug. Sept. Oct. Nov. Interest rates (levels, per cent per annum) Short-term rates 11 Federal funds 4 4.88 4.66 5.16 5.82 5.42 5.90 6.14 6.47 6.51 12 Treasury bills (3-month market yield) s 4.67 c4.63 4.84 5.50 5.19 5.49 5.81 6.16 6.10 13 Commercial paper (90- to 119-day) 6 4.91 4.74 5.15 5.74 5.38 5.75 6.09 6.51 6.54 14 Federal Reserve discount 7 5.39 5.25 5.25 5.42 5.25 5.27 5.75 5.80 6.00 Long-term rates Bonds: 15 U.S. Govt. 8 7.54 7.62 7.68 7.60 7.60 7.64 7.57 7.71 7.76 16 State and local government 9 6.18 5.88 5.70 5.59 5.63 5.62 5.51 5.64 5.49 17 Aaa utility (new issue) 10 8.15 8.17 8.21 8.09 8.14 8.04 8.07 8.23 8.27 1188 Conventional mortgages 11 88..9955 88..8822 88..9955 99..0000 99..0000 99..0000 99..0000 99..0000 1 M-l equals currency plus private demand deposits adjusted. 7 Rate for the Federal Reserve Bank of New York. M-2 equals M-l plus bank time and savings deposits other than large 8 Market yields adjusted to a 20-year maturity by the U.S. Treasury. negotiable certificates of deposit (CD's). 9 Bond Buyer series for 20 issues of mixed quality. M-3 equals M-2 plus deposits at mutual savings banks, savings and l o Weighted averages of new publicly offered bonds rated Aaa, Aa, loan associations, and credit union shares. and A by Moody's Investors Service and adjusted to an Aaa basis. 2 Savings and loan associations, mutual savings banks, and credit Federal Reserve compilations. unions. 11 Average rates on new commitments for conventional first mortgages 3 Quarterly changes calculated from figures shown in Table 1.23. on new homes in primary markets, unweighted and rounded to nearest 4 Seven-day averages of daily effective rates (average of the rates on 5 basis points, from Dept. of Housing and Urban Development. a given date weighted by the volume of transactions at those rates). 12 Unless otherwise noted, rates of change are calculated from average 5 Quoted on a bank-discount rate basis. amounts outstanding in preceding month or quarter. 6 Most representative offering rate quoted by five dealers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A4 Domestic Financial Statistics • December 1977 1.11 FACTORS AFFECTING MEMBER BANK RESERVES Millions of dollars Monthly averages of daily Weekly averages of daily figures for weeks ending— figures 1977 Sept. Oct. Nov.? Oct. 19 Oct. 26 Nov. 2 Nov. 16 Nov. 23 p Nov. 30» SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding.... 112,171 113,279 110,707 112,319 112,779 112,993 109,497 110,374 111,133 111,475 2 U.S. Govt, securities1 97,618 98,037 95,421 96,402 98,047 96,725 95,196 94,919 95,565 95,825 3 Bought outright 96,427 97,395 95,170 96,402 97,862 95,861 95,196 94,919 95,414 95,382 4 Held under repurchase agreement 1,191 642 251 185 864 151 443 5 Federal agency securities 7,419 7,389 7,355 7,329 7,358 7,394 7,329 7,329 7,351 7,370 6 Bought outright 7,338 7,329 7,329 7,329 7,329 7,329 7,329 7,329 7,329 7,329 7 Held under repurchase agreement 81 60 26 29 65 22 41 8 Acceptances 109 91 42 4 34 154 26 61 9 Loans 634 1,319 839 1,861 1,444 1,113 887 534 881 1,073 10 Float 3,634 3,972 4,718 4,397 3,480 5,115 3,617 5,085 5,300 4,909 11 Other Federal Reserve assets 2,757 2,471 2,332 2,327 2,416 2,492 2,466 2,507 2,009 2,237 12 Gold stock 11,595 11,595 11,595 11,595 11,595 11,595 11,595 11,595 11,595 11,595 13 Special Drawing Rights certificate account. 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 14 Treasury currency outstanding 11,228 11,272 11,313 11,271 11,284 11,289 11,301 11,307 11,322 11,327 ABSORBING RESERVE FUNDS 15 Currency in circulation 98,180 98,868 100,741 99,194 98,856 99,006 99,886 100,883 101,034 101,492 16 Treasury cash holdings 436 429 415 432 426 419 418 418 410 450 Deposits, other than member bank reserves with F.R. Banks: 17 Treasury 6,956 6,618 2,399 4,704 5,985 6,176 2,929 1,790 1,757 2,112 18 Foreign 368 298 301 327 287 282 289 329 286 313 19 Other 2 668 699 597 617 656 626 571 575 518 713 20 Other F.R. liabilities and capital... 3,434 3,501 3,522 3,426 3,623 3,639 3,201 3,517 3,658 3,721 21 Member bank reserves with F.R. Banks 26,152 26,933 26,840 27,686 27,026 26,929 26,301 26,963 27,588 26,797 End-of-month figures Wednesday figures 1977 1977 Sept. Oct. Nov.? Oct. 19 Oct. 26 Nov. 2 Nov. 9 Nov. 16 Nov. 23® Nov. 30p SUPPLYING RESERVE FUNDS 22 Reserve Bank credit outstanding 118,845 109,358 111,889 112,005 114,562 111,722 107,477 107,548 115,317 111,889 23 U.S. Govt, securities1 104,715 94,597 96,477 94,278 99,362 96,006 91,671 89,945 97,687 96,477 24 Bought outright 102,405 94,597 94,438 94,278 98,068 94,337 91,671 89,945 96,627 94,438 25 Held under repurchase agreement 2,310 2,039 1,294 1,669 1,060 2,039 26 Federal agency securities 7,639 7,329 7,460 7,329 7,529 7,508 7,329 7,329 7,484 7,460 27 Bought outright 7,329 7,329 7,329 7,329 7,329 7,329 7,329 7,329 7,329 7,329 28 Held under repurchase agreement 310 131 200 179 155 131 29 Acceptances 482 248 4 222 340 182 248 30 Loans 1,069 923 925 3,550 1,183 704 585 369 2,966 925 31 Float 2,067 3,945 4,660 4,539 3,717 4,679 5,378 7,856 4,933 4,660 32 Other Federal Reserve assets 2,873 2,564 2,119 2,305 2,549 2,485 2,514 2,049 2,065 2,119 33 Gold stock 11,595 11,595 11,595 11,595 11,595 11,595 11,595 11,595 11,595 11,595 34 Special Drawing Rights certificate account 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 35 Treasury currency outstanding 11,206 11,244 11,327 11,273 11,288 11,291 11,305 11,319 11,327 11,327 ABSORBING RESERVE FUNDS 36 Currency in circulation 97,823 98,900 101,817 99,259 99,133 99,548 100,795 101,170 101,489 101,817 37 Treasury cash holdings 434 413 450 430 425 420 421 416 409 450 Deposits, other than member bank reserves with F.R. Banks: 38 Treasury 15,740 6,398 2,562 5,215 6,375 5,690 2,132 1,199 2,018 2,562 39 Foreign 382 425 416 243 344 280 314 268 269 416 40 Other 2 853 715 719 562 708 583 714 494 599 719 41 Other F.R. liabilities and capital. .. 3,659 3,704 3,675 3,466 3,637 3,227 3,422 3,776 3,794 3,675 42 Member bank reserves with F.R. Banks 23,953 22,841 26,372 26,898 28,023 26,060 23,780 24,339 30,861 26,372 1 Includes securities loaned—fully guaranteed by U.S. Govt, securities voluntarily held with member banks and redeposited in full with Federal pledged with F.R. Banks—and excludes (if any) securities sold and sched- Reserve Banks. uled to be bought back under matched sale-purchase transactions. NOTE.—For amounts of currency and coin held as reserves, see Table 2 Includes certain deposits of foreign-owned banking institutions 1.12. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Member Banks AS 1.12 RESERVES AND BORROWINGS Member Banks Millions of dollars Monthly averages of daily figures Reserve classification 1976 Dec. Mar. Apr. May June July Aug. Sept. Oct. NOV.P All member banks Reserves: 1 At F.R. Banks 26,430 25,849 26,096 25,970 25,646 26,663 26,373 26,152 26,933 26,8^0 2 Currency and coin 8,548 8,134 8,368 8,610 8,609 8,622 8,712 8,887 8,820 8,935 3 Total held i 35,136 34,135 34,613 34,732 34,406 35,391 35,186 35,156 35,860 35,839 4 Required 34,964 33,870 34,602 34,460 34,293 35,043 34,987 34,965 35,521 35,646 5 Excess1 172 265 11 272 113 348 199 191 339 193 Borrowings at F.R. Banks:2 6 Total 62 110 73 200 262 336 1,071 634 1,319 839 7 Seasonal 12 13 14 31 55 60 101 112 114 82 Large banks in New York City 8 Reserves held. 6,520 6,331 6,264 6,310 6,241 6,359 6,272 6,025 6,175 6,046 9 Required 6,602 6,259 6,351 6,279 6,188 6,342 6,247 6,022 6,120 6,171 10 Excess. -82 72 -87 31 53 17 25 3 55 -125 11 Borrowings2 15 44 16 18 36 74 157 75 133 131 Large banks in Chicago 12 Reserves held 1,632 1,610 1,629 1,637 1,662 1,573 1,653 1,655 1,666 1,554 13 Required 1,641 1,611 1,634 1,634 1,627 1,606 1,622 1,634 1,656 1,609 14 Excess -9 -1 -5 * 3 35 -33 31 21 10 -55 15 Borrowings2 4 3 4 15 6 5 12 24 23 Other large banks 16 Reserves held 13,117 12,779 13,090 13,067 12,869 13,438 13,290 13,362 13,711 13,428 17 Required 13,053 12,705 13,110 12,996 12,943 13,286 13,270 13,355 13,598 13,603 18 Excess 64 74 -20 71 -74 152 20 7 113 -175 19 Borrowings2 14 29 23 62 80 79 530 183 681 356 All other banks 20 Reserves held 13,867 13,415 13,630 13,718 13,634 14,021 13,971 14,114 14,308 14,356 21 Required 13,668 13,295 13,507 13,551 13,535 13,809 13,848 13,954 14,147 14,263 22 Excess 199 120 123 167 99 212 123 160 161 93 23 Borrowings2 29 34 34 116 131 177 379 364 481 329 Weekly averages of daily figures for weeks ending— 1977 Sept. 28 Oct. 5 Oct. 12 Oct. 19 Oct. 26 Nov. 2 Nov. 9 Nov. 16 Nov. 23» All member banks Reserves: 24 At F.R. Banks 26,349 27,002 25,471 27,686 27,026 26,929 26,301 26,963 27,588 25 Currency and coin 9,120 8,990 9,201 8,615 8,406 8,983 9,182 9,191 8,259 26 Total held1 35,614 36,218 34,798 36,369 35,502 35,981 35,551 36,221 35,909 27 Required 35,382 35,817 34,629 36,285 35,300 35,716 35,396 35,804 35,858 28 Excess1 232 401 169 84 202 265 155 417 51 Borrowings at F.R. Banks:2 29 Total 718 883 1,051 1,861 1,444 1,113 887 534 881 30 Seasonal 115 117 113 114 103 87 83 84 Large banks in New York City 31 Reserves held 6,096 6,325 5,768 6,652 5,757 6,220 6,260 6,335 6,071 32 Required 6,028 6,280 5,839 6,592 5,777 6,175 6,214 6,314 6,323 33 Excess 68 45 -71 60 -20 45 46 21 -252 34 Borrowings2 159 285 200 60 252 Large banks in Chicago 35 Reserves held 1,594 1,663 1,651 1,727 1,657 1,669 1,611 1,675 1,408 36 Required 1,597 1,642 1,597 1,745 1,643 1,648 1,624 1,638 1,594 37 Excess -3 21 54 -18 14 21 -13 37 -186 38 Borrowings2 15 15 13 56 15 17 14 13 34 Other large banks 39 Reserves held... 13,571 13,832 13,265 13,814 13,670 13,668 13,459 13,823 13,306 40 Required 13,532 13,676 13,288 13,866 13,582 13,601 13,478 13,689 13,603 41 Excess 39 156 -23 -52 88 67 -19 134 -297 42 Borrowings 2.... 293 307 661 1,039 586 631 560 168 304 All other banks 43 Reserves held. 14,353 14,398 14,114 14,176 14,418 14,424 14,221 14,388 14,391 44 Required... 14,225 14,219 13,905 14,082 14,298 14,^92 14,080 14,163 14,338 45 Excess 128 179 209 94 120 132 141 225 53 46 Borrowings2.. 410 402 377 481 643 465 313 293 291 i Adjusted to include waivers of penalties for reserve deficiencies in nonmember bank joins the Federal Reserve System. For weeks for which accordance with Board policy, effective Nov. 19, 1975, of permitting figures are preliminary, figures by class of bank do not add to total transitional relief on a graduated basis over a 24-month period when a because adjusted data by class are not available. nonmember bank merges into an existing member bank, or when a 2 Based on closing figures. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A6 Domestic Financial Statistics • December 1977 1.13 FEDERAL FUNDS TRANSACTIONS of Money Market Banks Millions of dollars, except as noted 1977, week ending Wednesday— TTyyppee Oct. 5 Oct. 12 Oct. 19 Oct. 26 Nov. 2 Nov. 9 Nov. 16 Nov. 23 Nov. 30 Total, 46 banks Basic reserve position 1 Excess reserves1 191 111 -16 38 133 64 131 -14 209 LESS: 2 Borrowings at F.R. Banks 202 138 795 345 281 363 48 415 422 3 Net interbank Federal funds transactions 15,361 2200,,662200 1188,,666666 16,378 1166,,441166 2200,,992299 2200,,006611 1177,,776666 16,212 EQUALS: Net surplus, or deficit (-): 4 Amount --1155,,337733 --2200,,664477 --1199,,447777 --1166,,668844 --1166,,556644 --2211,,222288 --1199,,997788 -18,195 -16,425 5 Per cent of average required reserves 100.6 141.5 122.9 113.2 109.1 140.2 129.8 119.6 110.9 Interbank Federal funds transactions Gross transactions: 6 Purchases 23,847 27,466 24,945 22,681 22,719 28,083 27,820 25,552 24,445 7 Sales 8,486 c6,846 6,279 6,304 6,304 7,155 7,760 7,786 8,233 8 Two-way transactions2 5,159 44,,882200 44,,993377 55,,337733 55,,337766 66,,000066 6,422 5,358 55,,883366 Net transactions: 9 Purchases of net buying banks... 18,688 22,646 20,008 17,309 17,344 22,077 21,398 20,194 18,609 10 Sales of net selling banks 3,327 2,026 1,342 931 928 1,149 1,337 2,428 2,397 Related transactions with U.S. Govt, securities dealers 11 Loans to dealers3 3,409 5,475 4,498 3,049 3,355 4,248 4,431 3,795 4,019 12 Borrowing from dealers4 2,503 2,384 2,133 1,762 2,359 1,648 1,519 1,864 1,758 13 Net loans 906 3,091 2,365 1,287 996 2,601 2,912 1,931 2,261 8 banks in New York City Basic reserve position 14 Excess reserves1 68 -32 42 4 50 72 60 -9 91 LESS: 15 Borrowings at F.R. Banks 115599 228855 220000 1100 225522 225522 16 Net interbank Federal funds transactions 6,608 88,,449944 6,173 55,,119955 5,061 7,566 7,391 7,185 6,004 EQUALS : Net surplus, or deficit (-): 17 Amount --66,,669999 --88,,552255 --66,,441166 -5,391 --55,,001111 --77,,449944 -7,340 -7,447 -6,165 18 Per cent of average required reserves 117.4 160.5 106.6 103.4 89.3 132.2 127.5 130.3 115.5 Interbank Federal funds transactions Gross transactions: 19 Purchases 7,187 8,984 7,203 6,271 5,645 8,536 8,235 7,874 6,806 20 Sales 579 490 1,030 1,076 584 970 844 689 803 21 Two-way transactions2 579 490 991 1,076 584 970 844 689 803 Net transactions: 22 Purchases of net buying banks... 6,608 88,,449944 6,212 5,195 55,,006611 77,,556666 7,391 7,185 66,,000044 2233 Sales of net selling banks....... 3399 Related transactions with U.S. Govt, securities dealers 24 Loans to dealers3 1,842 3,357 2,595 1,819 1,718 2,558 2,734 2,167 1,978 25 Borrowing from dealers4 1,298 1,246 1,181 1,004 1,016 1,173 1,103 1,087 1,076 26 Net loans 545 2,111 1,413 815 702 1,385 1,631 1,080 902 38 banks outside New York City Basic reserve position 27 Excess reserves1 122 143 -58 34 83 -8 71 -5 119 LESS: 28 Borrowings at F.R. Banks 44 138 510 145 281 363 38 162 169 29 Net interbank Federal funds transactions 8,753 12,126 1122,,449933 1111,,118822 1111,,335555 13,363 1122,,667700 1100,,558811 1100,,220099 EQUALS: Net surplus, or deficit (-): 30 Amount -8,675 -12,122 --1133,,006611 -11,294 -11,554 -13,734 --1122,,663388 --1100,,774488 --1100,,225599 31 Per cent of average required reserves 90.6 130.6 132.9 118.6 120.7 145.0 131.2 113.2 108.2 Interbank Federal funds transactions Gross transactions: 32 Purchases 16,660 18,483 17,742 16,410 17,075 19,548 19,586 17,678 17,639 33 Sales 7,907 6,356 5,249 5,228 5,720 6,185 6,916 7,097 7,431 34 Two-way transactions2 44,,558800 44,,333300 3,946 44,,229977 AA,,119922 5,036 55,,557788 44,,666699 5,033 Net transactions: 35 Purchases of net buying banks... 12,080 14,152 13,796 12,113 12,283 14,511 14,008 13,009 12,606 36 Sales of net selling banks 3,327 2,026 1,303 931 928 1,149 1,337 2,428 2,397 Related transactions with U.S. Govt, securities dealers 37 Loans to dealers3 1,567 2,118 1,903 1,230 1,637 1,690 1,697 1,628 2,041 38 Borrowing from dealers4 1,206 1,137 952 758 1,343 474 416 116 682 39 Net loans 361 981 952 All 294 1,216 1,282 852 1,359 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Federal Funds Al 1.13 Continued 1977, week ending Wednesday— Type Oct. 5 Oct. 12 Oct. 19 Oct. 26 Nov. 2 Nov. 9 Nov. 16 Nov. 23 Nov. 30 5 banks in City of Chicago Basic reserve position 40 Excess reserves1 18 82 -12 16 23 -3 38 -1 16 LESS: 41 Borrowings at F.R. Banks... 40 3 20 20 42 Net interbank Federal funds transactions 5,288 6,391 6,446 5,524 5,570 6,777 6,159 5,757 5,968 EQUALS: Net surplus, or deficit (-): 43 Amount -5,270 -6,309 -6,498 -5,508 -5,550 -6,780 -6,120 -5,777 -5,972 44 Per cent of average required reserves 343.6 423.6 397.5 358.6 360.2 447.2 400.4 389.0 408.7 Interbank Federal funds transactions Gross transactions: 45 Purchases 6,310 7,275 7,229 6,537 6,875 7,756 7,783 7,144 7,381 46 Sales 1,023 884 783 1,014 1,305 979 1,624 1,387 1,413 47 Two-way transactions2 1,023 879 770 1,014 1,280 979 1,607 1,349 1,409 Net transactions: 48 Purchases of net buying banks.. 5,287 6,396 c6,459 5,524 5,595 6,777 6,176 5,795 5,972 49 Sales of net selling banks 5 12 25 17 38 3 Related transactions with U.S. Govt, securities dealers 50 Loans to dealers 3 254 491 372 195 378 312 283 268 357 51 Borrowing from dealers4... 241 269 128 171 288 13 104 114 52 Net loans 13 222 243 24 90 " 3i2" 270 164 243 33 other banks Basic reserve position 5 3 Excess reserves1 105 60 -46 18 60 -5 33 -4 103 LESS: 54 Borrowings at F.R. Banks... 44 138 470 145 278 363 38 142 149 55 Net interbank Fedefal funds transactions 3,466 5,735 6,047 5,659 5,785 6,586 6,512 4,825 4,241 EQUALS: Net surplus, or deficit (-): 56 Amount -3,405 -5,813 -6,563 -5,786 -6,004 -6,954 -6,517 -4,971 -4,287 57 Per cent of average required reserves 42.3 74.6 80.1 72.5 74.8 87.4 80.4 62.1 53.5 Interbank Federal funds transactions Gross transactions: 58 Purchases 10,350 11,208 10,513 9,873 10,200 11,791 11,803 10,534 10,258 59 Sales 6,884 5,472 4,466 4,214 4,415 5,206 5,292 5,710 6,018 60 Two-way transactions2 3,557 3,452 3,176 3,283 3,512 4,057 3,971 3,320 3,624 Net transactions: 61 Purchases of net buying banks.. 6,793 7,756 7,337 6,590 6,688 7,734 7,832 7,215 6,634 62 Sales of net selling banks 3,327 2,021 1,291 931 903 1,149 1,320 2,390 2,393 Related transactions with U.S. Govt, securities dealers 63 Loans to dealers 3 1,313 1,627 1,532 1,035 1,259 1,378 1,415 1,360 1,684 64 Borrowing from dealers4 965 869 823 587 1,055 474 403 672 568 65 Net loans 348 759 709 448 204 904 1,012 688 1,116 1 Based on reserve balances, including adjustments to include waivers 4 Federal funds borrowed, net funds acquired from each dealer by of penalties for reserve deficiencies in accordance with changes in policy clearing banks, reverse repurchase agreements (sales of securities to of the Board of Governors effective Nov. 19, 1975. dealers subject to repurchase), resale agreements, and borrowings secured 2 Derived from averages for individual banks for entire week. Figure by U.S. Govt, or other securities. for each bank indicates extent to which the bank's average purchases and sales are offsetting. NOTE.—Weekly averages of daily figures. For description of series, 3 Federal funds loaned, net funds supplied to each dealer by clearing see August 1964 BULLETIN, pp. 944-53. Back data for 46 banks appear banks, repurchase agreements (purchases from dealers subject to resale), in the Board's Annual Statistical Digest, 1971-1975, Table 3. or other lending arrangements. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A8 Domestic Financial Statistics • December 1977 1.14 FEDERAL RESERVE BANK INTEREST RATES Per cent per annum Current and previous levels Loans to member banks— Loans to all others Under Sec. 10(b) 2 under Sec. 13. last par.4 Federal Reserve Under Sees. 13 and 13ai Bank Regular rate Special rate3 Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous 11/30/77 date rate 11/30/77 date rate 11/30/77 date rate 11/30/77 date rate Boston 6 10/26/77 534 61/2 10/26/77 614 7 10/26/77 634 9 10/26/77 83/4 New York 6 10/26/77 53/4 61/2 10/26/77 61/4 7 10/26/77 63/4 9 10/26/77 834 Philadelphia 6 10/26/77 534 61/2 10/26/77 614 7 10/26/77 634 9 10/26/77 834 Cleveland 6 10/26/77 534 6% 10/26/77 614 7 10/26/77 634 9 10/26/77 83/4 Richmond 6 10/26/77 5 3/4 61/2 10/26/77 614 7 10/26/77 634 9 10/26/77 834 C A h tl i a c n a t g a o 6 6 1 1 0 0 / / 2 2 6 6 / / 7 7 7 7 5 5 3 3 4 4 6 6 1 1 / / 2 2 1 1 0 0 / / 2 2 6 6/ / 7 7 7 7 6 6 1 1 / / 4 4 7 7 1 1 0 0 / / 2 2 6 6 / / 7 7 7 7 6 6 3 3 4 4 9 9 1 1 0 0 / / 2 2 6 6 / / 7 7 7 7 8 8 3 3 / 4 4 St. Louis 6 10/26/77 534 61/2 10/26/77 614 7 10/26/77 634 9 10/26/77 834 Minneapolis 6 10/26/77 534 61/2 10/26/77 61/4 7 10/26/77 63/4 9 10/26/77 834 Kansas City 6 10/26/77 534 61/2 10/26/77 614 7 10/26/77 634 9 10/26/77 834 Dallas 6 10/26/77 53/4 61/2 10/26/77 614 7 10/26/77 634 9 10/26/77 834 San Francisco.... 6 10/26/77 534 61/2 10/26/77 61/4 7 10/26/77 634 9 10/26/77 834 Range of rates in recent years5 Range F.R. Range F.R. Range F.R. Effective date (or level)— Bank Effective date (or level)— Bank Effective date (or level)— Bank All F.R. of All F.R. of All F.R. of Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1970 51/2 5% 1973—Jan. 15. 5 5 1975—Jan. 6 714-734 734 Feb. 26. 5-5Vi 5Vi 10 714-734 714 1971—Jan. 8 5^-51/2 51/4 Mar. 2. 5V4 5Vi 24 71/4 714 1 1 5 9 5 51 - / 5 4 V 4 5 5 1 1 / / 4 4 A M p a r y . 23 4 . . 53/4 5 5 V % i Feb. 7 5 63 6 4 3 -7 4 1 4 6 6 3 3 4 4 22 5 -514 5 11. 53/4-6 6 Mar. 10 6V4-634 614 29 5 5 18. 6 6 14 614 61/4 Feb. 1 1 3 9 4^-5 4 5 3/4 June 1 1 5 1 . . 6 6 - V 6 i i /2 6 6V V2 1 May 2 1 3 6 6 6 -614 6 6 July 16 4%-5 5 July 2. 7 7 2 3 5 5 Aug. 14, 7-71/2 71/2 1976—Jan. 19 5Vi-6 51/2 Nov. 11 43/4-5 5 23, 7Vi m 23 51/2 5% 19 m 4Va Nov. 22 514-51/2 5V4 Dec. 13 43/4 1974—Apr. 25, 7Vi-8 26. 51/4 51/4 17 416-43/4 4 Vi 30 8 2 4 41/2 4Vi Dec. 1 9 6 73/4 m73 4 1977—Aug. 3 3 1 0 5 51 1 / 4 4 - - 5 5 3 3 4 4 5 5 1 3 / 4 4 Sept. 2 53/4 534 Oct. 26 6 6 In effect Nov. 30, 1977... 6 6 1 Discounts of eligible paper and advances secured by such paper or by 4 Advances to individuals, partnerships, or corporations other than U.S. Govt, obligations or any other obligations eligible for F.R. Bank member banks secured by direct obligations of, or obligations fully purchase. guaranteed as to principal and interest by, the U.S. Govt, or any agency 2 Advances secured to the satisfaction of the F.R. Bank. Advances thereof. secured by mortgages on 1- to 4-family residential property are made at 5 Rates under Sees. 13 and 13a (as described above). For description the Section 13 rate. and earlier data, see the following publications of the Board of Governors: 3 Applicable to special advances described in Section 201.2(e)(2) of Banking and Monetary Statistics, 1914-1941, Banking and Monetary Regulation A. Statistics, 1941-1970, and Annual Statistical Digest, 1971-75. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Policy Instruments A9 1 15 MEMBER BANK RESERVE REQUIREMENTS1 Per cent of deposits Requirements in effect Previous requirements Nov. 30, 1977 TTyyppee ooff ddeeppoossiitt,, aanndd ddeeppoossiitt iinntteerrvvaall iinn mmiilllliioonnss ooff ddoollllaarrss Per cent Effective date Per cent Effective date Net demand:2 7 12/30/76 71/2 2/13/75 2-10 91/2 12/30/76 10 2/13/75 10-100 11% 12/30/76 12 2/13/75 100-400 12% 12/30/76 13 2/13/75 Over 400 16% 12/30/76 16% 2/13/75 Time:2,3 Savings 3 3/16/67 3/2/67 Other time: 0-5, maturing in— 30-179 days 3 3/16/67 3% 3/2/67 180 days to 4 years 4 21/2 1/8/76 3 3/16/67 4 years or more 4 1 10/30/75 3 3/16/67 Over 5, maturing in— 30-179 days 6 12/12/74 5 10/1/70 180 days to 4 years 4 2J/i 1/8/76 3 12/12/74 4 years or more 41 10/30/75 3 12/12/74 Legal limits, Nov. 30, 1977 Minimum Maximum Net demand: Reserve city banks 10 22 Other banks 7 14 Time 3 10 1 For changes in reserve requirements beginning 1963, see Board's (c) The Board's Regulation M requires a 4 per cent reserve against net Annual Statistical Digest, 1971-1975 and for prior changes, see Board's balances due from domestic banks to their foreign branches and to foreign Annual Report for 1976, Table 13. banks abroad. Effective Dec. 1, 1977, a 1 per cent reserve is required 2 (a) Requirement schedules are graduated, and each deposit interval against deposits that foreign branches of U.S. banks use for lending to applies to that part of the deposits of each bank. Demand deposits U.S. residents. Loans aggregating $100,000 or less to any U.S. resident are subject to reserve requirements are gross demand deposits minus cash excluded from computations, as are total loans of a bank to U.S. residents items in process of collection and demand balances due from domestic if not exceeding $1 million. Regulation D imposes a similar reserve rebanks. quirement on borrowings from foreign banks by domestic offices of a (b) The Federal Reserve Act specifies different ranges of requirements member bank. for reserve city banks and for other banks. Reserve cities are designated 3 Negotiable orders of withdrawal (NOW) accounts and time deposits under a criterion adopted effective Nov. 9, 1972, by which a bank having such as Christmas and vacation club accounts are subject to the same net demand deposits of more than $400 million is considered to have the requirements as savings deposits. character of business of a reserve city bank. The presence of the head 4 The average of reserves on savings and other time deposits must be office of such a bank constitutes designation of that place as a reserve at least 3 per cent, the minimum specified by law. city. Cities in which there are F.R. Banks or branches are also reserve cities. Any banks having net demand deposits of $400 million or less NOTE.—Required reserves must be held in the form of deposits with are considered to have the character of business of banks outside of F.R. Banks or vault cash. reserve cities and are permitted to maintain reserves at ratios set for banks not in reserve cities. For details, see the Board's Regulation D. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A10 Domestic Financial Statistics • December 1977 .16 MAXIMUM INTEREST RATES PAYABLE on Time and Savings Deposits at Federally Insured Institutions Per cent per annum Commercial banks Savings and loan associations and mutual savings banks Type and maturity of deposit In effect Sept. 30,1977 Previous maximum In effect Sept. 30, 1977 Previous maximum Per cent Effective Per cent Effective Per cent Effective Per cent date date date 1 Savings 7/1/73 41/2 1/21/70 51/4 (6) 2 Negotiable order of withdrawal (NOW) accounts1 1/1/74 5 1/1/74 Time (multiple- and single-maturity unless otherwise indicated):2 30-89 days : 4 3 S M in u g lt l i e p -m le- a m tu a r t i u ty ri ty 7/1/73 J I 4 5 % 9 1 / / 2 2 6 1 / / 6 7 6 0 (8) (8) 90 days to 1 year: 5 6 M Sin u g lt l i e p l m ea m tu a r t i u ty ri ty 5Vi 111 113 9 7 / / 2 2 6 0 / / 6 6 6 6 3 5*4 (6) 51/4 7 8 9 2 2 1 y t t 2 o o t 2 2 o y y 4 z e y y a e e r a s a 3 r r s s 3 3 6 6 1 /2 7 7 / / 1 1 / / 7 7 3 3 5 5V Y i 4 1 1 1 / / / 2 2 2 1 1 1 / / / 7 7 7 0 0 0 6 6 1 % /2 ( ( 6 6 ) ) 6 6 10 4 to 6 years4 71/4 11/1/73 (9) IV2 11/1/73 (9) 11 6 years or more4 12/23/74 1V4 11/1/73 12/23/74 71/2 71/2 m 12 Governmental units (all maturities)... 12/23/74 71/2 11/27/74 12/23/74 m 13 Indiv K id e u o a g l h r (H et . ir R e . m 1 e 0 n ) t pl a a c n c s o u 5 n ts and 7 73 V /4 a 7/6/77 (8) m m 7/6/77 (8) 1 For authorized States only. Federally insured commercial banks, 9 Between July 1, 1973, and Oct. 31, 1973, there was no ceiling for savings and loan associations, cooperative banks, and mutual savings certificates maturing in 4 years or more with minimum denominations banks were first permitted to offer NOW accounts on Jan. 1, 1974. of $1,000; however, the amount of such certificates that an institution Authorization to issue NOW accounts was extended to similar institu- could issue was limited to 5 per cent of its total time and savings deposits. tions throughout New England on Feb. 27, 1976. Sales in excess of that amount, as well as certificates of less than $1,000, 2 For exceptions with respect to certain foreign time deposits see the were limited to the 6Vi per cent ceiling on time deposits maturing in 2l/i Federal Reserve BULLETIN for October 1962 (p. 1279), August 1965 (p. years or more. 1094), and February 1968 (p. 167). Effective Nov. 1, 1973, the present ceilings were imposed on certificates 3 A minimum of $1,000 is required for savings and loan associations, maturing in 4 years or more with minimum denominations of $1,000. except in areas where mutual savings banks permit lower minimum de- There is no limitation on the amount of these certificates that banks can nominations. This restriction was removed for deposits maturing in less issue. than 1 year, effective Nov. 1, 1973. 4 $1,000 minimum except for deposits representing funds contributed NOTE—Maximum rates that can be paid by Federally insured commerto an Individual Retirement Account (IRA) or a Keogh (H.R. 10) Plan es- cial banks, mutual savings banks, and savings and loan associations are tablished pursuant to the Internal Revenue Code. The $1,000 minimum established by the Board of Governors of the Federal Reserve System, requirement was removed for such accounts in December 1975 and No- the Board of Directors of the Federal Deposit Insurance Corporation, vember 1976, respectively. and the Federal Home Loan Bank Board under the provisions of 12 5 3-year minimum maturity. CFR 217, 329, and 526, respectively. The maximum rates on time de- 6 July 1, 1973, for mutual savings banks; July 6, 1973, for savings and posits in denominations of $100,000 or more were suspended in midloan associations. 1973. For information regarding previous interest rate ceilings on all 7 Oct. 1, 1966, for mutual savings banks; Jan. 21, 1970, for savings and types of accounts, see earlier issues of the Federal Reserve BULLETIN, loan associations. the Federal Home Loan Bank Board Journal, and the Annual Report 8 No separate account category. of the Federal Deposit Insurance Corporation. 1.161 MARGIN REQUIREMENTS Per cent of market value; effective dates shown. Type of security on sale Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 1 Margin stocks 70 80 65 55 65 50 2 Convertible bonds 50 60 50 50 50 50 3 Short sales 70 80 65 55 65 50 NOTE.—Regulations G, T, and U of the Federal Reserve Board of difference between the market value (100 per cent) and the maximum Governors, prescribed in accordance with the Securities Exchange Act of loan value. The term "margin stocks" is defined in the corresponding 1934, limit the amount of credit to purchase and carry margin stocks regulation. that may be extended on securities as collateral by prescribing a maximum Regulation G and special margin requirements for bonds convertible loan value, which is a specified percentage of the market value of the into stocks were adopted by the Board of Governors effective Mar. 11, collateral at the time the credit is extended. Margin requirements are the 1968. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Policy Instruments All 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS Millions of dollars 1977 TTyyppee ooff ttrraannssaaccttiioonn 11997744 11997755 11997766 Apr. May June July Aug. Sept. Oct. U.S. GOVT. SECURITIES Outright transactions (excl. matched salepurchase transactions) Treasury bills: 11111111,,,,666666660000 11111111,,,,555566662222 11114444,,,,333344443333 1111 ,,,,€€€€77771111 666888111 2222,,,,666699996666 111111888 881122 2222,,,,000000005555 2 Gross sales 5555,,,,888833330000 5555,,,,555599999999 8888,,,,444466662222 222266660000 444888999 1111,,,,111155554444 777555333 117766 333300003333 1,877 4444,,,,555555550000 2222 6666,,,,444433331111 2222 5555,,,,000011117777 11119999 444000000 666600000000 555000000 333311117777 Others within 1 year:1 444455550000 3333,,,,888888886666 444477772222 22220000 88889999 2222,,,,666611116666 6 Exchange, or maturity shift ---111,,,111888333 ---444 792 374 -1,209 478 238 2,321 320 --4455 111333111 333,,,555444999 22,,550000 1 to 5 years: 777999777 222333,,,222888444 2222 3333,,,,222200002222 332277 220000 668811 111177777777 10 Exchange, or maturity shift --669977 33,,885544 ----2222,,,,555588888888 --337744 -865 --447788 -238 -1,664 --332200 45 5 to 10 years: 11 Gross purchases 443344 11,,551100 1111,,,,000044448888 110044 6688 9966 12 Gross sales 13 Exchange, or maturity shift 111,,,666777555 ---444,,,666999777 111,,,555777222 11,,117744 --778822 Over 10 years: 14 Gross purchases 111999666 111,,,000777000 666444222 3388 111144 112288 15 Gross sales 16 Exchange, or maturity shift 222220000055555 888884444488888 222222222255555 999900000000 111222555 All maturities:1 17 Gross purchases 1111133333,,,,,555553333377777 222222222211111,,,,,333331111133333 222221111199999,,,,,777770000077777 2222,,,,111166660000 666688881111 3333,,,,111166667777 111111888 888111222 555,,,555222666 18 Gross sales 55555,,,,,888883333300000 55555,,,,,555559999999999 88888,,,,,666663333399999 222266660000 444488889999 1111,,,,111155554444 777555333 111777666 333000333 11,,887777 19 Redemptions 44444,,,,,666668888822222 22222 99999,,,,,999998888800000 22222 55555,,,,,000001111177777 11119999 444400000000 666600000000 555000000 333111777 22,,550000 Matched sale-purchase transactions 20 Gross sales 6666644444,,,,,222222222299999 111115555511111,,,,,222220000055555 111119999966666,,,,,000007777788888 33332222,,,,222288887777 22228888,,,,555533332222 33336666,,,,222255558888 222777,,,999444777 45,831 333999,,,555555222 4488,,220044 21 Gross purchases 6666622222,,,,,888880000011111 111115555522222,,,,,111113333322222 111119999966666,,,,,555557777799999 33332222,,,,888855552222 22227777,,,,333300006666 33336666,,,,444444449999 222777,,,333000111 46,170 333999,,,666999444 4444,,777722 Repurchase agreements 22 Gross purchases 7777711111,,,,,333333333333333 111114444400000,,,,,333331111111111 222223333322222,,,,,888889999911111 11113333,,,,333399997777 22229999,,,,333300008888 11114444,,,,777744448888 111333,,,999777333 4,397 111666,,,777000000 99,,557788 23 Gross sales 7777700000,,,,,999994444477777 111113333399999,,,,,555553333388888 222223333300000,,,,,333335555555555 11111111,,,,888866662222 33330000,,,,444444448888 11111111,,,,555500006666 111555,,,777111999 5,648 111555,,,444666999 1111,,888899 24 Net change in U.S. Govt, securities ----2222,,,,555577773333 ---333,,,555222888 -276 666,,,222777999 --1100,,111188 FEDERAL AGENCY OBLIGATIONS 11111,,,,,999998888844444 77777,,,,,444443333344444 99999,,,,,000008888877777 3333,,,,999988880000 4444,,,,888844445555 Outright transactions: 25 Gross purchases 26 Gross sales 27 Redemptions 33333,,,,,000003388888227777722 11111,,,,,666662211111446666666 888881199999661111199 333344446666 ** 3333338888330000 --6699 2255 Repurchase agreements: 28 Gross purchases 2233,,220044 1155,,117799 1100,,552200 709 22,,116644 11,,665566 1,672 226655 11,,113366 741 29 Gross sales 2222,,773355 1155,,556666 1100,,336600 639 22,,227788 11,,005566 1,938 445599 997788 1,051 BANKERS ACCEPTANCES ** 30 Outright transactions, net 551111 116633 --554455 -51 --4455 --1155 -24 --1155 -4 31 Repurchase agreements, net 442200 --3355 441100 653 --772299 552288 -204 --224477 335511 -478 32 Net change in total System Account 66,,114499 88,,553399 99,,883333 4,998 --33,,446611 66,,330055 -4,020 --880011 66,,776644 -10,910 i Both gross purchases and redemptions include special certificates amounting to $189 million. Acquisition of these notes is treated as a created wh ( e m n il l t i° h n e s T o r f e d as o u ll r a y r s b ): o r 1 r 9 o 7 w 4 s , ' 1 d 3 i 1 re ; c 1 tl 9 y 7 5 f , r o 3 m ,5 4 t 9 h ; e 1 F 97 e 6 d , e r n a o l n e R ; e S se e r p v t e . , purchase; the run-off of bills, as a redemption. 1977,2,500. NOTE.—Sales, redemptions, and negative figures reduce holdings of . 2 In 1975, the System obtained $421 million of 2-year Treasury notes the System Open Market Account; all other figures increase such holdings. in exchange lor maturing bills. In 1976 there was a similar transaction Details may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A12 Domestic Financial Statistics • December 1977 1.18 FEDERAL RESERVE BANKS Condition and F.R. Note Statements Millions of dollars Wednesday End of month Account 1977 1977 Nov. 2 Nov. 9 Nov. 16 Nov. 23p Nov. 30p Sept. Oct. NOV.P Consolidated condition statement ASSETS 1 Gold certificate account 11,595 11,595 11,595 11,595 11,595 11,595 11,595 11,595 2 Special Drawing Rights certificate account 1,2C0 1,200 1,200 1,200 1,200 1,200 1,200 1,200 3 300 294 295 296 289 308 310 289 Loans: 4 Member bank borrowings 704 585 369 2,966 925 1,069 923 925 Other Acceptances: 6 4 7 334400 118822 224488 447788 224488 Federal agency obligations: 8 7,329 7,329 7,329 7,329 7,329 7,329 7,329 7,329 9 117799 115555 113311 331100 113311 U.S. Govt, securities Bought outright: 10 Bills 3355,,998800 3333,,331144 3311,,558888 38,270 3366,,008811 41,548 36,240 3366,,008811 11 22,,550000 P Other 13 49,856 49,856 49,616 49,616 49,616 49,856 49,856 49,616 14 8,501 8,501 8,741 8,741 8,741 8,501 8,501 8,741 15 Total2 94,337 9911,,667711 8899,,994455 96,627 94,438 102,405 94,597 94,438 16 1 669 1,060 2,039 2,310 2,039 17 Total U.S. Govt, securities 96,006 91,671 89,945 97,687 96,477 104,715 94,597 96,477 18 Total loans and securities 104,558 99,585 97,643 108,319 105,110 113,905 102,849 105,110 19 Cash items in process of collection 11,404 11.042 16,316 11,468 11,151 7,607 8,513 11,151 20 Bank premises 381 381 381 382 383 379 381 383 Other assets: 21 Denominated in foreign currencies 18 21 20 21 16 65 18 16 22 All other 2,086 2,112 1,648 1,662 1,720 2,429 2,165 1,720 23 131,542 126,230 129,098 134,943 131,464 137,488 127,031 131,464 LIABILITIES 24 F.R. notes 8888,,997777 9900,,220044 9900,,556622 90,867 91,229 87,361 8888,,338800 9911,,222299 Deposits: 25 Member bank reserves 26,060 23,780 24,339 30,861 26,372 23,953 22,841 26,372 26 U.S. Treasury—General account 5,690 2,132 1,199 2,018 2,562 15,740 6,398 2,562 27 280 314 268 269 416 382 425 416 28 Other 3 583 714 494 599 719 853 715 719 29 32,613 26,940 26,300 33,747 30,069 40,928 30,379 30,069 30 Deferred availability cash items 6,725 5,664 8,460 6,535 6,491 5,540 4,568 6,491 31 Other liabilities and accrued dividends 1,154 1,226 1,471 1,371 1,130 1,165 1,127 1,130 32 Total liabilities 129,469 124,034 126,793 132,520 128,919 134,994 124,454 128,919 CAPITAL ACCOUNTS 33 1,021 1,023 1,023 1,024 1,025 1,016 1,022 1,025 34 983 983 983 983 983 983 983 983 35 Other capital accounts 69 190 299 416 537 495 572 537 36 Total liabilities and capital accounts 131,542 126,230 129,098 134,943 131,464 137,488 127,031 131,464 37 MEMO: Marketable U.S. Govt, securities held in custody for foreign and intl. account 69,449 69,443 71,382 72,819 74,208 63,781 68,768 74,208 Federal Reserve note statement 38 F.R. notes outstanding (issued to Bank) 94,375 95,910 95,502 96,109 9966,,339988 9933,,776622 9944,,228888 9966,,339988 Collateral held against notes outstanding: 39 Gold certificate account 11,591 11,591 11,591 11,591 11,591 11,591 11,590 11,591 40 Special Drawing Rights certificate account.... 855 855 855 855 855 855 855 855 41 Acceptances 42 U.S. Govt, securities 83,185 83,715 84,193 84,795 84,795 82,885 83,185 84,795 43 Total collateral 95,631 96,161 96,639 97,241 97,241 95,331 95,630 97,241 1 Effective Jan. 1, 1977, Federal Reserve notes of other Federal Reserve owned banking institutions voluntarily held with member banks and Banks were merged into the liability account for Federal Reserve notes. redeposited in full with F.R. Banks. 2 Includes securities loaned—fully guaranteed by U.S. Govt, securities pledged with F.R. Banks—and excludes (if any) securities sold and NOTE.—Beginning Jan. 1, 1977, "Operating equipment" was transferred scheduled to be bought back under matched sale-purchase transactions. to "Other assets." 3 Includes certain deposits of domestic nonmember banks and foreign- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Reserve Banks A13 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holdings Millions of dollars Wednesday End of month Type and maturity 1977 Nov. 2 Nov. 9 Nov. 16 Nov. 23 Nov. 30 Sept. 30 1 Loans 703 586 371 2,966 925 1,069 922 2 Within 15 days 660 541 346 2,954 895 1,032 883 3 16 days to 90 days. 43 45 25 12 30 37 39 4 91 days to 1 year.. 5 Acceptances 340 182 248 482 6 Within 15 days 340 182 248 478 7 16 days to 90 days. 4 8 91 days to 1 year... 9 U.S. Govt, securities 96,006 91,671 89,945 97,687 96,477 104,715 94,597 10 Within 15 days1 6,233 3,993 2,040 4,218 3,950 6,709 4,197 11 16 days to 90 days 13,866 12,728 10,880 19,181 18,203 20,858 14,222 12 91 days to 1 year 30.486 29,529 32,834 30,097 30,255 31,772 30,757 13 Over 1 year to 5 years. . . 28,155 28,155 27,010 27,010 26,888 28,110 28,155 14 Over 5 years to 10 years. 10,547 10,547 10,222 10,222 10,222 10,547 10,547 15 Over 10 years 6,719 6,719 6,959 6,959 6,959 6,719 6,719 16 Federal agency obligations.. 7,508 7,329 7,329 7,484 7,460 7,639 7,329 17 Within 15 days i 179 131 286 292 335 42 18 16 days to 90 days 379 443 312 312 291 355 379 19 91 days to 1 year 883 819 819 819 836 884 841 20 Over 1 year to 5 years. . . 3,752 3,752 3,752 3,752 3,726 3,679 3,752 21 Over 5 years to 10 years . 1,492 1,492 1,492 1,492 1,492 1,563 1,492 22 Over 10 years 823 823 823 823 823 823 823 1 Holdings under repurchase agreements are classified as maturing within 15 days in accordance with maximum maturity of the agreements. 1.20 BANK DEBITS AND DEPOSIT TURNOVER Debits are shown in billions of dollars. Monthly data are at annual rates 1977 BBaannkk ggrroouupp,, oorr ttyyppee 11997744 11997755 11997766 ooff ccuussttoommeerr June July Aug. Sept. Oct. Debits to demand deposits 2 (seasonally adjusted) 1111 AAAAllllllll ccccoooommmmmmmmeeeerrrrcccciiiiaaaallll bbbbaaaannnnkkkkssss 22,937.8 25,028.5 29,180.4 34,805.2 34,098.5 35,644.8 36,083.9 36,763.1 2222 MMMMaaaajjjjoooorrrr NNNNeeeewwww YYYYoooorrrrkkkk CCCCiiiittttyyyy bbbbaaaannnnkkkkssss........ 8,434.8 9,670.7 11,467.2 14,049.7 13,501.0 14,351.0 14,389.6 14,973.3 3333 OOOOtttthhhheeeerrrr bbbbaaaannnnkkkkssss 14,503.0 15,357.8 17,713.2 20,755.5 20,597.5 21,293.8 21,694.2 21,789.8 Debits to savings deposits 3 (not seasonally adjusted) 4444 AAAAllllllll ccccuuuussssttttoooommmmeeeerrrrssss 333355559999....1111 333366666666....2222 333344447777....5555 333366662222....7777 5 Business 1 44443333....6666 55555555....0000 55550000....0000 55552222....5555 6 Others 333311115555....6666 333311111111....2222 222299997777....5555 333311110000....2222 Demand deposit turnover 2 (seasonally adjusted) 77777 AAAAAllllllllll cccccooooommmmmmmmmmeeeeerrrrrccccciiiiiaaaaalllll bbbbbaaaaannnnnkkkkksssss 99.0 105.3 116.8 133.6 127.5 133.8 134.7 134.4 88888 MMMMMaaaaajjjjjooooorrrrr NNNNNeeeeewwwww YYYYYooooorrrrrkkkkk CCCCCiiiiitttttyyyyy bbbbbaaaaannnnnkkkkksssss..... ..... 321.6 356.9 411.6 524.2 479.7 519.3 533.9 534.0 99999 OOOOOttttthhhhheeeeerrrrr bbbbbaaaaannnnnkkkkksssss 70.6 72.9 79.8 88.8 86.1 89.2 90.1 88.8 Savings deposit turnover 3 (not seasonally adjusted) 1111100000 AAAAAllllllllll cccccuuuuussssstttttooooommmmmeeeeerrrrrsssss 1111....7777 1111....7777 1111....6666 1111....7777 11 Business 1 4444....3333 5555....2222 4444....6666 4444....8888 12 Others 1111....5555 1111....5555 1111....5555 1111....5555 1 Represents corporations and other profit-seeking organizations (ex- NOTE.—Historical data—estimated for the period 1970 through June cluding commercial banks but including savings and loan associations, 1977, partly on the basis of the debits series for 233 SMSA's, which were mutual savings banks, credit unions, the Export-Import Bank, and available through June 1977 are available from Publications Services, Federally sponsored lending agencies). Division of Administrative Services, Board of Governors of the Federal 2 Represents accounts of individuals, partnerships, and corporations, Reserve System, Washington, D.C. 20551. Debits and turnover data for and of States and political subdivisions. savings deposits are not available prior to July 1977. 3 Excludes negotiable orders of withdrawal (NOW) accounts and special club accounts, such as Christmas and vacation clubs. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A14 Domestic Financial Statistics • December 1977 1.21 MONEY STOCK MEASURES AND COMPONENTS Billions of dollars, averages of daily figures 1977 1973 1974 1975 1976 Dec. Dec. Dec. Dec. Item May June July Aug. Sept. Oct. Seasonally adjusted MEASURES i 1 M-l 270.5 283.1 294.8 312.4 320.7 321.9 326.8 328.4 330.4 333.7 2 M-2 571.4 612.4 664.3 740.3 767.6 772.8 783.5 787.7 792.9 799.6 3 M-3 919.6 981.5 1,092.6 1,237.1 1,289.0 1,299.5 1,316.9 rl,329.5 '1,343.1 1,357.0 4 M-4 634.4 701.4 746.5 803.5 829.9 836.8 846.3 850.9 856.2 865.9 5 982.5 1,070.5 1,174.7 1,300.3 1,351.3 1,363.5 1,379.8 rl,392.7 rl ,406.3 1,423.3 COMPONENTS 6 Currency 61.5 67.8 73.7 80.5 83.6 84.0 85.1 85.5 86.4 87.1 Commercial bank deposits: 7 209.0 215.3 221.0 231.9 237.1 238.0 r241.7 '242.9 244.0 224466..66 8 Time and savings 363.9 418.3 451.7 491.1 509.2 514.8 519.5 522.5 525.8 532.2 9 Negotiable CD's2 63.0 89.0 82.1 63.3 62.3 63.9 62.8 63.2 63.2 66.4 10 Other 300.9 329.3 369.6 All.9 446.9 450.9 456.7 r459.3 462.6 465.9 11 Nonbank thrift institutions3 348.1 369.1 428.3 496.8 521.4 526.7 533.5 541.7 '550.2 557.4 Not seasonally adjusted MEASURES i 12 M-l 278.3 291.3 303.2 321.3 315.5 321.4 327.2 '325.2 328.2 332.5 13 M-2 576.5 617.5 669.3 745.3 766.2 774.5 784.0 '784.4 788.9 796.4 14 M-3 921.8 983.8 1,094.3 1,237.9 1,290.3 1,305.7 1,322.1 1,326.6 '1,337.1 1,350.6 15 M-4 640.5 708.0 752.8 809.5 827.4 837.5 846.8 848.8 854.3 864.7 16 M-5 985.8 1,074.3 1,177.7 1,302.1 1,351.4 1,368.7 1,384.9 '1,391.1 '1,402.6 1,419.0 COMPONENTS 17 Currency 62.7 69.0 75.1 82.0 83.4 84.2 85.7 85.8 86.1 86.9 Commercial bank deposits: 18 Demand 215.7 222.2 228.1 239.3 232.1 237.1 241.4 239.3 242.1 245.6 19 Member 156.5 159.7 162.1 168.5 161.8 165.1 167.7 '166.3 167.5 170.0 20 Domestic nonmember 56.3 58.5 62.6 67.3 66.6 68.3 69.5 69.1 70.4 71.3 21 Time and savings 362.2 416.7 449.6 488.2 511.8 516.1 519.6 523.7 526.1 532.2 22 Negotiable CD's2 64.0 90.5 83.5 64.3 61.2 63.0 61.8 '64.5 65.4 68.3 23 Other 298.2 326.3 366.2 423.9 450.7 453.2 456.9 459.2 460.7 463.8 24 Nonbank thrift institutions 3 345.3 366.3 424.9 492.6 524.1 531.1 538.1 542.3 '548.2 554.3 25 U.S. Govt, deposits (all commercial banks) 6.3 4.9 4.1 4.7 3.8 5.2 3.9 3.7 5.4 4.1 1 Composition of the money stock measures is as follows: M-4: M-2 plus large negotiable CD's. M-5: M-3 plus large negotiable CD's. M-l: Averages of daily figures for (1) demand deposits at commercial For a description of the latest revisions in the money stock measures banks other than domestic interbank and U.S. Govt., less cash items in see "Money Stock Measures: Revision" in the March 1977 BULLETIN, pp. process of collection and F.R. float; (2) foreign demand balances at F.R. 305 and 306. Banks; and (3) currency outside the Treasury, F.R. Banks, and vaults Latest monthly and weekly figures are available from the Board's H.6 of commercial banks. release. Back data are available from the Banking Section, Division of M-2: M-l plus savings deposits, time deposits open account, and time Research and Statistics. certificates of deposit (CD's) other than negotiable CD's of $100,000 or 2 Negotiable time CD's issued in denominations of $100,000 or more more of large weekly reporting banks. by large weekly reporting commercial banks. M-3: M-2 plus the average of the beginning- and end-of-month deposits 3 Average of the beginning- and end-of-month figures for deposits of of mutual savings banks, savings and loan shares, and credit union shares mutual savings banks, for savings capital at savings and loan associations, (nonbank thrift). and for credit union shares. NOTES TO TABLE 1.23: 1 Adjusted to exclude domestic commercial interbank loans. As of Oct. 31, 1974, "Total loans and investments" of all commercial 2 Loans sold are those sold outright to banks' own foreign branches, banks were reduced by $1.5 billion in connection with the liquidation nonconsolidated nonbank affiliates of the bank, the banks' holding of one large bank. Reductions in other items were: "Total loans," $1.0 company (if not a bank), and nonconsolidated nonbank subsidiaries of billion (of which $0.6 billion was in "Commercial and industrial loans"), the holding company. Prior to Aug. 28, 1974, the institutions included and "Other securities," $0.5 billion. In late November "Commercial and had been defined somewhat differently, and the reporting panel of banks industrial loans" were increased by $0.1 billion as a result of loan rewas also different. On the new basis, both "Total loans" and "Com- classifications at another large bank. mercial and industrial loans" were reduced by about $100 million. 3 Reclassification of loans reduced these loans by about $1.2 billion NOTE.