Federal Reserve Bulletin, 1978-05

M AY 1978 FEDERAL RESERVE BULLETIN Dom estic Financial Developm ents in the First Quarter of 1978 Repurchase Agreements and Federal Funds Exercise of Consumer Rights Survey of Tim e and Savings D eposits, January 1978 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A copy of the Federal Reserve Bulletin is sent to each member bank without charge; member banks desiring additional copies may secure them at a special $10.00 annual rate. The regular subscription price in the United States and its possessions, and in Bolivia, Canada, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, Guatemala, Haiti, Republic of Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, El Salvador, Uruguay, and Venezuela is $20.00 per annum or $2.00 per copy; elsewhere, $24.00 per annum or $2.50 per copy. Group subscriptions in the United States for 10 or more copies to one address, $1.75 per copy per month, or $18.00 for 12 months. The Bulletin may be obtained from the Division of Administrative Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551, and remittance should be made payable to the order of the Board of Governors of the Federal Reserve System in a form collectible at par in U.S. currency. (Stamps and coupons are not accepted.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NUMBER 5 □ VOLUME 64 □ MAY 1978 FEDERAL RESERVE RT Jl IFTTN Board o f G overnors o f the Federal R eserve System W ashington, D .C . PUBLICATIONS COMMITTEE Joseph R. Coyne, Chairman ° Stephen H. Axilrod ° John M. Denkler Janet O. Hart a James L. Kichline n Neal L. Petersen □ 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 345 Domestic Financial Developm ents in 367 Survey of Time and Savings Deposits the First Q uarter of 1978 at Commercial Banks, January 1978 The quarterly report to the Joint Economic Total time and savings deposits at insured Committee of the U.S. Congress, which commercial banks expanded at a quarterly highlights developments in domestic fi­ rate of 3V2 per cent over the most recent nancial markets during the winter and survey period, up from 2lA per cent over early spring, points out that growth of the the preceding survey quarter. major monetary aggregates slowed during the quarter, reflecting largely the effects 373 Statem ents to Congress of a less rapid expansion of economic activity. G. William Miller, Chairman of the Board of Governors, reports before the Commit­ 353 Repurchase Agreem ents and tee on Banking, Housing and Urban Af­ Federal Funds fairs, U.S. Senate, on April 25, 1978, that monetary growth ranges for the year ahead Over the past decade, large commercial are expected to support further economic banks have relied more and more on dis­ expansion and a lower unemployment cretionary sources of funds, such as rate, but inflation may not decelerate until repurchase agreements and Federal funds, later. to supplement deposits during periods of heavy demand for credit, according to a 377 J. Charles Partee, Member of the Board Federal Reserve survey. of Governors, in testimony before the same Committee on May 9, 1978, states 361 Staff Economic Studies that the Federal Reserve continues to have Summary of “Mortgage Borrowing reservations about some of the provisions Against Equity in Existing Homes: Meas­ in the Humphrey-Hawkins bill because urement, Generation, and Implications for they still do not acknowledge adequately Economic Activity” discusses the fact that the crucial need to reduce inflation. recently households have raised unprece­ dented amounts of funds against inflated 382 Record of Policy Actions of the equities in their homes and have used the Federal Open M arket Committee money for a variety of purposes other than At the meeting held on March 21, 1978, homebuilding. the Committee decided that growth in M-l and M-2 over the March-April period at 363 Exercise of Consumer Rights Under annual rates within ranges of 4 to 8 per Equal Credit Opportunity and cent and 5Vz to 9 per cent, respectively, Fair Credit B illing Acts would be appropriate. It was understood Results of Board survey of large creditors that in assessing the behavior of these requesting information in connection with aggregates the Manager should continue notices required under the Equal Credit to give approximately equal weight to the Opportunity and Fair Credit Billing Acts. behavior of M-l and M-2., Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

In the judgment of the Committee such over-the-counter stocks that are subject to growth rates were likely to be associated margin requirements. With a weekly-average Federal funds rate Interpretation of Regulations D and Q ex­ of about 63A per cent. The members agreed tends the kinds of bankers acceptances that if growth rates of the aggregates over eligible for discount by the Federal Re­ the 2-month period appeared to be deviat­ serve Banks. ing significantly from the midpoints of the indicated ranges, the operational objective Criteria under which States may apply for for the weekly-average Federal funds rate exemption from the consumer leasing re­ should be modified in an orderly fashion quirements of the Truth in Lending Act within a range of 6V2 to 7 per cent. It was and Regulation Z. also agreed, however, that a reduction in Revised procedure for issuing official staff the rate below 6% per cent would not be interpretations of Regulations B and Z. sought until the Committee had had an opportunity for further consultation. Changes in Board staff. Proposed revisions of Regulation Z to 396 Law Department cover all cases in which a debt is repaid in payments of varying amounts and of Amendments to Regulations B, Z, H, D, Regulation T to permit a broker or dealer and Q; various bank holding company and to extend and maintain credit on certain bank merger orders; and pending cases. nonconvertible corporate bonds. 423 Announcem ents Two State banks were admitted to mem­ bership in the Federal Reserve System. Increase in the discount rate. Two new types of time certificates avail­ 430 Industrial Production able to bank customers. Output increased an estimated 1.1 per cent Amendment of Regulation Q to permit in April. individual customers of member banks to transfer funds automatically from their savings to their checking accounts. Al Financial and Business Statistics Actions regarding (1) net settlement of A3 Domestic Financial Statistics member bank reserve accounts and (2) A46 Domestic Nonfinancial Statistics automated clearinghouses. A54 International Statistics Publication of Truth in Leasing. A69 Guide to Tabular Presentation The three bank regulatory agencies have and Statistical Releases adopted a uniform interagency system for A70 Board of Governors and Staff rating the condition and soundness of the Nation’s banks. A72 Open Market Committee and Staff; Advisory Councils Amendments to Regulations D and Q to facilitate the participation of member A73 Federal Reserve Banks, banks in a new Treasury tax and loan Branches, and Offices investment program. (See Law Depart­ A74 Federal Reserve Board ment.) Publications Regulations G, T, and U have been A76 Index to Statistical Tables amended to change requirements for in­ clusion of stocks in the Board’s list of A78 Map of Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Developments in the First Quarter of 1978 This report, which was sent to the Joint Eco­ liabilities to help support the expansion of their nomic Committee of the U.S. Congress, high­ loan portfolios. Banks issued substantial lights the important developments in domestic amounts of large-denomination time deposits, financial markets during the winter and early which are not subject to regulatory ceilings, and spring. increased their use of nondeposit sources of funds. Thrift institutions, especially savings and Growth of the major monetary aggregates loan associations, were able to extend sizable slowed during the first quarter of 1978, ap­ amounts of mortgage credit, though at a pace parently reflecting in large measure the effects below the record high levels of late 1977; they of the weather-induced lull in the growth of financed these extensions in part by stepping up economic activity and a higher level of market their borrowing from Federal home loan banks. interest rates. The rate of increase in M-l for The total volume of credit raised by nonfi­ the quarter was well below the average for all nancial sectors in the first quarter appears to of 1977. Inflows to commercial banks of inter­ have remained around the high level of the est-bearing deposits subject to regulatory ceil­ fourth quarter of 1977. Businesses increased ings also weakened, as did deposit flows into their borrowing slightly as a rapid increase in nonbank thrift institutions, thus contributing to their bank loans more than offset a reduction slower growth of M-2 and M-3 for the quarter. in their use of other forms of credit. In the As flows into deposit accounts subject to household sector, mortgage financing slowed regulatory ceilings abated in the first quarter, from the record pace of the fourth quarter, while commercial banks continued to rely on managed consumer credit remained strong. Credit de- Interest rates Per cent per annum NOTES: SHORT-TERM LONG-TERM i t t ■ Monthly averages except for F.R. discount rate and conven­ tional mortgages (based on quota­ Aaa utility tions for one day each month). New issue ■ C m o o n r v tg e a n g t e io s nal Yields: U.S. Treasury bills, market HUD_______^ yields on 3-month issues; prime commercial paper, dealer offering rates; conventional mortgages, rates on first mortgages in primary markets, unweighted and rounded to nearest 5 basis points, from U.S. Govt. Dept, of Housing and Urban De­ velopment; Aaa utility bonds, F.R. discount weighted averages of new publicly rate offered bonds rated Aaa, Aa, and State and local government A by Moody’s Investors Service and adjusted to Aaa basis; U.S. Federal funds Govt, bonds, market yields ad­ Treasury bills 3-month justed to 20-year constant maturity by U.S. Treasury; State and local ! t govt, bonds (20 issues, mixed quality), Bond Buyer. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

346 Federal Reserve Bulletin □ May 1978 mands by the U.S. Treasury were again heavy, rate remained at the 6% per cent level to midreflecting another sizable budget deficit. State April, as growth of the monetary aggregates was and local governments maintained their bor­ generally within the longer-run ranges set by rowing close to the pace of the fourth quarter, the Federal Open Market Committee. Most as they continued to refund in advance debt other short-term interest rates rose along with obligations issued at higher interest rates. the Federal funds rate in early January. Over In early January the Federal Reserve raised the rest of the quarter, however, many of these the discount rate on advances to member banks rates tended to edge lower; some of this decline from 6 to 6V2 per cent; this action was designed stemmed from the substantial demand for to help stabilize conditions prevailing in inter­ Treasury bills by foreign central banks, which national exchange markets. Concurrently, the were investing dollars purchased in foreign ex­ System became less accommodative in the pro­ change markets. As a result, many short-term vision of reserves to the banking system through market rates increased only about 5 to 10 basis open market operations, and the rate on Federal points, on balance, over the quarter. funds (overnight loans of immediately available Increases in interest rates on many longerbank funds) increased to about 6% per cent from term securities in the first quarter equaled or 6V2 per cent in December. The Federal funds even exceeded somewhat the upward movement Changes in selected monetary aggregates Per cent, seasonally adjusted annual rates 1977 1978 Item 1975 1976 1977 Ql Q2 Q3 Q4 Ql Member bank reserves: Total ..................................... -.3 1.0 5.2 4.1 2.9 7.3 6.1 8.5 Nonborrowed ................... 3.2 1.2 2.7 4.0 1.8 1.7 3.5 14.5 Concepts of money:1 M-l ....................................... 4.4 5.7 7.8 6.9 8.1 8.1 7.2 5.0 M-2 ....................................... 8.3 10.9 9.8 10.9 9.0 9.9 8.0 6.4 M-3 ....................................... 11.1 12.8 11.7 12.2 10.2 11.9 10.6 7.4 M-4 ....................................... 6.5 7.1 10.0 10.2 8.2 9.5 10.7 10.0 M-5 ....................................... 9.6 10.3 11.7 11.7 9.6 11.6 12.1 9.5 Time and savings deposits at commercial banks: Total (excluding large CD’s) ............................. 11.7 15.0 11.2 13.7 9.7 11.2 8.5 7.5 Savings ........................... 17.5 25.0 11.1 21.3 8.8 7.3 5.4 2.2 Other time ................... 7.8 7.4 11.4 7.2 10.5 14.6 11.4 12.0 Thrift institutions2 ................ 15.6 15.8 14.6 14.1 11.9 15.0 14.4 8.8 Memo (change in billions of dollars, seasonally adjusted): Large negotiable CD’s at large banks ................... -5.6 -19.1 8.0 .4 -.2 .7 7.1 8.8 All other large time deposits3 ....................... -3.6 -1.0 11.7 .5 -.4 5.2 6.4 6.4 Small time deposits ___ 18.6 16.5 13.7 3.4 6.6 3.3 .4 1.1 Nondeposit sources of funds4 ................................... -5.9 14.9 11.9 0.0 2.1 4.3 3.9 5.8 *M-1 is currency plus private demand deposits adjusted. M-2 of Federal funds purchased, securities sold under agreements is M-l plus bank time and savings deposits other than large to repurchase, and other liabilities for borrowed money, plus negotiable CD’s. M-3 is M-2 plus deposits at mutual savings gross liabilities to own foreign branches (Euro-dollar borrow­ banks and savings and loan associations and credit union ings), loans sold to affiliates, loan repurchase agreements, shares. M-4 is M-2 plus large negotiable CD’s. M-5 is M-3 borrowings from Federal Reserve Banks, and other minor plus large negotiable CD’s. items. 2Savings and loan associations, mutual savings banks, and credit unions. Note. Changes are calculated from the average amounts included in M-2 and M-3. outstanding in each quarter. Annual rates of change in reserve 4Nondeposit sources of funds include borrowings by com­ measures have been adjusted for changes in reserve require­ mercial banks from other than commercial banks in the form ments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Developments, Ql 1978 347 of short-term rates over that period. Like short­ weather, the lengthy coal strike, and a slowerterm rates, yields on intermediate- and long­ than-usual pace of tax refund disbursements by term instruments shifted upward with the rise the Treasury—led to a slight decline in M-1 in the Federal funds rate in January. This during February. By late March, however, these movement tended to reinforce a rising trend in factors were no longer restricting money de­ long-term rates that had been evident through mand, and expansion in M-1 resumed. December as investors revised upward their M-1 grew at about the same rate as GNP expectations about the future strength of de­ during the first quarter, and as a result, veloc­ mands for money and credit. Long-term rates ity—the ratio of GNP to M-1—increased only showed little change in February and early very slightly. Apparently, the substantial rise in March but began to rise again in late March interest rates that occurred between April and and early April, apparently reflecting market October of 1977 was no longer prompting fur­ concern about indications of an acceleration in ther efforts by the public to economize on cash the rate of inflation and the possibility of a more balances, and the upward movements of rates restrictive policy stance by the Federal Reserve. in the first quarter had only a small effect on money demand. Moreover, in the first quarter, as in the previous five quarters, M-1 grew about in line with expectations based on historical MONETARY AGGREGATES relationships among money, income, and inter­ AND BANK CREDIT est rates. Earlier in the current economic ex­ Largely because of the slower growth of eco­ pansion, the effects of financial innovations on nomic activity, the pace of expansion of M-1— cash-management practices had given rise to currency and privately held demand deposits at extraordinarily large increases in velocity. commercial banks—declined to an annual rate Growth of M-2 also slowed in the first quar­ of 5 per cent in the first quarter, about 2% ter—to an annual rate of about 6V2 per cent from percentage points below the average rate for 8 per cent in the fourth quarter. The reduction 1977. Special factors—including severe winter in M-2 growth resulted from a slowing of in­ flows of savings deposits to commercial banks as well as from a moderation in the rate of Changes in income velocity of M-1 and M-2 increase of M-1. The rate of expansion of sav­ ings deposits held by individuals declined Percentage rate of change sharply in the first quarter, and savings accounts of businesses and of State and local govern­ ments contracted for the third consecutive quar­ ter. Flows into small-denomination time accounts at banks, which had slowed markedly in the fourth quarter, continued to expand at a reduced pace in the first 3 months of 1978. The slow growth of savings and small-denomination time deposits was attributable to the rise in market interest rates in the second half of 1977 and early 1978, which brought yields on market instruments maturing in 4 years or less well above regulatory ceilings on deposits of compa­ rable maturity. The relative attractiveness of returns available in credit markets during the first quarter was reflected in a substantial rise in fund flows to money market mutual funds Seasonally adjusted annual rates. Money stock data are quar­ terly averages. and in noncompetitive tenders in auctions of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

348 Federal Reserve Bulletin □ May 1978 Treasury securities. As in the two previous Deposit growth quarters, growth in M-2 was supported by the Per cent issuance of large time deposits (other than ne­ gotiable certificates of deposit (CD’s) at weekly reporting banks), which are not subject to rate ceilings. Increases in these deposits accounted for more than three-fourths of the growth in the time and savings deposit component of M-2 in the first quarter. Faced with weak inflows of deposits subject to regulatory ceilings, banks—especially large ones—again relied heavily on managed liabili­ ties during the first quarter to finance the accu­ mulation of earning assets. Total large-denomi­ nation time deposits, including both negotiable and nonnegotiable CD’s, increased more than in the fourth quarter, and other borrowings— ■ ■ ■ ■ ■ ■ I principally repurchase agreements and pur­ 1974________________1976________________ 1978 chases of Federal funds from nonbanking insti­ tutions—also rose more strongly. The average of Treasury securities in February, which re­ level of borrowings by member banks at Federal versed the pattern of disinvestment that had Reserve discount windows fell substantially, prevailed in the previous two quarters. Portfo­ however, as the spread between the discount and lios of other investment securities, which had Federal funds rates generally narrowed. risen throughout 1977, were essentially un­ The use of managed liabilities enabled banks changed in the first quarter. The expansion in to expand total loans and investments at an loans eased only slightly from the rapid pace annual rate of IOV2 per cent in the first 3 months of the fourth quarter, as real estate and business of 1978, the largest gain since the second quar­ lending remained strong while net credit exten­ ter of 1977. The faster growth of bank credit sions to consumers slowed somewhat. was accounted for by an increase in holdings BUSINESS CREDIT Bank lending to businesses—as measured by changes in business loans net of holdings of bankers acceptances—surged to an annual rate of 20 per cent in the first quarter. Both large and small banks experienced rapid increases. Data from the largest banks indicated that growth was distributed widely across industries; loans to manufacturing, trade, construction, and service industries displayed particular strength. Term business loans at these large banks ex­ panded more than $2 billion, the greatest quar­ terly increase since late 1974. These loans, 1 i 1 1 1 1 0 which have maturities of 1 year or more, ac­ 1 2 3 4 5 6 7 ___________Years to maturity____________________ counted for half of the first-quarter expansion in total business loans net of bankers accept­ Data reflect annual effective yields. Ceiling rates are yields ances at the largest banks. This acceleration in derived from continuous compounding of the nominal ceiling rates. Market yield data are on an investment yield basis. term lending apparently was related to height- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Developments, Ql 1978 349 Business loans and short- ance on bank borrowing during the first quarter, and intermediate-term business credit the volume of new long-term financing declined Seasonally adjusted changes at annual percentage rates markedly. Gross bond and equity issuance by U.S. corporations fell to a seasonally adjusted Business loans annual rate of $34 billion, the slowest quarterly Excluding pace since 1974. Period Total1 bank holdings Total short- and of bankers intermediate-term Public bond offerings by most categories of acceptances business credit2 issuers dropped off sharply during January and February but recovered somewhat in March and 1975—Ql -5.2 -6.8 -3.9 Q2 -8.7 -9.0 -8 9 April. The volume of industrial and public util­ Q3 -3.1 -3.5 -1.1 Q4 .7 -3.2 -4.4 ity issues was particularly light. Offerings by financial concerns, however, picked up toward 1976—Ql -6.7 -4.8 Q2 1.4 2.2 6.1 the end of the quarter, resuming the historically Q3 3.9 1.1 1.1 Q4 12 0 8.2 11.6 high pace of late 1977. Private placements of corporate debt are estimated to have moderated 1977—Ql 11.4 16.4 16.7 Q2 12.6 13.3 16.4 in the first quarter. Q3 10.2 8.9 9.4 Q4 16.0 14.9 18.0 Yields on long-term corporate bonds contin­ ued to rise during the first quarter, partly in 1978—Ql 16.4 19 8 17.1 response to increased investor apprehension JAt all commercial banks based on last-Wednesday-of-month about an acceleration in the rate of inflation. data, adjusted for outstanding amounts of loans sold to affili­ The Federal Reserve index of yields on recently ates. 2Short- and intermediate-term business credit is business offered Aaa-rated utility bonds rose from 8.48 loans at commercial banks excluding bank holdings of bankers per cent at the end of 1977 to 8.75 per cent acceptances plus nonfinancial company commercial paper and finance company loans to businesses measured from end of at the end of the first quarter of 1978. Rates month to end of month. climbed further during April, reaching their ened demand for such loans by corporations. Components of Major categories of Survey data indicate that interest rates on term bank credit bank loans loans rose more than rates on similar market Change, billions of dollars instruments in the first quarter, and that banks TREASURY SECURITIES generally were no more willing to make fixedrate term loans than they had been in other recent months. The volume of short- and intermediate-term U funds raised by businesses from nonbank sources was a little lower during the quarter. On balance, commercial paper issued by non­ OTHER SECURITIES financial corporations was about unchanged, - l i n n with a sizable gain during March roughly off­ setting declines in January and February. Those TOTAL LOANS earlier declines had resulted mainly from repay­ ments of paper issued by public utilities during December to cover temporarily inadequate cash flows. In March, however, commercial paper issued by utilities declined less than seasonally. Growth in business loans at finance companies abated somewhat from the very rapid pace of Ql Q2 Q3 Q4 Ql Ql Q2 Q3 Q4 Ql 1977 ’78 1977 ’78 the fourth quarter, with automobile-related credit again accounting for most of the advance. Seasonally adjusted. Total loans and business loans adjusted for transfer between banks and their holding companies, affili­ As businesses in general increased their reli- ates, subsidiaries, or foreign branches. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

350 Federal Reserve Bulletin □ May 1978 highest levels since mid-1976. The slower pace Gross offerings of new security issues of new bond offerings and the concurrent rise Billions of dollars, seasonally adjusted annual rates in term loans at banks this year may reflect a reluctance of potential corporate borrowers to Type 1977r 1978 enter into long-term obligations at existing in-( Ql Q2 Q3 Q4 Qle terest rates. Following the widespread strength­ Corporate securities—Total 48 50 61 59 34 ening of balance sheet positions during Bonds ................................... 38 40 49 43 27 Publicly offered .......... 22 20 33 24 15 1975-76, many corporations are capable of Privately placed .......... 16 20 16 19 12 Stocks ................................. 10 10 12 16 7 turning to short- and intermediate-term borrow­ Foreign securities ................ 4 13 13 5 4 ing and of slowing their accumulation of liquid assets without reducing their liquidity positions State and local govt.............. 44 50 47 46 41 to unacceptably low levels. r Revised. Stock prices were generally lower on the New e Estimated. York Stock Exchange (NYSE) during the first quarter of 1978, at least partly in response to conditions of uncertainty created by the decline in stock prices in late 1974. Public utilities, of the U.S. dollar on international currency which tend to have less flexibility in adjusting markets, a temporary slowing in domestic eco­ their debt-to-equity ratios, continued to account nomic expansion, and a more rapid rate of for the bulk of new equity issues. inflation. Over the quarter, the NYSE composite index declined 5.0 per cent from its level at the end of 1977. As during 1977, however, GOVERNMENT SECURITIES stock prices of smaller firms generally outper­ formed those of the more highly capitalized In the municipal securities market, gross bond corporations that dominate the NYSE index. issuance proceeded at a $41 billion annual pace Both the American Stock Exchange (AMEX) during the first quarter. Although down some­ index and the National Association of Securities what from the record quarterly levels of 1977, Dealers Automated Quotation (NASDAQ) volume remained large by historical standards. over-the-counter index—which reflect the stock Repeating the 1977 pattern, advance refundings price performance of smaller corporations— of outstanding higher-coupon issues accounted registered further increases during the first for about one-fifth of new offerings. A sizable quarter. decline since late 1975 in interest rates on tax- A vigorous rally in the stock market in April exempt bonds—particularly lower-rated returned the NYSE index to its level at year-end issues—remained a strong incentive for refund­ and carried the AMEX and NASDAQ indexes ing, although a Treasury Department ruling in higher. The rally—reportedly sparked by heavy late 1977 placed tighter limits on the type of stock purchases by institutional and foreign in­ issues that may be refunded in advance. vestors—appeared to have been spurred partly The Bond Buyer index of long-term tax-exby a stabilization of the U.S. dollar on interna­ empt yields was about unchanged on balance tional currency markets, by indications of a over the first quarter. While net acquisitions of resurgence in domestic economic activity after municipal bonds by commercial banks slowed a weather-related winter slowdown, and by evi­ during the first quarter in the face of the in­ dence that economic policy actions were being creased volume of business loans, continued undertaken to slow the rate of inflation. strong demand for tax-exempt investment out­ The generally lower level of stock prices on lets by property-casualty insurance companies, the New York Stock Exchange limited the in­ investment companies, and individuals has centive for new corporate equity issues during helped keep rates on tax-exempt bonds in an the first quarter. The volume of new issues, historically low range relative to taxable yields. estimated at a seasonally adjusted annual rate The Treasury borrowed a total of $20.8 bil­ of $7 billion, was the smallest since the trough lion net (not seasonally adjusted) during the first Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Developments, Ql 1978 351 Federal Government borrowing and cash balance Quarterly totals, billions of dollars, not seasonally adjusted Item 1976 1977 1978 Q2 Q3 Q4 Ql Q2 Q3 Q4r Ql Treasury financing: Budget surplus, or deficit (-) 2.0 --13.0 --22.8 --18.7 8.6 --12.2 -28.8 --25.8 Off-budget deficit1 .................. -.6 -1.8 .4 -4.3 .1 -4.9 -1.3 -3.7 Net cash borrowings, or repayments (—) .................... 9.4 18.0 17.4 17.6 -1.1 419.5 20.7 20.8 Other means of financing2 -4.0 -.7 -.8 2.7 -.4 .4 2.6 1.3 Change in cash balance ___ 6.8 2.6 -5.7 -2.6 7.2 42.8 -6.8 -5.9 Federally sponsored credit agencies, net cash borrowings3 ............................... .5 1-7 .4 .7 3.0 1.8 2.0 4.5 includes outlays of the Pension Benefit Guaranty Corpora­ poration, Federal home loan banks, Federal land banks, Fed­ tion, Postal Service Fund, Rural Electrification and Telephone eral intermediate credit banks, banks for cooperatives, and Revolving Fund, Rural Telephone Bank, Housing for the Federal National Mortgage Association (including discount Elderly or Handicapped Fund, and Federal Financing Bank. notes and securities guaranteed by the Government National All data have been adjusted to reflect the return of the Export- Mortgage Association). Import Bank to the unified budget. includes $2.5 billion of borrowing from the Federal Reserve 2Checks issued less checks paid, accrued items, and other on September 30, which was repaid October 4 after the new transactions. debt ceiling bill became law. 3Includes debt of the Federal Home Loan Mortgage Cor­ rRevised. quarter to help finance a $25.8 billion budget MORTGAGE AND deficit and a $3.7 billion deficit of off-budget CONSUMER CREDIT programs. Increases in outstanding marketable obligations accounted for $15.6 billion of the Net mortgage lending during the first quarter of net borrowing, primarily in the form of notes 1978 was at an estimated annual rate of $126 and bonds. Net financing by Federally spon­ billion, down sharply from the record pace of sored credit agencies jumped to $4.5 billion, $142 billion during the final quarter of 1977. the highest level since 1974, as the Federal Reduced lending on residential properties ac­ Home Loan Bank System and the Federal Na­ counted for the entire decline, as expansion of tional Mortgage Association (FNMA) borrowed nonresidential mortgage credit continued at its to help finance their support of the residential pace in late 1977. Among major lenders, the mortgage market. FNMA acquired $2.1 billion slowdown was most pronounced at depositary of mortgages in the first quarter, and the Federal institutions, where net mortgage acquisitions home loan banks advanced $1.1 billion (not declined in the face of a weakening in deposit seasonally adjusted) to savings and loan associ­ inflows. Delays in construction due to bad ations. weather may have further disrupted mortgage Continuing the pattern of late 1977, foreign flows during the early months of the year. official institutions and State and local govern­ Largely because of their smaller cash flow, ments remained major sources of demand for savings and loan associations, the largest sup­ Treasury obligations during the first quarter. pliers of residential mortgage funds, reduced Foreign official institutions increased their hold­ their net lending by more than 15 per cent from ings of marketable and nonmarketable securities recent record levels. These associations also by $13.7 billion, primarily investing dollar pro­ curtailed new mortgage commitments; the result ceeds acquired from intervention in foreign ex­ was the first quarterly decline in outstanding change markets. State and local governments, commitments (seasonally adjusted) since 1974. using the proceeds of advance refunding opera­ The slackening in deposit growth also forced tions, invested $2.5 billion in special nonmar­ savings and loans to rely increasingly on ad­ ketable Treasury obligations. vances from the Federal home loan banks, and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

352 Federal Reserve Bulletin □ May 1978 Deposits at savings and loans Net change in mortgage debt outstanding Billions of dollars, seasonally adjusted annual rates Annual rate of change, per cent X91T 1978 Change— Ql Q2 Q3 Q4 Ql* By type of property: Total .................................. 108 131 139 142 126 Residential .................. 84 104 107 109 93 Other1 ........................... 24 27 32 33 33 Li 1—1 .. i ■ £ 0 By type of holder: Ql Q2 Q3 Q4 Ql Commercial banks ......... 20 27 29 26 22 1977 ’78____ Savings and loans ......... 50 59 62 63 53 Mutual savings banks .. 4 6 8 8 7 Life insurance Seasonally adjusted. Quarterly averages at annual rates. companies .................. 2 4 5 8 7 FNMA and GNMA .... (3) 6 -3 (3) 6 Other2 ............................... 32 29 38 37 31 on other borrowed funds, to help meet take­ downs of mortgage commitments. Outstanding includes commercial and other nonresidential as well as advances increased $3.6 billion on a seasonally farm properties. 2Includes mortgage pools backing securities guaranteed by adjusted basis, reaching a level above the 1974 the Government National Mortgage Association, Federal Home peak. Savings and loans expanded their holdings Loan Mortgage Corporation, or Farmers Home Administration, some of which may have been purchased by the institutions of liquid assets (seasonally adjusted) during the shown separately. first quarter at the greatly reduced pace of the 3Less than $500 million. r Revised. previous quarter. The Federal Home Loan Bank e Partially estimated. Board, in an attempt to free additional funds for mortgage lending, reduced its minimum thrift institutions, sustained demand for mort­ liquidity requirements for the associations, ef­ gages, and a rise in interest rates on other fective May 1. long-term instruments pushed home mortgage Among other major lenders, commercial yields higher during the first quarter. Average banks also slowed their net mortgage acquisi­ rates on new commitments for conventional tions significantly from the strong pace of late mortgages on new homes increased from 9.10 1977, in part because of increased demand for per cent at the end of 1977 to 9.30 per cent business loans. Mortgage lending by life insur­ at the end of March, the highest since 1974. ance companies, primarily on nonresidential During the quarter, rate ceilings on Govern­ properties, changed little. The flow of funds into ment-underwritten home mortgages were raised markets for mortgages insured by the Federal by 0.25 of a percentage point to 8.75 per cent. Housing Administration or guaranteed by the Nonrate terms and credit standards are also Veterans Administration held up relatively well, reported to have tightened somewhat in recent as reductions in issues of mortgage-backed, months; many lenders, for example, now are pass-through securities guaranteed by the Gov­ said to be insisting upon larger downpayments. ernment National Mortgage Association were Consumer instalment credit, the other major roughly offset by increased mortgage purchases source of household financing, expanded at a by FNMA. A general increase in home-mort- record seasonally adjusted annual rate of $37 gage interest rates since late 1977 made the billion during the first quarter. Automobile purchase price on outstanding 4-month FNMA credit, buttressed by a sharp recovery in new-car purchase commitments attractive to mortgage sales in March, continued to account for more originators possessing such commitments. than 40 per cent of total growth in instalment The combination of slower deposit flows into credit. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

353 Repurchase Agreements and Federal Funds Over the past decade, large commercial banks less than 20 per cent in 1962 to well over 200 have made significant fundamental changes in per cent at year-end 1976 (Chart 1). their management of assets and liabilities. Be­ In a special survey of 46 large member banks fore the mid-1960’s deposit liabilities had conducted by the Federal Reserve System dur­ served as the traditional source of bank funds ing the statement week ended December 7, to support lending and investment activities. 1977, the structure of borrowings of Federal The introduction of the large-denomination ne­ funds and Rp’s by banks was examined in gotiable certificate of deposit (CD) in the early detail. The banks were asked to indicate the 1960’s, however, marked a change in attitude volume of funds obtained through Rp’s and, by banks. Rather than passively relying on separately, the amounts obtained through Fed­ growth in deposits, large banks began to focus eral funds. Data on both the source and the more aggressively on discretionary sources of maturities of these funds were also collected. funds—funds that could be obtained as needed The findings of the survey suggest that bank to supplement deposits during periods of heavy transactions in Federal funds and Rp’s are con­ demand for credit.1 This process, which has ducted with a wide variety of institutions and, come to be known as liability management, has although essentially short term in nature, over enabled large banks to exert greater direct con­ a wide range of maturities. When compared trol over the cost and supply of funds. with a similar special survey conducted in April In addition to CD’s, large banks have come 1974, the results indicated that, although Fed­ to rely increasingly on Federal funds and repur­ eral funds have remained the principal source chase agreements (Rp’s) as important tools of of borrowed funds to banks, they have grown liability management. These discretionary bor­ at a much slower pace than have Rp’s over the rowings have increased rapidly in recent years. 3-year period. At large weekly reporting banks, for example, 1. Federal funds and reserves at F.R. Banks the amount of funds raised in the Federal funds and Rp markets jumped from $12 billion in 1969 Billions of dollars to more than $80 billion in 1978. Moreover, such borrowings, which were once used almost exclusively to adjust reserve positions, are now more than twice as large as required reserves. Indeed, the ratio of gross purchases of Federal funds and Rp’s to reserves maintained at Federal Reserve Banks for large banks had climbed from Note—This article was prepared by Wayne J. Smith of the Financial Reports Section, Division of Research and Statistics. 1 Emphasis on discretionary sources of funds has also tended to reduce the need for banks to adjust their holdings of liquid assets to support credit demand, resulting in considerably more loan-oriented portfolios. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

354 Federal Reserve Bulletin □ May 1978 NONRESERVABLE BORROWINGS Federal funds and Rp’s have other features in common. Both are in general transacted for While the strategy of banks in liability manage­ very short-term periods and both are settled in ment may dictate obtaining funds in a variety immediately available funds.2 The funds are of markets, Federal funds and Rp’s form a large immediately available in the sense that a bank share of banks’ discretionary borrowings. In receives the proceeds from the borrowing on the addition to the ease and convenience, borrowing same business day that the borrowing transac­ tends to be relatively less costly in these markets tion is executed, usually by transfer over the than in alternative markets (Chart 2). Further­ Federal Reserve wire facilities. By contrast, more, unlike CD’s or Euro-dollars, both Rp’s settlement in clearinghouse funds resulting from collateralized by U.S. Treasury or Federal payment by check would involve a delay in the agency securities and borrowings of Federal availability of funds until the check had been funds are exempt from reserve requirements for cleared. Immediately available funds permit the banks that are members of the Federal Reserve bank more flexibility to make instant adjust­ System. Under the Board’s Regulation D, ments to its balance sheet in the event of unex­ member banks are required to maintain reserves pected changes in deposits and loans. in the form of vault cash or balances at a Federal Reserve Bank on all deposits, including certain other obligations issued to borrow funds. The effective cost of such discretionary bor­ REPURCHASE AGREEMENTS rowings is considerably reduced by the exemp­ Repurchase agreements involving U.S. Treas­ tion from reserve requirements. For example, ury and Federal agency securities have become the difference in effective interest rates between the fastest growing source of discretionary funds borrowing in Federal funds or Rp’s and in to banks. Generally transacted in denominations obligations that are subject to reserve require­ of $5 million or more, these instruments are ments can vary from 20 to more than 50 basis basically arrangements by which the bank sells points, depending on the level of interest rates. government securities at a specified price under This difference in effective rates reflects the commitment to repurchase the same or similar opportunity cost of maintaining a portion of the securities at a later date. The securities are proceeds of a reservable borrowing in a non-in­ considered collateral for the transaction to pro­ terest-earning capacity. tect the purchaser against default by the bank. Since the price of the security may be affected by market movements, purchasers may 2. Selected commercial bank borrowing rates require that the value of the securities be greater Per cent than the amount of funds supplied, thus estab­ lishing an additional “margin” of protection. The transfer of collateral is usually effected by issuance of a nonnegotiable safekeeping receipt to the purchaser, stating whether the securities are to be held at the Federal Reserve under book entry or in the vault of the borrowing bank. Sometimes actual physical transfer of the col­ lateral is also provided at the purchaser’s re­ quest, although such transfers are not very common because of the relatively short maturi­ 2 In addition, Federal funds and Rp’s are not re­ stricted by Regulation Q interest rate ceilings; thus they compete more favorably with similar money market instruments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Repurchase Agreements and Federal Funds 355 1. Repurchase agreements on U.S. Treasury and Federal agency securities, for week ended December 7, 1977, 46 large banks Seven-day average dollar volume in millions of dollars Maturity Buyers Total 1 day Continuing 2-7 8-30 More than contract days days 30 days Member commercial banks.................................................. 2,803.5 1,541.1 170.1 358.7 427.8 305.8 Nonmember domestic commercial banks........................... 255.8 147.2 23.2 27.7 26.2 31.5 Branches and agencies of foreign banks operating in U.S.. 38.6 25.1 13.5 Edge Act and Agreement Corporations............................. 40.6 29.4 10.1 .4 .7 77.8 59.1 .1 12.4 1.4 4.8 Agencies of the U.S.2.......................................................... 403.5 385.1 7.8 7.1 3.5 Securities dealers................................................................... 1,976.1 397.5 248.4 215.4 608.4 506.4 Credit unions......................................................................... 61.9 32.4 .8 18.0 10.7 Financial businesses.............................................................. 1,701.7 1,042.0 155.2 303.4 160.0 41.1 Nonfinancial businesses........................................................ 10,472.4 3,256.8 1,198.5 2,203.1 2,913.0 901.0 State and local governments................................................ 3,787.7 2,188.8 144.5 432.2 681.2 341.0 Foreign banks and foreign official institutions................... 323.0 225.7 58.1 37.4 1.8 All others3............................................................................. 248.4 150.8 16.7 37.4 33.5 10.0 Total........................................................................... 22,191.0 9,481.0 1,957.5 3,697.8 4,896.4 2,158.3 1 Includes mutual savings banks, savings and loan associations, and cooperative banks. 2 Includes Federal Home Loan Bank Board and other Federal agencies. 3 Includes nonprofit organizations, such as hospitals and educational institutions, and others. ties of these agreements. The right of the pur­ throughout the 1950’s and early 1960’s as busi­ chaser to substitute securities at the maturity of nesses became more aware of the opportunity the agreement is as a rule accepted by the bank, cost of maintaining idle balances in demand but very little substitution actually occurs. deposit accounts at banks. Rather than placing Participation by banks in the Rp market de­ temporary excess funds in demand deposits, veloped largely as a competitive measure to corporate treasurers began to transact Rp’s with maintain or regain funds that otherwise might both banks and securities dealers. have been invested in money market assets by Today, many commercial banks regard Rp’s large corporations. Securities dealers, however, as one of a number of alternative sources of were among the first institutions to offer Rp’s. funds that may be used to finance their securities During the periods of monetary restraint that portfolios or their lending activities. The rate followed the Treasury-Federal Reserve accord paid by commercial banks generally ranges from of 1951, securities dealers frequently had diffi­ 10 to 15 basis points below the Federal funds culty in obtaining adequate financing of inven­ rate but may vary depending on the availability tories through bank sources.3 Rates on dealer of securities. At large commercial banks, efforts loans ranged from 3Vi to 4 per cent, whereas are made each day to arrange Rp’s on securities rates on U.S. Treasury securities rarely ex­ that are not being used as collateral for other ceeded 3lA per cent. As a result, dealers began purposes. to look elsewhere for cheaper sources of fi­ Current estimates of the volume of Rp’s by nancing. banks suggest that nearly $40 billion is traded Expanding on corporate relationships that had under this arrangement. The 46 banks that par­ already been established, the dealers began to ticipated in the Federal Reserve System’s spe­ encourage many of their customers to become cial survey reported an average of $22.2 billion lenders through Rp’s as an alternative to the of these agreements each day during the survey direct investment in securities. Corporate activ­ week (Table 1), thus accounting for slightly ity in repurchase agreements continued to grow more than half of the estimated total. Additional data obtained from the 1974 survey of 45 of the banks indicated that the volume of Rp’s has 3 Securities dealers can earn profits by selling securi­ grown by nearly $14 billion, or about 155 per ties at a higher price than the original purchase price, cent, from the 1974 level of $8.7 billion (Table or by borrowing funds to finance holdings of securities at rates lower than the rate obtained from the securities. 2). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