—Data are for last Wednesday of month except for June 30 as of Mar. 31, 1976. and Dec. 31; data are partly or wholly estimated except when June 30 4 Data beginning June 30, 1974, include one large mutual savings and Dec. 31 are call dates. bank that merged with a nonmember commercial bank. As of that date there were increases of about $500 million in loans, $100 million in "Other" securities, and $600 million in "Total loans and investments." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Monetary Aggregates A15 1.22 AGGREGATE RESERVES AND DEPOSITS Member Banks Billions of dollars, averages of daily figures 1976 1977 IItteemm 11997733 11997744 11997755 DDeecc.. DDeecc.. DDeecc.. Dec. Apr. May June July Aug. Sept. Oct. Seasonally adjusted 11 RReesseerrvveess 11 34.94 36.60 34.73 34.95 34.68 34.72 34.86 35.35 35.64 35.63 35.90 22 NNoonnbboorrrroowweedd 33.64 35.87 34.60 34.90 34.61 34.52 34.60 35.03 34.58 35.00 34.59 33 RReeqquuiirreedd 34.64 36.34 34.47 34.68 34.49 34.51 34.71 35.08 35.44 35.42 35.69 44 DDeeppoossiittss ssuubbjjeecctt ttoo rreesseerrvvee rreeqquuiirreemmeennttss 22 442.3 486.2 505.4 529.6 538.4 537.6 544.5 547.7 551.4 552.9 559.4 55 TTiimmee aanndd ssaavviinnggss 279.2 322.1 337.9 355.0 361.4 363.1 367.0 369.2 370.8 372.4 377.1 DDeemmaanndd:: 66 PPrriivvaattee 158.1 160.6 164.5 171.4 173.4 172.3 173.8 175.8 177.0 176.9 179.0 77 UU..SS.. GGoovvtt 5.0 3.5 3.0 3.2 3.6 2.1 3.7 2.8 3.6 3.7 3.3 Not seasonally adjusted 8 Deposits subject to reserve requirements 2 447.5 491.8 510.9 534.8 541.3 535.8 544.5 547.6 548.3 552.1 558.2 9 Time and savings 278.5 321.7 337.2 353.6 362.3 364.7 367.8 369.5 371.7 373.0 377.5 Demand: 10 Private 164.0 166.6 170.7 177.9 175.0 168.5 173.0 175.6 174.1 175.2 178.0 11 U.S. Govt 5.0 3.4 3.1 3.3 4.0 2.5 3.7 2.6 2.5 3.8 2.7 1 Series reflects actual reserve requirement percentages with no adjust- 2 Includes total time and savings deposits and net demand deposits as ment to eliminate the effect of changes in Regulations D and M. There defined by Regulation D. Private demand deposits include all demand are breaks in series because of changes in reserve requirements effective deposits except those due to the U.S. Govt., less cash items in process of Dec. 12,1974; Feb. 13, May 22, and Oct. 30,1975; Jan. 8, and Dec. 30,1976. collection and demand balances due from domestic commercial banks. In addition, effective Jan. 1, 1976, statewide branching in New York was instituted. The subsequent merger of a number of banks raised NOTE.—Back data and estimates of the impact on required reserves required reserves because of higher reserve requirements on aggregate and changes in reserve requirements are shown in Table 14 of the Board's deposits at these banks. Annual Statistical Digest, 1971-1975. 1.23 LOANS AND INVESTMENTS All Commercial Banks Billions of dollars; last Wednesday of month except for June 30 and Dec. 31 1977 11997733 11997744 44 11997755 11997766 DDeecc.. 3311 DDeecc.. 3311 DDeecc.. 3311 DDeecc.. 3311 CCCaaattteeegggooorrryyy June 30 July 27 Aug. 31 Sept. 28 Oct. 26 Nov. 30 P p P p Seasonally adjusted 1 Loans and investments1 633.4 690.4 721.1 784.4 830.5 837.0 845.6 848.4 857.9 866.1 2 Including loans sold outright2 637.7 695.2 725.5 788.2 834.5 841.1 849.7 852.4 862.0 870.5 Loans: 3 Total 449.0 500.2 496.9 538.9 572.4 579.0 587.0 592.2 602.5 611.2 4 Including loans sold outright2 453.3 505.0 501.3 542.7 576.4 583.1 591.1 596.2 606.6 615.6 5 Commercial and industrial 3 156.4 183.3 176.0 179.5 190.2 192.4 194.6 195.1 199.3 201.6 6 Including loans sold outright2,3 159.0 186.0 178.5 181.9 193.0 195.2 197.4 197.9 202.2 204.7 Investments: 7 U.S. Treasury 54.5 50.4 79.4 97.3 105.2 103.6 103.1 100.1 97.8 95.0 8 Other 129.9 139.8 144.8 148.2 152.9 154.4 155.5 156.1 157.6 159.9 Not seasonally adjusted 9 Loans and investments1 647.3 705.6 737.0 801.6 835.5 834.2 842.8 848.4 856.1 866.4 10 Including loans sold outright 651.6 710.4 741.4 805.4 839.5 838.3 846.9 852.4 860.2 870.8 Loans: 11 Total1 458.5 510.7 507.4 550.2 579.8 579.9 588.2 594.0 601.3 610.1 12 Including loans sold outright2 462.8 515.5 511.8 554.0 583.9 584.0 592.3 598.0 605.4 614.6 13 Commercial and industrial3 159.4 186.8 179.3 182.9 192.7 192.4 193.6 195.5 198.6 200.8 14 Including loans sold outright2,3 162.0 189.5 181.8 185.3 195.6 195.2 196.4 198.3 201.5 203.9 Investments: 15 U.S. Treasury 58.3 54.5 84.1 102.5 101.6 100.0 99.4 98.5 97.7 97.9 16 Other 130.6 140.5 145.5 148.9 154.1 154.3 155.2 155.9 157.1 158.4 For notes see bottom of opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A16 Domestic Financial Statistics • December 1977 1.24 COMMERCIAL BANK ASSETS AND LIABILITIES Last-Wednesday-of-Month Series Billions of dollars except for number of banks 1975 1976 19773 Account Dec. 31 Dec. Mar. Apr. May June July*3 Aug.P Sept.p Oct.p Nov.f All commercial 1 Loans and investments 775.8 846.4 844.6 852.2 860.4 877.5 875.0 886.8 891.4 897.7 915.0 2 Loans, gross 546.2 594.9 590.9 595.8 604.6 621.9 620.7 632.2 637.1 642.9 658.7 Investments: 3 U.S. Treasury securities 84.1 102.5 105.0 103.4 102.4 101.6 100.0 99.4 98.5 97.7 97.8 4 Other 145.5 148.9 148.7 153.0 153.4 154.1 154.3 155.2 155.9 157.1 158.4 5 Cash assets 133.6 136.1 123.6 123.6 120.6 139.1 126.9 135.5 128.7 129.4 138.9 6 Currency and coin 12.3 12.1 13.0 13.4 13.1 12.7 13.5 13.7 13.9 13.9 14.7 7 Reserves with F.R. Banks 26.8 26.1 26.9 28.2 24.0 25.5 27.2 28.2 30.0 28.3 26.3 8 Balances with banks 47.3 49.6 42.6 41.0 42.4 47.4 42.4 45.3 42.7 44.4 46.8 9 Cash items in process of collection.. 47.3 48.4 41.1 41.0 41.0 53.4 43.9 48.3 42.1 42.8 51.0 10 Total assets/total liabilities and capital i 964.9 1,030.7 1,023.7 1,032.3 1,036.2 1,074.2 1,059.3 1,079.7 1,076.7 1,083.9 1,117.5 11 Deposits 786.3 838.2 820.5 823.7 824.4 861.9 843.2 857.6 852.1 858.8 883.5 Demand : 12 Interbank 41.8 45.4 38.0 34.2 35.7 46.5 38.2 39.6 37.1 37.5 41.8 13 U.S. Govt 3.1 3.0 3.1 7.4 3.6 2.8 3.8 2.5 8.0 3.6 4.7 14 Other 278.7 288.4 264.0 269.1 264.3 288.1 273.9 285.1 272.5 279.4 293.2 Time: 15 Interbank 12.0 9.2 8.9 8.6 8.5 8.9 8.3 8.0 8.3 8.5 9.0 16 Other 450.6 492.2 506.6 504.4 512.3 515.6 519.0 522.6 526.1 529.9 534.8 17 Borrowings 60.2 80.2 85.4 89.4 89.0 88.2 92.2 94.8 96.5 96.8 101.0 18 Total capital accounts2 69.1 78.1 77.3 77.7 78.2 81.8 79.2 79.6 80.1 80.5 81.4 19 MEMO: Number of banks 14,633 14,671 14,685 14,690 14,695 14,718 14,709 14,713 14,724 14,718 14,718 Member 20 Loans and investments 578.6 620.5 611.7 614.7 620.1 632.8 628.9 637.9 640.8 645.2 658.6 21 Loans, gross 416.4 442.9 434.5 435.9 441.5 453.4 451.3 459.9 463.0 467.1 479.0 Investments: 22 U.S. Treasury securities 61.5 74.6 74.9 73.0 72.6 72.6 70.8 70.5 69.6 68.9 69.2 23 Other 100.7 103.1 102.2 105.8 106.0 106.7 106.8 107.5 108.3 109.3 110.3 24 Cash assets, total 108.5 108.9 100.0 99.4 95.7 110.6 101.2 108.6 103.1 102.3 110.6 25 Currency and coin 9.2 9.1 9.6 9.9 9.7 9.3 9.9 10.0 10.2 10.2 10.8 26 Reserves with F.R. Banks 26.8 26.0 26.9 28.2 24.0 25.6 27.2 28.2 30.0 28.3 26.3 27 Balances with banks 26.9 27.4 24.0 21.9 22.6 24.4 22.0 24.0 22.5 22.8 24.7 28 Cash items in process of collection.. 45.5 46.5 39.5 39.4 39.3 51.3 42.1 46.4 40.4 41.0 48.9 29 Total assets/total liabilities and capital1 733.6 772.9 759.7 762.7 763.9 795.2 780.1 796.3 793.2 796.5 823.9 30 Deposits 590.8 618.7 598.0 597.7 597.4 628.7 611.0 622.2 617.0 620.9 641.8 Demand: 31 Interbank 38.6 42.4 35.3 31.6 32.9 43.4 35.3 36.6 34.3 34.6 38.7 32 U.S. Govt c2.3 2.1 2.1 5.9 2.7 2.0 2.8 1.7 6.4 2.6 3.6 33 Other 210.8 215.5 195.8 198.9 195.1 213.9 202.2 211.0 200.3 205.3 216.4 Time: 34 Interbank 10.0 7.2 6.9 6.6 6.5 6.9 6.3 6.0 6.3 6.5 6.8 35 Other 329.1 351.5 357.8 354.7 360.3 362.5 364.4 366.9 369.6 372.0 376.2 36 Borrowings 53.6 71.7 75.3 78.1 77.5 77.0 80.4 82.5 84.0 83.8 87.8 37 Total capital accounts2 52.1 58.6 58.1 58.3 58.7 60.8 59.4 59.9 60.2 60.6 61.2 38 MEMO: Number of banks 5,788 5,759 5,739 5,726 5,708 5,721 5,701 5,676 5,692 5,686 5,686 1 Includes items not shown separately. NOTE.—Figures include all bank-premises subsidiaries and other sig- Effective Mar. 31, 1976, some of the item "reserve for loan losses" nificant majority-owned domestic subsidiaries. and all of the item "unearned income on loans" are no longer reported Commercial banks: All such banks in the United States, including as liabilities. As of that date the "valuation" portion of "reserve for member and nonmember banks, stock savings banks, nondeposit trust loan losses" and the "unearned income on loans" have been netted companies, and U.S. branches of foreign banks, but excluding one naagainst "other assets," and against "total assets" as well. tional bank in Puerto Rico and one in the Virgin Islands. Total liabilities continue to include the deferred income tax portion of Member banks: The following numbers of noninsured trust companies "reserve for loan losses." that are members of the Federal Reserve System are excluded from mem- 2 Effective Mar. 31, 1976, includes "reserves for securities" and the ber banks in Tables 1.24 and 1.25 and are included with noninsured banks contingency portion (which is small) of "reserve for loan losses." in Table 1.25: 1974—June, 2; December, 3; 1975—June and December, 3 Figures partly estimated except on call dates. 4; 1976 (beginning month shown)—July, 5, December, 7; 1977-January, 8. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Commercial Banks A17 1.25 COMMERCIAL BANK ASSETS AND LIABILITIES Call-Date Series Millions of dollars except for number of banks 1975 1976 ff \\11997777 1975 1976 1977 Account Dec. 31 June 30 Dec. 31 June 30 Dec. 31 June 30 Dec. 31 June 30 Total^sured National (all insured) ! Loans and investments, gross 776622,,440000 773,701 827,692 854,736 441,135 443,959 476,602 488,240 Loans: 2 3 G Ne r t o ss 53 (( 522,1 )) 70 5 5 2 3 0 9, , 0 9 2 7 1 6 5 5 7 6 8 0 , , 7 0 1 6 0 2 6 5 0 8 1 1 , , 1 1 4 6 1 3 31 ( 52,7 ) 38 3 3 1 0 5 5 , , 6 2 2 8 8 0 3 3 4 2 0 9 , , 6 9 7 6 9 8 3 3 5 3 1 9 , , 3 9 1 5 1 5 Investments: 4 U.S. Treasury securities 83,629 90,947 101,463 100,566 46,799 49,688 55,729 53,346 5 Other 143.602 143,731 147,517 153,029 78,598 78,642 80,193 83,582 6 Cash assets 128,256 124,072 129,581 130,724 78,026 75,488 76,074 74,641 7 Total assets/total liabilities1 944,654 942,519 1,004,001 1,040,952 553,285 548,702 583,315 599,743 8 Deposits 777755,,220099 776,957 882255,,001100 847,373 447,590 444,251 469,378 476,381 Demand: 9 U.S. Govt 3,108 4,622 3,020 2,817 1,788 2,858 1,674 1,632 10 Interbank 40,259 37,502 44,068 44.965 22,305 20,329 23,148 22,876 11 Other 227766,,338844 265,671 285,201 284,544 159,840 152,383 163,347 161,358 Time: 12 Interbank 10,733 9,406 8,249 7,721 7,302 5,532 4,909 4,599 13 Other 444,725 459,753 484,470 507,323 256,355 263,147 276,298 285,915 14 Borrowings 56,775 63,828 75,302 81,157 40,875 45,187 54,420 57,283 15 Total capital accounts 68,474 68,988 72,065 75,503 38,969 39,501 41,323 43,142 16 MEMO: Number of banks 14,372 14,373 14,397 14,425 4,741 4,747 4,735 4,701 State member (all insured) Insured nonmember 17 Loans and investments, gross 137,620 136,915 144,000 144,597 183,645 192,825 207,089 221,898 Loans: 1 1 8 9 G Ne r t o ss 10 (( 022, )) 8 23 9 9 8 6 , , 8 0 8 3 9 7 1 99 0 99 2 ,, , 44 2 77 7 44 7 1 99 0 99 2 ,, , 22 1 00 4 00 4 11 (( 822, )) 6 09 11 1 11 2 99 4 ,, , 66 5 55 0 88 3 1 1 3 3 0 5 , , 6 7 1 5 8 3 1 1 4 4 2 7 , , 0 6 0 8 8 5 Investments: 20 U.S. Treasury securities 14,720 16,323 18,849 19,296 22,109 24,934 26,884 27,923 21 Other 22,077 21,702 22,873 23,157 42,927 43,387 44,450 46,288 22 Cash assets 30,451 30,422 32,859 35,918 19,778 18,161 20,647 20,164 23 Total assets/total liabilities 180,495 179,649 189,578 195,455 210,874 214,167 231,106 245,753 24 Deposits 114433,,440099 114422,,006611 114499,,449911 115522,,447711 118844,,221100 119900,,664444 206,140 218,519 Demand: 25 U.S. Govt 467 869 429 371 853 894 917 813 26 Interbank 16,265 15,833 19,295 20,568 1,689 1,339 1,624 1,520 27 Other. 5500,,998844 49,659 52,204 5522,,557711 65,560 63,629 69,649 70,615 Time: 28 Interbank 2,712 3,074 2,384 2,134 719 799 956 988 29 Other 72,981 72,624 75,178 76,826 115,389 123,980 132,993 144,581 30 Borrowings. 12,771 15,300 17,310 19,718 3,128 3,339 3,571 4,155 31 Total capital accounts 13,105 12,791 13,199 13,441 16,400 16,696 17,543 18,919 32 MEMO: Number of banks 1,046 1,029 1,023 1,019 8,585 8,597 8,639 8,705 Noninsured nonmember Total nonmember 33 Loans and investments, gross. 1133,,667744 15,905 1188,,881199 2222,,994400 197,319 220088,,773300 225,909 244,839 Loans: 3 3 5 4 N G e r t o ss 1 (( 122, )) 2 83 11 13 33 , ,, 2 00 0 99 9 22 1 11 6 66 , ,, 3 2200 3 99 6 2 2 200 0 ,, , 66 8 77 6 99 5 12 (( 922, )) 8 92 1 1 133 3 22 7 ,, , 77 7 55 1 11 2 1 14 5 6 2 , , 8 0 2 9 8 0 1 1 6 6 2 8 , , 6 55 8 1 7 Investments: 36 U.S. Treasury securities 490 472 1,054 993 22,599 25,407 27,939 28,917 37 Other 1,902 2,223 1,428 1,081 44,829 45,610 45,879 47,370 38 Cash assets 5,359 4,362 6,496 8,330 25,137 22,524 27,144 28,494 39 Total assets/total liabilities 20,544 21,271 26,790 33,390 231,418 235,439 257,897 279,143 40 Deposits 11,323 11,735 1133,,332255 1144,,665588 119955,,553333 220022,,338800 219,466 233,177 Demand : 41 U.S. Govt 6 4 4 8 859 899 921 822 42 Interbank 1,552 1,006 1,277 1,504 3,241 2,346 2,901 3,025 43 Other 22,,330088 22,,555555 3,236 3,588 6677,,886688 6666,,118844 72,885 74,203 Time: 44 Interbank 1,291 1,292 1,041 1,164 2,010 2,092 1,997 2,152 45 Other 6,167 6,876 7,766 8,392 121,556 130,857 140,760 152,974 46 Borrowings 3,449 3,372 4,842 7,056 6,577 6,711 8,413 11,212 47 Total capital accounts 651 663 818 893 17,051 17,359 18,361 19,813 48 MEMO: Number of banks 261 270 275 293 8,846 8,867 8,914 8,998 1 Includes items not shown separately. For Note see Table 1.24. 2 Not available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A18 Domestic Financial Statistics • December 1977 1.26 COMMERCIAL BANK ASSETS AND LIABILITIES Detailed Balance Sheet, June 30, 1977 Asset and liability items are shown in millions of dollars. Member banks1 All Insured Asset account commercial commercial Large banks banks banks Total All other2 New York City of Other City Chicago large 1 Cash bank balances, items in process 139,055 130,725 110,560 32,752 4,674 39,078 34,056 2 Currency and coin 12,729 12,718 9,347 895 171 3,073 5,209 3 Reserves with F.R. Banks 25,536 25,536 25,536 4,452 1,997 9,261 9,826 4 Demand balances with banks in United States 36,269 30,589 18,153 6,669 179 3,341 7,964 5 Other balances with banks in United States... 6,128 4,840 2,813 27 17 1,028 1,740 6 Balances with banks in foreign countries 5,018 3,800 3,393 335 157 1,875 1,026 7 Cash items in process of collection 53,375 53,242 51,318 20,374 2,153 20,500 8,291 8 Total securities held—Book value 254,052 252,016 178,050 22,989 8,520 56,518 90,023 9 U.S. Treasury 101,560 100,566 72,642 12,098 3,898 23,810 32,837 10 Other U.S. Govt, agencies 35,827 35,250 21,846 1,406 477 5,676 14,287 11 States and political subdivisions 110,106 109,875 79,216 9,032 3,943 25,822 40,419 12 All other securities 6,452 6,224 4,273 454 202 1,186 2,432 13 Unclassified total 108 101 73 25 48 14 Trading-account securities 7,055 7,049 6,916 3,572 617 2,465 262 15 U.S. Treasury 3,797 3,797 3,725 2,347 412 877 90 16 Other U.S. Govt, agencies 953 953 952 479 38 410 25 17 States and political subdivisions 1,764 1,764 1,733 561 123 951 98 18 All other trading acct. securities 433 433 432 185 44 202 2 19 Unclassified 108 101 73 25 48 20 Bank investment portfolios 246,998 244,967 171,135 19,417 7,903 54,053 89,761 21 U.S. Treasury 97,762 96,769 68,917 9,751 3,486 22,933 32,747 22 Other U.S. Govt, agencies 34,874 34,297 20,894 927 439 5,266 14,263 23 States and political subdivisions 108,342 108,110 77,483 8,471 3,821 24,870 40,321 24 All other portfolio securities 6,020 5,791 3,841 269 158 984 2,430 25 F.R. stock and corporate stock 1,618 1,580 1,332 287 100 499 446 26 Federal funds sold and securities resale agreement. 44,318 40,759 32,986 2,962 1,431 18,636 9,958 27 Commercial banks 37,469 34,098 26,504 1,509 1,255 14,502 9,239 28 Brokers and dealers 4,342 4,304 4,219 735 137 2,728 618 29 Others 2,507 2,358 2,264 718 40 1,406 101 30 Other loans, gross 577,689 560,382 420,469 71,053 21,812 156,134 171,469 31 LESS: Unearned income on loans 13,610 13,558 9,182 579 85 2,980 5,538 32 Reserves for loan loss 6,553 6,420 5,119 1,213 324 1,866 1,716 33 Other loans, net 557,525 540,405 406,169 69,261 21,403 151,289 164,216 Other loans, gross, by category 34 Real estate loans 161,276 161,047 111,520 9,218 2,017 40,619 59,666 35 Construction and land development 18,405 18,392 14,135 2,412 437 6,761 4.525 36 Secured by farmland 7,358 7,341 3,129 18 9 302 2,800 37 Secured by residential 91,349 91,214 64,398 4,466 1,016 23,733 35,182 38 1- to 4-family residences 86,839 86,709 61,150 4,045 920 22,541 33,644 39 FHA-insured or VA-guaranteed 7,786 7,738 6,710 582 46 3,557 2.526 40 Conventional 79,053 78,971 54,440 3,463 874 18,984 31,118 41 Multifamilv residences 4,511 4,505 3,248 422 96 1,192 1,539 42 FHA-insured 353 352 281 108 16 81 76 43 Conventional 4,158 4,153 2,967 314 80 1,110 1,463 44 Secured by other properties 44,164 44,100 29,858 2,322 555 9,823 17,158 45 Loans to financial institutions 40,151 33,371 31,419 10,625 4,179 13,592 3,024 46 To REIT's and mortgage companies 9,247 9,234 8,879 2,870 1,128 4,196 684 47 To domestic commercial banks 4,573 2,470 1,911 497 116 1,008 290 48 To banks in foreign countries 10,383 6,165 6,014 2,624 284 2,501 605 49 To other depository institutions 1,257 1,241 1,126 73 27 822 204 50 To other financial institutions 14,691 14,261 13,490 4,561 2,624 5,065 1,240 51 Loans to security brokers and dealers 10,436 10,180 9,943 5,664 1,303 2,734 241 52 Other loans to purch./carry securities 4,142 4,135 3,425 374 353 1,760 939 53 Loans to farmers—except real estate 25,642 25,620 14,157 153 126 3,385 10,493 54 Commercial and industrial loans 192,715 183,767 149,361 36,383 10,819 57,632 44,527 55 Loans to individuals 127,701 127,590 88,149 6,083 1,860 30,887 49,319 56 Instalment loans 101,424 101,355 69,803 4,481 1,110 24,797 39,415 57 Passenger automobiles 44,707 44,694 28,632 845 142 8,342 19,303 58 Residential-repair/modernize 6,640 6,639 4,447 291 55 1,586 2,516 59 Credit cards and related plans 14,936 14,929 13,098 1,769 731 7,156 3,441 60 Charge-account credit cards 11,576 11,576 10,330 1,186 695 5,810 2,639 61 Check and revolving credit plans 3,360 3,353 2,768 584 36 1,346 803 62 Other retail consumer goods 16,601 16,598 11,307 354 64 4,040 6,849 63 Mobile homes 8,836 8,836 6,224 184 26 2,233 3,781 64 Other 7,765 7,762 5,082 170 38 1,807 3,068 65 Other instalment loans 18,539 18,496 12,319 1,221 118 3,674 7,306 66 Single-payment loans to individuals 26,277 26,235 18,346 1,603 750 6,090 9,904 67 All other loans 15,624 14,672 12,495 2,553 1,156 5,526 3,260 68 Total loans and securities, net 857,514 834,759 618,538 95,499 31,455 226,941 264,642 69 Direct lease financing 5,169 5,168 4,845 879 131 3,003 832 70 Fixed assets—Buildings, furniture, real estate 20,360 20,258 15,100 2,071 689 5,867 6,473 71 Investment in unconsolidated subsidiaries.... 2,634 2,591 2,555 1,193 212 1,062 88 72 Customer acceptances outstanding 12,749 11,882 11,457 5,692 749 4,710 306 73 Other assets 36,862 35,568 32,144 13,709 1,362 12,718 4,355 74 Total assets 1,074,343 1,040,952 795,199 151,796 39,272 293,378 310,752 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Commercial Banks A19 1.26 Continued Member banks1 AAAllllll IIInnnsssuuurrreeeddd NNNooonnn--- LLLiiiaaabbbiiillliiitttyyy ooorrr cccaaapppiiitttaaalll aaaccccccooouuunnnttt cccooommmmmmeeerrrccciiiaaalll cccooommmmmmeeerrrccciiiaaalll Large banks mmmeeemmmbbbeeerrr bbbaaannnkkksss bbbaaannnkkksss bbbaaannnkkksss111 TToottaall AAllll ootthheerr22 New York City of Other City Chicago large 337,428 332,327 259,378 64,350 10,338 90,634 94,056 78,051 76 Mutual savings banks 1,621 1,443 1,257 684 2 270 301 364 77 Other individuals, partnerships, and corporations 252,889 251,580 189,126 32,633 7,349 71,011 78,134 63,763 78 U.S. Govt 2,826 2,817 2,004 136 31 710 1,126 822 79 States and political subdivisions 17,825 17,752 12,328 636 173 3,794 7,725 5,497 80 Foreign governments, central banks, etc 1,908 1,454 1,382 1,115 17 225 25 527 81 Commercial banks in United States 37,537 36,909 35,716 19,236 2,289 10,522 3,670 1,821 82 Banks in foreign countries 7,311 6.613 6,471 5,157 159 1,021 134 840 83 Certified and officers' checks, etc 15,511 13,759 11,094 4,754 318 3,081 2,941 4,417 84 Time deposits 308,831 299,840 217,098 32,405 12,921 74,985 96,787 91,733 134 134 108 10 98 26 86 Mutual savings banks 363 346 332 136 67 100 30 30 87 Other individuals, partnerships, and corporations 242,952 237,078 170,322 24,043 9,454 57,628 79,197 72,630 88 U.S. Govt 752 752 602 68 46 272 216 150 89 States and political subdivisions 46,541 46,212 31,715 1,372 981 13,134 16,230 14,826 90 Foreign governments, central banks, etc 9,590 7,967 7,635 4,254 1,520 1,797 65 1,955 91 Commercial banks in United States 6,358 5,770 4,934 1,694 736 1,774 730 1,423 92 Banks in foreign countries 2,142 1,582 1,449 838 118 270 223 693 93 Savings deposits 215,772 215,206 152,378 11,746 3,145 56,133 81,353 63,394 94 Individuals and nonprofit organizations 200,240 199,697 141,252 10,714 2,880 52.234 75,425 58,988 95 Corporations and other profit organizations.. 10,072 10,056 7,289 603 219 3,076 3,391 2,783 61 61 52 4 25 24 9 97 States and political subdivisions 5,331 5,325 3,725 394 46 782 2,504 1,606 98 Allother 67 67 60 32 1 17 9 7 99 Total deposits 862,031 847,373 628,853 108,501 26,405 221,751 272,196 233,178 100 Federal funds purchased and securities sold under agreements to repurchase 79,167 75,397 7711,,554477 17,045 8,277 36,363 9,862 7,620 101 Commercial banks 42,487 39,624 37,861 7,203 5,437 20,513 4,707 4,626 102 , Brokers and dealers 9,397 9,374 8,979 1,639 1,454 4,973 914 418 103 Others 27,283 26,399 24,707 8,203 1,386 10,877 4,241 2,576 104 Other liabilities for borrowed money 9,047 5,761 5,455 1,914 45 3,030 467 3,592 105 Mortgage indebtedness 807 804 572 57 16 297 201 235 106 Bank acceptances outstanding 13,407 12,536 12,111 6,337 750 4,717 307 1,296 107 Other liabilities 28,093 18,248 15,854 5,256 1,000 6,256 3,342 12,239 108 Total liabilities 992,552 960,118 734,392 139,110 36,493 272,415 286,374 258,160 109 Subordinated notes and debentures 5,393 5,330 4,223 1,118 82 1,881 1,142 1,170 110 Equity capital 76,397 75,503 56,584 11,568 2,698 19,082 23,236 19,813 Ill Preferred stock 77 71 28 2 26 48 112 Common stock 16,719 16,623 12,084 2,496 570 3,850 5,167 4,635 113 Surplus 30,211 29,728 21,794 4,290 1,298 7,839 8,367 8,418 114 Undivided profits 27,608 27,365 21,492 4,744 776 6,994 8,978 6,116 115 Other capital reserves 1,782 1,717 1,187 38 53 396 699 595 116 Total liabilities and equity capital 1,074,343 1,040,952 795,199 151,796 39,272 293,378 310,752 279,144 MEMO ITEMS: 117 Demand deposits adjusted3 243,690 239,359 170,340 24,604 5,866 58,901 80,969 73,350 Average for last 15 or 30 days : 118 Cash and due from bank 132,469 126,370 107,671 29,887 4,764 4400,,009944 32,927 24,798 119 Federal funds sold and securities purchased under agreements to resell 47,876 42,907 33,605 3,667 1,449 16,759 11,730 14,271 120 Total loans 559,178 542,036 407,556 69,936 21,456 151,616 164,548 151,621 121 Time deposits of $ 100,000 or more 139,145 132,096 107,972 26,712 10,328 43,044 27,888 31,174 122 Total deposits 845,218 830,008 612,859 98,375 25,769 217,875 270,841 232,359 123 Federal funds purchased and securities sold under agreements to repurchase 84,385 80,374 76,761 20,960 9,219 36,604 9,977 7,624 124 Other liabilities for borrowed money 9,553 5,961 5,666 2,172 79 2,980 436 3,887 125 Standby letters of credit outstanding 14,499 13,705 12,902 7,705 1,037 3,302 858 1,598 126 Time deposits of $100,000 or more 140,410 133,981 109,615 26,547 10,360 44,386 28,322 30,795 115,589 111,351 90,425 22,011 8,703 35,781 23,930 25,164 24,820 22,630 19,190 4,536 1,657 8,605 4,392 5,630 14,718 14,425 5,720 12 9 154 5,545 8,998 1 Member banks exclude and nonmember banks include 10 noninsured NOTE.—Data include consolidated reports, including figures for all trust companies that are members of the Federal Reserve System, and bank-premises subsidiaries and other significant majority-owned domember banks exclude 2 national banks outside the continental United mestic subsidiaries. Securities are reported on a gross basis before deduc- States. tions of valuation reserves. Holdings by type of security will be reported 2 Figures for one large national bank have been estimated due to a as soon as they become available. merger. Back data in lesser detail were shown in previous BULLETINS. Details 3 Demand deposits adjusted are demand deposits other than domestic may not add to totals because of rounding. commercial interbank and U.S. Govt., less cash items reported as in process of collection. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A20 Domestic Financial Statistics • December 1977 1.27 ALL LARGE WEEKLY REPORTING COMMERCIAL BANKS Assets and Liabilities Millions of dollars, Wednesday figures 1977 Oct. 12 Oct. 19 Oct. 26 Nov. 2 Nov. 9 Nov. 16 Nov. 23 Nov. 30f Total loans and investments. 435,931 435,931 433,032 438,706 447,608 446,312 437,552 442,829 Loans: Federal funds sold1 25,822 23,339 21,662 24,841 32,396 29,011 23,006 26,101 To commercial banks 19,467 16,117 16,658 18,041 23,143 19,937 17,926 19,099 To brokers and dealers involving- U.S. Treasury securities 3,121 4,434 2,570 3,643 5,116 5,991 2,629 3,983 Other securities 663 514 522 589 1X1 549 487 533 To others 2,571 2,274 1,912 2,568 3,420 2,534 1,964 2,486 Other, gross 308,989 310,413 309,390 312,266 313,018 314,132 311,361 313,514 Commercial and industrial 121,295 121,680 122,383 123,508 123,560 123,111 123,049 123,514 Agricultural 4,771 4,786 4,785 4,785 4,771 4,750 4,732 4,700 For purchasing or carrying securities: To brokers and dealers: 10 U.S. Treasury securities 1,792 2,266 967 1,455 2,340 2,547 1,088 1,486 11 Other securities 8,960 9,501 8,755 8,752 8,779 9,125 8,467 8,989 To others: 12 U.S. Treasury securities 72 72 97 83 82 88 87 95 13 Other securities 2,614 2,612 2,637 2,615 2,631 2,603 2,612 2,613 To nonbank financial institutions: 14 Personal and sales finance cos., etc 7,682 7,614 7,659 7,640 7,662 7,523 7,549 7,793 15 Other 15,371 15,058 15,228 15,548 15,398 15,398 15,261 15.358 16 Real estate 71,745 72,019 72,267 72,490 72,779 73,104 73,287 73,356 To commercial banks: 17 Domestic 1,995 2,151 1,975 2,158 2,188 2.466 2,122 2,160 18 Foreign 6,337 6,353 6,425 6,410 6,344 6.467 5,988 6,014 19 Consumer instalment 43,999 44,118 44,385 44,523 44,579 44,708 44,935 45,085 20 Foreign governments, official institutions, etc. 1,647 1,646 1,517 1,528 1,426 1,405 1,426 1,433 21 All other loans 20,709 20,537 20,310 20,771 20,479 20,837 20,758 20,918 22 LESS : Loan loss reserve and unearned income on loans 9,285 9,346 9,372 9,390 9,435 9,462 9,505 9,444 23 Other loans, net 299,704 301,067 300,018 302,876 303,583 304,670 301,856 304,070 Investments: U.S. Treasury securities 44,405 45,571 45,153 44,816 44,859 45,927 45,522 45,597 Bills 7,311 7,979 7,703 7,604 8,003 8,617 8,414 8,116 Notes and bonds, by maturity: Within 1 year 8,760 8,916 8,923 8,465 8,312 8,240 8,358 8,372 1 to 5 years 24,524 23,936 23,807 24,131 24,047 24,677 24,540 24,943 After 5 years 3,810 4,740 4,720 4,616 4,497 4,393 4,210 4,166 Other securities 66,000 65,954 66,199 66,173 66,770 66,704 67,168 67,061 Obligations of States and political subdivisions: Tax warrants, short-term notes, and bills 9,550 9,058 9,115 9,139 9,438 9,145 8,961 8,849 All other 42,490 42,572 42,613 42,640 42,773 42,876 42,896 42,896 Other bonds, corporate stocks, and securities: Certificates of participation2 2,128 1,908 2,090 2,082 2,090 2,083 2,167 2,214 All other, including corporate stocks. 11,832 12,416 12,381 12,312 12,469 12,600 13,144 13,102 34 Cash items in process of collection 44,133 38,619 37,053 40,865 40,629 45,147 41,741 44,205 35 Reserves with F.R. Banks 22,169 20,195 21,197 19,339 17,049 17,541 23,649 19,238 36 Currency and coin 6,042 6,065 6,252 5,870 5,929 6,192 5,881 6,597 37 Balances with domestic banks 14,013 14,646 13,079 15,273 15,387 14,115 13,782 14,354 38 Investments in subsidiaries not consolidated. 2,837 2,813 2,918 2,921 2,881 2,901 2,869 2,874 39 Other assets 55,035 53,373 53,637 55,151 59,723 56,100 57,032 58,472 40 Total assets/total liabilities.. 580,160 571,642 567,168 578,125 589,206 588,308 582,506 588,569 Deposits: Demand deposits 185,404 178,991 176,075 182,852 190,196 189,124 178,276 188,800 Individuals, partnerships, and corporations.. 135,194 129,106 128,563 131,535 130,289 136,527 129,971 135,420 States and political subdivisions 5,967 5,883 5,662 6,630 5,926 6,575 6,221 6,109 U.S. Govt 1,301 2,467 1,726 1,196 962 1,867 1,207 2,582 Domestic interbank: Commercial 27,194 26,679 25,241 27,714 36,977 27,685 25,710 29,303 Mutual savings 1,027 917 783 1,036 972 945 881 816 Foreign: Governments, official institutions, etc 1,110 1,136 1,154 1,115 1,139 1,094 1,300 1,253 Commercial banks 6,447 6,055 6,156 6,034 6,228 6,854 6,051 6,017 Certified and officers' checks 7,164 6,748 6,790 7,592 7,703 7,577 6,935 7,300 Time and savings deposits3 241,890 242,526 242,947 243,106 244,027 244,956 246,720 246,848 Savings 4 93,608 93,357 93,034 92,845 92,952 92,650 92,550 92,354 Time: 148,282 149,169 149,913 150,261 151,075 152,306 154,170 154,494 Individuals, partnerships, and corporations 113,504 113,803 114,408 114,683 115,340 116,122 117,406 117^708 States and political subdivisions 21,795 22,055 22,076 21,902 21,929 22,071 22,446 22,353 Domestic interbank 4,496 4,551 4,670 4,645 4,766 4,787 4,993 5,129 Foreign govts., official institutions, etc 6,892 7,191 7,184 7,447 7,461 7,783 7,751 7,750 57 Federal funds purchased, etc. 5 77,093 70,758 71,791 75,690 78,839 78,065 78,536 76,161 Borrowings from : 58 F.R. Banks 481 3,233 698 424 376 172 2,669 626 59 Others 4,797 4,993 5,375 5,159 5,192 5,190 5,372 5,165 60 Other liabilities, etc.6 26,523 27,232 26,254 26,732 26,343 26,630 26,770 26,589 61 Total equity capital and subordinated notes /debentures 7 43,972 43,909 44,028 44,162 44,233 44,171 44,163 44,380 1 Includes securities purchased under agreements to resell. 5 Includes securities sold under agreements to repurchase. 2 Federal agencies only. 6 Includes minority interest in consolidated subsidiaries and deferred 3 Includes time deposits of U.S. Govt, and of foreign banks, which are tax portion of reserves for loans. not shown separately. 7 Includes reserves for securities and contingency portion of reserves 4 For amounts of these deposits by ownership categories, see Table 1.30. for loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Weekly Reporting Banks A21 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1977 Account Oct. 12 Oct. 19 Oct. 26 Nov. 2 Nov. 9 Nov. 16 Nov. 23 Nov. 30^ 1 Total loans and investments. 94,035 95,936 94,662 94,207 96,632 95,969 93,469 95,760 Loans: Federal funds sold 1 4,939 4,282 4,721 3,840 5,997 3,380 3,436 4,473 To commercial banks . 2,573 2,482 3,053 2,200 3,189 1,881 1,895 2,522 To brokers and dealers involving— U.S. Treasury securities 1,067 1,084 941 896 1,336 931 688 743 Other securities 54 To others 1,299 716 727 744 1,418 568 853 1,208 Other, gross 69,650 71,392 69,605 70,445 70,846 71,985 69,389 70,635 Commercial and industrial 34,312 34,797 35,183 35,311 35,171 35,036 34,873 35,165 Agricultural 156 162 160 164 174 176 180 177 For purchasing or carrying securities: To brokers and dealers: 10 U.S. Treasury securities 1,615 2,070 833 1,146 2,036 2,406 945 1,324 11 Other securities 4,628 5,140 4,589 4,518 4,507 4,836 4,389 4,737 To others: 12 U.S. Treasury securities 23 23 38 23 23 22 22 22 13 Other securities 376 362 364 361 358 358 373 372 To nonbank financial institutions: 14 Personal and sales finance cos., etc 2,695 2,708 2,687 2,603 2,612 2,523 2,636 2,871 15 Other 4,743 4,689 4,731 4,840 4,873 4,895 4,926 4,901 16 Real estate 8,828 8,841 8,876 8,901 8,918 8,940 8,970 8,971 To commercial banks: 17 Domestic 673 877 629 809 748 1,034 757 662 18 Foreign 3,101 3,156 3,088 3,124 3,075 3,196 2,706 2,759 19 Consumer instalment 4,243 4,261 4,282 4,288 4,289 4,299 4,318 4,319 20 Foreign governments, official institutions, etc. 453 457 347 379 293 302 300 297 21 All other loans 3,804 3,849 3,798 3,978 3,769 3,962 3,994 4,058 22 LESS : Loan loss reserve and unearned income on loans 1,664 1,695 1,699 1,706 1,708 1,713 1,716 1,701 23 Other loans, net 67,986 69,697 67,906 68,739 69,138 70,272 67,673 68,934 Investments: U.S. Treasury securities 10,495 11,132 11,283 10,934 10,697 11,442 11,149 11,288 Bills 2,651 2,939 3,049 2,620 2,566 2,957 2,916 2,573 Notes and bonds, by maturity: Within 1 year. 1,568 1,541 1,582 1,648 1,541 1,542 1,429 1,610 1 to 5 years 5,450 5,306 5,325 5,433 5,439 5,901 5,877 6,178 After 5 years 826 1,346 1,327 1,233 1,151 1,042 927 927 Other securities 10,615 10,825 10,752 10,694 10,800 10,875 11,211 11,065 Obligations of States and political subdivisions: Tax warrants, short-term notes, and bills. 2,426 2,312 2,342 2,353 2,378 2,263 2,220 2,220 All other 6,452 6,623 6,481 6,515 6,546 6,647 6,547 6,502 Other bonds, corporate stocks, and securities: Certificates of participation2 193 192 192 192 192 192 192 189 All other, including corporate stocks 1,544 1,698 1,737 1,634 1,684 1,773 2,252 2,154 34 Cash items in process of collection 13,445 12,452 11,867 12,823 16,000 14,486 13,533 15,754 35 Reserves with F.R. Banks 5,023 5,787 4,971 5,880 6,424 6,229 6,034 3,507 36 Currency and coin 900 879 910 883 903 937 877 962 37 Balances with domestic banks 5,749 7,022 5,744 7,381 8,017 5,749 6,656 6,740 38 Investments in subsidiaries not consolidated. 1,386 1,372 1,381 1,388 1,408 1,413 1,411 1,416 39 Other assets 20,229 17,932 18,955 20,112 23,215 21,233 21,670 21,706 40 Total assets/total liabilities. 140,767 141,380 138,490 142,674 152,599 146,016 143,650 145,845 Deposits: 41 Demand deposits 49,634 49,973 48,583 50,876 60,300 51,774 48,173 53,834 42 Individuals, partnerships, and corporations.. 27,517 26,613 26,775 27,623 27,751 28,641 26,481 28,423 43 States and political subdivisions 419 528 440 592 476 572 598 471 44 U.S. Govt 142 386 324 94 114 232 129 409 Domestic interbank: 45 Commercial 12,060 13,580 11,999 13,310 22,107 12,307 11,996 15,352 46 Mutual savings 557 483 376 520 519 481 490 407 Foreign : 47 Governments, official institutions, etc 887 892 918 900 944 875 1,082 999 48 Commercial banks 4,920 4,421 4,645 4,546 4,761 5,332 4,543 A,521 49 Certified and officers' checks 3,132 3,070 3,106 3,291 3,628 3,334 2,854 3,246 50 Time and savings deposits3 42,541 43,023 43,358 43,310 43,324 43,575 43,985 44,052 51 Savings4 10,320 10,236 10,185 10,123 10,115 10,065 10,026 9,953 52 Time: 32,221 32,787 33,173 33,187 33,209 33,510 33,959 34,099 53 Individuals, partnerships, and corporations 24,161 24,402 24,528 24,462 24,541 24,789 25,322 25,447 54 States and political subdivisions 1,484 1,612 1,649 1,702 1,704 1,705 1,681 1,682 55 Domestic interbank 1,689 1,654 1,813 1,711 1,707 1,621 1,595 1,631 56 Foreign govts., official institutions, etc 4,107 4,358 4,429 4,553 4,511 4,656 4,629 4,617 57 Federal funds purchased, etc. 5 22,291 20,061 19,904 21,738 22,205 23,830 23,289 21,291 Borrowings from: 58 F.R. Banks 1,123 1,766 59 Others 1,969 2,130 2,346 2,097 2,178 2,310 2,274 2,299 60 Other liabilities, etc. 6 11,720 12,467 11,702 11,978 11,898 11,822 11,466 11,613 61 Total equity capital and subordinated notes/debentures7 12,612 12,603 12,597 12,675 12,694 12,705 12,697 12,756 1 Includes securities purchased under agreements to resell. 5 Includes securities sold under agreements to repurchase. 2 Federal agencies only. * Includes minority interest in consolidated subsidiaries and deferred 3 Includes time deposits of U.S. Govt, and of foreign banks, which tax portion of reserves for loans. are not shown separately. 7 Includes reserves for securities and contingency portion of reserves 4 For amounts of these deposits by ownership categories, see Table 1.30. for loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A22 Domestic NonfinancialS tatistics • December 1977 1.29 LARGE WEEKLY REPORTING COMMERCIAL BANKS OUTSIDE NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1977 Oct. 12 Oct. 19 Oct. 26 Nov. 2 Nov. 9 Nov. 16 Nov. 23 Nov. 30p Total loans and investments. 341,896 339,995 338,370 344,499 350,976 350,343 344,083 347,069 Loans: Federal funds sold1 20,883 19,057 16,941 21,001 26,399 25,631 19,570 21,628 To commercial banks 16,894 13,635 13,605 15,841 19,954 18,056 16,031 16,577 To brokers and dealers involving— U.S. Treasury securities 2,054 3,350 1,629 2,747 3,780 5,060 1,941 3,240 Other securities 663 514 522 589 663 549 487 533 To others 1,272 1,558 1,185 1,824 2,002 1,966 1,111 1,278 Other, gross 239,339 239,021 239,785 241,821 242,172 242,147 241,972 242,879 Commercial and industrial 86,983 86,883 87,200 88,197 88,389 88,075 88,176 88,349 Agricultural 4,615 4,624 4,625 4,621 4,597 4,574 4,552 4,523 For purchasing or carrying securities: To brokers and dealers: 10 U.S. Treasury securities 177 196 134 309 304 141 143 162 Other securities 4,332 4,361 4,166 4,234 4,272 4,289 4,078 4,252 To others: 12 U.S. Treasury securities 49 49 59 60 59 66 65 73 13 Other securities 2,238 2,250 2,273 2,254 2,273 2,245 2,239 2,241 To nonbank financial institutions: 14 Personal and sales finance cos., etc 4,987 4,906 4,972 5,037 5,050 5,000 4,913 4,922 15 Other 10,628 10,369 10,497 10,708 10,525 10,503 10,335 10,457 16 Real estate 62,917 63,178 63,391 63,589 63,861 64,164 64,317 64,385 To commercial banks: 17 Domestic 1,322 1,274 1,346 1,349 1,440 1,432 1,365 1,498 18 Foreign 3,236 3,197 3,337 3,286 3,269 3,271 3,282 3,255 19 Consumer instalment 39,756 39,857 40,103 40,235 40,290 40,409 40,617 40,766 20 Foreign governments, official institutions, etc. 1,194 1,189 1,170 1,149 1,133 1,103 1,126 1,136 21 All other loans 16,905 16,688 16,512 16,793 16,710 16,875 16,764 16,860 22 LESS : Loan reserve and unearned income on loans 7,621 7,651 7,673 7,684 7,727 7,749 7,789 7,743 23 Other loans, net 231,718 231,370 232,112 234,137 234,445 234,398 234,183 235,136 Investments: U.S. Treasury securities 33,910 34,439 33,870 33,882 34,162 34,485 34,373 34,309 Bills 4,660 5,040 4,654 4,984 5,437 5,660 5,498 5,543 Notes and bonds, by maturity: Within 1 year 7,192 7,375 7,341 6,817 6,771 6,698 6,929 6,762 1 to 5 years 19,074 18,630 18,482 18,698 18,608 18,776 18,663 18,765 After 5 years 2,984 3,394 3,393 3,383 3,346 3,351 3,283 3,239 Other securities 55,385 55,129 55,447 55,479 55,970 55,829 55,957 55,996 Obligations of States and political subdivisions: Tax warrants, short-term notes, and bills. 7,124 6,746 6,773 6,786 7,060 6,882 6,741 6,629 All other 36,038 35,949 36,132 36,125 36,227 36,229 36,349 36,394 Other bonds, corporate stocks, and securities: Certificates of participation2 1,935 1,716 1,898 1,890 1,898 1,891 1,975 2,025 All other, including corporate stocks 10,288 10,718 10,644 10,678 10,785 10,827 10,892 10,948 34 Cash items in process of collection 30,688 26,167 25,186 28,042 24,629 30,661 28,208 28,451 35 Reserves with F. R. Banks 17,146 14,408 16,226 13,459 10,625 11,312 17,615 15,731 36 Currency and coin 5,142 5,186 5,342 4,987 5,026 5,255 5,004 5,635 37 Balances with domestic banks 8,264 7,624 7,335 7,892 7,370 8,366 7,126 7,614 38 Investments in subsidiaries not consolidated. 1,451 1,441 1,537 1,533 1,473 1,488 1,458 1,458 39 Other assets 34,806 35,441 34,682 35,039 36,508 34,867 35,362 36,766 40 Total assets/total liabilities 439,393 430,262 428,678 435,451 436,607 442,292 438,856 442,724 Deposits: 41 Demand deposits 135,770 129,018 127,492 131,976 129,896 137,350 130,103 134,966 42 Individuals, partnerships, and corporatii 107,677 102,493 101,788 103,912 102,538 107,886 103,490 106,997 43 States and political subdivisions 5,548 5,355 5,222 6,038 5,450 6,003 5,623 5,638 44 U.S. Govt 1,159 2,081 1,402 1,102 848 1,635 1,078 2,173 Domestic interbank: 45 Commercial 15,134 13,099 13,242 14,404 14,870 15,378 13,714 13,951 46 Mutual savings 470 434 407 516 453 464 391 409 Foreign: 47 Governments, official institutions, etc, 223 244 236 215 195 219 218 254 48 Commercial banks 1,527 1,634 1,511 1,488 1,467 1,522 1,508 1,490 49 Certified and officers' checks 4,032 3,678 3,684 4,301 4,075 4,243 4,081 4,054 50 Time and savings deposits* . 199,349 199,503 199,589 199,796 200,703 201,381 202,735 202,796 51 Savings4 83,288 83,121 82,849 82,722 82,837 82,585 82,524 82,401 52 Time: 116,061 116,382 116,740 117,074 117,866 118,796 120,211 120,395 53 Individuals, partnerships, and corporations 89,343 89,401 89,880 90,221 90,799 91,333 92,084 92,261 54 States and political subdivisions 20,311 20,443 20,427 20,200 20,225 20,366 20,765 20,671 55 Domestic interbank 2,807 2,897 2,857 2,934 3,059 3,166 3,398 3,498 56 Foreign govts., official institutions, etc, 2,785 2,833 2,755 2,894 2,950 3,127 3,122 3,133 57 Federal funds purchased, etc.5 54,802 50,697 51,887 53,952 56,634 54,235 55,247 54,870 Borrowings from: 58 F. R. Banks 481 2,110 698 424 376 172 903 626 59 Others 2,828 2,863 3,029 3,062 3,014 2,880 3,098 2,866 60 Other liabilities, etc.6 14,803 14,765 14,552 14,754 14,445 14,808 15,304 14,976 61 Total equity capital and subordinated notes/debentures7 31,360 31,306 31,431 31,487 31,539 31,466 31,466 31,624 1 Includes securities purchased under agreements to resell. 5 Includes securities sold under agreements to repurchase. 2 Federal agencies only. 6 Includes minority interest in consolidated subsidiaries and deferred 3 Includes time deposits of U.S. Govt, and of foreign banks, which tax portion of reserves for loans. are not shown separately. 7 Includes reserves for securities and contingency portion of reserves 4 For amounts of these deposits by ownership categories, see Table 1.30. for loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Weekly Reporting Banks A23 1.30 LARGE WEEKLY REPORTING COMMERCIAL BANKS Balance Sheet Memoranda Millions of dollars, Wednesday figures 1977 Account and bank group Oct. 12 Oct. 19 Oct. 26 Nov. 2 Nov. 9 Nov. 16 Nov. 23 Nov. 30f Total loans (gross) and investments, adjusted1 1 Large banks 423,754 427,009 423,771 427,897 431,712 433,371 427,009 431,014 2 New York City banks 92,453 94,272 92,679 92,904 94,403 94,767 92,533 94,277 3 Banks outside New York City 331,301 332,737 331,092 334,993 337,309 338,604 334,476 336,737 Total loans (gross), adjusted 4 Large banks 313,349 315,484 312,419 316,908 320,083 320,740 314,319 318,356 5 New York City banks 71,343 72,315 70,644 71,276 72,906 72,450 70,173 71,924 6 Banks outside New York City 242,006 243,169 241,775 245,632 247,177 248,290 244,146 246,432 Demand deposits, adjusted2 7 Large banks 112,776 111,226 112,055 113,077 111,628 114,425 109,618 112,710 8 New York City banks 23,987 23,555 24,393 24,649 22,079 24,749 22,515 22,319 9 Banks outside New York City 88,789 87,671 87,662 88,428 89,549 89,676 87,103 90,391 Large negotiable time CD's included in time and savings deposits3 Total: 10 Large banks 67,750 68,483 69,332 69,724 70,481 71,693 73,253 73,416 11 New York City 21,374 21,944 22,391 22,359 22,386 22,663 23,215 23,173 12 Banks outside New York City 46,376 46,539 46,941 47,365 48,095 49,030 50,038 50,243 Issued to IPC's: 13 Large banks 45,594 45,82.3 46,628 46,885 47,485 48,361 49,470 49,599 14 New York City Banks 14,730 15,018 15,232 15,129 15,237 15,490 16,084 16,040 15 Banks outside New York City 30,864 30,805 31,396 31,756 32,248 32,871 33,386 33,559 Issued to others: 16 Large banks 22,156 22,660 22,704 22,839 22,996 23,332 23,783 23,817 17 New York City banks 6,644 6,926 7,159 7,230 7,149 7,173 7,131 7,133 18 Banks outside New York City 15,512 15,734 15,545 15,609 15,847 16,159 16,652 16,684 All other large time deposits4 Total: 19 Large banks 27,788 28,151 28,241 28,504 28,617 28,719 29,112 29,002 20 New York City banks 5,775 5,892 5,927 6,073 6,035 6,049 5,987 5,982 21 Banks outside New York City 22,013 22,259 22,314 22,431 22,582 22,670 23,125 23,020 Issued to IPC's: 22 Large banks 15,913 16,204 16,201 16,505 16,642 16,663 16,856 16,799 23 New York City banks 4,447 4,548 4,570 4,709 4,658 4,646 4,625 4,605 24 Banks outside New York City 11,466 11,656 11,631 11,796 11,984 12,017 12,231 12,194 Issued to others: 25 Large banks 11,875 11,947 12,040 11,999 11,975 12,056 12,256 12,203 26 New York City banks. 1,328 1,344 1,357 1,364 1,377 1,403 1,362 1,377 27 Banks outside New York City 10,547 10,603 10,683 10,635 10,598 10,653 10,894 10,826 Savings deposits, by ownership category Individuals and nonprofit organizations: 28 Large banks 86,813 86,645 86,377 86,284 86,325 86,054 85,950 85,791 29 New York City banks 9,477 9,422 9,390 9,364 9,370 9,333 9,309 9,235 30 Banks outside New York City 77,336 77,223 76,987 76,920 76,955 76,721 76,641 76,556 Partnerships and corporations for profit:5 31 Large banks 5,121 5,104 5,131 5,105 5,175 5,156 5,227 5,246 32 New York City banks 538 528 524 520 515 517 520 522 33 Banks outside New York City 4,583 4,576 4,607 4,585 4,660 4,639 4,707 4,724 Domestic governmental units: 34 Large banks 1,634 1,577 1,491 1,423 1,416 1,415 1,345 1,287 35 New York City banks 279 264 250 219 212 203 185 182 36 Banks outside New York City 1,355 1,313 1,241 1,204 1,204 1,212 1,160 1,105 All other:6 37 Large banks 40 31 35 33 36 25 28 30 38 New York City banks 26 22 21 20 18 12 12 14 39 Banks outside New York City 14 9 14 13 18 13 16 16 Gross liabilities of banks to their foreign branches 40 Large banks 5,381 6,665 5,366 4,989 4,955 5,018 4,575 5,306 41 New York City banks 3,015 4,252 2,836 2,747 2,679 3,011 3,304 3,257 42 Banks outside New York City 2,366 2,413 2,530 2,242 2,276 2,007 1,271 2,049 Loans sold outright to selected institutions by all large banks7 43 Commercial and industrial 2,804 2,762 2,879 2,886 3,115 3,120 3,143 3,069 44 Re^l estate 216 241 226 220 214 220 220 240 45 Allother 1,057 1,053 1,009 984 1,136 1,131 1,127 1,129 t Exclusive of loans and Federal funds transactions with domestic 5 Other than commercial banks. commercial banks. 6 Domestic and foreign commercial banks, and official international 2 All demand deposits except U.S. Govt, and domestic commercial organizations. banks, less cash items in process of collection. 7 To bank's own foreign branches, nonconsolidated nonbank af- 3 Certificates of deposit (CD's) issued in denominations of $100,000 or filiates of the bank, the bank's holding company (if not a bank), and more. nonconsolidated nonbank subsidiaries of the holding company. 4 All other time deposits issued in denominations of $100,000 or more (not included in large negotiable CD's). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A24 Domestic NonfinancialS tatistics • December 1977 1.31 LARGE WEEKLY REPORTING COMMERCIAL BANKS Commercial and Industrial Loans Millions of dollars Outstanding Net change during— Industry classification 1977 1977 1977 i Nov. 2 Nov. 9 Nov. 16 | Nov. 23 | Nov. 30p Q2 Q3 Sept. Oct. Nov.f I i Total loans classified2 1 Total 100,599 100,463 100,040 100,040 100,434 1,530 268 676 2,161 668 Durable goods manufacturing: 2 Primary metals... . .-• 2,396 2,397 2,378 2,393 2,358 -161 74 104 -58 -78 3 Machinery 4,682 4,676 4,583 4,499 4,514 39 -233 90 86 -143 4 Transportation equipment 2.331 2,369 2,325 2.346 2,449 94 -15 50 -26 89 5 Other fabricated metal products... 