356 Federal Reserve Bulletin □ May 1978 2. Repurchase agreements and Federal funds for week ended April 24, 1974, 45 large banks Seven-day average dollar volume in millions of dollars Type Maturity Buyers Rp’s on U.S. Govt, Federal Continu­ 2-7 8-29 30-90 More than and funds Total 1 day ing days days days 90 days agency contract securities Member commercial banks........... 1,001.7 13,083.7 14,085.4 11,404.1 1,421.7 234.8 182.0 456.8 385.8 Nonmember domestic commercial banks........................................ 1,347.7 69.5 30.4 56.1 14.0 Branches and agencies of foreign banks operating in United States........................................ .1 3,183.1 3,183.2 2,347.0 72.8 44.0 209.2 350.1 160.0 Edge Act and Agreement Corpora­ tions........................................ 28.7 116.2 145.0 95.5 6.5 4.2 38.5 , Savings and loan associations and cooperative banks................. 64.0 2,889.4 2,953.4 1.766.5 511.1 97.4 131.5 370.5 76.1 Savings banks................................. 7.2 1,643.5 1,650.8 1.198.5 432.5 4.1 .2 14.0 1.2 Federal home loan banks.............. 6.8 1,173.0 1,179.8 680.0 5.8 6.4 147.5 240.4 99.5 All other agencies of the United States...................................... 235.8 483.1 719.0 367.8 6.0 100.1 59.2 50.7 135.0 Securities dealers........................... 941.1 66.4 1,007.5 136.7 93.5 133.0 245.5 368.4 30.2 Business corporations1................. 2,110.4 ................. 2,110.4 1,013.8 190.5 452.7 349.7 88.8 14.7 State and local governments........ 3.033.2 3,033.2 1,240.0 181.1 429.7 482.5 490.7 209.0 Foreign banks and foreign official institutions.............................. 613.4 ................. 613.4 342.5 165.5 31.2 67.0 7.0 All others2..................................... 235.0 ................. 235.0 76.1 43.8 50.0 39.2 24.7 1.0 Total................................... 8.733.2 26,528.1 35,261.4 23,496.0 4,479.1 1,653.4 1,948.8 2,557.1 1,126.8 1 Includes both financial and nonfinancial corporations. 2 Includes credit unions, nonprofit organizations, such as hospitals and educational institutions, and others. Buyers of Repurchase A greements Because of their flexibility and security, Rp’s are ideally suited to supplement cash manage­ The increasing use of Rp’s by businesses—both ment techniques. They may be tailored to any financial and nonfinancial organizations—has desired short-term maturity and are relatively accounted for much of the rapid growth in this free of risk. In addition, like money market source of funds to banks. In the 1977 survey, assets in general, Rp’s may be used not only businesses contributed almost 55 per cent to to invest temporary excess cash but also to earn total Rp’s transacted with banks, while they interest on funds being accumulated for tax or accounted for only 24 per cent in 1974 (Table dividend payments and on the proceeds of 3). Since 1974 the volume of Rp’s by businesses long-term financing temporarily awaiting dis­ has increased more than 400 per cent. bursement. One of the reasons for the growing use of Rp’s by businesses has been the recent devel­ opment of sophisticated cash management tech­ 3. Buyers of repurchase agreements niques. Corporate cash management involves Percentage distribution procedures designed to speed the receipt of income, delay disbursement of payments, and Buyers Week ended Week ended Dec. 7,1977 Apr. 24, 1974 reduce the uncertainty about daily cash-flow patterns, thus permitting businesses to hold only Member commercial banks................. 12.6 11.5 Nonmember domestic commercial a minimal amount of funds without explicit 1.1 5.2 Branches and agencies of foreign interest return. These procedures have resulted banks operating in the United States............................................. .2 in a more efficient use of corporate funds and Edge Act and Agreement Corpora- .2 .3 have served greatly to increase the availability Other depositary institutions............. .3 .8 Agencies of the United States............ 1.8 2.8 of funds for investment in money market assets. Securities dealers................................. 8.9 10.8 Corporate treasurers have thus increasingly used 54.9 24.2 State and local governments............... 17.1 34.7 Rp’s as an attractive alternative to maintaining Foreign banks and foreign official institutions.................................... 1.4 7.0 surplus funds in non-interest-earning demand 1.5 2.7 100.0 100.0 deposits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Repurchase Agreements and Federal Funds 357 State and local governments, which were the gaining the funds initially supplied plus a profit. primary source of Rp funds to the banks that Alternatively, banks may purchase securities were sampled in 1974, continued to supply a under an Rp from other banks simply to obtain sizable amount of funds during the 1977 survey the collateral for a short time. week. Despite having been displaced by busi­ nesses as the principal buyers of Rp’s, they nevertheless accounted for 17 per cent of the M aturities of total funds supplied to the banks.4 Moreover, Repurchase A greements since 1974 the volume of Rp’s transacted by More than half of all Rp’s reported in the 1977 these governmental bodies has grown nearly 25 survey were executed either for only 1 day per cent. State and local governments have or under continuing contract (Table 4). Con­ found Rp’s to be an attractive short-term in­ tinuing contract refers to any transaction that vestment for reasons similar to those of busi­ may remain in effect for more than 1 day but nesses. They have often been faced with main­ that has no specified maturity and does not taining sizable balances at times throughout the require advance notice by the purchaser to year because the timing patterns of tax receipts terminate. In general, such arrangements and of expenditures never exactly match. consist of 1-day transactions that are auto­ Repurchase agreements have provided the op­ matically rolled over each day until the bank portunity for converting these temporary bal­ is notified by the purchaser to terminate the ances into interest-earning assets.5 transaction. Other member commercial banks and securi­ Only 10 per cent of the maturities extended ties dealers also represented important pur­ for periods beyond 30 days, while about 39 chasers of Rp’s in both the 1974 and the 1977 per cent ranged from 2 to 30 days. The survey weeks. Unlike businesses or State and relatively low level of activity in the longer local governments, these institutions operate in maturities has probably reflected the existence the Rp market both to obtain funds and to supply of investment alternatives that may earn higher funds. As mentioned earlier, banks and securi­ interest, such as certificates of deposit and com­ ties dealers obtain funds to finance securities mercial paper. inventories. In addition, these institutions often The very short maturities tended to be more provide funds by purchasing Rp’s when oppor­ prevalent among banking and financial buyers tunities arise, enabling them to profit from dif­ in the Rp market: 66 per cent of the Rp’s ferences in interest rates. For example, the bank purchased by these institutions had maturities or dealer may purchase securities under an Rp of 1 day or were under continuing contract at one rate and then sell the securities at a in contrast to 45 per cent for nonfinancial slightly lower rate under another Rp, thus re­ businesses, securities dealers, and State and local governments. Nevertheless, 64 per cent 4 The timing of the two surveys may have been partly of all Rp’s purchased by nonfinancial busi­ responsible for the apparent shift in relative importance between State and local governments and businesses. nesses, securities dealers, and State and local The April 1974 survey was conducted immediately governments extended for periods of fewer following a tax date, when State and local government than 8 days. funds were at their peak and corporate balances had been reduced by tax outlays. In contrast, the 1977 survey was conducted before a quarterly tax date. 4. Maturities of repurchase agreements 5 In addition, since November 1974 State and local governments have also been permitted to hold savings Percentage distribution deposits at commercial banks. These deposits have increased sharply when market rates on Rp’s have fallen Maturity Week ended below the Regulation Q ceiling rate on savings deposits. Dec. 7, 1977 Such a situation occurred in December 1976, for ex­ ample, when savings deposits held by these govern­ 42.7 Continuing contract.............................................. 8.8 ments at large weekly reporting banks rose from $1.7 16.7 billion to $2.9 billion. In contrast, when market rates 22.1 Over 30 days.......................................................... 9.7 on Rp’s have risen above the ceiling rate on savings, Total............................................................ 100.0 savings deposits have declined. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

358 Federal Reserve Bulletin □ May 1978 FEDERAL FUNDS savings and loan association, cooperative bank, domestic office of a foreign bank, and the Ex­ Of the total volume of discretionary funds bor­ port-Import Bank. As a result of these rulings, rowed by the 46 banks that participated in the the term Federal funds has come to mean any special 1977 survey, $35.8 billion, or about 62 borrowing or lending of immediately available per cent, was obtained through purchases of funds by any of these participants. Federal funds. The term “Federal funds” his­ In more recent years, immediately available torically has referred to the transfer of a deposit funds have been transferred for periods of longer at a Federal Reserve Bank from one member than 1 day. These transactions are basically bank to another. Such transactions represented similar to regular Federal funds in all aspects the overnight borrowing and lending of excess other than maturity and have been designated reserve balances by member banks to adjust “term Federal funds.” Term Federal funds reserve positions. Today, Federal funds trans­ generally command higher interest rates than do actions need not involve a transfer at a Federal regular Federal funds and have not been exten­ Reserve Bank nor necessarily involve two sively traded. member banks. Indeed, Federal funds are cur­ The Federal funds market contributes signifi­ rently traded by a variety of institutions that do cantly to a more efficient utilization of bank not maintain accounts at Federal Reserve Banks, resources. Through its redistribution of reserves including nonmember banks, branches of within the banking system, excess reserves held foreign banks operating in the United States, by smaller banks are channeled to larger banks mutual savings banks, and savings and loan and converted to loanable funds. In addition, associations. the market assists the Federal Reserve in the To a large extent, the present-day Federal conduct of monetary policy. Since only minimal funds market has evolved as a result of Federal excess reserves are held by the banking system Reserve regulation. As trading in Federal funds as a whole, the impact of policy actions tends became more widespread throughout the to be felt more quickly by all sizes of banks. 1960’s, the Federal Reserve issued several im­ Finally, the rate on Federal funds serves as an portant rulings that had the effect of altering the important indicator of current credit conditions structure of the market and the types of institu­ and generally forms the basis for other short­ tions from which member banks could borrow term rates. without the borrowings being subject to reserve requirements. In 1964 the Board noted that purchases of funds by member banks from other Lenders of Federal Funds banking institutions did not differ fundamentally Although basically an interbank market, the from traditional Federal funds purchases, even Federal funds market includes participants other though these borrowings did not go through a than commercial banks, such as mutual savings Federal Reserve Bank. In effect, this ruling banks, savings and loan associations, and Fed­ served to alter the concept of Federal funds by eral agencies (Table 5). Nevertheless, commer­ including transactions that resulted simply from cial banks are the primary suppliers of Federal bookkeeping entries at correspondent banks.6 funds. In both the 1974 and 1977 surveys, Later in 1964 the Board granted permission for commercial banks, largely dominated by Sys­ Edge Act and Agreement corporations to par­ tem members, accounted for about 65 per cent ticipate in the market. In 1970 the Board ruled of the Federal funds supplied to the banks that that member banks could borrow Federal funds were surveyed (Table 6). free of reserve requirements from any member Commercial bank participation in the inter­ or nonmember commercial bank, savings bank, bank market tends to be characterized by well- 6 Correspondent bookkeeping transfers of Federal established market patterns. Smaller banks act funds consisted basically of reducing the correspondent basically as sellers of funds, selling to larger bank’s deposit balance at the member bank and crediting correspondents and regional money center an account designated “Federal funds purchased” from the correspondent. banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Repurchase Agreements and Federal Funds 359 5. Federal funds for week ended December 7, 1977, 46 large banks Seven-day average dollar volume in millions of dollars Maturity Lenders Continu­ 2-7 8-30 More than Total 1 day ing days days 30 days contract Member commercial banks. 17,908.0 16,982.2 512.2 79.1 143.7 190.8 Nonmember domestic com­ mercial banks................ 5,529.2 4,726.2 558.8 18.4 162.7 63.1 Branches and agencies of foreign banks operating in U.S............................. 2,190.3 2,155.2 1.8 1.4 4.1 27.8 Edge Act and Agreement Corporations................. 210.0 181.5 1.0 5.5 22.0 Other depositary institu­ tions 1............................. 5,946.9 4,047.4 364.5 83.7 370.8 1,080.5 Agencies of the U.S.2.......... 2,245.6 1,983.4 .5 33.1 49.8 178.8 Securities dealers.................. 1,689.2 1,689.2 All other............................... 149.3 79.0 6.5 63.7 . 1 Total........................... 35,868.5 31,844.1 1,444.3 280.4 736.7 1,563.0 1 Includes mutual savings banks, savings and loan associations, and cooperative banks. 2 Includes Federal Home Loan Bank Board and other Federal agencies. The arrangement most often used is the contin­ amounts of Federal funds to commercial banks. uing contract. The denomination of transactions These institutions, which accounted for about ranges from $50,000 to $5 million or more. 17 per cent of the funds supplied, operate in Larger regional banks tend to be sellers of funds the Federal funds market as a means of earning but may often be borrowers. Rather than engage interest on liquid balances that might otherwise in continuing contracts, this group usually remain temporarily idle. Offices of foreign makes direct inquiries of potential purchasing banks and Federal agencies are other important banks, frequently through Federal funds lenders of Federal funds. Federal agencies par­ brokers, to obtain the most attractive yield. ticipate in the market for reasons similar to those Amounts provided by these banks range from of other depositary institutions, while partici­ $5 million to $40 million per transaction. Large pation by foreign-related banking organizations money center banks tend to be basically pur­ to some extent parallels participation by com­ chasers of funds, although at times they may mercial banks. sell funds to accommodate smaller corre­ spondents. Other depositary institutions, consisting 7. Maturities of Federal funds mainly of mutual savings banks and savings and Percentage distribution loan associations, also provide substantial Maturity Week ended Dec. 7, 1977 6. Lenders of Federal funds 88.7 Continuing contract.............................................. 4.0 .9 Percentage distribution 2.0 Over 30 days.......................................................... 4.4 Total............................................................ 100.0 Lender Week ended Week ended Dec. 7, 1977 Apr. 24, 1974 Member commercial banks................ 49.9 49.3 Nonm ba e n m k b s e .. r . .... d .. o .. m ... e .. s .. t . i . c .. ... c .. o .. m ... m ... e .. r .. c . i . a .. l . 15.4 14.7 M aturities of Federal Funds Branches and agencies of foreign banks in the United States.......... 6.1 12.0 The Federal funds market is essentially an Edge Act and Agreement Corpora­ tions............................................... .6 .4 overnight market. Almost 93 per cent of the Other depositary institutions.............. 16.6 17.1 Agencies of the United States............ 6.3 6.2 total funds reported in the 1977 survey were Securities dealers................................. 4.7 .3 All others............................................. .4 supplied for 1 day or were under continuing Total.......................................... 100.0 100.0 contract (Table 7). Less than 3 per cent of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

360 Federal Reserve Bulletin □ May 1978 funds were transacted in maturities of 2 to 30 Federal funds market serves as a residual market days, while slightly more than 4 per cent ex­ for funds. Once financing requirements have tended for periods of longer than 30 days. been established for a particular day and other Despite its very short-term nature, the Federal funds obtained, any deficit is generally met funds market is regarded by many banks as a through purchases of Federal funds. This mech­ permanent source of financing. Since funding anism allows banks to match sources and uses requirements may vary considerably each day, of funds much more closely and contributes to participants are careful not to borrow in excess a more efficient utilization of bank re­ of their projected needs. To a large extent, the sources. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

361 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 B u lle­ similar 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 B u lletin includes a sepa­ are of general interest to the economics pro­ rate section entitled “ Staff Economic Studies" 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 B u lletin . in mimeographed form. STUDY SUMMARY MORTGAGE BORROWING AGAINST EQUITY IN EXISTING HOMES: MEASUREMENT, GENERATION, AND IMPLICATIONS FOR ECONOMIC ACTIVITY David F. Seiders—Staff, Board of Governors Prepared as a staff study in early 1978 The relationship between home mortgage lend­ This study examines borrowing against hous­ ing and homebuilding has changed dramatically ing equity within the context of other develop­ in recent years. This shift has occurred as the ments in the structure of income and wealth in household sector has raised unprecedented the household sector and in an environment of amounts of mortgage funds against inflated eq­ general price inflation. It analyzes the volume uity in the stock of existing homes and used of net funds borrowed against equity in existing these funds for a variety of purposes other than homes and examines the various ways in which homebuilding. Mortgage borrowing on a large households have raised these funds. The extent scale for such purposes may, of course, have to which the borrowed funds have been used significant implications for the efficiency of to support personal consumption expenditures Federal housing support programs operating or to change the composition of household bal­ through the mortgage markets. In view pf the ance sheets is also considered as are possible well-known sensitivity of the supply and cost implications for future economic activity. of home mortgage credit to changes in general The conclusion is that household borrowing financial conditions, such a development also against equity in existing homes has accounted may influence the impact of monetary policy on for nearly half of total home mortgage debt various sectors of the economy. formation during the past 2 years, about double Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

362 Federal Reserve Bulletin □ May 1978 the proportion during the previous 5 years. expansion but that some portions have sup­ These funds have been raised primarily in con­ ported capital expenditures, substituted for other nection with transactions in existing homes, forms of household debt, or contributed to ac­ rather than through junior mortgages or refi­ quisitions of financial assets. It is argued that nancings of outstanding first mortgages, both of exogenous changes in household financial net which have received much attention in the press. worth, household expectations about future Moreover, it appears that significant portions of levels of income, and the spread between longthe funds raised against housing equity have and short-term interest rates determine in part served to bolster personal consumption expend­ how funds raised in connection with transactions itures during much of the current economic in existing homes are used. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

363 Exercise of Consumer Rights Under the Equal Credit Opportunity and Fair Credit Billing Acts In November 1977 the Board of Governors they had treated the informal questions the same initiated a survey of selected large creditors to as the formal ones. determine to what extent consumers were exer­ In order to obtain information from a national cising their rights under the Equal Credit Op­ cross-section of consumers with a minimum portunity Act and the Fair Credit Billing Act. burden on the consumer credit industry, the The survey was also designed to determine the Board selected nine large creditors that were cost to creditors of complying with these laws. believed to have readily available records. This An inquiry requesting information in connec­ group included four major retailers (Alden’s, tion with credit-card and other types of revolv- Inc.; Federated Department Stores, Inc.; J. C. ing-credit operations was sent to a group of nine Penney and Co., Inc.; and Sears, Roebuck and creditors. Areas covered in the inquiry were the Co.); three banks (Bank of America, First Na­ right to a separate credit history for married tional Bank of Chicago, and Maryland National persons, notification by creditors of specific Bank); one travel and entertainment card issuer reasons for denial of credit, and customers’ use (American Express Co.); and one oil company of their rights under the law regarding the reso­ (Shell Oil Co.). Information was gathered from lution of billing disputes. all companies except Alden’s; the data reported The initial notices regarding the right to a by Federated Department Stores represent the separate credit history for married persons were combined answers of 13 of its 16 department enclosed with billing statements rather than and specialty store divisions. mailed separately in order to hold down the cost. About 11 per cent of the customers requested that separate credit histories be maintained. The SEPARATE CREDIT HISTORY average cost to the creditors of printing and processing the notices was less than 1 cent per Under Regulation B married persons have the notice, and the average cost of processing the right to a separate credit history. All creditors return requests and providing the necessary with open-end credit contracts were required to credit information was about 9 cents per request. send a notice advising their married customers The survey showed that a substantial propor­ of this right by June 1, 1977, unless the com­ tion of the applicants who were rejected for re­ pany already had arranged to maintain access volving credit accounts requested the reasons for to the account records for each person entitled the denial if such reasons had not been stated to use the account. American Express had such at the time of rejection; many of these applicants an arrangement for each person who had been then provided sufficient additional information issued a card on an account. The other seven to warrant the granting of credit. reporting creditors, however, sent notices to Although a large number of credit customers each of their married customers informing them raised questions concerning their billing state­ of their right to separate credit histories. ments each month, relatively few followed the The total initial mailing of somewhat less than formal procedures provided by Regulation Z. 48.5 million notices by the seven companies Most of the companies, however, indicated that yielded more than 5 million returns (about 11 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

364 Federal Reserve Bulletin □ May 1978 1. Separate credit history Notices Creditor Number Number of Percentage Total cost Average cost return resulting per notice sent sent (dollars) requests in requests (dollars) Federated Department Stores ............ 5,600,536 471,875 8.4 64,880 .012 J. C. Penney ......................................... 10,252,692 818,659 8.0 64,556 .006 Sears ......................................................... 23,000,000 3,000,000 13.0 68,095 .003 Bank of America .................................. 3,130,529 326,783 10.4 88,697 .028 First National Bank of Chicago ....... 861,453 82,561 9.6 5,000 .006 Maryland National Bank .................... 1,056,365 77,501 7.3 23,940 .023 Shell Oil .................................................. 4,500,000 430,000 9.6 45,000 .010 American Express1 .............................. Cost of dual reporting of credit records, in dollars Processing Total, Average Cost of Annual mainte­ initial Reporting new for initial initial cost reporting nance cost of requests information returns per account new accounts dual reporting per account per account Federated Department Stores .. 31,575 262,466 94,041 .20 .00 to 1.50 •'*39,825 J. C. Penney .............................. 12,061 31,614 43,675 .05 Negligible Negligible Sears .............................................. '94,134 55,555 149,689 .05 .01 88,667 Bank of America ....................... 55,543 36,744 92,287 .28 .10 3,600 First National Bank of Chicago 6,571 13,571 20,142 .24 .14 23,880 Maryland National Bank ......... 22,392 5,470 27,862 .36 .12 13,600 Shell Oil ....................................... 19,700 9,900 29,600 .07 Negligible 3,000 American Express1 .................... 1 American Express provides separate access to its credit records for each credit-card holder and, therefore, was not required to send a special notice. 2Excludes two divisions that maintain manual operations and report to credit-reporting agencies only on demand. 3Represents estimates from only five divisions. 4Reported an additional cost, estimated at $900,000, of annotating history record cards to reflect the requested changes. per cent) from customers who requested the The identifiable costs of printing, processing, maintenance of separate credit histories. The and mailing each notice averaged slightly less difference in the rate of return among the re­ than 1 cent. There was considerable variation porting companies was relatively small, ranging among the companies, however, with the from about 7.3 per cent for Maryland National average identifiable cost per notice ranging from Bank to 13 per cent for Sears (Table 1). a low of 0.3 cent to a high of 2.8 cents. Direct cost estimates for the nearly 50 million Processing the more than 5 million returns notices sent totaled $360,168; however, since and initially reporting the new information to some companies were unable to identify and the credit-reporting agencies cost a little more include all administrative costs, this figure ac­ than $450,000 for the seven companies, or an counted for only a portion of the total cost. average of about 9 cents per request. Again the Furthermore, Penney’s noted that the inclusion costs reported by the different companies varied of the required notice with the billing statement sharply—from about 5 cents per request to 36 displaced advertising inserts, which resulted in cents per request (Table 1). a loss of sales estimated at $665,000. Federated Once the reporting of credit records on a dual Department Stores also noted a loss of revenue basis for existing accounts had been completed, due to the displacement of advertising inserts the cost of reporting new accounts on that basis but did not estimate the amount. Although all ranged from “negligible” or “nominal” to of the reporting companies enclosed the required about 14 cents per account. Federated Depart­ notice with the monthly billing statement, Bank ment Stores reported a range from “negligible” of America noted that it had spent $68,000 to to $1.50 for its divisions. The cost of maintain­ mail the notice separately to inactive Bank- ing dual reporting varied widely, from “negli­ Americard accounts. gible” to nearly $89,000 a year. If the 3 million Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Exercise of Consumer Rights 365 requests received by Sears had resulted in about for the adverse action at the time of the denial. the same number of dual-reporting accounts, the The other companies provided reasons for denial annual total cost would have amounted to 3 only upon request. Maryland National Bank cents per account. The same calculation for the received such requests from 12 per cent of other companies suggests an average annual rejected applicants; Federated Department maintenance cost per account of about 1 cent Stores, from 20 per cent; and American for Bank of America and Shell, 9 cents for Express, from 23 per cent. Shell stated that each Federated Department Stores, 18 cents for month about 4,600 rejected applicants requested Maryland National Bank, and 29 cents for First the specific reasons for the denial. National Bank of Chicago. Each of the last two Many of the rejected credit applicants who companies had less than 100,000 dual-reporting were initially given reasons for credit denial accounts, which suggests that maintaining any supplied additional information, and a high dual reporting system may involve a significant proportion of these were then granted credit. element of fixed cost or that the wide variation Sears, which initially sent reasons for the in reporting maintenance costs may be the result credit denial to all rejected applicants, received of the different approaches used in estimating additional credit information from 4 per cent of costs. these, and in half of the cases the information was sufficient to warrant the granting of credit. These proportions were even larger for Bank of America, which received additional informa­ ADVERSE ACTION NOTICES tion from 8 per cent of its rejected applicants The revisions in Regulation B that became ef­ and which was then able to grant credit to fective June 1, 1977, required creditors to in­ three-fourths of them. First National Bank of form rejected credit applicants of the reasons Chicago, the third company that provided rea­ for the denial either initially or upon request. sons initially to all rejected applicants, received Sears, First National Bank of Chicago, Bank requests for reconsideration from about 35 per of America, and 1 of the 13 divisional respond­ cent of such applicants, and of those who pro­ ents of Federated Department Stores furnished vided additional information one-third were all rejected credit applicants with the reasons granted credit. 2. Adverse action on applications for credit Average cost per account of providing reasons Applicants rejected for credit who for credit denial (dollars) Creditor Requested Were given reason, Provided more reasons then provided information and for denial more information were given credit (per cent) (per cent of col. 1) (per cent of col. 2) Initially Upon request (1) (2) (3) (4) (5) Federated Department Stores ---- 20 34 26 *.43 .22 to 5.25 J. C. Penney .................................. (2) n.a. n.a. .56 Sears .................................................. 3100 4 50 .59 Bank of America ........................... 3100 8 75 1.07 2.20 First National Bank of Chicago 3100 (4) 33 .60 Maryland National Bank ............ 12 45 35 4.14 Shell Oil ........................................... (5) 70 72 ' .55 .38 American Express ......................... 23 30 60 1.75 3.00 to 5.25 Represents an estimate by one division only. ^Approximately 13.3 per cent wrote to J.C. Penney regarding their rejection, but it is not known how many asked for specific reasons. 3All rejected credit applicants were given the reasons initially. Approximately 3,000 of the 8,600 rejected applicants per month requested reconsideration, and some provided additional information. Approximately 4,600 rejected applicants per month requested specific reasons for denial, n.a.—Not available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

366 Federal Reserve Bulletin □ May 1978 3. Experience with fair credit billing Average Average Number of Annual number of Billing number of formal cost of Creditor active billing statement inquiries billing error accounts statement inquiries asserted statements billed (per cent) inquiries monthly (dollars) monthly Federated Department Stores .......................... 3,366,000 86,000 2.55 4,400 147,447 J. C. Penney .................. 12,082,395 113,575 .94 n.a. 27,308 Sears .................................. 18,600,000 n.a. n.a. 9,167 (3) Bank of America ........... 2,464,469 119,164 4.84 3,047 (3) First National Bank of Chicago ....... 901,000 57,000 6.33 5,000 (;J) Maryland National Bank ............................ 301,000 2,606 .87 134 (3) Shell Oil ........................... 3,500,000 37,000 1.06 1,150 467,300 American Express ......... 3,800,000 86,000 2.26 n.a. 525,760 Represents estimate of printing costs only for monthly mailing. 2The billing-error statement is printed on the back of the billing statement and the costs reported are those for printing the full billing statement provided to those persons who raise billing inquiries. 3The billing-error statement is printed on the back of the billing statement and no specific costs were reported. 4Mails the statement semiannually but estimates that mailing the shorter monthly statement would cost $247,600 per year. 5Represents estimate of printing costs only for mailing semiannual statements. n.a.—Not available. A similar pattern existed for those specifically ments each month (Table 3). The extent of the requesting reasons for the denial of credit in that increase in the number of customer inquiries the additional information was often adequate since the billing-error sections were incorpo­ to warrant the granting of credit. Federated rated into Regulation Z is not known, but the Department Stores estimated that about one- figures reported by the eight creditors for recent third of those requesting reasons for credit de­ months showed that the proportion of monthly nial during the first 7 months after the revised billing statements questioned ranged from about Regulation B went into effect provided addi­ 1 per cent for Penney’s, Maryland National tional information, and in one-fourth of these Bank, and Shell to about 5 per cent for Bank cases credit was granted. The highest propor­ of America and 6 per cent for the First National tions were shown by Shell; almost 70 per cent Bank of Chicago. Only a small proportion of of those requesting specific reasons supplied these questions were submitted according to the additional information, and in three-fourths of formal procedures provided by Regulation Z, those cases credit was granted (Table 2). but most of the companies indicated that they The cost of providing reasons for the denial had treated all questions alike, whether pre­ of credit to the rejected applicants varied sented in a formal or informal manner. widely. For the three companies that provided Creditors are permitted to use either a semi­ reasons initially, the average cost per rejected annual billing-error statement, informing cus­ account ranged from 59 cents to $1.07. For the tomers of their rights and the appropriate proce­ other companies the average cost of responding dures, or a shorter monthly statement. Only to specific requests for reasons for credit denial Shell, American Express, and one division of varied from 22 cents to $5.25. Federated Department Stores used the semian­ nual statement. The other companies found the monthly statement, which in some cases could be printed on the back of the billing statement, BILLING INQUIRIES to be less costly than a semiannual statement. A considerable number of credit customers Precise cost figures, however, could not be raised questions concerning their billing state­ provided by most companies. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

367 Survey of Time and Savings Deposits at Commercial Banks, January 1978 During the 3 months ended January 25, 1978, mained strong. Such growth reflects the higher total time and savings deposits at insured com­ interest rate ceilings on these accounts that en­ mercial banks, not adjusted for seasonal varia­ courage individuals to extend the maturity of tion, expanded at a quarterly rate of 3V2 per their bank deposits. Since July 1973, when the cent compared with 2xk per cent over the pre­ ceilings on time deposits maturing in 4 years ceding survey quarter.1 For the 6 months cover­ or more and with minimum denominations of ing the two most recent survey periods, time $1,000 were temporarily suspended, growth in and savings deposits subject to Regulation Q this category has totaled more than $70 billion.2 ceiling rates had grown only slightly, as banks By comparison shorter-maturity time deposits experienced net outflows in the earlier period issued to households and businesses in small followed by small net inflows in the later period. denominations declined about $10 billion over In contrast, large-denomination ($100,000 or the same interval. more) time deposits grew sharply in both peri­ ods, accounting for more than 90 per cent of / the growth of total time and savings deposits SAVINGS DEPOSITS between the end of July and the end of January. Although total net inflows to savings and Throughout the intersurvey period, yields on small-denomination (less than $100,000) time short-term market instruments, such as 90-day deposits registered growth of less than 1 per cent Treasury bills, exceeded by 1 to \lA percentage between the October and January surveys, ex­ points the maximum return banks may legally pansion in the longest-maturity categories re­ offer on savings deposits. Expansion of savings deposits, not adjusted for seasonal variation, Note.—John R. Williams of the Board’s Division matched the slow pace of the preceding 3 of Research and Statistics prepared this article. months—a period when market yields had 1 Surveys of time and savings deposits (STSD) at all member banks were conducted by the Board of Gover­ ranged from Vi to 1 percentage point above the nors in late 1965, in early 1966, and quarterly in 1967. passbook ceiling rate. All of the $1.6 billion In January and July 1967 the surveys also included data growth was concentrated in accounts held by for all insured nonmember banks collected by the Fed­ eral Deposit Insurance Corporation (FDIC). Since the individuals, accounts that tend to be the least beginning of 1968 the Board of Governors and the FDIC sensitive to movements of interest rates. Mean­ have conducted joint quarterly surveys to provide esti­ while, a small absolute decline in savings demates for all insured commercial banks based on a probability sample of banks. The results of all earlier surveys have appeared in previous Bulletins from 2 Prior to July 1973, the maximum rate payable was 1966 to 1978, the most recent being February 1978. 5%. per cent at commercial banks for all small-denomi­ The current sample—designed to provide estimates nation deposits maturing in 2 years or more. At that of the composition of deposits—includes about ,560 time, an estimated $600 million was outstanding in insured commercial banks. For details of the statistical commercial bank time accounts with original maturities methodology, see “Survey of Time and Savings De­ of 4 years or more. Then, during the 4-month period posits, July 1976” in the Bulletin for December 1976. when ceilings were suspended, about $9 billion flowed Detailed data for the current survey (formerly con­ into these accounts. Effective November 1, 1973, a tained in appendix tables) are available on request from ceiling rate of 7.25 per cent at commercial banks was Publications Services, Division of Administrative Serv­ established for deposits of 4 years or more. Effective ices, Board of Governors of the Federal Reserve Sys­ December 23, 1974, the ceiling was raised to 7.50 per tem, Washington, D.C. 20551. cent for deposits of 6 years or more. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

368 Federal Reserve Bulletin □ May 1978 posits of businesses offset a slight rise in such ernmental units the proportion rose to 95 per holdings of governmental units within the cent from 89 per cent. Taking all banks to­ United States. gether, the average rate paid on all types of The January survey provides evidence that a savings deposits, weighted by the amounts out­ few large banks raised offering rates on savings standing, rose over the period to 4.92 per cent deposits, in light of the continued sluggish in­ from 4.90 per cent. flows of such deposits. On new deposits issued to individuals in late January, the maximum offering rate of 5 per cent prevailed at 89 per SMALL-DENOMINATION TIME cent of banks with total outstanding deposits DEPOSITS greater than $100 million, up from 87 per cent in late October. Similarly, the proportion of By the end of the survey period, yields on large banks paying the ceiling interest rate on Treasury securities had moved above regulatory accounts of businesses rose to 95 per cent from rate ceilings on bank time deposits issued to 92 per cent, and on accounts of domestic gov­ consumers and businesses for all comparable 1. Types of time and savings deposits held by insured commercial banks on survey dates, July 27 and October 26, 1977, and January 25, 1978 Deposits Number of issuing banks Type of deposit In millions of dollars Percentage change July 27 Oct. 26 Jan. 25 July 27 Oct. 26 Jan. 25 July 27- Oct. 26- Oct. 26 Jan. 25 Total time and savings deposits.......................... 14,405 14,409 14,333 518,117 529,862 548,293 2.3 3.5 Savings............................................................. 14,405 14,409 14,333 215,391 216,896 218,539 .7 .8 Issued to: Individuals and nonprofit organizations... 14,405 14,409 14,333 199,629 201,011 202,653 .7 .8 Partnerships and corporations operated for profit (other than commercial banks). 8,986 9,141 9,463 10,310 10,808 10,568 4.8 -2.2 Domestic governmental units..................... 6,922 7,891 8,391 5,310 4,968 5,206 -6.4 4.8 All other....................................................... 704 724 1,251 142 108 112 -24.0 3.5 IRA and Keogh Plan time deposits with original maturities of 3 years or more... 0) 8,808 9,088 0) 1,546 2,084 34.8 Other interest-bearing time deposits in de­ nominations of less than $100,000............ 14,173 14,166 14,090 167,363 165,097 166,717 -1.4 1.0 Issued to: Domestic governmental units....................... 10,789 10,838 10,688 4,688 4,334 4,118 -7.6 -5.0 Accounts with original maturity of: 30 up to 90 days...................................... 4,812 5,147 5,201 1,068 949 862 -11.1 -9.1 90 up to 180 days.................................... 8,321 8,008 7,367 1,622 1,396 1,243 -13.9 -10.9 180 days up to 1 year.............................. 3,774 4,802 4,882 746 823 854 10.3 3.7 1 year and over........................................ 8,345 8,431 8,680 1,253 1,166 1,159 -6.9 -.6 Other than domestic governmental units.... 14,173 14,166 14,090 162,674 160,764 162,598 -1.2 1.1 Accounts with original maturity of: 30 up to 90 days...................................... 5,836 6,638 6,629 7,635 7,327 6,250 -4.0 -14.7 90 up to 180 days.................................... 11,495 11,699 11,751 31,599 30,626 31,459 -3.1 2.7 180 days up to 1 year.............................. 8,264 8,999 8,808 4,661 3,539 3,587 -24.1 1.4 1 up to 2 Vi years..................................... 13,701 13,825 13,508 34,207 34,601 33,977 1.2 -1.8 2Vi up to 4 years2................................... 12,628 12,549 12,476 18,768 18,539 18,463 -1.2 -.4 4 up to 6 years2....................................... 12,108 12,401 12,390 51,691 50,366 50,848 -2.6 1.0 6 years and over2..................................... 9,372 8,894 9,198 14,113 15,766 18,016 11.7 14.3 Interest-bearing time deposits in denomina­ tions of $100,000 or more........................ 11,376 11,636 11,747 128,593 140,451 156,122 9.2 11.2 Non-interest-bearing time deposits.............. 1,709 1,686 1,625 4,790 4,052 4,019 -15.4 -.8 In denominations of: Less than $100,000................................... 1,378 1,381 1,379 1,396 862 692 -38.2 -19.8 $100,000 or more..................................... 740 720 623 3,394 3,190 3,327 -6.0 4.3 Club accounts (Christmas savings, vacation, or similar club accounts)......................... 9,155 8,929 9,212 1,981 1,820 813 -8.1 -55.3 1 Data not collected. offered certain deposit types as of the survey date are not counted as 2 Excludes all IRA and Keogh Plan accounts with original maturity issuing banks. However, small amounts of deposits held at banks that of 3 years or more. had discontinued issuing certain deposit types are included in the amounts outstanding. Note.—All banks that had either discontinued offering or never Figures may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Survey of Time and Savings Deposits 369 2. Small-denomination time and savings deposits held by insured commercial banks on January 25, 1978, compared with October 26, 1977, by type of deposit, by most common rate paid on new deposits in each category, and by size of bank Size of bank Size of bank (total deposits in millions of dollars) (total deposits in millions of dollars) All banks All banks Deposit group, and dis­ tribution of deposits by Less than 100 100 and over Less than 100 100 and over most common rate Jan. 25 Oct. 26 Jan. 25 Oct. 26 Jan. 25 Oct. 26 Jan. 25 Oct. 26 Jan. 25 Oct. 26 Jan. 25 Oct. 26 Amount of deposits (in millions of dollars), Number of banks, or percentage distribution or percentage distribution Savings deposits Individuals and non­ profit organizations Issuing banks............ 14,333 14,409 13,300 13,381 1,033 1,028 202,653 201,011 76,926 76,403 125,727 124,608 Distribution, total... 100 100 100 100 100 100 100 100 100 100 100 100 4.00 or less............ 4.4 4.6 4.4 4.6 4.1 5.1 3.1 3.6 3.4 3.4 3.0 3.8 4.01-4.50................ 9.5 9.3 9.7 9.4 6.7 7.5 9.5 9.7 9.6 9.5 9.4 9.9 4.51-5.00................ 86.1 86.1 85.9 86.0 89.1 87.4 87.4 86.6 87.1 87.1 87.5 86.3 Paying ceiling rate1... 86.1 86.1 85.9 86.0 89.1 87.4 87.4 86.6 87.1 87.1 87.5 86.3 Partnerships and cor­ porations Issuing banks............ 9,463 9,141 8,444 8,124 1,019 1,017 10,568 10,808 3,205 3,340 7,363 7,469 Distribution, total... 100 100 100 100 100 100 100 100 100 100 100 100 4.00 or less............ 1.3 1.5 1.4 1.5 .5 1.5 .6 1.1 1.1 1.0 .4 1.1 4.01-4.50............... 7.6 7.1 7.9 7.2 4.7 6.3 5.7 7.0 5.8 6.8 5.7 7.1 4.51-5.00............... 91.1 91.4 90.7 91.3 94.7 92.2 93.6 91.9 93.1 92.2 93.8 91.7 Paying ceiling rate1... 90.9 91.2 90.4 91.0 94.7 92.2 93.6 91.9 93.1 92.1 93.8 91.7 Domestic govt, units Issuing banks............ 8,391 7,891 7,690 7,178 701 714 5,206 4,968 2,760 2,544 2,447 2,424 Distribution, total... 100 100 100 100 100 100 100 100 100 100 100 100 4.00 or less............ 3.7 5.3 4.0 5.6 .7 1.8 1.4 2.0 1.8 2.9 .9 1.1 4.01-4.50............... 10.7 9.9 11.3 9.9 4.2 9.1 7.1 8.8 11.0 14.0 2.6 3.4 4.51-5.00............... 85.6 84.8 84.7 84.4 95.1 89.1 91.5 89.2 87.2 83.1 96.5 95.5 Paying ceiling rate1... 85.3 84.5 84.4 84.1 95.1 89.1 91.5 89.1 87.1 82.9 96.5 95.5 All other Issuing banks............ 1,251 724 1,104 558 147 166 112 108 37 24 75 84 Distribution, total... 100 100 100 100 100 100 100 100 100 100 100 100 4.00 or less............ 9.8 17.0 10.9 21.5 2.0 1.7 1.4 1.4 1.7 3.4 1.3 .8 4.01-4.50................ 18.9 12.3 21.4 16.0 (2) (2) .1 (2) .3 (2) (2) (2) 4.51-5.00................ 71.3 70.7 67.7 62.5 98.0 98.3 98.5 98.6 98.0 96.6 98.7 99.2 Paying ceiling rate1... 71.3 70.7 67.7 62.5 98.0 98.3 98.5 98.6 98.0 96.6 98.7 99.2 IRA and Keogh Plan time deposits with original maturities of 3 years or more Issuing banks................ 9,088 8,808 8,151 7,887 938 921 2,082 1,544 846 635 1,236 909 Distribution, total........ 100 100 100 100 100 100 100 100 100 100 100 100 6.00 or less................ 7.9 9.3 8.2 9.7 4.5 6.7 2.5 4.8 2.0 4.4 2.8 5.0 6.01-7.00.................. 5.5 8.1 5.7 8.2 3.9 7.1 2.7 4.1 4.1 4.7 1.7 3.7 7.01-7.50.................. 48.1 57.9 49.2 59.7 37.7 43.2 39.0 49.0 52.1 58.6 30.1 42.3 7.51-7.75 .................. 38.6 24.6 36.9 22.5 53.9 43.0 55.8 42.1 41.8 32.3 65.3 49.0 Paying ceiling rate1... 38.6 24.4 36.9 22.2 53.9 43.0 55.8 42.0 41.8 32.0 65.3 49.0 Time deposits in denomina­ tions of less than $100,000 Domestic govt, units: Maturing in— 30 up to 90 days 5,201 5,147 4,540 4,460 661 686 862 949 532 563 330 386 Distribution, total... 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less............ 3.1 2.7 3.3 2.5 2.4 4.2 .6 .6 (2) .2 1.6 1.1 4.51 5.00................ 64.9 58.6 63.9 56.4 72.2 72.9 57.7 53.7 55.6 55.8 61.1 50.7 5.01 5.50............... 10.0 22.5 10.7 24.5 5.6 9.5 11.4 21.9 10.9 24.6 12.2 17.9 5.51-7.75................ 21.9 16.2 22.2 16.6 19.8 13.5 30.3 23.8 33.6 19.3 25.1 30.4 Paying ceiling rate1... 1.2 (2) 1.4 (2) (2) (2) 3.2 (2) 5.2 (2) (2) (2) 90 up to 180 days 7,367 8,008 6,563 7,234 804 774 1,224 1,395 903 1,022 321 373 Distribution, total... 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less............ 1.0 1.3 .9 1.2 1.6 1.6 .1 .3 (2) .3 .2 .2 4.51 5.00............... 11.4 13.1 11.9 13.5 6.6 9.9 9.4 11.7 10.4 13.4 6.7 6.9 5.01 5.50................ 76.4 74.7 76.1 74.5 78.6 76.8 69.2 76.5 67.9 76.9 73.0 75.2 5.51 7.75............... 11.3 10.9 11.0 10.8 13.3 11.7 21.3 11.6 21.7 9.4 20.1 17.7 Paying ceiling rate1... (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) 180 days up to 1 year 4,882 4,802 4,299 4,225 583 577 853 822 612 582 241 240 Distribution, total... 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less............ .1 .7 (2) .7 .7 .2 (2) (2) (2) (2) (2) (2) 4.51-5.00................ 7.7 8.1 7.8 7.7 6.8 11.4 19.1 20.4 10.2 12.2 41.6 40.2 5.01-5.50................ 67.0 65.5 66.7 65.1 69.6 68.6 40.8 47.2 41.9 50.1 37.8 40.3 5.51 7.75................ 25.2 25.7 25.5 26.5 22.9 19.8 40.1 32.4 47.8 37.7 20.6 19.4 Paying ceiling rate1... (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) For notes see page 372. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