1,991 1,997 1,994 1,978 1,958 75 11 106 18 ~35 6 Other durable goods 3,671 3,670 3,651 3,636 3,574 322 66 71 -30 -128 Nondurable goods manufacturing: 7 Food, liquor, and tobacco, 3,705 3,812 3,766 3,762 3,749 -21 128 180 141 152 8 Textiles, apparel, and leather 3,842 3,863 3,751 3,700 3,628 470 166 -45 -134 -258 9 Petroleum refining 2.896 2,789 2,839 2,847 2,919 284 91 15 114 92 10 Chemicals and rubber 2,940 2,946 2,949 2,946 2,926 68 124 68 32 13 11 Other nondurable goods 2,177 2,180 2,188 2,141 2,146 -20 149 71 9 -31 12 Mining, including crude petroleum and natural gas 8,378 8,363 8,324 8,330 8,427 728 88 73 146 49 Trade: 13 Commodity dealers 1.644 1,704 1,678 1,780 1.815 -433 -379 -58 288 203 14 Other wholesale 7,135 7.120 7,056 7,088 7,121 34 103 130 221 40 15 Retail 7,480 7.474 7,475 7,548 7,501 380 311 40 213 88 16 Transportation 4.943 4,971 4,963 4,987 5,010 -126 -68 3 -60 102 17 Communication 1,400 1,381 1.398 1,372 1,395 -152 72 13 56 71 18 Other public utilities 5,183 5,125 5,108 5.048 5,071 12 -512 -89 74 -43 19 Construction 4,480 4,463 4,499 4,538 4,544 289 243 130 -38 78 20 Services 11,047 11,023 11,093 11,074 11,097 329 -270 -112 -22 106 21 All other domestic loans 8,105 8.233 8,083 8,134 8,110 102 197 -17 48 140 22 Bankers acceptances. 44,,887733 44,,883355 5,004 4,990 5,241 -263 86 -33 924 551 23 Foreign commercial and industrial loans 5,300 5,072 4,935 4,903 4,881 -520 -164 -114 159 -390 MEMO ITEMS: 24 Commercial paper included in total classified loans1 113388 --3344 --8855 3300 --2222 --7733 25 Total commercial and industrial loans of all large weekly reporting banks 123,508 123,560 123,111 123,049 123,514 2,741 674 958 2,172 1,131 1977 1977 1977 July 27 Aug. 31 Sept. 28 Oct. 26 Nov. 30 Q2 Q3 Sept. Oct. Nov. "Term" loans classified3 26 Total 45,901 46,076 46,274 46,631 46,664 675 -242 198 357 33 Durable goods manufacturing: 27 Primary metals 1,323 1,394 1,426 1,420 1,405 -133 38 32 -6 -15 28 Machinery 2,414 2,306 2,337 2,384 2,319 -32 -183 31 47 -65 29 Transportation equipment 1,404 1.382 1,429 1,373 1,339 43 47 47 -56 -34 30 Other fabricated metal products... 813 785 775 831 838 12 -57 -10 56 7 31 Other durable goods 11,,771199 11,,773344 11,,777744 11,,777744 11,,774422 9977 5522 4400 --3322 Nondurable goods manufacturing: 32 Food, liquor, and tobacco 1,363 1,368 1,400 1,441 1,442 23 -35 32 41 1 33 Textiles, apparel, and leather 1,204 1,149 1,154 1,173 1,142 79 4 5 19 -31 34 Petroleum refining 1,975 1,988 1,997 2,129 2,167 168 59 9 132 38 35 Chemicals and rubber 1,677 1,705 1,745 1,746 1,770 99 99 40 1 24 36 Other nondurable goods 11,,111188 11,,008888 11,,009944 11,,009944 11,,112233 9966 --3344 6 2299 37 Mining, including crude petroleum and natural gas 66,,225500 66,,229955 66,,228844 66,,332288 66,,441122 519 -91 -11 44 84 Trade: 38 Commodity dealers 180 209 194 209 234 -28 23 -15 15 25 39 Other wholesale 1,478 1,485 1,540 1,588 1,592 4 57 55 48 4 40 Retail 2,331 2,379 2,400 2,495 2,583 57 75 21 95 88 41 Transportation 3,607 3,624 3,625 3,622 3,651 -124 -24 1 -3 29 42 Communication 764 785 786 812 835 -31 38 1 26 23 43 Other public utilities 3,416 3,358 3,302 3,413 3,294 -136 -469 -56 111 —119 44 Construction 1,873 1,904 2,011 1.956 2,007 172 178 107 -55 51 45 Services 5.247 5,288 5,281 5,185 5,250 190 -20 -7 -96 65 46 All other domestic loans 2,464 22,,773333 22,,554422 2,502 22,,664411 _ J 110 -191 -40 139 47 Foreign commercial and industrial loans 3,281 3,117 3,178 3,156 2,878 -399 -109 61 -22 -278 J Reported for the last Wednesday of each month. all outstanding loans granted under a formal agreement—revolving credit 2 Includes "term" loans, shown below. or standby—on which the original maturity of the commitment was in 3 Outstanding loans with an original maturity of more than 1 year and excess of 1 year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Deposits and Commercial Paper A25 1.32 GROSS DEMAND DEPOSITS of Individuals, Partnerships, and Corporations Billions of dollars, estimated daily-average balances At commercial banks TTyyppee ooff hhoollddeerr 1976 1977 11997722 11997733 11997744 11997755 DDeecc.. DDeecc.. DDeecc.. DDeecc.. June Sept. Dec. Mar. June Sept.P 1 All holders, IPC 208.0 220.1 225.0 236.9 234.2 236.1 250.1 242.3 253.8 252.7 18.9 19.1 19.0 20.1 20.3 19.7 22.3 21.6 25.9 23.7 109.9 116.2 118.8 125.1 121.2 122.6 130.2 125.1 129.2 128.5 65.4 70.1 73.3 78.0 78.8 80.0 82.6 81.6 84.1 86.2 1.5 2.4 2.3 2.4 2.5 2.3 2.7 2.4 2.5 2.5 6 Other 12.3 12.4 11.7 11.3 11.4 11.5 12.4 11.6 12.2 11.8 At weekly reporting banks 1977 11997733 11997744 11997755 11997766 DDeecc.. DDeecc.. DDeecc.. DDeecc.. Apr. May June July Aug. Sept.? 7 All holders, IPC 118.1 119.7 124.4 128.5 127.5 124.4 128.7 131.0 128.0 129.2 8 Financial business 14.9 14.8 15.6 17.5 16.7 17.0 17.8 18.9 18.0 17.4 9 Nonfinancial business 66.2 66.9 69.9 69.7 68.5 67.2 69.5 70.7 68.8 70.0 10 Consumer 28.0 29.0 29.9 31.7 33.5 31.5 32.3 32.6 32.4 32.8 11 Foreign 2.2 2.2 2.3 2.6 2.3 2.4 2.4 2.2 2.5 2.4 12 Other 6.8 6.8 6.6 7.1 6.6 6.4 6.7 6.7 6.4 6.6 NOTE.—Figures include cash items in process of collection. Estimates of Data for August 1976 have been revised as follows: All holders, IPC, gross deposits are based on reports supplied by a sample of commercial 119.4; financial business, 15.3; nonfinancial business, 65.5; consumer, banks. Types of depositors in each category are described in the June 1971 30.0; foreign, 2.5; all other, 6.1. BULLETIN, p. 466. 1.33 COMMERCIAL PAPER AND BANKERS ACCEPTANCES OUTSTANDING Millions of dollars, end of period 1977 1974 1975 1976 Instrument Dec. Dec. Dec. Apr. May June July Aug. Sept. Oct. Commercial paper (seasonally adjusted) 1 All issuers 49,742 48,145 52,623 56,715 57,434 61,237 60,323 60,320 61,391 62,591 Financial companies:1 Dealer-placed paper:2 2 Total 4,599 6,220 7,271 7,286 7,555 8,196 8,261 8,167 8,493 8,547 3 Bank-related 1,814 1,762 1,900 1,778 1,805 1,894 1,744 1,650 1,846 1,961 Directly-placed paper:3 4 Total 31,801 31,230 32,365 34,753 34,949 37,593 36,773 36,699 37,670 38,979 5 Bank-related 6,518 6,892 5,959 5,703 5,999 6,636 6,344 6,394 7,069 7,008 6 Nonfinancial companies4.. 13,342 10,695 12,987 14,676 14,930 15,538 15,289 15,454 15,228 15,065 Dollar acceptances (not seasonally adjusted) 7 Total 18,484 18,727 22,523 22,899 23,201 23,440 23,499 23,091 23,317 23,908 Held by: 8 Accepting banks 4,226 7,333 10,442 7,761 7,326 7,630 7,601 7,647 7,473 8,673 9 Own bills 3,685 5,899 8,769 6,309 6,218 6,356 6,464 6,580 6,566 7,248 10 Bills bought 542 1,435 1,673 1,381 1,108 1,273 1,137 1,067 907 1,424 F.R. Banks: 11 Own account 999999 11,,112266 999911 881 108 621 393 131 482 12 Foreign correspondents... 11,,110099 229933 337755 394 385 360 296 304 287 422 13 Others 12,150 9,975 13,447 13,863 15,382 14,829 15,209 15,009 15,075 14,813 Based on: 14 Imports into United States.. 4,023 3,726 4,992 5,114 5,124 5,635 5,570 5,446 5,654 5,886 15 Exports from United States. 4,067 4,001 4,818 5,376 5,642 5,729 5,842 5,747 5,544 5,584 16 All other 10,394 11,000 12,713 12,410 12,436 12,076 12,088 11,899 12,119 12,438 1 Institutions engaged primarily in activities such as, but not limited to, 3 As reported by financial companies that place their paper directly commercial, savings, and mortgage banking; sales, personal, and mortgage with investors. financing; factoring, finance leasing, and other business lending; insurance 4 Includes public utilities and firms engaged primarily in activities such underwriting; and other investment activities. as communications, construction, manufacturing, mining, wholesale and 2 Includes all financial company paper sold by dealers in the open retail trade, transportation, and services. market. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A26 Domestic Nonfinancial Statistics • December 1977 1.34 PRIME RATE CHARGED BY BANKS on Short-term Business Loans Per cent per annum Month Average Month Effective date Rate Effective date Rate rate 1976—June 1 7 1977—May 13... 61/Z 1976—June 7.20 1977—Apr 7 M 6% July. 7.25 31... Aug. 7.01 Aug. 2 7 7 Sept. 7.00 July Aug. 22... Oct.. 6.78 Oct. 4 6V4 71/4 Nov. 6.50 Sept Sept. 16. . . Dec. 6.35 Nov. 1 61/2 Oct. 7.... 71/2 Oct. 24.... 73/4 1977—Jan.. 6.25 Dec. 13 6% Feb. 6.25 Mar 6.25 1.35 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, Aug. 1-6, 1977 Size of loan (in thousands of dollars) All Item sizes 1,000 1-24 25-49 50-99 100-499 500-999 and over Short-term commercial and industrial loans 1 Amount of loans (thousands of dollars) 8,184,373 895,501 660,159 693,427 2,102,846 626,169 3,206,271 2 Number of loans 174,527 129,887 20,838 10,947 10,734 1,015 1,106 3 Weighted-average maturity (months) 3.0 2.6 3.0 2.5 2.8 2.8 3.5 4 Weighted-average interest rate (per cent per annum).. 7.87 9.24 8.56 8.75 7.87 7.59 7.22 5 Interquartile range 1 6.92-8.66 8.30-10.11 8.00-9.20 7.78-10.00 7.19-8.32 6.94-8.00 6.75-7.45 Percentage of amount of loans: 6 With floating rate 52.7 26.1 29.3 50.9 53.0 55.2 64.6 7 Made under commitment 40.8 13.9 17.5 20.7 36.8 59.4 56.3 Long-term commercial and industrial loans 8 Amount of loans (thousands of dollars) 1,195,225 375,556 206,220 86,110 527,338 9 Number of loans 25,464 24,063 1,121 116 164 10 Weighted-average maturity (months) 63.8 51.7 116.6 46.5 54.7 11 Weighted-average interest rate (per cent per annum).. 8.09 9.35 7.03 8.18 7.60 12 Interquartile range 1 6.95-9.16 8.45-10.00 4.41-9.00 7.50-9.11 6.85-8.77 Percentage of amount of loans: 13 With floating rate 53.4 23.3 41.2 61.5 78.4 14 Made under commitment 53.6 15.4 64.7 54.1 76.5 Construction and land development loans 15 Amount of loans (thousands of dollars) 570,762 163,298 141,147 48,143 109,676 108,497 16 Number of loans 30,413 25,343 3,751 689 554 c76 17 Weighted-average maturity (months) 13.1 11.7 10.3 9.9 10.5 23.6 18 Weighted-average interest rate (per cent per annum).. 8.70 9.16 8.84 8.93 8.70 7.73 19 Interquartile range 1 8.16-9.28 8.24-9.84 8.27-9.25 8.48-9.43 8.23-9.34 7.76-9.00 Percentage of amount of loans: 20 With floating rate 29.0 8.4 9.0 45.8 51.5 55.7 21 Secured by real estate 73.4 67.6 59.5 87.5 84.0 83.4 22 Made under commitment 44.2 39.7 29.3 64.4 62.6 42.9 23 Type of construction: 1-to 4-family 41.4 44.2 54.0 59.9 30.2 23.7 24 Multifamily 7.3 8.4 1.4 4.0 10.5 11.4 25 Nonresidential 51.4 47.5 44.6 36.1 59.3 64.8 All 250 sizes 1-9 10-24 25-49 50-99 100-249 and over Loans to farmers 26 Amount of loans (thousands of dollars) 871,995 162,789 157,705 113,508 118,272 92,800 226,921 27 Number of loans 64,828 47,939 10,788 3,412 1,871 618 199 28 Weighted-average maturity (months) 7.0 6.9 10.1 5.8 8.3 5.6 5.6 29 Weighted-average interest rate (per cent per annum).. 8.72 8.98 8.79 8.81 8.82 8.90 8.33 30 Interquartile range 1 8.25-9.24 8.50-9.27 8.59-9.27 8.59-9.20 8.16-9.31 8.59-9.31 7.51-9.04 31 By purpose of loan : 32 Feeder livestock 8.40 8.88 8.76 8.80 8.75 8.60 8.03 33 Other livestock 8.60 8.69 8.61 8.46 8.48 8.58 (2) 34 Other current operating expenses 9.00 8.97 9.01 8.87 9.06 9.01 c9.13 35 Farm machinery and equipment 9.02 9.07 9.23 9.12 9.30 (2) 8.57 36 Other 8.60 9.25 7.80 8.81 8.47 8.98 8.61 1 Interest rate range that covers the middle 50 per cent of the total NOTE.—For more detail, see the Board's G.14 statistical release, dollar amount of loans made. 2 Fewer than three sample loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Securities Markets All 1.36 INTEREST RATES Money and Capital Markets Averages, per cent per annum 1977 1977, week ending— Instrument 1974 1975 1976 Aug. Sept. Oct. Nov. Nov. 5 Nov. 12 Nov. 19 Nov. 26 Dec. 3 Money market rates Prime commercial paper 1 1 90- to 119-day 10.05 6.26 5.24 5.75 6.09 6.51 6.54 6.56 6.57 6.54 6.53 6.53 2 4- to 6-month. 9.87 6.33 5.35 5.84 6.17 6.55 6.59 6.61 6.61 6.59 6.56 6.57 3 Finance company paper, directly placed, 3- to 6-month 2 8.62 6.16 5.22 5.71 6.04 6.41 66..4499 66..5500 6.50 66..4499 6.48 6.50 4 Prime bankers acceptances, 90-day 3 9.92 6.30 5.19 5.88 6.16 6.57 6.58 6.69 6.66 6.57 6.52 6.46 5 Federal funds 4 10.51 5.82 5.05 5.90 6.14 6.47 6.51 6.50 6.58 6.42 6.51 6.55 Large negotiable certificates of deposit 6 3-month, secondary market 5 10.27 6.43 5.26 5.91 6.18 6.24 6.68 6.67 6.74 6.68 6.65 6.62 7 5 15 5.82 6.04 6.53 6.56 6.55 6.60 6.55 6.55 6.55 8 Euro-dollar deposits, 3-month 7 10.96 6.97 5.57 6.30 6.57 7.14 7.09 7.14 7.23 7.09 7.01 6.97 U.S. Govt, securities Bills: 8 Market yields: 9 3-month 7.84 5.80 4.98 5.49 5.81 6.16 6.10 6.20 6.15 6.07 6.06 6.04 10 6-month 7.95 6.11 5.26 5.83 6.04 6.43 6.41 6.49 6.44 6.38 6.37 6.37 11 1-year 7.71 6.30 5.52 5.97 6.13 6.52 6.52 6.60 6.55 6.49 6.48 6.49 Rates on new issue: 12 3-month 7.886 5.838 4.989 5.500 5.770 6.188 6.160 6.278 6.187 6.092 6.084 6.057 13 6-month 7.926 6.122 5.266 5.810 5.991 6.410 6.433 6.508 6.464 6.373 6.385 6.371 Notes and bonds maturing in 14 9 to 12 months9 8.25 6.70 5.84 6.35 6.53 6.96 6.92 7.03 7.00 6.88 6.85 6.85 Constant maturities:1 o 15 1-year 8.18 6.76 5.88 6.37 6.53 6.97 6.95 7.05 6.99 6.92 6.91 6.91 Capital market rates Government notes and bonds U.S. Treasury: Constant maturities:10 16 2-year 6.31 6.61 6.71 7.11 7.14 7.22 7.16 7.11 7.12 7.12 17 3-year 7.82 7.49 6.77 6.79 6.84 7.19 7.22 7.32 7.24 7.17 7.19 7.22 18 5-year 7.80 7.77 7.18 7.03 7.04 7.32 7.34 7.45 7.36 7.27 7.30 7.35 19 7-year 7.71 7.90 7.42 7.24 7.21 7.44 7.46 7.56 7.47 7.41 7.42 7.45 20 10-year 7.56 7.99 7.61 7.40 7.34 7.52 7.58 7.65 7.60 7.55 7.54 7.56 21 20-year 8.05 8.19 7.86 7.64 7.57 7.71 7.76 7.81 7.80 7.74 7.73 7.75 2222 30-year 77..6688 77..6644 77..7777 77..8855 77..8888 77..8877 77..8833 77..8822 77..8844 Notes and bonds maturing in 9— 23 3 to 5 years 7.81 7.55 6.94 6.90 6.92 7.23 7.28 7.36 7.30 7.24 7.25 7.29 24 Over 10 years (long-term) 6.99 6.98 6.78 7.00 6.94 7.08 7.14 7.16 7.15 7.14 7.13 7.14 State and local: Moody's series:11 25 Aaa 5.89 6.42 5.66 5.28 5.27 5.31 5.15 5.20 5.20 5.15 5.05 5.05 26 Baa 6.53 7.62 7.49 5.95 5.83 5.94 5.94 6.05 6.00 5.90 5.80 5.90 27 Bond Buyer series 12 6.17 7.05 6.64 5.62 5.51 5.64 5.49 5.55 5.51 5.45 5.45 5.47 Corporate bonds Seasoned issues 13 28 All industries 9.03 9.57 9.01 8.34 8.31 8.42 8.48 8.48 8.49 8.49 8.48 8.47 By rating groups: 29 Aaa 8.57 8.83 88..4433 7.98 7.92 8.04 8.08 8.08 8.10 8.08 8.07 8.08 30 Aa 8.84 9.17 8.75 8.17 8.15 8.26 8.34 8.33 8.35 8.36 8.34 8.31 31 A 9.20 9.65 9.09 8.40 8.37 8.48 8.56 8.54 8.56 8.58 8.56 8.54 32 Baa 9.50 10.61 9.75 8.82 8.80 8.89 8.95 8.96 8.95 8.96 8.95 8.94 Aaa utility bonds:14 33 New issue 9.33 9.40 8.48 8.04 8.07 8.23 8.27 8.35 8.29 8.24 8.23 8.26 34 Recently offered issues 9.34 9.41 8.49 8.05 8.07 8.22 8.24 8.32 8.26 8.24 8.19 8.23 Dividend/price ratio 35 Preferred stocks 8.23 8.38 7.97 77..5555 7.58 7.60 7.67 7.56 7.63 7.66 7.73 7.79 36 Common stocks 4.47 4.31 3.77 4.72 4.82 4.97 5.02 5.14 5.07 4.95 4.92 5.01 1 Averages of the most representative daily offering rates quoted by 7 Averages of daily quotations for the week ending Wednesday. dealers. 8 Except for new bill issues, yields are computed from daily closing 2 Averages of the most representative daily offering rates published by bid prices. Yields for all bills are quoted on a bank-discount basis. finance companies for varying maturities in this range. 9 Unweighted averages for all outstanding notes and bonds in maturity 3 Beginning Aug. 15, 1974, the rate is the average of the midpoint of ranges shown, based on daily closing bid prices. "Long-term" includes the range of daily dealer closing rates offered for domestic issues; prior all bonds neither due nor callable in less than 10 years. data are averages of the most representative daily offering rate quoted by I o Yields on the more actively traded issues adjusted to constant dealers. maturities by the U.S. Treasury, based on daily closing bid prices. 4 Weekly figures are 7-day averages of daily effective rates for the week II General obligations only, based on figures for Thursday, from ending Wednesday; the daily effective rate is an average of the rates on Moody's Investors Service. a given day weighted by the volume of transactions at these rates. 12 Twenty issues of mixed quality. 5 Weekly figures are 7-day averages of the daily midpoints as determined 13 Averages of daily figures from Moody's Investors Service. from the range of offering rates; monthly figures are averages of total days 14 Compilation of the Board of Governors of the Federal Reserve in the month. System. 6 Posted rates, which are the annual interest rates most often quoted Issues included are long-term (20 years or more). New-issue yields are on new offerings of negotiable CD's in denominations of $100,000 or based on quotations on date of offering; those on recently offered issues more. Rates prior to 1976 not available. Weekly figures are for Wednes- (included only for first 4 weeks after termination of underwriter price day dates. restrictions), on Friday close-of-business quotations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A28 Domestic Nonfinancial Statistics • December 1977 1.37 STOCK MARKET Selected Statistics 1977 Indicator 1974 1975 1976 May June July Aug. j Sept. Oct. Nov. Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31,1965 = 50) 43.84 45.73 54.45 53,96 54.31 54.94 53.51 52.66 51.37 51.87 2 Industrial 48.08 51.88 60.44 58.13 58.44 58.90 57.30 56.41 54.99 55.62 3 Transportation 31.89 30.73 39.57 43.25 43.29 43.52 41.04 39.99 38.33 39.30 4 Utility 29.82 31.45 36.97 41.14 41.59 42.44 41.50 40.93 40.38 40.33 5 Finance 49.67 46.62 52.94 54.80 55.15 57.29 56.52 55.33 53.24 54.04 6 Standard & Poor's Corporation (1941-43 = 10) *. 82.85 85.17 102.01 98.76 99.29 100.19 97.75 96.23 93.78 94.28 7 American Stock Exchange (Aug. 31,1973 = 100) 79.97 83.15 101.63 113.72 116.28 122.03 119.33 118.08 115.41 117.80 Volume of trading (thousands of shares)2 8 New York Stock Exchange 13,883 18,568 21,189 20,277 22,007 23,656 18,831 18,270 19,689 23,557 9 American Stock Exchange 1,908 2,150 2,565 2,440 2,720 2,880 2,140 2,080 2,080 2,061 Customer financing (end-of-period balances, in millions of dollars) 10 Regulated margin credit at brokers/dealers and banks3 4,836 6,500 9,011 10,068 10,255 10,490 10,592 10,617 10,583 11 Brokers, total 3,980 5,540 8,166 9,267 9,432 9,667 9,763 9,793 9,756 12 Margin stock4 3,840 5,390 7,960 9,070 9,230 9,460 9,560 <9,590 9,560 13 Convertible bonds 137 147 204 196 198 204 196 c196 192 14 Subscription issues 3 3 2 1 4 3 7 c7 4 15 Banks, total 856 960 845 801 823 823 829 c824 827 16 Margin stocks 815 909 800 761 779 780 787 c783 783 17 Convertible bonds 30 36 30 25 25 24 23 c24 27 18 Subscription issues 11 15 15 15 19 19 19 c17 17 19 Unregulated nonmargin stock credit at banks5 2,064 2,281 2,817 2,345 2,403 2,419 2,438 2,434 2,431 MEMO: Free credit balances at brokers6 20 Margin-account 410 475 585 625 595 600 605 600 615 21 Cash-account 1,425 1,525 1,855 1,710 1,805 1,860 1,745 1,745 1,850 Margin-account debt at brokers (percentage distribution, end of period) 22 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 By equity class (in per cent): 23 Under 40 45.4 24.0 12.0 17.8 12.9 16.2 17.4 18.0 27.0 24 40-49 23.0 28.8 23.0 35.6 27.0 32.9 32.0 36.0 35.0 25 50-59 13.9 22.3 35.0 23.0 33.0 26.4 27.0 23.0 18.0 26 60-69 8.8 11.6 15.0 11.0 13.3 12.0 12.0 11.0 9.8 27 70-79 4.6 6.9 8.7 7.0 8.0 7.0 7.0 6.0 6.0 28 80 or more 4.3 5.3 6.0 5.0 5.8 5.5 5.0 5.0 5.0 Special miscellaneous-account balances at brokers (end of period) 29 Total balances (millions of dollars) »... 7,010 7,290 8,776 9,360 9,470 9,730 9,660 9,640 9,640 Distribution by equity status (per cent) 30 Net credit status 41.1 43.8 41.3 41.0 41.0 40.9 41.1 41.7 42.8 Debit status, equity of— 31 60 per cent or more 32.4 40.8 47.8 46.3 47.8 47.1 46.2 45.9 43.8 32 Less than 60 per cent 26.5 15.4 10.9 12.6 11.2 12.0 12.4 12.4 13.4 1 Effective July 1976, includes a new financial group, banks and in- 5 Nonmargin stocks are those not listed on a national securities exsurance companies. With this change the index includes 400 industrial change and not included on the Federal Reserve System's list of over-thestocks (formerly 425), 20 transportation (formerly 15 rail), 40 public counter margin stocks. At banks, loans to purchase or carry nonmargin utility (formerly 60), and 40 financial. stocks are unregulated; at brokers, such stocks have no loan value. 2 Based on trading for a 5 Vi-hour day. 6 Free credit balances are in accounts with no unfulfilled commitments 3 Margin credit includes all credit extended to purchase or carry to the brokers and are subject to withdrawal by customers on demand. stocks or related equity instruments anc} secured at least in part by stock. 7 Each customer's equity in his collateral (market value of collateral Credit extended by brokers is end-of-month data for member firms of less net debit balance) is expressed as a percentage of current collateral the New York Stock Exchange; June data for banks are universe totals; values. all other data for banks are estimates for all commercial banks based on 8 Balances that may be used by customers as the margin deposit redata from a sample of reporting banks. quired for additional purchases. Balances may arise as transfers based In addition to assigning a current loan value to margin stock generally, on loan values of other collateral in the customer's margin account or Regulations T and U permit special loan values for convertible bonds deposits of cash (usually sales proceeds) occur. and stock acquired through exercise of subscription rights. 4 A distribution of this total by equity class is shown below. NOTE.—For table on "Margin Requirements" see p. A-10, Table 1.161. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Thrift Institutions A29 1.38 SAVINGS INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1977 1974 1975 1976 Account Feb. Mar. Apr. May June July Aug. Sept. Savings and loan associations 1 Assets 295,545 338,233 391,999 403,591 409,357 414,436 421,865 427,041 433,828 440,202 444,484 450,595 2 Mortgages 249,301 278,590 323,130 329,086 333,703 338,984 344,631 350.765 355,991 361,719 366,978 371,834 3 Cash and investment 23,251 30,853 35,660 39,505 39,656 3399,,006611 40,461 39,626 40,990 41,002 39,639 40,456 4 Other 22,993 28,790 33,209 35,000 35,998 36,391 36,773 36,650 36,847 37,481 37,867 38,305 5 Liabilities and net worth 295,545 338,233 391,999 403,591 409,357 414,436 421,865 427,041 433,828 440,202 444,484 450,595 242,974 285,743 336,030 344,616 352,194 354,318 357,965 364,349 368,513 371.376 377,338 379,718 7 Borrowed money 24,780 20,634 19,087 18,256 18,283 18,880 19,804 20,558 20,964 22,031 22,925 23,993 8 FHLBB 21,508 17,524 15,708 14,661 14,325 14,809 15,000 15,595 15,724 16,255 16,908 17,526 9 Other 3,272 3,110 3,379 3,595 3,958 4,071 4,804 4,963 5,240 5,776 6,017 6,467 3,244 5,128 6,836 6,783 7,351 7,899 8,505 9,123 9,332 9,657 9,735 9,848 11 Other 6,105 6,949 8,015 11,418 8,833 10,360 12,287 9,515 11,220 12,990 10,113 12,334 12 Net worth2 18,442 19,779 22,031 22,518 22,696 22,979 23,304 23,496 23,799 24,148 24,373 24,702 13 MEMO: Mortgage loan commitments outstanding3.. 7,454 10,673 14,828 16,796 1199,,330044 21,242 22,274 22,037 21,911 21,905 21,635 21,528 Mutual savings banks 14 Assets 109,550 121,056 134,812 137,307 138,901 139,496 140,593 141,778 143,036 143,815 144,666 Loans: 15 Mortgage 74,891 77,221 81,630 81,982 82,273 82,687 83,075 84,051 84,700 85,419 86,079 16 Other 3,812 4,023 5,183 6,254 6,389 6,050 6,650 6,887 7,176 7,119 6,878 Securities: 17 U.S. Govt 2,555 4,740 5,840 6,096 6,360 6,323 6,248 6,604 6,101 6,019 6,192 18 State and local government. 930 1,545 2.417 2,366 2,431 2,504 2,539 2,544 2,594 2,762 2,777 19 Corporate and other4 22,550 27,992 33,793 35,088 35,928 36,322 36,455 36,349 36,674 36,878 36,927 20 Cash 2,167 2,330 2,355 1,835 1,823 1,900 1,922 2,071 2,001 6,857 1,992 21 Other assets 2,645 3,205 3,593 3,686 3,668 3,709 3,703 3,771 3,789 3,760 3,821 22 Liabilities 109,550 121,056 134,812 137,307 138,901 139,496 140,593 141,778 143,036 143,815 144,666 23 Deposits 98,701 109,873 122,877 124,728 126,687 126,938 127,791 129,332 130,111 130,381 131,688 24 Regular: 5 98,221 109,291 121,961 123,721 125,624 125,731 126,587 128,071 128,748 129,030 130,230 25 Ordinary savings 64,286 69,653 74,535 75,038 76,260 76,336 76,384 77,033 77,069 77,163 77,640 26 Time and other 33,935 39,639 47,426 48,683 49,364 49,395 50,203 51,038 51,679 51,867 52,590 27 Other 480 582 916 1,007 1,063 1,207 1,204 1,261 1,363 1,351 1,458 28 Other liabilities 2,888 2,755 2,884 3,368 2,939 3,230 3,381 2,939 3,379 3,779 3,254 29 General reserve accounts 7,961 8,428 9,052 9,211 9,275 9,329 9,422 9,506 9,546 9,654 9,723 30 MEMO: Mortgage loan commitments outstanding6.. 2,040 1,803 2,439 2,840 3,161 3,287 3,521 4,079 4,049 4,198 4,254 Life insurance companies 31 Assets 263,349 289,304 321,552 325,094 326,753 328,786 331,028 334,386 336,651 338,964 341,382 Securities: 32 Government 10,900 13,758 17,942 18,443 18,470 18,500 18,475 18,579 18,916 19,174 19,515 33 United States7 3,372 4,736 5,368 5,592 5,546 5,544 5,396 5,400 5,628 5,831 5,883 34 State and local 3,667 4,508 5,594 5,709 5,732 5,758 5,797 5,813 5,847 5,881 5,994 35 Foreign » 3,861 4,514 6,980 7,142 7,192 7,198 7,282 7,366 7,441 7,462 7,638 36 Business 119,637 135,317 157,246 160,463 161,214 162,816 164,126 166,859 168,498 169,747 170,606 37 Bonds 97,717 107,256 122,984 127,603 128,596 130,057 131,568 133,497 135,262 136,752 138,046 38 Stocks 21,920 28,061 34,262 32,860 32,618 32,759 32,558 33,362 33,236 32,995 32,560 39 Mortgages 86,234 89,167 91,552 91,585 91,786 92,200 92,358 92,854 93,106 93,326 94,070 40 Real estate 8,331 9,621 10,476 10,629 10,738 10,802 10,822 10,897 10,901 10,926 10,930 41 Policy loans 22,862 24,467 25,834 26,034 26,207 26,364 26,500 26,657 26,780 26,946 27,087 42 Other assets 15,385 16,971 18,502 17,940 18,338 18,104 18,747 18,540 18,450 18,845 19,174 Credit unionsr 43 Total assets/liabilities and capital 31,948 38,037 45,225 46,248 47,621 47,974 48,999 50,186 50,218 50,904 52,136 44 Federal 16,715 20,209 24,396 24,957 25,813 25,980 26,594 27,364 27,290 27,632 28,384 45 State 15,233 17,828 20,829 21,291 21,808 21,994 22,405 22,822 22,928 23,272 23,752 46 Loans outstanding 24,432 28,169 34,384 34,580 35,471 36,102 36,987 38,201 38.657 39,711 40,573 47 Federal 12,730 14,869 18,311 18,367 18,869 19,151 19,680 20,420 20,591 21,194 21,692 48 State 11,702 13,300 16,073 16,213 16,602 16,951 17,307 17,781 18,066 18,517 18,881 49 Savings 27,518 33,013 39,173 40,267 41,483 41,760 42,504 43,552 43.658 43,982 45,103 50 Federal (shares) 14,370 17,530 21,130 21,775 22,534 22,730 23,169 23,825 23,873 24,080 24,775 51 State (shares and deposits), 13,148 15,483 18,043 18,492 18,949 19,030 19,335 19,727 19,785 19,902 20,328 For notes see bottom of page A30. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A30 Domestic Nonfinancial Statistics • December 1977 1.39 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year Transition Fiscal quarter Fiscal TTyyppee ooff aaccccoouunntt oorr ooppeerraattiioonn year (July- year 1976 1977 1977 1976 Sept. 1977 1976) HI H2 HI Aug. Sept. Oct. U.S. Budget 1 Receipts 1 299,197 81,686 356,861 159,742 157,868 189,410 29,676 36,642 24,127 2 Outlays i,2,3 365,658 94,659 401,896 180,559 -193,629 199,482 34,720 35,097 38,790 3 Surplus, or deficit ( —) -66,461 -12,973 -45,035 -20,816 -35,761 -10,072 -5,044 1,545 -14,663 4 Trust funds 2,409 -1,952 7,833 5,503 -4,621 7,332 2,384 3,900 198 5 Federal funds 4 -68,870 -11,021 -52,868 -26,320 -31,140 -17,405 -7,429 -2,355 -14,861 Off-budeet entities surplus, or deficit (-) 6 Federal Financing Bank outlays... -5,915 -2,575 -8,415 -3,222 -5,176 -2,075 -1,241 -892 -1,211 7 Other 2,5 -1,355 793 -269 -1,119 3,809 -2,086 -290 -786 1,750 U.S. Budget plus off-budget, including Federal Financing Bank 8 Surplus, or deficit (—) --7733,,773311 --1144,,775555 --5533,,771188 -25,158 --3377,,112255 --1144,,223333 --66,,557755 -133 --1144,,112244 Financed by: 9 Borrowing from the public 3. . .. 82,922 18,027 53,516 33,561 35,457 16,480 7,780 10,024 11,,885511 10 Cash and monetary assets (decrease, or increase (— )) -7,796 -2,899 -2,238 -7,909 2,153 -4,666 2,740 -12,093 9,952 11 Other 6 -1,396 -373 2,440 -495 -485 2,420 -3,944 2,202 2,321 MEMO ITEMS : 12 Treasury operating balance (level, end of period) 14,836 17,418 19,104 14,836 11,670 77,311 7,063 19,104 7,687 13 F.R. Banks 11,975 13,299 15,740 11,975 10,393 65,372 6,115 15,740 6,398 14 Tax and loan accounts 2,854 44,,111199 33,,336644 2,854 11,,227777 11,940 948 33,,336644 11,,228899 1155 Other demand accounts 7 7 7 1 Effective June 1977, earned income credit payments in excess of an Electrification and Telephone Revolving Fund, Rural Telephone Bank, individual's tax liability, formerly treated as outlays, are classified as and Housing for the Elderly or Handicapped Fund until October 1978. income tax refunds retroactive to January 1976. 6 Includes: Public debt accrued interest payable to the public; deposit 2 Outlay totals reflect the reclassification of the Export-Import Bank, funds; miscellaneous liability (including checks outstanding) and asset and the Housing for the Elderly and Handicapped Fund effective October accounts; seignorage; increment on gold; net gain/loss for U.S. currency 1978, from off-budget status to unified budget status. valuation adjustment; net gain/loss for IMF valuation adjustment. 3 Export-Import Bank certificates of beneficial interest (effective July 7 Excludes the gold balance but includes deposits in certain commercial 1, 1975) and loans to the Private Export Funding Corp. (PEFCO), a wholly depositories that have been converted from a time deposit to a demand owned subsidiary of the Export-Import Bank are treated as debt rather deposit basis to permit greater flexibility in Treasury cash management. than asset sales. 4 Half years calculated as a residual of total surplus/deficit and trust SOURCE.—"Monthly Treasury Statement of Receipts and Outlays of fund surplus/deficit. the U.S. Government," Treasury Bulletin, and U.S. Budget, Fiscal Year 5 Includes Pension Benefit Guaranty Corp., Postal Service Fund, Rural 1978. NOTES TO TABLE 1.38 1 Holdings of stock of the Federal home loan banks are included in Even when revised, data for current and preceding year are subject to "other assets." further revision. 2 Includes net undistributed income, which is accrued by most, but not Mutual savings banks: Estimates of National Association of Mutual all, associations. Savings Banks for all savings banks in the United States. Data are re- 3 Excludes figures for loans in process, which are shown as a liability. ported on a gross-of-valuation-reserves basis. 4 Includes securities of foreign governments and international organiza- Life insurance companies: Estimates of the Institute of Life Insurance tions and nonguaranteed issues of U.S. Govt, agencies. for all life insurance companies in the United States. Annual figures are 5 Excludes checking, club, and school accounts. annual-statement asset values, with bonds carried on an amortized basis 6 Commitments outstanding (including loans in process) of banks in and stocks at year-end market value. Adjustments for interest due and New York State as reported to the Savings Banks Assn. of the State of accrued and for differences between market and book values are not New York. made on each item separately but are included, in total, in "other assets." 7 Direct and guaranteed obligations. Excludes Federal agency issues Credit unions: Estimates by the National Credit Union Administration not guaranteed, which are shown in this table under "business" securities. for a group of Federal and State-chartered credit unions that account for 8 Issues of foreign governments and their subdivisions and bonds of the about 30 per cent of credit union assets. Figures are preliminary and International Bank for Reconstruction and Development. revised annually to incorporate recent benchmark data. NOTE.—Savings and loan associations: Estimates by the FHLBB for all associations in the United States. Data are based on monthly reports of Federally insured associations and annual reports of other associations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Federal Finance A31 1.40 U.S. BUDGET RECEIPTS AND OUTLAYS Millions of dollars Calendar year Transition Fiscal quarter Fiscal Source or type year (July- year 1976 1977 1977 1976 Sept. 1977 1976) HI H2 HI Aug. Sept. Oct. Receipts 1 All sources 1 299,197 81,686 356,861 159,742 157,868 189,410 29,676 36,642 24,127 2 Individual income taxes, net 130,794 39,611 156,725 64,959 75,899 77,948 12,725 17,327 13,275 3 Withheld 123,408 32,949 144,820 63,859 68,023 73,303 12,429 11,776 12,770 4 Presidential Election Campaign Fund 34 1 37 33 1 37 5 Nonwithheld 35,528 6,809 42,062 27,879 8,426 32,959 660 5,903 711 6 Refunds i 28,175 1,139 30,194 26,813 1,541 28,350 364 352 206 7 Corporation income taxes: 8 Gross receipts 46,783 9,808 60,057 27,973 20,706 37,133 1,288 8,770 2,159 9 Refunds 5,374 1,348 5,164 2,639 2,886 2,324 479 394 714 10 Social insurance taxes and contributions, net 92,714 25,760 108,683 51,828 47,596 58,099 12,958 7,828 6,550 11 Payroll employment taxes and contributions 2 76,391 21,534 88,196 40,947 40,427 45,242 10,347 6,990 5,542 12 Self-employment taxes and contributions 3 33,,551188 269 44,,001144 33,,225500 286 33,,668877 309 13 Unemployment insurance 88,,005544 2,698 1111,,331122 55,,119933 4,379 66,,557755 2,161 94 541 14 Other net receipts 4 AA,,115522 1,259 55,,116622 22,,443388 2,504 22,,559955 450 434 466 15 Excise taxes 16,963 4,473 17,548 8,204 8,910 8,432 1,523 1,589 1,529 16 Customs 4,074 1,212 5,150 2,147 2,361 2,519 543 494 406 17 Estate and gift 5,216 1,455 7,327 2,643 2,943 4,332 547 454 410 18 Miscellaneous receipts 5 8,026 1,612 6,536 4,630 3,236 3,269 572 575 512 Outlays 19 All types 365,658 94,659 401,896 180,559 193,629 199,482 34,720 35,097 38,790 20 National defense 89,996 22,518 96,721 44,052 45,002 48,721 8,412 8,979 8,087 21 International affairs 6 5,067 1,997 5,593 2,668 3,028 2,522 497 868 446 22 General science, space, and technology 4,370 1,161 4,677 1,708 2,377 2,108 420 393 378 23 Natural resources, environment, and energy 11,282 3,324 14,335 6,900 7,206 6,855 1,404 1,511 1,259 24 Agriculture 2,502 584 5,330 417 2,019 2,628 740 50 1,103 25 Commerce and transportation 17,248 4,700 14,731 5,766 9,643 5,945 988 1,863 3,586 26 Community and regional development 5,300 1,530 7,394 2,411 3,192 3,149 875 941 628 27 Education, training, employment, and social services 18,167 5,013 19,718 9,116 9,083 9,775 1,970 1,801 1,761 28 Health 33,448 8,720 38,838 17,008 19,329 18,654 3,469 3,316 3,355 29 Income security 1 126,598 32,710 137,151 64,526 65,367 69,917 11,598 11,643 11,476 30 Veterans benefits and services 18,432 3,962 18,040 9,450 8,542 9,382 1,430 1,325 1,587 31 Law enforcement and justice 3,320 859 3,589 1,784 1,839 1,783 269 267 282 32 General government 2,927 878 3,338 870 1,734 1,587 347 326 182 33 Revenue sharing and general purpose fiscal assistance 7,119 2,024 9,404 3,664 4,729 4,333 44 65 2,274 34 Interest 7 34,589 7,246 38,092 18,560 18,409 18,927 2,844 2,722 2,908 35 Undistributed offsetting receipts 7,8 -14,704 -2,567 -15,053 -8,340 -7,869 -6,803 -587 -973 -524 1 Effective June 1977, earned income credit payments in excess of an from off-budget status to unified budget status. Export-Import Bank individual's tax liability, formerly treated as outlays, are classified as in- certificates of beneficial interest (effective July 1, 1975) and loans to the come tax refunds retroactive to January 1976. Private Export Funding Corp. (PEFCO), a wholly owned subsidiary of 2 Old-age, disability and hospital insurance, and Railroad Retirement the Export-Import Bank, are treated as debt rather than asset sales. accounts. 7 Effective September 1976, "Interest" and "Undistributed Offsetting 3 Old-age, disability, and hospital insurance. Receipts" reflect the accounting conversion for the interest on special 4 Supplementary medical insurance premiums, Federal employee re- issues for U.S. Govt, accounts from an accrual basis to a cash basis. tirement contributions, and Civil Service retirement and disability fund. 8 Consists of interest received by trust funds, rents and royalties on 5 Deposits of earnings by F.R. Banks and other miscellaneous receipts. the Outer Continental Shelf, and U.S. Govt, contributions for em- 6 Outlay totals reflect the reclassification of the Export-Import Bank ployee retirement. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A32 Domestic NonfinancialS tatistics • December 1977 1.41 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1974 1975 1976 1977 IItteemm Dec. 31 June 30 Dec. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 1 Federal debt outstanding 504.0 544.1 587.6 631.9 2 646.4 665.5 680.1 685.2 709.1 2 Public debt securities 492.7 533.7 576.6 620.4 634.7 653.5 669.2 674.4 698.8 3 Held by public 351.5 387.9 437.3 470.8 488.6 506.4 524.3 523.2 543.4 4 Held by agencies 141.2 145.3 139.3 149.6 146.1 147.1 144.9 151.2 155.5 5 Agency securities 11.3 10.9 10.9 11.5 11.6 12.0 10.9 10.8 10.3 6 Held by public 9.3 9.0 8.9 9.5 29.7 10.0 9.1 9.0 8.5 7 Held by agencies 2.0 1.9 2.0 2.0 1.9 1.9 1.8 1.8 1.8 8 Debt subject to statutory limit 493.0 534.2 577.8 621.6 635.8 654.7 670.3 675.6 698.5 490.5 532.6 576.0 619.8 634.1 652.9 668.6 673.8 696.8 10 Other debt1 2.4 1.6 1.7 1.7 1.7 1.7 1.7 1.7 1.7 11 MEMO: Statutory debt limit 495.0 577.0 595.0 636.0 636.0 682.0 682.0 700.0 752.0 1 Includes guaranteed debt of Govt, agencies, specified participation $0.5 billion due to a retroactive reclassification of the Export-Import Bank certificates, notes to international lending organizations, and District of certificates of beneficial interest from loan asset sales to debt, effective Columbia stadium bonds. July 1, 1975. 2 Gross Federal debt and Agency debt held by the public increased NOTE.—Data from Treasury Bulletin (U.S. Treasury Dept.). 1.42 GROSS PUBLIC DEBT OF U.S. TREASURY Types and Ownership Billions of dollars, end of period 1977 TTyyppee aanndd hhoollddeerr 11997733 11997744 11997755 11997766 July Aug. Sept. Oct. 1 Total gross public debt1 469.9 492.7 576.6 653.5 673.9 685.2 698.8 697.4 708.0 By type: 2 Interest-bearing debt 467.8 491.6 575.7 652.5 671.4 684.1 697.6 696.3 707.0 3 Marketable 270.2 282.9 363.2 421.3 430.2 438.1 443.5 447.4 454.9 4 Bills 107.8 119.7 157.5 164.0 154.2 154.3 156.1 156.2 156.7 5 Notes 124.6 129.8 167.1 216.7 231.4 238.1 241.7 245.6 251.1 6 Bonds 37.8 33.4 38.6 40.6 44.7 45.8 45.7 45.7 47.1 7 Nonmarketable2 197.6 208.7 212.5 231.2 241.1 245.9 254.1 248.9 252.1 8 Convertible bonds 3 2.3 2.3 2.3 2.3 2.2 2.2 2.2 2.2 2.2 9 Foreign issues4 26.0 22.8 21.6 22.3 21.5 21.4 21.8 21.1 21.7 10 Savings bonds and notes 60.8 63.8 67.9 72.3 75.2 75.5 75.8 76.2 76.6 11 Govt, account series5 108.0 119.1 119.4 129.7 132.4 136.3 140.1 136.9 138.6 By holder:6 12 U.S. Govt, agencies and trust funds 129.6 141.2 139.3 147.1 148.7 151.9 155.5 13 F.R. Banks 78.5 80.5 87.9 97.0 98.6 98.4 9104.7 14 Private investors 261.7 271.0 349.4 409.5 426.5 434.9 438.6 15 Commercial banks 60.3 55.6 85.1 103.8 100.1 100.0 101.0 16 Mutual savings banks 2.9 2.5 4.5 5.7 6.0 6.0 6.1 17 Insurance companies 6.4 6.1 9.3 12.5 14.1 r14.1 14.5 18 Other corporations 10.9 11.0 20.2 26.5 23.5 24.5 23.9 19 State and local governments 29.2 29.2 33.8 41.6 47.8 52.7 53.5 Individuals: 20 60.3 63.4 67.3 72.0 74.9 75.2 75.6 21 Other securities 16.9 21.5 24.0 28.8 28.4 28.5 28.3 22 Foreign and international7 55.5 58.4 66.5 78.1 90.2 91.9 95.1 23 Other miscellaneous investors8 19.3 23.2 38.6 40.5 41.5 42.1 40.7 1 Includes $1.0 billion of non-interest-bearing debt (of which $611 7 Consists of the investments of foreign balances and international million on Nov. 30, 1977, was not subject to statutory debt limitations). accounts in the United States. Beginning with July 1974, the figures exclude 2 Includes (not shown separately): Securities issued to the Rural non-interest-bearing notes issued to the International Monetary Fund. Electrification Administration and to State and local governments, de- 8 Includes savings and loan associations, nonprofit institutions, corpositary bonds, retirement plan bonds, and individual retirement bonds. porate pension trust funds, dealers and brokers, certain Govt, deposit 3 These nonmarketable bonds, also known as Investment Series B accounts, and Govt.-sponsored agencies. Bonds, may be exchanged (or converted) at the owner's option for 1 l/i 9 Includes a nonmarketable Federal Reserve special certificate for $2.5 per cent, 5-year marketable Treasury notes. Convertible bonds that have billion. been so exchanged are removed from this category and recorded in the notes category above. NOTE.—Gross public debt excludes guaranteed agency securities and, 4 Nonmarketable foreign government dollar-denominated and foreign beginning in July 1974, includes Federal Financing Bank security issues. currency denominated series. Data by type of security from Monthly Statement of the Public Debt of 5 Held only by U.S. Govt, agencies and trust funds. the United States (U.S. Treasury Dept.); data by holder from Treasury 6 Data for F.R. Banks and U.S. Govt, agencies and trust funds are Bulletin. actual holdings; data for other groups are Treasury estimates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Federal Finance A33 1.43 U.S. GOVERNMENT MARKETABLE SECURITIES Ownership, by maturity Par value; millions of dollars, end of period 1977 1977 TTyyppee ooff hhoollddeerr 1975 1976 1975 1976 Sept. Oct. Sept. Oct. All maturities 1 to 5 years 1 All holders 363,191 421,276 443,508 447,435 112,270 141,132 148,428 149,820 2 U.S. Govt, agencies and trust funds 19,397 16,485 14,619 14,548 7,058 6,141 5,931 5,921 3 F. R. Banks 87,934 96,971 102,215 94,597 30,518 31,249 29,178 28,155 255,860 307,820 326,674 338,290 74,694 103,742 113,319 115,744 5 Commercial banks 64,398 IS,262 75,132 73,127 29,629 40,005 39,724 38,493 3,300 4,072 4,422 4,393 1,524 2,010 2,144 2,109 7,565 10,284 11,533 11,576 2,359 3,885 4,282 4,285 9,365 14,193 11,126 10,305 1,967 2,618 2,518 2,821 9 Savings and loan associations 2,793 4,576 5,179 5,138 1,558 2,360 2,758 2,725 9,285 12,252 16,960 16,524 1,761 2,543 4,221 3,930 11 All others 159,154 184,182 202,322 217,227 35,894 50,321 57,672 61,381 Total, within 1 year 5 to 10 years 12 All holders 199,692 211,035 217,917 217,765 26,436 43,045 45,872 48,599 13 U.S. Govt, agencies and trust funds 2,769 2,012 951 890 3,283 2,879 2,139 2,139 14 F. R. Banks 46,845 51,569 55,637 49,176 6,463 9,148 10,666 10,547 150,078 157,454 161,329 167,699 16,690 31,018 33,067 35,913 16 Commercial banks 29,875 31,213 28,109 26,572 4,071 6,278 6,504 7,164 983 1,214 1,334 1,335 448 567 640 655 18 Insurance companies 2,024 2,191 2,116 2,103 1,592 2,546 3,066 3,135 19 Nonfinancial corporations 7,105 11,009 7,979 6.867 175 370 375 367 914 1,984 2,198 2,177 216 155 149 161 5,288 6,622 9,111 8,493 782 1,465 1,257 1,325 22 All others 103,889 103,220 110,483 120,153 9,405 19,637 21,076 23,104 Bills, within 1 year 10 to 20 years 23 All holders 157,483 163,992 156,091 156,174 14,264 11,865 13,001 12,975 24 U.S. Govt, agencies and trust funds 207 449 182 112 4,233 3,102 3,102 3,102 25 F. R. Banks 38,018 41,279 42,256 36,240 1,507 1,363 1,471 1,467 119,258 122,264 113,654 119,822 8,524 7,400 8,428 8,406 27 Commercial banks 17,481 17,303 10,556 9,549 552 339 480 490 554 454 438 444 232 139 204 152 1,513 1,463 1,128 1,171 1,154 1,114 1,276 1,253 30 Nonfinancial corporations 5,829 9,939 5,875 5,239 61 142 131 136 31 Savings and loan associations 518 1,266 1,041 976 82 64 58 57 32 State and local governments 4,566 5,556 7,481 6,876 896 718 857 918 33 All others 88,797 86,282 87,135 95,566 5,546 4,884 5,431 5,400 Other, within 1 year Over 20 years 34 All holders 42,209 47,043 61,826 61,592 10,530 14,200 18,288 18,276 2,562 1,563 769 779 2,053 2,350 2,495 2,495 8,827 10,290 13,381 12,936 2,601 3,642 5,262 5,252 30,820 35,190 47,675 47,877 5,876 8,208 10,531 10,529 12,394 13,910 17,553 17,023 271 427 315 409 429 760 896 890 112 143 110 142 511 728 987 931 436 548 793 800 41 Nonfinancial corporations 1,276 1,070 2,104 1,628 57 55 123 114 42 Savings and loan associations 396 718 1,157 1,201 22 13 16 18 722 1,066 1,630 1,617 558 904 1,513 1,858 44 All others 15,092 16,938 23,348 24,587 4,420 6,120 7,660 7,189 NOTE.—Direct public issues only. Based on Treasury Survey of Owner- banks, 466 mutual savings banks, and 728 insurance companies, each ship from Treasury Bulletin (U.S. Treasury Dept.). about 90 per cent; (2) 440 nonfinancial corporations and 486 savings Data complete for U.S. Govt, agencies and trust funds and F.R. Banks, and loan assns., each about 50 per cent; and (3) 496 State and local but data for other groups include only holdings of those institutions govts., about 40 per cent. that report. The following figures show, for each category, the number "All others," a residual, includes holdings of all those not reporting and proportion reporting as of Oct. 31, 1977; (1) 5,490 commercial in the Treasury Survey, including investor groups not listed separately. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A34 Domestic Nonfinancial Statistics • December 1977 1.44 U.S. GOVERNMENT SECURITIES DEALERS Transactions Par value; averages of daily figures, in millions of dollars 1977 1977, week ending Wednesday— Item 1974 1975 1976 Aug. Sept. Oct. Oct. 12 Oct. 19 Oct. 26 Nov. 2 Nov. 9 Nov. 16 1 U.S. Govt, securities 3,579 6,027 10,449 10,288 9,987 11,231 11,569 12,686 10,539 12,039 10,889 13,207 By maturity: 2 Bills 2,550 3,889 6,676 6,208 6,391 6,916 6,664 8,041 6,862 6,349 5,642 8,205 3 Other within 1 year 250 223 210 339 211 291 234 242 307 382 246 236 4 1-5 years 465 1,414 2,317 2,216 2,267 2,355 2,223 2,569 2,029 3,236 2,095 2,423 5 5-10 years 256 363 1,019 1,079 785 1,320 2,033 1,470 1,011 1,658 1,802 1,588 6 Over 10 years 58 138 229 446 334 348 415 363 330 414 1,104 755 By type of customer: 7 U.S. Govt, securities dealers 652 885 1,360 1,106 1,190 1,195 1,195 1,267 1,239 973 1,002 1,175 8 U.S. Govt, securities brokers 965 1,750 3,407 3,439 3,516 4,204 4,673 4,770 3,940 4,482 3,947 4,877 9 Commercial banks 998 1,451 2,426 '2,274 2,017 2,126 2,096 2,381 1,853 2,358 1,992 2,588 10 All others1 964 1,941 3,257 3,469 3,265 3,705 3,605 4,268 3,507 4,225 3,948 4,567 11 Federal agency securities.... 965 1,043 1,548 1,863 n ,60i 1,733 '2,425 f1,700 1,608 1,524 1,300 2,390 1 Includes—among others—all other dealers and brokers in commodi- Transactions are market purchases and sales of U.S. Govt, securities ties and securities, foreign banking agencies, and the F.R. System. dealers reporting to the F.R. Bank of New York. The figures exclude allotments of, and exchanges for, new U.S. Govt, securities, redemptions NOTE.—Averages for transactions are based on number of trading days of called or matured securities, or purchases or sales of securities under in the period. repurchase, reverse repurchase (resale), or similar contracts. 1.45 U.S. GOVERNMENT SECURITIES DEALERS Positions and Sources of Financing Par value; averages of daily figures, in millions of dollars 1977 1977, week ending Wednesday— IItteemm 11997744 11997755 11997766 Aug. Sept. Oct. Sept. 21 Sept. 28 Oct. 5 Oct. 12 Oct. 19 Oct. 26 Positions2 1 U.S. Govt, securities 2,580 5,884 7,592 2,951 5,011 3,913 5,671 4,056 3,356 3,789 3,536 4,701 2 Bills 1,932 4,297 6,290 3,883 5,323 4,283 6,359 4,318 4,132 4,005 4,032 4,847 3 Other within 1 year -6 265 188 -191 13 11 -49 48 26 68 10 -37 4 1-5 years 265 886 515 -661 -378 -233 -763 -257 -632 -630 -261 226 5 5-10 years 302 300 402 -79 -41 -84 -18 -124 -160 350 -182 -238 6 Over 10 years 88 136 198 93 -64 142 72 -10 -3 -63 -97 -1 7 Federal agency securities.... 1,212 943 729 522 r648 637 716 710 542 528 723 699 Sources of financing3 8 All sources 3,977 6,666 8,715 8,738 10,424 8,362 11,027 9,109 8,202 8,369 8,341 8,463 Commercial banks: 9 New York City 1,032 1,621 1,896 808 922 876 1,342 452 763 1,473 469 859 10 Outside New York City... 1,064 1,466 1,660 1,824 2,365 1,954 2,876 2,180 1,876 2,050 2,243 1,682 11 Corporations1 459 842 1,479 2,347 2,663 2,469 2,572 2,036 1,968 2,137 2,560 2,877 12 All others 1,423 2,738 3,681 3,759 4,473 3,063 4,237 r4,441 3,595 2,710 3,069 3,046 1 All business corporations except commercial banks and insurance firms and dealer departments of commercial banks against U.S. Govt, companies. and Federal agency securities (through both collateral loans and sales 2 Net amounts (in terms of par values) of securities owned by nonbank under agreements to repurchase), plus internal funds used by bank dealer dealer firms and dealer departments of commercial banks on a commit- departments to finance positions in such securities. Borrowings against ment, that is, trade-date basis, including any such securities that have been securities held under agreement to resell are excluded where the borrowing sold under agreements to repurchase. The maturities of some repurchase contract and the agreement to resell are equal in amount and maturity, agreements are sufficiently long, however, to suggest that the securities that is, a matched agreement. involved are not available for trading purposes. Securities owned, and hence dealer positions, do not include securities purchased under agree- NOTE.—Averages for positions are based on number of trading days ments to resell. in the period; those for financing, on the number of calendar days in the 3 Total amounts outstanding of funds borrowed by nonbank dealer period. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Federal Finance A35 1.46 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1977 Agency 1975 1976 Apr. May June July Aug. Sept. 1 Federal and Federally sponsored agencies. 89,381 97,680 103,325 105,579 105,823 107,152 108,243 107,868 108,379 2 Federal agencies 12 J19 19,046 21,896 22,462 22,316 22,220 22,232 22,322 23,055 3 Defense Department1 1,312 1,220 1,113 1,068 1,059 1,044 1,035 1,024 1,016 4 Export-Import Bank 2,3 2,893 7,188 7,801 8,610 8,596 8,742 8,742 8,742 9,246 5 Federal Housing Administration4 440 564 575 598 594 588 583 579 579 6 Government National Mortgage Association participation certificates 5 4,280 4,200 4,120 3,803 3,803 3,803 3,768 3,768 3,768 7 Postal Service 6 721 1,750 2,998 2,998 2,856 2,431 2,431 2,431 2,431 8 Tennessee Valley Authority 3,070 3,915 5,185 5,155 5,175 5,370 5,410 5,490 5,705 9 United States Railway Association6 3 209 104 230 233 242 263 288 310 10 Federally sponsored agencies., 76,662 78,634 81,429 83,117 84,248 84,932 86,011 85,546 85,324 11 Federal home loan banks 21,890 18,900 16,811 16,678 16,851 16,921 17,328 17,196 17,162 12 Federal Home Loan Mortgage Corporation. 1,551 1,550 1,690 957 rl ,698 1,698 1,698 1,686 1,686 13 Federal National Mortgage Association 28,167 29,963 30,565 30,684 30,843 31,378 31,566 31,301 31,491 14 Federal land banks 12,653 15,000 17,127 18,137 18,137 18,137 18,719 18,719 18,719 15 Federal intermediate credit banks 8,589 9,254 10,494 10,990 11,174 11,418 11,654 11,786 11,693 16 Banks for cooperatives. 3,589 3,655 4,330 5,254 5,113 4,948 4,604 4,356 4,061 17 Student Loan Marketing Association? 220 310 410 415 430 430 440 500 510 18 Other 3 2 2 2 2 2 2 2 2 MEMO ITEMS : 19 Federal Financing Bank debt6,8 4,474 17,154 28,711 30,823 31,007 30,820 32,443 33,800 35,418 Lending to Federal and Federally sponsored agencies: 20 Export-Import Bank3 4,595 5,208 5,273 5,273 5,420 5,420 5,420 5,924 21 Postal Service6 500 1,500 2,748 2,748 2,606 2,181 2,181 2,181 2,181 22 Student Loan Marketing Association7 220 310 410 415 430 430 440 500 510 23 Tennessee Valley Authority 895 1,840 3,110 3,330 3,350 3,545 3,585 3,665 3,880 24 United States Railway Association6 3 209 104 230 233 242 263 288 310 Other lending:9 25 Farmers Home Administration 2,500 7,000 10,750 11,750 12,250 12,900 13,650 14,465 14,615 26 Rural Electrification Administration. 566 1,415 1,806 1,864 2,042 2,105 2,184 2,382 27 Other 356 1,134 4,966 5,271 5,001 4,060 4,799 5,097 5,616 1 Consists of mortgages assumed by the Defense Department between 7 Unlike other Federally sponsored agencies, the Student Loan 1957 and 1963 under family housing and homeowners assistance programs. Marketing Association may borrow from the Federal Financing Bank 2 Includes participation certificates reclassified as debt beginning (FFB) since its obligations are guaranteed by the Department of Health, Oct. 1, 1976. Education, and Welfare. 3 Off-budget Aug. 17,1974, through Sept. 30,1976; on-budget thereafter. 8 The FFB, which began operations in 1974, is authorized to purchase 4 Consists of debentures issued in payment of Federal Housing Ad- or sell obligations issued, sold, or guaranteed by other Federal agencies. ministration insurance claims. Once issued, these securities may be sold Since FFB incurs debt solely for the purpose of lending to other agencies, privately on the securities market. its debt is not included in the main portion of the table in order to avoid 5 Certificates of participation issued prior to fiscal 1969 by the Govern- double counting. ment National Mortgage Association acting as trustee for the Farmers 9 Includes FFB purchases of agency assets and guaranteed loans; Home Administration; Department of Health, Education, and Welfare; the latter contain loans guaranteed by numerous agencies with the Department of Housing and Urban Development; Small Business Ad- guarantees of any particular agency being generally small. The Farmers ministration; and the Veterans Administration. Home Administration item consists exclusively of agency assets, while the 6 Off-budget. Rural Electrification Administration entry contains both agency assets and guaranteed loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A36 Domestic Nonfinancial Statistics • December 1977 1.47 NEW SECURITY ISSUES State and Local Government and Corporate Millions of dollars 1977 Type of issue or issuer, 1974 1975 1976 or use Mar. Apr. May June July Aug. State and local government 1 All issues, new and refunding 1 24,315 30,607 35,313 4,140 3,566 4,308 5,347 By type of issue: 2 General obligation 13,563 16,020 18,040 1,812 1,701 2,032 2,265 3 Revenue 10,212 14,511 17,140 2,323 1,862 2,272 3,079 4 Housing Assistance Administration 2 461 5 U.S. Govt, loans 79 76 133 By type of issuer: 6 State 4,784 7,438 7,054 705 769 875 1,476 7 Special district and statutory authority 8.638 12,441 15,304 1,818 1,388 1,836 1,873 8 Municipalities, counties, townships, school districts 10,817 10,660 12,845 1,612 1,407 1,593 1.994 9 Issues for new capital, total 23,508 29,495 32,108 3,209 2,939 3,781 4,456 By use of proceeds: 10 Education 4,730 4,689 4,900 472 249 497 807 11 Transportation 1,712 2,208 2,586 180 119 508 218 12 Utilities and conservation 5,634 7,209 9,594 804 703 1,235 1,202 13 Social welfare 3,820 4,392 6,566 600 658 438 816 14 Industrial aid 494 445 483 38 42 130 23 15 Other purposes 7,118 10,552 7,979 1,115 1,168 973 1.390 Corporate 16 All issues 3 38,313 53,619 53,356 5,495 3,639 3,735 5,321 4,074 3,322 17 Bonds 32,066 42,756 42,262 4,300 3,048 2,487 4,286 -3,379 2,765 By type of offering: 18 Public 25,903 32,583 26,453 2,610 1,961 1,600 2,045 2,360 1,947 19 Private placement 6,160 10,172 15,808 1,690 1,087 887 2,241 1,019 818 By industry group : 20 Manufacturing 9,867 16,980 13,243 1,049 ,128 644 1,006 ,165 932 21 Commercial and miscellaneous. 1,845 2,750 4,361 454 180 112 363 526 380 22 Transportation 1,550 3,439 4,357 243 129 169 25 143 241 23 Public utility 8,873 9,658 8,297 756 602 581 1,237 480 347 24 Communication 3,710 3,464 2,787 808 324 294 371 258 45 25 Real estate and financial 6,218 6,469 9,222 991 684 688 1,284 807 819 26 Stocks 6,247 10,863 11,094 1,195 591 1,248 1,035 695 557 By type: 27 Preferred 2,253 3,458 2,789 520 163 212 332 327 178 28 Common 3,994 7,405 8,305 675 428 1,036 703 368 379 By industry group: 29 Manufacturing 544 1,670 2,237 76 220 176 144 34 30 Commercial and miscellaneous 940 1,470 1,183 114 114 126 437 66 94 31 Transportation 22 24 125 103 100 32 Public utility 3,964 6,235 6,101 842 172 "I *03I 229 363 "M 3 3 3 4 C R o ea m l m es u t n a i te c a a t n io d n f inancial 2 5 1 6 7 2 1,0 4 0 88 2 7 7 7 7 6 1 38 7 1 5 0 84 4 4 5 5 19 3 2 4 7 5 9 1 Par amounts of long-term issues based on date of sale. than $100,000, secondary offerings, undefined or exempted issues as 2 Only bonds sold pursuant to the 1949 Housing Act, which are secured defined in the Securities Act of 1933, employee stock plans, investment by contract requiring the Housing Assistance Administration to make companies other than closed-end, intracorporate transactions, and sales to annual contributions to the local authority. foreigners. 3 Figures, which represent gross proceeds of issues maturing in more SOURCES.—State and local government securities, Securities Industry than 1 year, sold for cash in the United States, are principal amount or Association; corporate securities, Securities and Exchange Commission. number of units multiplied by offering price. Excludes offerings of less Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Corporate Finance A37 1.48 CORPORATE SECURITIES Net Change in Amounts Outstanding Millions of dollars 1975 1976 SSoouurrccee ooff cchhaannggee,, oorr iinndduussttrryy 11997744 11997755 11997766 Q2 Q3 Q4 Q1 Q2 Q3 Q4 All issues1 1 New issues 39,344 53,255 53,123 15,602 9,079 13,363 13,671 14,229 11,385 13,838 2 Retirements 9,935 10,991 12,184 3,211 2,576 3,116 2,315 3,668 2,478 3,723 3 Net change 29,399 42,263 40,939 12,390 6,503 10,24,7 11,356 10,561 8,907 10,115 Bonds and notes 4 New issues 31,354 40,468 38,994 11,460 6,654 9,595 9,404 10,244 8,701 10,645 5 Retirements 6,255 8,583 9,109 2,336 2,111 2,549 1,403 3,159 1,826 2,721 6 Net change: Total 25,098 31,886 29,884 9,124 4,543 7,047 8,001 7,084 6,875 7,924 By industry: 7 Manufacturing 7,404 13,219 8,978 4,574 1,442 2,069 2,966 1,529 1,551 2,932 8 Commercial and other2 1,116 1,605 2,259 483 221 528 203 726 610 720 9 Transportation, including railroad 341 2,165 3,078 429 147 1,588 985 488 1,092 513 10 Public utility 7,308 7,236 6,829 1,977 1,395 1,211 1,820 1,260 2,109 1,640 11 Communication 3,499 2,980 1,687 810 472 429 498 953 335 -99 12 Real estate and financial 5,428 4,682 7,054 852 866 1,222 1,530 2,128 1,178 2,218 Common and preferred stock 13 New issues 7,980 12,787 14,129 4,142 2,425 3,768 4,267 3,985 2,684 3,193 14 Retirements 3,678 2,408 3,075 875 465 567 912 509 652 1,002 15 Net change: Total 4,302 10,377 11,055 3,266 1,960 3,200 3,355 3,477 2,032 2,191 By industry: 16 Manufacturing 1177 11,,660077 2,634 500 412 433 838 1,120 744 -68 17 Commercial and other2 -135 1,137 762 490 108 462 88 318 117 239 18 Transportation, including railroad -20 65 96 7 53 4 5 25 17 49 19 Public utility 3,834 6,015 6,171 1,866 1,043 1,537 2,174 1,300 932 1,765 20 Communication 398 1,084 854 359 97 604 47 735 19 53 21 Real estate and financial 207 468 538 43 247 160 203 -21 203 153 1 Excludes issues of investment companies. New issues and retirements exclude foreign sales and include sales of 2 Extractive and commercial and miscellaneous companies. securities held by affiliated companies, special offerings to employees, new stock issues, and cash proceeds connected with conversions of bonds NOTE.—Securities and Exchange Commission estimates of cash trans- into stocks. Retirements, defined in the same way, include securities actions only, as published in the Commission's Statistical Bulletin. retired with internal funds or with proceeds of issues for that purpose. 1.49 OPEN-END INVESTMENT COMPANIES Net Sales and Asset Position Millions of dollars 1977 IItteemm 11997755 11997766 Apr. May June July Aug. Sept. Oct. INVESTMENT COMPANIES excluding money market funds 1 Sales of own shares1 3,302 4,226 558 421 639 573 501 558 542 2 Redemptions of own shares2 3,686 6,802 468 531 510 515 493 469 519 3 Net sales -384 2,496 63 -110 129 58 8 89 23 4 Assets3 42,179 47,537 44,862 44,403 46,255 45,651 45,038 45,046 43,435 5 Cash position4 3,748 2,747 2,776 2,859 2,901 3,068 3,135 3,403 3,481 6 Other 38,431 44,790 42,086 41,544 43,354 42,583 41,903 41,643 39,954 1 Includes reinvestment of investment income dividends. Excludes 4 Also includes all U.S. Govt, securities and other short-term debt reinvestment of capital gains distributions and share issue of conversions securities. from one fund to another in the same group. 2 Excludes share redemption resulting from conversions from one fund NOTE.—Investment Company Institute data based on reports of memto another in the same group. bers, which comprise substantially all open-end investment companies 3 Market value at end of period, less current liabilities. registered with the Securities and Exchange Commission. Data reflect newly formed companies after their initial offering of securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A38 Domestic Nonfinancial Statistics • December 1977 1.50 CORPORATE PROFITS AND THEIR DISTRIBUTION Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1976 1977 AAccccoouunntt 11997744 11997755 11997766 QI Q2 Q3 Q4 Ql Q2 Q3p 1 Profits before tax 126.9 123.5 156.9 153.5 159.2 159.9 154.8 161.7 174.0 171.6 2 Profits tax liability 52.4 50.2 64.7 63.1 66.1 65.9 63.9 64.4 69.7 67.9 3 Profits after tax 74.5 73.3 92.2 90.4 93.1 94.0 90.9 97.3 104.3 103.7 4 Dividends 31.0 32.4 35.8 33.6 35.0 36.0 38.4 38.5 40.3 42.3 5 Undistributed profits 43.5 40.9 56.4 56.8 58.1 58.0 52.5 58.8 64.0 61.4 6 Capital consumption allowances 81.6 89.5 97.2 94.1 95.9 98.2 100.4 102.0 103.5 105.8 7 Net cash flow 125.1 130.4 153.6 150.9 154.0 156.2 152.9 160.8 167.5 167.2 SOURCE.—Survey of Current Business (U.S. Dept. of Commerce). 1.51 NONFINANCIAL CORPORATIONS Current Assets and Liabilities Billions of dollars, end of period 1976 1977 AAccccoouunntt 11997722 11997733 11997744 11997755 Ql Q2 Q3 Q4 Ql Q2 1 Current assets 574.4 643.2 712.2 731.6 753.5 775.4 791.8 816.8 845.3 874.7 2 Cash 57.5 61.6 62.7 68.1 68.4 70.8 71.1 77.0 75.0 77.9 3 U.S. Govt, securities 10.2 11.0 11.7 19.4 21.7 23.3 23.9 26.4 27.3 24.1 4 Notes and accounts receivable 243.4 269.6 293.2 298.2 310.9 321.8 328.5 328.2 346.6 361.4 5 U.S. Govt.1 3.4 3.5 3.5 3.6 3.6 3.7 4.3 4.3 4.7 4.8 6 Other 240.0 266.1 289.7 294.6 307.3 318.1 324.2 323.9 342.0 356.6 7 Inventories 215.2 246.7 288.0 285.8 288.8 295.6 302.1 315.4 322.1 332.5 8 Other 48.1 54.4 56.6 60.0 63.6 63.9 66.3 69.8 74.3 78.8 9 Current liabilities 352.2 401.0 450.6 457.5 465.9 475.9 484.1 499.9 516.6 532.0 10 Notes and accounts payable 234.4 265,9 292.7 288.0 286.9 293.8 291.7 302.9 309.0 318.9 11 U.S. Govt.1 4.0 4.3 5.2 6.4 6.4 6.8 7.0 7.0 6.8 5.7 12 Other 230.4 261.6 287.5 281.6 280.5 287.0 284.7 295.9 302.2 313.2 13 Accrued Federal income taxes 15.1 18.1 23.2 20.7 23.9 22.0 24.9 26.8 28.6 24.5 14 Other 102.6 117.0 134.8 148.8 155.0 160.1 167.5 no.2 179.0 188.6 15 Net working capital 222.2 242.3 261.5 274.1 287.6 299.5 307.7 316.9 328.7 342.8 l Receivables from, and payables to, the U.S. Govt, exclude amounts SOURCE.—Estimates published in Statistical Bulletin (Securities and offset against each other on corporations' books. Exchange Commission). 1.52 BUSINESS EXPENDITURES on New Plant and Equipment Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1975 1976 1977 IInndduussttrryy 11997766 Q4 Ql Q2 Q3 Q4 Ql Q2 Q32 Q42 1 All industries 120.82 111.80 114.72 118.12 122.55 125.22 130.16 134.24 138.43 142.02 Manufacturing 2 Durable goods industries 23.50 21.07 21.63 22.54 24.59 25.50 26.30 27.26 27.96 29.74 3 Nondurable goods industries 29.22 25.75 27.58 28.09 30.20 28.93 30.13 32.19 33.40 34.58 Nonmanufacturing 4 Mining 3.98 3.82 3.83 3.83 4.21 4.13 4.24 4.49 4.52 4.54 Transportation: 5 Railroad 2.35 2.39 2.08 2.64 2.69 2.63 2.71 2.57 2.74 3.19 6 Air 1.31 1.65 1.18 1.44 1.12 1.41 1.62 1.43 1.84 2.05 7 Other 3.56 3.56 3.29 4.16 3.44 3.49 2.96 2.96 2.18 1.72 Public utilities: 8 Electric 18.90 17.92 18.56 18.82 18.22 19.49 21.19 21.14 22.24 22.72 9 Gas and other 3.47 3.00 3.36 3.03 3.45 3.96 4.16 4.16 4.47 4.78 10 Communication 12.93 12.22 12.54 12.62 13.64 14.30 14.19 15.32 11 Commercial and other1 20.87 20.44 20.68 20.94 20.99 21.36 22.67 22.73 > 39.08 38.70 1 Includes trade, service, construction, finance, and insurance. agriculture; real estate operators; medical, legal, educational, and cultural 2 Anticipated by business. service; and nonprofit organizations. NOTE.—Estimates for corporate and noncorporate business, excluding SOURCE.—Survey of Current Business (U.S. Dept. of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Corporate Finance A39 1.521 DOMESTIC FINANCE COMPANIES Assets and Liabilities Billions of dollars, end of period 1976 1977 AAccccoouunntt 11997722 11997733 11997744 11997755 Q2 Q3 Q4 Ql Q2 Q3 ASSETS Accounts receivable, gross 1 Consumer 31.9 35.4 36.1 36.0 36.7 37.6 38.6 39.2 40.7 42.3 2 Business 27.4 32.3 37.2 39.3 42.4 42.4 44.7 47.5 50.4 50.6 3 Total 59.3 67.7 73.3 75.3 79.2 80.0 83.4 86.7 91.2 92.9 4 LESS : Reserves for unearned income and losses 7.4 8.4 9.0 9.4 9.8 10.2 10.5 10.6 11.1 11.7 5 Accounts receivable, net 51.9 59.3 64.2 65.9 69.4 69.9 72.9 76.1 80.1 81.2 6 Cash and bank deposits 2.8 2.6 3.0 2.9 2.7 2.6 2.6 2.7 2.5 2.5 7 Securities .9 .8 .4 1.0 .8 1.2 1.1 1.0 1.2 1.8 8 All other 10.0 10.6 12.0 11.8 12.4 12.7 12.6 13.0 13.7 14.2 9 Total assets 65.6 73.2 79.6 81.6 85.3 86.4 89.2 92.8 97.5 99.6 LIABILITIES 10 Bank loans 5.6 7.2 9.7 8.0 6.9 5.5 6.3 6.1 5.7 5.4 11 Commercial paper 17.3 19.7 20.7 22.2 22.2 21.7 23.7 24.8 27.5 25.7 Debt: 12 Short-term, n.e.c 4.3 4.6 4.9 4.5 5.0 5.2 5.4 4.5 5.5 5.4 13 Long-term, n.e.c 22.7 24.6 26.5 27.6 30.1 31.0 32.3 34.0 35.0 34.8 14 Other 4.8 5.6 5.5 6.8 7.8 9.5 8.1 9.5 9.4 13.7 15 Capital, surplus, and undivided profits 10.9 11.5 12.4 12.5 13.2 13.4 13.4 13.9 14.4 14.6 16 Total liabilities and capital 65.6 73.2 79.6 81.6 85.3 86.4 89.2 92.8 97.5 99.6 NOTE.—Components may not add to totals due to rounding. 1.522 DOMESTIC FINANCE COMPANIES Business Credit Millions of dollars, seasonally adjusted except as noted Changes in accounts Extensions Repayments AAAccccccooouuunnntttsss receivable during— rrreeeccceeeiiivvvaaabbbllleee TTTyyypppeee ooouuutttssstttaaannnddd--iiinnnggg OOOcccttt... 333111,,, 1977 1977 1977 111999777777111 Aug. Sept. Oct. Aug. Sept. Oct. Aug. Sept. Oct. 1 Total 52,757 1,968 -240 1,522 13,218 11,702 12,461 11,250 11,942 10,939 2 Retail automotive (commercial vehicles) 11,474 269 239 152 1,022 1,004 942 753 765 790 3 Wholesale automotive 1100,,666677 11,,118877 -960 741 66,,332211 4,233 55,,448888 5,134 5,193 4,747 4 Retail paper on business, industrial, and farm equipment 14,113 296 369 415 805 1,097 1,096 509 728 681 5 Loans on commercial accounts receivable... 3,933 -2 19 -128 2,270 2,499 2,032 2,272 2,480 2,160 6 Factored commercial accounts receivable 2,329 17 -58 248 1,429 1,477 1,506 1,412 1,535 1,258 7 All other business credit 10,241 201 151 94 1,371 1,392 1,397 1,170 1,241 1,303 1 Not seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A40 Domestic NonfinancialS tatistics • December 1977 1.53 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1977 Item 1974 1975 1976 May June July Aug. Sept. Oct. Terms and yields in primary and secondary markets PRIMARY MARKETS Conventional mortgages on new homes Terms:1 1 40.1 44.6 48.4 52.8 53.1 53.7 54.9 r56.0 54.9 2 Amount of loan (thous. dollars) 29.8 33.3 35.9 39.9 39.5 40.0 40.8 r41.7 40.3 3 Loan/price ratio (per cent) 74.3 74.7 74.2 77.4 76.0 76.2 76.5 r76.3 76.3 4 Maturity (years) 26.3 26.8 27.2 27.9 27.2 27.9 28.2 28.2 27.7 5 Fees and charges (per cent of loan amount)2. 1.30 1.54 1.44 1.34 1.25 1.31 1.30 1.34 1.36 6 8.71 8.75 8.76 8.74 8.78 8.79 8.81 8.82 8.85 Yield (per cent per annum): 7 FHLBB series3 8.92 9.01 8.99 88..9966 8.98 9.00 9.02 9.04 9.07 8 HUD series4 9.22 9.10 8.99 8.95 9.00 9.00 9.00 9.00 9.00 SECONDARY MARKETS Yields (per cent per annum) on— q 9.55 9.19 8.82 8.74 8.74 8.74 8.72 8.78 10 8.72 8.52 8.17 8.04 7.95 7.95 8.03 8.03 8.16 FN MA auctions:7 11 Government-underwritten loans 9.31 9.26 8.99 8.74 8.75 8.72 8.76 8.74 8.82 12 Conventional loans 9.43 9.37 9.11 9.08 9.12 9.07 9.06 9.05 9.10 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 13 Total 29,578 3311,,882244 3322,,990044 3333,,558800 33,918 33,954 34,029 34,149 34,123 14 FHA-insured 19,189 19,732 18,916 18,939 18,974 18,887 18,785 18,704 18,602 15 VA-guaranteed 8,310 9,573 9,212 9,399 9,509 9,449 9,388 9,344 9,287 16 Conventional 2,080 2,519 4,776 5,241 5,435 5,618 5,866 6,100 6,234 Mortgage transactions (during period) 17 Purchases 6,953 4,263 3,606 947 656 322 405 385 251 1188 Sales 4 2 8866 7 Mortgage commitments:8 19 Contracted (during period) 10,765 6,106 6,247 11,,445522 999 357 531 364 897 20 Outstanding (end of period) 7,960 4,126 3,398 5,773 5,854 5,062 4,717 3,522 3,702 Auction of 4-month commitments to buy— Government-underwritten loans: 21 Offered 9 5,462.6 7,042.6 4,929.8 1,842.8 278.9 206.4 314.9 112.9 613.2 22 2,371.4 3,848.3 2,787.2 1,027.4 127.8 131.4 221.4 75.4 400.5 Conventional loans: 23 Offered 9 1,195.4 1,401.3 2,595.7 1,164.6 371.1 286.8 370.2 246.4 758.1 24 Accepted 656.5 765.0 1,879.2 751.7 263.0 184.4 236.7 184.4 529.0 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)10 25 Total 4,586 4,987 44,,226699 33,,228855 33,,338899 3,483 3,424 3,376 33,,440022 26 FHA/VA 1,904 1,824 1,618 1,523 1,502 1,481 1,463 1,443 1,424 27 2,682 3,163 2,651 1,763 1,887 2,001 1,961 1,933 1,978 Mortgage transactions (during period) 28 Purchases 2,191 1,716 11,,117755 331100 379 236 r455 479 428 29 Sales 52 1,020 1,396 329 336 79 r4 79 386 354 Mortgage commitments:11 30 Contracted (during period) 4,553 982 1,477 525 511 511 567 547 3311 Outstanding (end of period) 22,,339900 111111 333 1,314 11,,229933 11,,335500 11,,335522 11,,335533 1 Weighted averages based on sample surveys of mortgages originated securities, assuming prepayment in 12 years on pools of 30-year FHA/VA by major institutional lender groups. Compiled by the Federal Home Loan mortgages carrying the prevailing ceiling rate. Monthly figures are Bank Board in cooperation with the Federal Deposit Insurance Cor- unweighted averages of Monday quotations for the month. poration. 7 Average gross yields (before deduction of 38 basis points for mortgage 2 Includes all fees, commissions, discounts, and "points" paid (by servicing) on accepted bids in Federal National Mortgage Association's the borrower or the seller) in order to obtain a loan. auctions of 4-month commitments to purchase home mortgages, assuming 3 Average effective interest rates on loans closed, assuming prepayment prepayment in 12 years for 30-year mortgages. No adjustments are made at the end of 10 years. for FN MA commitment fees or stock related requirements. Monthly 4 Average contract rates on new commitments for conventional first figures are unweighted averages for auctions conducted within the month. mortgages, rounded to the nearest 5 basis points; from Dept. of Housing 8 Includes some multifamily and nonprofit hospital loan commitments and Urban Development. in addition to 1- to 4-family loan commitments accepted in FNMA's 5 Average gross yields on 30-year, minimum-downpayment, Federal free market auction system, and through the FNMA-GNMA Tandem Housing Administration-insured first mortgages for immediate delivery plans. in the private secondary market. Any gaps in data are due to periods of 9 Mortgage amounts offered by bidders are total bids received. adjustment to changes in maximum permissible contract rates. 10 Includes participations as well as whole loans. 6 Average net yields to investors on Government National Mortgage 11 Includes conventional and Government-underwritten loans. Association-guaranteed, mortgage-backed, fully-modified pass-through Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Real Estate Debt A41 1.54 MORTGAGE DEBT OUTSTANDING Millions of dollars, end of period 1976 1977 Type of holder, and type of property 11997722 11997733 1974 1975 Q4 Ql Q2 Q3 1 All holders 603,417 682,321 742,512 801,537 R889,062 '912,528 947,196 983,565 2 1- to 4-family 372,154 416,211 449,371 490,761 r556,344 '572,709 599,219 626,333 3 Multifamily 82,840 93,132 99,976 100,601 r104,269 '105,586 105,902 107,850 4 Commercial 112,665 131,725 146,877 159,298 '171,399 '174,937 180,260 185,526 5 Farm 35,758 41,253 46,288 50,877 '57,050 '59,296 61,815 63,856 6 Major financial institutions 450,000 505,400 542,560 581,193 '647,650 '662,390 688,798 715,168 7 Commercial banks1 99,314 119,068 132,105 136,186 r151,326 r154,628 161,128 168,528 8 1- to 4-family 57,004 67,998 74,758 77,018 '86,234 '88,116 91,820 96,039 9 Multifamily 5,778 6,932 7,619 5,915 '8,082 '8,258 8,605 9,000 10 Commercial 31,751 38,696 43,679 46,882 '50,289 '51,388 53,548 56,008 11 Farm 4,781 5,442 6,049 6,371 '6,721 '6,866 7,155 7,481 12 Mutual savings banks 67,556 73,230 74,920 77,249 ' 81,639 82,273 84,051 86,103 13 1- to 4-family 46,229 48,811 49,213 50,025 '53,089 '53,502 54,658 55,993 14 Multifamily 10,910 12,343 12,923 13,792 '14,177 '14,291 14,600 14,956 15 Commercial 10,355 12,012 12,722 13,373 '14,313 '14,422 14,734 15,094 16 Farm 62 64 62 59 '60 58 59 60 17 Savings and loan associations 206,182 231,733 249,301 278,590 323,130 333,703 350,765 366,975 18 1- to 4-family 166,410 187,078 200,987 223,903 260,895 '269,932 284,541 298,122 19 Multifamily 21,051 22,779 23,808 25,547 28,436 '29,199 30,517 31,863 20 Commercial 18,721 21,876 24,506 29,140 33,799 '34,572 35,707 36,990 21 Life insurance companies 76,948 81,369 86,234 89,168 91,555 91,786 92,854 93,562 22 1- to 4-family 22,315 20,426 19,026 17,590 16,088 15,699 15,418 15,533 23 Multifamily 17,347 18,451 19,625 19,629 19,178 18,921 18,891 19,033 24 Commercial 31,608 36,496 41,256 45,196 48,864 49,526 50,405 50,790 25 Farm 5,678 5,996 6,327 6,753 7,425 7,640 8,140 8,206 26 Federal and related agencies 40,157 46,721 58,320 66,891 66,753 '67,066 68,301 69,135 27 Government National Mortgage Assn. 5,113 4,029 4,846 7,438 4,241 4,013 3,912 3,599 28 1-to 4-family 2,513 1,455 2,248 4,728 1,970 1,670 1,654 1,522 29 Multifamily 2,600 2,574 2,598 2,710 2,271 2,343 2,258 2,077 30 Farmers Home Admin 1,019 1,366 1,432 1,109 1,064 500 1,043 1,342 31 1- to 4-family 279 743 759 208 454 98 410 528 32 Multifamily 29 29 167 215 218 28 97 125 33 Commercial 320 218 156 190 72 64 126 162 34 Farm 391 376 350 496 320 310 410 527 35 Federal Housing and Veterans Admin. 3,338 3,476 4,015 4,970 5,150 r5,223 5,222 5,100 36 1-to 4-family 2,199 2,013 2,009 1,990 1,676 '1,730 1,701 1,552 37 Multifamily 1,139 1,463 2,006 2,980 3,474 '3,493 3,521 3,548 38 Federal National Mortgage Assn... . 19,791 24,175 29,578 31,824 32,904 '33,831 33,918 34,148 39 1- to 4-family 17,697 20,370 23,778 25,813 26,934 26,836 27,933 28,178 40 Multifamily 2,094 3,805 5,800 6,011 5,970 6,995 5,985 5,970 41 Federal land banks 9,107 11,071 13,863 16,563 19,125 19,942 20,818 21,523 42 1- to 4-family 13 123 406 549 601 611 628 649 43 Farm 9,094 10,948 13,457 16,014 18,524 19,331 20,190 20,874 44 Federal Home Loan Mortgage Corp.. 1,789 2,604 4,586 4,987 4,269 3,557 3,388 3,423 45 1- to 4-family 1,754 2,446 4,217 4,588 3,889 3,200 2,901 2,931 46 Multifamily 35 158 369 399 380 357 487 492 47 Mortgage pools or trusts2 14,404 18,040 23,799 34,138 49,801 '55,462 58,748 64,398 48 Government National Mortgage Assn. 5,504 7,890 11,769 18,257 30,572 34,260 36,573 41,089 49 1- to 4-family 5,353 7,561 11,249 17,538 29,583 33,190 35,467 39,865 50 Multifamily 151 329 520 719 989 1,070 1,106 1,224 51 Federal Home Loan Mortgage Corp. 441 766 757 1,598 2,671 3,570 4,460 5,294 52 1- to 4-family 331 617 608 1,349 2,282 3,112 3,938 4,675 53 Multifamily 110 149 149 249 389 458 522 619 54 Farmers Home Admin 8,459 9,384 11,273 14,283 16,558 ' 17,632 17,715 18,015 55 1- to 4-family 5,017 5,458 6,782 9,194 10,219 '10,821 10,814 10,996 56 Multifamily 131 138 116 295 532 '786 777 791 57 Commercial 867 1,124 1,473 1,948 2,440 '2,570 2,680 2,726 58 Farm 2,444 2,664 2,902 2,846 3,367 '3,455 3,444 3,502 59 Individuals and others3 98,856 112,160 117,833 119,315 124,858 127,610 131,349 134,864 60 1- to 4-family 45,040 51 ,112 53,331 56,268 62,430 64,192 67,336 69,750 61 Multifamily 21,465 23,982 24,276 22,140 20,173 19,387 18,536 18,152 62 Commercial 19,043 21,303 23,085 22,569 21,622 22,395 23,060 23,756 63 Farm 13,308 15,763 17,141 18,338 20,633 21,636 22,417 23,206 1 Includes loans held by nondeposit trust companies but not bank trust NOTE.—Based on data from various institutional and Govt, sources, departments. with some quarters estimated in part by Federal Reserve in conjunction 2 Outstanding principal balances of mortgages backing securities in- with the Federal Home Loan Bank Board and the Dept. of Commerce. sured or guaranteed by the agency indicated. Separation of nonfarm mortgage debt by type of property, if not re- 3 Other holders include mortgage companies, real estate investment ported directly, and interpolations and extrapolations where required, are trusts, State and local credit agencies, State and local retirement funds, estimated mainly by Federal Reserve. Multifamily debt refers to loans on noninsured pension funds, credit unions, and U.S. agencies for which structures of 5 or more units. amounts are small or separate data are not readily available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A42 Domestic Nonfinancial Statistics • December 1977 1.55 CONSUMER INSTALMENT CREDIT Total Outstanding, and Net Change Millions of dollars 1977 Holder, and type of credit 1974 1975 1976 Apr. May June July Aug. Sept. Oct. Amounts outstanding (end of period) 1 Total 157,454 164,955 185,489 189,720 192,828 196,998 199,971 204,358 207,294 209,141 By holder: 2 Commercial banks 75,846 78,667 89,511 92,377 93,875 96,149 97,794 100,059 101,564 102,504 3 Finance companies 36,087 35,994 38,639 39,561 40,127 40,712 41,398 41,987 42,333 42,704 4 Credit unions 21,895 25,666 30,546 31,912 32,704 33,750 34,122 35,077 35,779 35,993 5 Retailers1 17,933 18,002 19,052 17,734 17,911 18,032 18,137 18,475 18,725 18,961 6 Others2 5,693 6,626 7,741 8,136 8,211 8,355 8,520 8,760 8,894 8,978 By type of credit: 7 Automobile 52,871 55,879 66,116 69,298 70,857 72,829 74,304 76,027 77,207 77,845 8 Commercial banks 30,994 31,553 37,984 40,175 41,060 42,307 43,211 44,262 44,933 45,399 9 Indirect 18,687 18,353 21,176 22,189 22,606 23,258 23,735 24,277 24,717 24,972 10 Direct 12,306 13,200 16,808 17,986 18,453 19,050 19,476 19,985 20,216 20,427 11 Finance companies 10,623 11,155 12,489 12,757 13,023 13,219 13,597 13,783 13,930 13,998 12 Credit unions 10,869 12,741 15,163 15,841 16,234 16,754 16,938 17,412 17,761 17,867 13 Others 386 430 480 525 540 549 558 570 584 581 14 Mobile homes 14,618 14,423 14,572 14,521 14,540 14,627 14,713 14,812 14,880 14,929 15 Commercial banks 8,972 8,649 8,734 8,648 8,680 8,722 8,761 8,794 8,828 8,839 16 Finance companies 3,525 3,451 3,273 3,170 3,149 3,136 3,126 3,114 3,119 3,116 17 Home improvement 8,522 9,405 10,990 11,315 11,507 11,794 12,025 12,329 12,532 12,703 18 Commercial banks 4,694 4,965 5,554 5,626 5,744 5,889 6,022 6,158 6,265 6,377 Revolving credit: 19 Bank credit cards 8,281 9,501 11,351 11,215 11,287 11,563 11,754 12,227 12,651 12,829 20 Bank check credit 2,797 2,810 3,041 3,094 3,148 3,230 3,295 3,409 3,504 3,551 21 Allother 70,364 72,937 79,418 80,277 81,488 82,955 83,880 85,554 86,519 87,283 22 Commercial banks, total, 20,108 21,188 22,847 23,619 23,955 24,437 24,752 25,209 25,383 25,510 23 Personal loans 13,771 14,629 15,669 16,263 16,464 16,749 16,922 17,238 17,373 17,452 24 Finance companies, total 21,590 21,238 22,749 23,506 23,827 24,223 24,538 24,951 25,143 25,448 25 Personal loans 16,985 17,263 18,554 18,938 19,214 19,540 19,808 20,118 20,256 20,498 26 Credit unions 9,174 10,754 12,799 13,371 13,703 14,141 14,297 14,697 14,991 15,081 27 Retailers 17,933 18,002 19,052 17,734 17,911 18,032 18,137 18,475 18,725 18,961 28 Others 1,559 1,755 1,971 2,047 2,092 2,121 2,157 2,221 2,277 2,283 Net change (during period) 3 29 Total 9,280 7,504 20,533 2,898 2,655 2,422 2,464 2,651 2,351 2,626 By holder: 30 Commercial banks 3,975 2,821 10,845 1,462 1,235 1,422 1,150 1,448 1,228 1,315 31 Finance companies 731 -90 2,644 391 460 182 524 321 378 487 32 Credit unions 2,262 3,771 4,880 634 665 519 368 472 458 469 33 Retailers 1 1,538 69 1,050 223 210 144 286 170 144 280 34 Others 2 774 933 1,115 187 84 154 136 240 143 75 By type of credit: 35 Automobile 500 3,007 10,238 1,205 1,247 963 1,069 1,054 1,105 850 36 Commercial banks -508 559 6,431 747 620 745 584 725 714 587 37 Indirect -310 -334 2,823 382 273 365 290 357 466 295 38 Direct -198 894 3,608 364 347 380 294 368 248 292 39 Finance companies -116 532 1,334 134 258 -28 275 65 128 52 40 Credit unions 1,123 1,872 2,422 297 352 244 208 237 228 222 41 Other 2 44 50 27 17 2 2 27 34 -11 42 Mobile homes 1,068 -195 150 65 -6 34 57 55 32 44 43 Commercial banks 632 -323 85 24 12 3 19 3 10 15 44 Finance companies 166 -73 -177 -14 -24 -21 -12 -18 -3 -11 45 Home improvement 1,094 881 1,585 188 133 181 165 183 143 201 46 Commercial banks 611 271 588 72 66 75 76 62 77 115 Revolving credit: 47 Bank credit cards 1,443 1,220 1,850 278 192 238 184 315 279 287 48 Bank check credit 543 14 231 60 103 90 39 60 49 57 49 Allother 4,631 2,577 6,479 1,101 985 916 951 984 743 1,188 50 Commercial banks, total 1,255 1,080 1,659 281 242 271 248 283 99 254 51 Personal loans 898 858 1,040 206 170 180 143 161 56 142 52 Finance companies, total 746 -348 1,509 271 227 226 260 273 251 448 53 Personal loans 486 279 1,290 220 184 185 228 186 223 353 54 Credit unions 948 1,580 2,045 283 258 239 129 200 197 204 55 Retailers 1,538 69 1,050 223 210 144 286 170 144 280 56 Others 145 196 217 43 48 36 28 59 52 2 1 Excludes 30-day charge credit held by retailers, oil and gas companies, NOTE.—Total consumer noninstalment credit outstanding—credit and travel and entertainment companies. scheduled to be repaid in a lump sum, including single-payment loans, 2 Mutual savings banks, savings and loan associations, and auto dealers. charge accounts, and service credit—amounted to $38.7 billion at the 3 Net change equals extensions minus liquidations (repayments, charge- end of 1976, $35.7 billion at the end of 1975, and $33.8 billion at the end ofifs, and other credits); figures for all months are seasonally adjusted. of 1974. Comparable data for Dec. 31, 1977, will be published in the February 1978 BULLETIN. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Consumer Debt A43 1.56 CONSUMER INSTALMENT CREDIT Extensions and Liquidations Millions of dollars 1977 Holder, and type of credit 1974 1975 1976 Apr. May June July Aug. Sept. Extensions 3 1 Total 157,200 164,169 193,328 18,784 18,503 18,810 18,631 19,204 19,164 19,787 By holder: 2 Commercial banks 72,605 77,312 94,220 9,182 9,070 9,232 9,143 9,426 9,442 9,802 3 Finance companies 34,061 31,173 36,028 3,444 3,359 3,444 3,335 3,459 3,514 3,653 4 Credit unions 19,596 24,096 28,587 2,861 2,860 2,769 2,663 2,806 2,773 2,858 5 Retailers1 27,034 27,049 29,188 2,721 2,728 2,806 2,951 2,840 2,860 2,961 6 Others2 3,904 4,539 5,305 576 485 559 540 673 575 512 By type of credit: 7 Automobile 45,429 51,413 62,988 6,106 6,048 6,063 5,966 6,158 6,109 6,083 8 Commercial banks 26,406 28,573 36,585 3,532 3,416 3,527 3,553 3,616 3,640 3,642 9 Indirect 15,576 15,766 19,882 1,888 1,791 1,865 1,905 1,925 2,028 1,976 10 Direct 10,830 12,807 16,704 1,644 1,625 1,661 1,649 1,692 1,612 1,666 11 Finance companies 8,604 9,674 11,209 1,073 1,114 1,099 963 1,036 1,013 989 12 Credit unions 10,015 12,683 14,675 1,431 1,457 1,390 1,402 1,434 1,376 1,414 13 Others 404 483 518 70 60 47 48 72 80 38 14 Mobile homes 5,782 4,323 4,841 479 415 420 455 479 424 457 15 Commercial banks 3,486 2,622 3,071 285 275 244 267 267 261 270 16 Finance companies 1,376 764 690 58 50 48 55 55 51 61 17 Home improvement 5,211 5,556 6,736 668 636 686 671 733 679 718 18 Commercial banks 2,789 2,722 3,245 317 317 328 330 332 340 373 Revolving credit: 19 Bank credit cards 17,098 20,428 25,862 2,576 2,621 2,640 2,566 2,711 2,847 2,973 20 Bank check credit A,221 4,024 4,783 475 506 521 499 510 485 487 21 Allother 79,453 78,425 88,117 8,480 8,277 8,480 8,476 8,612 8,620 9,067 22 Commercial banks, total, 18,599 18,944 20,673 1,998 1,935 1,973 1,928 1,990 1,870 2,056 23 Personal loans 13,176 13,386 14,480 1,435 1,396 1,413 1,350 1,404 1,346 1,463 24 Finance companies, total 23,796 20,657 24,087 2,307 2,188 2,289 2,309 2,361 2,440 2,596 25 Personal loans 17,162 16,944 19,579 1,833 1,744 1,850 1,836 1,870 1,938 2,044 26 Credit unions 8,560 10,134 12,340 1,266 1,233 1,225 1,113 1,207 1,240 1,282 27 Retailers 27,034 27,049 29,188 2,721 2,728 2,806 2,951 2,840 2,860 2,961 28 Others 1,463 1,642 1,830 189 193 187 175 214 211 172 Liquidations3 29 Total 147,920 156,665 172,795 15,886 15,849 16,388 16,167 16,553 16,814 17,160 By holder: 30 Commercial banks 68,630 74,491 83,376 7,720 7,835 7,810 7,992 7,978 8,214 8,487 31 Finance companies 33,330 31,263 33,384 3,053 2,899 3,261 2,811 3,138 3,135 3,166 32 Credit unions 17,334 20,325 23,707 2,227 2,195 2,250 2,295 2,333 2,316 2,389 33 Retailers i 25,496 26,980 28,138 2,497 2,518 2,662 2,665 2,670 2,716 2,681 34 Others2 3,130 3,606 4,191 389 401 405 404 433 432 437 By type of credit: 35 Automobile 44,929 48,406 52,750 4,901 4,801 5,100 4,897 5,104 5,005 5,234 36 Commercial banks 26,915 28,014 30,154 2,786 2,796 2,781 2,969 2,891 2,926 3,055 37 Indirect 15,886 16,101 17,059 1,506 1,518 1,500 1,615 1,568 1,562 1,681 38 Direct 11,029 11,913 13,095 1,279 1,278 1,281 1,354 1,324 1,364 1,374 39 Finance companies 8,720 9,142 9,875 939 856 1,127 688 970 885 937 40 Credit unions 8,892 10,811 12,253 1,134 1,106 1,146 1,194 1,197 1,148 1,193 41 Others 402 439 468 43 43 45 46 45 46 49 42 Mobile homes 4,715 4,517 4,691 414 421 386 397 424 392 413 43 Commercial banks 2,854 2,944 2,986 261 263 241 248 264 251 255 44 Finance companies 1,210 837 867 72 74 68 68 73 54 72 45 Home improvement 4,117 4,675 5,151 480 502 505 506 551 536 517 46 Commercial banks 2,178 2,451 2,657 245 251 253 254 270 263 257 Revolving credit: t Al Bank credit cards: 15,655 19,208 24,012 2,298 2,430 2,403 2,382 2,396 2,567 2,687 48 Bank check credit 3,684 4,010 4,552 415 402 431 459 450 436 430 49 Allother 74,821 75,849 81,638 7,379 7,292 7,564 7,525 7,628 7,877 7,880 50 Commercial banks, total. 17,345 17,864 19,014 1,716 1,692 1,702 1,680 1,707 1,771 1,802 51 Personal loans 12,278 12,528 13,439 1,230 1,226 1,233 1,207 1,243 1,291 1,321 52 Finance companies, total. 23,050 21,005 22,578 2,036 1,961 2,063 2,049 2,089 2,189 2,148 53 Personal loans 16,676 16,665 18,289 1,613 1,560 1,666 1,609 1,684 1,714 1,692 54 Credit unions 7,613 8,554 10,295 984 975 986 984 1,008 1,043 1,078 55 Retailers 25,496 26,980 28,138 2,497 2,518 2,662 2,665 2,670 2,716 2,681 56 Others 1,318 1,446 1,613 146 146 151 146 155 158 170 1 Excludes 30-day charge credit held by retailers, oil and gas companies, 2 Mutual savings banks, savings and loan associations, and auto dealers. and travel and entertainment companies. 3 Monthly figures are seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A44 Domestic Nonfinancial Statistics • December 1977 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS Billions of dollars; half-year data are at seasonally adjusted annual rates. 1975 1976 1977 TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 1972 1973 1974 1975 1976 HI H2 HI H2 HI Nonfinancial sectors 1 Total funds raised 177.8 202.0 189.6 205.6 268.3 180.8 230.4 254.5 282.1 309.6 1 2 Excluding equities 167.2 194.3 185.8 195.5 257.8 170.3 220.8 241.1 274.4 300.8 2 By sector and instrument: 3 U.S. Govt 15.1 8.3 11.8 85.4 69.0 79.6 91.2 73.1 64.9 40.3 3 4 Public debt securities 14.3 7.9 12.0 85.8 69.1 80.4 91.3 73.0 65.3 40.9 4 5 Agency issues and mortgages .8 .4 -.2 -.4 -.1 -.8 -.1 .1 -.3 -.6 5 6 All other nonfinancial sectors 162.7 193.8 177.8 120.2 199.2 101.1 139.2 181.4 217.1 269.3 6 7 Corporate equities 10.5 7.7 3.8 10.0 10.5 10.5 9.6 13.3 7.6 8.8 7 8 Debt instruments 152.2 186.1 174.0 110.1 188.8 90.7 129.6 168.0 209.5 260.5 8 9 158.7 187.5 162.4 107.0 179.0 93.1 120.9 166.2 191.7 264.9 9 10 Corporate equities 10.9 7.9 4.1 9.9 10.5 10.3 9.5 13.3 7.7 8.2 10 11 Debt instruments 147.8 179.7 158.3 97.1 168.4 82.8 111.4 152.9 184.0 256.6 11 12 Debt capital instruments 102.3 105.0 98.7 95.8 122.7 93.8 97.8 111.7 133.7 163.5 12 13 State and local obligations 14.7 14.7 17.1 13.6 15.1 12.3 14.9 14.7 15.5 27.2 13 14 Corporate bonds 12.2 9.2 19.7 27.2 22.8 33.4 21.1 20.4 25.3 19.6 14 Mortgages: 15 Home 42.6 46.4 34.8 39.5 63.6 33.4 45.6 57.1 70.2 85.6 15 16 Multifamily residential 12.7 10.4 6.9 * 1.6 .4 -.4 .6 2.6 4.6 16 17 Commercial 16.5 18.9 15.1 11.0 13.4 9.4 12.6 13.9 12.9 17.3 17 18 Farm 3.6 5.5 5.0 4.6 6.1 5.1 4.0 5.0 7.3 9.2 18 19 Other debt instruments 45.5 74.6 59.6 1.3 45.7 -11.0 13.6 41.2 50.3 93.2 19 20 Consumer credit 18.9 22.0 10.2 9.4 23.6 2.2 16.6 22.9 24.2 35.2 20 21 Bank loans n.e.c 18.9 39.8 29.1 -14.5 3.7 -20.9 -8.2 -.3 7.8 37.2 21 22 Open market paper .8 2.5 6.6 -2.6 4.0 -1.4 -3.8 6.4 1.6 5.0 22 23 Other 6.9 10.3 13.7 9.0 14.4 9.0 9.0 12.2 16.7 15.9 23 24 By borrowing sector 158.7 187.5 162.4 107.0 179.0 93.1 120.9 166.2 191.7 264.9 24 25 State and local governments 14.5 13.2 16.2 11.2 14.6 10.0 12.3 13.0 16.3 20.6 25 26 Households 66.6 79.1 49.2 48.6 89.8 37.3 59.9 83.9 95.6 129.6 26 27 Farm 5.8 9.7 7.9 8.7 11.0 8.7 8.8 10.6 11.6 16.9 27 28 Nonfarm noncorporate 14.1 12.8 7.4 2.0 5.2 -1.1 5.1 2.7 7.6 10.6 28 29 Corporate 57.7 72.7 81.8 36.6 58.3 38.3 34.8 56.1 60.5 87.2 29 30 Foreign 4.0 6.2 15.4 13.2 20.3 8.0 18.3 15.2 25.4 4.4 30 31 Corporate equities -.4 -.2 -.2 . 1 * .1 .1 * -.1 .6 31 32 Debt instruments 4.4 6.4 15.7 13.0 20.3 7.9 18.2 15.1 25.5 3.9 32 33 Bonds 1.0 1.0 2.1 6.2 8.4 5.7 6.8 7.3 9.5 4.3 33 34 Bank loans n.e.c 2.9 2.8 4.7 3.7 6.7 -.4 7.8 3.4 10.0 -5.8 34 35 Open market paper -1.0 .9 7.3 .3 1.9 -.8 1.4 1.5 2.4 2.2 35 36 U.S. Govt, loans 1.5 1.7 1.6 2.8 3.3 3.4 2.2 2.9 3.6 3.1 36 Financial sectors 37 Total funds raised 28.3 51.6 39.4 14.0 28.6 15.1 12.8 27.8 29.4 64.0 37 By instrument: 38 U.S. Govt, related 8.4 19.9 23.1 13.5 18.6 14.5 12.6 18.6 18.6 25.7 38 39 Sponsored credit agency securities 3.5 16.3 16.6 2.3 3.3 1.9 2.8 4.5 2.1 10.1 39 40 Mortgage pool securities 4.9 3.6 5.8 10.3 15.7 11.5 9.2 14.2 17.2 17.9 40 41 .7 .9 -.4 1.1 .6 * — 7 — 2 3 41 42 Private financial sectors 19.9 31.7 16.3 .4 10.0 .6 .2 9.1 10.8 38.3 42 43 Corporate equities 2.8 1.5 .3 * .7 . 1 -.1 -.7 2.2 .9 43 44 Debt instruments 17.1 30.2 16.0 .4 9.2 .6 .3 9.8 8.6 37.4 44 45 Corporate bonds 5.1 3.5 2.1 2.9 5.8 2.3 3.5 7.0 4.5 8.2 45 46 Mortgages 1.7 -1.2 -1.3 2.3 2.1 1.4 3.2 1.4 2.8 3.0 46 47 Bank loans n.e.c 5.9 8.9 4.6 -3.6 -3.7 -4.7 -2.5 -3.0 -4.4 -2.7 47 48 Open market paper and Rp's 4.4 11.8 3.9 2.8 7.1 8.2 -2.6 6.1 8.1 25.4 48 49 Loans from FHLB's * 7.2 6.7 -4.0 -2.0 -6.6 -1.3 -1.6 -2.4 3.5 49 By sector: 50 Sponsored credit agencies 33..55 1166..33 17.3 33..22 2.9 3.0 3.4 4.5 1.4 7.8 50 51 Mortgage pools 4.9 3.6 5.8 10.3 15.7 11.5 9.2 14.2 17.2 17.9 51 52 Private financial sectors 19.9 31.7 16.3 .4 10.0 .6 .2 9.1 10.8 38.3 52 53 Commercial banks 4.8 8.1 -1.1 1.7 7.4 5.7 -2.3 9.0 5.9 15.1 53 54 Bank affiliates .7 2.2 3.5 .3 -.8 .9 -.3 -1.3 -.3 1.3 54 55 Savings and loan associations 2.0 6.0 6.3 -2.2 * -6.8 2.3 .5 -.5 10.6 55 56 Other insurance companies .5 .5 .9 1.0 1.0 .9 1.0 1.0 1.0 1.0 56 57 Finance companies 6.2 9.4 4.5 .5 6.4 -1.4 2.4 5.7 7.1 14.9 57 58 REIT's 6.3 6.5 .6 -2.0 -2.8 -2.0 -1.9 -2.5 -3.0 -2.9 58 59 Open-end investment companies -.5 -1.2 -.7 —. 1 -1.0 .7 -.9 -2.5 .5 -1.1 59 60 2.4 1.3 -.3 2.6 * -.7 .2 -.5 60 All sectors 61 Total funds raised, by instrument 206.1 253.7 229.0 219.5 296.8 195.9 243.2 282.2 311.4 373.6 61 62 Investment company shares -.5 -1.2 -.7 -.1 -1.0 .7 -.9 -2.5 .5 -1.1 62 63 Other corporate equities 13.8 10.4 4.8 10.2 12.2 9.8 10.5 15.1 9.3 10.8 63 64 Debt instruments 192.8 244.5 224.9 209.5 285.6 185.4 233.6 269.6 301.6 363.9 64 65 U.S. Govt, securities 23.6 28.3 34.3 98.2 88.1 93.1 103.2 91.9 84.3 68.4 65 66 State and local obligations 14.7 14.7 17.1 13.6 15.1 12.3 14.9 14.7 15.5 27.2 66 67 Corporate and foreign bonds 18.4 13.6 23.9 36.3 37.0 41.3 31.3 34.7 39.3 32.2 67 68 Mortgages 77.0 79.9 60.5 57.2 86.8 49.5 65.0 77.9 95.7 119.6 68 69 Consumer credit 18.9 22.0 10.2 9.4 23.6 2.2 16.6 22.9 24.2 35.2 69 70 Bank loans n.e.c 27.8 51.6 38.4 -14.4 6.7 -25.9 -2.9 .1 13.4 28.7 70 71 Open market paper and Rp's 4.1 15.2 17.8 .5 13.0 6.1 -5.0 14.0 12.0 32.5 71 72 Other loans 8.4 19.1 22.7 8.7 15.3 6.9 10.5 13.4 17.2 20.1 72 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Flow of Funds A45 1.58 DIRECT AND INDIRECT SOURCES OF FUNDS TO CREDIT MARKETS Billions of dollars, except as noted; half-year data are at seasonally adjusted annual rates. 1975 1976 1977 TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 11997722 11997733 11997744 11997755 11997766 HI H2 HI H2 HI 1 Total funds advanced in credit markets to nonfinancial sectors 167.2 194.3 185.8 195.5 257.8 170.3 220.8 241.1 274.4 300.8 1 By public agencies and foreign: 2 Total net advances 19.8 34.1 52.7 44.3 54.6 55.0 33.6 53.2 56.0 74.0 2 3 U.S. Govt, securities 7.6 9.5 11.9 22.5 26.8 33.4 11.6 27.1 26.5 31.7 3 4 Residential mortgages 7.0 8.2 14.7 16.2 12.8 16.9 15.5 12.1 13.5 20.0 4 5 FHLB advances to S&L's * 7.2 6.7 -4.0 -2.0 -6.6 -1.3 -1.6 -2.4 3.5 5 6 Other loans and securities 5.1 9.2 19.5 9.5 16.9 11.3 7.8 15.6 1188..33 1188..88 66 Totals advanced, by sector 7 U.S. Govt 1.8 2.8 9.8 15.1 8.9 15.9 14.3 6.4 11.4 5.9 7 8 Sponsored credit agencies 9.2 21.4 25.6 14.5 20.6 16.5 12.6 20.7 20.6 27.5 8 9 Monetary authorities .3 9.2 6.2 8.5 9.8 7.6 9.5 14.5 5.2 11.6 9 10 Foreign 8.4 .6 11.2 6.1 15.2 15.0 -2.7 11.6 18.8 28.9 10 11 Agency borrowing not included in line 1 8.4 19.9 23.1 13.5 18.6 14.5 12.6 18.6 18.6 25.7 11 Private domestic funds advanced 12 Total net advances 155.9 180.2 156.1 164.8 221.8 129.8 199.7 206.6 237.0 252.5 12 13 U.S. Govt, securities 16.0 18.8 22.4 75.7 61.3 59.7 91.6 64.8 57.8 36.7 13 14 State and local obligations 14.7 14.7 17.1 13.6 15.1 12.3 14.9 14.7 15.5 27.2 14 15 Corporate and foreign bonds 13.1 10.0 20.9 32.8 30.3 38.8 26.8 26.8 33.9 20.9 15 16 Residential mortgages 48.2 48.4 26.9 23.2 52.4 16.7 29.6 45.5 59.2 70.1 16 17 Other mortgages and loans 63.9 95.4 75.4 15.6 60.8 -4.3 35.5 53.2 68.3 101.1 17 18 LESS: FHLB advances * 7.2 6.7 -4.0 -2.0 -6.6 -1.3 -1.6 -2.4 3.5 18 Private financial intermediation 19 Credit market funds advanced by private financial institutions 149.7 164.9 126.3 119.9 187.2 99.8 140.0 167.6 206.8 233.9 19 20 Commercial banking 70.5 86.5 64.6 27.6 58.0 14.4 40.7 44.5 71.5 80.1 20 21 Savings institutions 48.2 36.9 26.9 52.0 71.7 48.5 55.4 71.8 71.7 84.6 21 22 Insurance and pension funds 17.2 23.9 30.0 41.5 47.6 38.3 44.7 47.8 47.3 55.3 22 23 Other finance 13.9 17.5 4.7 -1.1 9.9 -1.4 -.7 3.4 16.3 13.9 23 24 Sources of funds 149.7 164.9 126.3 119.9 187.2 99.8 140.0 167.6 206.8 233.9 24 25 Private domestic deposits 100.8 86.5 69.4 90.9 122.8 90.3 91.5 106.1 139.5 122.8 25 26 Credit market borrowing 17.1 30.2 16.0 .4 9.2 .6 .3 9.8 8.6 37.4 26 27 Other sources 31.8 48.2 40.9 28.6 55.1 9.0 48.2 51.7 58.7 73.7 27 28 Foreign funds 5.3 6.9 14.5 -.4 3.1 -5.6 4.8 -2.6 8.8 -4.1 28 .7 -1.0 -5.1 -1.7 -.1 -3.5 , 1 2.9 -3.1 -1.1 29 30 Insurance and pension reserves 11.6 18.4 26.0 29.0 35.8 26.4 31.5 35.1 36.5 46.2 30 31 Other, net 14.1 23.9 5.4 1.7 16.4 -8.3 11.7 16.2 16.6 32.7 31 Private domestic nonfinancial investors 32 Direct lending in credit markets 23.3 45.5 45.9 45.3 43.8 30.6 60.0 48.8 38.8 56.0 32 33 U.S. Govt, securities 3.9 19.5 18.2 22.2 19.4 6.0 38.4 22.6 16.1 11.0 33 34 State and local obligations 3.0 5.4 10.0 6.3 4.7 7.2 5.5 3.9 5.5 9.5 34 35 Corporate and foreign bonds 4.4 1.3 4.7 8.2 4.0 10.8 5.6 4.9 3.1 .4 35 36 Commercial paper 2.9 12.5 4.8 3.1 4.0 1.5 4.7 6.7 1.3 18.7 36 37 Other 9.1 6.8 8.2 5.5 11.8 5.1 6.0 10.8 12.8 16.4 37 38 Deposits and currency 105.2 90.4 75.7 97.1 130.3 96.0 98.2 111.0 149.5 127.1 38 39 Time and savings accounts 83.8 76.1 66.7 84.8 113.0 73.0 96.5 98.3 127.6 106.6 39 40 Large negotiable CD's 7.7 18.1 18.8 -14.0 -14.2 -27.8 -.2 -18.0 -10.4 -2.6 40 41 Other at commercial banks 30.6 29.6 26.1 39.4 58.1 39.3 39.4 50.2 66.0 41.9 41 42 At savings institutions 45.4 28.5 21.8 59.4 69.1 61.5 57.4 66.1 72.1 67.4 42 43 Money 21.4 14.3 8.9 12.3 17.2 23.0 1.7 12.7 21.6 20.5 43 44 Demand deposits 17.0 10.3 2.6 6.1 9.9 17.3 -5.0 7.8 11.9 16.2 44 45 Currency 4.4 3.9 6.3 6.2 7.3 5.7 6.7 4.9 9.8 4.3 45 46 Total of credit market instruments, deposits 128.5 136.0 121.5 142.4 174.0 126.6 158.2 159.8 188.1 183.1 46 47 Public support rate (in per cent) 11.8 17.5 28.4 22.7 21.2 32.3 15.2 22.1 20.4 24.6 47 48 Private financial intermediation (in per cent) 96.1 91.5 80.9 72.8 84.4 76.9 70.1 81.1 87.3 92.6 48 49 Total foreign funds 13.7 7.5 25.7 5.8 18.3 9.4 2.1 9.0 27.6 24.9 49 MEMO: Corporate equities not included above 1133..33 99..22 44..11 10.0 11.2 10.5 9.5 12.6 9.8 9.7 50 51 Mutual fund shares -.5 -1.2 -.7 -.1 -1.0 .7 -.9 -2.5 .5 -1.1 51 13.8 10.4 4.8 10.2 12.2 9.8 10.5 15.1 9.3 10.8 52 53 Acquisitions by financial institutions 15.3 13.3 5.8 9.4 12.3 10.7 8.1 12.6 12.0 6.5 53 54 Other net purchases -2.1 -4.1 -1.6 .6 -1.1 -.2 1.4 • -2.2 3.3 54 NOTES BY LINE NO. 29. Demand deposits at commercial banks. 