370 Federal Reserve Bulletin □ May 1978 TABLE 2—Continued Size of bank Size of bank (total deposits in millions of dollars) (total deposits in millions of dollars) All banks All banks Deposit group, and dis­ tribution of deposits by Less than 100 100 and over Less than 100 100 and over most common rate Jan. 25 Oct. 26 Jan. 25 Oct. 26 Jan. 25 Oct. 26 Jan. 25 Oct. 26 Jan. 25 Oct. 26 Jan. 25 Oct. 26 Amount of deposits (in millions of dollars), Number of banks, or percentage distribution or percentage distribution Time deposits in denomina­ tions of less than $100,000 (cont.) Domestic govt. units (cont.) 1 year and over Issuing banks............ 8,680 8,431 7,875 7,619 805 812 1,152 1,160 945 931 207 228 Distribution, total. . . 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less............ 1.1 2.5 .8 2.2 4.3 5.5 .4 .6 .1 .1 2.1 2.5 5.01-5.50............... 7.1 4.1 7.0 3.8 8.7 6.4 5.9 5.3 2.9 .8 19.8 23.4 5.51-6.00................ 62.9 64.7 63.0 64.7 62.0 64.0 60.1 63.3 61.4 65.8 54.4 52.7 6.01-7.75................ 28.8 28.8 29.2 29.3 25.0 24.1 33.5 30.9 35.7 33.2 23.7 21.3 Paying ceiling rate1... (2) (2) (2) (2) .2 (2) (2) (2) (2) (2) (2) (2) Other than domestic govt, units: Maturing in— 30 up to 90 days Issuing banks............ 6,629 6,638 5,741 5,723 888 915 6,229 7,305 1,507 1,659 4,722 5,645 Distribution, total... 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less............ 2.5 1.6 2.6 1.3 1.7 3.0 .8 .8 (2) (2) 1.1 1.0 4.51-5.00............... 97.5 98.4 97.4 98.7 98.3 97.0 99.2 99.2 100.0 100.0 98.9 99.0 Paying ceiling rate1... 97.5 98.4 97.4 98.7 98.3 96.7 99.2 99.2 100.0 100.0 98.9 99.0 90 up to 180 days Issuing banks............ 11,751 11,699 10,733 10,688 1,018 1,011 31,459 30,527 12,356 12,185 19,103 18,342 Distribution, total... 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less............ .5 .5 .6 .6 (2) (2) (2) (2) (2) (2) (2) (2) 4.51-5.00............... 8.2 7.1 8.7 7.5 3.6 2.5 6.6 5.8 5.3 6.4 7.4 5.5 5.01-5.50............... 91.2 92.4 90.7 91.9 96.4 97.5 93.4 94.2 94.7 93.6 92.6 94.5 Paying ceiling rate1... 91.1 92.2 90.7 91.9 95.4 95.8 92.5 90.1 94.7 93.6 91.2 87.7 180 days up to 1 year Issuing banks............ 8,808 8,999 7,933 8,112 875 886 3,579 3,520 2,158 1,907 1,421 1,613 Distribution, total... 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less............ .5 .5 .4 .4 1.4 1.4 (2) .1 (2) (2) .1 .2 4.51-5.00............... 7.0 6.9 7.4 7.4 3.1 2.8 1.4 3.5 1.9 4.8 .6 2.0 5.01-5.50............... 92.5 92.6 92.2 92.3 95.5 95.8 98.6 96.4 98.1 95.1 99.3 97.8 Paying ceiling rate1... 91.1 92.2 90.7 92.0 94.5 94.6 97.8 96.3 96.9 95.1 99.3 97.8 1 up to 2 Vi years Issuing banks............ 13,508 13,825 12,485 12,807 1,023 1,018 33,973 34,600 20,984 21,611 12,990 12,989 Distribution, total. . . 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less............ .7 .6 .7 .7 .1 .1 .1 .1 .1 .1 .1 .1 5.01-5.50............... 2.0 3.6 2.1 3.9 1.2 .7 .9 1.8 1.0 2.5 .6 .6 5.51-6.00............... 97.3 95.7 97.2 95.4 98.7 99.3 99.0 98.1 98.8 97.3 99.3 99.3 Paying ceiling rate'... 96.9 95.4 96.9 95.2 97.3 97.7 98.7 97.9 98.8 97.3 98.7 98.8 2 Vi up to 4 years Issuing banks............ 12,476 12,549 11,474 11,552 1,002 997 18,428 18,506 10,637 10,612 7,791 7,894 Distribution, total... 100 100 100 100 100 100 100 100 100 100 100 100 6.00 or less............ 2.0 2.6 2.0 2.6 2.2 2.2 1.2 1.3 .5 1.1 2.2 1.5 6.01-6.50............... 98.0 97.4 98.0 97.4 97.8 97.8 98.8 98.7 99.5 98.9 97.8 98.5 Paying ceiling rate1... 97.5 97.2 97.6 97.2 96.8 97.0 97.9 98.2 98.7 98.4 96.8 98.0 4 up to 6 years Issuing banks............ 12,390 12,401 11,390 11,404 1,001 998 50,599 50,136 26,930 26,609 23,669 23,528 Distribution, total... 100 100 100 100 100 100 100 100 100 100 100 100 6.50 or less............ .9 2.3 .7 2.0 2.9 4.8 1.3 2.5 .4 .7 2.4 4.5 6.51-7.00............... 13.0 15.9 13.6 16.6 6.0 7.7 9.0 13.8 12.9 18.4 4.6 8.7 7.01-7.25............... 86.1 81.9 85.7 81.4 91.1 87.5 89.7 83.6 86.7 80.9 93.0 86.8 Paying ceiling rate'... 86.1 81.9 85.7 81.4 91.1 87.5 89.7 83.6 86.7 80.9 93.0 86.8 6 years and over Issuing banks............ 9,198 8,894 8,285 8,007 913 887 17,739 15,479 7,222 6,314 10,517 9,164 Distribution, total... 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less .6 .6 .6 .7 .2 .2 (2) (2) (2) (2) (2) (2) 5.01-7.25............... 6.1 7.6 5.8 7.3 8.7 9.6 4.4 6.8 1.0 1.6 6.7 10.5 7.26-7.50............... 93.3 91.8 93.6 92.0 91.1 90.2 95.6 93.1 99.0 98.4 93.3 89.5 Paying ceiling rate1... 93.3 91.8 93.6 92.0 91.0 90.1 93.0 90.5 99.0 98.4 88.9 85.2 Club accounts Issuing banks............ 9,212 8,929 8,428 8,190 784 739 810 1,776 356 767 453 1,008 Distribution, total... 100 100 100 100 100 100 100 100 100 100 100 100 0.00......................... 46.0 46.6 47.5 48.4 29.6 26.7 23.4 21.8 32.5 31.1 16.3 14.8 0.01-4.00............... 15.2 17.3 15.5 17.4 12.7 15.7 14.9 13.3 19.0 18.7 11.7 9.1 4.01-4.50................ 7.4 8.1 7.3 8.0 9.2 9.4 14.2 9.0 14.4 9.9 14.0 8.4 4.51-5.50............... 31.3 28.0 29.7 26.2 48.5 48.2 47.5 55.9 34.0 40.3 58.0 67.7 For notes see page 372. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Survey of Time and Savings Deposits 371 3. Average of most common interest rates paid on various categories of time and savings deposits at insured commercial banks on January 25, 1978 Bank size (total deposits in millions of dollars) Type of deposit All size Less 20 up 50 up 100 up 500 up 1,000 groups than 20 to 50 to 100 to 500 to 1,000 and over Savings and small-denomination time deposits..................... 5.58 5.77 5.73 5.62 5.54 5.50 5.44 Savings, total............................................................................ 4.92 4.95 4.91 4.92 4.93 4.90 4.92 Individuals and nonprofit organizations............................ 4.92 4.94 4.90 4.92 4.93 4.89 4.92 Partnerships and corporations............................................ 4.96 5.00 4.94 4.97 4.98 4.99 4.95 Domestic governmental units............................................ 4.95 4.92 4.95 4.90 4.98 4.99 4.97 All other............................................................................... 4.98 4.70 5.00 5.00 4.98 5.00 5.00 IRA and Keogh Plan time deposits with maturity of 3 years or more............................................................................. 7.55 7.48 7.48 7.49 7.57 7.54 7.63 Other time deposits in denominations of less than $100,000, total................................................................................. 6.43 6.39 6.54 6.44 6.41 6.41 6.36 Domestic governmental units, total................................... 5.84 5.94 5.99 5.60 5.56 6.20 5.71 Maturing in— 30 up to 90 days............................................................... 5.54 5.97 5.40 5.30 5.31 5.99 5.33 90 up to 180 days............................................................. 5.69 5.50 5.94 5.56 5.63 6.03 5.80 180 days up to 1 year...................................................... 5.83 5.88 6.37 5.40 5.31 6.31 6.06 1 year and over................................................................ 6.23 6.29 6.13 6.39 5.99 6.70 6.32 Other than domestic governmental units, total................. 6.44 6.41 6.56 6.46 6.43 6.42 6.37 Maturing in— 30 up to 90 days.............................................................. 4.99 5.00 5.00 5.00 4.99 4.96 5.00 90 up to 180 days........................................................... 5.46 5.48 5.47 5.47 5.47 5.49 5.44 180 days up to 1 year...................................................... 5.49 5.48 5.50 5.48 5.49 5.50 5.50 1 up to 2l/i years............................................................ 5.99 5.99 6.00 5.99 6.00 6.00 5.99 2 l/i up to 4 years.............................................................. 6.49 6.50 6.50 6.49 6.49 6.48 6.48 4 up to 6 years................................................................. 7.22 7.23 7.21 7.22 7.21 7.24 7.21 Over 6 years..................................................................... 7.48 7.49 7.50 7.50 7.47 7.47 7.46 Memo: Club accounts1.......................................................... 3.53 2.63 2.69 3.51 3.85 3.91 4.15 i Club accounts are excluded from all of the above categories. amount of that type of deposit outstanding. All banks that had either discontinued offering or never offered particular deposit types as of the Note.—The average rates were calculated by weighting the most survey date were excluded from the calculations for those specific common rate reported on each type of deposit at each bank by the deposit types. maturities except 6 years and over.3 Although a separate category of accounts—individual re­ more than 90 per cent of banks were paying tirement accounts (IRA) and Keogh accounts the ceiling rate for nearly all deposit categories, with maturities of 3 years and more—on which they still experienced a net outflow of nearly the nominal ceiling rate is 13A per cent; the %Vi billion of small time deposits maturing in weighted-average rate paid on these accounts less than 6 years, while attracting about $21A was 7.55 per cent in January.4 billion in deposits with longer maturities. Banks Banks continued to experience net outflows also acquired %Vi billion of deposit inflows to from time deposits issued to governmental units in the United States. On these time deposits banks may pay stated rates up to 7% per cent 3 When comparing investment alternatives it is im­ portant to take account of the effects of interest com­ without regard to maturity. In fact, however, pounding on the stated nominal rates. For a given stated the average interest rates on various maturity rate, the effective rate is at a legal maximum when the bank employs continuous compounding of interest on categories exceeded the ceilings for issues to the basis of a 360-day year. Therefore, given the current nongovernmental units by only lA to xh of a nominal rate ceilings (listed in Bulletin Table 1.16 percentage point; these spreads probably were on page A10), the highest legal yields on small-denom­ ination time deposits issued to consumers and businesses limited by the fact that banks must pledge se­ are as follows: savings deposits, 5.20 per cent; time curities against government deposits. Moreover, deposits maturing in under 1 year, 5.73 per cent; 1 up with about three-quarters of such deposits ma­ to 2Vi years, 6.27 per cent; 2xh up to 4 years, 6.81 per cent; 4 up to 6 years, 7.63 per cent; 6 years and over, 7.90 per cent. Since this survey records only the stated nominal rates of interest paid by banks and does 4 Unknown amounts of individual retirement accounts not record the method of compounding, the number of and Keogh accounts are included in the savings deposits banks offering maximum effective yields cannot be category and among categories of time deposits matur­ determined. ing in less than 3 years. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

372 Federal Reserve Bulletin □ May 1978 turing within 1 year, the average rate offered its—the largest inter-survey growth since July in January for all maturities was only 5 3A per 1973. Based on comparable not-seasonally-ad­ cent, somewhat below the average rate of 6V2 justed data, which are not shown in the tables, per cent on issues to individuals, partnerships, large negotiable certificates of deposit at weekly and corporations. reporting banks grew about $63A billion. Non-interest-bearing time deposits were es­ sentially unchanged over the period, as a slight OTHER TIME DEPOSITS decline in small-denomination accounts offset Given continued strength in loan demand be­ a small rise in large-denomination deposits. tween November and January, coupled with Finally, club accounts, which normally display slow growth of deposits subject to interest rate a seasonal decline between October and Jan­ ceilings, banks relied heavily on managed lia­ uary, fell $1 billion to a level of about $800 bilities, including large-denomination time de­ million. This is somewhat below the $1.1 billion posits that are not subject to rate ceilings. Banks level recorded a year earlier, suggesting a grad­ obtained nearly $153A billion of such depos­ ual attrition in these low-yielding deposits. □ NOTES TO TABLE 2: 1 See Bulletin Table 1.16 on page A10 for the ceiling rates that in the amounts outstanding. Therefore, the deposit amounts shown existed at the time of each survey. in Table 1 may exceed the deposit amounts shown in this table. 2 Less than .05 per cent. The most common interest rate for each instrument refers to the Note.—All banks that either had discontinued offering or had stated rate per annum (before compounding) that banks paid on the never offered particular deposit types as of the survey date are not largest dollar volume of deposit inflows during the 2-week period counted as issuing banks. Moreover, the small amounts of deposits immediately preceding the survey date. held at banks that had discontinued issuing deposits are not included Figures may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

373 Statements to Congress Statement by G. William Miller, Chairman, in employment suggests that businessmen have Board of Governors of the Federal Reserve had sufficient confidence in the underlying System, before the Committee on Banking, strength of the economy to be positioning Housing and Urban Affairs, L/.S. Senate, April themselves for further increases in production. 25, 797S. Looking ahead, growth in economic activity is expected to be sustained over future months Mr. Chairman, members of the committee, it by expanding consumer and business demands. is a pleasure to meet with you and to report, The near-term prospects for good gains in con­ on behalf of the Board of Governors of the sumer spending appear favorable, as indexes of Federal Reserve System, about the outlook for consumer sentiment have remained at high the national economy and about the course that levels. the Federal Reserve has charted for monetary Business spending also should provide im­ policy over the year ahead. I look forward to petus to expansion. Inventories generally remain a continuing dialogue with you on these matters lean, and businesses are likely to be building at this committee’s regular monetary oversight their stocks in the next few quarters. Business hearings. investment in plant and equipment, after lagging early in the economic upswing, has increased Economic activity is rebounding at a good pace over the past 2 years. Surveys The economy is currently rebounding from of capital spending plans and other advance a slack period early in the year when economic indicators suggest at least moderate further activity was constrained by severe weather and growth in the year ahead. the long coal strike. Retail sales and industrial Although State and local governments by and production have risen sharply since midwinter. large continue to pursue cautious financial poli­ Auto sales have strengthened. Housing starts cies, they also may register significant increases increased markedly in March from the relatively in real expenditures in the period ahead. Resi­ depressed levels of January and February. dential construction should show sizable in­ Employment has grown steadily since the creases in the next few months before tapering beginning of the year. Although the length of off gradually in the second half of this year. the average workweek declined in the first And the foreign trade deficit, while remaining quarter, the number of people on the Nation’s large, should moderate somewhat from the very payrolls rose substantially between December high first-quarter rate. and March, and the unemployment rate edged down from 6.4 to 6.2 per cent. These favorable But inflation has worsened trends in the labor market are depicted, along While the prospects for economic activity with the behavior of real gross national product, thus appear to remain favorable, there are other in the attached chart 1.1 The continuing uptrend aspects of recent economic performance that reflect fundamental problems, which will not be put behind us quickly. Inflation undoubtedly is 1 The attachments to this statement are available on the most troubling of these to the American request from Publications Services, Division of Admin­ people. Even as growth in real GNP was inter­ istrative Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. rupted in the first quarter, the rate of increase Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

374 Federal Reserve Bulletin □ May 1978 in prices accelerated. Wholesale prices rose at So too has the declining a 9.6 per cent annual rate during the past 3 international value of the dollar months—well above the already uncomfortably Another disturbing aspect of economic per­ high rates experienced last year. Consumer price formance in the opening months of this year increases also accelerated. To be sure, a sub­ has been the pronounced widening of the foreign stantial spurt in volatile food prices contributed trade deficit and the weakness of the interna­ importantly to the advance in the broad price tional value of the dollar. The estimated trade indexes, but prices of industrial commodities deficit was greatly enlarged in the first quarter and of services also have continued to rise at of 1978, as exports remained sluggish and im­ a brisk pace. These unfavorable trends in prices ports in nearly all categories increased sharply. are displayed in the charts. Against this backdrop, the dollar declined in foreign exchange markets, and by the end of Upward cost pressures remain March its trade-weighted value against other There is little reason to be optimistic about major currencies was 8V2 per cent lower than the likelihood of achieving a significant reduc­ early last fall. The depreciation of the dollar tion in underlying inflationary forces in the near is tending to raise the domestic price structure future. Cost pressures remain strong. In 1977, in various ways: higher prices of imported fin­ for example, total compensation per hour in the ished goods raise directly the prices paid by private business sector rose almost 9 per cent, consumers; higher prices of imported materials while productivity increased only 2l/i per cent; raise the costs of domestic manufacturers; and as a result, unit labor costs rose more than 6 higher prices of foreign goods reduce the pres­ per cent. There has been no sign of any abate­ sure to hold down prices of the domestically ment of the advance in wage rates, and at this produced goods with which they compete in our stage of economic expansion there is little like­ markets. lihood of a sustained pick-up in productivity In recent weeks, the dollar has risen relative growth. Therefore, rising unit labor costs can to other major currencies. Such a trend, if be expected to continue to exert considerable continued, will help moderate inflationary pres­ upward pressure on prices. sures. The President’s anti-inflation Governmental programs program offers hope of breaking have added to costs and inflation inflationary psychology Price pressures have been exacerbated by governmental actions. Certain tax actions, while President Carter recently outlined a broad they have helped to reduce the budgetary deficit program to help deal with the problem of infla­ and in this way have worked to restrain one tion. The Federal Reserve welcomes this initia­ of the forces feeding inflation, simultaneously tive. Given the support of the Congress and of have added to labor costs. This has been the the general public, the program is a constructive case, for instance, with increases in employer step toward breaking the inflationary patterns contributions for social security and unemploy­ and psychology that today are so firmly en­ ment insurance. Some other governmental ac­ trenched. The job of containing inflation re­ tions also have added to inflationary forces quires a concerted effort on the part of all without any compensating restraint. In this class Americans. The Federal Reserve will play its are the increase in the minimum wage, agricul­ part in supporting the President’s initiative by tural price supports, and various import restric­ exercising appropriate restraint in the provision tions. In general, there has been a tendency by of bank reserves, credit, and money. Government over the years to treat the problems The prospects for inflation will play a major of individual sectors without adequate regard to role in shaping future financial developments. the cumulative inflationary bias that the pro­ The strength of the dollar on foreign exchange grams have imparted to the economy. markets is influenced by expectations about in­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 375 flation. So, too, is the level of interest rates in Federal Reserve to hold money growth within domestic credit markets. The increase in interest bounds while not risking undue interference rates during the past 12 months—especially the with continued economic expansion. Finally, it increase of Vi to 3A of a percentage point in is possible that the public earlier had reduced long-term bond rates—may be attributable in its cash, balances to unsustainably low levels part to heightened inflationary expectations. relative to income and that some part of the sizable expansion in money last year reflected Monetary policy has been adjusted a restoration of cash balances to more normal to restrain unduly rapid monetary growth levels. Yields on most short-term market instruments today are about 13A to 2 percentage points higher Money growth has slowed than a year ago. This rise has occurred gradually Growth in the monetary aggregates slowed as the Federal Reserve adjusted its policies in during the latter part of 1977 and in the early light of the tendency for monetary expansion months of 1978. M-l has moved back within to exceed the growth ranges that had been the ranges of the Federal Open Market Com­ established. The tendency was most pronounced mittee, while M-2 has moved from the upper in the case of the narrowly defined money stock, limits of the ranges toward the lower limits. M-3 M-1, which includes only currency and demand has behaved about the same as M-2. This mod­ deposits. Largely as a result of the rapid expan­ eration of monetary expansion has reflected in sion of M-l, however, growth in the broader part the cumulative impact of the restraining monetary aggregates—M-2 and M-3—also has actions and rise of short-term interest rates that remained near the upper ends of their ranges. began in the spring of last year. The influence M-2 is M-l plus time and savings deposits at of interest rates has been most evident in the commercial banks (other than large negotiable case of the interest-bearing components of the certificates of deposit), while M-3 includes also monetary aggregates. As market rates of interest time and savings deposits at thrift institutions. rose relative to deposit rate ceilings, some For most of the current cyclical expansion, savers shifted their funds from deposits at banks growth in M-l has been well within the ranges and nonbank thrift institutions into market in­ established by the Federal Reserve. Indeed, struments, in the process contributing to the early in the expansion, growth was near the low slowing of growth of M-2 and M-3. end of the range. In part, this was the result of actions by the public to shift funds from With credit demands strong, liquidity of demand deposits to interest-bearing savings de­ banks and thrifts has come under pressure posits and market instruments in response to The slowing of monetary expansion in recent financial innovations that made it easier to months, in conjunction with strong credit de­ transfer funds in and out of savings deposits. mands, has been accompanied by some erosion In part, it seems to have reflected a lagged in the liquidity of depositary institutions. To response to the unusually high level of interest finance business, consumer, and mortgage credit rates reached during the 1973-74 inflation. And demands, commercial banks have turned in­ in part, it may also have reflected the return creasingly to the short-term credit markets as of confidence during economic recovery, which a source of funds. There has been marked made the public more willing to spend out of growth in the outstanding volume of large-de­ existing cash balances and which thus reduced nomination time deposits, which are not subject the need for the Federal Reserve to supply to regulatory interest rate ceilings, and in the additional money to the economy. nondeposit interest-bearing liabilities of banks. By last year, the moderating impact on money At the same time, banks have appreciably re­ growth of such factors had considerably less­ duced their holdings of Treasury securities. ened. Moreover, persisting upward cost and Despite these changes in bank portfolios, how­ price pressures were making it difficult for the ever, customary measures of bank liquidity still Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

376 Federal Reserve Bulletin □ May 1978 indicate more comfortable conditions than pre­ 9 per cent, and for M-3, 7V2 to 10 per cent. vailed a few years ago. These ranges are the same as the Committee Thrift institutions, with the exception of had earlier specified for the year ending with credit unions, have experienced much the same the fourth quarter of 1978. Although the FOMC pressures as commercial banks since mortgage at this time has not made a further reduction loan demand has remained strong. To accom­ in its monetary growth ranges, it remains firmly modate that demand, institutions—in particular, committed to a gradual reduction in monetary savings and loan associations, which are the growth over time to rates more nearly consistent largest home mortgage lenders—have borrowed with reasonable price stability. The ranges just heavily from Federal home loan banks and cur­ adopted in fact contemplate that actual monetary tailed their acquisitions of securities. growth in 1978 and into early 1979 will be The savings and loans have also utilized other slower than last year. Because there have been sources of funds, including the growing markets signs of a resurgence in M-1 growth over the for private mortgage-backed bonds and mort­ last few weeks, the Federal Reserve has recently gage pass-through securities, to sustain new been less accommodative in supplying reserves mortgage lending. These markets promise ulti­ in order to keep monetary growth within rea­ mately to give thrift institutions greater flexi­ sonable bounds over the long run. The money bility in managing their portfolios and to make market in consequence has tightened a bit over the residential mortgage market less dependent the past few days. on thrift institutions’ deposit flows. At present, In addition to adopting ranges for the mone­ however, with deposit flows running weaker and tary aggregates, the FOMC also adopted an liquidity coming under pressure, savings and associated range for bank credit that projects an loans have cut back on the outstanding volume increase of between IV2 and WV2 per cent over of loan commitments since the year-end. And the 1-year period ahead. Such a range would mortgage interest rates have risen moderately allow for continued expansion in bank credit at in recent months. around its recent pace. It was the consensus of the FOMC that ex­ Credit remains generally ample, however pansion of monetary and credit aggregates Despite the greater pressures experienced by within these ranges would be consistent with depositary institutions, credit generally remains moderate growth in real GNP over the coming in ample supply. Borrowers are experiencing year and with some further decline in the un­ little difficulty in raising needed funds at current employment rate. However, upward price pres­ interest rate levels. And while higher than a year sures remain strong, and the rate of increase ago, interest rates are at relatively modest levels in the average price level, therefore, might be after allowance is made for the effect of infla­ somewhat more rapid over the year ahead than tion. it was in 1977. Full and effective public support of the administration’s anti-inflation program, Monetary growth ranges for the year ahead and success in keeping the budget deficit under are expected to support further economic control, would aid in restraining upward pres­ expansion and a lower unemployment rate, sure on prices and would help create conditions but inflation may not decelerate until later whereby we could look forward to a gradual The ranges of monetary expansion adopted deceleration of the inflationary process. by the Federal Open Market Committee for the Let me supplement this with my own views year ending with the first quarter of 1979 reflect about the outlook for the economy in quantita­ our belief that growth in the monetary aggre­ tive terms. My personal expectation is that, over gates should be moderate, with credit remaining the year ending with the first quarter of 1979, in reasonably good supply. The Committee has real GNP probably will increase in a range of specified a growth range for M-1 of 4 to 6V2 4xk to 5 per cent, the unemployment rate prob­ per cent. For M-2, the range selected is 6V2 to ably will drop into the area of 5% to 6 per cent, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 377 and the GNP price deflator is likely to rise by and M-3 could fall short of the ranges set by 63A to IV4 per cent. It is hardly necessary to the FOMC, unless there are upward adjustments add that quantitative projections, such as these, in the ceiling rates on some or all categories are subject to considerable margins of uncer­ of time and savings deposits. tainty. Necessarily they have to be re-evaluated on the basis of incoming economic data and Federal Reserve should not changing conditions here and abroad. be left to combat inflation alone. Specifying growth rates for the monetary ag­ Effective anti-inflation program gregates, too, is subject to considerable uncer­ requires cooperative effort tainty. The growth in the narrowly defined The Federal Reserve believes that its deter­ money supply (M-l) needed to support eco­ mination to hold monetary growth within the nomic expansion depends in part on changes in ranges just adopted will work to curb inflation the velocity of money—that is, on the rate at over the longer run and at the same time provide which the public uses the existing stock of adequate money and credit for continued eco­ money to finance transactions. Velocity may rise nomic growth. However, under current condi­ rapidly or slowly, depending on shifting public tions—when inflationary pressures are to a great preferences for demand deposits as compared extent embodied in the structure of the econ­ with other assets and on the state of consumer omy—any deceleration in monetary growth and business confidence. rates has to be undertaken with caution. The The behavior of the broader aggregates—M-2 pace of deceleration cannot proceed much more and M-3—will be affected in the year ahead also rapidly than the pace at which built-in inflation­ by the constraint placed on the ability of depos­ ary pressures are wrung out of the economy if itary institutions to attract funds under existing satisfactory economic growth is to be main­ regulatory ceilings on deposit rates. If heavy tained. Thus, bringing inflation under control demands for money and credit should place urgently requires the cooperative efforts of the further upward pressure on market interest rates, administration, the Congress, the Federal Re­ deposits subject to regulatory rate ceilings will serve, and the private sectors of the economy. be placed at a substantial, competitive disad­ The Federal Reserve should not be left to com­ vantage. In such a circumstance, growth of M-2 bat inflation alone. □ Statement by J. Charles Partee, Member, Board The several, somewhat different versions of of Governors of the Federal Reserve System, the act now under discussion in the Congress before the Committee on Banking, Housing and contain substantial improvements over the ear­ Urban Affairs, U.S. Senate, May 9, 1978. lier bill on which I testified before this commit­ tee in the spring of 1976. Particularly welcome I appreciate this opportunity to present the views is the increased emphasis of the current bills of the Board of Governors of the Federal Re­ on the need to reduce inflation as well as unem­ serve System on the Full Employment and Bal­ ployment. The Federal Reserve strongly sup­ anced Growth Act—known popularly as the ports this change, as the more specific recogni­ Humphrey-Hawkins bill. This proposed legisla­ tion of the goal of price stability addresses a tion would amend the Employment Act of 1946 major inadequacy of both the 1946 Act and the by setting forth specific economic goals and by amendments to it proposed in earlier versions providing explicit roles in the economic policy- of the Humphrey-Hawkins bill. planning process for the President, the Con­ We are encouraged also by deletion of some gress, and the Federal Reserve. of the major inflationary features of the previous Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

378 Federal Reserve Bulletin □ May 1978 bill. The Board had been especially concerned adjusted to take account of this change in labor by the provisions that would have required the force composition, it would have been nearly Federal Government to become the employer of 0.5 percentage point lower than the 6.2 per cent last resort and by the very high wage standards rate that was reported. mandated for such Federally funded jobs. The Efforts to keep our rapidly expanding labor new versions of the bill require that all special force fully employed have been further compli­ programs that provide job opportunities to the cated because those seeking work have often hard-core unemployed be designed to avoid lacked the skills required to handle the jobs drawing workers from private employment, and available. Also, the job markets in which op­ the wage rate provisions appear to be more portunities occur have often been at locations reasonable than those of the earlier bill. far distant from the persons in search of work. The bills under discussion today also no These structural problems, I believe, can be longer contain those provisions that would have attributed in part to the higher skills required unduly restricted economic policy by requiring by a technologically advancing society and in a comprehensive policy-planning process part to geographical shifts in population and in directed toward the achievement of an unem­ job opportunities—broadly from north to south ployment rate goal of 3 per cent, with no regard and also from central cities to the suburbs. for any inflationary consequences until that goal Moreover, in the case of unproved workers, was reached. That earlier structure would have such as unskilled teenagers, the unemployment stripped monetary policy of its ability to respond problem has been aggravated by increases in the flexibly to changing economic conditions. minimum wage. Such increases have tended to These improvements in the current bills are mean that marginally productive job applicants clearly all to the good. However, the Federal become unemployable on an economic basis at Reserve continues to have reservations about the going wage. some of the provisions that still remain. I would In our present circumstances, therefore, it is emphasize in particular that the unemployment unlikely that macroeconomic policies alone can goals to be attained within 5 years are extremely achieve the low unemployment goals of the ambitious. The goals established by the bill—3 Humphrey-Hawkins bill without running the per cent for workers aged 20 years and over grave risk of substantially exacerbating the in­ and 4 per cent for workers aged 16 years and flation problem. If sole reliance were to be over—were last achieved only during the placed on general economic policies to reach 1966-69 period, when the U.S. economy was these very ambitious unemployment rate objec­ suffering from demand-pull inflation stemming tives, certain critical labor skills could be ex­ from the military manpower requirements and pected to come into short supply and some heavy spending pressures of the Vietnam war. industries would be pressed above practicable The historically low unemployment goals, capacity limits, well before aggregate demands moreover, tend to ignore the significant changes had risen sufficiently to absorb the more mar­ that have occurred in the composition of our ginal types of workers. labor force over the past decade or so. Due to It seems to me abundantly clear, therefore, changes in the age distribution of our population that any hope of attaining the Humphreyand to increases in the participation rate for Hawkins unemployment targets without esca­ certain groups, the numbers of teenagers and lating price pressures will depend on a major adult women in the labor force have grown effort to develop special employment programs. dramatically. For example, in the last 10 years, These are needed to make our unemployed more total population has increased about 9 per cent, employable, to put the jobless in touch with while the numbers of adult women and teen­ available jobs, and to generate employer interest agers in the labor force have risen 42 and 40 in taking on marginal workers—perhaps at an per cent, respectively. If the unemployment rate initially subsidized wage cost that makes their for the first quarter of this year were to be employment economically attractive. Moreover, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 379 although our structural employment problems Economic Report after the law becomes effec­ are aggravated by business cycle downturns, tive. This alternative would provide parallel they appear also to be growing over time, so treatment for both the inflation and the unem­ their correction is likely to require more than ployment goals. the countercyclical programs contained in Title The Board would urge also that every effort II of the proposed bill. be made to reduce or eliminate the many infla­ Apart from training and other programs for tionary biases that are at work in the economy, the hard-core unemployed, careful consideration some of which are a result of longstanding also needs, to be given to the recent shortfall Federal programs. We are encouraged by rec­ in business investment spending and to the ef­ ognition in the Humphrey-Hawkins bill of the fects this is likely to have on the creation of need for structural measures to combat infla­ new job opportunities. Unfortunately, during tion—including the removal or modification of the past 5 years, growth in the Nation’s stock governmental restrictions that have anticompe­ of capital has been slowing relative to growth titive effects or add needlessly to costs, and the in our labor force. If this trend persists, it may effective enforcement of the antitrust laws. But mean a slower creation of new jobs relative to there is a need to re-examine the relative costs our employment needs as well as a slower and benefits of other Federally mandated pro­ increase in the general productivity of our grams as well, such as the Davis-Bacon Act, economy. Thus, there is an important stake for the minimum wage for teenagers, extended un­ all of us in finding effective means of encour­ employment insurance, and the full indexing of aging more investment in productive plant and all public retirement benefits. Also, we would equipment, through stronger incentives for recommend that the inflationary costs as well business and perhaps some structural revision as the potential benefits explicitly be taken into in the tax laws. account in setting our environmental quality In addition, the Board is deeply concerned goals, particularly at the outer margins of the that the emphasis and organization of the current improvements specified. Meaningful progress in bills still appear to place the objective of con­ reducing the over-all inflation rate will require trolling inflation in a role distinctly subordinate a comprehensive attack on the problem, pro­ to that of reducing unemployment. Although the gram by program, in the public as well as the reduction of inflation is mentioned in one way private sector. or another five or six separate times in the bills, Let me turn now to the specifics of the the prescription for moderating inflation is quite Humphrey-Hawkins bill that apply to monetary vague. Moreover, in the House-passed version, policy. The procedures currently contemplated the President is not even required to report on for evaluating and monitoring the role of the progress or plans for controlling inflation until Federal Reserve in economic policy planning the third year of the program. and coordination have substantially improved The amendment introduced by Senator Prox- upon the rigidity of the earlier bills. The Federal mire seeks to redress this relative imbalance in Reserve would now be required to provide an objectives by adding an explicit goal for reduc­ independent statement setting forth its intended ing inflation to 3 per cent or less, on the same policies for the year ahead, along with an ex­ timetable set forth for achieving the unemploy­ planation of their relationship to the economic ment rate goals. The Federal Reserve supports goals presented in the Economic Report of the the inclusion of a specific interim inflation rate President. objective, though we believe that greater flexi­ In the House-passed version of the bill the bility for revision should be provided than the role of reviewing the intended policies of the amendment contemplates. A possible approach Federal Reserve remains appropriately with the would be to permit the President to recommend banking committees of the Congress. The Board modification in the inflation rate goal and/or the believes that this assignment is consistent with timetable for attainment, starting with the third the quarterly oversight procedures now in place Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

380 Federal Reserve Bulletin □ May 1978 and that it would benefit from the accumulated long trail on inflation, public policies are in experience and familiarity of these committees danger of giving insufficient weight to potential with the Federal Reserve and the major issues inflationary pressures unless they focus on a encountered in the formulation of monetary planning horizon that looks beyond the next year policy. And to the extent that the Congress or two. determines that action may be called for in order Thus, the inclusion of inflation as well as to ensure the consistency of monetary policy unemployment rate targets to be attained on the with the purposes of the bill, the Board would same timetable 3 to 5 years out would be a favor a provision that assigns principal respon­ desirable addition to the Humphrey-Hawkins sibility to the banking committees. bill. Policy-makers would then be guided by In order to provide further consistency with both of these longer-range economic goals, and the current procedures for congressional review the undue focus on short-term objectives that of monetary policy, the Board supports the can occur would tend to be moderated. It must inclusion of the last sentence of Section 2A of be recognized, of course, that the linkages be­ the Federal Reserve Act, as appears in H.R. tween current policy actions and the perform­ 50. Section 2A provides that the Federal Re­ ance of the economy over a longer horizon are serve not be required to adhere strictly to its quite tenuous. Moreover, since current eco­ intended policies for the year ahead if the Board nomic conditions can often change in abrupt and and the Federal Open Market Committee should unexpected ways, appropriate adjustments in determine that these policies, as reported to the short-term policy goals may require revisions Congress, cannot or should not be achieved in longer-range policy plans as well. But so long because of changing conditions. That language as the longer-range unemployment and inflation was wisely included in the Federal Reserve rate goals are not considered rigid absolutes, it Reform Act in order to preserve the flexibility would be preferable to make adjustments in essential to the proper conduct of monetary short-term policy with an eye to their implica­ policy. Its inclusion in the Humphrey-Hawkins tions for the timing and attainability of longerbill would avoid the statutory inconsistency that run objectives, especially with respect to price might otherwise occur. developments. One potential problem inherent in the plan­ In conclusion, I want to assure you that the ning for general economic policies designed to Federal Reserve fully shares the desires of the control both unemployment and inflation is that Congress and the administration to achieve trends in employment tend to respond more conditions that will foster the creation of jobs quickly to changes in policy, including mone­ for all of our people who are able and willing tary policy, than do trends in prices. Actions to work. Since the passage of the Employment that stimulate a general expansion in spending Act in 1946, this has been an explicit objective for goods and services tend to generate needs of national economic policy to which the Fed­ for additional workers fairly early in the eral Reserve has subscribed. The economic his­ process. While this step-up in demands for tory of this and other countries in the postwar workers and the materials they use may exert period, however, has amply demonstrated that some immediate upward pressure on wages and our performance with respect to inflation has a prices, the full impact of the stimulus is likely critical bearing on the chances for actually to be stretched out over a fairly extended period. achieving meaningful and sustainable full em­ Some wage and price adjustments are delayed ployment. High and rising rates of inflation, until the expiration of existing contracts, or until quite aside from the inequitable consequences the strengthening trend develops sufficient up­ they bring to our people, tend to distort eco­ ward momentum. But when these contracts are nomic decisions, sap consumer purchasing eventually adjusted, they often generate addi­ power, and lead to conditions that are likely in tional catch-up demands for further adjustments time to reduce rather than enhance employment in other sectors of the economy. Because of this prospects. We must be on guard also to avoid Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 381 the higher Federal expenditures and therefore achieving full employment and as a necessary larger budget deficits that might follow from condition for effective public and private plan­ mechanical efforts to achieve the employment ning. There is a real risk that the Humphreyobjectives of this bill. Hawkins bill, if enacted with the present lop­ While the current versions of the Humphrey- sided emphasis, will accord by law a back seat Hawkins bill take more account than earlier to the need for more effective control over versions of the threat that inflation poses to our inflation. It seems paradoxical that this might economic health, they still do not acknowledge take place at precisely the time when inflation­ adequately the crucial need to reduce inflation, ary pressures are coming to represent the major both as an integrated element in the process of threat to the stability of our economic process. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

382 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON MARCH 21, 1978 1. Dom estic Policy Directive The information reviewed at this meeting suggested that growth in real output of goods and services in the first quarter of 1978 had been adversely affected by unusually severe weather and by the lengthy strike in coal mining but that the underlying economic situation had changed little. It now appeared that growth in the current quarter had slowed from the pace in the fourth quarter of 1977, estimated by the Commerce Department to have been at an annual rate of 3.8 per cent. Staff projections suggested, however, that the shortfall in growth from the rate expected at the time of the February meeting would be about made up over the next quarter or two and that on the average over the four quarters of 1978 output would grow at a good pace. The rise in average prices— as measured by the fixed-weighted price index for gross domestic business product— appeared to have stepped up in the first quarter from the annual rate of 5.4 per cent estimated for the fourth quarter of 1977, mainly because of large increases in prices of farm products and foods. It was expected that over the remaining quarters of 1978 the rate of increase in prices would be below that of the first quarter but would remain above that of the fourth quarter of 1977. It was also anticipated that the unemployment rate would move downward gradually over the year. In the first quarter, according to staff estimates, expansion in final sales in real terms had slowed much more than growth in output, and the rate of business inventory accumulation had picked up from the sharply reduced pace in the final quarter of 1977. Consumer expenditures for goods in real terms— which had grown at a rapid pace in the fourth quarter— apparently declined in the first quarter, at least in part because of the severe weather. More­ over, construction activity— public as well as private— was ad­ versely affected by the weather. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 383 The staff projections for the rest of 1978 suggested that consumer spending for goods in real terms would rebound in the second quarter and would continue to grow thereafter— particularly in the fourth quarter, following the reduction in personal income taxes assumed to take effect on October 1. It was anticipated that business fixed investment would expand moderately, owing in part to stimu­ lative modifications of the investment tax credit that were assumed to be retroactive to the beginning of the year, but that residential construction would begin to edge down after midyear in response to the less favorable mortgage market conditions that appeared to be developing. In February the index of industrial production rose 0.5 per cent, recovering more than half of the decline in January that was attributable in large part to the severe weather and to the coal strike. Unfavorable weather in some parts of the country continued to restrict output in February, and the ongoing strike held coal mining at a reduced level. Dwindling supplies of coal in some areas caused limitations on industrial use of electric power, but secondary effects of the strike appeared to have been small. Nonfarm payroll employment increased considerably further be­ tween mid-January and mid-February. Employment in the serviceproducing industries continued to grow at about the average rate of the second half of 1977. In manufacturing the gain in employ­ ment was sizable for the third successive month, and the average workweek recovered part of the weather-induced decrease of Jan­ uary. As measured by the survey of households, total employment edged up in February while the labor force changed little, and the unemployment rate declined 0.2 of a percentage point to 6.1 per cent— 1.5 percentage points below a year earlier and the lowest figure since late 1974. According to the Census Bureau’s advance estimate, total retail sales in February had recovered only a small portion of the substantial decline of the month before, at least in part because of continuing unfavorable weather. Unit sales of new automo­ biles— domestic and foreign combined— rose 5 per cent, retracing half of the January drop, and sales rose further in early March. Private housing starts— which had declined from an annual rate of 2.20 million units in December to 1.55 million units in Jan­ uary— recovered only to 1.58 million units in February, as adverse Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

384 Federal Reserve Bulletin □ May 1978 weather apparently remained a significant inhibiting factor. Re­ gionally, changes from January to February were quite diverse: Starts rose 43 per cent in the North Central States and 5 per cent in the West, while they declined 10 per cent in the South and 39 per cent in the Northeast. The latest Department of Commerce survey of business spending plans, taken in late January and February, suggested that spending for plant and equipment would expand 10.9 per cent in 1978, whereas the survey taken in late November and December had suggested an increase of 10.1 per cent. However, the increment of 0.8 of a percentage point reflected a downward revision in the estimated level of spending for 1977. The expansion in 1977 now was indicated to have been 12.7 per cent, compared with the previous estimate of 13.7 per cent. The index of average hourly earnings for private nonfarm pro­ duction workers was unchanged in February, after having increased sharply in January when higher minimum wage rates became effective. Over the 2-month period the index rose at an annual rate of 7.6 per cent, about the same as the average rate of increase during 1977. The wholesale price index for all commodities rose 1.1 per cent in February, compared with 0.9 per cent in January and an average rise of 0.6 per cent in the preceding 3 months. In February the increase in the index for prices of farm products and processed foods was more than twice as large as the average for the preceding 4 months. Average prices of industrial commodities continued to rise at a somewhat faster pace than in the latter part of 1977. In foreign exchange markets the trade-weighted value of the dollar against major foreign currencies rose sharply on March 9 and 10 in anticipation of the conclusion of discussions between the governments of the United States and Germany. In a joint statement on March 13, 1978, U.S. and German authorities an­ nounced that continued forceful action would be taken to counter disorderly conditions in exchange markets and that close coopera­ tion to that end would be maintained. Included in the cooperative effort were an increase of $2 billion in the System’s swap arrange­ ment with the German Federal Bank, an arrangement for the U.S. Treasury to sell SDR 600 million (approximately $740 million) to purchase German marks, and a willingness of the United States Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 385 to draw on its reserve position in the IMF (automatically available in amounts up to approximately $5 billion) if and as necessary to acquire additional foreign exchange. The authorities also an­ nounced that developments during the first quarter of 1978 would be particularly important in determining the course of economic policies in Germany directed toward the objective of noninflationary growth and that in the United States high priority would be given to swift and resolute action to conserve energy and to develop new sources. Nevertheless, market participants apparently were disappointed by the announcements, and the value of the dollar receded to about its level in the last few days of February. The U.S. foreign trade deficit remained very large in January. Interpretation of the data for recent months had been complicated by the 2-month dock strike that had ended on November 29 and by changes in the method for compiling the statistics, but it appeared that imports had continued to rise along with expansion in economic activity in the United States, while exports had shown no upward momentum. At U.S. commercial banks growth in total credit during February was close to the sizable rate in January and about in line with the average for 1977. In February bank holdings of Treasury securities expanded substantially following a series of monthly declines. However, growth of total loans slowed, reflecting a sharp contraction in loans to finance holdings of securities. Growth in real estate and consumer loans apparently slowed a little, while expansion in business loans remained at about the average pace in 1977. Large banks significantly expanded their lending to manu­ facturing companies and to wholesale and retail trade concerns, but their lending to public utilities declined as the utilities drew down their inventories of coal. For nonfinancial businesses the general pattern of short-term borrowing in February was little changed from that in January. Continued strong expansion in borrowings from banks was offset only in part by a further net run-off of outstanding commercial paper. Utilities accounted for much of the further decline in outstanding commercial paper issued by nonfinancial businesses. At this meeting revised measures of the monetary aggregates incorporating the effects of new benchmark data for deposits at nonmember banks and revised seasonal factors were available to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