1. Line 2 of p. A-44. 30. Excludes net investment of these reserves in corporate equities. 2. Sum of lines 3-6 or 7-10. 31. Mainly retained earnings and net miscellaneous liabilities. 6. Includes farm and commercial mortgages. 32. Line 12 less line 19 plus line 26. 11. Credit market funds raised by Federally sponsored credit agencies, 33-37. Lines 13-17 less amounts acquired by private finance. Line 37 and net issues of Federally related mortgage pool securities. Included includes mortgages. below in lines 3, 13, and 33. 45. Mainly an offset to line 9. 12. Line 1 less line 2 plus line 11. Also line 19 less line 26 plus line 32. 46. Lines 32 plus 38 or line 12 less line 27 plus line 45. Also sum of lines 27, 32, 39, and 44. 47. Line 2/line 1. 17. Includes farm and commercial mortgages. 48. Line 19/line 12. 25. Lines 39 plus 44. 49. Lines 10 plus 28. 26. Excludes equity issues and investment company shares. Includes 50. 52. Includes issues by financial institutions. line 18. NOTE.—Full statements for sectors and transaction types quarterly, 28. Foreign deposits at commercial banks, bank borrowings from foreign and annually for flows and for amounts outstanding, may be obtained branches, and liabilities of foreign banking agencies to foreign af- from Flow of Funds Section, Division of Research and Statistics, Board filiates. of Governors of the Federal Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A46 Domestic Nonfinancial Statistics • December 1977 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures 1967 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1977 Measure 1974 1975 1976 Apr. May June July Aug.r Sept. Oct. 1 Industrial production 129.3 117.8 129.8 136.1 137.0 137.8 138.7 138.1 138.6 139.0 Market groupings: 2 Products, total 129.3 119.3 129.3 135.8 136.5 137.3 138.7 138.4 138.8 138.9 3 Final, total 125.1 118.2 127.2 134.1 134.7 135.4 136.8 136.3 136.8 136.9 4 Consumer goods 128.9 124.0 136.2 142.9 143.1 143.8 145.4 144.7 144.9 145.5 5 Equipment 120.0 110.2 114.6 122.1 123.2 124.1 124.8 124.9 125.6 125.2 6 Intermediate 135.3 123.1 137.2 142.3 143.5 144.7 146.3 146.1 146.4 146.8 7 Materials 132.4 115.5 130.6 136.5 137.8 138.7 138.9 137.6 138.2 139.1 Industry groupings: 8 Manufacturing 129.4 116.3 129.5 135.8 137.1 137.8 138.5 138.6 139.1 139.4 Capacity utilization (per cent)1 in— 9 Manufacturing 84.2 73.6 80.2 '82.3 82.8 83.0 83.1 82.9 '83.0 '82.9 10 Industrial materials industries 87.7 73.6 80.4 82.1 82.7 83.0 82.9 82.0 '82.2 '82.5 11 Construction contracts2 173.9 162.3 190.2 250.0 317.0 284.0 218.0 267.0 279.0 244.0 12 Nonagricultural employment, total3 119.1 116.9 120.6 124.0 124.4 124.7 125.1 125.2 125.7 125.9 13 Goods-producing, total 106.2 96.9 100.3 104.1 104.5 104.7 104.9 104.5 104.7 105.0 14 Manufacturing, total 103.1 94.3 97.5 100.4 100.8 100.9 101.1 100.8 '100.8 101.1 15 Manufacturing, production-worker 102.1 91.3 95.2 98.3 98.9 98.9 '98.9 98.4 98.5 98.8 16 Service-producing 126.1 127.8 131.7 134.9 135.3 135.6 136.2 136.6 137.1 137.3 17 Personal income, total4 184.3 200.0 220.7 241.0 242.1 243.3 245.6 247.1 '249.1 252.3 18 Wages and salary disbursements 178.9 188.5 208.6 227.9 229.7 230.8 232.3 233.2 '235.2 238.5 19 Manufacturing 157.6 157.3 177.7 196.0 198.5 200.4 201.2 200.7 '202.2 204.9 20 Disposable personal income 180.8 199.2 217.8 239.4 240.9 21 Retail sales 5 170.1 r184.6 '203.5 '222.2 '221.6 '221.0 '223.7 225.5 "225.4 229.4 Prices:6 22 Consumer 147.7 161.2 170.5 179.8 180.9 181.9 183.2 183.8 184.3 23 Wholesale 160.1 174.1 182.9 194.5 195.2 193.9 193.8 193.9 194.8 196.4 1 Ratios of indexes of production to indexes of capacity. Based on data 6 Data without seasonal adjustment, as published in Monthly Labor from Federal Reserve, McGraw-Hill Economics Department, and De- Review (U.S. Dept. of Labor). Seasonally adjusted data for changes in partment of Commerce. the price indexes may be obtained from the Bureau of Labor Statistics, 2 Index of dollar value of total construction contracts, including U.S. Dept. of Labor. residential, nonresidential, and heavy engineering, from McGraw-Hill Informations Systems Company, F. W. Dodge Division. NOTE.—Basic data (not index numbers) for series mentioned in notes 3 Based on data in Employment and Earnings (U.S. Dept. of Labor). 3, 4. and 5, and indexes for series mentioned in notes 2 and 6 may also be Series covers employees only, excluding personnel in the Armed Forces. found in the Survey of Current Business (U.S. Dept. of Commerce). 4 Based on data in Survey of Current Business (U.S. Dept. of Com- Figures for industrial production for the last 2 months are preliminary merce). Series for disposable income is quarterly. and estimated, respectively. 5 Based on Bureau of Census data published in Survey of Current Business (U.S. Dept. of Commerce). 2.11 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION Seasonally adjusted 1976 1977 1976 1977 1976 1977 SSeerriieess Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Output (1967 = 100) Capacity (per cent of 1967 output) Utilization rate (per cent) 11 MMaannuuffaaccttuurriinngg 131.2 133.1 136.9 138.7 162.8 164.0 165.6 167.1 80.6 81.2 82.7 83.0 22 PPrriimmaarryy pprroocceessssiinngg 138.8 140.1 146.3 147.6 168.8 170.2 171.8 173.5 '82.2 82.3 85.1 85.1 127.2 129.3 132.0 134.0 159.6 '160.7 162.2 163.8 79.7 80.5 81.4 81.8 33 AAddvvaanncceedd pprroocceessssiinngg 131.9 133.1 137.7 138.4 164.3 165.5 166.6 167.8 80.3 80.4 82.6 82.5 44 MMaatteerriiaallss 128.4 129.2 135.1 136.1 167.8 169.0 170.3 171.6 76.5 76.5 79.4 79.3 55 DDuurraabbllee ggooooddss 107.4 108.6 116.4 110.2 144.4 144.8 145.1 145.3 74.4 75.0 80.2 75.8 66 BBaassiicc mmeettaall 146.9 149.5 154.6 154.7 174.1 175.6 177.2 178.8 84.4 85.1 87.2 86.5 77 NNoonndduurraabbllee ggooooddss 151.4 153.9 159.9 159.6 182.0 183.6 185.4 187.1 83.2 83.8 86.3 85.3 88 TTeexxttiillee,, ppaappeerr,, aanndd cchheemmiiccaall 112.1 111.3 110.9 112.5 140.6 141.4 141.9 142.5 79.7 78.7 78.1 79.0 99 TTeexxttiillee 130.2 131.7 134.3 135.7 147.9 148.9 150.1 151.3 88.1 88.4 89.5 89.7 1100 PPaappeerr 177.3 181.6 191.8 190.0 213.7 216.2 218.7 221.2 83.0 84.0 87.7 85.9 1111 CChheemmiiccaall 122.0 122.0 122.6 124.0 143.9 144.3 144.7 145.2 84.8 84.5 84.8 85.4 1122 EEnneerrggyy Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Labor Market A47 2.12 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data are seasonally adjusted. Exceptions noted. 1977 CCaatteeggoorryy 11997744 11997755 11997766 May June July Aug. Sept. Oct. Nov. Household survey data 1111 NNNNoooonnnniiiinnnnssssttttiiiittttuuuuttttiiiioooonnnnaaaallll ppppooooppppuuuullllaaaattttiiiioooonnnn1111 150,827 153,449 156,048 158,228 158,456 158,682 158,899 159,114 159,334 159,522 2222 LLLLaaaabbbboooorrrr ffffoooorrrrcccceeee ((((iiiinnnncccclllluuuuddddiiiinnnngggg AAAArrrrmmmmeeeedddd FFFFoooorrrrcccceeeessss))))1111 93,240 94,793 96,917 99,286 99,770 99,440 99,834 99,999 100,236 101,130 3333 CCCCiiiivvvviiiilllliiiiaaaannnn llllaaaabbbboooorrrr ffffoooorrrrcccceeee 91,011 92,613 94,773 97,158 97,641 97,305 97,697 97,868 98,102 98,998 EEEEmmmmppppllllooooyyyymmmmeeeennnntttt:::: 4444 NNNNoooonnnnaaaaggggrrrriiiiccccuuuullllttttuuuurrrraaaallll iiiinnnndddduuuussssttttrrrriiiieeeessss2222 82,443 81,403 84,188 87,022 87,341 87,348 87,519 87,880 87,958 88,818 5555 AAAAggggrrrriiiiccccuuuullllttttuuuurrrreeee 3,492 3,380 3,297 3,386 3,338 3,213 3,252 3,215 3,272 3,362 UUUUnnnneeeemmmmppppllllooooyyyymmmmeeeennnntttt:::: 6666 NNNNuuuummmmbbbbeeeerrrr 5,076 7,830 7,288 6,750 6,962 6,744 6,926 6,773 6,872 6,818 7777 RRRRaaaatttteeee ((((ppppeeeerrrr cccceeeennnntttt ooooffff cccciiiivvvviiiilllliiiiaaaannnn llllaaaabbbboooorrrr ffffoooorrrrcccceeee)))) 5.6 8.5 7.7 6.9 7.1 6.9 7.1 6.9 7.0 6.9 8888 NNNNooootttt iiiinnnn llllaaaabbbboooorrrr ffffoooorrrrcccceeee 57,587 58,655 59,130 58,943 58,686 59,242 59,064 59,114 59,099 58,391 Establishment survey datar 9999 NNNNoooonnnnaaaaggggrrrriiiiccccuuuullllttttuuuurrrraaaallll ppppaaaayyyyrrrroooollllllll eeeemmmmppppllllooooyyyymmmmeeeennnntttt3333 78,419 77,052 79,436 81,837 82,157 82,407 82,474 82,763 82,905 83,217 11110000 MMMMaaaannnnuuuuffffaaaaccccttttuuuurrrriiiinnnngggg 20,048 18,347 18,955 19,566 19,611 19,666 19,594 19,612 19,655 19,718 11111111 MMMMiiiinnnniiiinnnngggg 694 745 783 845 856 833 818 856 859 863 11112222 CCCCoooonnnnttttrrrraaaacccctttt ccccoooonnnnssssttttrrrruuuuccccttttiiiioooonnnn 3,963 3,515 3,594 3,853 3,888 3,913 3,893 3,892 3,924 3,953 11113333 TTTTrrrraaaannnnssssppppoooorrrrttttaaaattttiiiioooonnnn aaaannnndddd ppppuuuubbbblllliiiicccc uuuuttttiiiilllliiiittttiiiieeeessss.... 4,696 4,499 4,510 4,586 4,588 4,572 4,581 4,616 4,607 4,612 11114444 TTTTrrrraaaaddddeeee 17,016 16,999 17,690 18,202 18,264 18,322 18,377 18,431 18,411 18,465 11115555 FFFFiiiinnnnaaaannnncccceeee 4,209 4,223 4,315 4,481 4,494 4,506 4,524 4,545 4,571 4,592 11116666 SSSSeeeerrrrvvvviiiicccceeee 13,617 14,007 14,642 15,197 15,260 15,372 15,448 15,482 15,531 15,606 11117777 GGGGoooovvvveeeerrrrnnnnmmmmeeeennnntttt 14,176 14,719 14,948 15,107 15,196 15,223 15,239 15,329 15,347 15,408 1 Persons 16 years of age and over. Monthly figures, which are based 3 Data include all full- and part-time employees who worked during, on sample data, relate to the calendar week that contains the 12th day; or received pay for, the pay period that includes the 12th day of the annual data are averages of monthly figures. By definition, seasonality month, and exclude proprietors, self-employed persons, domestic servants, does not exist in population figures. Based on data from Employment unpaid family workers, and members of the Armed Forces. Data are and Earnings (U.S. Dept. of Labor). adjusted to the February 1977 benchmark. Based on data from Employ- 2 Includes self-employed, unpaid family, and domestic service workers. ment and Earnings (U.S. Dept. of Labor). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A48 Domestic Nonfinancial Statistics • December 1977 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value Monthly data are seasonally adjusted. 11996677 1976 1977 GGrroouuppiinngg pprroo-- 11997766 ppoorr-- aavveerr-ttiioonn aaggee Sept. Oct. Nov. Apr. May June July Aug.r Sept. Oct.p Nov.* Index (1967 = 100) MAJOR MARKET 1 Total index. 100.00 129.8 130.6 130.2 131.5 136.1 137.0 137.8 138.7 138.1 138.6 139.0 139.7 Products 60.71 129.3 129.4 129.2 131.3 135.8 136.5 137.3 138.7 138.4 138.8 138.9 139.4 Final products 47.82 127.2 126.9 126.7 129.3 134.1 134.7 135.4 136.8 136.3 136.8 136.9 137.0 Consumer goods 27.68 136.2 135.7 135.9 138.4 142.9 143.1 143.8 145.4 144.7 144.9 145.5 145.4 Equipment 20.14 114.6 114.8 114.2 116.8 122.1 123.2 124.1 124.8 124.9 125.6 125.2 125.4 Intermediate products. 12.89 137.2 138.7 138.8 139.0 142.3 143.5 144.7 146.3 146.1 146.4 146.8 148.0 Materials 39.29 130.6 132.4 131.8 131.9 136.5 137.8 138.7 138.9 137.6 138.2 139.1 140.1 Consumer goods Durable consumer goods 7.89 141.4 138.7 138.9 143.7 151.5 152.2 155.8 158.0 154.7 155.8 157.9 155.9 9 Automotive products 2.83 154.8 147.6 147.8 161.6 173.9 172.8 179.8 184.8 177.2 177.7 182.0 175.1 10 Autos and utility vehicles.... 2.03 149.8 139.2 136.3 154.0 171.2 167.4 177.4 184.1 173.1 172.8 178.4 168.2 11 Autos 1.90 132.0 121.0 120.2 138.4 150.6 148.5 156.8 161.4 150.9 151.6 154.3 147.5 12 Auto parts and allied goods. .80 167.6 168.6 176.6 180.5 181.3 186.6 185.8 186.6 187.3 189.7 191.4 192.7 13 Home goods 5.06 133.9 133.8 133.9 133.7 138.8 140.6 142.3 142.9 142.1 143.5 144.5 145.1 14 Appliances, A/C, and TV. 1.40 114.6 113.1 115.7 114.9 126.4 131.0 133.1 130.1 129.6 129.4 131.1 132.3 15 Appliances and TV 1.33 117.2 116.6 118.5 117.3 129.9 134.8 136.8 134.4 133.0 134.0 134.2 16 Carpeting and furniture... 1.07 144.1 146.3 146.2 143.6 145.0 147.3 151.2 154.1 154.8 159.0 160.6 17 Misc. home goods 2.59 140.1 139.8 138.6 139.9 143.0 143.1 143.6 145.1 143.6 144.9 145.1 145.1 18 Nondurable consumer goods 19.79 134.1 134.5 134.7 136.2 139.4 139.5 139.1 140.3 140.6 140.6 140.5 141.2 19 Clothing 4.29 124.0 121.5 123.3 123.1 124.4 125.5 125.7 124.1 126.4 128.0 20 Consumer staples 15.50 136.9 138.0 138.0 139.8 143.6 143.4 142.9 144.8 144.6 144.2 143.7 144.6 21 Consumer foods and tobacco. 8.33 130.7 132.6 133.1 132.4 136.1 135.0 135.4 137.1 137.9 137.2 135.7 22 Nonfood staples 7.17 144.1 144.2 143.7 148.2 152.5 153.2 151.7 153.8 152.4 152.3 153.0 154.1 23 Consumer chemical products. 2.63 166.4 169.2 168.3 173.7 178.1 180.8 179.3 179.4 181.8 182.5 182.8 24 Consumer paper products 1.92 113.3 111.9 110.9 114.2 116.6 118.4 116.3 117.4 117.0 116.4 118.3 25 Consumer energy products 2.62 144.4 142.9 142.9 147.6 153.0 150.8 149.8 154.9 148.9 148.3 148.5 26 Residential utilities 1.45 151.1 148.4 148.7 153.9 Equipment Business equipment 12.63 136.3 137.0 135.7 140.1 147.1 148.9 150.1 151.2 151.1 152.2 152.6 153.0 Industrial equipment 6.77 128.0 129.5 129.6 131.1 136.3 138.4 140.0 140.7 140.4 141.4 142.1 143.1 Building and mining equipment. 1.44 177.7 180.3 181.2 181.5 200.5 205.3 208.1 210.6 203.9 204.5 205.4 205.1 Manufacturing equipment 3.85 106.5 108.2 108.1 109.9 112.0 112.8 115.0 114.3 115.3 117.6 119.0 120.4 Power equipment 1.47 135.3 135.8 136.0 137.0 136.7 139.9 139.0 141.2 143.7 141.4 140.6 142.0 32 Commercial transit, farm equipment. 5.86 145.8 145.8 142.6 150.6 159.5 161.2 161.9 163.3 163.4 164.6 164.6 164.7 33 Commerical equipment 3.26 173.5 176.8 177.5 179.6 189.7 191.1 191.4 191.7 193.0 193.7 195.0 197.3 34 Transit equipment 1.93 104.1 98.2 97.6 107.8 115.2 116.5 118.5 121.5 121.9 125.5 121.7 117.8 35 Farm equipment .67 131.4 131.4 102.0 132.4 141.0 144.4 143.2 144.6 139.2 134.9 140.8 36 Defense and space equipment... 7.51 78.4 77.6 78.0 77.6 79.9 80.0 80.3 80.4 80.8 80.9 79.3 79.0 Intermediate products 37 Construction supplies 6.42 132.6 134.1 134.8 135.8 137.2 138.7 139.9 141.2 141.7 143.3 144.1 145.6 38 Business supplies 6.47 141.8 143.2 142.8 141.9 147.5 148.4 149.6 151.3 150.6 149.6 149.6 39 Commercial energy products. 1.14 157.1 157.5 155.4 156.2 164.6 165.8 164.2 168.2 165.0 162.7 161.8 Materials 40 Durable goods materials. .. 20.35 126.8 129.9 128.3 128.2 133.8 135.2 136.4 136.8 135.4 135.7 137.1 138.3 41 Durable consumer parts. 4.58 121.6 123.6 118.4 126.2 129.4 132.0 134.5 137.2 135.2 136.2 136.6 137.9 42 Equipment parts 5.44 133.9 138.3 138.0 137.2 140.7 141 .7 143.0 145.0 145.6 146.8 147.6 148.6 43 Durable materials n.e.c.. 10.34 125.5 128.3 127.5 124.4 132.2 133.2 133.8 132.4 130.1 129.8 131.8 133.2 44 Basic metal materials. 5.57 110.9 113.7 172.0 105.5 115.0 117.8 116.3 112.6 108.7 106.7 109.8 45 Nondurable goods materials 146.3 147.6 147.5 147.3 153.7 155.4 154.7 154.1 155.1 154.5 154.5 155.8 46 Textile, paper, and chem. mat. 7.62 151.1 152.4 152.5 151.4 159.0 160.7 160.1 158.9 159.6 159.8 159.5 160.3 47 Textile materials 1.85 115.1 114.6 112.6 110.0 111.8 111.8 109.0 110.1 112.2 114.8 116.2 48 Paper materials 130.8 131.2 132.1 131.0 132.2 136.2 134.4 134.3 135.7 137.0 136.1 49 Chemical materials 4.15 175.1 177.6 178.3 178.1 190.6 192.2 192.7 190.3 190.1 189.0 188.1 50 Containers, nondurable i 142.7 143.5 141.7 145.9 148.5 152.3 152.4 152.4 156.2 151.2 152.3 51 Nondurable materials n.e.c. 119.9 122.1 122.4 121.3 125.6 123.1 122.9 124.9 122.4 123.9 124.4 52 Energy materials : 120.2 119.9 120.8 121.9 121.3 122.3 124.3 125.2 121.4 123.7 125.1 53 Primary energy 4.65 107.1 108.4 108.6 106.7 106.0 106.6 109.7 108.9 106.8 110.5 111.9 54 Converted fuel materials.... : 136.2 134.2 135.5 140.3 140.1 141.4 142.0 145.1 139.1 139.9 141.0 Supplementary groups 55 Home goods and clothing. 129.4 128.1 129.0 128.8 132.2 133.6 134.7 134.3 134.9 136.3 137.4 137.7 56 Energy, total i 128.8 128.3 128.8 130.6 132.1 132.5 133.5 135.6 131.4 132.7 133.5 134.2 57 Products i 148.2 147.3 146.8 150.2 156.5 155.3 154.1 158.9 153.7 152.7 152.6 58 Materials ! 120.2 119.9 120.8 121.9 121.3 122.3 124.3 125.2 121.4 123.7 125.1 For NOTE see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Output A49 2.13 Continued 1967 1976 1977 Grouping SIC pro- 1976 code por- avertion age Sept. Oct. Nov. Apr. May June July Aug.r Sept. Oct.P Nov.e Index (1967 = 100) MAJOR INDUSTRY 1 Mining and utilities. 12.05 131.6 131.6 132.5 133.8 135.7 137.1 138.8 139.4 134.4 135.2 136.3 137.2 2 Mining 6.36 114.2 115.5 116.1 115.3 119.2 119.5 122.8 119.8 115.4 118.4 119.4 119.8 3 Utilities 5.69 151.0 149.6 150.8 154.6 115544..00 115566..77 115566..88 116611..44 115555..77 154.0 155.0 115566..66 4 Electric 3.88 167.6 166.0 167.0 171.8 5 Manufacturing. 87.95 129.5 130.5 129.8 131.4 135.8 137.1 137.8 138.5 138.6 139.1 139.4 139.9 6 Nondurable., 35.97 140.9 142.3 141.9 143.0 147.0 148.5 148.4 148.6 149.4 149.7 149.6 150.2 7 Durable 51.98 121.7 122.4 121.4 123.4 128.0 129.3 130.5 131.6 131.3 131.8 132.4 113322..88 Mining 8 Metal mining 10 .51 122.8 123.2 126.1 124.5 126.1 120.5 121.3 101.9 70.0 71.4 79.6 9 Coal 11,12 .69 117.2 121.3 126.4 122.1 118.4 122.4 133.4 120.7 113.6 133.0 141.4 140.6 10 Oil and gas extraction 13 4.40 112.0 113.1 112.5 112.3 117.5 118.3 121.3 120.6 119.3 120.2 119.3 118.5 11 Stone and earth minerals. 14 .75 118.3 119.2 120.0 120.8 124.0 123.0 122.5 126.7 125.0 126.7 128.4 Nondurable manufactures 12 Foods 20 8.75 132.3 134.6 134.8 134.3 138.0 138.3 136.9 138.3 139.3 138.5 137.6 13 Tobacco products 21 .67 117.9 115.4 118.3 119.6 112.1 105.2 119.2 114.5 117.0 113.5 14 Textile mill products ... 22 2.68 136.4 136.4 134.2 133.3 134.6 136.0 135.4 137.2 136.6 139.5 140.7 15 Apparel products 23 3.31 122.2 119.5 122.9 122.7 121.4 123.5 122.1 121.1 124.1 127.7 16 Paper and products 26 3.21 133.0 132.1 132.3 132.5 136.3 139.5 139.3 139.2 140.3 139.9 138.7 139.2 17 Printing and publishing 27 4.72 120.6 120.6 119.3 119.7 123.4 124.4 124.1 124.9 125.0 124.3 125.2 125.7 18 Chemicals and products 28 7.74 169.3 171.3 170.7 173.7 180.6 182.8 183.5 182.6 182.6 181.7 181.2 19 Petroleum products 29 1.79 133.1 133.9 130.3 135.8 143.4 142.4 140.0 140.4 139.9 141.9 140.2 141.1 20 Rubber & plastic products . 30 2.24 200.2 212.4 211.1 215.5 226.0 232.4 235.2 235.2 237.4 242.2 239.5 21 Leather and products 31 .86 80.9 77.9 77.2 75.8 74.7 76.2 74.1 74.1 74.5 74.0 76.7 Durable manufactures 22 Ordnance, pvt. & govt.... 19,91 3.64 72.7 73.0 72.3 71.6 74.6 74.4 74.1 75.0 75.5 75.1 73.6 73.1 23 Lumber and products 24 1.64 125.1 128.7 129.6 129.5 130.6 133.0 132.4 132.9 131.8 136.1 136.9 24 Furniture and fixtures 25 1.37 132.7 133.6 134.5 133.7 135.4 137.5 139.9 143.0 142.9 145.6 146.2 25 Clay, glass, stone products. 32 2.74 137.1 137.9 139.9 143.2 145.0 145.0 147.7 148.0 148.8 145.5 147.1 26 Primary metals 33 6.57 108.9 113.0 109.9 104.6 112.2 117.1 114.7 114.4 112.5 109.0 113.2 114.7 27 Iron and steel 331,2 4.21 104.9 108.6 105.1 100.3 103.9 111.0 109.2 110.9 110.6 104.6 107.6 28 Fabricated metal products. 34 5.93 123.3 126.5 123.5 126.7 127.6 128.2 130.8 132.0 134.0 134.0 133.7 135.2 29 Nonelectrical machinery.. . 35 9.15 135.0 136.8 134.3 137.5 142.9 142.6 144.0 145.7 145.2 147.4 148.4 150.0 30 Electrical machinery 36 8.05 131.6 133.9 135.0 135.7 139.6 141.8 142.6 143.6 143.9 144.7 144.9 145.5 31 Transportation equipment. . 37 9.27 110.6 104.7 104.3 112.7 119.8 120.3 123.7 125.6 124.3 125.5 124.7 121.5 32 Motor vehicles & parts.. . 371 4.50 140.7 130.6 128.4 145.5 158.1 157.7 163.2 166.2 164.4 165.6 167.6 161.9 33 Aerospace & misc. tr. eq. 372-9 4.77 82.2 80.3 81.6 81.7 83.8 85.2 86.5 87.3 86.5 87.7 84.1 83.4 34 Instruments 38 2.11 148.2 148.7 150.2 150.3 157.8 157.4 158.2 159.0 158.3 160.3 162.4 161.5 35 Miscellaneous mfrs 39 1.51 143.5 143.7 142.4 143.7 145.6 148.0 148.4 150.4 147.5 150.7 149.4 149.2 Gross value (billions of 1972 dollars, annual rates) MAJOR MARKET 36 Products, total. . 1507.4 550.4 548.2 548.1 558.7 578.3 582.2 585.9 590.5 590.2 590.0 592.0 590.9 37 Final products 1390.9 425.7 421.5 421.6 432.6 448.5 451.0 453.7 457.8 456.9 456.8 459.0 456.7 38 Consumer goods. , 1277.5 301.6 299.4 300.4 306.4 316.1 316.3 318.9 321.5 320.0 319.1 321.3 320.8 39 Equipment , 1113.4 124.0 121.9 121.3 126.4 132.6 134.6 134.9 136.2 137.0 137.6 137.8 135.8 40 Intermediate products. . U16.6 124.8 126.6 126.2 126.4 130.1 131.4 131.8 132.8 133.1 133.4 133.1 134.3 1 1972 dollars. The industrial production indexes have been revised back to January 1976, on the basis of more complete information now available. A complete NOTE.—Published groupings include some series and subtotals not shown set of the revised 1976 series is attached to the September G.12.3 release separately. For summary description and historical data, see June 1976 which may be obtained from the Publications Services, Board of Governors BULLETIN, pp. 470-79. Availability of detailed descriptive and historical of the Federal Reserve System, Washington, D.C. 20551. data will be announced in a forthcoming BULLETIN. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A50 Domestic Nonfinancial Statistics • December 1977 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates. Exceptions noted. 1977 Item 1976 Apr. May July Aug.r Sept. Oct.f Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 1,074 927 1,296 1,605 1,615 1,678 1,639 1,772 1,695 1,852 2 1-family 644 669 894 1,051 1,077 1,105 1,089 1,156 1,135 1,199 3 2-or-more-family 431 278 402 554 538 573 550 616 560 653 4 Started 1,338 1,160 1,540 1,880 1,937 1,897 2,083 2,034 2,063 2,179 5 1-family 888 892 1,163 1,413 1,455 1,389 1,437 1,459 1,518 1,555 6 2-or-more-family 450 268 377 467 482 508 646 575 545 624 7 Under construction, end of period 1 1,189 1,003 1,147 1,268 1,302 1,323 1,344 1,366 1,376 8 1-family 516 531 655 748 111 787 793 806 804 9 2-or-more-family 673 All 492 520 531 536 551 562 572 10 Completed 1,692 1,297 1,362 1,540 1,536 1,647 1,671 1,691 1,679 11 1-family 931 866 1,026 1,226 1,177 1,209 1,267 1,278 1,252 12 2-or-more-family 760 430 336 314 359 438 404 413 All 13 Mobile homes shipped 329 213 250 252 251 264 251 270 300 323 Merchant builder activity in 1-family units: 14 Number sold 501 544 639 775 774 806 694 823 889 869 15 Number for sale, end of period*.. 407 383 433 441 441 444 453 467 467 476 Price (thous. of dollars)2 Median: 16 Units sold 35.9 39.3 44.2 48.7 49.3 49.0 48.6 49.0 48.5 51.7 17 Units for sale 36.2 38.9 41.6 43.3 43.9 44.3 44.8 45.2 45.9 46.6 Average: 18 Units sold 38.9 42.5 48.1 54.6 54.4 53.9 53.6 54.3 53.9 58.0 EXISTING UNITS (1-family) 19 Number sold 2,272 2,452 3,002 3,300 3,450 3,420 3,510 3,720 3,880 3,930 Price of units sold (thous. of dollars):2 20 Median 32.0 35.3 38.1 42.0 42.2 43.4 43.7 43.9 43.8 44.0 21 Average 35.8 39.0 42.2 46.5 46.8 47.7 48.0 48.1 47.9 48.2 Value of new construction 3 (millions of dollars) CONSTRUCTION 22 Total put in place 138,499 134,293 147,481 167,605 172,239 174,378 172,264 170,928 174,888 176,047 23 Private . 100,165 93,624 109,499 131,421 133,816 135,026 133,024 132,701 135,636 138,521 24 Residential 50,377 46,472 60,519 79,616 82,542 82,181 79,643 79,076 80,874 84,192 25 Nonresidential, total 49,788 47,152 48,980 51,805 51,274 52,845 53,381 53,625 54,762 54,329 Buildings: 26 Industrial 7,902 8,017 7,182 7,279 7,184 7,066 7,210 7,646 7,484 7,435 27 Commercial 15,945 12,804 12,757 13,851 13,760 15,235 15,533 15,257 16,054 15,702 28 Other 5,797 5,585 6,155 6,271 6,077 6,206 6,474 6,294 6,370 6,500 29 Public utilities and other. 20,144 20,746 22,886 24,404 24,253 24,338 24,164 24,428 24,854 24,692 30 Public 38,333 40,669 37,982 36,184 38,423 39,352 39,240 38,228 39,252 37,526 31 Military 1,188 1,392 1,508 1,494 1,642 1,566 1.538 1,460 1,497 1,385 32 Highway 12,066 10,861 9,756 9,052 9,835 10,792 9.539 9,449 9,051 33 Conservation and developm 2,740 3,256 3,722 4,012 3,562 3,196 4,252 4,120 4,878 34 Other4 . 22,339 25,160 22,996 21,626 23,384 23,798 23,911 23,199 23,826 1 Not at annual rates. NOTE.—Census Bureau estimates for all series except (a) mobile 2 Not seasonally adjusted. homes, which are private, domestic shipments as reported by the Manu- 3 Value of new construction data in recent periods may not be strictly factured Housing Institute and seasonally adjusted by the Census Bureau, comparable with data in prior periods due to changes by the Bureau of and (b) sales and prices of existing units, which are published by the the Census in its estimating techniques. For a description of these changes National Association of Realtors. All back and current figures are availsee Construction Reports (C-30-76-5), issued by the Bureau in July 1976. able from originating agency. Permit authorizations are for 14,000 4 Beginning Jan. 1977 Highway imputations are included in Other. jurisdictions reporting to the Census Bureau. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Prices A51 2.15 CONSUMER AND WHOLESALE PRICES Percentage changes based on seasonally adjusted data, except as noted. 12 months to— 3 months (at annual rate) to— 1 month to— Index level Item 1976 1977 1977 Oct. 1976 1977 1977 Oct. Oct. J j (1967 Dec. Mar. June Sept. June July Aug. Sept. Oct. = 100)1 Consumer prices 1 All items 5.3 6.5 4.2 10.0 8.1 4.2 .6 .4 .3 3 .3 184.5 2 Commodities 5.5 5.7 3.4 10.4 7.4 2.3 .5 .1 .3 .2 .2 177.0 3 Food 1.5 7.0 .0 14.6 12.7 1.7 .8 .1 .3 1 1 194.4 4 Commodities less food 4.9 4.9 5.7 7.4 4.2 2.7 .2 1 .3 !3 167.4 '.2 5 Durable 6.0 4.6 6.0 10.5 2.5 1.0 —. l o!o . 1 .2 .0 165.0 6 Nondurable 4.1 5.1 5.4 5.5 5.2 4.2 .4 •3 .4 .3 .5 169.2 7 Services 8.2 7.8 5.1 9.8 9.4 7.4 .8 .8 .5 .5 .4 198.5 8 Rent 5.5 6.3 5.3 6.3 6.3 7.0 .5 .6 .5 .6 .4 156.1 9 Services less rent 8.6 8.1 5.4 '9.9 '10.1 7.5 '.9 .8 '.4 .5 .4 206.2 Other groupings: 10 All items less food1 6.5 6.3 5.3 6.9 7.8 5.7 .6 .4 .4 .6 .4 181.6 11 All items less shelter1 5.2 6.3 4.3 9.4 '8.2 '3.6 .7 .3 .3 .2 .3 181.7 12 Homeo wnership1 5.4 7.8 1.2 9.1 9.6 10.6 .8 1.1 .6 .8 .4 210.0 Wholesale prices 13 All commodities 3.6 5.9 7.1 '10.6 '3.2 1.9 -.7 -.1 .1 .5 .8 196.3 14 Farm products, and processed foods and feeds -5.8 2.6 6.6 19.1 -2.5 -17.0 -3.6 -2.1 -2.1 -.4 1.3 184.2 15 Farm products -5.4 -2.3 5.8 '26.5 '-21.9 -22.3 -6.8 -1.8 -4.3 -.2 2.4 182.4 16 Processed foods and feeds -6.1 5.5 6.5 '15.4 '11.0 -14.1 -1.7 -2.4 -.8 -.6 .8 184.5 17 Industrial commodities 6.6 6.9 7.6 r8.1 '5.7 7.6 .3 .5 .5 .8 .6 199.1 Materials, supplies, and components of which: 18 Crude materials2 14.3 8.0 '21.8 '21.7 2.0 8.9 -1.6 0.0 1.9 .3 -.2 282.3 19 Intermediate materials 3 6.5 6.7 '7.5 8.0 '4.3 7.8 .2 .6 .5 .7 .5 206.2 Finished goods, excluding foods: 20 Consumer 5.2 6.4 5.2 '8.7 '6.3 5.2 .4 .2 .3 .7 .6 175.5 21 Durable 4.3 6.0 3.3 7.0 6.0 5.4 .3 .3 1.0 .1 1.1 156.1 22 Nondurable 5.7 6.6 6.5 '10.0 '6.5 4.8 .5 .2 0.0 1.0 '.3 188.4 23 Producer 6.4 7.2 '9.2 '5.5 6.3 5.6 .4 .4 .4 .5 1.5 189.9 MEMO: 24 Consumer foods -5.5 7.2 8.4 12.7 13.8 -7.5 -1.3 -.7 -.9 -.3 .3 189.8 1 Not seasonally adjusted. 3 Excludes intermediate materials for food manufacturing and manu- 2 Excludes crude foodstuffs and feedstuffs, plant and animal fibers, factured animal feeds. oilseeds, and leaf tobacco. SOURCE.—Bureau of Labor Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A52 Domestic Nonfinancial Statistics • December 1977 2.16 GROSS NATIONAL PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates. 1976 1977 Account 1974 1975 1976 Q2 Q3 Q4 Ql Q2 | Q3 Gross national product 1 Total 1,412.9 1,528.8 1,706.5 1,691.9 1,727.3 1,755.4 1 ,810.8 1,869.9 1,914.9 By source: 2 Personal consumption expenditures 889.6 980.4 1,094.0 1,078.5 1,102.2 1,139.0 1 ,172.4 1,194.0 1,216.9 3 Durable goods 122.0 132.9 158.9 156.7 159.3 166.3 177.0 178.6 178.0 4 Nondurable goods 376.3 409.3 442.7 437.1 444.7 458.8 466.6 474.4 478.6 5 Services 391.3 438.2 492.3 484.6 498.2 513.9 528.8 541.1 560.3 6 Gross private domestic investment 214.6 189.1 243.3 244.4 254.3 243.4 271.8 294.9 302.3 7 Fixed investment 205.7 200.6 230.0 226.1 232.8 244.3 258.0 273.2 279.2 8 Nonresidential 150.6 149.1 161.9 159.8 164.9 167.6 177.0 182.4 186.7 9 Structures 54.5 52.9 55.8 55.8 56.0 57.0 57.9 61.0 62.4 10 Producers' durable equipment 96.2 96.3 106.1 104.0 109.0 110.6 119.2 121.4 124.3 11 Residential structures 55.1 51.5 68.0 66.3 67.8 76.7 81.0 90.8 92.5 12 Nonfarm 52.7 49.5 65.7 64.1 65.7 74.3 78.5 88.2 89.9 13 Change in business inventories 8.9 -11.5 13.3 18.3 21.5 -.9 13.8 21.7 23.1 14 Nonfarm 10.8 -15.1 14.9 20.4 22.0 1.4 14.1 22.4 22.6 15 Net exports of goods and services 6.0 2.0 7.8 10.2 7.9 3.0 -8.2 -9.7 -7.6 16 Exports 137.9 147.3 162.9 160.6 168.4 168.5 170.4 178.1 180.4 17 Imports 131.9 126.9 155.1 150.4 160.6 165.6 178.6 187.7 188.1 18 Govt, purchases of goods and services 302.7 338.9 361.4 358.9 363.0 370.0 374.9 390.6 403.3 19 Federal 111.1 123.3 130.1 128.5 130.2 134.2 136.3 143.6 149.3 20 State and local 191.5 215.6 231.2 230.4 232.7 235.8 238.5 247.0 254.0 By major type of product: 21 Final sales, total 1,404.0 1,540.3 1,693.1 1,673.7 1,705.8 1,756.3 1 ,797.0 1,848.2 1,891.7 22 Goods 638.6 686.2 764.2 761.7 746.0 774.7 805.9 827.1 840.2 23 Durable goods 247.8 258.2 303.4 301.9 313.4 312.6 334.4 341.0 342.2 24 Nondurable 390.8 428.0 460.9 459.7 464.1 460.6 471.5 486.1 498.0 25 Services 626.8 699.2 782.0 770.8 791.8 813.8 833.7 855.3 883.7 26 Structures 147.4 143.5 160.2 159.4 159.6 166.9 171.2 187.5 191.0 27 Change in business inventories 8.9 -11.5 13.3 18.3 21.5 -.9 13.8 21.7 23.1 28 Durable goods 7.1 -9.2 4.1 7.0 10.7 .6 7.8 11.5 9.8 29 Nondurable goods 1.8 -2.2 9.3 11.2 12.4 -3.1 6.0 10.2 13.4 30 MEMO: Total GNP in 1972 dollars 1,217.8 1,202.1 1,274.7 1,271.5 1,283.7 1,287.4 1 ,311.0 1,330.7 1,346.1 National income 31 1,136.0 1,217.0 1,364.1 1,353.9 1,379.6 1,402.1 1,450.2 1,505.7 1,538.8 32 Compensation of employees 875.8 930.3 1,036.3 1,024.9 1,046.5 1,074.2 1 ,109.9 1,144.7 1,166.9 33 Wages and salaries 764.1 805.7 891.8 882.4 900.2 923.2 951.3 980.9 998.4 34 Government and Government enterprises.. 160.0 175.4 187.2 185.4 188.2 192.5 194.8 197.2 200.6 35 Other 604.1 630.3 704.6 697.0 712.0 730.7 756.4 783.6 797.8 36 Supplement to wages and salaries 111.7 124.6 144.5 142.5 146.3 150.9 158.6 163.8 116688..55 37 Employer contributions for social insurance 56.1 59.8 68.6 68.0 69.1 70.9 75.4 77.1 78.2 38 Other labor income 55.6 64.9 75.9 74.5 77.3 80.0 83.2 86.7 90.3 39 Proprietors' income1 86.4 86.0 88.0 90.4 86.2 88.7 95.1 97.0 95.5 40 Business and professional1 60.9 62.8 69.4 68.8 70.0 72.0 74.3 77.3 80.0 41 Farm1 25.4 23.2 18.6 21.6 16.2 16.6 20.7 19.7 15.5 42 Rental income of persons2 21.4 22.3 23.3 22.9 23.3 24.1 24.5 24.9 25.5 43 Corporate profits1 83.6 99.3 128.1 129.2 133.5 123.1 125.4 140.2 147.8 44 Profits before tax 3 126.9 123.5 156.9 159.2 159.9 154.8 161.7 174.0 171.6 45 Inventory valuation adjustment -40.4 -12.0 -14.1 -15.5 -11.7 -16.9 -20.6 -17.8 -5.9 46 Capital consumption adjustment -2.9 -12.2 -14.7 -14.6 -14.7 -14.8 -15.6 -15.9 -17.9 47 Net interest 69.0 79.1 88.4 86.5 90.1 92.0 95.3 98.9 103.1 1 With inventory valuation and capital consumption adjustments. 3 For after-tax profits, dividends, etc., see Table 1.50. 2 With capital consumption adjustments. SOURCE.—Survey of Current Business (U.S. Dept. of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
National Income Accounts A53 2.17 PERSONAL INCOME AND SAVING Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted. 1976 1977 11997744 11997755 11997766 AAccccoouunntt Q2 Q3 Q4 Q1 Q2 Q3 Personal income and saving 1 1111 TTTToooottttaaaallll ppppeeeerrrrssssoooonnnnaaaallll iiiinnnnccccoooommmmeeee 1,154.9 1,253.4 1,382.7 1,366.7 1,393.9 1,432.2 1,476.8 1,517.2 1,549.3 2222 WWWWaaaaggggeeee aaaannnndddd ssssaaaallllaaaarrrryyyy ddddiiiissssbbbbuuuurrrrsssseeeemmmmeeeennnnttttssss 764.6 805.7 891.8 882.4 900.2 923.2 951.3 980.9 998.4 3333 CCCCoooommmmmmmmooooddddiiiittttyyyy----pppprrrroooodddduuuucccciiiinnnngggg iiiinnnndddduuuussssttttrrrriiiieeeessss 274.6 275.0 308.4 306.7 310.8 317.7 328.9 345.4 350.9 4444 MMMMaaaannnnuuuuffffaaaaccccttttuuuurrrriiiinnnngggg 211.4 211.0 238.2 236.7 240.2 245.1 255.4 265.9 270.0 5555 DDDDiiiissssttttrrrriiiibbbbuuuuttttiiiivvvveeee iiiinnnndddduuuussssttttrrrriiiieeeessss 184.3 195.4 217.1 213.7 220.2 226.4 234.5 240.5 244.2 6666 SSSSeeeerrrrvvvviiiicccceeee iiiinnnndddduuuussssttttrrrriiiieeeessss 145.1 159.9 179.0 176.6 180.9 186.7 193.0 197.7 202.7 7777 GGGGoooovvvveeeerrrrnnnnmmmmeeeennnntttt aaaannnndddd ggggoooovvvveeeerrrrnnnnmmmmeeeennnntttt eeeennnntttteeeerrrrpppprrrriiiisssseeeessss 160.5 175.4 187.2 185.4 188.2 192.5 194.8 197.2 200.6 8888 OOOOtttthhhheeeerrrr llllaaaabbbboooorrrr iiiinnnnccccoooommmmeeee 55.6 64.9 75.9 74.5 77.3 80.0 83.2 86.7 90.3 9999 PPPPrrrroooopppprrrriiiieeeettttoooorrrrssss'''' iiiinnnnccccoooommmmeeee1111 86.2 86.0 88.0 90.4 86.2 88.7 95.1 97.0 95.5 11110000 BBBBuuuussssiiiinnnneeeessssssss aaaannnndddd pppprrrrooooffffeeeessssssssiiiioooonnnnaaaallll1111 60.9 62.8 69.4 68.8 70.0 72.0 74.3 77.3 80.0 11111111 FFFFaaaarrrrmmmm1111 25.4 23.2 18.6 21.6 16.2 16.6 20.7 15.5 19.7 11112222 RRRReeeennnnttttaaaallll iiiinnnnccccoooommmmeeee ooooffff ppppeeeerrrrssssoooonnnnssss2222 21.4 22.3 23.3 22.9 23.3 24.1 24.5 25.5 24.9 11113333 DDDDiiiivvvviiiiddddeeeennnnddddssss 31.0 32.4 35.8 35.0 36.0 38.4 38.5 42.3 40.3 11114444 PPPPeeeerrrrssssoooonnnnaaaallll iiiinnnntttteeeerrrreeeesssstttt iiiinnnnccccoooommmmeeee 103.0 115.6 130.3 127.5 132.2 136.4 140.3 150.3 145.4 11115555 TTTTrrrraaaannnnssssffffeeeerrrr ppppaaaayyyymmmmeeeennnnttttssss 140.8 176.8 192.8 188.7 194.3 198.0 203.5 208.7 11116666 OOOOlllldddd----aaaaggggeeee ssssuuuurrrrvvvviiiivvvvoooorrrrssss,,,, ddddiiiissssaaaabbbbiiiilllliiiittttyyyy,,,, aaaannnndddd hhhheeeeaaaalllltttthhhh 203.0 iiiinnnnssssuuuurrrraaaannnncccceeee bbbbeeeennnneeeeffffiiiittttssss 70.1 81.4 92.9 89.3 95.8 98.4 99.9 108.5 101.8 11117777 LLLLEEEESSSSSSSS:::: PPPPeeeerrrrssssoooonnnnaaaallll ccccoooonnnnttttrrrriiiibbbbuuuuttttiiiioooonnnnssss ffffoooorrrr ssssoooocccciiiiaaaallll 47.7 50.4 55.2 54.8 55.6 56.6 59.6 60.8 61.7 iiiinnnnssssuuuurrrraaaannnncccceeee 1,154.9 1,253.4 1.382.7 1.366.7 1,393.9 1.432.2 1,476.8 1,517.2 1,549.3 11118888 EEEEQQQQUUUUAAAALLLLSSSS:::: PPPPeeeerrrrssssoooonnnnaaaallll iiiinnnnccccoooommmmeeee 170.3 169.0 196.9 192.6 200.6 209.5 224.4 224.8 227.6 11119999 LLLLEEEESSSSSSSS:::: PPPPeeeerrrrssssoooonnnnaaaallll ttttaaaaxxxx aaaannnndddd nnnnoooonnnnttttaaaaxxxx ppppaaaayyyymmmmeeeennnnttttssss 984.6 1,084.4 1.185.8 1,174.1 1,193.3 1,222.6 1,252.4 1,292.5 1,321.7 22220000 EEEEQQQQUUUUAAAALLLLSSSS :::: DDDDiiiissssppppoooossssaaaabbbblllleeee ppppeeeerrrrssssoooonnnnaaaallll iiiinnnnccccoooommmmeeee 913.0 1,004.2 1.119.9 1.103.8 1,128.5 1.166.3 1,201.0 1,223.9 1,248.2 22221111 LLLLEEEESSSSSSSS:::: PPPPeeeerrrrssssoooonnnnaaaallll oooouuuuttttllllaaaayyyyssss 71.7 80.2 65.9 70.3 64.8 56.3 51.4 68.5 73.5 22222222 EEEEQQQQUUUUAAAALLLLSSSS:::: PPPPeeeerrrrssssoooonnnnaaaallll ssssaaaavvvviiiinnnngggg MMMMEEEEMMMMOOOO IIIITTTTEEEEMMMMSSSS:::: PPPPeeeerrrr ccccaaaappppiiiittttaaaa ((((1111999977772222 ddddoooollllllllaaaarrrrssss)))):::: 5,746 5,629 5,924 5,916 5,961 5,966 6,064 6,143 6,201 22223333 GGGGrrrroooossssssss nnnnaaaattttiiiioooonnnnaaaallll pppprrrroooodddduuuucccctttt 3,589 3,629 3,817 3,794 3,820 3,892 3,934 3,943 3,956 22224444 PPPPeeeerrrrssssoooonnnnaaaallll ccccoooonnnnssssuuuummmmppppttttiiiioooonnnn eeeexxxxppppeeeennnnddddiiiittttuuuurrrreeeessss 3,973 4,014 4,137 4,130 4,135 4,177 4,202 4,268 4,297 22225555 DDDDiiiissssppppoooossssaaaabbbblllleeee ppppeeeerrrrssssoooonnnnaaaallll iiiinnnnccccoooommmmeeee 7.3 7.4 5.6 6.0 5.4 4.6 4.1 5.3 5.6 22226666 SSSSaaaavvvviiiinnnngggg rrrraaaatttteeee ((((ppppeeeerrrr cccceeeennnntttt)))) Gross saving 22227777 GGGGrrrroooossssssss pppprrrriiiivvvvaaaatttteeee ssssaaaavvvviiiinnnngggg 209.5 259.4 272.5 275.4 277.2 261.6 262.9 292.1 310.9 22228888 PPPPeeeerrrrssssoooonnnnaaaallll ssssaaaavvvviiiinnnngggg 71.7 80.2 65.9 70.3 64.8 56.3 51.4 68.5 73.5 22229999 UUUUnnnnddddiiiissssttttrrrriiiibbbbuuuutttteeeedddd ccccoooorrrrppppoooorrrraaaatttteeee pppprrrrooooffffiiiittttssss1111 .2 16.7 27.6 28.0 31.6 20.8 22.5 30.3 37.6 33330000 CCCCoooorrrrppppoooorrrraaaatttteeee iiiinnnnvvvveeeennnnttttoooorrrryyyy vvvvaaaalllluuuuaaaattttiiiioooonnnn aaaaddddjjjjuuuussssttttmmmmeeeennnntttt................ -40.4 -12.0 -14.1 -15.5 -11.7 -16.9 -20.6 -17.8 -5.9 CCCCaaaappppiiiittttaaaallll ccccoooonnnnssssuuuummmmppppttttiiiioooonnnn aaaalllllllloooowwwwaaaannnncccceeeessss:::: 33331111 CCCCoooorrrrppppoooorrrraaaatttteeee 84.6 101.7 111.8 110.4 112.9 115.2 117.6 119.4 123.7 33332222 NNNNoooonnnnccccoooorrrrppppoooorrrraaaatttteeee 53.1 60.8 67.2 66.6 68.0 69.2 71.4 73.8 76.2 33333333 WWWWaaaaggggeeee aaaaccccccccrrrruuuuaaaallllssss lllleeeessssssss ddddiiiissssbbbbuuuurrrrsssseeeemmmmeeeennnnttttssss 34 Government surplus, or deficit (—), national income and product accounts -3.2 -64.3 -35.6 -33.3 -32.4 -29.4 -11.5 -14.9 -28.9 35 Federal -10.7 -70.2 -54.0 -46.2 -53.5 -55.9 -38.8 -40.3 -59.4 36 State and local 7.6 5.9 18.4 12.9 21.1 26.5 27.3 25.4 30.5 37 Capital grants received by the United States, net 38 Investment 210.1 201.0 242.5 246.5 252.8 237.5 254.7 276.1 284.2 39 Gross private domestic 214.6 189.1 243.3 244.4 254.1 243.3 271.8 294.9 302.3 40 Net foreign -4.5 11.8 -.9 2.2 -1.5 -5.9 -17.1 -18.8 -18.1 41 Statistical discrepancy 5.8 5.9 5.5 4.5 8.0 5.3 3.3 -1.2 2.2 1 With inventory valuation and capital consumption adjustments. SOURCE.—Survey of Current Business (U.S. Dept. of Commerce). 2 With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A54 International Statistics • December 1977 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data are seasonally adjusted except as noted.1 1976 1977 Item credits or debits 1974 1975 1976 Ql Q2 Q3 Q4 Ql Q2 1 Merchandise exports 98,306 107,088 114,694 27,000 28,380 29,603 29,711 29,458 30,488 2 Merchandise imports 103,673 98,043 124,014 28,343 29,955 32,411 33,305 36,561 38,347 3 Merchandise trade balance 2 -5,367 9,045 -9,320 -1,343 -1,575 -2,808 -3,594 -7,103 -7,859 4 Military transactions, net -2,083 -876 366 -65 -39 235 235 516 464 5 Investment income, net 8,744 5,954 9,808 2,437 2,280 2,667 2,424 3,252 3,401 6 Other service transactions, net 865 2,042 2,743 523 839 781 598 340 629 7 Balance on goods and services 3 2,160 16,164 3,596 1,552 1,505 875 -337 -2,995 -3,365 8 Remittances, pensions, and other transfers -1,714 -1,719 -1,878 -485 -459 -461 -473 -526 -505 9 U.S. Govt, grants (excluding military) -5,475 -2,893 -3,146 -544 -556 -1,475 -572 -637 -735 10 Balance on current account --55,,002288 11,552 --11,,442277 523 490 -1,061 -1,382 -4,158 -4,605 11,,445588 662211 --33,,880099 330033 --33,,440099 --44,,881122 12 Change in U.S. Govt, assets, other than official reserve assets, net (increase, —) 365 -3,463 -4,213 -723 -944 -1,405 -1,142 -909 -827 13 Change in U.S. official reserve assets (increase, —) -1,434 -607 2,530 -773 -1,578 -407 -228 -388 6 14 Gold --5588 15 Special Drawing Rights (SDR's) -172 -66 — 78 —45 14 —18 —29 — 83 16 Reserve position in International Monetary Fund (IMF). -1,265 -466 -2,212 -237 -798 -716 -461 -389 -80 17 Foreign currencies 3 -75 -240 -491 -794 327 718 59 169 18 Change in U.S. private assets abroad (increase, —) -25,960 -27,478 -36,216 -9,254 -7,257 -6,597 -13,108 1,627 -10,952 19 Bank-reported claims -19,516 -13,532 -20,904 -3,630 -4,754 -3,372 -9,148 3,446 -5,426 20 Long-term -1,183 -2,357 -2,124 -289 -377 -978 -480 -306 -28 21 Short-term -18,333 -11,175 -18,780 -3,341 -4,377 -2,394 -8,668 3,752 -5,398 22 Nonbank-reported claims -3,221 -1,447 -1,986 -738 -1,004 723 -967 -722 -1,179 23 Long-term -474 -432 10 -191 145 66 -10 45 85 24 Short-term -2,747 -1,015 -1,996 -547 -1,149 657 -957 -767 -1,264 25 U.S. purchase of foreign securities, net -1,854 -6,236 -8,730 -2,460 -1,357 -2,743 -2,171 -692 -1,746 26 U.S. direct investments abroad, net -1,368 -6,264 -4,596 -2,427 -142 -1,205 -822 -404 -2,602 27 Change in foreign official assets in the United States (increase', -f) 10,981 6,960 17,945 3,847 4,051 3,070 6,977 5,719 6,935 3,282 4,408 9,333 1,998 2,166 1,260 3,909 5,149 4,757 29 Other U.S. Govt, obligations 902 905 566 68 316 66 116 100 588 30 Other U.S. Govt, liabilities 4 724 1,701 4,938 1,524 743 1,819 852 712 307 31 Other U.S. liabilities reported by U.S. banks 5,818 -2,158 893 -412 135 -599 1,769 -420 410 32 Other foreign official assets 5 254 2,104 2,215 669 691 524 331 178 873 33 Change in foreign private assets in the United States (increase, +) 22,631 7,376 16,575 3,009 3,333 5,132 5,102 -3,209 6,056 34 U.S. bank-reported liabilities 16,017 628 10,982 672 3,528 1,774 5,008 -5,298 6,321 35 Long-term 9 -280 175 -105 -16 75 221 47 98 36 Short-term 16,008 908 10,807 777 3,544 1,699 4,787 -5,345 6,223 37 U.S. nonbank-reported liabilities 1,844 240 -616 161 -238 -297 -242 -374 -298 38 Long-term -90 334 -947 -233 -162 -241 -311 -229 -102 39 Short-term 1,934 -94 331 394 -76 -56 69 -145 -196 40 Foreign private purchases of U.S. Treasury securities, 697 2,590 2,783 437 -592 3,026 -88 1,047 -1,273 41 Foreign purchases of other U.S. securities, net 378 2,503 1,250 1,030 131 68 21 879 820 42 Foreign direct investments in the United States, net.... 3,695 1,414 2,176 709 504 561 403 537 486 43 Allocation of SDR's -1,555 5,660 9,866 3,372 1,905 1,268 3,325 1,317 3,388 45 Owing to seasonal adjustments 771177 112299 --22,,662222 11,,778800 552244 --220055 46 Statistical discrepancy in recorded data before seasonal -1,555 5,660 9,866 2,655 1,776 3,890 1,545 793 3,593 MEMO ITEMS : Changes in official assets: 47 U.S. official reserve assets (increase, —) -1,434 -607 -2,530 -773 -1,578 -407 228 -388 6 48 Foreign official assets in the United States (increase, -f). 10,257 5,259 13,007 2,323 33,,330088 11,,225511 6,125 55,,000077 66,,662288 49 Changes in Organization of Petroleum Exporting Countries (OPEC) official assets in the United States (part of line 27 above) 10,841 7,092 9,324 3,482 33,,226633 11,,777744 805 33,,224499 824 50 Transfers under military grant programs (excluded from lines 1, 4, and 9 above) 1,817 2,217 386 50 86 156 94 46 28 1 Seasonal factors are no longer calculated for lines 13 through 50. excludes certain military sales to Israel from exports and excludes U.S. 2 Data are on an international accounts (IA) basis. Differs from the Govt, interest payments from imports. Census basis primarily because the IA basis includes imports into the 4 Primarily associated with military sales contracts and other transac- U.S. Virgin Islands, and it excludes military exports, which are part of tions arranged with or through foreign official agencies. Line 4. 5 Consists of investments in U.S. corporate stocks and in debt securi- 3 Differs from the definition of "net exports of goods and services" in ties of private corporations and state and local governments. the national income and product (GNP) account. The GNP definition NOTE.—Data are from Bureau of Economic Analysis, Survey of Current Business (U.S. Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Trade and Reserve Assets A55 3.11 U.S. FOREIGN TRADE Millions of dollars; monthly data are seasonally adjusted. 1977 IItteemm 11997744 11997755 11997766 Apr. May June July Aug. Sept. Oct. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments 97,908 107,130 114,802 9,970 10„395 10,112 10,150 9,563 10,916 9,190 2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 100,252 96,115 120,678 12,593 11,616 12,932 12,476 12,232 12,631 12,288 3 Trade balance -2,344 +11,014 -5,876 -2,623 -1,221 -2,820 -2,326 -2,669 -1,715 -3,098 NOTE.—Bureau of Census data reported on a free-alongside-ship exports (which are combined with other military transactions and are (f.a.s.) value basis. Before 1974 imports were reported on a customs reported separately in the "service account"). On the import side, the import value basis. For calendar year 1974 the f.a.s. import value was largest single adjustment is the addition of imports into the Virgin Islands $100.3 billion, about 0.7 per cent less than the corresponding customs (largely oil for a refinery on St. Croix), which are not included in Census import value. The international-accounts-basis data shown in Table 3.10 statistics. adjust the Census basis data for reasons of coverage and timing. On the export side, the largest adjustments are: (a) the addition of exports to SOURCE.—FT 900 "Summary of U.S. Export and Import Merchandise Canada not covered in Census statistics, and (b) the exclusion of military Trade" (U.S. Dept. of Commerce, Bureau of the Census). 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 1977 TTyyppee 11997744 11997755 11997766 May June July Aug. Sept. Oct. Nov.p 1 Total 15,883 16,226 18,747 19,195 19,156 18,927 19,055 318,988 19,048 319,155 2 Gold stock, including Exchange Stabilization Fund1 11,652 11,599 11,598 11,658 11,658 11,658 11,658 11,658 11,658 11,658 3 Special Drawing Rights2 2,374 2,335 2,395 2,470 2,486 2,498 2,483 3 2,489 2,530 3 2,548 4 Reserve position in International Monetary Fund 1,852 2,212 4,434 4,972 4,920 4,716 4,859 3 4,776 3 4,842 34,933 5 Convertible foreign currencies 5 80 320 95 92 55 55 65 18 16 1 Gold held under earmark at F.R. Banks for foreign and international SDR based on a weighted average of exchange rates for the currencies accounts is not included in the gold stock of the United States; see Table of 16 member countries. The U.S. SDR holdings and reserve position in 3.24. the IMF also are valued on this basis beginning July 1974. At valuation 2 Includes allocations by the International Monetary Fund (IMF) of used prior to July 1974 (SDR1 = $1.20635) total U.S. reserve assets SDR's as follows: $867 million on Jan. 1, 1970; $717 million on Jan. 1, at end of Nov. amounted to $19,177; SDR holdings, $2,597, and reserve 1971; and $710 million on Jan. 1, 1972; plus net transactions in SDR's. position in IMF, $4,906. 3 Beginning July 1974, the IMF adopted a technique for valuing the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A56 International Statistics • December 1977 3.13 SELECTED U.S. LIABILITIES TO FOREIGNERS Millions of dollars, end of period 1977 HHoollddeerr,, aanndd ttyyppee ooff lliiaabbiilliittyy 11997744 11997755 11997766 Apr.r May T Juner July Aug. Sept.p Oct.f 1 Total 119,164 126,552 151,356 156,382 160,950 163,545 168,799 166,319 174,635 178,851 2 Foreign countries 115,842 120,929 142,873 148,668 152,259 155,362 162,379 159,163 167,221 171,455 3 Official institutions1 76,823 80,712 91,975 99,843 102,112 103,656 107,601 108,134 111,195 117,039 4 Short-term, reported by banks in the United States.2 53,079 49,530 53,619 57,531 58,260 57,413 60,059 56,810 56,780 59,798 U.S. Treasury bonds and notes: 5 Marketable3 5,059 6,671 11,788 15,230 16,382 18,345 19,393 23,089 25,597 28,604 6 Nonmarketable4 16,339 19,976 20,648 20,976 20,950 20,917 20,837 20,655 21,128 20,351 7 Other readily marketable liabilities 5 2,346 4,535 5,920 6,106 6,520 6,981 7,312 7,580 7,690 8,286 Commercial banks abroad: 8 Short-term, reported by banks in the United States2,6 30,106 29,516 37,329 34,748 35,521 36,687 39,946 35,789 40,362 38,704 9 Other foreigners 8,913 10,701 13,569 14,077 14,626 15,019 14,832 1155,,224400 15,664 1155,,771122 10 Short-term, reported by banks in the United States2 88,,441155 10,000 12,592 12,873 13,398 13,623 1133,,337777 1133,,668844 1144,,003366 1144,,002211 11 Marketable U.S. Treasury bonds and notes3,7 498 701 977 1,204 1,228 1,396 1,455 1,556 1,628 1,691 12 Nonmonetary international and regional organization8 3,322 5,623 8,483 7,714 8,691 8,183 6,420 7,156 7,414 7,396 13 Short-term, reported by banks in the United States2 3,171 5,292 5,450 5,287 6,556 5,727 3,834 4,216 33,,555555 3,395 14 Marketable U.S. Treasury bonds and notes3 151 331 3,033 2 All 2,135 2,456 2,586 2,940 3,859 4,001 1 Includes Bank for International Settlements. 8 Principally the International Bank for Reconstruction and Develop- 2 Includes Treasury bills as shown in Table 3.15. ment and the Inter-American and Asian Development Banks. 3 Derived by applying reported transactions to benchmark data. 4 Excludes notes issued to foreign official nonreserve agencies. NOTE.—Based on Treasury Dept. data and on data reported to the 5 Includes long-term liabilities reported by banks in the United States Treasury Dept. by banks (including Federal Reserve banks) and brokers and debt securities of U.S. Federally sponsored agencies and U.S. cor- in the United States. Data exclude the holdings of dollars of the Interporations. national Monetary Fund derived from payments of the U.S. subscription, 6 Includes short-term liabilities payable in foreign currencies to com- and from the exchange transactions and other operations of the IMF. mercial banks abroad and to other foreigners. Data also exclude U.S. Treasury letters of credit and nonnegotiable, non- 7 Includes marketable U.S. Treasury bonds and notes held by com- interest-bearing special U.S. notes held by nonmonetary international mercial banks abroad and other foreigners. and regional organizations. 3.14 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1977 AArreeaa 11997744 11997755 11997766 Apr.r May r Juner July r Aug. Sept.? Oct.35 1 76,823 80,712 91,975 99,843 102,112 103,656 107,601 108,134 111,195 117,039 2 Western Europe 1 44,328 45,701 45,882 49,288 50,605 53,342 55,669 57,741 60,716 64,969 3 Canada 3,662 3,132 3,406 2,752 2,798 2,699 2,653 2,553 2,507 1,862 4 Latin American republics 4,419 4,450 4,906 4,396 4.672 4,240 4,340 4,246 4,463 4,269 5 Asia 18,627 22,551 34,108 39,486 40,341 39,839 41,162 40,438 40,331 42,752 6 Africa 3,160 2,983 1,893 1,883 1,821 1,938 2,458 2,265 2,144 2,026 7 Other countries 2 2,627 1,895 1,780 2,038 1,875 1,598 1,319 891 1,034 1,161 1 Includes Bank for International Settlements. NOTE.—Data represent breakdown by area of line 3, Table 3.13. 2 Includes countries in Oceania and Eastern Europe, and Western European dependencies in Latin America. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Nonbank-reported Data A57 3.15 SHORT-TERM LIABILITIES TO FOREIGNERS Reported by Banks in the United States By Holder and by Type of Liability Millions of dollars, end of period 1977 HHoollddeerr,, aanndd ttyyppee ooff lliiaabbiilliittyy 1974 1975 1976 Apr.t Mayf Junet July Aug.f Sept.** Oct.p 1 AH foreigners, excluding the International Monetary Fund 94,771 94,338 108,990 111,002 114,449 113,432 117,216 110,595 114,733 115,919 2 Payable in dollars 94,004 93,781 110088,,226666 111100,,119944 111133,,779966 112,758 116,256 109,705 111133,,998899 111155,,113322 Deposits: 3 Demand 14,051 1133,,556644 16,803 15,382 16,732 16,272 17,496 15,950 16,894 16,900 4 Time1 9,907 10,250 11,316 11,282 11,612 12,082 11,833 11,745 11,607 11,534 5 U.S. Treasury bills and certificates2 35,662 37,414 40,744 44,661 45,463 44,110 44,413 42,240 43,180 44,638 6 Other short-term liabilities 3 34,384 32,552 39,403 38,869 39,990 40,294 42,515 39,770 42,306 42,061 7 Payable in foreign currencies 766 558 724 809 653 675 960 890 744 787 8 Nonmonetary international and regional organizations4 3,171 5,293 5,450 5,287 6,557 5,728 3,834 4,216 3,555 3,396 9 Payable in dollars 33,,117711 5,284 55,,444455 55,,228844 66,,555511 55,,771155 33,,881199 44,,117788 33,,552233 33,,337766 Deposits: 10 Demand 139 139 290 119 172 228 122 142 214 173 11 Time1 111 148 205 207 167 156 154 147 134 146 12 U.S. Treasury bills and certificates 497 2,554 2,701 2,849 2,977 2,521 2,191 1,990 1,875 802 13 Other short-term liabilities5 2,424 2,443 2,250 2,109 3,234 2,811 1,352 1,900 1,300 2,255 14 Pnvahlp in fnrpion rurrcnripc 8 5 3 6 13 15 38 32 20 15 Official institutions, banks, and other foreigners.. 91,600 89,046 103,540 105,715 107,892 107,705 113,382 106,379 111,178 112,523 16 Payable in dollars 90,834 88,496 102,821 104,910 107,246 107,043 112,437 105,527 111100,,446666 111,756 Deposits: 17 Demand 13,912 13,426 16,513 15,262 16,559 16,044 17,374 15,808 16,681 16,727 18 Time1 9,796 10,102 11,112 11,076 11,445 11,926 11,679 11,599 11,473 11,388 19 U.S. Treasury bills and certificates2 35,165 34,860 38,042 41,812 42,485 41,589 42,221 40,250 41,305 43,836 20 Other short-term liabilities3 31,961 30,109 37,153 36,760 36,756 37,483 41,163 37,870 41,005 39,805 21 Payable in foreign currencies 766 549 719 805 647 662 945 852 712 767 22 Official institutions6 53,079 49,530 53,619 57,486 58,260 57,413 60,059 56,773 56,780 59,798 23 Payable in dollars 52,952 49,530 53,619 57,486 58,260 5577,,441133 6600,,005599 5566,,777733 5566,,778800 5599,,779988 Deposits: 24 Demand 2,951 2,644 33,,339944 2,747 2,676 2,705 3,642 3,122 3,133 2,990 25 Time1 4,167 3,423 2,321 2,335 2,441 2,506 2,401 2,241 1,984 1,898 26 U.S. Treasury bills and certificates2 34,656 34,199 37,725 41,508 42,197 41,322 41,926 39,810 40,780 43,370 27 Other short-term liabilities 5 11,178 9,264 10,179 10,896 10,947 10,880 12,090 11,600 10,882 11,540 28 Pavahle in foreien currencies 127 29 Banks and other foreigners 38,520 39,515 49,921 48,230 49,362 50,292 53,323 49,606 54,398 52,725 30 Payable in dollars 37,881 38,966 49,202 47,424 48,985 49,630 52,378 48,754 53,686 51,958 31 Banks 7 29,467 28,966 36,610 3344,,555511 3355,,559922 3366,,001155 3399,,000011 3355,,007700 3399,,665500 3377,,993377 Deposits : 32 Demand 8,231 7,534 9,104 8,712 9,772 9,551 10,136 8,936 9,678 9,681 33 Time1 1,885 1,856 2,267 1,675 1,808 2,128 1,826 1,868 1,861 1,891 34 U.S. Treasury bills and certificates 232 335 119 104 108 100 144 112 121 121 35 Other short-term liabilities 3 19,119 19,241 25,120 24,060 23,904 24,236 26,895 24,154 27,990 26,244 36 Other foreigners 8,414 10,000 12,592 12,873 13,393 1133,,661144 13,376 1133,,668844 1144,,003366 1144,,002211 Deposits: 37 Demand 2,729 3,248 4,015 3,803 4,111 3,788 3,595 3,751 3,870 4,056 38 Time1 3,744 4,823 6,524 7,065 7,196 7,292 7,453 7,490 7,628 7,599 39 U.S. Treasury bills and certificates 277 325 198 201 180 167 151 328 404 345 40 Other short-term liabilities5 1,664 1,604 1,854 1,804 1,906 2,367 2,177 2,116 2,133 2,021 41 Payable in foreign currencies 639 549 719 805 647 662 945 852 712 767 1 Excludes negotiable time certificates of deposit, which are included 5 Principally bankers acceptances, commercial paper, and negotiable in "Other short-term liabilities." time certificates of deposit. 2 Includes nonmarketable certificates of indebtedness and Treasury 6 Foreign central banks and foreign central governments and their bills issued to official institutions of foreign countries. agencies, and Bank for International Settlements. 3 Includes liabilities of U.S. banks to their foreign branches, liabilities i Excludes central banks, which are included in "Official institutions." of U.S. agencies and branches of foreign banks to their head offices and t Revised figures for this month will be published in the January 1978 foreign branches of their head offices, bankers acceptances, commercial BULLETIN. paper, and negotiable time certificates of deposit. 4 Principally the International Bank for Reconstruction and Develop- NOTE.—"Short-term obligations" are those payable on demand, or ment, and the Inter-American and Asian Development Banks. having an original maturity of 1 year or less. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A58 International Statistics • December 1977 3.16 SHORT-TERM LIABILITIES TO FOREIGNERS Reported by Banks in the United States By Country Millions of dollars, end of period 1977 Area and country 1974 1975 1976 Apr.r Mayr Juner July Aug. Sept.*3 Oct.^ 1 Total 94,771 94,338 108,990 110,439 113,735 113,448 117,216 110,499 114,733 2 Foreign countries. 91,600 89,046 103,540 105,152 107,179 107,720 113,382 106,283 111,178 3 Europe 48,813 43,988 46,938 44,431 47,505 49,627 50,604 48,953 51,430 4 Austria 607 754 348 506 409 465 455 498 448 5 Belgium-Luxembourg.., 2,506 2,898 2,275 2,609 2,641 2,704 2,822 2,691 2,667 6 Denmark 369 332 363 809 974 1,178 1,154 I,032 1,172 7 Finland 266 391 422 306 242 258 209 217 248 8 France 4,287 7,733 4,875 4,748 4,921 5,089 4,745 4,894 4,799 9 Germany 9,429 4,357 5,965 4,490 4,825 4,271 4,937 4,413 4,289 10 Greece 248 284 403 350 409 556 573 709 629 11 Italy 2,577 1,072 3,206 2,625 3,509 4,636 5,422 5,538 5,770 12 Netherlands 3,234 3,411 3,007 2,924 3,111 3,545 3.397 3,328 3,216 13 Norway 1,040 996 785 906 999 1.195 1,203 1,140 1,190 14 Portugal 310 195 239 184 238 163 222 169 173 15 Spain 382 426 561 501 586 667 642 543 723 16 Sweden 1,138 2,286 1,693 2,047 2,431 2,390 1,963 1,782 2,483 17 Switzerland 10,139 8,514 9,458 8,798 8,436 9,323 9,162 9,386 9,920 18 Turkey 152 118 166 81 68 127 101 203 93 19 United Kingdom 7,584 6,886 10,004 10,086 11,230 10,701 11,250 10,226 11,426 20 Yugoslavia 183 126 188 111 102 115 125 110 119 21 Other Western Europe1 4,073 2,970 2,672 2,132 2,136 2,009 1,973 1,855 1,839 22 U.S.S.R 82 40 51 41 66 73 88 70 53 23 Other Eastern Europe. , 206 200 255 176 172 162 160 151 174 24 Canada. 3,520 3,076 4,784 4,823 4,869 4,253 4,456 4,631 4.491 25 Latin America 11,754 14,942 19,026 20,447 19,958 20,786 23,038 21,412 24,433 26 Argentina 886 1,147 1,538 1,845 1,971 1,699 1,754 2,022 2,187 27 Bahamas 1,054 1,827 2,750 4,001 2.744 3,777 5,518 4,283 5,940 28 Brazil 1,034 1,227 1,432 1,225 1,175 1,357 1.398 1,233 1,096 29 Chile 276 317 335 329 432 393 373 353 342 30 Colombia 305 417 1,017 1,253 1,172 1.196 1,220 1,164 1.152 31 Cuba 7 6 6 6 8 7 6 6 6 32 Mexico 1,770 2,066 2,848 2,699 2,764 2,832 2,869 2,790 2,797 33 Panama 510 1,099 1,140 1,008 984 941 1,015 954 947 34 Peru 272 244 257 255 219 224 241 273 288 35 Uruguay 165 172 245 263 251 234 242 230 244 36 Venezuela 3,413 3,289 3,095 2,450 3,006 2,478 2,532 2,887 3,037 37 Other Latin American republics. 1,316 1,494 2,081 2,284 2,270 2,376 2,238 2,154 2,318 38 Netherlands Antilles2 158 129 140 173 215 207 158 180 169 39 Other Latin America 589 1,507 2,142 2,656 2.745 3,066 3,476 2,886 3,910 40 Asia. 21,130 21,539 28,472 30,504 29,933 28,456 30,296 26,931 26,457 41 China, People's Republic of (Mainland).... 50 123 47 52 53 44 49 46 44 42 China, Republic of (Taiwan) 818 1,025 989 1,138 1,210 1,196 1,259 925 924 43 Hong Kong 530 623 892 993 950 931 1,028 1,066 1.153 44 India 261 126 648 648 721 814 746 743 850 45 Indonesia 1,221 369 340 887 531 282 782 589 453 46 Israel 389 386 391 466 503 547 484 467 416 47 Japan 10,931 10,218 14,380 13,071 12,481 12,387 12,837 II,691 11,440 48 Korea 384 390 437 430 472 534 633 527 600 49 Philippines 747 698 627 624 634 614 653 561 559 50 Thailand 333 252 275 308 275 257 281 293 264 51 Middle East oil-exporting countries3 4,623 6,461 8,073 10,414 10,447 9,283 9,976 8,828 8.492 52 Other 845 867 1,372 1,473 1,655 1,568 1,568 1,195 1,262 53 Africa 3,551 3,373 2,300 2,587 2,753 2,671 3,284 3,177 3,023 54 Egypt 103 343 333 245 360 314 401 603 484 55 Morocco 38 68 88 91 93 81 73 61 68 56 South Africa 130 169 143 176 184 237 264 185 208 57 Zaire 84 63 35 28 30 30 40 38 36 58 Oil-exporting countries4. 2,814 2,239 1,116 1,151 1,205 1,145 1,541 1,430 1,565 59 Other 383 491 585 896 881 866 966 860 662 60 Other countries. 2,831 2,128 2,019 2,361 2,162 1,926 1,704 1,179 1,345 61 Australia 2,742 2,014 1,911 2,223 2,026 1,800 1,553 1,007 1,198 62 All other 89 114 108 138 135 126 151 172 146 63 Nonmonetary international and regional organizations 3,171 5,293 5,450 5,287 6,557 5,728 3,834 4,216 3,555 64 International 2,900 5,064 5,091 4,995 6,230 5,365 3,484 3,816 3,182 65 Latin American regional. 202 187 136 110 118 144 165 187 161 66 Other regional5 69 42 223 182 209 218 186 213 212 For notes see bottom of p. A59. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Nonbank-reported Data A59 3.17 SHORT-TERM LIABILITIES TO FOREIGNERS Reported by Banks in the United States Supplemental "Other" Countries 1 Millions of dollars, end of period 1975 1976 1977 1975 1976 Area and country Area and country Apr. Dec. Apr. Dec. Apr. Apr. Dec. Apr. Dec. Other Western Europe Other Asia 1 Cyprus 38 68 58 25 Afghanistan 19 41 57 2 Iceland 43 40 32 26 Bangladesh 50 54 44 3 Ireland, Republic of. 43 236 131 27 Burma 49 31 34 28 Cambodia 4 4 3 Other Eastern Europe 29 Jordan 30 39 23 4 Bulgaria 13 19 14 30 Laos 5 2 2 5 Czechoslovakia 11 32 11 31 Lebanon 180 117 132 6 German Democratic Republic. 18 17 3 32 Malaysia 92 77 130 7 Hungary 11 13 11 16 33 Nepal 22 28 34 8 Poland 42 66 74 64 34 Pakistan 118 74 92 9 Rumania 14 44 29 23 35 Singapore 215 256 344 36 Sri Lanka (Ceylon) 13 13 10 Other Latin American republics 37 Vietnam 70 62 66 10 Bolivia 93 110 117 121 135 Costa Rica 120 124 134 134 170 Other Africa Dominican Republic 214 169 170 274 280 38 Ethiopia (incl. Eritrea) 76 60 72 Ecuador 157 120 150 319 311 39 Ghana 13 23 45 El Salvador 144 171 212 176 214 40 Ivory Coast 11 18 17 Guatemala 255 260 368 340 392 41 Kenya 32 19 39 Haiti 34 38 48 46 68 42 Liberia 33 53 63 Honduras 92 99 137 134 210 43 Southern Rhodesia 3 Jamaica 62 41 59 34 43 44 Sudan 14 12 17 Nicaragua 126 133 158 113 133 45 Tanzania 21 30 20 Paraguay 38 43 50 47 60 46 Tunisia 23 29 34 Surinam 2 13 29 17 47 Uganda 38 22 50 Trinidad and Tobago 31 131 44 167 85 48 Zambia 18 78 14 Other Latin America: All Other 23 Bermuda 100 170 197 177 199 49 New Zealand 36 42 48 24 British West Indies. 627 1,311 2,284 1,874 2,377 1 Represents a partial breakdown of the amounts shown in the "Other" 2 Surinam included with Netherlands Antilles until January 1976. categories on Table 3.16. 3.18 LONG-TERM LIABILITIES TO FOREIGNERS Reported by Banks in the United States Millions of dollars, end of period 1977 HHoollddeerr,, aanndd aarreeaa oorr ccoouunnttrryy 11997744 11997755 11997766 rr Apr.r Mayr Juner July Aug. Sept.*5 Oct.p 1 Total 1,285 1,812 2,432 2,004 2,230 2,376 2,322 2,336 2,508 2,639 2 Nonmonetary international and regional organizations 822 415 269 255 266 279 269 313 330 352 3 Foreign countries 464 1,397 2,163 1,750 1,964 2,097 2,053 2,023 2,178 2,287 4 Official institutions, including central banks. .. 124 931 1,337 852 1,080 1,135 1,081 1,006 1,074 1,144 5 Banks, excluding central banks 261 366 621 631 615 650 644 680 713 720 6 Other foreigners 79 100 204 267 270 312 329 337 391 422 Area or country: 7 Europe 226 330 570 583 579 628 634 664 708 717 8 Germany 146 214 346 304 297 312 307 308 307 308 9 United Kingdom 59 66 124 131 133 147 162 169 200 203 10 Canada 19 23 29 35 34 35 33 27 27 27 11 Latin America 115 140 230 264 254 280 287 304 324 346 12 Middle East oil-exporting countries1 94 894 1,286 848 1,076 1,130 1,075 987 1,056 1,119 13 Other Asia 7 8 46 18 19 18 18 34 38 53 14 African oil-exporting countries 2 * * j 15 Other Africa 11 11 22 22 66 66 66 2233 2222 ** ** 16 All other countries 1 11 11 11 11 11 11 22 1 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, NOTE.—Long-term obligations are those having an original maturity and United Arab Emirates (Trucial States). of more than 1 year. 2 Comprises Algeria, Gabon, Libya, and Nigeria. NOTES TO TABLE 3.16: 1 Includes Bank for International Settlements. 4 Comprises Algeria, Gabon, Libya, and Nigeria. 2 Surinam included with Netherlands Antilles until January 1976. 5 Asian, African, and European regional organizations, except BIS, 3 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, which is included in "Other Western Europe." and United Arab Emirates (Trucial States). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A60 International Statistics • December 1977 3.19 SHORT-TERM CLAIMS ON FOREIGNERS Reported by Banks in the United States By Country Millions of dollars, end of period 1977 Area and country 1974 1975 1976 r Apr.r Mayr Juner July Aug. Sept.*5 Oct.p 1 Total 39,056 50,231 69,139 65,637 68,060 69,732 69,608 68,592 69,048 71,890 2 Foreign countries 39,055 50,229 69,134 65,632 68,057 69,720 69,599 68,581 69,037 71,881 3 Europe 6,255 8,987 12,122 11,414 12,185 12,923 12,763 12,277 13,347 13,657 4 Austria 21 15 44 63 43 53 63 53 117 74 5 Belgium-Luxembourg 384 352 662 470 589 759 505 476 558 782 6 Denmark 46 49 85 84 84 85 86 100 140 127 7 Finland 122 128 139 126 130 113 101 103 95 111 8 France 673 1,471 1,445 1,511 1,546 1,455 1,503 1,471 1,356 1,338 9 Germany 589 416 517 550 503 575 647 648 615 767 10 Greece 64 49 79 70 65 51 66 68 103 98 11 345 370 929 946 979 875 972 1,014 1,054 1,075 12 Netherlands 348 300 304 385 362 480 471 371 447 306 13 Norway 119 71 98 142 148 124 121 135 109 120 14 Portugal 20 16 65 90 100 97 110 138 148 138 15 Spain 196 249 373 363 302 284 323 344 346 471 16 Sweden 180 167 180 116 79 101 153 151 139 172 17 Switzerland 335 237 485 496 473 484 488 533 700 685 18 Turkey 15 86 176 291 322 333 333 329 337 329 19 United Kingdom 2,580 4,718 6,179 5,320 6,074 6,638 6,473 6,011 6,771 6,536 20 Yugoslavia 22 38 41 31 55 58 49 35 34 28 21 Other Western Europe 22 27 52 51 40 51 42 47 43 267 22 U.S.S.R 46 103 99 108 82 90 88 81 89 82 23 Other Eastern Europe 131 r127 171 203 209 216 169 169 146 150 24 Canada 2,776 2,817 3,049 3,701 3,554 3,607 3,728 3,978 3,387 3,669 25 Latin America 12,377 20,532 34,270 32,171 3333,,119900 33,413 33,415 32,826 33,034 34,953 26 Argentina 720 1,203 964 873 888866 904 839 856 939 1,076 27 Bahamas 3,405 7,570 15,336 14,157 15,127 16,058 15,061 13,647 13,502 15,950 28 Brazil 1,418 2,221 3,322 3,186 3,061 3,030 3,026 3,077 3,003 3,141 29 Chile 290 360 387 420 362 349 373 382 431 435 30 Colombia 713 689 586 565 505 495 514 542 528 570 31 Cuba 14 13 13 13 13 13 13 13 13 10 32 Mexico 1,972 2,802 3,432 3,302 3,249 3,204 3,469 3,455 3,478 3,252 33 Panama 505 1,052 1,257 1,135 1,469 905 1,278 1,463 1,063 1,430 34 Peru 518 583 704 756 741 797 796 783 785 737 35 Uruguay 63 51 38 35 36 32 38 39 42 47 36 Venezuela 704 1,086 1,564 1,197 1,359 1,348 1,421 1,435 1,656 1,654 37 Other Latin American republics 852 967 1,125 1,079 1,176 1,144 1,181 1,233 1,224 1,292 38 Netherlands Antilles1 62 49 40 54 36 69 64 57 75 61 39 Other Latin America 1,142 1,885 5,503 5,401 5,170 5,066 5,342 5,844 6,294 5,297 40 16,226 16,057 17,672 15,760 16,606 16,979 17,025 16,838 16,615 16,819 41 China, People's Republic of (Mainland) 4 22 3 3 15 30 13 9 27 20 42 China, Republic of (Taiwan) 500 736 991 1,099 1,221 1,259 1,275 1,236 1,303 1,311 43 Hong Kong 223 258 271 337 298 337 359 272 360 361 44 India 14 21 41 24 34 39 25 65 59 48 45 Indonesia 157 102 76 41 39 72 65 56 67 97 46 Israel 255 491 551 287 280 334 311 323 304 348 47 Japan 12,518 10,776 10,997 9,397 9,591 9,935 9,698 9,623 9,353 9,312 48 Korea 955 1,561 1,714 1,807 1,912 1,861 1,981 2,069 2,001 1,999 49 Philippines 372 384 559 490 498 418 372 478 All 489 50 Thailand 458 499 422 468 519 558 584 580 617 608 51 Middle East oil-exporting countries2 330 524 1,312 1,170 1,469 1,275 1,476 1,369 1,340 1,533 52 Other 441 684 735 638 730 860 867 758 708 693 53 855 1,228 1,481 1,572 1,559 1,789 1,658 1,720 1,656 1,824 54 Egypt 111 101 127 146 152 157 158 149 134 155 55 Morocco 18 9 13 35 34 36 46 43 48 44 56 South Africa 329 545 763 783 778 810 821 799 802 877 57 Zaire 98 34 29 8 7 9 8 6 15 7 58 Oil-exporting countries3 115 231 253 291 243 422 290 357 306 378 59 Other 185 308 296 309 344 355 333 365 350 363 60 Other countries 565 609 540 1,013 963 1,009 1,010 943 998 959 61 Australia 466 535 441 894 846 878 861 795 863 832 62 All other 99 73 99 119 117 132 150 148 135 127 63 Nonmonetary international and regional organizations * 1 5 5 4 13 10 11 10 9 1 Includes Surinam until January 1976. 3 Comprises Algeria, Gabon, Libya, and Nigeria. 2 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Nonbank-reported Data A61 3.20 SHORT-TERM CLAIMS ON FOREIGNERS Reported by Banks in the United States By Type of Claim Millions of dollars, end of period 1977 TTyyppee 11997744 11997755 11997766 rr Apr.r May r Juner July r Aug. Sept.? Oct.f 1 39,056 50,231 69,139 65,637 68,060 69,732 69,608 68,592 69,048 71,890 2 Payable in dollars 37,859 48,888 67,494 63,951 66,297 67,954 67,942 66,661 67,305 69,844 3 Loans, total 11,287 13,200 18,141 16,265 16,647 16,090 17,602 16,687 18,259 18,204 4 Official institutions, including central banks. 381 613 1,448 741 967 983 851 1,018 1,009 869 5 Banks, excluding central banks 7,332 7,665 11,142 10,441 10,638 10,001 11,523 10,609 11,874 11,730 6 All other, including nonmonetary international and regional organizations 3,574 4,921 5,552 5,083 5,041 5,105 55,,222288 55,,006600 5,376 55,,660044 7 Collections outstanding 5,637 5,467 5,756 6,339 6,317 6,417 6,352 6,200 6,025 6,005 8 Acceptances made for accounts of foreigners... 11,237 11,147 12,358 12,976 13,045 13,166 13,431 13,556 13,631 13,600 9 Other claims1 9,698 19,075 31,238 28,371 30,288 32,280 30,556 30,218 29,390 32,034 1,196 1,342 1,645 1,686 1,764 1,779 1,667 1,931 1,743 2,047 11 Deposits with foreigners 669 656 1,063 918 864 845 817 1,032 844 922 12 Foreign government securities, commercial and finance paper 289 314 89 332 377 302 277 233 239 296 13 238 372 493 436 522 631 572 667 660 829 i Includes claims of U.S. banks on their foreign branches and claims made to, and acceptances made for, foreigners; drafts drawn against of U.S. agencies and branches of foreign banks on their head offices and foreigners, where collection is being made by banks and bankers for foreign branches of their head offices. their own account or for account of their customers in the United States; and foreign currency balances held abroad by banks and bankers and NOTE.—Short-term claims are principally the following items payable their customers in the United States. Excludes foreign currencies held on demand or with a contractual maturity of not more than I year: loans by U.S. monetary authorities. 3.21 LONG-TERM CLAIMS ON FOREIGNERS Reported by Banks in the United States Millions of dollars, end of period 1977 Type, and area or country 1974 1975 1976 r Apr.r Mayr Juner July Aug. Sept.2' Oct.2' 1 7,179 9,536 11,898 12,458 12,294 12,182 12,251 12,468 12,622 12,727 By type: 2 7,099 9,419 11,750 12,257 12,091 11,982 12,049 12,250 12,407 12,497 3 Loans, total 6,490 8,316 10,093 10,531 10,395 10,286 10,323 10,504 10,583 10,752 4 Official institutions, including central banks 1,324 1,351 1,407 1,647 1,674 1,653 1,676 1,712 1,749 1,754 5 Banks, excluding central banks 929 1,567 22,,223322 22,,119933 22,,226622 22,,226633 22,,223388 22,,227799 2,314 22,,444411 6 All other, including nonmonetary international and regional organizations 4,237 5,399 6,454 6,690 6,460 6,371 6,408 6,513 6,520 6,557 7 Other long-term claims 609 1,103 1,656 1,726 1,696 1,695 1,726 1,746 1,824 1,745 8 Payable in foreign currencies 80 116 148 201 202 200 202 218 216 229 By area or country: 9 Europe 1,908 2,704 3,314 3,698 3,650 3,677 3,648 3,706 3,677 3,642 10 Canada 501 555 637 558 501 483 485 455 456 461 11 Latin America 2,614 3,468 4,870 4,990 5,042 5,016 5,045 5,219 5,403 5,581 12 Asia 1,619 1,795 1,904 1,933 1,884 1,832 1,862 1,846 1,871 1,761 13 Japan 258 296 382 387 391 381 391 371 359 334 14 Middle East oil-exporting countries i 384 220 146 149 149 151 155 170 162 170 15 Other Asia 977 1,279 1,376 1,397 1,345 1,301 1,317 1,305 1,350 1,257 16 Africa 366 747 890 953 898 860 857 898 873 860 17 Oil-exporting countries2 62 151 271 228 213 213 191 219 221 202 18 Other 305 596 619 725 685 647 666 679 652 657 19 All other countries3 171 267 282 327 319 313 353 344 343 423 l Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, 2 Comprises Algeria, Gabon, Libya, and Nigeria, and United Arab Emirates (Trucial States). 3 includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A62 International Statistics • December 1977 3.22 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data Millions of dollars, end of period 1976 1977 AAsssseett aaccccoouunntt 11997744 1975 Dec.r Mar.r Apr.r May r Juner July Aug. Sept.f All foreign countries 1 Total, all currencies 151,905 176,493 219,420 223,020 223,222 229,542 236,480 235,637 235,153 244,907 2 Claims on United States 6,900 6,743 7,889 7,056 8,676 7,361 7,398 10,683 8,750 11,909 3 Parent bank 4,464 3,665 4,323 3,399 5,276 3,928 3,610 7,134 5,188 8,231 4 Other 2,435 3,078 3,566 3,657 3,400 3,432 3,788 3,549 3,562 3,678 5 Claims on foreigners 138,712 163,391 204,486 208,545 207,573 214,784 221,667 217,456 218,859 225,080 6 Other branches of parent bank. 27,559 34,508 45,955 48,621 48,164 49,464 52,406 48,387 48,308 52,051 7 Other banks 60,283 69,206 83,765 81,692 79,782 83,937 86,887 84,363 85,526 87,735 8 Official institutions 4,077 5,792 10,609 11,885 12,517 13,045 13,194 13,572 13,820 14,161 9 Nonbank foreigners 46,793 53,886 64,157 66,347 67,110 68,337 69,180 71,134 71,205 71,133 10 Other assets 6,294 6,359 7,045 7,419 6,973 7,397 7,414 7,497 7,543 7,918 11 Total payable in U.S. dollars 105,969 132,901 167,695 172,141 172,134 176,603 182,396 179,647 179,611 188,008 12 Claims on United States 6,603 6,408 7,595 6,657 8,302 6,951 6,984 10,266 8,306 11,429 13 Parent bank 4,428 3,628 4,264 3,352 5,232 3,903 3,590 7,095 5,118 8,177 14 Other 2,175 2,780 3,332 3,305 3,070 3,049 3,393 3,170 3,188 3,252 15 Claims on foreigners 96,209 123,496 156,896 161,959 160,529 166,160 172,011 166,057 167,706 173,028 16 Other branches of parent bank 19,688 28,478 37,909 40,900 40,300 41,350 43,952 39,647 39,986 42,966 17 Other banks 45,067 55,319 66,331 64,613 63,061 66,319 68,815 65,875 66,820 68,658 18 Official institutions 3,289 4,864 9,018 10,587 11,174 11,682 11,758 12,110 12,223 12,672 19 Nonbank foreigners 28,164 34,835 43,638 45,860 45,994 46,808 47,486 48,425 48,677 48,731 20 Other assets 3,157 2,997 3,204 3,525 3,303 3,492 3,401 3,325 3,600 3,551 United Kingdom 21 Total, all currencies 69,804 74,883 81,466 81,268 80,150 83,178 84,734 83,484 83,273 88,033 22 Claims on United States. 3,248 2,392 3,354 2,311 2,541 2,714 2,450 3,129 2,307 3,422 23 Parent bank 2, All 1,449 2,376 1,302 1,698 1,850 1,553 2,249 1,397 2,556 24 Other 776 943 978 1,009 843 863 897 881 910 866 25 Claims of foreigners 64,111 70,331 75,859 76,865 75,559 78,333 80,087 78,083 78,607 82,154 26 Other branches of parent bank. 12,724 17,557 19,753 21,091 21,707 21,097 22,121 20,909 20,015 22,363 27 Other banks 32,701 35,904 38,089 37,098 35,585 38,660 39,157 37,772 38,784 39,576 28 Official institutions 788 881 1,274 1,722 1,728 1,948 1,764 1,863 1,983 1,955 29 Nonbank foreigners 17,898 15,990 16,743 16,954 16,539 16,627 17,045 17,538 17,826 18,259 30 Other assets 2,445 2,159 2,253 2,092 2,050 2,131 2,197 2,272 2,359 2,458 31 Total payable in U.S. dollars. 49,211 57,361 61,587 62,353 61,179 63,481 64,841 62,815 62,690 66,895 32 Claims on United States. 3,146 2,273 3,275 2,173 2,430 2,590 2,338 3,011 2,130 3,259 33 Parent bank 2,468 1,445 2,37 4 1,297 1,690 1,842 1,547 2,237 1,348 2,527 34 Other 678 828 902 876 740 748 791 774 781 732 35 Claims on foreigners 44,694 54,121 57,488 59,342 57,894 60,030 61,582 58,875 59,419 62,584 36 Other branches of parent bank. 10,265 15,645 17,249 18,691 19,232 18,619 19,538 18,135 17,550 19,865 37 Other banks 23,716 28,224 28,983 28,373 26,941 29,521 29,930 28,497 29,199 29,808 38 Official institutions 610 648 846 1,426 1,415 1,624 1,437 1,473 1,574 1,555 39 Nonbank foreigners 10,102 9,604 10,410 10,852 10,306 10,267 10,676 10,769 11,095 11,355 40 Other assets. 1,372 967 824 839 855 861 922 930 1,142 1,052 Bahamas and Caymans 41 Total, all currencies 31,733 45,203 66,774 69,526 70,950 71,540 74,853 74,727 73,842 78,430 42 Claims on United States 2,464 3,229 3,508 3,411 4,998 3,543 3,970 6,447 5,433 7,450 43 Parent bank 1,081 1,477 1,141 1,037 2,703 1,251 1,394 4,062 3,023 4,861 44 Other 1,383 1,752 2,367 2,374 2,295 2,292 2,576 2,385 2,410 2,590 45 Claims on foreigners 28,453 41,040 62,048 64,781 64,652 66,579 69,528 66,970 67,114 69,685 46 Other branches of parent bank 3,478 5,411 8,144 9,060 8,095 8,703 9,638 7,586 8,250 9,828 47 Other banks 11,354 16,298 25,354 25,339 25,234 25,588 27,372 25,967 25,475 26,367 48 Official institutions 2,022 3,576 7,101 7,495 7,784 8,062 8,344 8,628 8,591 9,192 49 Nonbank foreigners 11,599 15,756 21,449 22,888 23,538 24,226 24,174 24,788 24,798 24,298 50 Other assets 815 933 1,217 1,333 1,300 1,419 1,356 1,309 1,295 1,294 51 Total payable in U.S. dollars 28,726 41,887 62,705 64,946 66,366 66,550 69,930 69,548 68,767 72,948 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Overseas Branches A63 3.22 Continued 1976 1977 LLiiaabbiilliittyy aaccccoouunntt 1974 1975 Dec. Mar. Apr. May June July Aug. Sept.P All foreign countries 52 Total, all currencies 151,905 176,493 219,420 223,020 223,222 229,542 236,480 235,637 235,152 244,907 53 To United States 11,982 20,221 32,721 34,008 33,054 34,792 37,242 37,713 35,482 38,443 54 Parent bank 5,809 12,165 19,775 20,527 18,256 20,497 22,825 19,670 18,559 18,353 55 Other 6,173 8,057 12,946 13,481 14,798 14,295 14,416 18,043 16,922 20,090 56 To foreigners 132,990 149,815 179,953 182,120 183,203 187,619 191,822 189,347 191,168 198,944 57 Other branches of parent bank. 26,941 34,111 44,370 47,615 46,386 48,137 50,291 47,015 48,658 51,189 58 Other banks 65,675 72,259 83,878 80,071 82,180 84,114 84,263 86,919 86,443 91,473 59 Official institutions 20,185 22,773 25,829 26,438 26,150 27,328 28,247 27,084 27,778 27,995 60 Nonbank foreigners 20,189 20,672 25,877 27,996 28,486 28,040 29,021 28,329 28,288 28,286 61 Other liabilities 6,933 6,456 6,747 6,893 6,965 7,130 7,416 8,577 8,502 7,520 62 Total payable in U.S. dollars 107,890 135,907 173,071 177,036 177,270 181,813 187,643 184,722 183,859 192,916 63 To United States 11,437 19,503 31,934 33,042 32,068 33,882 36,130 36,751 34,604 37,518 64 Parent bank 5,641 11,939 19,561 20,273 18,011 20,241 22,382 19,396 18,290 18,039 65 Other 5,795 7,564 12,373 12,769 14,057 13,640 13,748 17,355 16,314 19,479 66 To foreigners 92,503 112,879 137,610 140,395 141,479 144,220 147,346 142,957 144,126 151,282 67 Other branches of parent bank, 19,330 28,217 37,098 40,646 39,307 40,677 42,739 38,939 40,919 43,031 68 Other banks 43,656 51,583 60,617 57,795 60,025 60,931 60,263 61,771 61,123 65,896 69 Official institutions 17,444 19,982 22,878 23,650 23,241 24,369 25,299 24,159 24,481 24,683 70 Nonbank foreigners 12,072 13,097 17,017 18,305 18,906 18,242 19,045 18,088 17,603 17,671 71 Other liabilities 3,951 3,526 3,527 3,600 3,724 3,712 4,167 5,013 5,129 4,117 United Kingdom 72 Total, all currencies 69,804 74,883 81,466 81,268 80,150 83,178 84,734 83,484 83,273 88,033 73 To United States 3,978 5,646 5,997 6,365 6,272 5,845 6,894 8,537 7,933 7,922 74 Parent bank 510 2,122 1,198 1,537 1,515 1,460 2,150 2,217 1,611 1,425 75 Other 3,468 3,523 4,798 4,828 4,756 4,386 4,743 6,320 6,322 6,496 76 To foreigners 63,409 67,240 73,228 72,665 71,787 75,145 75,683 72,585 72,840 77,580 77 Other branches of parent bank 4,162 6,494 7,092 8,247 7,762 8,569 8,936 7,987 8,395 8,934 78 Other banks 32,040 32,964 36,259 33,835 33,749 35,933 34,960 34,623 34,153 36,777 79 Official institutions 15,258 16,553 17,273 17,711 17,260 17,538 18,086 17,148 17,368 18,553 80 Nonbank foreigners 11,349 11,229 12,605 12,872 13,016 13,106 13,701 12,827 12,923 13,316 81 Other liabilities 2,418 1,997 2,241 2,238 2,091 2,187 2,157 2,362 2,500 2,532 82 Total payable in U.S. dollars 49,666 57,820 63,174 63,346 62,373 64,343 65,735 63,848 63,337 67,689 83 To United States 3,744 5,415 5,849 6,189 6,108 5,688 6,679 8,348 7,676 7,622 84 Parent bank 484 2,083 1,182 1,506 1,498 1,438 2,083 2,184 1,563 1,363 85 Other 3,261 3,332 4,666 4,683 4,610 4,250 4,596 6,164 6,113 6,259 86 To foreigners 44,594 51,447 56,372 56,283 55,390 57,720 58,136 54,550 54,549 58,962 87 Other branches of parent bank 3,256 5,442 5,874 7,184 6,561 7,333 7,660 6,583 7,131 7,535 88 Other banks 20,526 23,330 25,527 23,845 23,818 25,172 24,135 23,681 23,264 25,737 89 Official institutions 13,225 14,498 15,423 15,817 15,394 15,674 16,301 15,295 15,252 16,430 90 Nonbank foreigners 7,587 8,176 9,547 9,437 9,617 9,541 10,040 8,990 8,902 9,259 91 Other liabilities 1,328 959 953 874 875 936 920 951 1,112 1,105 Bahamas and Caymans 92 Total, all currencies 31,733 45,203 66,774 69,526 70,950 71,540 74,853 74,727 73,842 78,430 93 To United States 4,815 11,147 22,723 24,299 23,082 25,162 26,625 25,080 23,608 26,867 94 Parent bank 2,636 7,628 16,163 17,110 14,514 16,426 18,366 14,835 14,410 14,814 95 Other 2,180 3,520 6,560 7,190 8,568 8,735 8,258 10,245 9,198 12,053 96 To foreigners 26,140 32,949 42,897 43,841 46,618 45,136 46,477 47,161 47,900 50,200 97 Other branches of parent bank 7,702 10,569 13,801 14,713 14,123 14,001 14,662 13,736 14,642 15,026 98 Other banks 14,050 16,825 21,758 20,456 23,245 22,296 22,693 24,166 23,878 27,535 99 Official institutions 2,377 3,308 3,573 3,540 3,917 4,130 4,216 4,322 4,592 3,184 100 Nonbank foreigners 2,011 2,248 3,765 5,132 5,334 4,709 4,906 4,936 4,789 4,454 101 Other liabilities 778 1,106 1,154 1,385 1,249 1,243 1,751 2,487 2,334 1,363 102 Total payable in U.S. dollars 28,840 42,197 63,417 65,755 67,168 67,518 70,816 70,399 69,221 73,769 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A64 International Statistics • December 1977 3.23 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Holdings and Transactions Millions of dollars ii 11997777 1977 Country or area 11997755 11997766 JJaann..—— OOcctt..pp Apr.r May r Juner July Aug. | Sept.P Oct.p Holdings (end of period) 4 1 Estimated total... 7,703 15,798 18,859 19,745 22,196 23,433 27,584 31,096 34,295 2 Foreign countries. 7,372 12,765 16,433 17,609 19,740 20,848 24,644 27,237 30,295 3 Europe 1,085 2,330 3,915 4,034 55,,227722 6,225 8,480 10,179 12,573 4 Belgium-Luxembourg.. 13 14 14 17 1188 19 19 19 20 5 Germany 215 764 1,112 1,112 1,261 1,266 1,847 1,957 2,165 6 Netherlands 16 288 388 418 492 503 633 719 821 7 Sweden 276 191 188 148 149 149 155 125 125 8 Switzerland 55 261 397 429 439 485 478 488 474 9 United Kingdom 363 485 1,479 1,591 2,600 3,478 5,017 6,522 8,611 10 Other Western Europe. 143 323 332 314 307 321 326 343 353 Eastern Europe 4 4 4 4 4 4 4 4 4 12 Canada. 395 256 267 271 279 283 288 292 294 13 Latin America 200 312 447 471 480 481 513 516 519 14 Venezuela 4 149 193 193 193 193 193 183 183 15 Other Latin America republics. 29 35 21 21 18 18 18 18 21 16 Netherlands Antilles 1 161 118 118 113 113 113 145 158 158 17 Asia 5,370 9,323 11,476 12,528 13,407 13,567 15,071 15,942 16,612 3,271 2,687 3,174 3,773 4,290 4,314 5,025 5,635 5,958 18 Japan 321 543 305 279 279 279 279 279 279 19 Africa * • 23 26 23 13 12 16 18 20 All other. 21 Nonmonetary international and regional organizations 331 3,033 2,426 2,136 2,456 2,585 2,940 3,859 4,000 22 International 322 2,905 2,318 2,032 2,353 2,440 2,830 3,759 3,900 23 Latin American regional. 9 128 108 103 103 146 110 100 100 Transactions (net purchases, or sales (—), during period) 24 Total 1,994 8,095 18,500 -28 886 2,451 1,238 4,151 3,499 3,212 25 Foreign countries 1,814 5,393 17,532 1,364 1,177 2,131 1,108 3,796 2,580 3,071 26 Official institutions 1,612 5,116 16,814 1,253 1,152 1,962 1,048 3,696 2,508 3,005 27 Other foreign 202 276 718 111 24 167 59 101 72 66 28 Nonmonetary international and regional organizations 180 2,702 966 -1,392 -292 321 130 354 919 140 MEMO: Oil-exporting countries 29 Middle East 2 1,797 3,887 3,259 338 392 397 -14 533 161 284 30 Africa 3 117700 222211 --226644 --2266 1 Includes Surinam until January 1976. 4 Estimated official and private holdings of marketable U.S. Treasury 2 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, securities with an original maturity of more than I year. Data are based and United Arab Emirates (Trucial States). on a benchmark survey of holdings as of Jan. 31, 1971, and monthly 3 Comprises Algeria, Gabon, Libya, and Nigeria. transactions reports. Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign countries. 3.24 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS Millions of dollars, end of period 1977 Assets 1974 1975 1976 May June July Aug. Sept. Oct. Nov. 1 Deposits 418 353 352 436 379 468 534 382 425 416 Assets held in custody: 2 U.S. Treasury securities1 55,600 60,019 66,532 73,964 74,098 75,443 75,976 79,285 83,832 89,497 3 Earmarked gold2 16,838 16,745 16,414 16,221 16,184 16,179 16,117 16,073 15,988 15,872 1 Marketable U.S. Treasury bills, certificates of indebtedness, notes, NOTE.—Excludes deposits and U.S. Treasury securities held for interand bonds; and nonmarketable U.S. Treasury securities payable in dollars national and regional organizations. Earmarked gold is gold held for and in foreign currencies. foreign and international accounts and is not included in the gold stock 2 The value of earmarked gold increased because of the changes in of the United States. par value of the U.S. dollar in May 1972 and in October 1973. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Investment transactions A65 3.25 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1977 1977 TTrraannssaaccttiioonnss,, aanndd aarreeaa oorr ccoouunnttrryy 1975' 1976 Jan.- Apr.' May r June' July' Aug. Sept.f Oct.p Oct.p U.S. corporate securities Stocks 1 Foreign purchases 15,355 18,227 11,629 1,142 1,207 1,196 1,373 1,023 1,012 973 10,678 r15,475 9,633 906 978 948 1,162 900 847 752 2 Foreign sales 4,678 '2,753 1,996 236 229 248 211 123 165 222 3 Net purchases, or sales (—). 4,660 2,740 1,982 236 209 254 210 124 170 223 4 Foreign countries 2,491 336 651 90 96 33 29 37 57 109 5 Europe 262 256 42 -3 -3 21 -24 -13 5 27 6 France 251 68 169 44 37 12 20 -1 14 37 7 Germany 359 -199 3 -7 27 -10 -2 -18 5 8 Netherlands 899 -100 120 38 4 -20 5 -7 6 2 9 Switzerland 594 340 399 20 35 35 57 67 80 52 10 United Kingdom 11 Canada 361 324 29 -5 -33 -3 12 -5 -3 20 12 Latin America -7 155 86 21 17 17 4 1 -3 -4 13 Middle East i 1,649 1,803 1,154 125 124 195 171 94 108 93 14 Other Asia 142 119 50 5 4 10 -7 -3 8 2 15 Africa 10 7 5 1 2 2 16 Other countries 15 -4 7 1 2 -2 2 -1 17 Nonmonetary international and regional organizations 18 13 14 1 20 -7 2 -1 -5 -1 Bonds2 18 Foreign purchases 5,408 5,529 6,658 883 609 976 752 714 507 939 4,642 4,322 2,933 250 332 394 286 252 386 292 19 Foreign sales 766 1,207 3,723 632 277 582 467 463 121 647 20 Net purchases, or sales (—) 1,795 1,248 3,684 588 308 569 499 438 123 647 21 Foreign countries 113 r91 1,663 121 99 314 232 130 33 373 22 Europe 82 '39 -23 -5 -7 -3 1 1 1 23 France -6 r_ 49 45 -4 13 12 12 1 3 5 24 Germany -9 -29 52 -7 -28 57 11 21 2 25 Netherlands 117 158 171 -4 19 17 34 21 12 -7 26 Switzerland -52 23 1,350 128 102 223 197 96 6 324 27 United Kingdom 28 Canada 128 96 141 6 1 7 30 13 15 4 29 Latin America 31 94 63 3 0 2 12 18 13 11 30 Middle East i 1,553 1,179 1,528 454 192 235 153 192 79 124 31 Other Asia -35 -165 294 4 17 10 72 84 -14 135 32 Africa 5 — 25 -5 -3 33 Other countries -21 34 Nonmonetary international and regional organizations -1,029 -41 40 45 -31 13 -32 25 -2 Foreign securities 35 Stocks, net purchases, or sales (—) -188 '-323 -498 -43 -12 -60 -265 -63 31 106 36 Foreign purchases 1,542 1,937 1,760 153 200 169 159 169 169 247 37 Foreign sales 1,730 2,259 2,258 197 211 229 423 232 138 141 38 Bonds, net purchases, or sales (—) -6,326 '-8,730 -4,301 -10 -866 -765 -205 -1,003 -685 -266 39 Foreign purchases 2,383 4,932 7,015 606 607 636 786 852 701 797 40 Foreign sales 8,708 '13,662 11,317 616 1,473 1,401 991 1,854 1,387 1,063 41 Net purchases, or sales ( — ) of stocks and bonds.. -6,514 -9,053 -4,799 -53 -878 -824 -469 -1,066 -654 -160 42 Foreign countries -4,323 --77,,115555 -3,189 2 -204 -696 -393 -227 -641 -9 43 Europe -53 ''--884433 -910 2 -124 -272 -267 -22 -24 -30 44 Canada -3,202 ''--55,,224455 -2,228 -93 -128 -292 -241 -255 -573 45 45 Latin America -306 19 65 -17 -42 52 -7 35 -170 46 Asia -622 ""--669999 -22 25 62 -93 57 55 -7 148 47 Africa 15 4488 3 3 1 -2 48 Other countries -155 --441166 -59 2 2 2 5 1 -81 1 49 Nonmonetary international and regional organizations -2,192 -1,898 -1,602 -55 -673 -129 -76 -839 -6 -151 1 Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, 2 Includes State and local government securities, and securities of U.S. Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial Govt, agencies and corporations. Also includes issues of new debt securities States). sold abroad by U.S. corporations organized to finance direct investments abroad. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A66 International Statistics • December 1977 3.26 SHORT-TERM LIABILITIES TO AND CLAIMS ON FOREIGNERS Reported by Nonbanking Concerns in the United States Millions of dollars, end of period 1976 1977 1976 1977 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy June Sept. Dec. Mar. Junef June Sept. Dec. Mar. June?5 Liabilities to foreigners Claims on foreigners 1 Total. 6,266 6,408 6,582 6,551 6,386 13,820 13,164 14,156 14,943 16,140 By type: 2 Payable in dollars. 5,640 5,671 5,870 5,787 5,737 12,823 12,104 13,169 13,943 15,018 3 Payable in foreign currencies 626 737 712 764 648 997 1,060 987 1,000 1,122 4 Deposits with banks abroad in reporter's name 558 592 442 431 448 5 Other 439 468 545 569 674 By area or country: 6 Foreign countries 6,020 6,222 6,374 6,359 6,216 13,819 13,163 14,155 14,940 16,139 7 Europe. 2,273 2,387 2,227 2,126 2,208 5,326 5,151 5,269 5,218 5,808 8 Austria 13 15 10 9 10 17 21 21 23 27 Belgium-Luxembourg.., 233 183 166 168 138 193 195 162 170 218 10 Denmark 12 13 7 15 14 30 26 56 48 40 11 Finland 1 17 2 2 10 131 135 77 40 90 12 France 159 185 200 163 157 363 413 426 422 402 13 Germany 228 256 174 175 163 358 492 378 367 377 14 Greece 29 28 48 80 73 47 56 51 90 86 15 Italy 116 148 131 135 154 335 358 384 473 439 16 Netherlands 170 141 141 168 205 146 142 166 172 182 17 Norway 22 24 29 37 33 52 43 51 42 42 18 Portugal 3 5 13 23 20 22 28 40 35 30 19 Spain 51 36 40 52 68 432 336 369 325 322 20 Sweden 24 35 34 36 36 84 62 90 93 92 21 Switzerland 213 243 190 214 236 270 253 241 154 179 22 Turkey 20 16 13 12 21 31 23 25 32 37 23 United Kingdom 839 888 878 689 730 2,602 2,365 2,445 2,475 3,027 24 Yugoslavia 108 113 123 113 110 28 30 26 30 27 25 Other Western Europe. 7 8 7 6 6 14 17 20 18 15 26 U.S.S.R 10 19 9 15 16 96 81 156 105 76 27 Other Eastern Europe. , 16 14 13 13 10 75 79 85 103 102 28 Canada. 372 327 379 403 420 2,201 2,196 2,464 2,432 2,570 29 Latin America 1,095 1,028 1,037 1,118 1,017 3,055 2,831 3,579 4,400 4,928 30 Argentina 49 48 44 42 50 43 39 44 46 51 31 Bahamas 330 251 260 256 216 1,150 940 1,384 1,869 2,231 32 Brazil 97 58 72 49 37 462 417 682 535 457 33 Chile 15 16 17 16 24 46 26 34 35 28 34 Colombia 19 11 13 18 22 57 66 59 75 72 35 Cuba 1 1 1 1 36 Mexico 72 74 99 118 117 332 352 332 317 301 37 Panama 12 10 34 12 10 101 83 74 105 120 38 Peru 31 32 25 24 21 39 35 42 32 28 39 Uruguay 3 3 4 4 3 4 22 5 6 5 40 Venezuela 184 222 219 260 208 186 215 194 214 245 41 Other Latin American republics. 102 104 141 148 140 188 182 276 237 236 42 Netherlands Antilles 1 55 68 10 11 17 10 9 9 14 8 43 Other Latin America 127 129 100 160 151 436 444 441 914 1,146 44 1,705 1,978 2,052 2,057 1,891 2,703 2,401 2,282 2,314 2,318 45 China, People's Republic of (Mainland)... 1 1 1 3 2 16 5 3 7 8 46 China, Republic of (Taiwan) 122 127 110 113 138 212 134 197 130 131 47 Hong Kong 28 33 40 42 27 104 88 96 107 93 48 India 10 11 23 39 41 51 53 55 35 51 49 Indonesia 115 131 110 94 80 143 179 185 206 184 50 Israel 34 32 37 37 45 53 48 41 51 70 51 Japan 272 247 193 172 184 1,170 1,010 912 969 934 52 Korea 60 85 76 96 95 129 142 117 130 158 53 Philippines 18 28 53 59 73 114 93 86 84 87 54 Thailand 11 23 24 19 11 19 23 22 27 22 55 Other Asia 1,035 1,260 1,385 1,383 1,196 692 625 568 569 582 56 Africa 532 435 603 588 587 378 406 392 429 368 57 Egypt 22 25 27 29 33 28 36 28 70 24 58 Morocco. 32 42 43 27 70 12 9 10 12 9 59 South Africa. 88 65 54 33 27 83 78 87 80 69 60 Zaire 12 24 36 39 39 25 28 21 19 17 61 Other Africa. 377 279 444 460 418 230 255 247 248 248 62 Other countries. 44 67 76 68 92 155 178 170 147 145 63 Australia 32 50 57 49 72 100 112 105 111 106 64 All other 12 18 19 19 20 56 67 65 36 40 65 Nonmonetary international and regional organizations 246 186 208 192 170 1 1 1 2 1 i Includes Surinam until 1976. mercial concerns and other nonbanking institutions in the United States. Data exclude claims held through U.S. banks and intercompany accounts NOTE.—Reported by exporters, importers, and industrial and com- between U.S. companies and their affiliates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Nonbank-reported Data A67 3.27 SHORT-TERM CLAIMS ON FOREIGNERS Reported by Large Nonbanking Concerns in the United States Millions of dollars, end of period 1977 Type and country 1973 1974 1975 I976r Apr. May June July Aug. Sept.P 1 Total 3,185 3,357 3,799 5,468 6,441 7,481 7,685 7,357 7,739 6,846 By type: 2 Payable in dollars 2,641 2,660 3,042 4,788 5,707 6,787 6,895 6,619 6,976 6,117 3 Deposits 2,604 2,591 2,710 4,415 5,125 6,264 6,424 6,195 6,475 5,709 4 Short-term investments 1. 37 69 332 373 582 523 471 424 501 408 5 Payable in foreign currencies 544 697 757 680 733 695 790 739 764 729 6 Deposits 431 429 511 373 423 361 389 352 394 356 7 Short-term investments 1. 113 268 246 302 310 334 401 387 370 373 By country: 8 United Kingdom 1,128 1,350 1,306 1,837 1,713 1,920 2,318 2,123 2,194 1,781 9 Canada 775 967 1,156 1,539 1,616 1,645 1,652 1,725 1,930 1,607 10 Bahamas 597 391 546 1,264 1,736 2,414 2,114 2,113 2,225 1,753 11 Japan 336 398 343 113 155 158 184 149 139 147 12 All other 349 252 446 715 1,221 1,344 1,417 1,247 1,251 1,558 i Negotiable and other readily transferable foreign obligations payable NOTE.—Data represent the assets abroad of large nonbanking conon demand or having a contractural maturity of not more than 1 year cerns in the United States. They are a portion of the total claims on from the date on which the obligation was incurred by the foreigner. foreigners reported by nonbanking concerns in the United States and are included in the figures shown in Table 3.26. 