386 Federal Reserve Bulletin □ May 1978 the Committee. These revised data, scheduled for publication on March 23, indicated that in February, M -l had contracted at an annual rate of about 1 per cent. On the basis of the revised series, M -l had grown at an annual rate of about 4 Vi per cent during the first 2 months of 1978 and about 13A per cent during 1977. After revisions M-2 had grown at rates of about 4 Vi per cent in February, 63A per cent over the January-February period, and 9 Vi per cent during 1977. Inflows to commercial banks of the interest-bearing deposits included in M-2 were about maintained in February, but they consisted almost entirely of large-denomination time deposits (in amounts of $100,000 or more) exempt from Regulation Q ceilings on interest rates. Inflows of time and savings deposits subject to such ceilings slowed to a low rate, as yields on market instruments of comparable maturities remained above the ceiling rates through­ out the month. To finance credit expansion in the face of the slowing in over-all inflows of deposits included in M-2, large banks issued a substantial volume of negotiable CD’s and raised a sizable amount of funds from nondeposit sources. Deposit growth at nonbank thrift institutions remained slow in February. Like the savings and smaller time accounts at commercial banks, deposits at the thrift institutions continued to be adversely affected by competition from market securities. Only the longestterm deposits at the thrift institutions provided effective yields above those available on competitive market securities. At its February meeting the Committee had decided that opera­ tions in the period immediately ahead should be directed toward maintaining about the prevailing money market conditions, pro­ vided that the monetary aggregates appeared to be growing at approximately the rates then expected. Specifically, the Committee had sought to maintain the weekly-average Federal funds rate around 63A per cent, so long as M -l and M-2 appeared to be growing over the February-March period at annual rates within ranges of 1 to 6 and 4Vi to 8Vi per cent, respectively. The members also agreed that if growth in the aggregates appeared to be ap­ proaching or moving 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 6V2 to 7 per cent. It was understood that in assessing the behavior of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 387 the aggregates, the Manager of the System Open Market Account should give approximately equal weight to the behavior of M -l and M-2. As the inter-meeting period progressed, it became evident that in February M -l had contracted somewhat and M-2 had increased relatively little. Staff projections for the February-March period suggested that M -l would grow at a rate below the lower limit of the range specified by the Committee and that M-2 would grow at a rate close to its lower limit. It also appeared, however, that the weakness in the aggregates might reflect the prolongation of the coal strike and the severe winter weather and thus would prove to be temporary. Against this background, and in view of recent developments in foreign exchange markets, the Committee voted on March 10 to instruct the Manager to continue aiming at a Federal funds rate of 6% per cent for the time being. For the full inter­ meeting period, the funds rate averaged 63A per cent. Market interest rates in general changed little over the inter­ meeting period, reflecting the stability in the Federal funds rate and, apparently, more or less of a balance among developments affecting the public’s expectations concerning monetary policy— namely, some slowing of the economic expansion and of growth in the monetary aggregates on one side, and some pick-up in the rate of increase in prices and continuing uncertainties in foreign exchange markets on the other. However, Treasury bill rates declined somewhat, in large part because of demands for bills from foreign central banks. Borrowing by the U.S. Treasury remained relatively strong during the inter-meeting period. In addition to regular debt roll­ overs, $3.3 billion of securities were auctioned to raise new money— $3.0 billion of short-term cash-management bills and $300 million of bills added to the regular weekly and monthly auctions. Incoming data on Treasury receipts and expenditures and on the cash balance implied, however, that Federal financing through the first quarter would be significantly smaller than had been suggested in late January. Borrowing by Federally sponsored credit agencies rose to $1.6 billion in February from the already expanded volume of $1.0 billion in January, in large part because of the midquarter financing of the Federal Home Loan Bank System. Mortgage lending by private institutions apparently continued Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

388 Federal Reserve Bulletin □ May 1978 to slacken in February from the record pace of late 1977. At commercial banks the increase in mortgage loans was the smallest in about a year. In January, the latest month for which data were available, mortgage acquisitions by savings and loan associations slowed significantly. Also, mortgage lending commitments out­ standing at these associations declined for the first time in 3 years. In the Committee’s discussion of the economic situation and prospects, the members agreed— as they had at other recent meet­ ings— that the expansion in activity was likely to be sustained throughout 1978. The range of views with respect to the average rate of growth in real GNP over the four quarters of the year was not wide. Half of the members present believed that real output would grow at about the rate projected by the staff; of the re­ mainder, some thought that output would grow somewhat less than projected, and some thought that it would grow somewhat more. One of the members who thought that growth in real GNP would fall somewhat short of the rate projected by the staff believed that the shortfall would be concentrated in the second half of the year. In his view, the second-quarter rebound in growth from the weather-retarded pace in the first quarter might be greater than projected by the staff, and the magnitude of that rebound— in conjunction with some acceleration in the rate of inflation— might generate forces that would adversely affect construction activity and consumer spending in the second half. Attention was drawn to the considerable improvement in the employment situation in recent months. The pace of growth in payroll employment over the past 6 months was regarded as indicative of near-term strength in the expansion of output. One member remarked that the unemployment rate had come close to the zone that he would characterize as reflecting full employment, suggesting that there was less time than he had anticipated earlier for growth in output to diminish toward a rate that could be sustained for the longer term. However, another member noted that the substantial decline in the unemployment rate in recent months— from 6.7 per cent in November to 6.1 per cent in Febru­ ary— reflected in part a sharp deceleration in growth of the civilian labor force. If, as he suspected, that deceleration proved to be an aberration in the statistics, the decline in the unemployment rate might well be reversed to some degree in coming months. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 389 The Committee members agreed that the rate of price advance was likely to remain relatively rapid in 1978, and they expressed a great deal of concern about this prospect. The comment was made that the pace of increase in prices appeared to be accelerating in this country while decelerating in European countries. Several members observed that inflation led to recession, and it was suggested that the greater the inflation, the worse the ensuing recession. For that reason, it was suggested, special emphasis should be given to the Committee’s long-standing objective of helping to resist inflationary pressures while simultaneously en­ couraging continued economic expansion. It was noted that an effective program to reduce the rate of inflation had to extend beyond monetary policy. At its meeting in February the Committee had agreed that from the fourth quarter of 1977 to the fourth quarter of 1978 average rates of growth in the monetary aggregates within the following ranges appeared to be consistent with broad economic aims: M -l, 4 to 6V2 per cent; M-2, 6V2 to 9 per cent; and M-3, IV2 to 10 per cent. The associated range for the rate of growth in commercial bank credit was 7 to 10 per cent. It had also been agreed that the longer-run ranges, as well as the particular aggregates for which such ranges were specified, would be subject to review and modifi­ cation at subsequent meetings. In the Committee’s discussion of policy for the period immedi­ ately ahead, it was suggested that an easing of money market conditions would be inappropriate in light of the outlook for prices, the recent behavior of the dollar in foreign exchange markets, and the likelihood that the demand for money would strengthen sub­ stantially again as growth of nominal GNP picked up. It was also suggested that a firming of money market conditions in the absence of actual evidence of excessive growth of the monetary aggregates would be premature, given the weakness of recent economic statistics, the still unsettled coal strike, and uncertainty about the strength of the prospective rebound in economic activity. However, a number of members favored some firming of money market conditions during the inter-meeting period with a view to keeping under control the anticipated pick-up in monetary growth, unless data for the first 2 weeks of the period suggested that monetary growth over the March-April period was likely to be significantly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

390 Federal Reserve Bulletin □ May 1978 weaker than expected. There was also some sentiment for a slight easing if the incoming data suggested unexpected weakness in monetary growth. These differences of emphasis notwithstanding, members of the Committee did not differ greatly in their preferences for operating specifications for the period immediately ahead, and all favored a return to basing decisions for open market operations between meeting dates primarily on the behavior of the monetary aggregates. In its previous five directives the Committee had called for giving greater weight than usual to money market conditions in conducting operations in the period until the next meeting. For the annual rate of growth in M -1 over the March-April period most members favored ranges with an upper limit of 8 or 9 per cent and a lower limit of 4 or AV2 per cent; one member indicated a preference for a range of 2 to 7 per cent. For the growth rate in M-2 over the 2 months, the members’ preferences for the upper limit ranged from 9 to 10 per cent and for the lower limit from 5 to 6 per cent. All of the members favored directing open market operations during the coming inter-meeting period initially toward the objec­ tive of maintaining the Federal funds rate at about the prevailing level of 6% per cent. Views differed somewhat with respect to the degree of leeway for operations during the inter-meeting period in the event that growth in the aggregates appeared to be deviating significantly from the midpoints of the specified ranges. Some members favored retaining the present range of 6V2 to 7 per cent for the funds rate but others preferred 63A to IV4 per cent and one advocated 6% to 7 per cent. Some who wished to retain the 6V2 to 7 per cent range suggested an understanding to the effect that operations would not be directed toward a rate below 63A per cent before the Committee had had an opportunity for further consultation. At the conclusion of the discussion the Committee decided that growth in M -l and M-2 over the March-April period at annual rates within ranges of 4 to 8 per cent and 5xh to 9 per cent, respectively, would be appropriate. It was understood that in assessing the behavior of these aggregates the Manager should continue to give approximately equal weight to the behavior of M -l and M-2. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 391 It was the Committee’s judgment that such growth rates were likely to be associated with a weekly-average Federal funds rate of about 6% per cent. The members agreed that if growth rates of the aggregates over the 2-month period appeared to be deviating significantly from the midpoints of the indicated ranges, the opera­ tional objective for the weekly-average Federal funds rate should be modified in an orderly fashion within a range of 6V2 to 7 per cent. It was also agreed, however, that a reduction in the rate below 63A per cent would not be sought until the Committee had had an opportunity for further consultation. As customary, it was understood that the Chairman might call upon the Committee to consider the need for supplementary in­ structions before the next scheduled meeting if significant incon­ sistencies appeared to be developing among the Committee’s various objectives. The members also agreed that in the conduct of day-to-day operations, account should be taken of emerging financial market conditions, including the conditions in foreign exchange markets. 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 has been adversely affected in the current quarter by unusually severe weather and the lengthy strike in coal mining but that there has been little change in the underlying economic situation. In February industrial production recovered much of the decline of the preceding month, and nonfarm payroll employment increased considerably further. The unemploy­ ment rate declined from 6.3 to 6.1 per cent. Retail sales picked up somewhat from the sharply reduced level of January. The pace of the rise in prices stepped up in February, reflecting large increases in farm products and processed foods. The index of average hourly earnings was unchanged, after having advanced sharply in January when higher minimum wages became effective. The trade-weighted value of the dollar against major foreign currencies rose sharply in anticipation of the U.S.-German an­ nouncements on March 13. Subsequently, the dollar declined to about the level at the end of February. The U.S. trade statistics reported for January showed a continuing large deficit. M-1 declined and M-2 increased relatively little in February, apparently in part because of the economic effects of the coal strike Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

392 Federal Reserve Bulletin □ May 1978 and the severe weather. Inflows to banks of the interest-bearing deposits included in M-2 were about maintained, but the inflows were almost entirely into large-denomination time deposits exempt from ceilings on interest rates. Inflows to nonbank thrift institutions remained slow. Market interest rates have changed little in recent weeks. 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 expan­ sion and help resist inflationary pressures, while contributing to a sustainable pattern of international transactions. At its meeting on February 28, 1978, the Committee agreed that growth of M-l, M-2, and M-3 within ranges of 4 to 6V2 per cent, 6V2 to 9 per cent, and IV2 to 10 per cent, respectively, from the fourth quarter of 1977 to the fourth quarter of 1978 appears to be consistent with these objectives. These ranges are subject to recon­ sideration at any time as conditions warrant. The Committee seeks to encourage near-term rates of growth in M-l and M-2 on a path believed to be reasonably consistent with the longer-run ranges for monetary aggregates cited in the preceding paragraph. Specifically, at present, it expects the annual growth rates over the March-April period to be within ranges of 4 to 8 per cent for M-l and 5V2 to 9 per cent for M-2. In the judgment of the Committee such growth rates are likely to be associated with a weekly-average Federal funds rate of about 63A per cent. If, giving approximately equal weight to M-l and M-2, it appears that growth rates over the 2-month period will deviate significantly from the midpoints of the indicated ranges, the operational objective for the Federal funds rate shall be modified in an orderly fashion within a range of 6V2 to 7 per cent. In the conduct of day-to-day operations, account shall be taken of emerging financial market conditions, including the conditions in foreign exchange markets. 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. Miller, Volcker, Baughman, Coldwell, Eastburn, Jackson, Partee, Wallich, Willes, and Winn. Votes against this ac­ tion: None. Absent and not voting: Messrs. Burns and Gardner. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 393 2. Authorization for Foreign Currency Operations Paragraph ID of the Committee’s authorization for foreign currency operations authorizes the Federal Reserve Bank of New York, for the System Open Market Account, to maintain an over-all open position in all foreign currencies not to exceed $1.0 billion unless a larger position is expressly authorized by the Committee. On February 28, 1978, the Committee had authorized an open position of $2.0 billion. At this meeting the Committee authorized an open position of $2.25 billion. This action was taken in view of the scale of recent and potential Federal Reserve operations in the foreign exchange markets undertaken pursuant to the Committee’s foreign currency directive. Votes for this action: Messrs. Miller, Volcker, Baughman, Coldwell, Eastburn, Jackson, Partee, Wallich, Willes, and Winn. Votes against this ac­ tion: None. Absent and not voting: Messrs. Burns and Gardner. 3. Procedural Instructions with Respect to Operations Under the Foreign Currency Docum ents Paragraph IB of the procedural instructions with respect to the conduct of operations under the Committee’s foreign currency authorization and directive instructed the Manager to clear with the Foreign Currency Subcommittee or, under certain circum­ stances, with the Chairman of the Committee any transactions that would result in gross transactions (excluding swap drawings and repayments) in a single foreign currency exceeding $100 million on any day or $300 million since the most recent regular meeting of the Committee. At this meeting the Committee amended paragraph IB to raise the levels of gross transactions beyond which clearance is required to $200 million on any day and to $500 million since the most recent regular meeting, and to clarify its intention that the measure of gross transactions used for this purpose should exclude not only swap drawings and repayments but also purchases and sales of currencies incidental to such repayments. This action was taken Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

394 Federal Reserve Bulletin □ May 1978 to relax the dollar limits on gross transactions, which had on occasion hampered ongoing operations, and to remove an ambiguity in the language. As amended, paragraph IB read as follows: 1. The Manager shall clear with the Subcommittee (or with the Chairman, if the Chairman believes that consultation with the Subcommittee is not feasible in the time available): sjc s(s B. Any transaction which would result in gross transactions (excluding swap drawings and repayments, and purchases and sales of any currencies incidental to such repayments), in a single foreign currency exceeding $200 million on any day or $500 million since the most recent regular meeting of the Committee. Votes for this action: Messrs. Miller, Volcker, Baughman, Coldwell, Eastburn, Jackson, Partee, Wallich, Willes, and Winn. Votes against this ac­ tion: None. Absent and not voting: Messrs. Burns and Gardner. 4. Review of Continuing Authorizations This being the first regular meeting of the Federal Open Market Committee following the election of new members from the Federal Reserve Banks to serve for the year beginning March 1, 1978, the Committee followed its customary practice of reviewing all of its continuing authorizations and directives. The Committee reaffirmed the authorization for domestic open market operations, the authorization for foreign currency operations, and the foreign currency directive, in the forms in which they were presently outstanding. The Committee also reaffirmed the procedural instruc­ tions with respect to operations under the foreign currency docu­ ments not affected by the action described in the preceding section. Votes for these actions: Messrs. Miller, Volcker, Baughman, Coldwell, Eastburn, Jackson, Partee, Wallich, Willes, and Winn. Votes against these actions: None. Absent and not voting: Messrs. Burns and Gardner. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 395 In reviewing the authorization for domestic open market opera­ tions, the Committee took special note of paragraph 3, which authorizes the Reserve Banks to engage in the lending of U.S. Government securities held in the System Open Market Account under such instructions as the Committee might specify from time to time. That paragraph had been added to the authorization on October 7, 1969, on the basis of a judgment by the Committee that in the existing circumstances such lending of securities was reasonably necessary to the effective conduct of open market operations and to the effectuation of open market policies, and on the understanding that the authorization would be reviewed periodically. At this meeting the Committee concurred in the judgment of the Manager that the lending activity in question remained reasonably necessary and that, accordingly, the authori­ zation should remain in effect subject to periodic review. 5. Agreem ent to “ W arehouse” Currencies for the Exchange Stabilization Fund (ESF) At its meeting of January 17-18, 1977, the Committee had agreed to a suggestion by the Treasury that the Federal Reserve undertake to “warehouse” foreign currencies held by the ESF— that is, to make spot purchases of foreign currencies from the ESF and simultaneously to make forward sales of the same currencies to the ESF— if that should prove necessary to enable the ESF to deal with potential liquidity strains. Specifically, the Committee had agreed that the Federal Reserve would be prepared, if requested by the Treasury, to warehouse up to SIVz billion of eligible foreign currencies, of which half would be for periods of up to 12 months and half for periods of up to 6 months. It was noted that the agreement to warehouse currencies would be subject to review by the Committee at its organizational meeting each March in connec­ tion with the regular review of all outstanding authorizations. At this meeting the Committee reaffirmed the agreement. Votes for this action: Messrs. Miller, Volcker, Baughman, Eastburn, Jackson, Partee, Wallich, Willes, and Winn. Vote against this action: Mr. Coldwell. Absent and not voting: Messrs. Burns and Gardner. 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

396 Law Departm ent Statutes, regulations, interpretations, and decisions EQUAL CREDIT OPPORTUNITY given an opportunity to comment. Any official staff interpretation issued after opportunity for TRUTH IN LENDING public comment shall become effective upon pub­ lication in the Federal Register. The Board of Governors has amended its regu­ (3) Any request for public comment on an offi­ lations B and Z to revise the Board’s procedures cial staff interpretation of this Part must be in for issuing official staff interpretations. writing and addressed to the Secretary, Board of Effective April 21, 1978, Section 202.1(d) is Governors of the Federal Reserve System, Wash­ amended to read as follows: ington, D.C. 20551, and postmarked or received by the Secretary’s office within 30 days of the Section 202.1— Authority, Scope, En­ interpretation’s publication in the Federal Regis­ forcement Penalties and Liabilities, In­ ter. The request must contain a statement setting terpretations forth the reasons why the person making the re­ quest believes that public comment would be ap­ propriate. (4) Pursuant to section 706(e) of the Act, the Board has designated the Director and other offi­ (d) issuance of staff interpretations. cials of the Division of Consumer Affairs as offi­ (1) Unofficial staff interpretations will be issued cials “duly authorized” to issue, at their discre­ at the staff’s discretion where the protection of tion, official staff interpretations of this Part. section 706(e) of the Act is neither requested nor Effective April 21, 1978, Section 226.1(d), is required, or where a rapid response is necessary. amended to read as follows: (2)(i) Official staff interpretations will be issued at the discretion of designated officials. No such Section 226.1— Authority, interpretation will be issued approving creditors’ Scope, Purpose, etc. forms or statements. Any request for an official staff interpretation of this Part must be in writing (d) issuance of staff interpretations. and addressed to the Director of the Division of (1) Unofficial staff interpretations will be issued Consumer Affairs, Board of Governors of the at the staff’s discretion where the protection of Federal Reserve System, Washington, D.C. section 130(f) of the Act is neither requested nor 20551. The request must contain a complete state­ required, or where a rapid response is necessary. ment of all relevant facts concerning the credit (2)(i) Official staff interpretations will be issued transaction or arrangement and must include at the discretion of designated officials. No such copies of all pertinent documents. interpretation will be issued approving creditors’ (ii) Within 5 business days of receipt of the or lessors’ forms or statements. Any request for request, an acknowledgment will be sent to the an official staff interpretation of this Part must be person making the request. If, in the opinion of in writing and addressed to the Director of the the designated officials, issuance of an official staff Division of Consumer Affairs, Board of Governors interpretation is appropriate, it will be published of the Federal Reserve System, Washington, D.C. in the Federal Register to become effective 30 20551. The request must contain a complete state­ days after the publication date. If a request for ment of all relevant facts concerning the credit or public comment is received, the effective date will lease transaction or arrangement and must include be suspended. The interpretation will then be copies of all pertinent documents. republished in the Federal Register and the public (ii) Within 5 business days of receipt of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 397 request, an acknowledgement will be sent to the Section 208.8— Banking Practices person making the request. If, in the opinion of the designated officials, issuance of an official staff * * * * * interpretation is appropriate, it will be published in the Federal Register to become effective 30 (e) LOANS BY STATE MEMBER BANKS IN days after the publication date. If a request for SPECIAL FLOOD-HAZARDOUS AREAS. public comment is received, the effective date will (1) Property securing loan must be insured against be suspended. The interpretation will then be flood. (2) Records of compliance. republished in the Federal Register and the public (3)(i) Notice of special flood hazards and given an opportunity to comment. Any official availability of federal disaster relief assistance. staff interpretation issued after opportunity for Each State member bank shall, as a condition of public comment shall become effective upon pub­ making, increasing, extending or renewing any lication in the Federal Register. loan secured by improved real estate or a mobile (3) Any request for public comment on an offi­ home located or to be located in an area that has cial staff interpretation of this Part must be in been identified by the Secretary of Housing and writing and addressed to the Secretary, Board of Urban Development as an area having special Governors of the Federal Reserve System, Wash­ flood hazards, mail or deliver as soon as feasible ington, D.C. 20551, and postmarked or received but not less than 10 days in advance of closing by the Secretary’s office within 30 days of the of the transaction (or not later than the bank’s interpretation’s publication in the Federal Regis­ commitment, if any, if the period between com­ ter. The request must contain a statement setting mitment and closing is less than 10 days) a written forth the reasons why the person making the re­ notice to the borrower stating: (1(a)) That the quest believes that public comment would be ap­ property securing the loan is or will be located propriate. in an area so identified, or in lieu of such notifica­ (4) Pursuant to section 130(f) of the Act, the tion a State member bank may obtain satisfactory Board has designated the Director and other offi­ written assurances from a seller or lessor stating cials of the Division of Consumer Affairs as offi­ that such seller or lessor has notified the borrower, cials “duly authorized” to issue, at their discre­ prior to the execution of any agreement for sale tion, official staff interpretations of this Part. or lease, that the property securing the loan is or will be located in an area so identified; and (2(b)) MEMBERSHIP OF whether, in the event of damage to the property STATE BANKING INSTITUTIONS caused by flooding in a federally-declared disaster, IN THE FEDERAL RESERVE SYSTEM Federal disaster relief assistance will be available for such property. Each State member bank shall The Board of Governors has amended its Regu­ require the borrower, prior to closing, to provide lation H to conform its treatment of State member the bank with a written acknowledgment that the bank loans secured by improved real estate or a property securing the loan is or will be located mobile home located or to be located in a special in an area so identified and that the borrower has flood-hazardous area in a community that does not received the above-required notice regarding Fed­ participate in the National Flood Insurance Pro­ eral disaster relief assistance. gram with recent statutory changes contained in the Housing and Community Development Act of (ii) Sample notices: A State member bank 1977 that remove the prohibitions against such providing written notice containing the language loans and include a notice requirement for loans presented in Appendix A within the time limits made in special flood-hazardous areas. prescribed in paragraph (a) will be considered to Effective April 20, 1978, Section 208.8(e) is be in compliance with the notice requirements of amended by revoking Sections 208.8(e)(2), (5), paragraph (a). renumbering Section 208.8(e)(3) as Section 208.8(e)(2) and Section 208.8(e)(4) as Section Appendix A— Sample Notices 208.8(e)(3), amending the renumbered Section 208.8(e)(3) to include the provision of notice to (1) Notice to borrower of special flood-hazborrowers of the availability of Federal disaster ards — N otice is hereby given to relief assistance, and adding Appendix A. Section ___________________ that the improved real estate 208.8 is amended to read as follows: or mobile home described in the attached instru- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

398 Federal Reserve Bulletin □ May 1978 ment is or will be located in an area designated System has amended its Regulations D and Q to by the Secretary of the Department of Housing exempt from deposit treatment a member bank’s and Urban Development as an area having special liability on its promissory note that evidences an flood hazards. This area is delineated on investment of funds by the United States Treasury. ___________________ ’s Flood Insurance Rate Map Consequently, these liabilities of member banks (“FIRM”) or, if the FIRM is unavailable, on the will not be subject to the reserve requirements and community’s Flood Hazard Boundary Map interest rate limitations imposed on member bank (“FHBM”). This area has a 1 per cent chance deposits. of being flooded within any given year. The risk Effective July 6, 1978, Section 204.1(f) of of exceeding the 1 per cent chance increases with Regulation D and Section 217.1(f) of Regulation time periods longer than one year. For example, Q are amended to read as follows: during the life of a 30-year mortgage, a structure located in a special flood-hazardous area has a 26 Section 204.1— Definitions per cent chance of being flooded. * * if; ^ ^ (2) Notice to borrower about federal disaster relief assistance—(a) Notice in participating com­ (f) DEPOSITS AS INCLUDING CERTAIN munities. The improved real estate or mobile home PROMISSORY NOTES AND OTHER OBLIGA­ securing your loan is or will be located in a TIONS. For the purposes of this Part, the term community that is now participating in the Na­ “deposits” also includes a member bank’s liability tional Flood Insurance Program. In the event such on any promissory note, acknowledgment of ad­ property is damaged by flooding in a federallyvance, due bill, banker’s acceptance, or similar declared disaster, Federal disaster relief assistance obligation (written or oral) that is issued or under­ may be available. However, such assistance will taken by a member bank as a means of obtaining be unavailable if your community has been identi­ funds to be used in its banking business, except fied as a special flood-hazardous area for one year any such obligation that: or longer and is not participating in the National (1) Is issued to (or undertaken with respect to) Flood Insurance Program at the time assistance and held for the account of (i) a domestic banking would be approved. This assistance, usually in the office8 of another bank, or (ii) the United States form of a loan with a favorable interest rate, may or an agency thereof, or the Government Devel­ be available for damages incurred in excess of your opment Bank for Puerto Rico; flood insurance. (b) Notice in non-participating communities. * * * * The improved real estate or mobile home securing your loan is or will be located in a community Section 217.1— Definitions that is not participating in the National Flood * * * * * Insurance Program. This means that such property is not eligible for Federal flood insurance. In the (f) DEPOSITS AS INCLUDING CERTAIN event such property is damaged by flooding in a PROMISSORY NOTES AND OTHER OBLIGA­ federally-declared disaster, Federal disaster relief TIONS. For the purposes of this Part, the term assistance will be unavailable if your community “deposits” also includes any member bank’s lia­ has been identified as a special flood-hazardous bility on any promissory note, acknowledgment area for one year or longer. Such assistance may of advance, due bill, or similar obligation (written be available only if at the time assistance would or oral) that is issued or undertaken by a member be approved your community is participating in bank principally as a means of obtaining funds the National Flood Insurance Program or has been to be used in its banking business, except any such identified as a special flood-hazardous area for less obligation that: than one year. (1) Is issued to (or undertaken with respect to) and held for the account of (i) a bank or an RESERVES OF MEMBER BANKS institution the time deposits of which are exempt from § 217.7 pursuant to § 217.3(g), or (ii) the INTEREST ON DEPOSITS United States or an agency thereof, or the Gov­ ernment Development Bank for Puerto Rico; The Board of Governors of the Federal Reserve Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 399 BANK HOLDING COMPANY AND BANK MERGER ORDERS ISSUED BY THE BOARD OF GOVERNORS Orders Under Section 3 posal would increase the market share controlled of Bank Holding Company Act by Applicant’s principal to 13.2 per cent. As part of its analysis of the competitive effects Eicher Bancorporation, of this proposal, the Board has taken into consid­ Iowa City, Iowa eration the competitive effects of the original Order Denying Formation transaction by which a common share ownership of a Bank Holding Company relationship between Bank and uniBank was es­ tablished.3 In this case, the Board has considered EICHER BANCORPORATION, Iowa City, the competitive effects of the purchase of Bank’s Iowa, has applied for the Board’s approval under shares by Applicant’s principal in 1977. At that section 3(a)(1) of the Bank Holding Company Act time Applicant’s principal indirectly controlled (12 U.S.C. § 1842(a)(1)) of formation of a bank uniBank. The Board finds that the effect of Bank’s holding company by acquiring 98.5 per cent or acquisition by Applicant’s principal was to elimi­ more of the voting shares of Hawkeye State Bank, nate significant competition that existed at that Iowa City, Iowa (“Bank”). time between Bank and uniBank. In the Board’s Notice of the application, affording opportunity view, the subject proposal involves the use of the for interested persons to submit comments and holding company form to further an anticompeti­ views, has been given in accordance with section tive arrangement. On the basis of all the facts of 3(b) of the Act. The time for filing comments and record, including the structure of the Iowa City views has expired, and the Board has considered banking market and the market shares of the orga­ the application and all comments received in light nizations involved, the Board concludes that ap­ of the factors set forth in section 3(c) of the Act proval of this proposal would perpetuate an ad­ (12 U.S.C. § 1842(c)). verse competitive situation. While denial of this Applicant, a nonoperating corporation with no proposal might not immediately alter the anticom­ subsidiaries, was organized for the purpose of petitive relationship existing between these two becoming a bank holding company by acquiring banking organizations, a denial would strengthen Bank (deposits of $17.4 million).1 Upon consum­ the possibility that Bank and uniBank could again mation of the proposed acquisition, Applicant become independent and competing organizations would control the 223rd largest bank in Iowa, in the future. On the other hand, approval would holding approximately 0.13 per cent of the total solidify and strengthen the common ownership of deposits in commercial banks in the State. Bank the two banks and would eliminate or significantly is the fifth largest of nine banks in the Iowa City diminish the likelihood of disaffiliation of the banking market2 and controls approximately 6.2 banks and deconcentration of the market. per cent of total deposits in commercial banks in The Board has indicated on previous occasions the market. The proposal involves a restructuring that it believes that a holding company should of Bank’s ownership from an individual to a cor­ constitute a source of financial and managerial poration owned by the same individual. In analyz­ strength to its subsidiary banks and that the Board ing the competitive effects of this proposal, it is will closely examine the condition of an applicant necessary to consider the fact that Applicant’s in each case with this consideration in mind.4 As principal is also a principal in a corporation that controls uniBank and Trust, Coralville, Iowa (“uniBank”), which is three miles from Bank and is the fourth largest bank in the Iowa City banking 3 See the Board’s Order of May 11, 1977, denying the application by Mahaska Investment Company, Oskaloosa, market. UniBank, which holds deposits of $19.7 Iowa, 63 Federal Reserve B ulletin 579 (1977), and the million, controls approximately 7.0 per cent of Board’s Order of November 18, 1977, denying the application by Citizens Bancorp, Inc., Hartford City, Indiana, 63 Federal total market deposits. Consummation of the pro- Reserve B ulletin 1083 (1977). 4 The Bank Holding Company Act requires that the Board, in acting on an application to acquire a bank, inquire into the 1 All banking data are as of December 30, 1976. financial and managerial resources of an applicant. While this 2 The Iowa City banking market is approximated by all proposal involves the transfer of the ownership of Bank from except the north central portion of Johnson County plus the individuals to a corporation owned by the same individuals, town of West Branch in Cedar County. (Footnote continued on following page) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

400 Federal Reserve Bulletin □ May 1978 part of the subject proposal, Applicant would circumstances are not outweighed by any benefits assume a substantial portion of the debt incurred that would result in serving the convenience and by Applicant’s principal in acquiring his shares needs of the community. Accordingly, it is the of Bank. Applicant proposes to service this debt Board’s judgment that approval of the application over a 12-year period through dividends to be would not be in the public interest and that the declared by Bank and tax benefits to be derived application should be denied. from filing consolidated tax returns. In the Board’s On the basis of the record, the application is view, Applicant’s financial projections over the denied for the reasons summarized above. debt retirement period appear to be unduly opti­ By order of the Board of Governors effective mistic and it does not appear that Applicant will April 25, 1978. possess the financial flexibility necessary to meet Voting for this action: Chairman Miller and Gover­ its annual debt service requirements while main­ nors Gardner, Wallich, Coldwell, and Partee. Voting taining adequate capital at Bank. The Board is of against this action: Governor Jackson. the view that it would not be in the public interest to approve the formation of a bank holding com­ (Signed) Griffith L. Garwood, [seal] Deputy Secretary of the Board. pany with an initial debt structure that could result in the weakening of Bank’s overall financial con­ Ellis Banking Corporation, dition. Furthermore, the Board concludes financial Bradenton, Florida pressures on the other banking organization with which Applicant’s principal is associated could Order Denying Acquisition of Banks place additional pressures on Applicant and Bank. In addition, based on certain policies and practices Ellis Banking Corporation, Bradenton, Florida, currently in evidence at uniBank, managerial con­ a bank holding company within the meaning of siderations are viewed as somewhat less than the Bank Holding Company Act, has applied for satisfactory. Accordingly, the Board concludes the Board’s approval under § 3(a)(3) of the Act that the considerations relating to banking factors (12 U.S.C. § 1842(a)(3)) to acquire 51 per cent weigh against approval of the application. or more of the voting shares each of Madeira As stated previously, consummation of this Beach Bank, Madeira Beach, Florida (“Madeira proposal would result in a restructuring of Bank’s Bank”), and First Gulf Beach Bank and Trust present ownership. No significant changes in Company, St. Petersburg Beach, Florida (“First Bank’s operations or in the services to be offered Gulf Bank”). to Bank’s customers are contemplated. Conse­ Notice of the applications, affording opportunity quently, considerations relating to the convenience for interested persons to submit comments and and needs of the community to be served lend no views, has been given in accordance with § 3(b) weight toward approval, and, in the Board’s judg­ of the Act. The time for filing comments and views ment, do not outweigh the adverse financial, man­ has expired, and the Board has considered the agerial, and competitive considerations involved applications and all comments received, including in the proposal. those of the United States Department of Justice On the basis of all of the facts of record, and the Florida Commissioner of Banking, in light the Board concludes that the financial and mana­ of the factors set forth in § 3(c) of the Act (12 gerial considerations involved in this proposal U.S.C. § 1842(c)). present adverse circumstances bearing upon the Applicant, the ninth largest banking organi­ financial and managerial resources and future zation in Florida, controls 26 banks with aggregate prospects of both Applicant and Bank. The Board deposits of approximately $805.6 million, repre­ also concludes that the proposal would have sig­ senting 2.9 per cent of total deposits in commercial nificant adverse competitive effects. Such adverse banks in Florida.1 Acquisition of Madeira Bank and First Gulf Bank, with deposits of $37.2 mil­ (Footnote 4 continued) lion and $52.7 million, respectively, would in­ the Act requires that before an organization is permitted to crease Applicant’s share of commercial bank de­ become a bank holding company and thus obtain the benefits posits in Florida by four-tenths of 1 per cent, and associated with the holding company structure, it must secure the Board’s approval. Section 3(c) of the Act provides that the Board must, in every case, consider, among other things, the financial and managerial resources of both the applicant company and the bank to be acquired. The Board’s action in 1 Unless otherwise indicated, banking data are as of August this case is based on a consideration of such factors. 31. 1977. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 401 would not have an appreciable effect upon the organization in the market. The proposed acquisi­ concentration of banking resources in the State. tions would increase the deposits held by the four Madeira Bank is the fourteenth largest of 28 largest banking organizations from 55.4 per cent commercial banks in the relevant banking market,2 to 58.4 per cent of market deposits. The Board and controls 2.6 per cent of deposits in commercial views the effects of the proposal on concentration banks in the market. First Gulf Bank is the tenth of banking resources in the relevant banking mar­ largest bank in the market, and controls 3.6 per ket as an adverse factor in its consideration of these cent of deposits in commercial banks in the mar­ applications. ket. While consummation of the proposal would Accordingly, the Board finds on the basis of appear to eliminate some existing competition in­ the foregoing and other facts of record that com­ asmuch as Madeira Bank and First Gulf Bank petitive considerations relating to this application operate in the same market, the Board notes that weigh sufficiently against approval so that it should both banks were organized by a group of four not be approved unless the anticompetitive effects families who have held more than eighty per cent are outweighed by considerations relating to the of the shares of both banks since their organi­ convenience and needs of the community to be zation, and the nature of this relationship is such served.3 that little, if any, meaningful competition presently The financial and managerial resources of Ap­ exists between Madeira Bank and First Gulf Bank. plicant and its subsidiaries are regarded as satis­ Viewed in light of this relationship, the effects factory, and their future prospects appear favor­ of the proposed acquisition on existing competition able. The financial and managerial resources and between Madeira Bank and First Gulf Bank are future prospects of both Madeira Bank and First not significant. Gulf Bank are likewise regarded as satisfactory. While there would be minimal effects on com­ Accordingly, considerations relating to banking petition between the two Banks, consummation of factors are consistent with approval of the appli­ this proposal would eliminate existing competition cation. between Applicant and Madeira and First Gulf Applicant proposes to assist both banks in im­ Banks. Applicant, with two subsidiary banks in proving their trust services, expanding their lend­ the relevant banking market, controls deposits of ing activities, and offering specialized lending and $68.9 million, representing 4.7 per cent of market investment services to their customers. However, deposits, and ranks as the eighth largest of eigh­ there is no indication that the needs of the cus­ teen banking organizations in the market. Viewed tomers of either Madeira Bank or First Gulf Bank as a single banking organization because of com­ are not currently being met, that the proposed mon ownership, Madeira Bank and First Gulf services cannot be obtained elsewhere in the rele­ Bank together hold aggregate deposits of $89.9 vant banking market, or that Applicant could not million, representing 6.2 per cent of market de­ offer such services through its present subsidiary posits, and would rank as the sixth largest banking banks in the market. Accordingly, the Board finds organization in the relevant banking market. Ac­ that considerations relating to convenience and cordingly, the Board regards the elimination of needs of the community to be served do not existing competition between Applicant and Ma­ outweigh the adverse competitive effects that deira and First Gulf Banks that would result from would result from Applicant’s acquisition of Ma­ consummation of the proposal as an adverse factor deira Bank and First Gulf Bank. in its consideration of the instant applications. On the basis of the facts in the record, and in In addition to eliminating existing competition light of the factors set forth in § 3(c) of the Act, between Applicant and Madeira and First Gulf it is the Board’s judgment that approval of the Banks, consummation of this proposal would have adverse effects upon the concentration of banking resources in the relevant banking market. The 3 In its official letter of comment concerning the instant applications, the United States Department of Justice found acquisition of both banks would increase Appli­ that the proposed acquisitions would have several adverse cant’s share of market deposits from 4.7 per cent competitive effects on which it based its recommendation that the Board deny the applications. In particular, it noted that to 10.9 per cent, thereby increasing Applicant’s under recently-enacted Florida law, banks may establish rank from the eighth to the fourth largest banking branches within the county of the bank’s main office, and that inasmuch as the immediate areas served by Madeira and First Gulf Banks are conducive to de novo entry, the Applicant has 2 The relevant banking market is approximated by the the resources to expand its operations in the market through southern portion of Pinellas County. branching rather than acquisition. 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402 Federal Reserve Bulletin □ May 1978 proposal would not be in the public interest. Ac­ zations in the Dallas banking market, which is the cordingly, the applications are denied for the rea­ relevant banking market,2 and controls approxi­ sons summarized herein. mately 0.3 per cent of the total deposits in com­ By Order of the Board of Governors, effective mercial banks in the market. Applicant is the April 24, 1978. fourth largest banking organization in the Dallas market, controlling five banking subsidiaries Voting for this action: Chairman Miller and Gover­ therein with aggregate deposits of approximately nors Wallich, Jackson, and Partee. Absent and not voting: Governors Gardner and Coldwell. $498 million, representing 4.9 per cent of market deposits. Applicant’s nearest subsidiary bank is (Signed) Griffith L. Garwood, approximately 15 miles south of Bank. While there [seal] Deputy Secretary of the Board. is some existing competition between Applicant’s First City Bancorporation of Texas, Inc., subsidiary banks and Bank, the amount of such Houston, Texas competition does not appear to be significant. Accordingly, on the basis of the above and other Order Approving Acquisition of Bank facts of record, it is concluded that consummation of the proposed transaction would have only a First City Bancorporation of Texas, Inc., Hous­ slightly adverse effect on competition in the Dallas ton, Texas, a bank holding company within the banking market. meaning of the Bank Holding Company Act, has The financial and managerial resources and fu­ applied for the Board’s approval under Section ture prospects of Applicant, its subsidiaries, and 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to Bank are regarded as generally satisfactory and acquire 100 per cent of the voting shares, less consistent with approval. Affiliation with Appli­ directors’ qualifying shares, of the successor by cant would enable Bank to draw upon Applicant’s merger to Lewisville State Bank, Lewisville, greater financial resources and expertise and Texas (“Bank”). The bank into which Bank is thereby offer new and improved services to its to be merged has no significance except as a means customers. In this regard, Applicant has indicated to facilitate the acquisition of the voting shares that it intends to improve Bank’s physical facilities of Bank. Accordingly, the proposed acquisition of and to offer a variety of additional banking services shares of the successor organization is treated through Bank, including trust services not cur­ herein as the proposed acquisition of the shares rently made available by Lewisville banks, and of Bank. that reduced credit insurance rates will be made Notice of the application, affording opportunity available at Bank for its loan customers. Consid­ for interested persons to submit comments and erations relating to the convenience and needs of views, has been given in accordance with Section the community to be served lend weight toward 3(b) of the Act. The time for filing comments and approval of the application and outweigh any views has expired, and the application and all slightly adverse effects on existing competition comments received have been considered in light that might result from consummation of the pro­ of the factors set forth in Section 3(c) of the Act posal. Accordingly, it has been determined that (12 U.S.C. § 1842(c)). the proposed acquisition would be in the public Applicant, the second largest banking organi­ interest and that the application should be ap­ zation in Texas, controls 28 banks with aggregate proved. deposits of approximately $4.2 billion, repre­ On the basis of the record, the application is senting 7.8 per cent of total commercial bank approved for the reasons summarized above. The deposits in Texas.1 Acquisition of Bank ($30.0 transaction shall not be made (a) before the thir­ million in deposits) would increase Applicant’s tieth calendar day following the effective date of share of Statewide commercial bank deposits by this Order or (b) later than three months after the less than 0.1 per cent and would have no appre­ effective date of this Order, unless such period ciable effect upon the concentration of banking is extended for good cause by the Board or by resources in the State. the Federal Reserve Bank of Dallas pursuant to Bank is the 38th largest of 108 banking organi­ delegated authority. 1 All banking data are as of June 30, 1977, and reflect bank 2 The Dallas banking market is approximated by the Dallas holding company formations and acquisitions approved as of RMA, which includes Dallas County and portions of six February 28, 1978. adjacent counties. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 403 By order of the Secretary of the Board, acting which is the relevant banking market,3 and con­ pursuant to delegated authority from the Board of trols approximately 0.45 per cent of the total Governors, effective April 18, 1978. deposits in commercial banks in the market. Ap­ plicant is the fifth largest banking organization in (Signed) Theodore E. Allison, the Houston market, controlling six banking sub­ [seal] Secretary of the Board. sidiaries therein with aggregate deposits of ap­ proximately $558.3 million, which represents 4.3 First International Bancshares, Inc., per cent of market deposits. Applicant has two Dallas, Texas subsidiary banks in the market within approxi­ Order Approving Acquisition of Bank mately 25 miles of Bank and the nearer of those is 12.5 miles west. While there is some existing First International Bancshares, Inc., Dallas, competition between Applicant’s subsidiary banks Texas, a bank holding company within the mean­ and Bank, the amount of such competition does ing of the Bank Holding Company Act, has ap­ not appear to be significant. Accordingly, on the plied for the Board’s approval under § 3(a)(3) of basis of the above and other facts of record, it the Bank Holding Company Act (12 U.S.C. is concluded that consummation of the proposed § 1843(a)(3)) (the “Act”) to acquire 100 per cent transaction would have only a slightly adverse of the voting shares, less directors’ qualifying effect on competition in the Houston banking shares, of the successor by merger to First State market. Bank & Trust Company of Houston, Houston, Considerations relating to the financial and Texas (“Bank”). The bank into which Bank is managerial resources and future prospects of to be merged has no significance except as a means Bank, Applicant, and its subsidiaries are regarded to facilitate the acquisition of the voting shares as generally satisfactory and consistent with ap­ of Bank. Accordingly, the proposed acquisition of proval, particularly in light of Bank’s retention of shares of the successor organization is treated $200,000 of interim capital. Applicant will pro­ herein as the proposed acquisition of the shares vide Bank with necessary expertise and capability of Bank. to develop Bank’s loan administration and invest­ Notice of the application, affording opportunity ment management techniques. Affiliation of Bank for interested persons to submit comments and with Applicant will enable Bank to utilize the views, has been given in accordance with § 3(b) specialized lending divisions of Applicant’s lead of the Act. The time for filing comments and views bank in expanding the types of lending services has expired, and the application and all comments currently offered including international services. received have been considered in light of the Also, Applicant has indicated that it intends to factors set forth in § 3(c) of the Act (12 U.S.C. offer reduced credit insurance rates to Bank’s loan § 1842(c)). customers through its two credit-related insurance Applicant, the third largest banking organization underwriting subsidiaries. Considerations relating in Texas, controls 28 banking subsidiaries1 with to the convenience and needs of the community aggregate deposits of approximately $4,138 bil­ to be served lend weight toward approval of the lion, representing 7.72 per cent of total commer­ application and outweigh any slightly adverse ef­ cial bank deposits in Texas.2 Acquisition of Bank fects on existing competition that might result from (approximately $58.7 million in deposits) would consummation of the proposal. Accordingly, it has increase Applicant’s share of Statewide commer­ been determined that the proposed acquisition cial bank deposits by slightly over 0.1 per cent would be in the public interest and that the appli­ and would have no appreciable effect upon the cation should be approved. concentration of banking resources in the State. On the basis of the record, the application is Bank is the twenty-ninth largest of 123 banking approved for the reasons summarized above. The organizations in the Houston banking market, transaction shall not be made (a) before the thir­ tieth calendar day following the effective date of this Order or (b) later than three months after the 1 The number of subsidiaries includes the acquisition of City National Bank of Wichita Falls, Wichita Falls, Texas, on effective date of this Order, unless such period January 6, 1978 (64 Federal Reserve Bulletin 116 (1978)), which has not yet been consummated. 2 All banking data are as of June 30, 1977, and reflect bank 3 The Houston banking market is approximated by the holding company formations and acquisitions approved as of Houston RMA, which includes Harris County and portions of February 28, 1978. five adjacent counties. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