3.28 LONG-TERM LIABILITIES TO AND CLAIMS ON FOREIGNERS Reported by Nonbanking Concerns in the United States Millions of dollars, end of period 1976 r 1977 1976r 1977 AArreeaa aanndd ccoouunnttrryy June Sept. Dec. Mar. June June Sept. Dec. Mar. JuneP Liabilities to foreigners Claims on foreigners 1 Total 4,008 3,791 3,567 3,504 3,331 4,982 5,006 4,925 4,894 4,827 2 Europe 3,036 2,858 2,725 2,655 2,499 929 901 853 847 829 3 Germany 425 406 396 391 370 35 73 72 84 76 4 Netherlands 233 290 277 272 262 211 211 156 154 147 5 Switzerland 467 327 260 178 177 56 54 57 53 43 1,516 1,470 1,420 1,388 1,274 310 245 240 207 221 7 Canada 166 111 89 82 81 1,511 1,507 1,530 1,475 1,486 8 Latin America 250 257 270 272 275 1,609 1,637 1,521 1,489 1,457 9 Bahamas 184 157 163 163 167 37 37 36 34 34 10 Brazil 5 5 5 5 7 165 172 133 125 125 11 Chile 1 1 1 1 1 306 244 248 210 208 12 Mexico 6 7 17 21 23 187 219 195 180 178 13 Asia 489 498 423 432 406 712 739 775 817 831 14 Japan 388 402 397 413 384 85 80 77 96 108 15 Africa 2 2 2 2 3 163 165 187 199 158 16 All other i 64 64 58 59 67 59 58 58 67 67 1 Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A68 International Statistics • December 1977 3.29 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Per cent per annum Rate on Nov. 30, 1977 Rate on Nov. 30, 1977 Rate on Nov. 30, 1977 CCoouunnttrryy Country Country Per Month Per Month Per Month cent effective cent effective cent effective Argentina 11118888....0000 FFFFeeeebbbb.... 1111999977772222 France ! 9.5 Aug. 1977 Norway 6.0 Sept. 1976 Austria 5555....5555 JJJJuuuunnnneeee 1111999977777777 Germany, Fed. Rep. of. 3.5 Sept. 1975 Sweden 8.0 Oct. 1976 Belgium 7777....0000 DDDDeeeecccc.... 1111999977777777 Italy 11.5 Aug. 1977 Switzerland 1.5 July 1977 Brazil 22228888....0000 MMMMaaaayyyy 1111999977776666 Japan 4.25 Sept. 1977 United Kingdom 7.0 Nov. 1977 Canada 7777....5555 MMMMaaaayyyy 1111999977777777 Mexico 4.5 June 1942 Venezuela 5.0 Oct. 1970 Denmark 9999....0000 MMMMaaaarrrr.... 1111999977777777 Netherlands ! 4.5 Nov. 1977 NOTE.—Rates shown are mainly those at which the central bank either more than one rate applicable to such discounts or advances, the rate discounts or makes advances against eligible commercial paper and/or shown is the one at which it is understood the central bank transacts the government securities for commercial banks or brokers. For countries with largest proportion of its credit operations. 3.30 FOREIGN SHORT-TERM INTEREST RATES Per cent per annum, averages of daily figures 1977 Country, or type 1974 1975 1976 June July Aug. Sept. 1 Euro-dollars 11.01 7.02 5.58 5.78 5.80 6.30 6.56 7.14 7.09 2 United Kingdom. 13.34 10.63 11.35 7.81 7.77 6.91 6.03 5.05 5.32 3 Canada 10.47 8.00 9.39 7.16 7.27 7.44 7.31 7.23 7.34 4 Germany 9.80 4.87 4.19 4.24 4.20 4.04 4.07 4.06 4.09 5 Switzerland. 3.01 1.45 3.80 3.01 2.41 2.37 2.23 2.32 6 Netherlands. 5.17 7.02 2.84 3.05 3.48 4.39 4.55 5.94 7 France 7.91 8.65 9.01 8.67 8.51 8.38 8.41 9.28 8 Italy.... 10.37 16.32 14.65 14.09 13.94 12.42 12.05 11.74 9 Belgium. 6.63 10.25 6.88 6.85 6.20 6.20 6.25 6.38 10 Japan... 11.64 7.70 6.05 6.25 6.24 5.32 5.25 5.37 NOTE.—Rates are for 3-month interbank loans except for—Canada, over; and Japan, loans and discounts that can be called after being held finance company paper; Belgium, time deposits of 20 million francs and over a minimum of two month-ends. 3.31 FOREIGN EXCHANGE RATES Cents per unit of foreign currency 1977 CCoouunnttrryy//ccuurrrreennccyy 11997744 11997755 11997766 June July Aug. Sept. Oct. Nov. 1 Australia/dollar 143.89 130.77 122.15 110.80 112.20 110.47 110.37 111.90 112.70 2 Austria/shilling 5.3564 5.7467 5.5744 5.9647 6.1691 6.0792 6.0377 6.1567 6.2551 3 Belgium/franc 2.5713 2.7253 2.5921 2.7713 2.8208 2.8107 2.7910 2.8229 2.8396 4 Canada/dollar 102.26 98.30 101.41 94.549 94.230 93.028 93.168 91.010 90.145 5 Denmark/krone 16.442 17.437 16.546 16.544 16.769 16.590 16.188 16.359 16.327 6 Finland/markka 26.565 27.285 25.938 24.524 24.902 24.801 23.977 24.139 23.986 7 France/franc 20.805 23.354 20.942 20.240 20.607 20.415 20.314 20.574 20.614 8 Germany/deutsche mark... 38.723 40.729 39.737 42.453 43.827 43.168 43.034 43.904 44.633 9 India/rupee 12.460 11.926 11.148 11.286 11.342 11.465 11.450 11.605 11.576 10 Ireland/pound 234.03 222.16 180.48 171.91 172.26 173.97 174.31 177.11 181.78 11 Italy/lira .15372 .15328 .12044 .11295 .11330 .11332 .11318 .11353 .11388 12 Japan/yen .34302 .33705 .33741 .36652 .37756 .37499 .37486 .39263 .40872 13 Malaysia/ringgit 41.682 41.753 39.340 40.270 40.443 40.606 40.600 41.088 4.910 14 Mexico/peso 8.0000 8.0000 6.9161 4.3582 4.3528 4.3629 4.3776 4.4069 4.4096 15 Netherlands/guilder 37.267 39.632 37.846 40.326 40.983 40.831 40.604 41.048 41.366 16 New Zealand/dollar 140.02 121.16 99.115 96.264 97.160 96.826 96.812 98.152 99.392 17 Norway/krone 18.119 19.180 18.327 18.915 19.023 18.863 18.226 18.232 18.328 18 Portugal/escudo 3.9506 3.9286 3.3159 2.5802 2.5953 2.5678 2.4606 2.4601 2.4575 19 South Africa/rand 146.98 136.47 114.85 114.88 114.98 115.00 115.00 115.04 115.04 20 Spain/peseta 1.7337 1.7424 1.4958 1.4404 1.2382 1.1804 1.1824 1.1902 1.2060 21 Sri Lanka/rupee 14.978 14.385 11.908 13.664 13.700 13.721 12.301 11.618 8.7721 22 Sweden/krona 22.563 24.141 22.957 22.625 22.991 22.472 20.602 20.846 20.848 23 Switzerland/franc 33.688 38.743 40.013 40.170 41.487 41.523 42.115 43.909 45.507 24 United Kingdom/pound... 234.03 222.16 180.48 171.91 172.26 173.97 174.31 177.11 181.78 MEMO: 25 United States/dollar * 84.11 82.20 89.68 89.91 88.67 89.10 89.52 88.38 87.29 1 Index of weighted-average exchange value of U.S. dollar against cur- NOTE.—Averages of certified noon buying rates in New York for cable rencies of other G-10 countries plus Switzerland. May 1970 parities = 100. transfers. Weights are 1972 global trade of each of the 10 countries. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Business Finance A69 4.10 SALES, REVENUE, PROFITS, AND DIVIDENDS—Large Manufacturing Corporations Millions of dollars 1976 1977 Industry Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql r Total (170 corps.) Sales 667,821 145,898 148,008 154,650 159,311 166,452 161,596 180,462 177,430 Total revenue 676,596 147,811 149,841 157,203 161,461 168,958 164,631 181,546 179,496 Profits before taxes 71,885 14,875 15,507 17,049 17,502 18,902 16,894 18,587 18,930 Profits after taxes 34,707 6,715 7,102 7,657 8,621 9,532 8,442 8,113 9,056 MEMO: PATunadj.1 36,016 6,603 7,054 8,471 8,636 9,490 8,550 9,340 9,107 Dividends 14,491 3,036 3,076 3,214 3,19i 3,449 3,480 4,371 3,840 Nondurable goods industries (86 corps.):2 Sales 362,935 78,656 82,361 84,822 86,927 87,404 88,678 99,926 95,836 Total revenue 368,184 79,940 83,595 86,351 88,179 88,864 90,967 100,174 96,948 Profits before taxes 42,694 9,989 10,924 10,614 10,674 10,595 10,632 10,793 11,074 Profits after taxes 18,571 3,919 4,441 4,357 4,809 4,833 4,871 4,058 4,837 MEMO: PATunadj.1 19,468 3,900 4,439 4,808 4,829 4,809 4,962 4,f'~ 4,880 Dividends 7,910 1,784 1,803 1,826 1,879 1,947 1,990 2,094 2,185 Durable goods industries (84 corps.):3 Sales 304,886 67,242 65,647 69,828 72,384 79,048 72,918 80,536 81,594 Total revenue 308,412 67,871 66,246 70,852 73,282 80,094 73,664 81,372 82,548 Profits before taxes 29,191 4,886 4,583 6,435 6,828 8,307 6,262 7,794 7,856 Profits after taxes 16,136 2,796 2,661 3,300 3,812 4,699 3,571 4,055 4,219 MEMO: PATunadj.1 16,548 2,703 2,615 3,663 3,807 4,681 3,588 4,472 4,227 Dividends 6,577 1,252 1,273 1,388 1,308 1,502 1,490 2,277 1,655 Selected industries: Food and kindred products (28 corps.): Sales 62,568 14,117 14,600 14,942 14,762 15,057 16,048 16,701 15,903 Total revenue 63,142 14,356 14,844 15,248 14,993 15,395 16,221 16,533 16,155 Profits before taxes 5,750 1,190 1,385 1,384 1,471 1,507 1,462 1,310 1,448 Profits after taxes 2,890 607 719 668 665 778 817 630 739 MEMO: PATunadj.1 3,013 615 745 715 667 785 827 734 746 Dividends 1,259 271 274 287 307 325 309 318 342 Chemical and allied products (22 corps.): Sales 64,125 14,329 14,660 15,128 15,756 16,081 15,878 16,410 17,103 Total revenue 64,837 14,503 14,791 15,326 15,899 16,242 16,084 16,612 17,271 Profits before taxes 8,197 1,622 1,858 1,955 2,179 2,117 2,008 1,893 2,112 Profits after taxes 4,511 929 1,035 993 1,244 1,208 1,130 929 1,192 MEMO: PATunadj.1 4,622 937 1,028 1,123 1,225 1,153 1,163 1,081 1,181 Dividends 1,918 425 429 439 444 445 481 548 514 Petroleum refining (15 corps.): Sales 196,154 41,342 43,873 45,442 46,656 46,065 46,923 56,510 52,344 Total revenue 199,688 42,100 44.633 46,331 47,407 46,888 48,744 56,649 52,891 Profits before taxes 25,857 6,612 6,961 6,505 6,254 6,210 6,559 6,834 6,746 Profits after taxes 9,555 2,078 2,300 2,268 2,481 2,383 2,606 2,085 2,498 MEMO: PATunadj.1 10,168 2,040 2,268 2,533 2,512 2,404 2,635 2,617 2,546 Dividends 4,089 937 949 949 971 1,017 1,036 1,065 1,163 Primary metals and products (23 corps.): Sales 54,044 12,393 12,274 11,429 12,733 14,441 13,751 13,119 13,773 Total revenue 54,825 12,604 12,479 11,669 12,904 14,650 13,958 13,313 13,963 Profits before taxes 2,834 711 487 708 633 924 701 576 516 Profits after taxes 1,652 478 396 315 409 603 513 127 260 MEMO: PATunadj.1 1,947 485 381 498 416 610 521 400 274 Dividends 926 227 216 229 218 227 230 251 234 Machinery (27 corps.): Sales 87,274 19,907 19,786 21,041 20,455 21,627 21,133 24,059 22,727 Total revenue 88,519 20,130 19,977 21,358 20,707 22,072 21,280 24,460 23,051 Profits before taxes 11,320 2,105 2,233 2,640 2,469 2,781 2,700 3,370 2,900 Profits after taxes 6,181 1,186 1,232 1,433 1,355 1,528 1,461 1,837 1,573 MEMO: PATunadj.1 6,202 1,180 1,239 1,490 1,354 1,517 1,467 1,864 1,571 Dividends 2,383 489 523 532 537 581 602 663 712 Motor vehicles and equipment (9 corps.): Sales 107,563 22,275 21,005 23,717 26,395 28,710 24,250 28,208 31,069 Total revenue 108,394 22,341 21,083 24,040 26,702 28,942 24,500 28,250 31,350 Profits before taxes 8,909 854 590 1,731 2,494 3,056 1,272 2,087 2,988 Profits after taxes 4,870 451 328 819 1,331 1,668 705 1,166 1,599 MEMO: PATunadj.1 4,918 455 280 881 1,337 1,658 704 1,219 1,603 Dividends 2,062 276 274 277 285 422 372 983 392 1 Profits after taxes unadjusted are as reported by the individual com- of returns, allowances, and discounts, and exclude excise taxes paid dipanies. These data are not adjusted to eliminate differences in accounting rectly by the company. Total revenue data include, in addition to sales, treatments of special charges, credits, and other nonoperating items. income from nonmanufacturing operations and nonoperating income. 2 Includes 21 corporations in groups not shown separately. Profits are before dividend payments and have been adjusted to exclude 3 Includes 25 corporations in groups not shown separately. special charges and credits to surplus reserves and extraordinary items not related primarily to the current reporting period. Income taxes (not NOTE.—Data are obtained from published reports of companies and shown) include Federal, State and local government, and foreign. reports made to the Securities and Exchange Commission. Sales are net Previous series last published in June 1972 BULLETIN, p. A-50. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A70 Federal Reserve Board of Governors ARTHUR F. BURNS, Chairman STEPHEN S. GARDNER, Vice Chairman PHILIP C. JACKSON, JR. J. CHARLES PARTEE OFFICE OF BOARD MEMBERS OFFICE OF STAFF DIRECTOR FOR MONETARY POLICY THOMAS J. O'CONNELL, Counsel to the Chairman MILTON W. HUDSON, Assistant to the Chairman STEPHEN H. AXILROD, Staff Director JOSEPH R. COYNE, Assistant to the Board ARTHUR L. BROIDA, Deputy Staff Director KENNETH A. GUENTHER, Assistant to the Board MURRAY ALTMANN, Assistant to the Board JAY PAUL BRENNEMAN, Special Assistant to the PETER M. KEIR, Assistant to the Board Board STANLEY J. SIGEL, Assistant to the Board FRANK O'BRIEN, JR., Special Assistant to the Board NORMAND R. V. BERNARD, Special Assistant to the JOSEPH S. SIMS, Special Assistant to the Board Board DONALD J. WINN, Special Assistant to the Board DIVISION OF RESEARCH AND STATISTICS JAMES L. KICHLINE, Director LEGAL DIVISION JOSEPH S. ZEISEL, Deputy Director JOHN D. HAWKE, JR., General Counsel EDWARD C. ETTIN, Associate Director BALDWIN B. TUTTLE, Deputy General Counsel JOHN H. KALCHBRENNER, Associate Director ROBERT E. MANNION, Assistant General Counsel JOHN J. MINGO, Senior Research Division Officer ALLEN L. RAIKEN, Assistant General Counsel ELEANOR J. STOCKWELL, Senior Research Division CHARLES R. MCNEILL, Assistant to the General Officer Counsel JAMES R. WETZEL, Senior Research Division Officer ROBERT A. EISENBEIS, Associate Research Division Officer JARED J. ENZLER, Associate Research Division OFFICE OF THE SECRETARY Officer JOHN D. PAULUS, Associate Research Division THEODORE E. ALLISON, Secretary Officer GRIFFITH L. GARWOOD, Deputy Secretary J. CORTLAND G. PERET, Associate Research *ROBERT E. MATTHEWS, Assistant Secretary Division Officer RICHARD H. PUCKETT, Associate Research Division Officer DIVISION OF CONSUMER AFFAIRS IHELMUT F. WENDEL, Associate Research Division Officer JANET O. HART, Director JAMES M. BRUNDY, Assistant Research Division NATHANIEL E. BUTLER, Associate Director Officer JERAULD C. KLUCKMAN, Associate Director ROBERT M. FISHER, Assistant Research Division Officer STEPHEN P. TAYLOR, Assistant Research Division Officer LEVON H. GARABEDIAN, Assistant Director DIVISION OF INTERNATIONAL FINANCE EDWIN M. TRUMAN, Director JOHN E. REYNOLDS, Counselor ROBERT F. GEMMILL, Associate Director GEORGE B. HENRY, Associate Director CHARLES J. SIEGMAN, Associate Director *0n loan from the Federal Reserve Bank of Philadelphia. fOn leave of absence. SAMUEL PIZER, Senior International Division $On loan from the Federal Reserve Bank of New York. Officer Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A71 and Official Staff HENRY C. WALLICH PHILIP E. COLD WELL DAVID M. LILLY OFFICE OF OFFICE OF STAFF DIRECTOR FOR STAFF DIRECTOR FOR MANAGEMENT FEDERAL RESERVE BANK ACTIVITIES JOHN M. DENKLER, Staff Director WILLIAM H. WALLACE, Staff Director ROBERT J. LAWRENCE, Deputy Staff Director DONALD E. ANDERSON, Assistant Director for DIVISION OF FEDERAL RESERVE Construction Management BANK EXAMINATIONS AND BUDGETS GORDON B. GRIM WOOD, Assistant Director and Program Director for Contingency Planning ALBERT R. HAMILTON, Associate Director CLYDE H. FARNSWORTH, JR., Assistant Director DIVISION OF DATA PROCESSING JOHN F. HOOVER, Assistant Director P. D. RING, Assistant Director CHARLES L. HAMPTON, Director BRUCE M. BEARDSLEY, Associate Director DIVISION OF ULYESS D. BLACK, Assistant Director FEDERAL RESERVE BANK OPERATIONS GLENN L. CUMMINS, Assistant Director ROBERT J. ZEMEL, Assistant Director JAMES R. KUDLINSKI, Director WALTER ALTHAUSEN, Assistant Director DIVISION OF PERSONNEL BRIAN M. CAREY, Assistant Director HARRY A. GUINTER, Assistant Director DAVID L. SHANNON, Director JOHN R. WEIS, Assistant Director CHARLES W. WOOD, Assistant Director DIVISION OF BANKING SUPERVISION AND REGULATION OFFICE OF THE CONTROLLER JOHN E. RYAN, Director JOHN KAKALEC, Controller ^FREDERICK C. SCHADRACK, Deputy Director EDWARD T. MULRENIN, Assistant Controller FREDERICK R. DAHL, Associate Director WILLIAM W. WILES, Associate Director DIVISION OF ADMINISTRATIVE SERVICES JACK M. EGERTSON, Assistant Director DON E. KLINE, Assistant Director WALTER W. KREIMANN, Director THOMAS E. MEAD, Assistant Director JOHN L. GRIZZARD, Assistant Director ROBERT S. PLOTKIN, Assistant Director JOHN D. SMITH, Assistant Director THOMAS A. SIDMAN, Assistant Director SAMUEL H. TALLEY, Assistant Director WILLIAM TAYLOR, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A 72 FOMC and Advisory Councils FEDERAL OPEN MARKET COMMITTEE ARTHUR F. BURNS, Chairman PAUL A. VOLCKER, Vice Chairman PHILIP E. COLDWELL PHILIP C. JACKSON, JR. J. CHARLES PARTEE STEPHEN S. GARDNER DAVID M. LILLY LAWRENCE K. Roos ROGER GUFFEY ROBERT P. MAYO HENRY C. WALLICH FRANK E. MORRIS ARTHUR L. BROIDA, Secretary ANATOL BALBACH, Associate Economist MURRAY ALTMANN, Deputy Secretary RICHARD G. DAVIS, Associate Economist NORMAND R. V. BERNARD, Assistant THOMAS DAVIS, Associate Economist Secretary ROBERT EISENMENGER, Associate Economist THOMAS J. O'CONNELL, General Counsel EDWARD C. ETTIN, Associate Economist EDWARD G. GUY, Deputy General Counsel JAMES L. KICHLINE, Associate Economist BALDWIN B. TUTTLE, Assistant General JOHN E. REYNOLDS, Associate Economist Counsel KARL SCHELD, Associate Economist STEPHEN H. AXILROD, Economist EDWIN M. TRUMAN, Associate Economist JOSEPH S. ZEISEL, Associate Economist ALAN R. HOLMES, Manager, System Open Market Account PETER D. STERNLIGHT, Deputy Manager for Domestic Operations SCOTT E. PARDEE, Deputy Manager for Foreign Operations FEDERAL ADVISORY COUNCIL RICHARD D. HILL, FIRST FEDERAL RESERVE DISTRICT, President GILBERT F. BRADLEY, TWELFTH FEDERAL RESERVE DISTRICT, Vice President WALTER B. WRISTON, SECOND DISTRICT EDWARD BYRON SMITH, SEVENTH DISTRICT ROGER S. HILLAS, THIRD DISTRICT DONALD E. LASATER, EIGHTH DISTRICT M. BROCK WEIR, FOURTH DISTRICT RICHARD H. VAUGHAN, NINTH DISTRICT JOHN H. LUMPKIN, FIFTH DISTRICT J. W. MCLEAN, TENTH DISTRICT FRANK A. PLUMMER, SIXTH DISTRICT BEN F. LOVE, ELEVENTH DISTRICT HERBERT V. PROCHNOW, Secretary WILLIAM J. KORSVIK, Associate Secretary CONSUMER ADVISORY COUNCIL LEONOR K. SULLIVAN, St. Louis, Missouri, Chairman WILLIAM D. WARREN, LOS Angeles, California, Vice Chairman ROLAND E. BRANDEL, San Francisco, California EDNA DECOURSEY JOHNSON, Baltimore, Maryland AGNES H. BRYANT, Detroit, Michigan ROBERT J. KLEIN, New York, New York JOHN G. BULL, Fort Lauderdale, Florida PERCY W. LOY, Portland, Oregon ROBERT V. BULLOCK, Frankfort, Kentucky R. C. MORGAN, EL Paso, Texas LINDA M. COHEN, Washington, D.C. REECE A. OVERCASH, JR., Dallas, Texas ROBERT R. DOCKSON, LOS Angeles, California RAYMOND J. SAULNIER, New York, New York ANNE G. DRAPER, Washington, D.C. E. G. SCHUHART, Dalhart, Texas CARL FELSENFELD, New York, New York JAMES E. SUTTON, Dallas, Texas MARCIA A. HAKALA, Omaha, Nebraska ANNE GARY TAYLOR, Alexandria, Virginia JOSEPH F. HOLT III, Oxnard, California RICHARD D. WAGNER, Simsbury, Connecticut RICHARD L. WHEATLEY, JR., Stillwater, Oklahoma Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A73 Federal Reserve Banks, Branches, and Offices FEDERAL RESERVE BANK, Chairman President Vice President branch, or facility Zip Deputy Chairman First Vice President in charge of branch BOSTON* 02106 Louis W. Cabot Frank E. Morris Robert M. Solow James A. Mcintosh NEW YORK* 10045 Frank R. Milliken Paul A. Volcker Robert H. Knight Thomas M. Timlen Buffalo 14240 Paul A. Miller John T. Keane PHILADELPHIA 19105 John W. Eckman David P. Eastburn Werner C. Brown Richard L. Smoot CLEVELAND* 44101 Horace A. Shepard Willis J. Winn . Robert E. Kirby Walter H. MacDonald Cincinnati 45201 Lawrence H. Rogers, II 1 Robert E. Showalter Pittsburgh 15230 G. Jackson Tankersley Robert D. Duggan RICHMOND* 23261 E. Angus Powell Robert P. Black E. Craig Wall, Sr. George C. Rankin Baltimore 21203 I. E. Killian Jimmie R. Monhollon Charlotte 28230 Robert C. Edwards Stuart P. Fishburne Culpeper Communications and Records Center.. 22701 Albert D. Tinkelenberg ATLANTA 30303 H. G. Pattillo Monroe Kimbrel Clifford M. Kirtland, Jr. Kyle K. Fossum Birmingham 35202 William H. Martin, III Hiram J. Honea Jacksonville 32203 Gert H. W. Schmidt Edward C. Rainey Miami 33152 David G. Robinson W. M. Davis Nashville 37203 John C. Bolinger Jeffrey J. Wells New Orleans 70161 George C. Cortright, Jr. George C. Guynn CHICAGO* 60690 Peter B. Clark Robert P. Mayo Robert H. Strotz Daniel M. Doyle Detroit 48231 Jordan B. Tatter William C. Conrad ST. LOUIS 63166 Edward J. Schnuck Lawrence K. Roos William B. Walton Donald W. Moriarty Little Rock 72203 Ronald W. Bailey John F. Breen Louisville 40201 James C. Hendershot Donald L. Henry Memphis 38101 Frank A. Jones, Jr. L. Terry Britt MINNEAPOLIS 55480 James P. McFarland Mark H. Willes Stephen F. Keating Clement A. Van Nice Helena 59601 Patricia P. Douglas John D. Johnson KANSAS CITY 64198 Harold W. Andersen Roger Guffey Joseph H. Williams Henry R. Czerwinski Denver 80217 A. L. Feldman Wayne W. Martin Oklahoma City 73125 James G. Harlow, Jr. William G. Evans Omaha 68102 Durward B. Varner Robert D. Hamilton DALLAS 75222 Irving A. Mathews Ernest T. Baughman Charles T. Beaird Robert H. Boykin El Paso 79999 Gage Holland Fredric W. Reed Houston 77001 Alvin I. Thomas J. Z. Rowe San Antonio 78295 Marshall Boykin, III Carl H. Moore SAN FRANCISCO ... .94120 Joseph F. Alibrandi John J. Balles Cornell C. Maier John B. Williams Los Angeles 90051 Joseph R. Vaughan Richard C. Dunn Portland 97208 Loran L. Stewart Angelo S. Carella Salt Lake City 84110 Sam Bennion A. Grant Holman Seattle 98124 Lloyd E. Cooney James J. Curran •Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; Cranford, New Jersey 07016; Jericho, New York 11753; Utica, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A 74 Federal Reserve Board Publications Available from Publications Services, Division of Ad- request and be made payable to the order of the Board ministrative Services, Board of Governors of the Fed- of Governors of the Federal Reserve System in a form eral Reserve System, Washington, D.C. 20551. Where collectible at par in U.S. currency. (Stamps and a charge is indicated, remittance should accompany coupons are not accepted.) THE FEDERAL RESERVE SYSTEM—PURPOSES AND INDUSTRIAL PRODUCTION—1976 EDITION. 1977. 304 pp. FUNCTIONS. 1974. 125 pp. $4.50 each; 10 or more to one address, $4.00 each. ANNUAL REPORT BANK CREDIT-CARD AND CHECK-CREDIT PLANS. 1968. FEDERAL RESERVE BULLETIN. Monthly. $20.00 per 102 pp. $1.00 each; 10 or more to one address, year or $2.00 each in the United States, its posses- $.85 each. sions, Canada, and Mexico; 10 or more of same SURVEY OF CHANGES IN FAMILY FINANCES. 1968. 321 issue to one address, $18.00 per year or $1.75 pp. $1.00 each; 10 or more to one address, $.85 each. Elsewhere, $24.00 per year or $2.50 each. each. BANKING AND MONETARY STATISTICS, 1914-1941. REPORT OF THE JOINT TREASURY-FEDERAL RESERVE (Reprint of Part 1 only) 1976. 682 pp. $5.00. STUDY OF THE U.S. GOVERNMENT SECURITIES BANKING AND MONETARY STATISTICS, 1941-1970. MARKET. 1969. 48 pp. $.25 each; 10 or more to 1976. 1,168 pp. $15.00. one address, $.20 each. ANNUAL STATISTICAL DIGEST, 1971-75. 1976. 339 pp. JOINT TREASURY-FEDERAL RESERVE STUDY OF THE $4.00 per copy for each paid subscription to Fed- GOVERNMENT SECURITIES MARKET: STAFF STUDeral Reserve Bulletin. All others, $5.00 each. IES—PART 1. 1970. 86 pp. $.50 each; 10 or more ANNUAL STATISTICAL DIGEST, 1972-76. 1977. 388 pp. to one address, $.40 each. PART 2. 1971. 153 pp. $10.00 per copy. and PART 3. 1973. 131 pp. Each volume $1.00; FEDERAL RESERVE MONTHLY CHART BOOK. Subscrip- 10 or more to one address, $.85 each. tion includes one issue of Historical Chart Book. OPEN MARKET POLICIES AND OPERATING PROCE- $12.00 per year or $1.25 each in the United States, DURES—STAFF STUDIES. 1971. 218 pp. $2.00 its possessions, Canada, and Mexico; 10 or more each; 10 or more to one address, $1.75 each. of same issue to one address, $1.00 each. Else- REAPPRAISAL OF THE FEDERAL RESERVE DISCOUNT where, $15.00 per year or $1.50 each. MECHANISM. Vol. 1. 1971. 276 pp. Vol. 2. 1971. HISTORICAL CHART BOOK. Issued annually in Sept. 173 pp. Vol. 3. 1972. 220 pp. Each volume $3.00; Subscription to Monthly Chart Book includes one 10 or more to one address, $2.50 each. issue. $1.25 each in the United States, its posses- THE ECONOMETRICS OF PRICE DETERMINATION CONsions, Canada, and Mexico; 10 or more to one FERENCE, October 30-31, 1970, Washington, D.C. address, $1.00 each. Elsewhere, $1.50 each. 1972. 397 pp. Cloth ed. $5.00 each; 10 or more CAPITAL MARKET DEVELOPMENTS. Weekly. $15.00 per to one address, $4.50 each. Paper ed. $4.00 each; year or $.40 each in the United States, its posses- 10 or more to one address, $3.60 each. sions, Canada, and Mexico; 10 or more of same issue to one address, $13.50 per year or $.35 each. FEDERAL RESERVE STAFF STUDY: WAYS TO MODERATE Elsewhere, $20.00 per year or $.50 each. FLUCTUATIONS IN HOUSING CONSTRUCTION. 1972. 487 pp. $4.00 each; 10 or more to one address, SELECTED INTEREST AND EXCHANGE RATES—WEEKLY $3.60 each. SERIES OF CHARTS. Weekly. $15.00 per year or $.40 each in the United States, its possessions, LENDING FUNCTIONS OF THE FEDERAL RESERVE Canada, and Mexico; 10 or more of same issue BANKS. 1973. 271 pp. $3.50 each; 10 or more to one address, $13.50 per year or $.35 each. to one address, $3.00 each. Elsewhere, $20.00 per year or $.50 each. IMPROVING THE MONETARY AGGREGATES (Report of the THE FEDERAL RESERVE ACT, as amended through De- Advisory Committee on Monetary Statistics). cember 1976, with an appendix containing provi- 1976. 43 pp. $1.00 each; 10 or more to one sions of certain other statutes affecting the Federal address, $.85 each. Reserve System. 307 pp. $2.50. ANNUAL PERCENTAGE RATE TABLES (Truth in Lend- REGULATIONS OF THE BOARD OF GOVERNORS OF THE ing—Regulation Z) Vol. I (Regular Transactions). FEDERAL RESERVE SYSTEM 1969. 100 pp. Vol. II (Irregular Transactions). PUBLISHED INTERPRETATIONS OF THE BOARD OF GOV- 1969. 116 pp. Each volume $1.00, 10 or more ERNORS, as of June 30, 1977. $7.50. of same volume to one address, $.85 each. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Federal Reserve Board Publications A 75 CONSUMER EDUCATION PAMPHLETS BANK DEBITS, DEPOSITS, AND DEPOSIT TURNOVER— REVISED SERIES. 7/72. (Short pamphlets suitable for classroom use. Multiple YIELDS ON NEWLY ISSUED CORPORATE BONDS. 9/72. copies available without charge.) RECENT ACTIVITIES OF FOREIGN BRANCHES OF U.S. BANKS. 10/72. THE EQUAL CREDIT OPPORTUNITY ACT AND . . . AGE REVISION OF CONSUMER CREDIT STATISTICS. 10/72. THE EQUAL CREDIT OPPORTUNITY ACT AND . . . ONE-BANK HOLDING COMPANIES BEFORE THE 1970 DOCTORS, LAWYERS, SMALL RETAILERS, AND AMENDMENTS. 12/72. OTHERS WHO MAY PROVIDE INCIDENTAL CREDIT YIELDS ON RECENTLY OFFERED CORPORATE BONDS. THE EQUAL CREDIT OPPORTUNITY ACT AND . 5/73. WOMEN CREDIT-CARD AND CHECK-CREDIT PLANS AT COMMER- FAIR CREDIT BILLING CIAL BANKS. 9/73. IF YOU BORROW TO BUY STOCK RATES ON CONSUMER INSTALMENT LOANS. 9/73. U.S. CURRENCY NEW SERIES FOR LARGE MANUFACTURING CORPORA- WHAT TRUTH IN LENDING MEANS TO YOU TIONS. 10/73. U.S. ENERGY SUPPLIES AND USES, Staff Economic Study by Clayton Gehman. 12/73. STAFF ECONOMIC STUDIES INFLATION AND STAGNATION IN MAJOR FOREIGN IN- DUSTRIAL COUNTRIES. 10/74. Studies and papers on economic and financial subjects THE STRUCTURE OF MARGIN CREDIT. 4/75. that are of general interest in the field of economic NEW STATISTICAL SERIES ON LOAN COMMITMENTS AT research. SELECTED LARGE COMMERCIAL BANKS. 4/75. RECENT TRENDS IN FEDERAL BUDGET POLICY. 7/75. SUMMARIES ONLY PRINTED IN THE BULLETIN RECENT DEVELOPMENTS IN INTERNATIONAL FINANCIAL (Limited supply of mimeographed copies of full text MARKETS. 10/75. available upon request for single copies.) MINNIE: A SMALL VERSION OF THE MIT-PENN-SSRC ECONOMETRIC MODEL, Staff Economic Study by Douglas Battenberg, Jared J. RECENT TRENDS IN LOCAL BANKING MARKET STRUC- Enzler, and Arthur M. Havenner. 11/75. TURE, by Samuel H. Talley. May 1977. 26 pp. AN ASSESSMENT OF BANK HOLDING COMPANIES, Staff THE PERFORMANCE OF BANK HOLDING COMPANY- Economic Study by Robert J. Lawrence and AFFILIATED FINANCE COMPANIES, by Stephen A. Samuel H. Talley. 1/76. Rhoades and Gregory E. Boczar. Aug. 1977. 19 pp. GREELEY IN PERSPECTIVE, by Paul Schweitzer and Joshua INDUSTRIAL ELECTRIC POWER USE. 1/76. Greene. Sept. 1977. 17 pp. REVISION OF MONEY STOCK MEASURES. 2/76. SURVEY OF FINANCE COMPANIES, 1975. 3/76. STRUCTURE AND PERFORMANCE STUDIES IN BANKING: A REVISED SERIES FOR MEMBER BANK DEPOSITS AND SUMMARY AND EVALUATION, by Stephen A. Rhoades. Dec. 1977. 45 pp. AGGREGATE RESERVES. 4/76. INDUSTRIAL PRODUCTION—1976 Revision. 6/76. FEDERAL RESERVE OPERATIONS IN PAYMENT MECHA- PRINTED IN FULL IN THE BULLETIN NISMS: A SUMMARY. 6/76. Staff Economic Studies shown in list below. RECENT GROWTH IN ACTIVITIES OF U.S. OFFICES OF BANKS. 10/76. REPRINTS NEW ESTIMATES OF CAPACITY UTILIZATION: MANU- (Except for Staff Papers, Staff Economic Studies, and FACTURING AND MATERIALS. 11/76. some leading articles, most of the articles reprinted do U.S. INTERNATIONAL TRANSACTIONS IN A RECOVERING not exceed 12 pages.) ECONOMY. 4/77. BANK HOLDING COMPANY FINANCIAL DEVELOPMENTS A REVISED INDEX OF MANUFACTURING CAPACITY, IN 1976. 4/77. Staff Economic Study by Frank de Leeuw with Frank E. Hopkins and Michael D. Sherman. 1 1/66. CHANGES IN BANK LENDING PRACTICES, 1976. 4/77. U.S. INTERNATIONAL TRANSACTIONS: TRENDS IN SURVEY OF TERMS OF BANK LENDING—NEW SERIES. 1960-67. 4/68. 5/77. MEASURES OF SECURITY CREDIT. 12/70. THE COMMERCIAL PAPER MARKET. 6/77. REVISED MEASURES OF MANUFACTURING CAPACITY CONSUMPTION AND FIXED INVESTMENT IN THE ECO- UTILIZATION. 10/71. REVISION OF BANK CREDIT SERIES. 12/71. NOMIC RECOVERY ABROAD. 10/77. ASSETS AND LIABILITIES OF FOREIGN BRANCHES OF CHANGES IN TIME AND SAVINGS DEPOSITS AT COM- U.S. BANKS. 2/72. MERCIAL BANKS, April-July 1977. 11/77. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A 76 Federal Reserve Bulletin • December 1977 ANTICIPATED SCHEDULE OF RELEASE DATES FOR PUBLIC PERIODIC RELEASES1- BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM DATE OR PERIOD APPROXIMATE TO WHICH DATA WEEKLY RELEASES RELEASE DAY REFER Aggregate Reserves and Member Bank Deposits 502 (H.3) Week ended previous Tuesday Wednesday Applications and Reports Received or Acted on and All Other Actions Week ended previous Friday of the Board 501 (H.2) Saturday Assets and Liabilities of All Commercial Banks in the United Wednesday, 2 weeks Wednesday States 510 (H.8) earlier Week ended previous Changes in State Member Banks 615 (K.3) Tuesday Saturday Wednesday, 1 week Commercial and Industrial Loans Outstanding by Industry 514 (H.I2)2 Wednesday earlier Week ended 3 Wed- Deposits, Reserves, and Borrowings of Member Banks 509 (H.7) Wednesday nesdays earlier Factors Affecting Bank Reserves and Condition Statement of Federal Week ended previous Thursday Reserve Banks 503 (H.4.1) Wednesday Week ended previous Foreign Exchange Rates 512 (H.10) Monday Friday Week ended Wednes- Money Stock Measures 508 (H.6) Thursday day of previous week Week ended Wednes- Reserve Positions of Major Reserve City Banks 507 (H.5) Friday day of previous week Week ended previous Selected Interest Rates and Bond Prices 519 (H.15) Monday Saturday Weekly Condition Report of Large Commercial Banks in New York Previous Wednesday Thursday and Chicago 506 (H.4.3) Weekly Condition Report of Large Commercial Banks and Domestic Wednesday, 1 week Wednesday Subsidiaries 504 (H.4.2)3 earlier Weekly Summary of Banking and Credit Measures 511 (H.9) Week ended previous Thursday Wednesday; and week ended Wednesday of previous week SEMIMONTHLY RELEASE Research Library—Recent Acquisitions 601 (J.2) 1st and 16th Period since last release of month MONTHLY RELEASES Assets and Liabilities of all Member Banks, by Districts 408 (G.7.1) 14th of month Last Wednesday of previous month Automobile Credit 428 (G.26) 6th working day 2nd month previous of month 1 Release dates are those anticipated or usually met. However, it should be noted that for some releases there is normally a certain variability because of reporting or processing procedures. Moreover, for all series unusual circumstances may, from time to time, result in a release date being later than anticipated. 2 On second Wednesday of month, contains monthly data release. 3 Contains revised H.4.3 data. NOTE.—The Board's official mailing list is being computerized, and new three-digit identification codes have been assigned to each individual release. The new code, as well as the current symbol, will be used for several months; thereafter, only the new code will appear. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
All MONTHLY RELEASES (cont.) DATE OR PERIOD APPROXIMATE TO WHICH DATA RELEASE DAY REFER Capacity Utilization: Manufacturing and Materials 402 (G.3) 17th of month Previous month Changes in Status of Banks and Branches 404 (G.4.5) 25th of month Previous month Consumer Instalment Credit 421 (G.19) 3rd working 2nd month previous day of month Debits and Deposit Turnover at Commercial Banks 406 (G.6) 25th of month Previous month Federal Reserve System Memorandum on Exchange Charges 628 (K.14) 5th of month Period since last release Finance Companies 422 (G.20) 5th working 2nd month previous day of month Foreign Exchange Rates 405 (G.5) 1st of month Previous month Index Numbers of Wholesale Prices 409 (G.8) 20th of month Previous month Industrial Production 414 (G.12.3) 15th of month Previous month Interest Rates on Selected Consumer Instalment Loans at Reporting 15th of month 2nd month previous Commercial Banks 411 (G.10) Loan Commitments at Selected Large Commercial Banks 423 (G.21) 20th of month 2nd month previous Maturity Distribution of Outstanding Negotiable Time Certificates of 24th of month Last Wednesday of Deposit 410 (G.9) previous month Monthly Report of Condition for U.S. Agencies, Branches and Domestic 15th of month 2nd month previous Banking Subsidiaries of Foreign Banks 412 (G.ll) Selected Interest Rates and Bond Prices 415 (G.13) 6th of month Previous month Summary of Equity Security Transactions 418 (G. 16) Last week of Release date month Survey of Terms of Bank Lending 416 (G. 14) 15th of month 3rd month previous QUARTERLY RELEASES Finance Rates and Other Terms on Selected Types of Consumer 25th of January, 2nd month previous Instalment Credit Extended by Major Finance Companies 120 (E. 10) April, July, October Flow of Funds: Seasonally adjusted and unadjusted 780 (Z.l) 15th of Febru- Previous quarter ary, May, Volume and Composition of Individuals' Saving August, (Flow of funds series) 118 (E.8) November Geographical Distribution of Assets and Liabilities of Major Foreign 15th of Previous quarter Branches of U.S. Banks 121 (E.ll) March, June, September, December Sales, Revenue, Profits, and Dividends of Large Manufacturing Corpo- 10th of March, 2nd quarter previous rations 116 (E.6) July, September, December DATE OR PERIOD APPROXIMATE TO WHICH DATA SEMIANNUAL RELEASES RELEASE DAY REFER Assets and Liabilities of Commercial Banks, by Class of Bank May and No- End of previous De- 113 (E.3.4) vember cember and June Check Collection Services—Federal Reserve System 119 (E.9) February Previous six and July months Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A 78 Federal Reserve Bulletin • December 1977 SEMIANNUAL RELEASES (cont.) DATE OR PERIOD APPROXIMATE TO WHICH DATA RELEASE DAY REFER List of OTC Margin Stocks 117 (E.7) June 30, De- Release date cember 31 Assets, Liabilities, and Capital Accounts of Commercial and Mutual May and No- End of previous De- Savings Banks—Reports of Call (Joint Release of the Federal vember cember and June Deposit Insurance Corp., the Board of Governors of the Federal Reserve System, and Office of the Comptroller of the Currency. Published and distributed by FDIC.) ANNUAL RELEASES Aggregate Summaries of Annual Surveys of Security Credit Extension February End of previous June 101 (C.2) Member Bank Income 103 (C.4) End of May Previous year State Member Banks of Federal Reserve System and Nonmember 1st quarter of End of previous year Banks that Maintain Clearing Accounts with Federal Reserve year Banks 403 (G.4) (Supplements issued monthly) 15th of month Previous month Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A79 Index to Statistical Tables References are to pages A-3 through A-69 although the prefix "A" is omitted in this index ACCEPTANCES, bankers, 11, 25, 27 Demand deposits: Agricultural loans, commercial banks, 18, 20-22, 26 Adjusted, commercial banks, 13, 15, 19 Assets and liabilities (See also Foreigners): Banks, by classes, 16, 17, 19, 20-23 Banks, by classes, 16, 17, 18, 20-23, 29 Ownership by individuals, partnerships, and Domestic finance companies, 39 corporations, 25 Federal Reserve Banks, 12 Subject to reserve requirements, 15 Nonfinancial corporations, current, 38 Turnover, 13 Automobiles: Deposits (See also specific types of deposits): Consumer instalment credit, 42, 43 Banks, by classes, 3, 16, 17, 19, 20-23, 29 Production, 48, 49 Federal Reserve Banks, 4, 12 Subject to reserve requirements, 15 BANKERS balances, 16, 18, 20, 21, 22 Turnover, 13 (See also Foreigners) Discount rates at F.R. Banks (See Interest rates) Banks for cooperatives, 35 Discounts and advances by F.R. Banks (See Loans) Bonds (See also U.S. Govt, securities): Dividends, corporate, 38, 69 New issues, 36, 37 Yields, 3 EMPLOYMENT, 46, 47 Branch banks: Euro-dollars, 27 Assets and liabilities of foreign branches of U.S. banks, 62 FARM mortgage loans, 41 Liabilities of U.S. banks to their foreign Farmers Home Administration, 41 branches, 23 Federal agency obligations, 4, 11, 12, 13, 34 Business activity, 46 Federal and Federally sponsored credit agencies, 35 Business expenditures on new plant and Federal finance: equipment, 38 Debt subject to statutory limitation and Business loans (See Commercial and industrial types and ownership of gross debt, 32 loans) Receipts and outlays, 30, 31 Treasury operating balance, 30 CAPACITY utilization, 46, 47 Federal Financing Bank, 35 Capital accounts: Federal funds, 3, 6, 18, 20, 21, 22, 27, 30 Banks, by classes, 16, 17, 19, 20 Federal home loan banks, 35 Federal Reserve Banks, 12 Federal Home Loan Mortgage Corp., 35, 40, 41 Central banks, 68 Federal Housing Administration, 35, 40, 41 Certificates of deposit, 23, 27 Federal intermediate credit banks, 35 Commercial and industrial loans: Federal land banks, 35, 41 Commercial banks, 15, 18, 23, 26 Federal National Mortgage Assn., 35, 40, 41 Weekly reporting banks, 20, 21, 22, 23, 24 Federal Reserve Banks: Commercial banks: Condition statement, 12 Assets and liabilities. 3. 15-18. 20-23 Discount rates (See Interest rates) Business loans, 26 U.S. Govt, securities held, 4, 12. 13. 32, 33 Commercial and industrial loans, 24 Federal Reserve credit, 4, 5, 12, 13 Consumer loans held, by type, 42, 43 Federal Reserve notes, 12 Loans sold outright, 23 Federally sponsored credit agencies, 35 Number, by classes, 16, 17, 19 Finance companies: Real estate mortgages held, by type of holder and Assets and liabilities, 39 property, 41 Busines credit, 39 Commercial paper, 3, 24, 25, 27, 39 Loans, 20, 21, 22, 42, 43 Condition statements (See Assets and liabilities) Paper, 25, 27 Construction, 46, 50 Financial institutions, loans to, 18, 20-23 Consumer instalment credit, 42, 43 Float, 4 Consumer prices, 46, 51 Flow of funds, 44, 45 Consumption expenditures, 52, 53 Foreign: Corporations: Currency operations, 12 Profits, taxes, and dividends, 38 Deposits in U.S. banks. 4, 12, 19, 20, 21, 22 Sales, revenue, profits, and dividends of large Fxchange rates, 68 manufacturing corporations, 69 Trade, 55 Security issues, 36, 37, 65 Foreigners: Cost of living (See Consumer prices) Claims on, 60, 61, 66, 67 Credit unions, 29, 42, 43 Liabilities to, 23. 56-59, 64-67 Currency and coin, 5, 16, 18 Currency in circulation, 4, 14 GOLD: Customer credit, stock market, 28 Certificates, 12 Stock, 4, 55 DEBITS to deposit accounts, 13 Government National Mortgage Assn., 35, 40, 41 Debt (See specific types of debt or securities) Gross national product, 52, 53 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A 80 Federal Reserve Bulletin • December 1977 HOUSING, new and existing units, 50 REAL estate loans: Banks, by classes, 18, 20-23, 29, 41 INCOME, personal and national, 46, 52, 53 Life insurance companies, 29 Industrial production, 46, 48 Mortgage terms, yields, and activity, 3, 40 Instalment loans, 42, 43 Type of holder and property mortgaged, 41 Insurance companies, 29, 32, 33, 41 Reserve position, basic, member banks, 6 Insured commercial banks, 17, 18, 19 Reserve requirements, member banks, 9 Interbank deposits, 16, 17, 20, 21, 22 Reserves: Interest rates: Commercial banks, 16, 17, 18, 20. 21, 22 Bonds, 3 Federal Reserve Banks, 12 Business loans of banks, 26 Member banks, 3, 4, 5, 15, 16, 18 Federal Reserve Banks, 3, 8 U.S. reserve assets, 55 Foreign countries, 68 Residential mortgage loans, 40 Money and capital market rates, 3, 27 Retail credit and retail sales, 42, 43, 46 Mortgages, 3, 40 Prime rate, commercial banks, 26 SALES, revenue, profits, and dividends of large Time and savings deposits, maximum rates, 10 manufacturing corporations, 69 International capital transactions of the United Saving: States, 56-67 Flow of funds, 44, 45 International organizations, 56-61, 65-67 National income accounts, 53 Inventories, 52 Savings and loan assns., 3, 10, 29, 33, 41, 44 Investment companies, issues and assets, 37 Savings deposits (See Time deposits) Investments (See also specific types of investments): Savings institutions, selected assets, 29 Banks, by classes, 16, 17, 18, 20, 21, 22, 29 Securities (See also U.S. Govt, securities): Commercial banks, 3, 15, 16, 17, 18 Federal and Federally sponsored agencies, 35 Federal Reserve Banks, 12, 13 Foreign transactions, 65 Life insurance companies, 29 New issues, 36, 37 Savings and loan assns., 29 Prices, 28 Special Drawing Rights, 4, 12, 54, 55 LABOR force, 47 State and local govts.: Life insurance companies (See Insurance Deposits, 19, 20, 21, 22 companies) Holdings of U.S. Govt, securities, 32, 33 Loans (See also specific types of loans): New security issues, 36 Banks, by classes, 16, 17, 18, 20-23, 29 Ownership of securities of, 18, 20, 21, 22, 29 Commercial banks, 3, 15-18, 20-23, 24, 26 Yields of securities, 3 Federal Reserve Banks, 3, 4, 5, 8, 12, 13 State member banks. 17 Insurance companies, 29, 41 Stock market, 28 Insured or guaranteed by U.S., 40, 41 Stocks (S^ also Securities); Savings and loan assns., 29 New issues, 36, 37 Prices, 28 MANUFACTURERS: Capacity utilization, 46, 47 TAX receipts, Federal, 31 Production, 46, 49 Time deposits, 3, 10. 13. 15, 16. 17, 19. 20. 21. Margin requirements, 28 22, 23 Member banks: Trade, foreign, 55 Assets and liabilities, by classes, 16, 17, 18 Treasury currency. Treasury cash, 4 Borrowings at Federal Reserve Banks, 5, 12 Treasury deposits, 4, 12, 30 Number, by classes, 16, 17, 19 Treasury operating balance, 30 Reserve position, basic, 6 Reserve requirements, 9 UNEMPLOYMENT, 47 Reserves and related items, 3, 4, 5, 15 U.S. balance of payments, 54 Mining production, 49 U.S. Govt, balances: Mobile home shipments, 50 Commercial bank holdings, 19, 20, 21, 22 Monetary aggregates, 3,15 Member bank holdings, 15 Money and capital market rates (See Interest Treasury deposits at Reserve Banks, 4, 12, 30 rates) U.S. Govt, securities: Money stock measures and components, 3, 14 Bank holdings, 16, 17, 18, 20, 21, 22, 29, Mortgages (See Real estate loans) 32, 33 Mutual funds (See Investment companies) Dealer transactions, positions, and financing, 34 Mutual savings banks, 3, 10, 20-22, 29, 32, 33, 41 Federal Reserve Bank holdings, 4, 12, 13, 32, 33 Foreign and international holdings and NATIONAL banks, 17, 19 transactions, 12, 32, 64 National defense outlays, 31 Open market transactions, 11 National income, 52 Outstanding, by type of security, 32, 33 Nonmember banks, 17, 18, 19 Ownership, 32, 33 Rates in money and capital markets, 27 OPEN market transactions, 11 Yields, 3 Utilities, production, 49 PERSONAL income, 53 Prices: VETERANS Administration, 40, 41 Consumer and wholesale, 46, 51 Stock market, 28 WEEKLY reporting banks, 20-24 Prime rate, commercial banks, 26 Wholesale prices, 46 Production, 46, 48 Profits, corporate, 38, 69 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A81 Index to Volume 63 GUIDE TO PAGE REFERENCES IN MONTHLY ISSUES Other ('A" pages) Other ("A" pages) Text Text etc. Index to etc. Index to Issue total Total tables Issue total Total tables January . 1-100 1-80 76-77 July 617-706 1-78 76-77 February 101-188 1-78 76-77 August 707-768 1-78 76-77 March ... 189-310 1-78 76-77 September . 769-870 1-78 76-77 April 311-432 1-78 76-77 October ... 871-964 1-78 76-77 May 433-524 1-80 78-79 November .. 965-1034 1-78 76-77 June 525-616 1-84 81-82 December .. 1035-1134 1-92 79-80 (References to "A" pages in this index are to such pages in the December issue.) Pages Pages ABRAHAMSON, Richard D., return to Federal Bank holding companies (For orders issued to Reserve Bank of Chicago 98 individual companies under the Bank Holding Acceptances, bankers (See Bankers acceptances) Company Act, see Bank Holding Company Adkins, Cecelia, appointed director, Nashville Act): Branch 176 Acting as futures commission merchant to execute Albanese, Naomi G., appointed director, Charlotte contracts covering gold and silver bullion Branch 174 and coins, Board decision to consider 704 Alford, John, elected Class A director, Cleveland .. 172 Delegation by Board of certain authority re- Andrews, William B., appointed director, Helena garding, amendment of rules 58, 671 Branch 179 Financial developments in 1976 337 Annual Report, 1976 614 Regulation Y (See Regulations and rules) Annual Statistical Digest 98, 522, 614, 1132 Reports, revised 97 Arnold, William E., Jr., appointed director, Jack- Staff economic studies (summaries) 715, 775 sonville Branch 175 Supervision and regulation: Articles: Improvement, statement on bills 551 Bank holding company financial developments Intensified supervision, Board announcement in 1976 337 of program 1031 Bank lending, changes in practices, 1976, and new Safe Banking Act of 1977, statement on survey of terms 341, 442 proposed legislation 891 Commercial paper market 525 Bank Holding Company Act (See also Bank hold- Consumer credit regulations, complying with ... 769 ing companies): Consumption and fixed investment in economic Amendments 1077 recovery abroad 871 Board review under grandfather proviso: Economy in 1976 1 Colorado Funding Company 954 Equal Credit Opportunity 101 General Educational Fund, Inc 955 Financial developments, quarterly reports to Investment Management, Inc 1100 Congress {See Statements to Congress) Valley Financial Services, Inc 957 Housing in the recovery 189 Orders issued: Industrial production developments 1035 Alabama Bancorporation 609 Insured commercial bank income in 1976 626 Alfred I. du Pont Testamentary Trust and International transactions of United States in a Florida National Banks of Florida, Inc., recovering economy 311 designation of purchaser of shares 940 Labor market trends 617 Allied Bancshares, Inc 1128 Monetary policy in 1976, implementation 323 Ameribanc, Inc 87, 1029 Time and savings deposits at commercial banks, American Bankcorp, Inc 517 surveys 347, 537, 782, 973 American General Insurance Company 510 Treasury and Federal Reserve foreign exchange American National Bancshares, Inc 149 operations, reports 200, 548, 793 American State Bancshares, Inc 864 Assets and liabilities, revisions in data and nomen- Ark Valley Bankshares, Inc 842 clature of call reports 522 Associated Bank Corporation 423 Audubon Investment Company 401 BAILEY, Virginia M., elected Class B director, B.O.C. Corporation 1011 St. Louis 178 Banco Central, S.A., Madrid, Spain 741 Bank credit proxy, discontinuance 765 Banco de Bogota and Banbogota, Inc., Bogota, Bank debits and deposit turnover series,revision .. 963 Colombia 671 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A 82 Federal Reserve Bulletin • December 1977 Pages Pages Bank Holding Company Act—Continued Bank Holding Company Act—Continued Orders issued—Cont. Orders issued—Cont. Banco Exterior de Espana, S.A., Madrid, First Maryland Bancorp 70 Spain 1079 First Midwest Bancorp., Inc 865 Banco Union, C.A. and Consorcio Financiero First National Boston Corporation 272, 1087 Union, S.A., Caracas, Venezuela, and Union First National Charter Corporation 87, 678 International Corporation, Wilmington, First National Cincinnati Del 61 Corporation 1028 Bancorporation of Montana 402, 1080 First National Fairbury Corporation 1129 Bancorporation of Wisconsin 424 First National Holding Corp 929 BankAmerica Corporation 687 First of Grandfield Corporation 865 Banker Agency, Inc 517 First of Iowa Bank Shares, Inc 1015 Bankstock One, Inc 267 First Security Corporation, request for recon- Barnett Banks of Florida, Inc 959 sideration and granting of determi- Benson Bancshares, Inc 1009 nation 287, 1025 Berbanc, Inc 742 First Security National Corporation 960 Berco, Inc 743 First Texas Bancorp, Inc 1029 Berlin City Bank 268 Florida Bankshares, Inc 701 Boyden Bancorp 86 Fort Sam Houston Bankshares, Inc 303, 424 Byron B. Webb, Inc 270 Freeco, Inc 73 C.I.T. Financial Corporation 79 FrostBank Corporation 676 Citicorp 416 GEM A Financial Corporation 1014 Capitol Bancorporation 1081 Gaylord Bankshares, Inc 73 Caprice Corporation 864 Gilman Investment Co 1129 Central Bancompany 493, 843 Glen-An Corporation 517 Central Bancorporation, Inc 762, 864 Granite Holding Corp 677 Central National Bancshares, Inc 754 Great Southwest Ban Corp., Inc 274 Central State Bancshares, Inc 1129 Hawaii Bancorporation, Inc 163 Central Wisconsin Bankshares, Inc 518 Hawkeye Bancorporation 701, 1088 Chalfen-Holiday, Inc 691 Hinsdale Capital Corporation 959 Chemical Financial Corporation 517, 518 Holt County Investment 959 Chickasha Bancshares, Inc 1082 Huntington Bancshares Incorpo- Citizens and Southern National Bank and rated 847,932,1129 Citizens and Southern Holding Company .. 302 Independent Bank Corporation 153 Citizens Bancorp, Inc 1083 Indiana National Corporation 152 CleveTrust Corporation 517, 960 Industrial Loan and Investment Company .... 693 Commerce Bancshares, Inc 494 International Bank, orders granting motion to Commercial National Corporation 279 reopen record and relating to control over Continental Illinois Corporation 750 Financial General Bankshares, Inc. ... 603, 1106 Country Bank Shares Corporation 495 Jackson Hole Banking Corporation 934 County National Bancorporation 1129 Jacobus Company and Inland Heritage Corpo- Crystal State Agency, Inc 1013 ration 275 D. H. Baldwin Company 280, 412, 672, 946 Jacobus Company, Inland Heritage Corpo- Daiwa Bank, Limited, Osaka, Japan 151 ration, and Inland Beloit Corporation 403 Dakota Bancorporation 63 King Ranch, Inc 404 Daniels Insurance Agency, Inc 925 Krey Co. Ltd 701 Deport Bancshares, Inc 1129 Kruse Insurance Agency, Inc 423 DETROITBANK Corporation 762, 926 Lake View Bancorp, Inc 154, 1017 Ellis Banking Corporation 511 Landmark Bancshares Corporation 959 Equimark Corporation 300 Landmark Banking Corporation of Florida ... 950 European-American Bancorp 595 Lincoln National Company 405 Evans Insurance Agency, Inc 65 McCune Bancshares, Inc 610 Exchange Bancorporation, Inc 158 Mahaska Investment Company 579 Falsbuilding, Inc 65 Manchester Financial Corp 848 Farmers Bancshares, Inc 424 Manufacturers Hanover Corporation 590 Financial General Bankshares, Inc 1106 Manufacturers National Corporation 75 Financial Services Corporation of the Mid- Marine Corporation 1090 west 948 Marion National Corporation 167 First Arabian Corporation, S.A., Paris, Marshall & Ilsley Corporation 424 France 66, 68 Maryville Bancshares, Inc 865 First Bancorp, Inc 271 Metropolitan Bank and Trust Company, First Bancshares, Inc 301 Philippine Securities Corporation, and First Bankers Corporation of Florida 518, 1029 Tytana Corporation, Makati, Rizal, First Charter Financial Corporation 1014 Philippines 851,935 First City Bancorporation of Texas, Inc 423, Michigan National Corporation 581, 1092 674, 928 Midland Capital Co 694 First Commerce Corporation 949 Midwest Bancorporation (of Ohio), Inc 1129 First Douglas BanCorporation, Inc 1129 Montbello Bankcorp, Inc 517 First Glenrock Corporation 1085 Montgomery Bancorporation, Inc 167 First Guthrie BancShares, Inc 854 Mountain Financial Services, Inc 167 First International Bancshares, Inc 301, NBC Co 688 701, 744 NBC Corp 497 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Index to Volume 63 A 83 Pages Pages Bank Holding Company Act—Continued Bank Holding Company Act—Continued Orders issued—Cont. Orders issued—Cont. National City Corporation 865, 1094 Valley Bancorporation 518, 685 National Detroit Corporation 583, 752 Washington Bancorporation 609 New Virginia Bancorporation 1029 Wells Fargo & Company 593 Northeast United Bancorp, Inc. of Western Michigan Corporation 506 Texas 747, 762 Westland Banks, Inc 302 Northwest Bancorporation 86, 585, 852, 1096 WilberCo 517 OLD CANAL BANKSHARES, INC 407 Winters National Corporation 753 Old Kent Financial Corporation 1029 Woodford Bancorporation, Inc 517 Omaha State Corporation 701 Yoakum County Bancshares, Inc 509 Ottawa Bancshares, Inc 865 Publication of each Order in Federal Register, Pacesetter Financial Corporation 610 cessation 1008 Page Bank Holding Company 423 Bank Holding Company Tax Act of 1976: Patagonia Corporation 288 Prior certifications: Peoples Bancshares of Schuyler County 302 American General Insurance Company 696 Peoples Banking Corporation 609 Clinton Cable TV Co., Inc 608 Peoples Credit Co 690 Educators Investment Company of Kansas, Peotone Bancorp, Inc 748 Inc 757 Phillipsco, Inc 936 H. F. Ahmanson & Company 1026 Piedmont Bankgroup Incorporated 762 Helmerich & Payne, Inc 512 Platte Valley Bancorporation 960 Jacobus Company 1105 Preferred Management Company 756 Republic of Texas Corporation 514, 515, 860 Quivira Banc Shares, Inc 302 Signal Companies, Inc 604 Ramapo Financial Corporation 302 304 Corporation 605 Redwood Bancorp 167, 1103 Transohio Financial Corporation 698 Republic Bancorporation, Inc 1098 Union Financial Corporation 759 Republic New York Corporation 951 Wachovia Corporation 606, 699, 863 Republic of Texas Corporation 408, 409, 414, Westland Banks, Inc 760 679,681 Bank lending, changes in practices, 1976, and new River Cities Investment Co. and Investment survey of terms 341, 442 Management, Inc 1100 Bank Merger Act: Roger Billings, Incorporated 586 Orders issued: Royal Trust Bank Corp 168, 682 Bank of New Orleans and Trust Company, Royal Trust Company, Montreal, Quebec, New Orleans, La 83 Canada 277, 498, 682 Commercial Bank, Delphos, Ohio 168 Royal Trustco Limited, Ottawa, Ontario, Davenport Bank and Trust Company, Daven- Canada 1129 port, Iowa 860 SYB Corporation 587 40 Main Street Bank, Hempstead, N.Y 1029 Scribner Banshares, Inc 76 Isabella Bank and Trust, Mount Pleasant, SEAFIRST CORPORATION 609 Mich 1022 Security Bancorp, Inc 302 Bank supervision and regulation (Federal): Seilon, Inc 156 Bank and bank holding companies, statement on Sibley Bancorporation 499 bills to improve 551 Sierra Petroleum Co., Inc., and K&B Pro- Bank holding companies, Board announcement ducers, Inc 938 of program of intensified supervision 1031 Southeast Banking Corporation 158 Banking practices, statement on need for more Southern Bank Holding Company 853 safeguards 886 Southwest Florida Banks, Inc 1129 Banking system, statement on condition 238 Spencer Financial Corporation 424 Federal Bank Examination Council, statement on Sumitomo Bank, Limited, Osaka, Japan 411 support for 817 TIC Inc 302 Foreign bank legislation, letter and state- T.N.B. Financial Corporation 303, 424 ment 613, 651 Texas Commerce Bancshares, Inc 423, 500, General Accounting Office study, statement on 504, 749 evaluation of major findings 116 Tipton Bancorporation, Inc 1129 Regulatory Reform Act 556 Trade Development Holland Holding B.V., Safe Banking Act of 1977, statement 891 Amsterdam, The Netherlands, and Trade Bankers acceptances, proposed interpretation of Development Finance (Netherlands Antilles) Regulation A to extend kinds eligible for discount N.V., Curacao, The Netherlands An- by Reserve Banks 1131 tilles 683 Banking market structure, staff economic studies Trans Texas Bancorporation, (summaries) 440, 1045 Inc 1104 Banking system, condition 238 Trust Company of Georgia 77, 161, 419, 421, Barna, Peter E., Assistant Director, Division of 424, 505 Banking Supervision and Regulation, resig- Twin Lakes Financial Corporation 937 nation 614 UB Financial Corp 1019, 1020 Berkeley, Frederick D., appointed director, United Bancorp 1102 Buffalo Branch 171 United Bank Corporation of New York 1029 Board of Governors (See also Federal Reserve United Banks Corporation 762 System): United Kentucky, Inc 592 Bank holding companies, actions concerning United Missouri Bancshares, Inc 1021 (See Bank holding companies) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A 84 Federal Reserve Bulletin • December 1977 Pages Pages Board of Governors—Continued Branch banks—Continued Consumer affairs: Foreign branches of member banks—Cont. Consumer Compliance and Education Sale of long-term debt obligations and trans- Program 427 fer of proceeds to U.S. parent(s) for do- Inquiry to determine consumer use of rights mestic purposes, interpretation 59 under Equal Credit Opportunity and Fair Brenner, Howard, appointed director, Louisville Credit Billing Acts, and cost of creditor Branch 178 compliance, approval for 1131 Bryans, Robert E., appointed director, Salt Lake Employee responsibilities and conduct, amend- City Branch 184 ment of rules 577 Budget, congressional and Federal, state- Foreign operations of State member banks, pro- ments 227, 358, 366, 369, 370 posals for revised financial reporting require- BULLETIN tables (See Tables) ments and more information on large banks .. 1032 Burns, Arthur F.: Interpretations (See Interpretations) Banking system, statement on condition 238 Litigation, pending cases 87, 168, 303, 424, 518, Central bank, address on importance of its in- 610, 702, 763, 866, 960, 1029, 1130 dependence 777 Members and officers A70 Economic and financial conditions, and Con- Publications (See Publications and releases in gressional Budget Act of 1974, state- 1977) ments 227, 358 Regulations and rules (See Regulations and rules) Economy, statements on condition, and course Staff changes: of monetary policy 119, 222, 463, 721, 986 Abrahamson, Richard D 98 Federal Reserve System: Barna, Peter E 614 Chairman and Vice Chairman of Board of Gov- Butler, Nathaniel E 97 ernors, statement on bill to change appoint- Dahl, Frederick R 704 ments 643 Eckert, James B 185, 614 Federal Open Market Committee and Federal Eisenbeis, Robert A 430 Reserve Bank meetings, statement on pro- Enzler, Jared J 1033 posed release of minutes and transcripts ... 1050 Ettin, Edward C 185 Federal Reserve Reform Act of 1977, state- Gemmill, Robert F 704 ment 717 Gramley, Lyle E 185 International finance, address on need for Grizzard, John L 868 order 456 Henry, George B 185, 704 Negotiable orders of withdrawal (NOW) accounts, Hudson, Milton W 185 statement on proposed legislation and on Kichline, James L 185 problem of decline in Federal Reserve mem- Kline, Don E 704 bership 636 Kluckman, Jerauld C 97 Butler, Nathaniel E., appointed Associate Director, Layton, William W 766 Division of Consumer Affairs 97 Leavitt, Brenton C 430 Matthews, Robert E 766 CALL reports, revisions in data and nomen- Mingo, John J 868 clature 522 Mulrenin, Edward T 1033 Capacity utilization, revised series 868 Paulus, John D 1033 Central bank, address by Chairman Burns on im- Puckett, Richard H 185, 1033 portance of its independence 777 Reister, Ruth A 98 Check clearing and collection (See Transfer of Reynolds, John E 704 funds) Ryan, John E 704 Coldwell, Philip E.: Schadrack, Frederick C 704 Audits of Federal Reserve System by General Siegman, Charles J 430, 704 Accounting Office, statements on proposed Sims, Joseph S 430 legislation ...233,1053 Talley, Samuel H 766 Bank supervision and regulation (Safe Banking Taylor, William 704 Act of 1977), statement 891 Truman, Edwin M 185, 704 Federal Reserve System, statement on expendi- Wallace, William H 703 tures and budgets 375 Weis, John R 1033 Payments mechanism, statement on role played Wetzel, James R 430 by Federal Reserve System, and relationship Zeisel, Joseph S 185 of pricing and access to problem of member Statements to Congress (See Statements to Con- bank withdrawal from membership 902 gress) Commercial banks (See also Member banks): Boczar, Gregory E., staff economic study 715 Call reports, revisions in data and nomen- Boltz, Paul W., article 442 clature 522 Branch banks: Foreign bank legislation 613, 651 Federal Reserve: Insured, article on income in 1976 626 Directors (See Directors) Negotiable orders of withdrawal (NOW) ac- Vice Presidents in charge A73 counts, statement on proposed legislation to Foreign branches of member banks: extend payment of interest nationwide 636 Reserve requirements on certain dollar depos- Time and savings deposits, surveys 347, 537 its, amendment and proposed amendment of 782, 973 Regulation M 1032, 1078 Commercial paper market, article 525 Rules Regarding Delegation of Authority, Consumer Advisory Council, meetings 867, 1131 amendment expanding authority of Secretary Consumer credit (See Credit) of Board to approve certain applications to Consumer Credit Protection Act 43^47 establish 840 Consumer Leasing Act 95, 265 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Index to Volume 63 A 85 Pages Pages Credit (See also Loans): Ehlis, Richard E., appointed director, Jackson- Bank credit proxy, discontinuance 765 ville Branch 175 Consumer: Eisenbeis, Robert A., appointed Associate Research Advisory Council, meetings 867, 1131 Division Officer, Division of Research and Sta- Compliance and Education Program, establish- tistics 430 ment by Board 427 Electronic funds transfer (EFT) systems (See Consumer Credit Protection Act 43-47 Transfer of funds) Consumer Leasing Act 95, 265 Enzler, Jared J., appointed Associate Research Equal Credit Opportunity (See Equal Credit Division Officer, Division of Research and Sta- Opportunity) tistics 1033 Fair Credit Billing Act (See Fair Credit Equal Credit Opportunity: Billing Act) Act: Instalment credit figures, revisions 765 Consumer use of rights under, and cost of Laws, statement on current status 125 creditor compliance, Board approval for in- Regulation, article on complying with 769 quiry to determine 1131 Truth in Lending (See Truth in Lending) Pamphlets, issuance 522, 614 Unfair or deceptive acts or practices by banks, Articles 101, 769 technical amendment of Regulation AA .... 147 Regulation B (See Regulations and rules) Federal Reserve Banks (See Federal Reserve Ettin, Edward C., appointed Associate Director, Banks) Division of Research and Statistics 185 Stocks (See Stock market) Crockett, Jean, appointed Class C director, FAIR Credit Billing Act: Philadelphia 172 Consumer use of rights under, and cost of credi- Cyrnak, Anthony, article 337 tor compliance, Board approval for inquiry .. 1131 Pamphlet, issuance 430 DAHL, Frederick R., appointed Associate Federal Advisory Council A72 Director, Division of Banking Supervision and Federal agency securities, change in rules 305 Regulation 704 Federal Bank Examination Council, statements on Debits to deposit accounts, revision 963 support for 553, 817 Defense production loans (See Regulations and Federal budget, statements 227, 358, 366 rules: V) Federal Financing Bank 305, 366 Deposits: Federal Open Market Committee: Interest rates (See Interest on deposits) Federal agency securities, change in rules for Negotiable orders of withdrawal (NOW) accounts, purchase 305 statement on proposed legislation to extend Foreign exchange operations, payment of interest nationwide 636 reports 200,548,793,1047 Reserve requirements (See Reserve requirements) Members and officers A72 Time and savings deposits at commercial banks, Minutes: surveys 347, 537, 782, 973 1971, availability 185 Turnover, revision of series 963 Proposed release, statement 1050 Dickman, M. Jane, appointed director, Buffalo Policy actions: Branch 171 Implementation in 1976, article 323 Directors: Record 15, 129, 247, 380, 473, 561, 655, 729, Federal Reserve Banks: 823, 909, 994, 1058 Chairmen and Federal Reserve Agents ... 170, A73 Rules, amendment 492 Deputy Chairmen 170, A73 Federal Reserve Act: List 170 Amendments 1076 New directors, number by minority group ... 96 Revised edition (legislation enacted through Federal Reserve branch banks: 1976) 1033 Chairmen and Deputy Chairmen 170, A73 Section 9, statement regarding application to be- List 170 come member of Federal Reserve System .... 84 New directors, number by minority group ... 96 Federal Reserve and Treasury foreign exchange Discount rates at Federal Reserve Banks (See operations, reports 200, 548, 793, 1047 Interest rates) Federal Reserve Banks: Dividends in 1976: Branches (See Branch banks) Federal Reserve Banks 97 Chairmen and Deputy Chairmen 170, A73 Insured commercial banks 626 Credit extended: Bankers acceptances, proposal 1131 EARNINGS and expenses in 1976: Changes in rates 867, 1031 Federal Reserve Banks 97 Delegation by Board of certain authority to, Insured commercial banks 626 amendment of rules 58, 671 Eckert, James B., appointed Senior Research Di- Directors (See Directors) vision Officer, Division of Research and Sta- Discount rates (See Interest rates) tistics, and retirement 185, 614 Earnings and expenses, 1976 97 Economic recovery abroad, article on consumption Expenditures and budgets, statement 375 and fixed investment 871 Meetings of boards of directors, statement on Economy: proposed release of transcripts 1050 Condition, and course of monetary policy, state- Presidents and Vice Presidents: ments 119, 222, 463, 721, 889, 986 Appointment and resignation of Presidents ... 430 Economic and financial conditions, and Con- List A73 gressional Budget Act of 1974, state- Supervision, intensified, of bank holding comments 227, 358 panies, Board announcement of program 1031 In 1976, article 1 Transfer of funds (See Transfer of funds) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A 86 Federal Reserve Bulletin • December 1977 Pages Pages Federal Reserve Reform Act of 1977, statement HANFORD, Norris E., appointed director, Helena and law enacted 717, 1076 Branch 180 Federal Reserve System (See also Board of Gover- Henry, George B., appointed Senior International nors): Division Officer and subsequently Associate Expenditures and budgets, statement 375 Director, Division of International Foreign currency arrangements, participation in Finance 185, 704 standby facility 96 Henson, Paul H., appointed Class C director, Independence of central bank, address of Chair- Kansas City 180 man Burns on importance 777 Hill, John S., article 323 Legislation: Holmes, Alan R 200, 323, 548, 793, 1047 Audits by General Accounting Office, state- Hopkins, George P., Jr., appointed director, New ments on proposed law 233, 1053 Orleans Branch 176 Federal Reserve Reform Act of 1977, state- Housing (See Real estate) ment and law enacted 717, 1076 Howard, David H., article 871 Regulatory Reform Act of 1977, statement on Howard, Jerome L., appointed director, Houston proposed law 556 Branch 182 Map of districts and their branch territories .... A92 Hudson, Milton W., appointed Assistant to the Membership: Chairman 185 Admissions of State banks 98, 186, 308, 431, Hunter, John, Jr., elected Class A director, 614, 704, 766, 868, 963, 1033, 1132 Boston 170 Applications of State banks, statements .. 84, 1024 Hurley, Evelyn M., article 525 Decline, statement on problem 636 Payments mechanism, statement on role played INCOME and expenses (See Earnings and expenses) by, and relationship of pricing and access to Individual retirement accounts (IRA's), amendproblem of member bank withdrawal from Fed- ment of Regulation Q 426, 489 eral Reserve membership 902 Industrial production: Publications (See Publications and releases Board releases 99, 187, 309, 432, 523, 615, 705, in 1977) 767, 869, 964, 1034, 1133 Transfer of funds (See Transfer of funds) Developments, article 1035 Feldman, A. L., appointed director, Denver Publication (1976 edition) 1132 Branch 180 Revision back to January 1976 868 Finance, international, address on need for Interest on deposits (See also Interest rates): order 456 Early withdrawal of time deposits, amendment Finance companies: of Regulation Q 395, 924, 1008, 1031 Bank holding company-affiliated companies, staff Flexible authority for Federal supervisory economic study (summary) on performance .. 715 agencies to set, extension 1076 New tables 614 Loans on security of depositor's time and sav- Financial developments, quarterly reports to ings deposits, amendment of Regu- Congress 108,433,707,965 lation Q 1078, 1131 Financing requirements of U.S. Treasury, state- Negotiable orders of withdrawal (NOW) accounts, ment on implications for monetary policy 370 statement on proposed legislation to extend Flowers, Drury, appointed director, Birmingham payment of interest nationwide 636 Branch 175 Pooled time deposits over $100,000, proposed Foreign banks, legislation 613, 651 amendment of Regulation Q not adopted 430 Foreign branches of member banks (See Branch Retirement accounts, amendment of Regulation Q banks) to establish new category of time de- Foreign currency arrangements 96 posit 426, 489 Foreign exchange operations of Treasury and Fed- Interest rates {See also Interest on deposits): eral Reserve, reports 200, 548, 793, 1047 Bankers acceptances, proposal 1131 Foreign industrial countries, article on consumption Federal Reserve Banks, changes 867, 1031 and fixed investment in economic recovery Interlocking relationships between member bank abroad 871 and minority or women's bank, amendment of Funds transfer (See Transfer of funds) Regulation L 95, 147 International finance, address on need for order .. 456 GARDNER, Stephen S.: International indebtedness, statement 811 Bank supervision and regulation: International lending by U.S. banks, statement ... 362 Bank and bank holding companies, statement International transactions of United States: on bills to improve 551 In a recovering economy, article 311 Banking practices, statement on need for more Trade and current-account deficits, statement .. 984 safeguards 886 Interpretations: Federal, evaluation of major findings of Gen- Bank holding companies: eral Accounting Office study, statement ... 116 Debt obligations, long-term, sale in foreign Foreign bank legislation, statement 651 markets and transfer of proceeds to U.S. Electronic funds transfer (EFT) systems, state- parent(s) for domestic purposes 59 ments 882, 898 Divestiture of assets and activities, Board Executive salary schedule, statement on bill to policy statements 263, 305, 962 raise level of Chairman and Board members .. 555 Insurance company, purchase of interests in, Gemmill, Robert F., appointed Associate Director, relative to extensions of credit 60 Division of International Finance 704 Bankers acceptances (See Bankers acceptances) Gramley, Lyle E., named member, Council of Equal Credit Opportunity: Economic Advisers 185 Special-purpose credit programs, Federal or Greene, Joshua, staff economic study 775 State 765, 841 Grizzard, John L., appointed Assistance Director, State law, consistency of certain provisions Division of Administrative Services 868 with Act 487,521,703 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Index to Volume 63 A 87 Pages Pages Interpretations—Continued Legislation—Continued Home Mortgage Disclosure: Consumer—Cont. Technical interpretation of Regulation C 429 Fair Credit Billing Act (See Fair Credit Bill- Treatment of majority-owned depositary sub- ing Act) sidiaries of depositary institutions, and dis- Truth in Lending Act, statement on bill to closure after loss of exemption 490 simplify 644 Published, price change 431 Electronic funds transfer (EFT) systems, state- Truth in Lending: ments 882, 898 Consumer lease disclosure statements, pro- Federal Reserve System: posed, and revised 95, 265 Audits by General Accounting Office, state- Credit-card issuers that bill customers in full on ments 233, 1053 transaction-by-transaction basis, proposed, Chairman, Board members, and Director and and subsequent simplified procedures Deputy Director, Office of Management and for 430, 841, 867 Budget, statement on bill to raise salary Disclosure of dealer participation 429, 492 levels in executive schedule 468, 555 Investment, article on consumption and fixed in- Chairman and Vice Chairman, Board of Govervestment in economic recovery abroad 871 nors, statement on bill to change appoint- Irvine, Reed J., Senior International Division ments 643 Officer, retirement 868 Federal Open Market Committee and Federal Reserve Banks, statement on proposed release of minutes and transcripts of meet- JACKSON, J. L., appointed director, Cincinnati ings 1050 Branch 173 Federal Reserve Reform Act of 1977, state- Jackson, Philip C., Jr.: ment and law 717, 1076 Consumer credit laws, statement on current Flood Disaster Protection Act of 1973 429, 487 status 125 Negotiable orders of withdrawal (NOW) accounts, Truth in Lending Act, statement on bill to proposed legislation to extend payment of insimplify 644 terest nationwide and to permit interest on all Janzen, George V., appointed director, El Paso required reserve balances held at Reserve Branch 182 Banks 636 Treasury operating balances, statement on bill to permit earning of direct return on 558 KEOGH plan retirement accounts, amendment of Liggett, William N., appointed director, Cincinnati Regulation Q 426, 489 Branch 172 Kichline, James L., appointed Director, Division Lilly, David M.: of Research and Statistics 185 Executive salary schedule, statement on bill to Kline, Don E., appointed Assistant Director, Diviraise levels on Chairman, Board members, sion of Banking Supervision and Regulation .... 704 and Director and Deputy, Office of Manage- Kluckman, Jerauld C., appointed Associate Direcment and Budget 468 tor, Division of Consumer Affairs 97 Loan guarantees by Federal Government, statement 366 LABOR market trends, article 617 Litigation: Larkin, Frederick G., Jr., elected Class A director, Greeley Bank case of 1973, staff economic study San Francisco 183 (summary) 775 Layton, William W., Director of Equal Employ- Pending cases involving Board of ment Opportunity, Office of Staff Director for Governors 87, 168, 303, 424, 518, 610, 702, Management, retirement 766 763, 866, 960, 1020, 1130 Leasing (Consumer Leasing Act) 95, 265 Loans (See also Credit): Leavitt, Brenton C., Director, Division of Banking Bank lending, articles on changes in practices, Supervision and Regulation, retirement 430 1976, and new survey of terms 341, 442 Legan, Pat, appointed director, San Antonio Defense production (See Regulations and rules: V) Branch 182 Guarantees by Federal Govt., statement 366 Legislation: International lending by U.S. banks, state- Bank supervision and regulation: ment 362 Bank and bank holding companies, statement on Real estate (See Real estate) bills to improve 551 Secured by depositors' time and savings deposits, Banking practices, statement on need for more amendment of Regulation Q 1078,1131 safeguards 886 Lubitz, Raymond, article 871 Federal Bank Examination Council, statement on support for 817 MCCURDY, Christopher R., article 323 Foreign banks (International Banking Act of MacLaury, Bruce K., President, Federal Reserve 1977), letter and statement 613, 651 Bank of Minneapolis, resignation 430 Regulatory Reform Act, statement 556 Margin requirements (Regulations G, T, and U): Safe Banking Act of 1977, statement 891 Options: Budget, congressional and Federal, state- Calculating margin on "straddles," amendment ments 227, 358, 369, 370 of Regulation T 487,521 Consumer: Specialists, extension of credit to, proposed Consumer Credit Protection Act 43-47 amendment and suspension of provision of Consumer Leasing Act 95, 265 Regulation T; amendment of general account Credit laws, statement on current status 125 provision 52, 95 Credit regulations, article on complying Trading, proposed amendment of Regulation with 769 T 522 Equal Credit Opportunity Act (See Equal Over-the-counter stocks, revised lists 98, 765 Credit Opportunity) Mater, Jean, appointed director, Portland Branch .. 183 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A 88 Federal Reserve Bulletin • December 1977 Pages Pages Matthews, Robert E., temporary appointment as Paulus, John D., appointed Associate Research Assistant Secretary of Board 766 Division Officer, Division of Research and Sta- Member banks (See also National banks): tistics 1033 Bank credit proxy, discontinuance 765 Payments mechanism (See Transfer of funds) Branches (See Branch banks) Pinola, J. J., appointed director, Los Angeles Call reports, revisions in data and nomencla- Branch 183 ture 522 Poe, Charles W., appointed Class C director, Credit, extensions by Federal Reserve Banks Minneapolis 179 (See Federal Reserve Banks) Policy actions, Federal Open Market Committee Debt obligations, long-term, sale in foreign mar- {See Federal Open Market Committee) kets and transfer of proceeds to U.S. parent(s) Production (See Industrial production) for domestic purposes, interpretation 59 Publications and releases in 1977: Interlocking relationships with minority or wom- Annual Report, 1976 614 en's bank, amendment of Regulation L 95, 147 Annual Statistical Digest 98, 522, 614, 1132 Reserve requirements (See Reserve requirements) Equal Credit Opportunity pamphlets 522, 614, State member banks (See State member banks) Fair Credit Billing, pamphlet 430 Transfer of funds (See Transfer of funds) Federal Reserve Act, revised edition (legislation Mingo, John J., appointed Senior Research Division enacted through 1976) 1033 Officer, Division of Research and Statistics .... 868 Federal Reserve System: Purposes and Func- Mitchell, MAURICE B., elected Class B director, tions, price change 431 Kansas City 180 Industrial Production—1976 Edition 1132 Monetary policy: Interpretations of Board of Governors, price Course, and condition of economy, state- change 431 ments 119, 222, 463, 721, 889, 986 List of available publications A74 In 1976, article on implementation 323 Over-the-counter margin stocks, revised U.S. Treasury financing requirements, statement lists 98, 765 on implications for 370 Puckett, Richard H., appointed Assistant Research Money stock measures, revision 305 Division Officer and subsequently Associate Re- Moore, Virgil H., Jr., appointed director, Nash- search Division Officer, Division of Research ville Branch 176 and Statistics 185, 1033 Mortensen, Peter, appointed director, Pittsburgh Branch 173 REAL estate: Mortgages (See Real estate) Home Mortgage Disclosure (See Regulations and Mulrenin, Edward T., appointed Assistant rules: C) Controller 1033 Housing, article 189 Loans in identified flood-hazard areas, amendment of Regulation H 429, 430, 487 NATIONAL banks: Regulation Z, proposed amendment 1131 Debt obligations, long-term, sale in foreign mar- Record of policy actions of Federal Open Market kets and transfer of proceeds to U.S. parent(s) Committee (See Federal Open Market Committee) for domestic purposes, interpretation 59 Regulations and rules: Reserve requirements on certain dollar deposits of A, Extensions of Credit by Federal Reserve foreign branches of U.S. banks, amendment Banks: and proposed amendment of Regulation Bankers acceptances, proposed interpretation M 1032, 1078 to extend kinds eligible for discount 1131 Negotiable orders of withdrawal (NOW) accounts, AA, Unfair or Deceptive Acts or Practices: statement on proposed legislation to extend pay- Technical amendments 147 ment of interest nationwide 636 B, Equal Credit Opportunity: Nelson, Dorothy Wright, appointed Class C direc- Credit, proposed amendments affecting definitor, San Francisco 183 tion of adverse action on request for 962 Newbern, Copeland D., appointed director, Jack- Credit histories for married persons, new sonville Branch 175 provision 613 Inquiry 1132 OPEN market operations (See Federal Open Market 1976 legislation, revision to carry out, and list Committee) of Federal enforcement agencies 27-51, 89 Opper, Barbara N., article 626 Special-purpose credit programs, Federal or Over-the-counter margin stocks, revised State, interpretation 765, 841 lists 98, 765 State law, consistency of certain provisions with Act, interpretations 487, 521, 703 Technical amendments 147 PADDOCK, Benjamin H. Ill, appointed director, C, Home Mortgage Disclosure: Detroit Branch 177 Majority-owned depositary subsidiaries of de- Pardee, Scott E., reports 200, 548, 793, 1047 positary institutions, treatment, and disclo- Partee, J. Charles: sure after loss of exemption, interpreta- Federal Bank Examination Council, statement tions 490 on support for 817 New York State lenders, continued Monetary developments, statement 889 exemption 521 Monetary policy, statement on implications of Standard metropolitan statistical areas U.S. Treasury financing requirements for 370 (SMSA's), amendment designating new Regulatory Reform Act, statement 556 areas 613 Treasury operating balances, statement on bill Technical interpretations 429 to permit earning of direct return on 558 D, Reserves of Member Banks: Patterson, Ellmore C., elected Class A director, Demand deposits, amendment to modify re- New York 171 quired balances 52, 89 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Index to Volume 63 A 89 Pages Pages Regulations and rules—Continued Regulations and rules—Continued F, Securities of Member State Banks: Y, Bank Holding Companies—Cont. Disclosures to shareholders, amendment 95 Divested assets and activities: H, Membership of State Banking Institutions in Board policy statements, interthe Federal Reserve System: pretations 263, 305, 962 Application under, statement regarding 84 Control, proposed amendment 185 Clearing agencies for stock market transac- Insurance company, purchase of interest in tions, amendments 920, 962 relative to extensions of credit, interpreta- Municipal securities dealers, amendment re- tion 60 quiring filing information about persons Investment advisor, serving as, petition of associated with State member banks as Investment Company Institute for reconsecurities principals or representatives 839 sideration and recision as permissible Real estate loans in identified flood-hazard activity 856 areas, technical and proposed amend- Management consulting advice to nonaffiliated ments 429, 430, 487 depositary institutions other than commercial J, Collection of Checks and Other Items and banks as permissible activity, deferral of Transfers of Funds: action 489, 521 Wire transfer of funds between member banks, Stock market transactions, operations of certain amendment 666, 703 clearing agencies for, amendment 920, 962 K, Corporations Engaged in Foreign Banking and Z, Truth in Lending: Financing Under the Federal Reserve Act: Billing of nonsale credit transactions, post- Debt obligations, long-term, sale in foreign ponement of rules and proposal to modify markets and transfer of proceeds to U.S. provisions on cash-advance checks .. 840,868,962 parent(s) for domestic purposes, interpreta- Complying with, article 769 tion 59 Disclosure of dealer participation in consumer L, Interlocking Bank Relationships Under the credit contract, proposed amendment 96 Clayton Act: Disclosure statement, proposed amendments to Member bank and minority or women's bank, simplify 522 amendment 95, 147 Discounts for cash customers, proposed M, Foreign Activities of National Banks: amendment 95 Debt-obligations, long-term, sale in foreign Enforcement, proposal for public comment on markets and transfer of proceeds to U.S. uniform guidelines 1033 parent(s) for domestic purposes, interpreta- Inquiry 1132 tion 59 Interpretations .... 95, 265, 429, 430, 492, 841, 867 Reserve requirements on certain dollar de- Open-end credit lines secured by interest posits of foreign branches of U.S. banks, in consumer's home, proposed amendment .. 1131 amendment and proposed amend- Supplement, issuance 52 ment 1032, 1078 Technical amendments 147 Q, Interest on Deposits: Variable interest rate clauses in credit contract, Early withdrawal of time deposits, amend- amendments 428, 489 ments for clarity, to delegate Board au- Reister, Ruth A., temporary appointment as thority to permit member banks to waive the Assistant Secretary of Board 98 penalty in major disaster areas, and to pro- Reppert, A. R., appointed director, Baltimore vide consumers with more flexibility in Branch 174 handling such deposits 395, 924, 1008, 1031 Reserve requirements, member banks: Loans upon security of depositor's time and Certain dollar deposits of foreign branches of savings deposits, amendment 1078, 1131 U.S. banks, amendment and proposed amend- Pooled time deposits of $100,000 or more, ment of Regulation M 1032, 1078 proposed amendment not adopted 430 Demand deposits, amendment to modify required Retirement accounts, new category of time balances 52, 89 deposit, amendment 426, 489 Interest on all required reserve balances held at Rules of Procedure, amendment 1008 Reserve Banks, statement on proposed legisla- Rules Regarding Availability of Information, tion to permit 636 amendments 263, 492, 1008 Revisions (See also Tables): Rules Regarding Delegation of Authority, amend- Bank debits and deposit turnover series 963 ments 58, 147, 671, 840, 924, 1008, 1078 Call reports, data and nomenclature 522 Rules regarding public observation of meetings, Capacity utilization 868 addition 396 Consumer credit 765 T, Credit by Brokers and Dealers: Industrial production, back to January 1976 .... 868 Options: Major, statistical section of BULLETIN 98 Calculating margin on "straddles," amend- Money stock measures 305 ment 487, 521 Reynolds, John E., appointed Counselor, Division Specialists, extension to, proposed amend- of International Finance 704 ment and suspension of provision, and of Rhoades, Stephen A., staff economic studies .715, 1045 general account provision 52, 95 Robards, Frank B., Jr., elected Class A director, Trading, proposed amendment 522 Richmond 173 V, Loan Guarantees for Defense Production: Ryan, John E., appointed Director, Division of Authority to guarantee V loans, amend- Banking Supervision and Regulation 704 ments 741, 1008 Y, Bank Holding Companies: SASTRE, Aristides R., appointed director, Miami Debt obligations, long-term, sale in foreign Branch 175 markets and transfer of proceeds to U.S. Schadrack, Frederick C., temporary appointment as parent(s) for domestic purposes, interpre- Deputy Director, Division of Banking Supervision tation 59 and Regulation 704 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A 90 Federal Reserve Bulletin • December 1977 Pages Pages Schweitzer, Paul, staff economic study 775 Statements to Congress—Continued Scott, Delano E., appointed director, Denver Federal Reserve System: Branch 180 Audits by General Accounting Office, proposed Scott, John T., article 341 legislation 233, 1053 Securities (See specific types): Chairman and Vice Chairman of Board, bill to State member banks: change appointments 643 Clearing agencies for stock market transac- Chairman, Board members, and Director and tions, amendment of Regulation H 920, 962 Deputy Director, Office of Management and Disclosures to shareholders, amendment of Budget, bill to raise salary levels in execu- Regulation F 95 tive schedule 468, 555 Municipal securities dealers, amendment of Expenditures and budgets 375 Regulation H 839 Federal Open Market Committee and Federal Municipal securities rulemaking, amendment Reserve Bank meetings, proposed release of of Board's Rules Regarding Delegation of minutes and transcripts 1050 Authority 840 Federal Reserve Reform Act of 1977 717 Siegman, Charles J., appointed Senior International Financial developments, quarterly reports to Division Officer and subsequently Associate Di- Congress: rector, Division of International Finance .... 430, 704 Q4, 1976 108 Simms, Martha H., appointed director, Birmingham Ql, Q2, and Q3, 1977 433, 707, 965 Branch 175 International indebtedness 811 Sims, Joseph S., appointed Special Assistant to International lending by U.S. banks 362 Board 430 International transactions of United States and Smouse, W. J., elected Class A director, Phila- trade and current-account deficits 984 delphia 171 Loan guarantees by Federal Government 366 Staff economic studies (summaries): Monetary developments 889 Bank holding company-affiliated finance com- Monetary policy, implications of U.S. Treasury panies, performance 715 financing requirements for 370 Banking market structure, local, recent trends .. 440 Negotiable orders of withdrawal (NOW) accounts, Banking market structure and performance, sum- proposed legislation to extend payment of inmary and evaluation 1045 terest nationwide and to permit interest on all Greeley Bank case of 1973 775 required reserve balances held at Reserve Stalnaker, Armand C., appointed Class C director, Banks; problem of decline in Federal Reserve St. Louis 178 membership 636 State member banks: Payments mechanism, role played by Federal Re- Capital, proposed subordinated debt issue as serve System, and relationship of pricing and addition to, amendment of Rules Regarding access to problem of member bank withdrawal Delegation of Authority 1078 from Federal Reserve membership 902 Consumer Compliance and Education Program, Treasury operating balances, bill to permit earnestablishment by Board 427 ing of direct return 558 Foreign operations, Board proposals for revised Truth in Lending Act, bill to simplify 644 financial reporting requirements and for addi- Stephenson, W. L., Jr., appointed director, Oklational information on large banks 1032 homa City Branch 180 Membership in Federal Reserve System: Sternlight, Peter D., article 323 Admissions 98, 186, 308, 431, 614, 704, 766, Stock market: 868, 963, 1033, 1132 Options (See Regulations and rules: T) Applications, statements 84, 1024 Over-the-counter margin stocks, revised Mergers {See Bank Merger Act) lists 98,765 Real estate loans in identified flood-hazard areas, Transactions, operations of certain clearing technical and proposed amendment of Regu- agencies for, amendment of Regulations H lation H 429, 430, 487 and Y 920, 962 Securities {See Securities) Supervision and regulation (See Bank supervision Unfair or deceptive acts or practices by banks, and regulation) technical amendment of Regulation AA 147 Statements to Congress (includes reports): TABLES (See also Revisions; for index to tables Consumer credit laws, current status 125 published monthly, see guide at top of p. Economic and financial conditions, and Con- A81): gressional Budget Act of 1974 227, 358 Bank credit proxy, discontinuance 765 Economy, condition, and course of monetary Finance companies, new tables 614 policy 119, 222, 463, 721, 889, 986 Talley, Samuel H.: Electronic funds transfer (EFT) systems 882, 898 Article and staff economic study 337, 440 Federal bank supervision and regulation: Assistant Director, Division of Banking Super- Bank and bank holding companies, bills to im- vision and Regulation, appointment 766 prove 551 Taylor, William, appointed Assistant Director, Di- Banking practices, need for more safe- vision of Banking Supervision and Regulation .. 704 guards 886 Thomas, Frank C., appointed director, Nashville Banking system, condition 238 Branch 176 Federal Bank Examination Council, support Thompson, James F., appointed director, Louisfor 817 ville Branch 178 Foreign bank legislation 651 Trade, statement on international transactions of General Accounting Office study, evaluation of U.S. and trade and current-account deficits .... 984 major findings 116 Transfer of funds: Regulatory Reform Act 556 Electronic funds transfer (EFT) systems, state- Safe Banking Act of 1977 891 ments 882, 898 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Index to Volume 63 A 91 Pages Pages Transfer of funds—Continued WALLACE, Robert F., appointed director, Port- Payments mechanism, statement on role played land Branch 183 by Federal Reserve System 902 Wallace, William H., appointed Staff Director for Wire transfer between member banks, amend- Federal Reserve Bank Activities 703 ment of Regulation J 666, 703 Wallich, Henry C.: Treasury Department: International indebtedness, statement 811 Financing requirements, statement on implica- International lending by U.S. banks, statement . 362 tions for monetary policy 370 International transactions of U.S. and trade and Foreign currency arrangements, participation in current-account deficits, statement 984 standby facility 96 Webber, William B., appointed director, Buffalo Foreign exchange operations of Treasury and Branch 171 Federal Reserve, reports 200, 548, 793, 1047 Weis, John R., appointed Assistant Director, Divi- Truman, Edwin M., appointed Associate Director sion of Personnel 1033 and subsequently Director, Division of Inter- Wetzel, James R., appointed Senior Research Divinational Finance 185, 704 sion Officer, Division of Research and Sta- Truth in Lending: tistics 430 Act: Willes, Mark H., appointed President, Federal Re- Enforcement, proposal for public comment on serve Bank of Minneapolis 430 uniform guidelines 1033 Williams, John R., articles 347, 537, 782 Simplification, statement 644 Wilson, Margaret Scarbrough, appointed Class C Regulation Z (See Regulations and rules) director, Dallas 181 Turnquist, Nels E., elected Class A director, Wire transfer of funds (See Transfer of funds) Minneapolis 179 Wright, Rebekah F., articles 537, 782, 973 UNDERWOOD, John M., article 311 YOUNG, Robert A., appointed director, Portland U.S. international transactions in a recovering Branch 183 economy, article 311 ZEISEL, Joseph S., appointed Deputy Director, VINSON, B. Finley, appointed director, Little Division of Research and Statistics 185 Rock Branch 178 Zickler, Joyce K., article 617 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A 92 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories Minneapolis^, Chicago | Omaha.* 'nver IS/CULPTPFA Kansas Cttyf J t . ^^ Oklahoma. Citjf Dallas Jiaustcn JFAJMT*** January 1977 LEGEND — Boundaries of Federal Reserve Districts © Federal Reserve Bank Cities Boundaries of Federal Reserve Branch • Federal Reserve Branch Cities Territories ^ , ^ ^ , ^ t Federal Reserve Bank Facility Q Board of Governors of the Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Guide to Tabular Presentation and Statistical Releases GUIDE TO TABULAR PRESENTATION SYMBOLS AND ABBREVIATIONS p Preliminary SMSA's Standard metropolitan statistical areas r Revised REIT's Real estate investment trusts rp Revised preliminary * Amounts insignificant in terms of the partice Estimated ular unit (e.g., less than 500,000 when c Corrected the unit is millions) n.e.c. Not elsewhere classified (1) Zero, (2) no figure to be expected, or Rp's Repurchase agreements (3) figure delayed or, (4) no change (when IPC's Individuals, partnerships, and corporations figures are expected in percentages). GENERAL INFORMATION Minus signs are used to indicate (1) a decrease, (2) obligations of the Treasury. "State and local govt." a negative figure, or (3) an outflow. also includes municipalities, special districts, and other "U.S. Govt, securities" may include guaranteed political subdivisions. issues of U.S. Govt, agencies (the flow of funds figures In some of the tables details do not add to totals also include not fully guaranteed issues) as well as direct because of rounding. STATISTICAL RELEASES LIST PUBLISHED SEMIANNUALLY, WITH LATEST BULLETIN REFERENCE Issue Anticipated schedule of release dates for individual releases December 1977 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Cite this document
Federal Reserve (1977, November 30). Federal Reserve Bulletin, 1977-12. Bulletin, Federal Reserve. https://whenthefedspeaks.com/doc/bulletin_197712
@misc{wtfs_bulletin_197712,
author = {Federal Reserve},
title = {Federal Reserve Bulletin, 1977-12},
year = {1977},
month = {Nov},
howpublished = {Bulletin, Federal Reserve},
url = {https://whenthefedspeaks.com/doc/bulletin_197712},
note = {Retrieved via When the Fed Speaks corpus}
}