404 Federal Reserve Bulletin □ May 1978 is extended for good cause by the Board or by ranks as the twenty-third largest commercial the Federal Reserve Bank of Dallas acting pursuant banking organization in that State.2 Consummation to delegated authority. of the subject proposal would increase Applicant’s By order of the Secretary of the Board, acting share of Statewide commercial bank deposits by pursuant to delegated authority from the Board of less than 0.1 per cent and would not have a Governors, effective April 20, 1978. significant effect upon the concentration of banking resources in Florida. (Signed) Theodore E. Allison, Bank ($9.7 million in deposits) is the 14th [seal] Secretary of the Board. largest of 21 banking organizations (controlling 37 banks) in the Orlando banking market (the relevant market) and holds approximately 0.6 per cent of The Royal Trust Company, market deposits.3 Applicant is not currently repre­ Montreal, Quebec, Canada sented in the relevant market and its closest bank­ ing subsidiary to Bank is located approximately Order Approving Acquisition of Bank 75 miles southwest of Bank. There does not appear to be any existing competition between Bank and The Royal Trust Company, Montreal, Quebec, any of Applicant’s banking and nonbanking sub­ Canada (“Applicant”), and its wholly-owned sidiaries and, in view of the distances involved, direct and indirect subsidiaries, Royal Trustco it does not appear likely that any significant com­ Limited, Ottawa, Ontario, Canada (“Trustco”), petition would develop in the future. While it and Royal Trust Bank Corp., Miami, Florida appears that Applicant could enter the Orlando (“Bank Corp.”), each of which is a bank holding banking market de novo, in view of Bank’s size company within the meaning of the Bank Holding and its market position the Board regards the Company Act, have applied for the Board’s ap­ proposed acquisition of Bank as essentially a foot­ proval under § 3(a)(3) of the Act (12 U.S.C. § hold entry by Applicant into the Orlando market 1842(a)(3)) to acquire 51 per cent or more of the and such entry by Applicant should enable Bank voting shares of The American Bank of Orange to become a more effective competitor in that County, Orlando, Florida (“Bank”). market. In addition, approval of this proposal will Notice of the applications, affording opportunity result in the severance of ownership and director for interested persons to submit comments and interlocks between Bank and another bank in the views, has been given in accordance with § 3(b) Orlando banking market. Therefore, on the basis of the Act. The time for filing comments and views of the facts of record, the Board concludes that has expired and the Board has considered the consummation of the proposal would not have any applications and all comments received in light of significant adverse effects upon either existing or the factors set forth in § 3(c) of the Act (12 U.S.C. potential competition in any relevant area. § 1842(c)). The financial and managerial resources and fu­ Applicant, with total assets of approximately ture prospects of Applicant, its subsidiaries and $4.7 billion (as of September 30, 1977), is one Bank are regarded as generally satisfactory, espe­ of the largest financial institutions in Canada and cially in light of recent improvements in Bank operates, through its subsidiaries and other inter­ Corp.. Therefore, considerations relating to bank­ ests, in both Europe and the Caribbean Islands. ing factors are consistent with approval of the In the United States, Applicant controls seven applications. Applicant will provide Bank with its Florida banks1 and operates one nonbank subsidi­ expertise in a wide area of banking services; ary. Through its seven subsidiary banks, Applicant accordingly, considerations relating to the con­ controls aggregate deposits of approximately venience and needs of the community to be served $197.2 million, representing 1.0 per cent of total are consistent with approval. It is the Board’s deposits held by commercial banks in Florida and judgment that the proposed acquisition would be 2 Unless otherwise indicated, all bank data are as of De­ 1 Applicant currently controls six of these subsidiary banks cember 31, 1977, and reflect bank holding company formations through Bank Corp. which was formed in 1976 to hold directly and acquisitions approved through January 31, 1978. all of Applicant’s banking interests in the United States. By 5 The Orlando banking market is approximated by Orange action of March 30, 1978, the Board approved Bank Corp.’s County and almost all of Seminole County, except for the most acquisition of a seventh bank, Baymeadows Bank, Jackson­ northern section which includes the towns of Oviedo and ville, Florida, held directly by Applicant. Sanford. Market data are as of June 30, 1977. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 405 in the public interest and that the applications Statement should be approved. Security Bancorp, Walnut Creek, California, On the basis of the record, the applications are has applied for the Board’s approval under approved for the reasons summarized above. The § 3(a)(1) of the Bank Holding Company Act, 12 transaction shall not be made (a) before the thir­ U.S.C. § 1842(a)(1) of formation of a bank hold­ tieth calendar day following the effective date of ing company by acquiring all of the voting shares this Order or (b) later than three months after the (less directors’ qualifying shares) of the successor effective date of this Order, unless such period by merger to Security National Bank, Walnut is extended for good cause by the Board, or by Creek, California (“Bank”). The proposed acqui­ the Federal Reserve Bank of Atlanta pursuant to sition of shares of the successor organization is delegated authority. treated herein as the proposed acquisition of shares By order of the Board of Governors, effective of Bank. By Order dated April 14, 1978, the Board April 5, 1978. denied this application for the reasons set forth Voting for this action: Chairman Miller and Gover­ below. nors Wallich, Coldwell, Jackson, and Partee. Absent Notice of the application, affording opportunity and not voting: Governors Gardner and Burns. for interested persons to submit comments and Governor Burns was a member of the Board at the time of its action on this application. views has been given in accordance with § 3(b) of the Act, 12 U.S.C. § 1842(b). The time for (Signed) Griffith L. Garwood, filing comments and views has expired, and the [seal] Deputy Secretary of the Board. Board has considered the application and all com­ ments received in light of the factors set forth in § 3(c) of the Act, 12 U.S.C. § 1843(c). Security Bancorp, Applicant is a nonoperating corporation organ­ Walnut Creek, California ized for the purpose of becoming a bank holding company through the acquisition of Bank ($156.9 Order Denying million in deposits).1 Upon acquisition of Bank, Formation of Bank Holding Company Applicant would control the 31st largest banking organization in California and .2 per cent of total Security Bancorp, Walnut Creek, California, deposits in commercial banks in the State. has applied for the Board’s approval under section Bank is the 14th largest banking organization 3(a)(1) of the Bank Holding Company Act (12 in the relevant banking market,2 controlling .5 per U.S.C. § 1842(a)(1)) of formation of a bank cent of the deposits therein. The proposed trans­ holding company by acquiring all of the voting action involves a transfer of ownership of Bank shares (less directors’ qualifying shares) of the from an individual to a corporation owned by the successor by merger to Security National Bank, same individual and consummation of the proposal Walnut Creek, California. would not have any adverse effect upon existing Notice of the application, affording opportunity or potential competition nor would it increase the for interested persons to submit comments and concentration of banking resources in the market. views, has been given in accordance with section Thus, the Board concludes that competitive con­ 3(b) of the Act. The time for filing comments and siderations are consistent with, but do not lend views has expired, and the Board has considered weight toward, approval of the application. the application and all comments received in light The financial resources and future prospects of of the factors set forth in section 3(c) of the Act Applicant and Bank are considered satisfactory (12 U.S.C. § 1842(c)). and consistent with approval of the application. On the basis of the record, the application is While there would be no immediate increase in denied for the reasons set forth in the Board’s the services offered by Bank as a result of the Statement, which will be released at a later date. proposed transaction, the considerations relating By order of the Board of Governors, effective to the convenience and needs of the community April 14, 1978. Voting for this action: Chairman Miller and Gover­ nors Gardner, Wallich, Coldwell, Jackson, and Partee. 1 All banking data are as of June 30, 1977. (Signed) Griffith L. Garwood, 2 The relevant banking market is approximated by the San [seal] Deputy Secretary of the Board. Francisco SMSA. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

406 Federal Reserve Bulletin □ May 1978 to be served are consistent with approval of the During the pendency of the subject application, application. the Board was aware that investigations were being Applicant’s principal shareholder is Adnan M. conducted by United States law enforcement au­ Khashoggi, a Saudi Arabian citizen. Mr. Kha- thorities into questionable payment practices by shoggi, primarily through his personal holding United States companies and that those investiga­ company, Triad Holding Corporation, S.A., Lux­ tions also involved Mr. Khashoggi. In view of the embourg, has worldwide investments in compa­ investigations and Mr. Khashoggi’s important po­ nies engaged in international trade, investment sition with respect to Bank and the proposed bank banking, and finance. He also serves as sales agent holding company, the Board requested from the for various companies. Approximately 97 per cent United States Department of Justice and the Se­ of the voting shares of Bank are owned by Mr. curities and Exchange Commission any informa­ Khashoggi and approximately the same proportion tion concerning Mr. Khashoggi that may be rele­ of the voting shares of Applicant would be owned vant to the banking factors the Board is required by him after consummation of the proposed trans­ to consider under the Act. In connection with their action. investigations, the Department of Justice and the The Board’s analysis of the managerial re­ SEC have sought Mr. Khashoggi’s testimony. Mr. sources of an Applicant or its proposed subsidiary Khashoggi, however, has been unwilling to submit bank does not customarily extend to shareholders to questioning in a manner satisfactory to those who do not serve as officers, directors or policy­ agencies. As a result of Mr. Khashoggi’s lack of making employees of those organizations.3 In the cooperation in these matters, the agencies have Board’s view, however, where an individual exer­ been unable to respond adequately to the Board’s cises a pervasive or controlling influence, or has requests for information. the power to exercise such influence, over an On February 17, 1978, the Board considered organization, whether by reason of stock owner­ the subject application and was advised of negoti­ ship or control over officers, directors or employ­ ations then in progress between the Department ees, that individual may appropriately be regarded of Justice and representatives of Mr. Khashoggi as part of the organization’s managerial resources, whereby it was anticipated that an agreement and the Board may consider such an individual might have been reached in the near future for in its assessment of an organization’s managerial Mr. Khashoggi to submit to questioning. In view resources. of the incomplete record and the prospect that Mr. Khashoggi’s ownership of approximately those negotiations might soon result in an agree­ 97 per cent of the voting shares of Bank enables ment, the Board decided not to take final action him to elect all of Bank’s directors and to control on the application at that time. Rather, the Board and direct Bank’s management. In addition to acted to defer a final decision on the application electing Bank’s board of directors, the record for 60 days and informed Applicant that when the reflects that Mr. Khashoggi provides broad guid­ Board reconsidered the application a relevant fac­ ance to Bank in terms of his own objectives as tor would be the status of the above investigations principal shareholder. In view of the above and and, in particular, Mr. Khashoggi’s cooperation other facts of record, it is the Board’s judgment in those investigations. It was the Board’s judg­ that Mr. Khashoggi’s ability to influence Bank is ment that deferral of final consideration for a short such that he should be considered as part of its period was reasonable under the circumstances. management. Since it last considered the application, the Board has been informed that the negotiations with Mr. Khashoggi have been terminated and that he has not evidenced a willingness to cooperate with 3 The Bank Holding Company Act requires that the Board, in acting on an application to acquire a bank, inquire into the the agencies in their investigations. As a result, financial and managerial resources of an applicant. While this Mr. Khashoggi’s lack of cooperation leaves un­ proposal involves the transfer of the ownership of Bank from an individual to a corporation owned by the same individual, answered the Board’s original requests for infor­ the Act requires that, before an organization is permitted to mation from the Department of Justice and the become a bank holding company, and thus obtain the benefits SEC. In addition, his lack of cooperation with associated with the holding company structure, it must secure the Board’s approval. Section 3(c) of the Act provides that formal investigations undertaken by United States the Board must, in every case, consider, among other things, law enforcement authorities raises some concern the financial and managerial resources of both the applicant whether Mr. Khashoggi would be personally company and the bank to be acquired. The Board’s action in this case is based on a consideration of such factors. available and accountable to bank supervisory au­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 407 thorities should the need arise. In the Board’s lion).1 Upon acquisition of Bank, Applicant would view, a requirement for a favorable finding with control the 173rd largest bank in Iowa holding respect to an Applicant’s managerial resources is about 0.17 per cent of the total deposits in com­ that management will be accessible to and cooper­ mercial banks in the State. Bank is the largest of ate with supervisory personnel. Furthermore, Mr. nine banks competing in the Crawford County Khashoggi’s unwillingness thus far to cooperate banking market 2 with approximately 25.7 per cent with United States law enforcement authorities is of the deposits in commercial banks therein. The not in keeping with what the Board regards as proposal to form a bank holding company repre­ acceptable conduct for the management of a bank sents a restructuring of the existing ownership holding company.4 from individual to corporate form and a shift of On the basis of the foregoing and the facts of control withiii the present directors group. record, the Board is unable to reach a favorable Two principals of Applicant are also principals conclusion with respect to the managerial re­ in four other one-bank holding companies and one sources of Bank or Applicant. While the other of Applicant’s principals is an officer of seven factors the Board is required to consider in acting other commercial banks. The closest of these is on the application are consistent with approval, forty road miles from Bank and all are in separate they are not sufficient to outweigh the adverse banking markets. In light of the distances separat­ managerial factors relating to the subject applica­ ing these banks, the chain banking relationship tion. Accordingly, it is the Board’s judgment that does not present adverse competitive effects. Con­ approval of the application would not be in the summation of the proposal would eliminate no public interest and the application should be de­ existing or potential competition and it does not nied. appear that there would be any adverse competitive Board of Governors of the Federal Reserve effects on other banks in the market. Competitive System, effective May 2, 1978. factors are consistent with approval of the appli­ cation. (Signed) Griffith L. Garwood, The Board has received adverse comment on [seal] Deputy Secretary of the Board. this application from Mr. Fred Koch, a minority The Viking Corporation, shareholder of bank. Mr. Koch alleged certain Denison, Iowa discrepancies between this application and the Order Approving offering circular by which Applicant offered to Formation of Bank Holding Company purchase minority shares of bank. Mr. Koch ap­ The Viking Corporation, Denison, Iowa, has parently believes that the offering circular was applied for the Board’s approval under section misleading to minority shareholders.3 However, 3(a)(1) of the Bank Holding Company Act (12 the offering circular does not appear to be mis­ U.S.C. § 1842(a)(1)) of formation of a bank leading in any material respect. Moreover, there holding company through acquisitions of 80 per is no evidence in the record to indicate that cent or more of the voting shares of Crawford principals of Applicant have acted in bad faith County Trust and Savings Bank, Denison, Iowa toward the minority shareholders of Bank. The (“Bank”). condition of each of the other banks and bank Notice of the application, affording opportunity holding companies with which principals of Ap­ for interested persons to submit comments and plicant are associated is satisfactory, and the Board views, has been given in accordance with section believes that Applicant will serve as a source of 3(b) of the Act. The time for filing comments and managerial strength to Bank. Although Applicant views has expired, and the application and com­ will incur debt in connection with this proposal, ments received, including those of Mr. Fred Koch, a shareholder of Bank, have been considered in light of the factors set forth in section 3(c) of the 1 All deposit data are as of June 30, 1977. 2 The Crawford County banking market is approximated by Act (12 U.S.C. § 1842 (c)). all of Crawford County. Applicant was recently organized under the laws 3 The Board has indicated that it views evidence that an of the State of Iowa for the purpose of becoming Applicant has dealt fraudulently with minority shareholders of a proposed subsidiary bank as reflecting adversely on the a bank holding company with respect to Bank Applicant’s ability to be a source of managerial strength for (aggregate deposits of approximately $22.0 mil­ the bank. See the Board’s Order dated October 26, 1977, approving the formation of a bank holding company by Benson 4 See also, Florida National Banks of Florida, Inc. 62 Federal Bancshares, Inc., Benson, Minnesota, 63 Federal Reserve Reserve B ulletin. Bulletin 1009 (1977). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

408 Federal Reserve Bulletin □ May 1978 Bank’s projected income should provide sufficient million, representing 0.08 per cent of total deposits funds to service this debt without unduly burden­ in commercial banks in the State of Illinois.1 Bank ing Bank’s capital position. Financial and mana­ is the 40th largest of 162 commercial banks in gerial factors are consistent with approval of the the St. Louis banking market,2 controlling 0.6 per application. cent of the deposits in commercial banks therein. Applicant has proposed no new or expanded One of the principals of Applicant is also a services upon approval of the application. Con­ principal of a one-bank holding company that venience and needs factors are consistent with, but owns Cedar Falls Trust and Savings Bank, Cedar lend no weight to, approval of the application. Falls, Iowa (“Savings Bank”). Savings Bank does On the basis of all the evidence in the record not operate in the St. Louis banking market. In the Board concludes that all the relevant factors light of that fact, the distance between the markets are consistent with approval. Consummation of the respectively served by Bank and Savings Bank, proposed transaction would be in the public inter­ and the fact that the proposed transaction repre­ est and the application should be approved. sents no more than the restructuring of the existing The application is approved for the reasons ownership of Bank, it appears that consummation summarized above. The transaction shall not be of the proposal would not have an adverse effect made (a) before the thirtieth calendar day follow­ on existing or potential competition. Accordingly, ing the effective date of this order, or (b) later it is concluded that competitive considerations are than three months after the effective date of this consistent with approval of the application. Order, unless such period is extended by the Where a principal of the applicant is engaged Board, or by the Federal Reserve Bank of Chicago in establishing a chain of one-bank holding com­ pursuant to delegated authority. panies, the Board applies multi-bank holding By order of the Board of Governors effective company standards not only in its competitive April 24, 1978. analysis, but also in assessing the financial and Voting for this action: Chairman Miller and Gover­ managerial resources and future prospects both of nors Gardner, Wallich, Jackson, and Partee. Absent and an applicant seeking to become a one-bank holding not voting: Governor Coldwell. company and of its proposed subsidiary bank.3 The (Signed) Cathy E. Minehan, condition of Savings Bank suggests that Appli­ [seal] Assistant Secretary of the Board. cant’s principals would conduct the operations of the proposed holding company and of Bank in a The Wedge Holding Company, satisfactory manner. Further, the financial re­ Alton, Illinois sources of Applicant, which are dependent upon Order Approving those of Bank, are considered to be consistent with Formation of Bank Holding Company approval of the application, and their future pros­ pects appear favorable. Although Applicant will The Wedge Holding Company, Alton, Illinois, incur some debt as a result of this proposal, it has applied for the Board’s approval under appears that income and dividends from Bank, as § 3(a)(1) of the Bank Holding Company Act (12 well as savings resulting from the filing of consol­ U.S.C. § 1842(a)(1)) of formation of a bank idated tax returns, should provide Applicant with holding company by acquiring 81.885 per cent of sufficient revenues to meet its debt service re­ the outstanding voting shares of Alton Banking quirements without adversely affecting the finan­ and Trust Co., Alton, Illinois (“Bank”). cial condition of Bank.4 Therefore, considerations Notice of the application, affording opportunity for interested persons to submit comments and views, has been given in accordance with § 3(b) of the Act. The time for filing comments and views 1 All banking data are as of June 30, 1977. has expired, and the Board has considered the 2 The St. Louis banking market is defined as the St. Louis Ranally Metro Area. application and all comments received in light of 3 See e.g., the Board’s Order of June 14, 1976, denying the factors set forth in § 3(c) of the Act (12 U.S.C. the application of Nebraska Banco, Inc., Ord, Nebraska, 62 § 1842(c)). Federal Reserve B ulletin 638 (1976). 4 In this connection, the Board notes that Applicant has made Applicant, a nonoperating corporation with no a commitment that Applicant’s principals will pay or cause subsidiaries, was formed for the purpose of be­ to be paid from other sources all principal and interest on the acquisition debt if payment of any such principal and interest coming a bank holding company by acquiring with distributions from Bank would reduce Bank’s gross capishares of Bank. Bank has total deposits of $52.1 (Footnote continued on following page) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 409 relating to banking factors are consistent with Board’s approval, under § 4(c)(8) of the Act (12 approval of the application. U.S.C. § 1843(c)(8)) and § 225.4(b)(2) of the While no major changes are contemplated in Board’s Regulation Y (12 CFR § 225.4(b)(2)), to Bank’s services, considerations relating to the acquire, respectively, 80.4 per cent and 19.6 per convenience and needs of the community to be cent of the voting shares of First Savings Company served are consistent with approval of the applica­ of Hastings, Hastings, Nebraska (“Company”), tion. Accordingly, it is the Board’s judgment that a de novo corporation. Company would engage consummation of the proposed transaction would in the activities of operating an industrial loan and be consistent with the public interest and that the investment company pursuant to the laws of Ne­ application should be approved. braska, and also of acting as insurance agent for On the basis of the record, the application is the sale of credit life insurance directly related to approved for the reasons summarized above. The extensions of credit by Company. Such activities transaction shall not be made (a) before the thir­ have been determined by the Board to be closely tieth calendar day following the effective date of related, to banking (12 CFR § 225.4(a)(2) and this Order or (b) later than three months after the (9)(ii)). effective date of this Order, unless such period Notice of the applications, affording opportunity is extended for good cause by the Board, or by for interested persons to submit comments and the Federal Reserve Bank of St. Louis pursuant views on the public interest factors, has been duly to delegated authority. published (43 Fed. Reg. 2227 (1978)). The time By order of the Board of Governors, effective for filing comments and views has expired, and April 19, 1978. the Board has considered the applications and all comments received in the light of the public inter­ Voting for this action: Chairman Miller and Gover­ est factors set forth in § 4(c)(8) of the Act (12 nors Wallich, Coldwell, Jackson, and Partee. Absent and not voting: Governor Gardner. U.S.C. § 1843(c)(8)). Bankshares is the eighth largest banking orga­ (Signed) Griffith L. Garwood, nization in Nebraska by virtue of its control of [seal] Deputy Secretary of the Board. The First National Bank of Grand Island, Grand Island, Nebraska (“FNB”), which has deposits of approximately $74.9 million, representing 1.1 per Orders Under Section 4 cent of total deposits in commercial banks in the of Bank Holding Company Act State.1 FNB is the largest of seven banks in the relevant market,2 controlling 32.6 per cent of the Bankshares of Nebraska, total deposits in commercial banks in that market. Grand Island, Nebraska Bankshares also controls First Savings Company, Grand Island, Nebraska (“First Savings”), an Hastings State Company, industrial bank with assets of approximately $6 Hastings, Nebraska million, located in the relevant market. HSC ranks as the 102nd largest banking organi­ Order Approving Acquisition zation in Nebraska through its control of Hastings of First Savings Company of Hastings State Bank, Hastings, Nebraska (“Hastings Bank”). Hastings Bank has deposits of approxi­ Bankshares of Nebraska, Inc., Grand Island, mately $15.2 million, representing 0.23 per cent Nebraska (“Bankshares”), and Hastings State of total deposits in commercial banks in the State, Company, Hastings, Nebraska (‘HSC”), bank and is the third largest of five banks in the relevant holding companies within the meaning of the Bank market,3 controlling approximately 8.2 per cent of Holding Company Act, have each applied for the the total deposits in commercial banks in that market. Through Company, Bankshares and HSC (Footnote 4 continued) tal-to-average annual total assets ratio below eight per cent. In addition, Applicant has committed that no dividends on Applicant’s common or preferred stock will be declared so long as Applicant’s income is required to service its acquisition 1 All banking data are as of December 31, 1976. debt. Further, Applicant has agreed to forego its right to redeem 2 The relevant banking market is approximated by Hall its preferred stock at any time subsequent to five years from County, Nebraska. the date of issuance so long as funds are required to service 3 The relevant banking market is approximated by Adams and retire its acquisition debt. County, Nebraska. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

410 Federal Reserve Bulletin □ May 1978 propose to engage in industrial loan activities,4 record in this case, including the structure of the including the making of consumer, commercial Adams County banking market, the relatively and real estate loans. Company would also engage small size of the two institutions, and the Nebraska in the sale of credit-related insurance. Since the laws prohibiting both multibank holding compa­ acquisition of Company would be de novo, no nies and branching, it is unlikely that any signifi­ existing competition would be eliminated between cant potential competition would be eliminated by Company and the subsidiaries of either Bankshares approval of this application or that other significant or HSC. Also, since Bankshares’ existing subsidi­ adverse effects would result therefrom. On the aries conduct business in a market separate and other hand, in the circumstances of this proposal distinct from that of HSC’s only subsidiary (Hast­ the Board finds that consummation of the proposal ings Bank),5 approval of the applications would would result in public benefits. Company would not eliminate any existing competition between provide the Hastings area with both an additional Bankshares and HSC. competitor and an additional source of loans and Approval of this application would eliminate credit-related insurance, which results the Board Bankshares as a potential entrant in the Adams regards as being in the public interest. County market. However, Nebraska law precludes There is no evidence in the record indicating FNB from branching, and the Nebraska bank that consummation of this proposal would result holding company statutes preclude Bankshares in undue concentration of resources, unfair com­ from acquiring de novo commercial banks. It ap­ petition, conflicts of interests, unsound banking pears, however, that in the absence of this pro­ practices or other adverse effects. posal, Bankshares would have the ability to estab­ Based upon the foregoing and other consid­ lish Company on its own. Despite this fact, the erations reflected in the record, the Board has association with HSC through this ownership ar­ determined that the balance of the public interest rangement is not considered adverse since HSC factors the Board is required to consider under is not in a dominant market position. Indeed, § 4(c(8) is favorable. Accordingly, the applications Bankshares’ financial strength and experience with are hereby approved. This determination is subject its other industrial bank and HSC’s knowledge of to the conditions set forth in § 225.4(c) of Regu­ the Adams County market should contribute to lation Y and to the Board’s authority to require Company’s ability to compete with the larger such modification or termination of the activities institutions in the market.6 On balance, therefore, of a holding company or any of its subsidiaries the Board does not find the effects of this proposal as the Board finds necessary to assure compliance on potential competition are sufficiently adverse with the provisions and purposes of the Act and to require denial of this application. the Board’s regulations and orders issued While the Board has previously expressed con­ thereunder, or to prevent evasion thereof. cern about the competitive effects of joint activity The transaction shall be made not later than by bank holding companies,7 given the facts of three months after the effective date of this Order, unless such period is extended for good cause by the Board or by the Federal Reserve Bank of 4 Under Nebraska law, an industrial loan and investment Kansas City. company is authorized to issue both paid-up and instalment By order of the Board of Governors, effective certificates of indebtedness, and is subject to regulation and examination by the Nebraska Department of Banking and April 4, 1978. Finance. 5 Company would serve Hastings Bank’s market, Adams County, and although Adams and Hall Counties are contiguous Voting for this action: Chairman Miller and Gover­ they are defined as separate banking markets. nors Wallich and Jackson. Voting against this action: 6 HSC, through Hastings Bank, controls 5.22 per cent of the market savings deposits and ranks fourth of eight financial Governors Coldwell and Partee. Absent and not voting: institutions in the Adams County Market. The three larger Governors Gardner and Burns. Governor Burns was a institutions, a savings and loan association and two commercial member of the Board at the time of its action on this banks, have a combined market total of 84.7 per cent of market application. savings deposits. 7 See the Board’s Order dated April 15, 1974, approving the formation of a joint venture between The Fort Worth (Signed) Griffith L. Garwood, National Corporation, Fort Worth, Texas, and Shawmut Asso­ [seal] Deputy Secretary of the Board. ciation, Inc., Boston, Massachusetts, by acquiring shares of American Cattle and Crop Services Corporation, Guymon, Oklahoma, a de novo corporation (60 Federal Reserve B ulle­ tin 382 (1974)). See also the Board’s Order dated October Banking Corporation, Miami, Florida (60 Federal Reserve 1, 1974, denying acquisition of a de novo bank by Southeast Bulletin 784 (1974)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 411 Dissenting Statement of Governor Partee First Union Bancorporation, St. Louis, Missouri I am unable to concur with the majority in its decision since I do not find that the public benefits of this proposal outweigh the possible adverse Order Approving Retention effects of formation of a joint venture by two bank of St. Louis Union Trust Company holding companies to engage in industrial banking and credit related insurance activities. The facts indicate that in the absence of a joint venture one First Union Bancorporation, St. Louis, Mis­ of the two bank holding companies would in all souri, a bank holding company within the meaning likelihood apply on its own to form an industrial of the Bank Holding Company Act, has applied loan Company in Hastings. Since there do not for the Board’s approval, under § 4(c)(8) of the appear to be any additional public benefits to be Act (12 U.S.C. § 1843(c)(8)) and § 225.4(b)(2) derived from having this activity carried out jointly of the Board’s Regulation Y (12 CFR rather than by one bank holding company alone, § 225.4(b)(2)), to retain shares of St. Louis Union the joint venture should not be approved. Further­ Trust Company, St. Louis, Missouri (“Trust more, since the State of Nebraska prohibits both Company”), a company that engages in personal multibank holding companies and branch banking, and group trust activities, probate activities, cor­ it would appear that the only vehicle for significant porate fiduciary activities, and making investments competition between these two holding companies in money market instruments for its own account. would be through the establishment of competing Such activities have been determined by the Board industrial banks. By approving this joint venture, to be closely related to banking (12 CFR the Board has foreclosed this possibility in the § 225.4(a)(4)). Trust Company also makes invest­ Hastings area. ments in equity securities for its own account For the above reasons, I would deny these within the limitation imposed by § 4(c)(6) of the applications. Act.1 Notice of the application, affording opportunity for interested persons to submit comments and views on the public interest factors, has been duly Dissenting Statement of Governor Coldwell published (43 Fed. Reg. 4679 (1978)). The time for filing comments and views has expired, and I join Governor Partee in his finding that the the Board has considered the application and all Board should not approve the formation of a joint comments received in the light of the public inter­ venture to form an industrial bank when it appears est factors set forth in § 4(c)(8) of the Act (12 more than likely that one of the two bank holding U.S.C. § 1843(c)(8)). companies, in the absence of Board approval of Applicant, the second largest banking organi­ the joint venture, would apply to engage in this zation in Missouri, controls eighteen subsidiary activity on its own. In addition, it appears to me banks in that State with aggregate deposits of $1.7 that the Board’s approval in this case, like certain billion, representing approximately 9 per cent of “chain banking” arrangements recently approved the total deposits in commercial banks in Mis­ by the Board,1 fosters evasion of state prohibitions souri.2 Applicant also engages, through subsidi­ on multi-bank holding companies. By permitting aries, in underwriting credit-related insurance, two bank holding companies to combine their acting as agent in the sale of credit-related insur­ resources by means of a joint venture, the Board ance, consumer finance, and holding properties is condoning a concentration of economic power used as bank premises by three of its subsidiary that would otherwise be impermissible under State banks. law. For these reasons, I would deny these appli­ Trust Company is a state-chartered non-deposit cations. trust company that operates, in effect, as the trust 1 Section 4(c)(6) of the Act permits a bank holding company 1 See, for example, the Dissenting Statement of Governor to acquire shares of any company that do not include more Coldwell to the Board’s Order dated February 27, 1978, than 5 per centum of the outstanding voting shares of such approving the formation of a bank holding company by Sueco, company. Inc., El Dorado, Kansas. 2 As of June 30, 1977. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

412 Federal Reserve Bulletin □ May 1978 department of Applicant’s lead bank, First Na­ of Trust Company outweigh any possible adverse tional Bank in St. Louis, St. Louis, Missouri effects that might result from Applicant’s retention (“Bank”).3 Trust Company is the twenty-third of those shares. largest trust organization in the United States and There is no evidence in the record indicating the largest in Missouri.4 In 1976, Trust Company that consummation of the proposal would result derived $13.8 million in gross income from its in undue concentration of resources, conflicts of operations, representing approximately 51.5 per interests, unsound banking practices, or other ad­ cent 5 of income from fiduciary services received verse effects. by trust organizations in the St. Louis market.6 Based upon the foregoing and other consid­ This approximation is overstated because the ag­ erations reflected in the record, the Board has gregate figure upon which this percentage is based determined that the balance of the public interest does not include income received by certain other factors the Board is required to consider under nondepository trust companies in the St. Louis §4(c)(8) is favorable. Accordingly, the application market, for which data is not readily available. is hereby approved. This determination is subject Trust Company was affiliated with Bank through to the conditions set forth in § 225.4(c) of Regu­ common stockholders and directors before Appli­ lation Y and to the Board’s authority to require cant was formed as a holding company with re­ such modification or termination of the activities spect to Bank in 1969, at which time both Bank of a holding company or any of its subsidiaries and Trust Company became subsidiaries of Appli­ as the Board finds necessary to assure compliance cant.7 It does not appear that the corporate reor­ with the provisions and purposes of the Act and ganization by which Applicant acquired Company the Board’s regulations and orders issued eliminated any competition. Currently, three of thereunder, or to prevent evasion thereof. Applicant’s subsidiary banks engage in certain By order of the Board of Governors, effective business activities in which Trust Company en­ April 10, 1978. gages. However, none of these banks compete in Voting for this Action: Chairman Miller and Gover­ the St. Louis market, and it does not appear that nors Wallich, Jackson, and Partee. Absent and not any significant competition exists between them voting: Governors Gardner and Coldwell. and Trust Company. Thus, approval of the pro­ (Signed) Cathy E. Minehan, posed retention should have no adverse effect on [seal] Assistant Secretary of the Board. competition. Approval of the application would avoid disruption of Trust Company’s service to custom­ ers of Bank and of Applicant’s other subsidiary Mercantile Bancorporation, Inc., banks. The Board concludes that the benefits to St. Louis, Missouri the public that can reasonably be expected to result from Applicant’s continued ownership of shares Order Approving Acquisition of Thorp Credit Company of Charleston 3 While Trust Company generally does not accept deposits, it does receive deposits under the circumstances permitted by § 225.4(a)(4) of the Board’s Regulation Y. Mercantile Bancorporation, Inc., St. Louis, 4 Based on market value of trust assets. Missouri, a bank holding company within the 5 The two largest of these control trust assets of approxi­ mately $125 million and $100 million respectively. meaning of the Bank Holding Company Act, has 6 The St. Louis market is defined as the City of St. Louis applied for the Board’s approval, under § 4(c)(8) and St. Louis County, portions of St. Charles, Lincoln, Frank­ of the Act (12 U.S.C. § 1843(c)(8)) and lin, and Jefferson Counties in Missouri, and portions of Jersey, Macoupin, Madison, St. Clair, and Monroe Counties in Illi­ § 225.4(b)(2) of the Board’s Regulation Y (12 nois. CFR § 225.4(b)(2)), to acquire through its subsid­ 7 Applicant has held shares of Trust Company under the authority of § 4(c)(5) of the Act, which permits bank holding iary, Franklin Finance Company, Clayton, Mis­ companies to hold shares of a kind that are eligible for souri (“Franklin”), the assets of Thorp Credit investment by national banks. Applicant now proposes to Company of Charleston, Charleston, West Vir­ relocate the main office of Bank and continue Trust Company’s activities at the old location, which would become a branch ginia (“Thorp Charleston”), an industrial loan facility of Bank. Under Missouri law, a State bank may not company that also acts as insurance agent for the engage in trust activities at a branch facility, and, accordingly, sale of insurance that is directly related to exten­ Applicant seeks to retain Trust Company as a nonbank subsid­ iary under § 4(c)(8) of the Act. sions of credit by Thorp Charleston, including Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 413 credit life and disability insurance.1 Such activities representing approximately 4 per cent of Frank­ have been determined by the Board to be closely lin’s total personal loans outstanding. Thus, upon related to banking (12 CFR § 225.4(a)(2) and (9)). acquisition of Thorp Charleston, Franklin would Notice of the application, affording opportunity hold approximately $3.1 million in personal loans for interested persons to submit comments and outstanding, representing 4.5 per cent of total views on the public interest factors, has been given personal loans outstanding in the market. How­ in accordance with § 4 of the Act (43 Fed. Reg. ever, the record indicates that 75 organizations 3437). The time for filing comments and views having an aggregate of 81 offices, including banks, has expired, and the Board has considered the consumer finance companies and credit unions, application and all comments received in the light originate personal loans in the Charleston market. of the public interest factors set forth in § 4(c)(8) Accordingly, the Board concludes that the acqui­ of the Act (12 U.S.C. § 1843(c)(8)). sition of Thorp Charleston by Applicant would Applicant, the largest banking organization in eliminate some existing competition between Missouri, controls 28 banks with aggregate de­ Thorp Charleston and Franklin. However, in light posits of approximately $2 billion, representing of the large number of competitors originating 10.9 per cent of the total commercial bank deposits personal loans in the Charleston market, and the in the State.2 Applicant also engages through sub­ small amount of competition between the two sidiaries in a variety of nonbanking activities, firms, the Board does not view these effects on including mortgage banking, consumer finance, competition as significant. insurance agency and real and personal property Acquisition by Applicant of Thorp Charleston leasing. Franklin directly and through subsidiaries would ensure the continuation of the availability presently operates 40 consumer finance and indus­ of personal loans and related credit life and credit trial loan offices in 12 States, including 10 offices disability insurance services to Thorp Charleston’s in West Virginia. customers at Thorp Charleston’s present location. Thorp Charleston operates a single industrial In addition, affiliation of the two firms may in­ loan office in the Charleston personal loan market.3 crease the availability of loanable funds to Frank­ On December 31, 1976, Thorp Charleston had lin’s customers, and may enable Franklin to be­ $1.9 million in personal loans outstanding. Frank­ come a more effective competitor in the Charleston lin also operates a small loan office, and through market. While the benefits to the public that would a subsidiary, an industrial loan office in the result from Applicant’s acquisition of Thorp Charleston market.4 Franklin has indicated that it Charleston are not substantial, based on these and plans to close both of its present offices upon other facts of record, the Board concludes that consummation of the proposed transaction.5 The such benefits are sufficient to outweigh any adverse record indicates that on December 31, 1976, effects on competition that may result from the Franklin had an aggregate of $1.2 million in per­ acquisition. Furthermore, there is no evidence in sonal loans outstanding in the Charleston market, the record to indicate that consummation of the proposed transaction would result in undue con­ centration of resources, unfair competition, con­ 1 Thorp Charleston’s parent, ITT Thorp Corporation flicts of interest, unsound banking practices or (“ITT”), intends to dispose of its two West Virginia offices and withdraw from the State, primarily because of the difficulty other effects that would be adverse to the public ITT has experienced in obtaining industrial loan licenses in interest. West Virginia. Accordingly, on March 10, 1978, Applicant Based upon the foregoing and other consid­ received approval from the Federal Reserve Bank of St. Louis, acting pursuant to delegated authority of its application to erations reflected in the record, the Board has acquire the assets of Thorp Credit Company of Parkersburg, determined that the balance of the public interest Parkersburg, West Virginia, ITT’s other West Virginia office. factors the Board is required to consider under 2 All banking data are as of June 30, 1977. * The Charleston personal loan market is approximated by § 4(c)(8) is favorable. Accordingly, the application the Charleston SMSA, which consists of Kanawha and Putnam is approved for the reasons summarized above. Counties. 4 Applicant’s subsidiary banks, which also make personal The acquisition shall be accomplished no later than loans, operate only in Missouri and do not compete in the three months after the effective date of this Order, Charleston market. unless such period is extended by the Board or 5 Franklin has entered into an agreement with a finance company having offices in the Charleston market, to sell the shares of its industrial loan subsidiary, contingent upon its acquisition of Thorp Charleston. Under this agreement Franklin December 31, 1976). With respect to the small loan office, would transfer its subsidiary’s industrial loan license, but not Franklin proposes to close it and liquidate its personal loan its personal loan receivables ($0.6 million outstanding on receivables ($0.6 million on December 31, 1976). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

414 Federal Reserve Bulletin □ May 1978 the Federal Reserve Bank of St. Louis. The ap­ the total deposits in commercial banks in the proval of this application is subject to the condi­ State.1 Through nonbank subsidiaries Applicant tions set forth in § 225.4(c) of Regulation Y and engages in lending and leasing activities pursuant to the Board’s authority to require such modifi­ to section 4(c)(8) of the Act. cation or termination of the activities of a holding Trust Company was organized in 1970 under company or any of its subsidiaries as the Board the Wyoming Business Corporation Act. It finds necessary to assure compliance with the operates one office in Gillette, Wyoming, that provisions and purposes of the Act and the Board’s solicits passive trusts and has generated trust assets regulations and orders issued thereunder, or to of $1 million that are managed by the Estate and prevent evasion thereof. Trust Division of Applicant’s subsidiary bank. By order of the Board of Governors, effective Through the acquisition of Trust Company, Ap­ April 7, 1978. plicant proposes to solicit trust business in the state of Wyoming. Applicant will continue Trust Com­ Voting for this action: Chairman Miller and Gover­ pany’s solicitation of passive trusts that will re­ nors Wallich, Jackson, and Partee. Absent and not voting: Governors Gardner and Coldwell. quire management in the future and will seek active trust business, including appointments (Signed) Theodore E. Allison, under wills to manage estates and other appoint­ [seal] Secretary of the Board. ments as trustee. The Estate and Trust Division of Applicant’s subsidiary bank would provide Omaha National Corporation, Trust Company with all accounting and other Omaha, Nebraska support services for trusts as agent for Trust Com­ Order Approving Acquisition pany and manage the trust assets. Since 1975 of Wyoming Trust and Management Co. Applicant’s subsidiary bank has managed accounts for Trust Company on an agency basis. In view Omaha National Corporation, Omaha, Ne­ of this existing relationship between Applicant and braska, a bank holding company within the mean­ Trust Company and the fact that Trust Company ing of the Bank Holding Company Act, has ap­ has been relatively inactive, functioning primarily plied for the Board’s approval, under § 4(c)(8) to solicit trust accounts for Applicant’s subsidiary of the Act (12 U.S.C. § 1843(c)(8)) and bank, it appears that consummation of the proposal § 225.4(b)(2) of the Board’s Regulation Y (12 would not have any significant adverse effects on CFR § 225.4(b)(2)), to acquire Wyoming Trust competition in any relevant area. and Management Company, Gillette, Wyoming The letters of comments submitted in connection (“Trust Company”), a company that engages in with this application by Sheridan Bank and Casper the activity of generating trust accounts that are Bank make the contentions that Trust Company currently and would continue to be managed by is not properly organized under Wyoming law, that itself and by Omaha National Bank, Omaha, Ne­ its activities are not closely related to banking as braska, a subsidiary of Applicant. Such activity required by § 4(c)(8) of the Act, that Applicant, has been determined by the Board to be closely being located in Nebraska, is barred by section related to banking (12 CFR § 225.4(a)(4)). 3(d) of the Bank Holding Company Act from Notice of the application, affording opportunity acquiring a trust company in Wyoming, and that for interested persons to submit comments and approval of the application would not be in the views on the public interest factors, has been duly public interest. Since these comments were filed published (42 Fed. Reg. 45954 (1977)). The time with the Board, Trust Company was granted a for filing comments and views has expired, and charter by the State Examiner of the State of the Board has considered the application and all Wyoming to operate as a trust company pursuant comments received including those submitted by to the Wyoming law governing the organization The Bank of Commerce, Sheridan, Wyoming of financial institutions, as amended in 1977.2 The (“Sheridan Bank”), and Wyoming National Board has determined that performing the activi­ Bank, Casper, Wyoming (“Casper Bank”), in ties that may be conducted by a trust company light of the public interest factors set forth in § 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)). 1 All banking data are as of June 30, 1977. Applicant, a one-bank holding company, con­ 2 Trust Company applied for such a charter on December 29, 1977, and the State Examiner held a hearing on the charter trols the largest bank in Nebraska with deposits application on February 16, 1978. The charter application was of $453.9 million, representing 6.7 per cent of (Footnote continued on following page) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 415 is closely related to banking, as set forth in section three months after the effective date of this Order, 225.4(a)(4) of the Board’s Regulation Y. Further­ unless such period is extended for good cause by more, the acquisition of Trust Company by an the Board or by the Federal Reserve Bank of out-of-state bank holding company is not barred Kansas City, pursuant to authority hereby dele­ by section 3(d) of the Bank Holding Company Act gated. because Trust Company is not a “bank” within By order of the Board of Governors, effective the meaning of the Act and neither accepts deposits April 28, 1978. nor makes loans of any kind. As discussed below, Voting for this action: Chairman Miller and Gover­ the Board has concluded that approval of the nors Gardner, Wallich, Coldwell, Jackson, and Partee. application would be in the public interest. In light of these considerations, the Board concludes that (Signed) Theodore E. Allison, the objections to approval of the application sub­ [seal] Secretary of the Board. mitted by Sheridan Bank and Casper Bank do not United Missouri Bancshares, Inc., have a basis in fact and do not weight against Kansas City, Missouri approval of the application. It is anticipated that Applicant’s acquisition of Order Approving Acquisition Trust Company would result in benefits to the of City Bond and Mortgage Company public by providing a fuller range of fiduciary United Missouri Bancshares, Inc., Kansas City, services in Wyoming. Applicant proposes to staff Missouri, a bank holding company within the Trust Company with a full-time representative to meaning of the Bank Holding Company Act, has solicit business and counsel customers, thereby applied for the Board’s approval, under section increasing the business expertise available to the 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) and public through Trust Company. Furthermore, there section 225.4(b)(2) of the Board’s Regulation Y is no evidence in the record to indicate that con­ (12 CFR § 225.4(b)(2)) to acquire City Bond and summation of the proposed transaction would re­ Mortgage Company, Kansas City, Missouri sult in any undue concentration of resources, un­ (“City Bond”), a company that engages in the fair competition, conflicts of interest, unsound activity of originating and servicing residential, banking practices, or other effects that would be apartment, commercial and industrial loans.1 City adverse to the public interest. The Board concludes Bond also engages in the activity of acting as agent that the benefits to the public can reasonably be for the sale of credit life insurance, credit accident expected to result from consummation of this and health insurance, and mortgage protection life proposal are consistent with approval of the appli­ and mortgage protection disability insurance di­ cation. rectly related to tis extensions of credit.2 The Based upon the foregoing and other consid­ Board has determined that such activities are so erations reflected in the record, the Board has closely related to banking as to be a proper incident determined that the balance of the public interest thereto (12 CFR § 225.4(a)(1) and (9)). Addi­ factors the Board is required to consider under tionally, City Bond currently engages in certain § 4(c)(8) is Favorable. Accordingly, the application other activities that the Board has not determined is hereby approved. This determination is subject are closely related to banking. to the conditions set forth in § 225.4(c) of Regu­ lation Y and to the Board’s authority to require such modification or termination of the activities of a holding company or any of its subsidiaries 1 Applicant also originally applied to acquire indirectly 50 as the Board finds necessary to assure compliance per cent of the shares of Central Management, Inc., (“CMI”), a subsidiary of City Bond that was engaged in acting as an with the provisions and purposes of the Act and investment adviser to a real estate investment trust. However, the Board’s regulations and orders issued Applicant has stated that CMI’s advisory contract has been terminated, and that City Bond will divest its interest in CMI thereunder, or to prevent evasion thereof. on or before consummation of the proposed acquisition. Ac­ The transaction shall be made not later than cordingly, Applicant has indicated that its application with respect to CMI should not be considered by the Board. 2 City Bond also acts as agent for the sale of property and casualty insurance sold in connection with its extensions of (Footnote 2 Continued) credit. However, Applicant’s proposal to acquire City Bond approved on March 7, 1978, subject to the condition that Trust does not include an application for this activity and Applicant Company meet the appropriate capital requirements. Applicant has stated that the sale of property and casualty insurance by has stated that it will pay the necessary capital into Trust City Bond will be terminated on or before acquisition by Company. Applicant. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

416 Federal Reserve Bulletin □ May 1978 Notice of the application, affording opportunity than one-half per cent of such loans in the Kansas for interested persons to submit comments and City market. In addition to City Bond and Appli­ views on the public interest factors, has been duly cant, there are numerous other financial organi­ published (42 Fed. Reg. 61084 (1977)). The time zations originating all types of mortgage loans in for filing comments and views has expired, and the Kansas City market. the Board has considered the application and all While consummation of the proposal would comments received in light of the public interest appear to eliminate some existing competition in­ factors set forth in section 4(c)(8) of the Act (12 asmuch as Applicant and City Bond operate in the U.S.C. § 1843(c)(8)). same market, the Board notes that City Bond was Applicant, the sixth largest banking organi­ formed to assume the mortgage loans business of zation in Missouri, controls nineteen subsidiary Applicant’s lead bank when it became a national banks in that State with aggregate deposits of $919 bank in 1934, that City Bond still maintains its million, representing approximately 4.83 per cent office in the lead bank’s main building, and that of the total deposits in commercial banks in Mis­ there is and has been significant common share souri.3 With six subsidiary banks in the market, ownership of Applicant and City Bond. Thus, it Applicant is the third largest banking organization appears that the nature of this relationship is such in the Kansas City market having an aggregate that little, if any, meaningful competition presently of $604.2 million in deposits, representing ap­ exists between Applicant and City Bond. Viewed proximately 10.9 per cent of commercial bank in light of the history of the established relation­ deposits in the market.4 Applicant does not cur­ ship between Applicant and City Bond, the effects rently engage in any significant nonbanking activ­ of consummation of the proposed transaction on ities. existing competition appear to be slight. Accord­ City Bond operates a single mortgage banking ingly, the Board concludes that the proposed ac­ office in Kansas City, Missouri. As of June 30, quisition of City Bond by Applicant would not 1977, City Bond, with a real estate mortgage have significant adverse effects on competition. servicing portfolio of $138.6 million,0 ranked The facts of record indicate that City Bond’s 234th among all mortgage companies in the United market share has declined in recent years. Acqui­ States. City Bond engages principally in the origi­ sition by Applicant of City Bond would provide nation and servicing of 1-4 family residential City Bond with access to Applicant’s substantial mortgage loans in the Kansas City market, as well financial resources and widespread investor rela­ as multifamily and commercial and industrial tionships. For example, the proposed transaction mortgage loans. It also makes construction loans, would result in an immediate injection of $300,000 and engages in credit-related insurance agency into City Bond’s capital accounts. Thus, it is activities. In 1976, City Bond originated $1.6 anticipated that the proposed affiliation of City million 1-4 family residential mortgage loans, Bond with Applicant will enable City Bond to representing approximately less than one-half of continue to better serve its existing customers, and one per cent of such loans in the Kansas City to revitalize itself to become a more aggressive market. Applicant, through its subsidiary banks in competitor in the mortgage banking business. On the Kansas City market, is likewise engaged in the basis of these and other facts of record, the originating commercial and industrial mortgage Board concludes that the benefits to the public that loans, as well as 1-4 family residential mortgage would result from Applicant’s acquisition of City loans and construction loans. In 1976, Applicant Bond are sufficient to outweigh any possible ad­ originated $2.0 million of 1-4 family residential verse effects on the public interest that might result mortgage loans, representing approximately less from the proposed acquisition. Furthermore, there is no evidence of record to indicate that consum­ mation of the proposed acquisition would result in undue concentration of resources, conflicts of 3 All banking data are as of December 31, 1976, unless otherwise noted, and reflect the acquisition by Applicant of interest, unsound banking practices, or other ad­ the Cass County Bank, Peculiar, Missouri, approved by the verse effects. Board by Order of December 23, 1977. 4 The Kansas City market is defined as Johnson and Wyan­ City Bond directly and through subsidiaries also dotte Counties in Kansas, and Jackson, Clay, and Platte Coun­ holds investments in certain real property, an ac­ ties and the northern half of Cass County in Missouri. tivity the Board has not determined to be permis­ 5 American Banker of October 24, 1977. As of June 30, 1976, it had a real estate mortgage servicing portfolio of $151.8 sible for bank holding companies. Therefore, City million and was the nation’s 202nd largest mortgage company. Bond must dispose of such real estate holdings Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 417 no later than two years from the effective date of By Order of the Board of Governors, effective this Order.H City Bond also holds an interest in April 25, 1978. excess of five per cent and manages an uncom­ Voting for this action: Chairman Miller and Gover­ pleted mobile home park, and is thereby engaged nors Wallich, Coldwell, Jackson, and Partee. Absent in real estate development and property managing, and not voting: Governor Gardner. activities which the Board has determined are not permissible for bank holding companies. Appli­ (Signed) Griffith L. Garwood, cant has stated that on or before consummation [seal] Deputy Secretary of the Board. of the subject proposal, City Bond will reduce its interest in the mobile home park to 5 per cent Certifications Pursuant to the or less and cease its management and development Bank Holding Company Tax Act of 1976 activities with respect to the mobile home park. The Brantley Company, Inc., Finally, in servicing loans for institutional inves­ Blackshear, Georgia tors, City Bond is obligated by contract to manage the property in the event of default by the bor­ [Docket No. TCR 76-134] rower, and City Bond is currently managing sev­ eral of such properties. However, Applicant has The Brantley Company, Inc., Blackshear, stated that upon consummation of the proposed Georgia (“Brantley”) has requested a prior certif­ acquisition, it will cause City Bond to obtain the ication pursuant to section 1101(b) of the Internal services of a property manager to maintain and Revenue Code (“Code”), as amended by section manage any such defaulted property. 2(a) of the Bank Holding Company Tax Act of Based upon the above and upon other facts of 1976, that its proposed divestiture of 8,360 shares record, the Board has determined that the balance of The Blackshear Bank, Blackshear, Georgia of the public interest factors the Board is required (“Bank”), presently held by Brantley, through the to consider under section 4(c)(8) is favorable. pro rata distribution of such shares to the share­ Accordingly, the application is hereby approved holders of Brantley, is necessary or appropriate subject to the conditions that City Bond divest its to effectuate the policies of the Bank Holding interest in CMI and cease its advisory activities Company Act (12 U.S.C. § 1841 et seq.) (“BHC prior to consummation of the proposed acquisition, Act”). that it dispose of the real estate holdings no later In connection with this request, the following than two years from the effective date of this information is deemed relevant, for purposes of Order, that it reduce its interest in the mobile home issuing the requested certification:1 park to no more than 5 per cent on or before 1. Brantley is a corporation organized under the consummation of this proposal, and that it cease laws of the State of Georgia on April 6, 1891. all impermissible property management activities 2. Brantley first acquired a substantial portion on or before consummation of this proposal. This of Bank’s outstanding voting shares in 1891. As determination is also subject to the conditions set of February 20, 1957, Brantley owned and con­ forth in section 225.4(c) of Regulation Y and to trolled 428 shares, representing 42.8 per cent of the Board’s authority to require such modification the outstanding voting shares, of Bank. Additional or termination of the activities of a holding com­ shares of Bank were subsequently acquired pany or any of its subsidiaries as the Board finds through stock dividends and some Bank shares necessary to assure compliance with the provisions were sold such that on July 7, 1970, Brantley held and purposes of the Act and the Board’s regula­ 836 shares, representing 41.8 per cent of the tions and orders issued thereunder, or to prevent outstanding voting shares of Bank. Brantley pur­ evasion thereof. The transaction shall be made not chased 20 shares of Bank on July 27, 1970, and later than three months after the effective date of on July 19, 1971, one share of Bank was issued this Order, unless such period is extended for good to Bank’s shareholders for every one share of stock cause by the Board or by the Federal Reserve Bank then outstanding. On July 30, 1976, five shares of Kansas City. of Bank were issued to Bank’s shareholders in In accomplishing a divestiture of such property, Applicant 1 This information derives from Brantley’s correspondence has indicated its willingness to transfer irrevocably the subject with the Board concerning its request for this certification, real estate to an independent trustee who shall have the duty Brantley’s Registration Statement filed with the Board pursuant of divesting the property within the applicable time period. to the BHC Act, and other records of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

418 Federal Reserve Bulletin □ May 1978 exchange for every one share of stock then out­ gain under section 1101(b)(1) of the Code, made standing. Immediately thereafter, Bank issued under the BHC Act as if that Act did not contain 5,000 additional shares of stock in order to in­ clause (ii) of section 4(c) or the proviso of section crease its capital. None of these shares were ac­ 4(a)(2). Brantley has represented that it will make quired by Brantley. Thus, Brantley now holds such an election.3 8,560 shares, representing 34.24 per cent of the 5. Brantley has committed to the Board that it outstanding voting shares, of Bank.2 will terminate all interlocking relationships be­ 3. Brantley became a bank holding company tween Brantley and Bank by July 1, 1978. on December 31, 1971, as a result of the 1970 On the basis of the foregoing information, it Amendments to the BHC Act, by virtue of its is hereby certified that: ownership and control at that time of more than (A) Brantley is a qualified bank holding cor­ 25 per cent of the outstanding voting shares of poration, within the meaning of section 1103(b) Bank, and it registered as such with the Board of the Code, and satisfies the requirements of that on May 21, 1971. Brantley would have been a section; bank holding company on July 7, 1970, if the BHC (B) the 8,360 shares of Bank that Brantley Act Amendments of 1970 had been in effect on proposes to distribute to its shareholders are all such date, by virtue of its ownership and control or part of the property by reason of which Brantley on that date of more than 25 per cent of the controls (within the meaning of section 2(a) of the outstanding voting shares of Bank. BHC Act) a bank or bank holding company; and 4. Brantley holds property acquired by it on or (C) the distribution of such 8,360 shares is before July 7, 1970, the disposition of which, but necessary or appropriate to effectuate the policies for clause (ii) of section 4(c) of the BHC Act and of the BHC Act. the proviso of section 4(a)(2) of that Act, would This certification is based upon the repre­ be necessary or appropriate to effectuate section sentations made to the Board by Brantley and upon 4 of the BHC Act, if Brantley were to continue the facts set forth above. In the event the Board to be a bank holding company beyond December should hereafter determine that facts material to 31, 1980, and which property, but for such clause this certification are otherwise than as represented and such proviso, would be “prohibited property” by Brantley, or that Brantley has failed to disclose within the meaning of section 1103(c) of the Code. to the Board other material facts, it may revoke Sections 1103(g) and 1103(h) of the Code provide this certification. This certification is granted upon that any bank holding company may elect, for the condition that after July 1, 1978, no person purposes of Part VIII of subchapter 0 of chapter holding an office or position (including an advisory 1 of the Code, to have the determination whether or honorary position) with Brantley or any of its property is “prohibited property”, or is property subsidiaries as a director, policymaking employee eligible to be distributed without recognition of or consultant, or who performs (directly or through an agent, representative or nominee) functions 2 Under subsection (c) of section 1101 of the Code, property comparable to those normally associated with such acquired after July 7, 1970, generally does not qualify for the office or position, will hold any such office or tax benefits of section 1101(b) when distributed by an otherwise position or perform any such function with Bank qualified bank holding company. However, where such prop­ erty was acquired by a qualified bank holding company in a or any of its subsidiaries, and is also conditioned transaction in which gain was not recognized under section upon Brantley’s making the elections required by 305(a) of the Code or section 368(a)(1)(E) of the Code, then sections 1103(g) and 1103(h) of the Code at such section 1101(b) is applicable. Brantley has indicated that the shares of Bank acquired on July 19, 1971, and June 30, 1976, time and in such manner as the Secretary of the were acquired in transactions in which gain was not recognized Treasury or his delegate may by regulation pre­ under section 305(a) and section 368(a)(1)(E), respectively, of the Code. Accordingly, even though such shares were scribe. acquired after July 7, 1970, those shares would nevertheless By order of the Board of Governors, acting qualify as property eligible for the tax benefits provided in through its Acting General Counsel, pursuant to section 1101(b) of the Act, by virtue of section 1101(c), if the shares of Bank were in fact received in a transaction in which gain was not recognized under sections 305(a) or 368(a)(1)(E) of the Code. Of the total 8,560 shares of Bank presently held by Brantley, 200 shares represent property acquired after July 7, 1970, for 5 Sections 1103(g) and 1103(h) of the Code require that an which none of the exemptions provided in section 1 101(c) of election thereunder be made “at such time and in such manner the Code appears to be available. Brantley has represented that as the Secretary [of the Treasury] or his delegate may by it will divest these shares of Bank through the sale of such regulations prescribe.” As of this date no such regulations have shares. been promulgated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 419 delegated authority, (12 CFR § 265.2(b)(3)), ef­ direct ownership and control at that time of more fective April 3, 1978. than 25 per cent of the outstanding voting shares (Signed) Griffith L. Garwood, of Security, and by virtue of its indirect ownership [seal] Deputy Secretary of the Board. and control at that time, through Security, of more than 25 per cent of the outstanding voting shares UniCapital Corporation, of Bank, and it registered as such with the Board Atlanta, Georgia on July 21, 1971.2 UniCapital would have been [Docket No. TCR 76-148] a bank holding company on July 7, 1970, if the BHC Act Amendments of 1970 had been in effect UniCapital Corporation, Atlanta, Georgia on such date, by virtue of its direct and indirect (“UniCapital”), has requested a prior certification ownership and control on that date of more than pursuant to section 6158(a) of the Internal Revenue 25 per cent of the outstanding voting shares of Code (“Code”), as added by section 3(a) of the Security and Bank respectively. Bank Holding Company Tax Act of 1976 (“Tax 4. On September 12, 1977, UniCapital held Act”), that its sale on September 12, 1977, of property acquired by it on or before July 7, 1970, 55,896 shares of The First National Bank of Cape the disposition of which would be necessary or Canaveral, Cape Canaveral, Florida (“Bank”), to appropriate to effectuate section 4 of the BHC Act First Bankers Corporation of Florida, Pompano if UniCapital were to remain a bank holding com­ Beach, Florida (“First Bankers”), was necessary pany beyond December 31, 1980, and which or appropriate to effectuate the policies of the Bank property is “prohibited property” within the Holding Company Act (12 U.S.C. § 1841 et seq.) meaning of sections 6158(f)(2) and 1103(c) of the (“BHC Act”). UniCapital has also requested a Code. final certification pursuant to section 6158(c)(2) of 5. On September 12, 1977, UniCapital sold all the Code, as added by section 3(a) of the Tax of the 55,896 shares of Bank owned by it, repre­ Act, that it has (before the expiration of the period senting 96.1 per cent of the outstanding voting prohibited property is permitted under the BHC shares of Bank, to First Bankers for $1,935,678 Act to be held by a bank holding company) ceased in cash. to be a bank holding company. 6. Neither UniCapital nor any subsidiary of In connection with these requests, the following UniCapital holds any interest in First Bankers, information is deemed relevant for purposes of Bank, or in any other bank or any company that issuing the prior and final certification:1 controls a bank. 1. United Stated Finance Company, Inc., At­ 7. Neither First Bankers nor any subsidiary of lanta, Georgia (“Finance”), was a corporation First Bankers, including Bank, holds any interest organized under the laws of the State of Georgia in UniCapital or any subsidiary of UniCapital. on February 19, 1958. UniCapital is a corporation 8. No officer, director (including honorary or organized under the laws of the State of Delaware advisory director) or employee with policy-making on May 9, 1969. functions of UniCapital or any subsidiary of Uni­ 2. On February 29, 1968, Finance, through its Capital also holds any such position with First wholly-owned subsidiary Security Financial Cor­ Bankers, or any subsidiary of First Bankers, in­ poration (“Security”), held indirect ownership cluding Bank, or with any other bank or any and control of approximately 94 per cent of the company that controls a bank. outstanding voting shares of Bank. On June 13, 9. UniCapital does not control in any manner 1969, Finance was merged into UniCapital, a the election of a majority of directors, or exercise corporation having no business or subsidiaries, and a controlling influence over the management or UniCapital thereby acquired indirect ownership policies, of First Bankers or any subsidiary of First and control of Bank. Bankers, incuding Bank, or of any other bank or 3. UniCapital became a bank holding company company that controls a bank. on December 31, 1970, as a result of the 1970 Amendments to the BHC Act, by virtue of its 2 Security similarly became a bank holding company on December 31, 1970, as a result of the 1970 Amendments to 1 This information derives from UniCapital’s corre­ the BHC Act, by virtue of its direct ownership and control spondence with the Board concerning its request for this of more than 25 per cent of the outstanding voting shares of certification, UniCapital’s Registration Statement filed with the Bank, and it registered as such with the Board on July 16, Board pursuant to the BHC Act, and other records of the Board. 1971. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

420 Federal Reserve Bulletin □ May 1978 On the basis of the foregoing information, it meaning of section 2(a) of the BHC Act) a bank is hereby certified that:3 or bank holding company; (A) at the time of its sale of 55,896 shares of (C) the sale of the shares of Bank was necessary Bank to First Bankers, UniCapital was a qualified or appropriate to effectuate the policies of the BHC bank holding company, within the meaning of Act; section 6158(f)(1) and section 1103(b) of the (D) UniCapital has (before the expiration of the Code, and satisfied the requirements of those sec­ period prohibited property is permitted under the tions; BHC Act to be held by a bank holding company) (B) the shares of Bank that UniCapital sold to ceased to be a bank holding company. First Bankers were all or part of the property by This certification is based upon the repre­ reason of which UniCapital controlled (within the sentations made to the Board by UniCapital and upon the facts set forth above. In the event the Board should hereafter determine that facts mate­ 3 Pursuant to section 6158(a) of the Code, with respect to rial to this certification are otherwise than as re­ the sale of bank property, the Board must certify before such sale that the sale is necessary or appropriate to effectuate the presented by UniCapital, or that UniCapital has policies of the BHC Act. UniCapital requested such certifi­ failed to disclose to the Board other material facts, cation by letter dated August 9, 1977. On that date, the it may revoke this certification. application of First Bankers to acquire UniCapital’s interest in Bank was approved by the Federal Reserve Bank of Atlanta By order of the Board of Governors, acting acting pursuant to delegated authority. At that time, UniCapital through its Acting General Counsel pursuant to informed the Board of its intention to sell the shares of Bank in September 1977. UniCapital clearly met the requirements delegated authority (12 CFR § 265.2(b)(3)), ef­ for a prior certification at the time it filed the request and at fective March 31, 1978. the time of the sale of the shares of Bank on September 21, 1977. The issuance of this certification is based, in part, upon (Signed) Griffith L. Garwood, such circumstances. [seal] Deputy Secretary of the Board. ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT By the Board of Governors During April 1978, the Board of Governors approved the applications listed below. Copies are available upon request to Publications Services, Division of Administrative Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Board action (effective Applicant Bank(s) date) Bank of Montana System, Midstate Bank of 4/17/78 Great Falls, Montana, Lewistown, Montana Montana Central National Corporation, The Citizens National 4/28/78 Richmond, Bank of Emporia, Virginia Emporia, Virginia First Bancorp, Inc., Clifton Bank, Clifton, 4/19/78 Corsicana, Texas Texas First Gridley BanCorporation, First Bank & Trust Co. 4/19/78 Inc., Gridley, of Gridley, Gridley, Illinois Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 421 Section 3—Continued Board action Applicant Bank(s) (effective date) First Steuben Bancorp, Inc., Community National 4/26/78 Toronto, Bank, Flushing, Ohio Ohio United Michigan Corporation, Community State Bank 4/28/78 Flint, of Fowlerville, Michigan Fowlerville, Michigan Order Approved Under Bank Merger Act Reserve Effective Applicant Bank(s) Bank date Metropolitan Bank and Trust American Guaranty Bank, Atlanta 4/27/78 Company, Tampa, Florida Tampa, Florida By Federal Reserve Banks Recent applications have been 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 First Missouri Banks, Montgomery County Bank, St. Louis 4/28/78 Inc., Creve Coeur, Montgomery City, Missouri Missouri Section 4 Nonbanking company Reserve Effective Applicant Bank(s) (or activity) Bank date BancOhio Corporation, Franklinton Cleveland 4/6/78 Columbus, Assurance Ohio Company, Phoenix, A n o Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

422 Federal Reserve Bulletin □ May 1978 PENDING CASES INVOLVING THE BOARD OF GOVERNORS* Hawkeye Bancorporation v. Board of Governors, BankAmerica Corporation v. Board of Gover­ filed April 1978, U.S.C.A. for the Eighth Cir­ nors, filed May 1977, U.S.D.C. for the North­ cuit. ern District of California. Dakota Bankshares, Inc. v. Board of Governors, BankAmerica Corporation v. Board of Gover­ filed April 1978, U.S.C.A. for the Eighth Cir­ nors, filed May 1977, U.S.C.A. for the Ninth cuit. Circuit. Citicorp v. Board of Governors, filed March 1978, Central Wisconsin Bankshares, Inc. v. Board of U.S.C.A. for the Second Circuit. Governors, filed June 1976, U.S.C.A. for the Security Bancorp and Security National Bank v. Seventh Circuit. Board of Governors, filed March 1978, National Urban League, et al. v. Office of the U.S.C.A. for the Ninth Circuit. Comptroller of the Currency, et al., filed April Michigan National Corporation v. Board of Gov­ 1976, U.S.D.C. for the District of Columbia ernors, filed January 1978, U.S.C.A. for the Circuit. Sixth Circuit. Memphis Trust Company v. Board of Governors, Wisconsin Bankers Association v. Board of Gov­ filed February 1976, U.S.D.C. for the Western ernors, filed January 1978, U.S.C.A. for the District of Tennessee. District of Columbia. First Lincolnwood Corporation v. Board of Gov­ Gelfand v. Board of Governors, filed December ernors, filed February 1976, U.S.C.A. for the 1977, U.S.C.A. for the Fifth Circuit. Seventh Circuit. Vickars-Henry Corp. v. Board of Governors, filed Roberts Farms, Inc. v. Comptroller of the Cur­ December 1977, U.S.C.A. for the Ninth Cir­ rency, et al., filed November 1975, U.S.D.C. cuit. for the Southern District of California. Emch v. The United States of America, et al., Florida Association of Insurance Agents, Inc. v. filed November 1977, U.S.D.C. for the Eastern Board of Governors, and National Association District of Wisconsin. of Insurance Agents, Inc. v. Board of Gover­ Corbin v. Federal Reserve Bank of New York, nors, filed August 1975, actions consolidated Board of Governors, et al., filed October 1977, in U.S.C.A. for the Fifth Circuit. U.S.D.C. for the Southern District of New David R. Merrill, et al., v. Federal Open Market York. Committee of the Federal Reserve System, filed Central Bank v. Board of Governors, filed Oc­ May 1975, U.S.D.C. for the District of Colum­ tober 1977, U.S.C.A. for the District of Co­ bia. lumbia. Bankers Trust New York Corporation v. Board Investment Company Institute v. Board of Gover­ of Governors, filed May 1973, U.S.C.A. for nors, filed September 1977. U.S.C.A. for the the Second Circuit. District of Columbia. Plaza Bank of West Port v. Board of Governors, filed September 1977, U.S.C.A. for the Eighth Circuit. First State Bank of Abilene, Texas v. Board of *This list of pending cases does not include suits against Governors, filed August 1977, U.S.C.A. for the the Federal Reserve Banks in which the Board of Governors District of Columbia. is not named a party. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

423 Announcements CHANGE IN DISCO UNT RATE that banks and savings and loan associations are permitted to pay on comparable deposit maturities. The two new certificates will provide these insti­ The Board of Governors of the Federal Reserve System has announced its approval of actions by tutions with the tools to become more competitive the directors of the 12 Federal Reserve Banks, with interest rates in the open market. increasing the discount rate of those Banks from The action by the Federal Home Loan Bank 6V2 per cent to 7 per cent. Board applies to members of the Federal Home Loan Bank System, principally Federally insured Action was taken in recognition of increases that savings and loan associations; that of the Federal have already occurred in other short-term interest rates, and this action will bring the discount rate Deposit Insurance Corporation to Federally in­ into closer alignment with short-term rates gener­ sured mutual savings banks and commercial banks that are not members of the Federal Reserve Sys­ ally. tem; and that of the Federal Reserve to commercial The discount rate is the interest rate that member banks that are members of the Federal Reserve banks are charged when they borrow from their System, including all national banks. district Federal Reserve Banks. The announcement was made after consultation The new rate was effective at the Federal Re­ among the three agencies and with the U.S. serve Banks of New York, Philadelphia, Cleve­ Treasury Department and the Comptroller of the land, Richmond, Atlanta, Chicago, St. Louis, Currency. Minneapolis, Kansas City, and San Francisco on No change was made in the rates on passbook May 11, 1978, and at the Reserve Banks of Boston savings nor in the maximum permissible rates that and Dallas on May 12, 1978. may be paid by banks or savings and loan associ­ ations on time deposits ranging from 30 days to less than 8 years. NEW TYPES The main features of the two new instruments OF TIM E CERTIFICATES are: Under action announced jointly by the Federal 1. Money market certificates will have many Flome Loan Bank Board, the Federal Deposit of the characteristics of a 6-month Treasury bill. Insurance Corporation, and the Federal Reserve They must be issued in minimum denominations Board, commercial banks, mutual savings banks, of $10,000 with a 6-month (26-week) maturity. and savings and loan associations will be allowed The maximum permissible rate of interest that may to offer their customers two new types of time be paid will be tied to the average (auction) yield certificates at interest rates higher than those pres­ for the 6-month Treasury bill in the most recent ently permitted. weekly auction. The action, which is effective June 1, will Treasury bills are auctioned weekly, normally provide more flexibility for financial institutions on Monday, and are issued three business days to compete for funds to assure an adequate flow later, normally on Thursday. The ceiling rate on of credit into housing and to meet other borrowing the money market certificates—which are nonneneeds. gotiable—will be adjusted each week effective on The two instruments are (1) a short-term money the day the new 6-month bills are issued. Com­ market certificate with a ceiling interest rate that mercial banks may pay a rate not to exceed the changes weekly for new deposits with changes in auction average (auction average on a discount the average yield on new issues of 6-month Treas­ basis), and savings and loan associations and mu­ ury bills, and (2) an 8-year certificate with a fixed tual savings banks may pay lA of 1 per cent more. maximum rate of interest. If a holiday falls on Monday, the auction is held Interest rates available on Treasury securities in the previous Friday. the open market now exceed the maximum rates The average yield on Treasury bills is an­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

424 Federal Reserve Bulletin □ May 1978 nounced by the Treasury Department late in the flow of funds to thrift institutions and to banks day of the auction. The average yield on 6-month after automatic transfer becomes effective, to de­ Treasury bills auctioned May 8, 1978, was 6.986 termine what, if any, changes take place as a result per cent. Since institutions may offer this new of the action. certificate for the first time beginning June 1, the Automatic transfers will be possible only if ceiling rate will be pegged initially to the Treasury arrangements are made in advance between the bill auction to be held Friday, May 26. bank and the customer. Use of the service will 2. Long-term certificates may be issued in min­ be entirely voluntary on the part of the customer. imum denominations of $ 1,000 with maturities of Banks will be permitted, but not required, to offer 8 years or more at a maximum rate of 7% per the service. cent for commercial banks and 8 per cent for The Board acted after extensive review of a savings and loan associations and mutual savings record number of responses— 1,380—to its pro­ banks. posal of the automatic transfer plan issued in early The introduction of an 8-year fixed-ceiling cer­ February. A majority of 721 (52 per cent) of the tificate will not only add to the ability of financial individuals, groups, governmental agencies, and institutions to compete more effectively for funds institutions responding favored the proposal. but will also have the advantage of lengthening Customers making automatic transfer arrange­ the deposit structure of institutions, thus contri­ ments with their banks can avoid the substantial buting to greater stability in the cost and avail­ fees banks usually charge for overdraft checks. ability of funds. Similarly, customers using the service will be able Both the money market certificate and the new to keep checking accounts at a pre-determined long-term certificate are subject to existing penal­ level to avoid check service charges. Participating ties for early withdrawal, namely a loss of 90 days’ depositors, as well as merchants and others to interest and the payment of any remaining interest whom overdraft checks are written, can avoid the at the passbook rate. All issuing institutions, how­ embarrassment of having such checks returned. ever, are permitted to lend on the collateral of their The automatic transfer service will be an alter­ time deposits, so long as the loan carries an interest native for depositors in member banks to two rate at least 1 per cent higher than the rate being services already permitted under Board rules: paid on the deposit pledged. transfers from savings by telephone and preauth­ As a result of the joint action, the maximum orized bill payment. It will also be an alternative permissible rate that may be paid by all depositary to plans under which banks automatically make institutions on new deposits of governmental units loans to cover customers’ checks. and individual retirement and Keogh Plan accounts The principal features of the automatic transfer will move to 8 per cent. This ceiling rate is fixed service plan adopted by the Board are as follows: at the highest rate a Federally insured bank or 1. Customers of banks offering arrangements savings and loan may pay on time deposits with for the automatic transfer of funds from savings maturities of more than 6 months (26 weeks). to checking accounts may make an agreement with Rates on existing governmental, individual retire­ their bank for the transfer of funds to cover their ment, and Keogh Plan accounts may not be in­ checks or to maintain a pre-determined amount in creased until they mature. their checking account. This means that without further instructions funds may be withdrawn from savings accounts and transferred to checking ac­ counts to pay for checks for which there are REGULATION Q: Amendment insufficient funds in the customers’ checking ac­ The Board of Governors on May 1, 1978, ap­ counts. proved a plan that will permit individual customers 2. No penalty—such as a forfeiture of interest of member banks to transfer funds automatically or a service charge—will be required for automatic from their savings to their checking accounts. transfers, at least initially. The Board said, how­ Member banks may offer the new service be­ ever, that competitive and other developments will ginning November 1, 1978. It will increase the remain under continuing review and will be con­ convenience and efficiency of savings accounts and sidered again by the Board no later than November can be used to cover checking overdrafts or to 1, 1979—a year after the effective date. maintain a minimum level of funds in a checking 3. The service will be available only to indi­ account. viduals. The Board said that it will closely monitor the 4. Automatic transfer service may be offered Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 425 beginning November 1, 1978. Banks will therefore concluded that the automatic transfer service will have a reasonable period to evaluate the costs and not seriously affect the flow of funds to thrift benefits of the automatic transfer service and to institutions since this service is likely to affect prepare for an orderly introduction of the service, most the division of commercial bank deposits including possible service charges. among savings and demand deposits and is similar 5. The service will be entirely voluntary on the to preauthorized bill payment and telephone with­ part of both the bank and the customer and may drawal services that both banks and savings and be cancelled in accordance with the terms of the loan associations are now permitted to offer. automatic transfer agreement between the bank and the customer. No transfers may be made without the customer’s consent. IM PROVED FUND S TRANSFERS 6. Participating banks are required to disclose AN D CLEARING SERVICES prominently, and to call to the attention of deposi­ tors, the fact that the bank—as in the past—re­ The Board of Governors has authorized Federal serves the right in an automatic transfer plan to Reserve Banks to provide services necessary to require not less than 30 days’ notice of withdrawal tie together facilities for a nationwide network for from savings accounts. making payments electronically rather than by 7. Arrangements may be made between thrift check. institutions, such as savings and loan associations, The Board also approved other Federal Reserve and member banks for the automatic transfer of services to facilitate transfers of funds among funds from the thrift institution to checking ac­ member banks over a privately operated wire net­ counts in the commercial bank. work. In addition to the expected benefits to individ­ The Board said it expects these actions to en­ uals, there will be a saving that benefits the public hance and improve financial services to individuals at large through lower operational costs of the and to financial institutions; to encourage the use Federal Reserve System due to a reduction in the of electronic movement of funds as a more effi­ number of checks written on accounts with insuf­ cient and less costly alternative to check payments; ficient funds. Such checks must be returned to the and to stimulate the development of nongovern­ bank on which they are written, and they involve mental services that will lower the cost of banking costly hand processing and multiple handling. services to the public. Approval of the automatic transfer service as The Board said that it intends to publish a announced amends Regulation Q (Interest on De­ proposed schedule of charges for automated clear­ posits). The Board has had the new service under inghouse (ACH) services as soon as such a sched­ consideration since it was first proposed in March ule can reasonably be developed. It is contem­ 1976. The proposal was revised and issued for plated that such charges for ACH services will be further comment in February of this year. considered in the context of possible charges for The proposal in February would have imposed other Reserve Bank services. To achieve equity on automatic transfers from savings a minimum under such a program allowance might be made forfeiture of interest equal to the amount of interest for balances held by users at Reserve Banks. earned in the last 30 days on the sum transferred. The services approved by the Board were pro­ Instead, the plan adopted by the Board imposes posed for public comment—which has been fa­ no penalty, at least initially. vorable—last December 27. They are: In giving its approval to the automatic transfer 1. Providing Federal Reserve clearing and set­ plan, the Board said that in its view the service tlement services for electronic payments made does not violate the prohibition against payment through local or regional automated clearinghouse of interest on demand deposits since the key dis­ associations. This will permit the connection of tinction between demand and savings deposits is these facilities into a national network for making preserved. This distinction, drawn in the Board’s funds transfers electronically rather than by check. regulation, is that a bank must reserve the right 2. Providing Federal Reserve net settlement to at least 30 days’ notice prior to withdrawal of services to member banks to complete transfers a savings deposit. Banks offering automatic of funds made over a communications network— transfer service are required to continue to reserve known as Bankwire—owned by an association of this right. banks. Further, the Board said that it has given serious Bankwire is operated by the Payment and Ad­ consideration to competitive aspects, and it has ministrative Communications Corporation. It pro­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

426 Federal Reserve Bulletin □ May 1978 vides transfers of funds among some 200 banks be forwarded over the Federal Reserve’s com­ throughout the country. Net settlement of Bank­ munications system rather than by mail or courier. wire transfers by member banks will begin as soon The Federal Reserve office serving the area as final arrangements are completed. where payments are destined to be made—for Under the terms of the arrangement with Bank­ instance, the San Francisco Federal Reserve wire, member banks will appoint Bankwire as their Bank—will sort and forward the payment instruc­ agent. Settlement for funds transfers over Bank­ tions to the indicated depositories. The deposi­ wire will be made by crediting or debiting member tories involved—in this example, members of the bank reserve accounts. Bankwire is responsible for Dallas and the San Francisco clearinghouse asso­ supplying the information needed to make settle­ ciations—will debit the accounts of the customers ment: net amounts to be credited or debited to who are making payments and credit the accounts the respective member banks. of customers receiving payments. Implementation of the nationwide exchange of Two recently initiated programs paved the way payments among ACH’s will begin in May and for and demonstrated the feasibility of such inter­ the program is expected to be operational by district electronic payments. One is the ongoing year-end. Treasury program for direct deposit of recurring An automated clearinghouse association is a Federal payments. The other program was a pilot local or regional association of banks and other test of interregional electronic payment transfers depositories agreeing to initiate and receive among conducted during most of last year by the Federal themselves electronic transfers of funds authorized Reserve and the National Automated Clearing by customers of member financial institutions. House Association. Such electronic transfers are made only on behalf The program approved by the Board does not of customers who request them. Depositors who alter the Treasury’s direct deposit program. prefer to use checks may continue to do so. The Federal Reserve currently operates 32 au­ tomated clearinghouses. These consist of com­ NEW CO NSUM ER PAM PHLET puters—used also for other Federal Reserve func­ tions—where payment instructions recorded on Truth in Leasing, the latest in a series of consumer magnetic tapes are sorted and cleared. The pay­ education pamphlets, is now available for public ment instructions are from customers of member distribution. banks and other financial institutions that are The pamphlet gives a simplified explanation of members of automated clearinghouse associations. the Consumer Leasing Act, which was intended At present, these electronic payments are generally to help consumers compare the cost of one lease cleared locally. with another or with the cost of buying for cash The planned nationwide connection of ACH’s or on credit. It also covers the law’s limits on will make possible the interchange of electronic balloon payments under open-end leases and the payments by some 9,000 banks and 1,000 thrift regulation of lease advertising. institutions that are members of the National Au­ Copies of Truth in Leasing may be obtained, tomated Clearing House Association. When the singly or in bulk, free of charge from the Board linkage has been made, a member bank or other of Governors in Washington or from any of the financial institution that is a member of an auto­ 12 Federal Reserve Banks. Requests should be mated clearinghouse association—for instance, in addressed to the Board’s Publications Services or Dallas—will be able to present payment instruc­ to the Publication Departments at any of the Fed­ tions on magnetic tape to the nearest Federal eral Reserve Banks. Reserve Bank’s electronic clearinghouse. Such tapes bear instructions to make payments to finan­ cial institutions that are members of automated UNIFORM INTERAGENCY clearinghouse associations in other parts of the RATING SYSTEM FOR BANKS Nation. The Federal Reserve Bank that receives the electronically recorded payment instructions The three Federal bank regulatory agencies have will sort them and forward them to their destina­ adopted a uniform interagency system for rating tions. the condition and soundness of the Nation’s com­ This parallels the sorting and forwarding of mercial banks. payment instructions recorded on checks. But the The new rating system is being implemented electronically recorded payment instructions will by the Federal Deposit Insurance Corporation (for Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements All insured State-chartered banks that are not members viously, these funds—which can be withdrawn at of the Federal Reserve System), by the Board of any time by the Treasury—have been treated as Governors of the Federal Reserve System (for demand deposits, which may earn no interest. State-chartered member banks), and by the Office The Treasury tax-and-loan investment program of the Comptroller of the Currency (for national will enable the Treasury to invest its non-interestbanks). bearing funds in interest-bearing notes of com­ The new Uniform Interagency Bank Rating mercial banks. System has two main elements: The Board has amended its rules to provide that 1. An assessment by Federal bank examiners such notes will not be regarded as deposits subject of five critical aspects of a bank’s operations and to Regulation D or to Regulation Q. condition. These are: adequacy of the bank’s cap­ The Board’s action will be effective on July 6, ital; the quality of the bank’s assets (its loans and 1978, as will the Treasury’s tax-and-loan invest­ investments); the ability of the bank’s management ment program. and administration; the quantity and quality of the bank’s earnings; and the level of its liquidity. 2. A combination of these basic factors into a REGULATIONS G, T, AN D U: composite—over-all—rating of the bank’s condi­ Amendment tion and soundness. Banks will be placed in one of five groups, ranging from banks that are sound The Board of Governors has amended its require­ in almost every respect to those with excessive ments for inclusion of stocks in the Board’s list weaknesses requiring urgent aid. of over-the-counter (OTC) stocks that are subject The agencies agreed upon the qualitative char­ to margin requirements. acteristics that would place a bank in one or The amendments to Regulations G, T, and U another of the five over-all groups, with composite (Securities Credit by Persons other than Banks, rating group 1 being the best and group 5 being Brokers, or Dealers; Credit by Brokers and the weakest. Dealers; and Credit by Banks for the Purpose of Until adoption of the uniform rating system the Purchasing or Carrying Margin Stocks) will affect three agencies used systems with technical dif­ the next list of OTC margin stocks that is expected ferences that made difficult meaningful reporting to be published this fall by the Board. to the Congress on the over-all soundness of the The amendment requires that if a stock is to Nation’s banking system. be included in the Board’s OTC list, at least four It is expected that agreement on what factors dealers in it must regularly submit bona fide bids constitute the main characteristics of a bank’s and offers for the stock to an automated quotation condition and soundness and on how these factors system, such as the National Association of Se­ should be combined into an over-all rating will curities Dealers Automated Quotation System that provide a basis for comparable judgments by links major brokers throughout the country. For supervisors about all Federally insured banks. the listing to be continued, three dealers must The Federal Deposit Insurance Corporation has regularly submit such bids and offers. indicated that it will continue to maintain its exist­ Previously, stocks included on the list were ing problem bank list for insurance exposure pur­ those for which dealers regularly published bona poses. fide bids and offers. The Board had announced a proposal to make this change on March 14. Since comment was REGULATIONS D AN D Q: generally favorable, the proposal was adopted es­ sentially unchanged. Amendm ents The Board of Governors has amended Regulation D (Reserves of Member Banks) and Regulation REGULATIONS D AN D Q: Q (Interest on Deposits) to facilitate the partici­ Interpretation pation of member banks in a newly announced Treasury program for the handling of its funds in The Board of Governors has announced adoption commercial banks and other depositories. of an interpretation to Regulations D (Reserves of The new Treasury tax-and-loan investment pro­ Member Banks) and Q (Interest on Deposits) that gram is designed to permit the Treasury to earn extends the kinds of bankers acceptances eligible .interest on its funds in commercial banks. Pre­ for discount by Federal Reserve Banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

428 Federal Reserve Bulletin □ May 1978 The interpretation makes bankers acceptances CHANGES IN BO ARD STAFF secured by field warehouse receipts covering read­ ily marketable goods eligible for discount. That The Board of Governors has announced the fol­ is, such acceptances may be used as collateral for lowing promotions in the Division of Federal Re­ Federal Reserve loans to member banks. serve Bank Examinations and Budgets, effective The interpretation was adopted as proposed by April 9, 1978. the Board last December, with some technical Albert R. Hamilton from Associate Director to changes based on comment received. Comment Director of the Division. was generally favorable. Clyde H. Farnsworth, Jr., from Assistant A 1933 interpretation by the Board had held Director to Associate Director of the Division. that acceptances backed by field warehouse re­ In addition, the Board has announced the retire­ ceipts were not eligible for discount and therefore ment of Thomas E. Mead, Assistant Director, could not be used as collateral for loans to member Division of Banking Supervision and Regulation banks. on April 28, 1978. In reviewing the matter, the Board concluded that changes in commercial law and in commercial practices since 1933 had made revision of the PROPOSED INTERPRETATION interpretation desirable. AND AM ENDM ENT A bankers acceptance is primarily a time draft used to finance the shipment or storage of goods. The Board of Governors has proposed a revised interpretation of its Regulation Z (Truth in Lend­ ing) to cover all cases in which a debt is repaid REGULATION Z: in payments of varying amounts. The Board asked Exem ption of Consumer Leasing Laws for comment by May 24, 1978. The Board has also proposed to amend its Reg­ The Board of Governors had adopted criteria under ulation T (Credit by Brokers and Dealers) to permit which States may apply for exemption from the a broker or dealer to extend and maintain credit consumer leasing requirements of the Truth in on certain nonconvertible corporate bonds, with Lending Act and the Board’s Regulation Z (Truth a 30 per cent margin requirement. The Board in Lending). asked for comment by June 15, 1978. A State may also apply to the Board for a determination that its law is not inconsistent with or pre-empted by the Federal consumer leasing law. OFFICIAL STAFF INTERPRETA­ The main features of the criteria of State con­ TIONS: Revised Procedures sumer leasing laws are the same as for exemptions for State laws from other provisions of the Truth The Board of Governors has revised its procedure in Lending Act and Regulation Z. These are: for issuing official staff interpretations of its Regu­ —A determination by the Board that the State lation B (Equal Credit Opportunity) and Regula­ law imposes requirements substantially similar to, tion Z (Truth in Lending). or is more protective and confers greater consumer The Board said that it will issue all official staff benefits than, the relevant Federal law. interpretations of the regulations with an effective —A Board determination that the State law date 30 days after publication of the interpretation. makes adequate provision for enforcement. Further, if an interpretation is challenged before The Board may not determine that a State law the effective date, it will be reissued for public is inconsistent with, or is pre-empted by. Federal comment before final action is taken. The change law if the State law provides greater protection in procedure was effective April 24, 1978. or benefits. The Board made the change after receiving a The Board also delegated authority to make number of complaints about existing procedures, these findings to the Director of the Board’s Divi­ which has been to publish an official staff inter­ sion of Consumer Affairs. The Director may not pretation in the Federal Register within 2 weeks deny or revoke an exemption or make a finding of issuance, to be effective upon publication. of inconsistency. Those questioning this procedure have taken the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 429 view that an official staff interpretation is a “rule,” SYSTEM M EM BERSHIP: as defined in the Administrative Procedures Act, Adm ission of State Banks calling for general notice and opportunity for comment before becoming effective. The following banks were admitted to membership An official staff interpretation provides a defense in the Federal Reserve System during the period to any creditor acting in good faith in conformity April 16, 1978, through May 15, 1978: with it. Official staff interpretations are limited to Oregon clarifications of technical points, or other matters North Bend ..........Northwest Commerce Bank not involving significant policy implications. They Wyoming may be appealed to the Board. Rawlins ..................Wyoming Bank of Rawlins Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

430 Industrial Production Released for publication May 15 equipment and consumer durable goods. However, production of nondurable materials increased only Industrial production increased an estimated 1.1 slightly further. Output of energy materials surged per cent in April, following a rise of 1.3 per cent 3.8 per cent, as coal production returned to about (revised) in March. About one-fourth of the April normal following the strike settlement. increase was due to further resumption of coal Seasonally adjusted, ratio seal*, 1967=100 production following the end of the recent strike. Advances in output last month were widespread among most products and materials; particularly large gains occurred in automotive products, busi­ ness equipment, and durable materials. At 142.5 per cent of the 1967 average, the April index is 2 per cent above the average for the first quarter when output was reduced by severe weather and strikes. Output of consumer goods rose 0.8 per cent in April. Auto assemblies increased more than 6 per cent to an annual rate of 9.8 million units; pro­ duction of other consumer goods increased only a little after large gains in the two preceding months. Output of business equipment advanced sharply for the third successive month, and pro­ duction of construction supplies increased some­ what further in April. Production of materials increased 1.6 per cent, following a sharp rise in March. Output of durable materials rose 1.7 per cent in April, reflecting F.R. indexes, seasonally adjusted. Latest figures: April. increases in basic metal materials and parts for *Auto sales and stocks include imports. 1967 == 100* Percentage change from preceding month to— Percentage change Industrial production 1978 1977 1978 4/77 to Mar.p Apr.p Nov. Dec. Jan. Feb. Mar. Apr. 4/78 Total ................................... 141.0 142.5 .3 .3 -.6 .3 1.3 1.1 4.7 Products, total ....................... 141.5 142.6 .4 .6 -1.3 .8 1.4 .8 5.0 Final products .................... 138.8 140.0 .4 .4 -2.0 1.1 1.8 .9 4.4 Consumer goods ............ 146.1 147.3 .2 .4 -2.7 1.3 1.7 .8 3.1 Durable ...................... 157.5 161.1 -1.0 .4 -6.0 3.3 4.1 2.3 6.3 Nondurable ................. 141.5 141.8 .8 .4 -1.3 .5 .6 .2 1.7 Business equipment ---- 157.4 158.9 .6 .3 -.9 1.0 2.1 1.0 8.0 Intermediate products ....... 151.8 152.6 .4 1.3 .8 -.1 .2 .5 7.2 Construction supplies ... 149.3 150.1 1.1 1.2 .6 -.3 .4 .5 9.4 Materials .................................. 140.1 142.4 .1 -.1 .3 -.4 1.1 1.6 4.3 ♦Seasonally adjusted. v Preliminary. e 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 Policy Instruments A25 Gross demand deposits of individuals, 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 Monetary and Credit Aggregates Federal Finance 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 A32 Federal debt subject to statutory A15 Aggregate reserves and deposits of limitation member banks A32 Gross public debt of U.S. Treasury— A15 Loans and investments of all Types and ownership commercial banks 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, June 30, 1977 agencies—Debt outstanding Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A2 Federal Reserve Bulletin □ May 1978 Securities Markets and INTERNATIONAL STATISTICS Corporate Finance A54 U.S. international transactions— A36 New security issues—State and local Summary governments and corporations A55 U.S. foreign trade A37 Open-end investment companies—Net A55 U.S. reserve assets sales and asset position A56 Selected U.S. liabilities to foreigners A37 Corporate profits and their distribution and to foreign official institutions A3 8 Nonfinancial corporations—Assets and liabilities Reported by Banks in the United States: A38 Business expenditures on new plant and equipment A57 Short-term liabilities to foreigners A39 Domestic finance companies—Assets A59 Long-term liabilities to foreigners and liabilities; business credit A60 Short-term claims on foreigners A61 Long-term claims on foreigners Real Estate A62 Foreign branches of U.S. banks— A40 Mortgage markets Balance sheet data A41 Mortgage debt outstanding Securities Holdings and Transactions Consumer Instalment Credit A64 Marketable U.S. Treasury bonds and A42 Total outstanding and net change notes—Foreign holdings and A43 Extensions and liquidations transactions A64 Foreign official assets held at F.R. Flow of Funds banks A65 Foreign transactions in securities A44 Funds raised in U.S. credit markets A45 Direct and indirect sources of funds to Reported by Nonbanking Concerns in credit markets the United States: DOMESTIC NONFINANCIAL STATISTICS A66 Short-term liabilities to and claims on foreigners A46 Nonfinancial business activity— A67 Long-term liabilities to and claims on Selected measures foreigners A46 Output, capacity, and capacity utilization Interest and Exchange Rates A47 Labor force, employment, and unemployment A68 Discount rates of foreign central banks A48 Industrial production—Indexes and A68 Foreign short-term interest rates gross value A68 Foreign exchange rates A50 Housing and construction A51 Consumer and wholesale prices A69 GUIDE TO TABULAR PRESENTATION A52 Gross national product and income AND STATISTICAL RELEASES A53 Personal income and saving Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Statistics A3 1.10 MONETARY AGGREGATES AND INTEREST RATES 1977 1978 1977 1978 Item Q2 Q3 Q4 Ql Nov. Dec. Jan. Feb. Mar. Monetary and credit aggregates (annual rates of change, seasonally adjusted in per cent)12 Member bank reserves 1 Total............................................................................................ '2.9 '7.3 '6.1 8.5 '5.3 '5.9 '15.2 '10.9 -8.7 2 Required..................................................................................... r3.5 r6.8 '6.3 8.3 '3.9 '8.0 '12.7 '11.8 -7.4 rl. 8 *•1.7 '3.5 14.5 '20.9 '16.1 '18.3 '13.7 -6.2 Concepts of money 1 4 M-l.............................................................................................. 8.1 8.1 7.2 5.0 0.4 7.2 9.6 -1.1 3.5 5 M-2.............................................................................................. 9.0 9.9 8.0 6.4 5.4 5.7 8.9 4.4 5.3 6 M-3.............................................................................................. 10.2 11.9 10.6 7.4 7.8 7.6 8.7 5.5 6.1 Time and savings deposits Commercial banks: 7 Total....................................................................................... 8.3 10.3 13.0 13.1 18.3 10.9 12.3 '13.7 11.4 9.7 11.2 8.5 7.5 9.3 4.6 8.4 8.4 6.5 11.9 15.0 14.4 8.8 11.2 10.3 8.5 '6.9 7.5 10 Total loans and investments at commercial banks 3........... 13.3 9.8 9.3 8.5 11.8 -0.7 12.1 10.1 9.1 1977 1978 1977 1978 Q2 Q3 Q4 Ql Dec. Jan. Feb. Mar. Apr. Interest rates (levels, per cent per annum) Short-term rates 11 Federal funds 4......................................................................... 5.16 5.82 6.51 6.76 6.56 6.70 6.78 6.79 6.89 12 Federal Reserve discount 5..................................................... 5.25 5.42 5.93 6.46 6.00 6.37 6.50 6.50 6.50 13 Treasury bills (3-month market yield) 6............................. 4.84 5.50 6.11 6.39 6.07 6.44 6.45 6.29 6.29 14 Commercial paper (90- to 119-day) 7.................................. 5.15 5.74 6.56 6.76 6.61 6.75 6.76 6.75 6.82 Long-term rates Bonds: 15 U.S. Govt. 8........................................................................... 7.68 7.60 7.78 8.19 7.87 8.14 8.22 8.21 8.32 16 State and local government 9............................................ 5.70 5.59 5.57 5.65 5.57 5.71 5.62 5.61 5.80 17 Aaa utility (new issue) ................................................... 8.21 8.09 8.27 8.70 8.34 8.68 8.69 8.71 8.90 18 Conventional mortgages 11................................................... 8.95 9.00 9.05 9.23 9.10 9.15 9.25 '9.30 9.40 1 M-l equals currency plus private demand deposits adjusted. 7 Beginning Nov. 1977, unweighted average of offering rates quoted by M-2 equals M-l plus bank time and savings deposits other than large five dealers. Previously, most representative rate quoted by these dealers. negotiable certificates of deposit (CD’s). 8 Market yields adjusted to a 20-year maturity by the U.S. Treasury. M-3 equals M-2 plus deposits at mutual savings banks, savings and 9 Bond Buyer series for 20 issues of mixed quality. loan associations, and credit union shares. 10 Weighted averages of new publicly offered bonds rated Aaa, Aa, 2 Savings and loan associations, mutual savings banks, and credit and A by Moody’s Investors Service and adjusted to an Aaa basis. unions. Federal Reserve compilations. 3 Quarterly changes calculated from figures shown in Table 1.23. 11 Average rates on new commitments for conventional first mortgages 4 Seven-day averages of daily effective rates (average of the rates on on new homes in primary markets, unweighted and rounded to nearest a given date weighted by the volume of transactions at those rates). 5 basis points, from Dept, of Housing and Urban Development. 5 Rate for the Federal Reserve Bank of New York. 12 Unless otherwise noted, rates of change are calculated from average 6 Quoted on a bank-discount rate basis. amounts outstanding in preceding month or quarter. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A4 Domestic Financial Statistics □ May 1978 1.11 FACTORS AFFECTING MEMBER BANK RESERVES Millions of dollars Monthly averages of daily Weekly averages of daily figures for weeks ending— figures Factors 1978 1978 Feb. Mar. Apr.P Mar. 15 Mar. 22 Mar. 29 Apr. 5 Apr. 12 Apr. 19p Apr. 26? SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding.... 115,227 114,848 116,841 112,254 116,460 117,211 116,520 114,241 116,467 118,551 ? U.S. Govt, securities1................... 98,739 99,573 101,345 97.548 100,955 101,498 101 286 99.211 101.451 102,452 3 Bought outright....................... 98,032 98,436 100,851 97.548 99,585 99,058 99,195 99.211 101.451 102,228 4 Held under repurchase agree­ ment ..................................... 707 1,137 494 1,370 2,440 2,091 224 5 Federal agency securities............. 8,069 8,217 8,013 7.944 8,334 8,515 8,278 7.929 7.929 7,967 6 Bought outright....................... 7,982 7,948 7,929 7.944 7,935 7,929 7,929 7.929 7.929 7,929 7 Held under repurchase agree­ ment ..................................... 87 269 84 399 586 349 38 8 Acceptances................................. 106 279 137 378 573 589 31 9 Loans.......................................... 405 344 539 248 280 385 304 171 239 809 10 Float............................................ 5,347 4,261 4,054 4,482 4,101 3,993 3,701 4,339 4 111 4,296 11 Other Federal Reserve assets.... 2,561 2,174 2,753 2,032 2,412 2,248 2,362 2,592 2,131 2,997 12 Gold stock...................................... 11,718 11,718 11,718 11,718 11,718 11,718 11,718 11,718 11,718 11,718 13 Special Drawing Rights certificate account..................................... 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 14 Treasury currency outstanding....... 11,423 11,460 11,500 11,459 11,461 11,470 11,464 11,494 11,497 11,512 absorbing reserve funds IS Currency in circulation.................... 101,190 102,017 103,258 102,048 102,168 102,322 102,655 103,389 103,555 103,251 16 Treasury cash holdings.................... 389 394 393 393 395 396 395 397 390 388 Deposits, other than member bank reserves with F.R. Banks: 17 Treasury................................... 5,707 4,705 5,001 2,555 5,394 6,528 5,441 3,905 3,412 6,321 18 Foreign........................................ 297 303 345 311 263 282 371 258 333 339 19 Other 2.......................................... 772 740 738 830 797 676 773 741 701 772 20 Other F.R. liabilities and capital.... 3,926 3,962 3,741 4,201 4,148 3,907 3,766 3,543 3,724 3,794 21 Member bank reserves with F.R. Banks.......................................... 27,337 27,155 27,833 26,338 27,725 27,539 27,552 26,471 28,817 28,167 End-of-month figures Wednesday figures 1978 1978 Feb. Mar. Apr.** Mar. 15 Mar. 22 Mar. 29 Apr. 5 Apr. 12 Apr. 19 p Apr. 26* SUPPLYING RESERVE FUNDS 22 Reserve Bank credit outstanding.... 112,134 115,932 119,664 113,281 116,317 118,231 113,774 113,366 118,221 121,354 23 U.S. Govt, securities1.................... 98,450 101,577 103,500 96,777 100,747 102,443 96,941 97,977 101,168 103,923 24 Bought outright....................... 98,450 99,890 102,768 96,777 99,984 99,160 96,539 97,977 101,168 102,357 25 Held under repurchase agree- 1,687 732 763 3,283 402 1,566 26 Federal agency securities............... 7,982 8,193 8,064 7,938 8,189 8,761 8,028 7,929 7.929 8,192 27 Bought outright....................... 7,982 7,929 7,929 7,938 7,929 7,929 7,929 7,929 7.929 7,929 28 Held under repurchase agree- 264 135 260 832 99 263 29 Acceptances 770 290 181 607 193 216 30 Loans.......................................... 304 332 1,751 4-i 3 356 364 159 171 556 1,764 31 Float............................................ 3,499 2,732 2,898 6,082 4,526 3,737 6,153 4,747 5,686 4,276 32 Other Federal Reserve assets.... 1,899 2,328 3,161 2,071 2,318 2,319 2,300 2,542 2,882 2,983 33 Gold stock...................................... 11,718 11,718 11,718 11,718 11,718 11,718 11,718 11,718 11,718 11,718 34 Special Drawing Rights certificate account........................................ 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 35 Treasury currency outstanding....... 11,396 11,441 11,516 11,461 11,464 11,480 11,483 11,497 11,497 11,516 absorbing reserve funds 36 Currency in circulation................... 101,369 102,392 103,133 102,406 102,471 102,728 103,213 103,858 103,649 103,520 37 Treasury cash holdings.................... 388 393 390 396 391 396 397 397 388 386 Deposits, other than member bank reserves with F.R. Banks: 38 Treasury...................................... 3,615 4,705 7,177 1,582 6,689 4,389 4,938 2,595 6,625 8,729 39 Foreign........................................ 445 352 481 300 248 276 585 268 249 460 40 Other2.......................................... 698 740 684 941 631 765 751 759 709 796 41 Other F.R. liabilities and capital... 3,933 3,860 4,080 4,578 3,901 3,889 3,457 3,654 3,760 3,879 42 Member bank reserves with F.R. Banks.......................................... 26,047 27,900 28,203 27,507 26,419 30,236 24,884 26,301 27,306 28,069 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 A5 1.12 RESERVES AND BORROWINGS Member Banks Millions of dollars Monthly averages of daily figures Reserve classification 1976 1977 1978 Dec. Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr.P All member banks Reserves: 1 At F.R. Banks................. 26,430 26,373 26,152 26,933 26,783 27,057 28,129 27,337 27,155 27,833 2 Currency and coin.......... 8,548 8,712 8,887 8,820 8,932 9,351 9,980 9,320 8,992 9,031 3 Total held1...................... 35,136 35,186 35,156 35,860 35,782 36,471 38,185 36,738 36,231 36,944 4 Required....................... 34,964 34,987 34,965 35,521 35,647 36,297 37,880 36,605 35,925 36,814 5 Excess1......................... 172 199 191 339 135 174 305 133 306 130 Borrowings at F.R. Banks:2 6 Total................................. 62 1,071 634 1,319 840 558 481 405 344 539 7 Seasonal........................... 12 101 112 114 83 54 32 52 Al 43 Large banks in New York City 8 Reserves held....................... 6,520 6,272 6,025 6,175 6,181 6,244 6,804 6,563 6,276 6,184 9 Required........................... 6,602 6,247 6,022 6,120 6,175 6,279 6,775 6,584 6,193 6,309 10 Excess............................... -82 25 3 55 6 -35 29 -21 83 -125 11 Borrowings2......................... 15 157 75 133 132 48 77 12 21 61 Large banks in Chicago 12 Reserves held...................... 1,632 1,653 1,655 1,666 1,607 1,593 1,733 1,623 1,629 1,665 13 Required........................... 1,641 1,622 1,634 1,656 1,609 1,613 1,684 1,633 1,620 1,695 14 Excess.............................. -9 31 21 10 -2 -20 49 -10 9 -30 15 Borrowings2......................... 4 5 12 24 23 26 14 11 11 Other large banks 16 Reserves held..................... 13,117 13,290 13,362 13,711 13,607 13,993 14,487 13,867 13,729 14,143 17 Required........................... 13,053 13,270 13,355 13,598 13,602 13,931 14,504 13,861 13,662 14,075 18 Excess.............................. 64 20 7 113 5 62 -17 6 67 68 19 Borrowings2......................... 14 530 183 681 355 243 164 150 92 249 All other banks 20 Reserves held...................... 13,867 13,971 14,114 14,308 14,387 14,641 15,161 14,685 14,597 14,799 21 Required........................... 13,668 13,848 13,954 14,147 14,261 14,474 14,917 14,527 14,450 14,735 22 Excess............................... 199 123 160 161 126 167 244 158 147 64 23 Borrowings2......................... 29 379 364 481 330 241 226 243 220 218 Weekly averages of daily figures for weeks ending— 1978 Feb. 22 Mar. 1 Mar. 8 Mar. 15 Mar. 22 Mar. 29 Apr. 5 Apr. 12 Apr. 19 *> Apr. 26» All member banks Reserves: At F.R. Banks.................. 28,035 26,961 26,468 26,338 27,725 27,539 27,552 26,471 28,817 28,167 Currency and coin............ 8,554 9,085 9,111 9,558 8,458 8,842 8,935 9,356 8,887 8,797 Total held1........................ 36,672 36,132 35,664 35,981 36,267 36,463 36,566 35,904 37,786 37,046 Required....................... 36,380 36,012 35,400 35,850 36,119 36,215 36,291 35,916 37,437 37,011 Excess1.......................... 292 120 264 131 148 248 275 -12 349 35 Borrowings at F.R. Banks:2 Total................................. 446 391 395 248 280 385 304 171 239 809 Seasonal........................... 53 58 47 41 47 52 45 37 36 49 Large banks in New York City 31 Reserves held....................... 6,734 6,213 5,964 6,420 6,200 6,258 6,220 6,168 6,631 6,116 32 Required........................... 6,692 6,233 5,990 6,334 6,229 6,199 6,241 6,114 6,657 6,172 33 Excess.......................... 42 -20 -26 86 -29 59 -21 54 -26 -56 34 Borrowings2.................... 11 77 5 59 Large banks in Chicago 35 Reserves held............. 1,591 1,550 1,573 1,628 1,641 1,712 1,683 1,638 1,797 1,639 36 Required................ 1,589 1,565 1,559 1,621 1,648 1,648 1,660 1,650 1,826 1,631 37 Excess.................... 2 -15 14 7 -7 64 23 -12 -29 8 38 Borrowings2.............. 49 41 1 Other large banks 39 Reserves held... 13,671 13,692 13,607 13,432 13,858 13,845 13,956 13,620 14,483 14,036 40 Required....... 13,595 13,719 13,476 13,537 13,748 13,830 13,827 13,766 14,284 14,173 41 Excess........... 76 -27 131 -105 110 15 129 -146 199 -137 42 Borrowings2.... 111 60 82 83 75 128 79 55 63 521 All other banks 43 Reserves held. 14,676 14,677 14,520 14,501 14,568 14,648 14,707 14,478 14,700 15,066 44 Required... 14,504 14,495 14,375 14,358 14,494 14,538 14,563 14,386 14,670 15,035 45 Excess....... 172 182 145 143 74 110 144 92 30 31 46 Borrowings2.. 269 271 236 160 205 257 225 116 135 228 1 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 □ May 1978 1.13 FEDERAL FUNDS TRANSACTIONS Money Market Banks Millions of dollars, except as noted 1978, week ending— Type Mar. 1 Mar. 8 Mar. 15 Mar. 22 Mar. 29 April 5 April 12 April 19 April 26 Total, 46 banks Basic reserve position 1 Excess reserves1.................................. 4 109 4 26 144 282 36 107 -24 Less: 2 Borrowings at F.R. Banks........... 50 77 4 6 42 16 7 41 300 3 Net interbank Federal funds transactions............................. 16,450 18,764 19,309 19,027 14,849 17,322 22,855 20,233 17,699 Equals: Net surplus, or deficit (—): 4 Amount............................................. -16,496 -18,732 -19,309 -19,007 -14,748 -17,056 -22,826 -20,167 -18,023 5 Per cent of average required reserves ..................................... 108.6 126.8 127.2 124.3 96.7 112.0 150.2 124.4 117.0 Interbank Federal funds transactions Gross transactions: 6 Purchases......................................... 23,555 26,121 25,948 26,936 23,573 25,649 29,580 27,442 24,398 7 Sales................................................... 7,106 7,357 6,639 7,909 8,724 8,327 6,726 7,209 6,699 8 Two-way transactions2..................... 5,364 5,531 4,673 4,920 5,419 6,011 5,734 5,547 5,310 Net transactions: 9 Purchases of net buying banks... 18,191 20,590 21,275 22,016 18,155 19,638 23,846 21,895 19,088 10 Sales of net selling banks............. 1,741 1,827 1,967 2,989 3,306 2,316 992 1,662 1,389 Related transactions with U.S. Govt, securities dealers 11 Loans to dealers 3................................ 2,891 4,120 4,601 3,360 2,147 3,360 4,095 3,508 3,371 12 Borrowing from dealers4................. 1,899 1,787 1,757 2,184 2,780 2,428 2,014 2,049 2,575 993 2,333 2,844 1,176 -633 932 2,081 1,458 796 8 banks in New York City Basic reserve position 14 Excess reserves1.................................. 14 —6 30 -20 43 16 72 8 37 Less: 15 Borrowings at F R Banks . . 77 59 16 Net interbank Federal funds transactions.............................. 4,849 6,848 7,567 7,505 5,552 6,399 8,296 6,343 5,334 Equals: Net surplus, or deficit (—): 17 Amount............................................. -4,836 -6,932 -7,537 -7,525 -5,510 -6,383 -8,224 -6,336 -5,356 18 Per cent of average required 84.7 126.8 130.5 132.2 97.9 112.5 148.2 103.8 95.6 Interbank Federal funds transactions Gross transactions: 19 Purchases.......................................... 5,891 7,525 8,216 8,235 6,175 7,360 8,993 7,585 6,132 1,042 677 650 730 623 961 698 1,242 798 21 Two-way transactions2..................... 830 677 649 730 623 953 698 673 798 Net transactions: 22 Purchases of net buying banks... 5,061 6,848 7,567 7,505 5,552 6,408 8,296 6,912 5,334 23 Sales of net selling banks............. 212 8 569 Related transactions with U.S. Govt, securities dealers 1,484 2,340 2,620 1,874 1,015 1,920 2,831 2,345 2,032 25 Borrowing from dealers4.................. 926 966 971 1,003 1,228 1,198 1,419 1,496 1,514 26 Net loans.............................................. 558 1,374 1,650 871 -213 722 1,412 848 518 38 banks outside New York City Basic reserve position 27 Excess reserves1.................................. -10 115 -26 46 101 266 -36 100 -61 Less: 28 Borrowings at F.R. Banks........... 50 4 6 42 16 7 41 241 29 Net interbank Federal funds transactions.............................. 11,600 11,915 11,742 11,522 9,297 10,923 14,559 13,890 12,356 Equals : Net surplus, or deficit (—): 30 Amount............................................ -11,660 r —11,801 -11,772 -11,482 -9,238 -10,673 -14,602 -13,831 -12,667 31 Per cent of average required reserves..................................... 126.7 *126.7 125.2 119.6 96.0 111.6 151.4 136.9 129.2 Interbank Federal funds transactions Gross transactions: 32 Purchases......................................... 17,664 18,596 17,732 18,701 17,399 18,289 20,587 19,857 18,266 33 Sales................................................... 6,064 6,680 5,990 7,179 8,012 7,366 6,028 5,967 5,901 34 Two-way transactions2..................... 4,534 4,854 4,024 4,190 4,796 5,058 5,037 4,874 4,512 Net transactions: 35 Purchases of net buying banks... 13,130 13,742 13,708 14,511 12,603 13,231 15,550 14,983 13,755 36 Sales of net selling banks............. 1,529 1,827 1,967 2,989 3,306 2,308 992 1,093 1,389 Related transactions with U.S. Govt, securities dealers 37 Loans to dealers 3................................ 1,407 1,780 1,981 1,487 1,132 1,439 1,264 1,163 1,339 38 Borrowing from dealers4.................. 973 821 787 1,181 1,552 1,229 596 553 1,061 39 Net loans.............................................. 435 959 1,194 306 -420 210 668 610 278 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 1978, week ending- Type Mar. 1 Mar. 8 Mar. 15 Mar. 22 Mar. 29 April 5 April 12 April 19 April 26 5 banks in City of Chicago Basic reserve position 40 Excess reserves1............................ -1 12 15 66 61 1 Less: 41 Borrowings at F.R. Banks... 49 41 42 Net interbank Federal funds transactions....................... 5,377 5,433 5,172 5,806 5,053 5,658 6,815 6,425 5,654 Equals: Net surplus, or deficit (—): 43 Amount.................................... -5,427 -5,421 -5,157 -5,804 -4,988 -5,597 -6,814 -6,464 -5,651 44 Per cent of average required reserves............................ 372.3 373.7 340.8 377.2 323.9 361.0 442.5 386.6 371.6 Interbank Federal funds transactions Gross transactions: Purchases........................................ 6,420 6,660 6,053 6,889 6,590 6,705 7,541 7,332 6,729 Sales................................................. 1.043 1.227 882 1.083 1.536 1.047 726 907 1.075 Two-way transactions2................... 1.043 1.227 882 1.083 1.536 1.047 726 907 1.075 Net transactions: Purchases of net buying banks.. 5,377 5,433 5,171 5,806 5,054 5,658 6,815 6,425 5,654 Sales of net selling banks........... Related transactions with U.S. Govt, securities dealers 50 Loans to dealers3................... 254 390 426 357 255 499 393 285 193 51 Borrowing from dealers4... 333 256 242 313 596 159 58 61 220 52 Net loans.................................. -79 135 183 44 -342 339 336 224 -27 33 other banks Basic reserve position 5 3 Excess reserves1............................ r—9 r103 r_4i r44 '35 206 -37 98 -64 54 Le B ss o : rrowings at F.R. Banks... 1 4 6 42 16 7 241 55 Net interbank Federal funds transactions....................... 6,223 6,483 6,570 5,716 4,243 5,265 7,744 7,465 6,711 Equals: Net surplus, or deficit (—): 56 Amount.................................... -6,232 -6,379 r—6,615 -5,678 ’•-4,251 -5,075 -7,788 -7,367 -7,016 57 Per cent of average required reserves............................ 77.7 r81.2 83.8 r70.5 52.6 63.4 96.1 87.4 84.7 Interbank Federal funds transactions Gross transactions: 58 Purchases........................................ 11,244 11,936 11,679 11,812 10,809 11,584 13,046 12,525 11,537 59 Sales................................................. 5,021 5,453 5,108 6,097 6,565 6,319 5,302 5,060 4,826 60 Two-way transactions2................... 3,491 3,627 3,143 3,108 3,260 4,011 4,311 2,967 3,436 Net transactions: 61 Purchases of net buying banks.. 7,752 8,309 8,536 8,705 7,549 7,573 8,736 8,558 8,101 62 Sales of net selling banks............. 1,529 1,827 1,967 2,989 3,306 2,308 992 1,093 1,389 Related transactions with U.S. Govt, securities dealers 63 Loans to dealers3................... 1,153 1,389 1,555 1,130 877 941 871 878 1,147 64 Borrowing from dealers4... 640 565 544 868 956 1,070 538 492 841 65 Net loans.................................. 513 824 1,011 261 -79 -129 333 386 305 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 □ May 1978 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 Secs. 13 and 13a1 Bank Regular rate Special rate3 Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous 4/30/78 date rate 4/30/78 date rate 4/30/78 date rate 4/30/78 date rate Boston.................... 6 Vi 1/10/78 6 7 1/10/78 6 Vi 71/2 1/10/78 7 91/2 1/10/78 9 New York............. 6Vi 1/9/78 6 7 1/9/78 61/2 7 Vi 1/9/78 7 9 Vi 1/9/78 9 Philadelphia.......... 6 Vi 1/20/78 6 7 1/20/78 61/2 7Vi 1/20/78 7 91/2 1/20/78 9 Cleveland............... 6 Vi 1/20/78 6 7 1/20/78 61/2 71/2 1/20/78 7 9 Vi 1 /20/78 9 Richmond............. 61/2 1/13/78 6 7 1/13/78 6Vi 7Vi 1/13/78 7 91/2 1/13/78 9 Atlanta................... 6 Vi 1/16/78 6 7 1/16/78 6Vi 71/2 1/16/78 7 9Vi 1/16/78 9 Chicago................. 6 Vi 1/9/78 6 7 1/9/78 61/2 m 1/9/78 7 91/2 1/9/78 9 St. Louis................ 6 Vi 1/13/78 6 7 1/13/78 6Vi 71/2 1/13/78 7 9Vi 1/13/78 9 Minneapolis.......... 6 Vi 1/10/78 6 7 1/10/78 61/2 71/2 1/10/78 7 91/2 1/10/78 9 Kansas City.......... 61/2 1/10/78 6 7 1/10/78 6 Vi 7 Vi 1/10/78 7 91/2 1/10/78 9 Dallas..................... 6 Vi 1/13/78 6 7 1/13/78 6 Vi 71/2 1/13/78 7 91/2 1/13/78 9 San Francisco.... 61/2 1/13/78 6 7 1/13/78 61/2 71/2 1/13/78 7 91/2 1/13/78 9 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 5Vi 5 Vi 1973—Jan. 15................. 5 5 1975—Jan. 6................ 714-734 734 Feb. 26................. 5-5 Vi 5% 10................. 714-734 714 1971— Jan. 8...... 5V4-5Vi 514 Mar. 2................. 5 Vi 24................. 714 714 15........... 514 514 Apr. 23................. 5Vi-534 % Feb. 5................ 634-714 634 19........... 5 -514 51/4 May 4................. 5Y4 5Y4 7................. 634 63/4 22........... 5 -51,4 5 11................. 53^-6 6 Mar. 6V4-634 614 29...... 5 5 18................. 6 14................. 614 614 Feb. 13...... 4^-5 5 June 11................... 6-6 Vi 6Vi May 16................. 6-614 6 19...... 4% 434 15................. 6% 6Vi 23................. 6 6 July 16...... 434-5 5 July 2................ 7 7 2 3 5 5 Aug. 14................ 7-7 Vi 7 Vi 1976—Jan. 19................. 5 Vi-6 5i/i Nov. 11........... 434-5 5 23................ m 7 Vi 23................. 5 Vi 5Vi 19........... 434 434 Nov. 22................. 514-5 Vi 514 Dec. 13........... 41/2-434 434 1974—Apr. 25................ 7Vi-8 8 26................. 514 51/4 17........... 4Vi-434 4*4 30................ 8 8 2 4 4Vi 4V4 Dec. 9................ 7%-8 m 1977—Aug. 30................. 514-534 514 16................ m m 31................. 51/4-534 534 Sept. 2................ 534 5*4 Oct. 26................ 6 6 1978—Jan. 9................ 6-6 Vi 6Vi 20................ 6Vi 6 Vi In effect Apr. 30, 1978.... 6Vi 61/2 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 Secs. 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, Annual Statistical Digest, 1971-75, and Annual Statistical Digest, 1972-76. 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 Apr. 30, 1978 Type of deposit, and deposit interval in millions of dollars Per cent Effective date Per cent Effective date Net demand:2 7 12/30/76 7^ 2/13/75 9% 12/30/76 10 2/13/75 10-100..................................................................................................... ll3/4 12/30/76 12 2/13/75 100-400............................................................................................... 123,4 12/30/76 13 2/13/75 Over 400................................................................................................. 161/4 12/30/76 161/z 2/13/75 Time:2'3 Savings.................................................................................................... 3 3/16/67 31/2 3/2/67 Other time: 0-5, maturing in— 3 3/16757 31/2 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 2 Vi 1/8/76 3 12/12/74 4 years or more............................................................................. 41 10/30/75 3 12/12/74 Legal limits, Apr. 30, 1978 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 re­ banks. 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 □ May 1978 1.16 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 Apr. 30, 1978 Previous maximum In effect Apr. 30, 1978 Previous maximum Per cent Effective Per cent Effective Per cent Effective Per cent Effective date date date date 1 Savings........................................................ 7/1/73 4i/2 1/21/70 SVa (6) (7) 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 - l m e- a m tu a r t i u t r y i . t .. y .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7/1/73 4 5 i/2 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 e- a m tu a r t i u t r y i . t .. y .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Vi 7/1/73 9 7 / /2 26 0/ / 6 6 6 6 35% (6) 5Va 1/21/70 7 8 2 1 t t o o 2 2 y y 2 e a y r e s a 3 rs .. 3 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 7/1/73 5 5V V 4 i 1 1 / / 2 2 1 1 / / 7 7 0 0 6% (6) 5 6 Va 1 1 / / 2 2 1 1 / / 7 7 0 0 9 2Vi to 4 years3......................................... 6Vi 7/1/73 5V4 1/21/70 6% (6) 6 1/21/70 10 4 to 6 years4............................................ 71/4 11/1/73 (9) m 11/1/73 (9) 11 6 years or more4...................................... 7Vi 12/23/74 IVa 11/1/73 m 12/23/74 71/2 11/1/73 12 Governmental units (all maturities)... m 12/23/74 71/2 11/27/74 m 12/23/74 m 11/27/74 13 Individual retirement accounts and Keogh (H.R. 10) plans 5............. 7% 7/6/77 (8) 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 6 Vi per cent ceiling on time deposits maturing in 2Vi 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 commer­ to 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 1978 Type of transaction 1975 1976 1977 Sept. Oct. Nov. Dec. Jan. Feb. Mar, U.S. GOVT. SECURITIES Outright transactions (excl. matched salepurchase transactions) Treasury bills: 1 Gross purchases. 11,562 14,343 13,738 2,005 3,109 696 379 748 2 Gross sales........... 5,599 8,462 7,241 303 1,877 436 311 1,323 1,974 50 3 Redemptions 26,431 2 5,017 2,136 317 300 1,100 31 Others within 1 year:1 Gross purchases..................... 3,886 472 3,017 2,616 99 56 288 Gross sales............................... Exchange, or maturity shift. -4 ‘792' 4.499 ”320 -45 1,352 623 -5ii -653 26i Redemptions........................... 3,549 2.500 2,500 1 to 5 years: 8 Gross purchases...................... 2 3,284 2 3,202 2,833 681 628 311 813 9 Gross sales............................... 177 10 Exchange, or maturity shift. 3,854 -2,588 -6 j 649 -320 45 -1,267 -623 sii 1,109 -26i‘ 5 to 10 years: 11 Gross purchases..................... 1,510 1,048 758 96 166 89 370 12 Gross sales............................... 13 Exchange, or maturity shift. -4’697 ‘i",572’ 584 -325 -906 Over 10 years: 14 Gross purchases.................... 1,070 642 553 128 108 100 147 15 Gross sales............................... 16 Exchange, or maturity shift. '”848 ’225' i i 565 240 450 All maturities:1 17 Gross purchases. 221,313 219,707 20,898 5,526 4,110 1,252 379 2,367 18 Gross sales........... 5,599 8,639 7,241 303 1,877 436 311 1,323 1,974 50 19 Redemptions.... 2 9,980 25,017 4,636 317 2,500 300 1,100 31 Matched sale-purchase transactions 20 Gross sales........................................ 151,205 196,078 425,214 39,552 48,204 56,899 32,320 54,859 40,128 44,976 21 Gross purchases.............................. 152,132 196,579 423,841 39,694 44,772 57,477 35,001 51,016 44,270 44,129 Repurchase agreements 22 Gross purchases.... 140,311 232,891 178,683 16,700 9,578 6,472 18,071 10,229 16.057 13,155 23 Gross sales................. 139,538 230,355 180,535 15,469 11,889 4,433 18,208 12,130 16.057 11,468 24 Net change in U.S. Govt, securities.......... 7,434 9,087 5,798 6,279 -10,118 1,880 6,342 -5,815 1,447 3,127 FEDERAL AGENCY OBLIGATIONS Outright transactions: 25 Gross purchases......... 1,616 891 1,433 707 26 Gross sales................... 27 Redemptions............... 246 169 223 25 *32 22 53 Repurchase agreements: 28 Gross purchases......... 15,179 10,520 13,811 1,136 741 615 2,712 1,680 1.966 2,638 29 Gross sales................... 15,566 10,360 13,638 978 1,051 484 2,392 2,131 1.966 2,374 BANKERS ACCEPTANCES 30 Outright transactions, net... 163 -545 -196 -4 31 Repurchase agreements, net. -35 410 159 351 -478 248 705 -954 770 32 Net change in total System Account. 8,539 9,833 7,143 6,764 -10,910 2,260 8,042 -7,220 1,425 4,107 1 Both gross purchases and redemptions include special certificates amounting to $189 million. Acquisition of these notes is treated as a created when the Treasury borrows directly from the Federal Reserve, purchase; the run-off of bills, as a redemption. as follows (millions of dollars): 1975, 3,549: 1976, none; Sept. 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 for 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 □ May 1978 1.18 FEDERAL RESERVE BANKS Condition and F.R. Note Statements Millions of dollars Wednesday End of month Account 1978 1978 Mar. 29 Apr. 5 Apr. 12 Apr. 19* Apr. 26? Feb. Mar. Apr.p Consolidated condition statement ASSETS 1 Gold certificate account...................................... 11,718 11,718 11,718 11,718 11,718 11,718 11,718 11,718 2 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 3 320 309 305 308 308 339 323 324 Loans: 4 Member bank borrowings............................... 364 159 171 556 1,764 304 332 1,751 Acceptances: 6 7 607 193 216 770 290 Federal agency obligations: 8 7,929 7,929 7,929 7,929 7,929 7,982 7,929 7,929 q 832 99 263 264 135 U.S. Govt, securities Bought outright: 10 Bills.............................................................. 38,222 35,007 36,445 38,965 40,154 38,536 38,358 40,565 11 1? 13 51,486 51,984 51,984 52,510 52,510 50,516 51,984 52,510 14 9,452 9,548 9,548 9,693 9,693 9,398 9,548 9,693 15 Total 2............................................................... 99,160 96,539 97,977 101,168 102,357 98,450 99,890 102,768 16 3,283 402 1,566 1,687 732 17 102,443 96,941 97,977 101,168 103,923 98,450 101,577 103,500 18 Total loans and securities.................................... 112,175 105,321 106,077 109,653 114,095 106,736 110,872 113,605 19 9,513 13,400 11,163 12,571 11,111 10,489 8,354 9,087 20 385 384 383 385 386 380 385 387 Other assets: 21 66 62 90 140 54 '18 80 54 22 1,868 1,854 2,069 2,357 2,543 rl,501 1,863 2,720 23 137,295 134,298 133,055 138,382 141,465 132,431 134,845 139,145 LIABILITIES 24 91,964 92,436 93,062 92,848 92,697 90,703 91,666 92,331 Deposits : 25 Member bank reserves..................................... 30,236 24,884 26,301 27,306 28,069 26,047 27,900 28,203 26 U.S. Treasury—General account.................... 4,389 4,938 2,595 6,625 8,729 3,615 4,705 7,177 27 276 585 268 249 460 445 352 481 28 765 751 759 709 796 698 740 684 29 35,666 31,158 29,923 34,889 38,054 30,805 33,697 36,545 30 Deferred availability cash items......................... 5,776 7,247 6,416 6,885 6,835 6,990 5,622 6,189 31 Other liabilities and accrued dividends............... 1,302 1,265 1,331 1,308 1,287 1,328 1,234 1,420 32 134,708 132,106 130,732 135,930 138,873 129,826 132,219 136,485 CAPITAL ACCOUNTS 33 1,048 1,048 1,047 1,047 1,049 1,044 1,047 1,050 34 1,029 1,029 1,029 1,029 1,029 1,029 1,029 1,029 35 510 115 247 376 514 532 550 581 36 137,295 134,298 133,055 138,382 141,465 132,431 134,845 139,145 37 Memo: Marketable U.S. Govt, securities held in custody for foreign and inti, account............. 88,336 88,898 89,038 88,218 86,590 83,261 88,965 85,141 Federal Reserve note statement 38 F.R. notes outstanding (issued to Bank)............. 103,431 103,570 103,744 103,904 104,165 102,773 103,427 104,164 Collateral held against notes outstanding: 39 Gold certificate account................................... 11,718 11,718 11,718 11,718 11,717 11,718 11,718 11,717 40 Special Drawing Rights certificate account.... 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 41 333 144 144 593 1,645 292 309 1,580 42 U.S. Govt, securities........................................ 90,130 90,458 90,632 90,343 89,553 89,513 90,150 89,617 43 Total collateral..................................................... 103,431 103,570 103,744 103,904 104,165 102,773 103,427 104,164 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 1978 1978 Mar. 29 Apr. 5 Apr. 12 Apr. 19 Apr. 26 Feb. 28 Mar. 31 Apr. 30 1 Loans............................. 363 159 172 556 1,764 303 331 1,751 2 Within 15 days 356 139 157 550 1,736 294 315 1,731 3 16 days to 90 days. 7 20 15 6 28 9 16 20 4 91 days to 1 year.., 5 Acceptances................. 607 193 216 770 290 6 Within 15 days. . . . 607 193 216 770 290 7 16 days to 90 days. 8 91 days to 1 year.., U.S. Govt, securities............. 102,443 96,941 97,977 101,168 103,923 98,450 101,577 103,500 Within 15 days1................ 6,967 3,101 2,181 3,318 5,727 2,512 4,642 3,710 16 days to 90 days............ 18,849 16,136 18,025 18,984 20,219 19,549 19,400 21,381 91 days to 1 year............... 29,838 30,623 30,690 31,214 30,325 30,377 30,454 30,757 Over 1 year to 5 years... 29,272 29,376 29,376 29,611 29,611 28,824 29,376 29,611 Over 5 years to 10 years. 9,846 9,941 9,941 10,132 10,132 9,571 9,941 10,132 Over 10 years.................... 7,671 7,764 7,764 7,909 7,909 7,617 7,764 7,909 16 Federal agency obligations.. 8,761 8,028 7,929 7,929 8,192 7,982 8,193 8,064 17 Within 15 days1................ 873 105 6 26 283 222 305 189 18 16 days to 90 days............ 233 257 258 238 265 140 233 231 19 91 days to 1 year............... 1,110 1,121 1,121 1,121 1,152 1,127 1,110 1,152 20 Over 1 year to 5 years... 4,044 4,044 4,043 4,043 3,991 3,954 4,044 3,991 21 Over 5 years to 10 years. 1,624 1,624 1,644 1,644 1,644 1,659 1,624 1,644 22 Over 10 years..................... 877 877 857 857 857 880 877 857 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 1978 Bank group, or type 1974 1975 1976 of customer Nov. Dec. Jan. Feb. Mar, Debits to demand deposits 2 (seasonally adjusted) 1 All commercial banks................ 22,937.8 25,028.5 29,180.4 36,253.5 36,427.2 36.923.3 36.156.1 36,883.0 2 Major New York City banks.. 8,434.8 9,670.7 11.467.2 14.216.3 14,651.4 14,432.0 13.483.1 13,701.6 3 Other banks.................................. 14,503.0 15,357.8 17.713.2 22.037.3 21,775.8 22.491.3 22,672.9 23,181.3 Debits to savings deposits 3 (not seasonally adjusted) 4 All customers................................ 326.0 353.8 392.6 328.7 382.7 5 Business 1...................................... 42.2 49.5 48.7 c40.1 49.7 6 Others............................................. 283.8 304.3 343.8 288.6 333.0 Demand deposit turnover 2 (seasonally adjusted) 7 All commercial banks................. 99.0 105.3 116.8 131.4 131.0 131.5 129.4 132.7 8 Major New York City banks.. 321.6 356.9 411.6 524.4 539.9 512.2 496.4 521.5 9 Other banks.................................. 70.6 72.9 79.8 88.6 86.8 89.0 89.9 92.1 Savings deposit turnover 3 (not seasonally adjusted) 10 All customers................................ 1.5 1.6 1.8 1.5 1.7 11 Business *...................................... 3.9 4.6 4.7 3.9 4.8 12 Others............................................. 1.4 1.5 1.7 1.4 1.6 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 □ May 1978 1.21 MONEY STOCK MEASURES AND COMPONENTS Billions of dollars, averages of daily figures 1977 1978 1974 1975 1976 1977 Dec. Dec. Dec. Dec. Oct. Nov. Dec. Jan. Feb. Mar. Seasonally adjusted MEASURES 1 1 M-1........................................................... 282.8 294.5 312.6 336.7 334.6 334.7 336.7 339.4 339.1 340.1 2 M-2........................................................... 612.1 664.1 739.6 807.6 800.2 803.8 807.6 813.6 816.6 820.2 3 M-3........................................................... 981.2 1,091.8 1,235.6 1,374.1 1,356.7 1,365.5 1,374.1 1,384.1 1,390.5 1,397.6 4 M-4........................................................... 701.1 745.4 802.3 881.6 866.5 874.6 881.6 889.9 896.0 902.2 5 M-5........................................................... 1,070.2 1,173.2 1,298.3 1,448.1 1,423.0 1,436.4 1,448.1 1,460.4 1,469.8 1,479.6 COMPONENTS 6 Currency.................................................. 67.8 73.7 80.7 88.5 87.1 87.7 88.5 89.3 90.0 90.6 Commercial bank deposits: 7 Demand............................................... 215.1 220.8 231.9 248.2 247.5 247.0 248.2 250.1 249.1 249.5 8 Time and savings................................ 418.3 450.9 489.7 544.9 531.9 540.0 544.9 550.5 r556.8 562.1 9 Negotiable CD’s2.......................... 89.0 81.3 62.7 74.0 66.4 70.9 74.0 76.3 79.4 82.0 10 Other................................................ 329.3 369.6 427.0 470.9 465.5 469.1 470.9 474.2 477.5 480.1 11 Nonbank thrift institutions3............... 369.1 427.8 496.0 566.5 556.5 561.7 566.5 570.5 r573.8 577.4 Not seasonally adjusted MEASURES1 12 M-1........................................................... 291.2 303.2 321.7 346.4 334.0 336.8 346.4 345.2 333.3 335.4 13 M-2........................................................... 617.5 669.3 744.8 813.0 797.5 801.2 813.0 818.3 r811.4 818.7 14 M-3..................................................... 983.8 1,094.3 1,237.5 1,375.5 1,351.7 1,358.5 1,375.5 1,386.5 1,383.4 1,397.5 15 M-4........................................................... 707.9 752.8 809.1 888.9 865.8 872.8 888.9 894.6 888.3 899.0 16 M-5........................................................... 1,074.2 1,177.7 1,301.8 1,451.4 1,420.0 1,430.1 1,451.4 1,462.9 1,460.3 1,477.7 COMPONENTS 17 Currency.................................................. 69.0 75.1 82.1 90.0 86.9 88.4 90.0 88.6 88.9 89.9 Commercial bank deposits: 18 Demand................................................ 222.2 228.1 239.5 256.4 247.0 248.4 256.4 256.6 244.4 245.5 19 Member........................................... 159.7 162.1 168.5 176.3 170.0 170.3 176.3 175.9 167.4 168.5 20 Domestic nonmember.................. 58.5 62.6 67.5 75.8 72.7 73.8 75.8 76.3 72.8 73.0 21 Time and savings................................ 416.7 449.6 487.4 542.5 531.8 536.0 542.5 549.4 555.0 563.6 22 Negotiable CD’s2......................... 90.5 83.5 64.3 75.9 68.3 71.6 75.9 76.4 76.9 80.2 23 Other............................................... 326.3 366.2 423.1 466.6 463.5 464.4 466.6 473.0 478.1 483.4 24 Nonbank thrift institutions3............... 366.3 424.9 492.7 562.5 554.2 557.3 562.5 568.2 571.9 578.8 25 U.S. Govt, deposits (all commercial banks).............................................. 4.9 4.1 4.4 5.1 3.7 3.5 5.1 4.2 4.2 4.6 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-1: 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 April 1978 Bulletin, pp. process of collection and F.R. float; (2) foreign demand balances at F.R. 338 and 339. 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-1 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 at 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. billion (of which $0.6 billion was in “Commercial and industrial loans”), 2 Loans sold are those sold outright to a bank’s own foreign branches, and “Other securities,” $0.5 billion. In late November “Commercial and nonconsolidated nonbank affiliates of the bank, the bank’s holding industrial loans” were increased by $0.1 billion as a result of loan re­ company (if not a bank), and nonconsolidated nonbank subsidiaries of classifications at another large bank. the holding company. Prior to Aug. 28, 1974, the institutions included 4 Reclassification of loans reduced these loans by about $1.2 billion had been defined somewhat differently, and the reporting panel of banks as of Mar. 31, 1976. was also different. On the new basis, both “Total loans” and “Com­ 5 Reclassification of loans at one large bank reduced these loans by mercial and industrial loans” were reduced by about $100 million. about $300 million as of Dec. 31, 1977. Data beginning June 30, 1974, include one large mutual savings 6 As of April 26, 1976, total loans sold were increased by $400 million bank that merged with a nonmember commercial bank. As of that date and business loans sold were reduced by $700 million as the result of there were increases of about $500 million in loans, $100 million in reclassifications at one large bank. “Other” securities, and $600 million in “Total loans and investments.” As of Oct. 31, 1974, “Total loans and investments” of all commercial Note.—Data are for last Wednesday of month except for June 30 banks were reduced by $1.5 billion in connection with the liquidation and Dec. 31; data are partly or wholly estimated except when June 30 of one large bank. Reductions in other items were: “Total loans,” $1.0 and Dec. 31 are call dates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Aggregates A 15 1.22 AGGREGATE RESERVES AND DEPOSITS Member Banks Billions of dollars, averages of daily figures 1977 1978 1974 1975 1976 Dec. Dec. Dec. July Aug. Sept. Oct. Nov. Seasonally adjusted 1 ••36.57 34.68 34.93 *■35.27 *■35.50 *•35.52 '35.81 35.96 '36.14 '36.60 '36.93 36.67 2 Nonborrowed................................................. r35.84 34.55 *■34.89 *•34.95 *•34.44 *■34.89 *•34.50 35.10 '35.57 '36.12 '36.53 36.34 3 Required.......................................................... *•36.31 *•34.42 *•34.29 *■35.00 *•35.30 *•35.31 *■35.60 35.71 '35.95 '36.33 '36.69 36.47 4 Deposits subject to reserve requirements2. . 486.1 504.6 528.9 547.2 550.5 553.0 558.5 564.4 569.1 575.7 577.8 582.2 5 Time and savings........................................... 322.1 337.1 354.3 368.9 370.8 373.0 377.1 383.5 387.0 390.5 395.4 399.2 Demand: 6 Private.......................................................... 160.6 164.5 171.4 175.3 176.5 176.7 178.3 178.0 178.5 182.1 179.5 179.6 7 U.S. Govt................................................... 3.3 2.9 3.2 3.0 3.2 3.3 3.1 3.0 3.6 3.1 3.0 3.4 Not seasonally adjusted 8 Deposits subject to reserve requirements2.. 491.8 510.9 534.8 547.6 548.3 552.1 558.2 562.1 575.3 581.3 572.5 579.5 9 Time ans savings.......................................... 321.7 337.2 353.6 369.5 371.7 373.0 377.5 380.7 386.4 390.3 393.2 399.3 Demand: 10 Private....................................................... 166.6 170.7 177.9 175.6 174.1 175.2 178.0 178.7 185.1 187.9 176.1 176.7 11 U.S. Govt................................................. 3.4 3.1 3.3 2.6 2.5 3.8 2.7 2.6 3.8 3.1 3.1 3.5 i 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 1978 1973 1974 1975 1976 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Category 3 Nov. 30 Dec. 31 Jan. 25 Feb. 22 Mar. 29 Apr. 26 V V p V p p Seasonally adjusted 1Loans and investments1............................................. 633.4 690.4 721.1 784.4 866.1 865.4 874.3 881.9 888.8 904.8 2 Including loans sold outright2............................ 637.7 695.2 725.5 788.2 870.5 870.0 878.8 886.2 892.9 6909.3 Loans: 3 Total.......................................................................... 449.0 500.2 496.9 538.9 611.2 612.9 622.4 625.4 633.5 645.0 4 Including loans sold outright2........................ 453.3 505.0 501.3 542.7 615.6 617.5 626.9 629.7 637.6 6 649.5 5 Commercial and industrial................................... 156.4 183.3 176.0 4179.5 201.6 5202.2 204.6 207.1 211.0 214.4 6 Including loans sold outright2........................ 159.0 186.0 178.5 4181.9 204.7 5205.5 207.7 210.1 213.9 6216.7 Investments: 7 U.S. Treasury.......................................................... 54.5 50.4 79.4 97.3 95.0 93.5 92.5 97.5 96.5 98.4 8 Other......................................................................... 129.9 139.8 144.8 148.2 159.9 159.0 159.4 159.0 158.8 161.4 Not seasonally adjusted 9 Loans and investments1............................................. 647.3 705.6 737.0 801.6 866.4 884.5 872.7 875.0 886.5 901.8 10 Including loans sold outright2............................ 651.6 710.4 741.4 805.4 870.8 889.1 877.2 879.3 890.6 6 906.3 Loans: 11 Total1........................................................................ 458.5 510.7 507.4 550.2 610.1 625.7 617.0 617.9 629.4 640.2 12 Including loans sold outright2........................ 462.8 515.5 511.8 554.0 614.6 630.4 621.5 622.2 633.5 6 644.7 13 Commercial and industrial................................. 159.4 186.8 179.3 4182.9 200.8 5206.0 202.5 205.0 210.9 214.7 14 Including loans sold outright2....................... 162.0 189.5 181.8 4185.3 203.9 5209.3 205.6 208.0 213.8 6217.0 Investments: 15 U.S. Treasury.......................................................... 58.3 54.5 84.1 102.5 97.9 98.9 97.2 98.9 97.9 98.9 16 Other......................................................................... 130.6 140.5 145.5 148.9 158.4 159.8 158.5 158.1 159.2 162.7 For notes see bottom of opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics □ May 1978 1.24 COMMERCIAL BANK ASSETS AND LIABILITIES Last-Wednesday-of-Month Series Billions of dollars except for number of banks 1976 1977 3 19783 Account Dec.3 July? Aug.* Sept.? Oct.* Nov.* Dec.* Jan.* Feb.* Mar.* Apr.* All commercial 1 Loans and investments................. 846.4 875.0 886.8 891.4 897.7 915.0 931.6 919.9 924.4 934.4 946.1 2 Loans, gross.............................. 594.9 620.7 632.2 637.1 642.9 658.7 673.4 664.2 667.4 677.2 684.4 Investments: 3 U.S. Treasury securities.. 102.5 100.0 99.4 98.5 97.7 97.8 98.9 97.2 98.9 97.9 98.9 4 Other...................................... 148.9 154.3 155.2 155.9 157.1 158.4 159.3 158.5 158.1 159.2 162.7 5 Cash assets.................................. 136.1 126.9 135.5 128.7 129.4 138.8 150.1 128.0 146.5 131.4 134.0 6 12.1 13.5 13.7 13.9 13.9 14.7 15.8 14.1 13.9 14.3 14.2 7 Reserves with F.R. Banks... 26.1 27.2 28.2 30.0 28.3 26.3 32.1 26.6 31.0 30.2 27.6 8 Balances with banks.............. 49.6 42.4 45.3 42.7 44.4 46.8 48.8 43.3 47.4 43.8 44.5 9 Cash items in process of collection.. 48.4 43.9 48.3 42.1 42.8 51.0 53.5 44.0 54.2 43.1 47.7 10 Total assets/total liabilities and 1,030.7 1,059.3 1,079.7 1,076.7 1,083.9 1,117.5 1,145.4 1,112.8 1,136.7 1,134.6 1,149.1 11 Deposits....................................... 838.2 843.2 857.6 852.1 858.8 883.5 908.5 880.3 895.8 892.4 906.4 Demand: 12 45.4 38.2 39.6 37.1 37.5 41.8 43.7 37.3 42.8 37.6 39.0 13 U.S. Govt............................ 3.0 3.8 2.5 8.0 3.6 4.7 7.2 4.5 5.8 4.8 6.0 14 Other.................................... 288.4 273.9 285.1 272.5 279.4 293.2 307.0 283.8 287.8 279.4 291.3 Time: 15 9.2 8.3 8.0 8.3 8.5 9.0 9.6 9.2 8.8 9.1 9.1 16 Other...................................... 492.2 519.0 522.6 526.1 529.9 534.8 541.1 545.5 550.7 561.5 561.1 17 Borrowings.................................... 80.2 92.2 94.8 96.5 96.8 101.0 107.1 101.7 105.7 107.3 106.5 18 Total capital accounts2............... 78.1 79.0 79.6 80.1 80.5 81.4 81.6 82.2 82.6 83.2 83.6 19 Memo: Number of banks.......... 14,671 14,709 14,713 14,724 14,718 14,718 14,703 14,702 14,683 14,689 14,689 Member 20 Loans and investments................ 620.5 628.9 637.9 640.8 645.2 658.6 670.8 659.5 661.8 668.6 676.8 21 Loans, gross.............................. 442.9 451.3 459.9 463.0 467.1 479.0 489.9 481.8 483.1 490.5 495.3 Investments: 22 U.S. Treasury securities... 74.6 70.8 70.5 69.6 68.9 69.2 69.9 67.7 69.2 68.2 68.8 23 103.1 106.8 107.5 108.3 109.3 110.3 111.1 110.0 109.5 109.9 112.7 24 Cash assets, total......................... 108.9 101.2 108.6 103.1 102.3 110.6 121.7 102.2 117.2 104.8 106.5 25 9.1 9.9 10.0 10.2 10.2 10.8 11.7 10.4 10.2 10.6 10.5 26 Reserves with F.R. Banks... 26.0 27.2 28.2 30.0 28.3 26.3 32.1 26.6 31.0 30.2 27.6 27 Balances with banks............... 27.4 22.0 24.0 22.5 22.8 24.7 26.6 23.0 24.6 22.9 22.7 28 Cash items in process of collection.. 46.5 42.1 46.4 40.4 41.0 48.9 51.3 42.2 51.4 41.2 45.7 29 Total assets/total liabilities and capital1...................................... 772.9 780.1 796.3 793.2 796.5 823.9 847.0 818.0 835.7 833.2 843.3 30 618.7 611.0 622.2 617.0 620.9 641.8 660.8 636.8 649.2 645.1 655.1 Demand: 31 Interbank............................... 42.4 35.3 36.6 34.3 34.6 38.7 40.4 34.4 39.5 34.7 36.0 32 U.S. Govt.............................. 2.1 2.8 1.7 6.4 2.6 3.6 5.3 3.4 4.4 3.7 4.5 33 Other...................................... 215.5 202.2 211.0 200.3 205.3 216.4 226.3 208.4 211.8 205.1 213.4 Time: 34 7.2 6.3 6.0 6.3 6.5 6.8 7.4 7.1 6.7 7.0 6.9 35 Other...................................... 351.5 364.4 366.9 369.6 372.0 376.2 381.4 383.5 386.9 394.7 394.3 36 Borrowings.................................... 71.7 80.4 82.5 84.0 83.8 87.8 93.4 88.0 90.8 91.8 91.1 37 Total capital accounts2............... 58.6 59.4 59.9 60.2 60.6 61.2 61.4 61.7 62.1 62.4 62.7 38 5,759 5,701 5,676 5,692 5,686 5,686 5,668 5,658 5*658 5,652 5,652 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 na­ against “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 1.2S 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 1977 1975 1976 1977 Account Dec. 31 June 30 Dec. 31 June 30 Dec. 31 June 30 Dec. 31 June 30 Total insured National (all insured) 1 Loans and investments, gross.................................... 762,400 773,701 827,692 854,736 441,135 443,959 476,602 488,240 Loans: 2 Gross..................................................................... 535,170 539,021 578,710 601,141 315,738 315,628 340,679 351,311 3 Net......................................................................... (2) 520,976 560,062 581,163 (2) 305,280 329,968 339,955 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 7 944,654 942,519 1,004,001 1,040,952 553,285 548,702 583,315 599,743 8 Deposits......................................................................... 775,209 776,957 825,010 847,373 447,590 444,251 469,378 476,381 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..................................................................... 276,384 265,671 285,201 284,544 159,840 152,383 163,347 161,358 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: 18 Gross..................................................................... 100,823 98,889 102,277 102,144 118,609 124,503 135,753 147,685 19 Net......................................................................... (2) 96,037 99,474 99,200 (2) 119,658 130,618 142,008 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......................................................................... 143,409 142,061 149,491 152,471 184,210 190,644 206,140 218,519 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...................................................................... 50,984 49,659 52,204 52,571 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.................................... 13,674 15,905 18,819 22,940 197,319 208,730 225,909 244,839 Loans: 34 Gross..................................................................... 11,283 13,209 16,336 20,865 129,892 137,712 152,090 168,551 35 Net......................................................................... (2) 13,092 16,209 20,679 (2) 132,751 146,828 162,687 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 13,325 14,658 195,533 202,380 219,466 233,177 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...................................................................... 2,308 2,555 3,236 3,588 67,868 66,184 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 □ May 1978 1.26 COMMERCIAL BANK ASSETS AND LIABILITIES Detailed Balance Sheet, September 30, 1977 Asset and liability items are shown in millions of dollars. Member banks1 Insured Non- Asset account commercial Large banks member banks banks1 Total All other New York City of Other City Chicago large 1 140,401 119,931 37,228 4,748 43,071 34,883 20,477 2 Currency and coin......................................................................... 11,322 8,309 786 166 2,741 4,618 3,012 25,582 25,582 2,658 1,592 11,035 10 297 4 Demand balances with banks in United States....................... 34,233 21,301 9,956 ’242 2,919 8’, 124 12,939 5 Other balances with banks in United States........................... 4,544 2,559 50 8 948 1,552 1,986 6 Balances with banks in foreign countries................................. 3,570 3,206 346 174 1,785 900 365 7 Cash items in process of collection............................................ 61,150 58,974 23,433 2,565 23,583 9,392 2,176 8 253,100 178,314 22,398 8,518 57,243 90,155 74,798 9 U.S. Treasury.................................................................................. 98,633 70,747 11,319 3,700 23,234 32,494 27,897 10 Other U.S. Govt, agencies........................................................... 35,232 21,954 1,435 629 5,911 13,979 13,278 11 113,002 81,356 9,276 3,953 26,854 41,273 31,646 12 All other securities........................................................................ 6,142 4,198 368 236 1,224 2,370 1,944 n 91 58 19 39 33 14 Trading-account securities............................................................. 6,524 6,399 2,912 762 2,465 260 125 15 U.S. Treasury.............................................................................. 3,824 3,815 2,019 458 1,232 105 9 16 Other U.S. Govt, agencies....................................................... 629 612 228 125 224 35 18 17 States and political subdivisions............................................ 1,471 1,438 536 97 726 79 32 18 All other trading acct. securities............................................ 510 477 129 82 264 2 33 14 91 58 19 39 33 20 Bank investment portfolios........................................................... 246,575 171,914 19,486 7,756 54,777 89,895 74,673 21 U.S. Treasury.............................................................................. 94,810 66,932 9,300 3,242 22,002 32,389 27,887 22 Other U.S. Govt, agencies....................................................... 34,603 21,343 1,207 504 5,687 13,945 13,261 23 States and political subdivisions............................................ 111,531 79,918 8,740 3,856 26,128 41,194 31,614 24 5,632 3,721 239 154 960 2,368 1,911 25 F.R. stock and corporate stock...................................................... 1,590 1,342 296 105 489 452 248 26 Federal funds sold and securities resale agreement....................... 42,200 33,672 3,450 1,366 17,721 11,135 8,623 27 Commercial banks......................................................................... 34,701 26,484 1,461 1,180 13,524 10,319 8,311 28 Brokers and dealers....................................................................... 5,104 4,960 1,337 143 2,828 652 144 29 2,396 2,228 652 43 1,369 163 168 30 Other loans, gross.............................................................................. 581,099 435,012 72,932 22,648 161,728 177,704 146,088 31 Less: Unearned income on loans.............................................. 14,273 9,632 600 85 3,116 5,831 4,641 32 Reserves for loan loss....................................................... 6,549 5,216 1,225 326 1,923 1,742 1,333 33 Other loans, net.............................................................................. 560,277 420,164 71,107 22,237 156,689 170,130 140,113 Other loans, gross, by category 34 Real estate loans............................................................................. 169,334 117,012 9,227 2,172 42,901 62,713 52,322 35 Construction and land development...................................... 19,606 14.940 2,327 429 7,169 5,014 4,666 36 Secured by farmland................................................................. 7,607 3,259 20 12 335 2,893 4,348 37 Secured by residential............................................................... 96,512 67,990 4,516 1,146 25,297 37,030 28,522 38 1- to 4-family residences....................................................... 91, 776 64,582 4,038 1,041 24,008 35,496 27,194 39 7,723 6,708 568 60 3,518 2,562 1,016 40 Conventional...................................................................... 84,053 57,874 3,470 981 20,490 32,934 26,179 41 Multifamily residences........................................................... 4,736 3,408 479 105 1,289 1,535 1,328 42 FHA-insured...................................................................... 367 306 106 22 107 71 61 43 Conventional...................................................................... 4,369 3,102 373 83 1,183 1,463 1,267 44 Secured by other properties..................................................... 45,609 30,824 2,364 585 10,099 17,776 14,786 45 Loans to financial institutions....................................................... 33,962 32,105 11,365 4,050 13,800 2,890 1,858 46 To REIT’s and mortgage companies.................................... 9,039 8,690 2,813 1,009 4,180 688 350 47 To domestic commercial banks.............................................. 2,581 2,074 679 113 1,029 253 507 48 6,621 6,446 3,008 286 2,624 528 175 49 To other depository institutions .*.......................................... 1,250 1,100 98 47 718 237 150 50 To other financial institutions................................................ 14,472 13,795 4,768 2,595 5,249 1,183 677 51 Loans to security brokers and dealers...................................... 11,478 11,239 6,508 1,693 2,808 231 239 52 Other loans to purch./carry securities....................................... 4,257 3,542 418 342 1,819 964 715 53 Loans to farmers—except real estate........................................ 26,271 14,434 154 127 3,392 10,760 11,836 54 Commercial and industrial loans............................................... 186,730 151,470 36,443 11,083 58,955 44,989 35,260 55 134,381 92,783 6,237 1,966 32,768 51,813 41,597 56 Instalment loans.......................................................................... 107,454 74,070 4,616 1,210 26,608 41,636 33,384 57 Passenger automobiles......................................................... 47,716 30,562 887 149 8,950 20,576 17,154 58 Residential-repair/modernize.............................................. 7,071 4,711 297 61 1,682 2,671 2,359 59 Credit cards and related plans............................................ 16,348 14,377 1,929 815 7,932 3,701 1,971 60 Charge-account credit cards........................................... 12,697 11,334 1,281 776 6,403 2,874 1,363 61 Check and revolving credit plans.................................. 3,651 3,043 648 39 1,529 826 608 62 Other retail consumer goods............................................... 17,214 11,737 365 60 4,263 7,049 5,477 63 Mobile homes.................................................................... 9,051 6,365 183 24 2,283 3,875 2,686 64 Other.................................................................................... 8,163 5,372 182 36 1,980 3,175 2,791 65 19,105 12,682 1,138 125 3,780 7,639 6,423 66 Single-payment loans to individuals...................................... 26,927 18,714 1,621 757 6,160 10,177 8,213 67 All other loans................................................................................ 14,687 12,426 2,581 1,214 5,286 3,345 2,261 68 Total loans and securities, net......................................................... 857,167 633,492 97,251 32,226 232,142 271,872 223,782 69 Direct lease financing........................................................................ 5,433 5,094 964 136 3,125 871 339 70 Fixed assets—Buildings, furniture, real estate............................ 20,681 15,388 2,191 721 5,882 6,593 5,296 71 Investment in unconsolidated subsidiaries................................... 2,816 2,775 1,290 234 1,161 90 41 72 Customer acceptances outstanding................................................ 11,822 11,357 5,459 794 4,800 303 465 73 Other assets......................................................................................... 28,438 24,850 8,359 1,246 10,811 4,434 3,653 74 Total assets........................................................................................... 1,066,758 812,886 152,743 40,105 300,993 319,045 254,052 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 Insured Non­ Liability or capital account commercial1 Large banks member banks banks1 Total All other New York City of Other City Chicago large 75 Demand deposits.............................................................................. 334,879 260,255 60,788 10,020 93,342 96,105 74,633 76 Mutual savings banks................................................................. 1,355 1,180 596 1 258 325 175 77 Other individuals, partnerships, and corporations............... 255,804 191,532 31,048 7,343 72,990 80,151 64,273 78 U.S. Govt...................................................................................... 5,279 4,095 356 138 1,815 1,787 1,184 79 States and political subdivisions.............................................. 16,719 11,572 773 264 3,498 7,037 5,147 80 Foreign governments, central banks, etc................................ 1,478 1,444 1,192 16 214 22 34 81 34,016 32,875 16,823 1,718 10,513 3,819 1,151 82 Banks in foreign countries......................................................... 6,713 6,571 5,203 199 1.013 157 142 83 Certified and officers’ checks, etc............................................. 13,516 10,987 4,797 341 3,042 2,807 2,529 84 Time deposits.................................................................................... 309,412 223,635 32,640 13,458 77,932 99,605 85,777 8S Accumulated for personal loan payments............................. 122 98 11 87 24 86 Mutual savings banks................................................................. 307 295 122 69 88 17 12 87 Other individuals, partnerships, and corporations............... 245,125 176,081 24,649 10,037 60,163 81,233 69,043 88 U.S. Govt...................................................................................... 811 660 50 46 356 208 151 89 States and political subdivisions.............................................. 48,847 33,495 1,517 1,309 13,623 17,046 15,352 90 Foreign governments, central banks, etc. ..................... 7,189 6,883 3,999 1,308 1,522 54 306 91 Commercial banks in United States........................................ 5,428 4.700 1,517 607 1,896 681 728 92 Banks in foreign countries.......................................................•. 1,583 1,422 787 82 274 280 161 93 Savings deposits................................................................................ 217,555 152,871 11,515 3,027 55,808 82,521 64,684 94 Individuals and nonprofit organizations................................ 201,982 141,902 10,541 2,828 51,981 76,553 60,081 95 Corporations and other profit organizations......................... 10,618 7,618 596 179 3,182 3,661 3,000 96 U.S. Government........................................................................ 57 49 4 16 29 g 97 4,859 3,267 355 20 617 2,274 1,593 98 All other........................................................................................ 38 35 20 11 5 3 99 Total deposits.................................................................................... 861,847 636,761 104,944 26,506 227,081 278,231 225,095 100 Federal funds purchased and securities sold under agreements to repurchase............................................................................ 80,475 76,053 19,246 8,847 37,148 10,811 4,422 101 Commercial banks....................................................................... 40,568 38,676 7,239 5,918 21,034 4,485 1,892 102 Brokers and dealers..................................................................... 10,327 9,920 1,872 1,551 5,197 1,299 408 103 Others............................................................................................ 29,580 27,457 10,135 1,378 10,917 5,027 2,123 104 Other liabilities for borrowed money.......................................... 6,941 6,594 2,305 134 3,299 855 347 105 Mortgage indebtedness................................................................... 822 587 75 16 293 202 236 12,448 11,983 6,063 802 4,813 305 465 107 Other liabilities................................................................................ 21,082 18,543 6,979 980 6,972 3,612 2,701 108 Total liabilities.................................................................................. 983,615 750,520 139,612 37,285 279,697 294,016 233,266 109 5,452 4,296 1,116 81 1,920 1,179 1,156 110 Equity capital.................................................................................... 77,691 58,070 12,014 2,740 19,466 23,850 19,630 Ill Preferred stock............................................................................. 76 31 2 29 45 112 Common stock............................................................................. 16,800 12,196 2,534 570 3,869 5,223 4,608 113 Surplus........................................................................................... 30.310 22,243 4,550 1,325 7,901 8,467 8,070 114 Undivided profits......................................................................... 28,784 22,414 4,891 791 7,289 9,442 6,373 115 Other capital reserves....................................................... .... 1,721 1,187 39 53 405 690 534 116 Total liabilities and equity capital................................................ 1,066,758 812,866 152,743 40,105 300,993 319,045 254,052 Memo items: 117 Demand deposits adjusted2........................................................... 234,434 164,312 20,176 5,599 57,431 81,106 70,123 Average for last 15 or 30 days: 118 Cash and due from bank........................................................... 130,354 111,396 32,164 4,734 41,131 33,367 18,964 119 Federal funds sold and securities purchased under agree­ ments to resell..................................................................... 45,457 35,524 4,308 1,467 17,459 12,290 9,997 120 Total loans.................................................................................... 562,308 421,470 71,435 22,100 157,150 170,785 140,838 121 Time deposits of $100,000 or more......................................... 137,978 112.438 26,334 10,410 46,080 29,613 25,540 122 Total deposits............................................................................... 845,729 622,100 96,770 25,565 233,052 276,712 223,636 123 Federal funds purchased and securities sold under agree­ ments to repurchase........................................................... 85,514 81,480 23,101 10,134 37,645 10,600 4,034 124 Other liabilities for borrowed money...................................... 6,792 6,436 2,125 110 3,470 732 356 125 Standby letters of credit outstanding.......................................... 13,068 12,223 6,744 1,036 3,515 928 845 126 Time deposits of $100,000 or more............................................. 141,125 114,857 26,424 10,626 47,351 30,276 26,268 127 Certificates of deposit................................................................. 118,970 96,381 22,542 9,270 38,845 25,724 22,589 128 Other time deposits..................................................................... 22,155 18,477 3,882 1,356 8,686 4,553 3,679 129 Number of banks............................................................................ 14,420 5,691 12 9 154 5,516 8,739 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 do­ member 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 Demand deposits adjusted are demand deposits other than domestic as soon as they become available. commercial interbank and U.S. Govt., less cash items reported as in Back data in lesser detail were shown in previous Bulletins. Details process of collection. may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Financial Statistics □ May 1978 1.27 ALL LARGE WEEKLY REPORTING COMMERCIAL BANKS Assets and Liabilities Millions of dollars, Wednesday figures 1978 Account Mar. 1 Mar. 8 Mar. 15 Mar. 22 Mar. 29 Apr. 5* Apr. 12p Apr. 19? Apr. 26? 1 Total loans and investments................................... 445,432 449,801 452,846 448,017 447,645 459,338 455,098 460,972 453,529 Loans: 2 Federal funds sold1.............................................. 23,635 25,878 26,925 24,929 25,271 30,143 25,933 28,076 23,969 3 To commercial banks..................................... 18,877 19,430 20,105 19,882 20,214 21,292 19,363 21,556 18,150 To brokers and dealers involving— 4 U.S. Treasury securities............................ 2,261 3,511 3,790 2,426 2,274 4,944 3,703 3,856 3,076 5 Other securities............................................ 460 601 582 532 507 691 647 662 673 6 To others........................................................... 2,037 2,336 2,448 2,089 2,276 3,216 2,220 2,002 2,070 7 Other, gross........................................................... 320,578 320,891 322,828 321,675 322,096 326,445 325,344 327,749 326,523 8 Commercial and industrial........................... 126,773 127,137 128,042 128,362 128,804 129,564 130,027 130,731 130,609 9 Agricultural...................................................... 4,557 4,595 4,649 4,677 4,711 4,740 4,746 4,777 4,793 For purchasing or carrying securities: To brokers and dealers: 10 U.S. Treasury securities........................ 1,189 2,125 1,790 1,102 818 2,363 1,558 2,000 1,354 11 Other securities....................................... 8,757 8,685 9,557 8,716 8,044 9,176 8,905 9,446 8,645 To others: 12 U.S. Treasury securities........................ 106 104 100 99 100 101 101 100 101 13 Other securities....................................... 2,612 2,579 2,584 2,544 2,559 2,584 2,583 2,597 2,609 To nonbank financial institutions: 14 Personal and sales finance cos., etc........ 7,317 7,393 7,519 7,510 7,486 7.685 7,566 7,524 7,590 15 Other............................................................. 15,094 15,097 15,046 15,010 15,104 15,282 15,156 15,055 15,029 16 Real estate........................................................ 75,879 76,061 76,391 76,585 76,788 76,937 77,239 77,562 77,713 To commercial banks: 17 Domestic...................................................... 2,278 2,030 1,880 2,002 1,990 2,098 1,969 1,956 2,054 18 Foreign......................................................... 6,428 6,064 5,984 5,880 6,238 6,244 5,998 5,717 5,637 19 Consumer instalment..................................... 46,784 46,770 46,878 46,986 47,234 47,382 47,558 47.845 48,098 20 Foreign govts., official institutions, etc------ 1,652 1,739 1,627 1,681 1,736 1.686 1,630 1,594 1,654 21 All other loans................................................ 21,152 20,512 20,781 20,521 20,484 20,603 20,308 20.845 20,637 22 Less: Loan loss reserve and unearned income on loans............................................ 9,544 9,628 9,665 9,694 9,629 9,587 9,676 9,746 9,764 23 Other loans, net................................................... 311,034 311,263 313,163 311,981 312,467 316,858 315,668 318,003 316,759 Investments: 24 U.S. Treasury securities..................................... 44,969 46,786 46,297 44,754 44,038 46,405 46,698 46,071 44,524 25 Bills.................................................................... 6,589 7,750 7,454 6,706 6,328 7,743 7,726 7,385 5,659 Notes and bonds, by maturity: 26 Within 1 year............................................... 8,779 8,774 8,745 8,426 8,393 8,310 8,476 8,433 8,449 27 1 to 5 years................................................... 25,081 25,804 25,889 25,509 25,221 25,746 25,556 25,505 25,614 28 After 5 years................................................. 4,520 4,458 4,209 4,113 4,096 4,606 4,940 4,748 4,802 29 Other securities..................................................... 65,794 65,874 66,461 66,353 65,869 65,932 66,799 68,822 68,277 Obligations of States and political subdivisions: 30 Tax warrants, short-term notes, and bills........................................................ 6,886 6,906 7,270 7,060 6,532 6,533 6,878 8,401 8,118 31 All other........................................................ 43,169 43,271 43,541 43,444 43,469 43,424 43,773 44,325 44,362 Other bonds, corporate stocks, and securities: 32 Certificates of participation2. ................. 2,741 2,739 2,741 2,751 2,786 2,738 2,739 2,815 2,802 33 All other, including corporate stocks... 12,998 12,958 12,909 13,098 13,082 13,237 13,409 13,281 12,995 34 Cash items in process of collection..................... 47,423 37,616 45,353 39,643 37,316 46,461 42,153 42,055 41,647 35 Reserves with F.R. Banks..................................... 21,595 18,953 20,018 19,814 23,192 18,499 19,737 20,459 20,025 36 Currency and coin.................................................. 6,057 5,783 6,018 6,149 6,572 5,659 6,285 6,314 6,454 37 Balances with domestic banks............................. 14,967 13,484 13,878 14,247 13,399 15,290 13,204 14,043 13,478 38 Investments in subsidiaries not consolidated... 3,072 3,118 3,110 3,056 3,069 3,109 3,142 3,132 3,173 39 Other assets.............................................................. 63,630 63,299 62,952 64,417 64,553 66,497 66,617 64,248 64,060 40 Total assets/total liabilities...................................... 602,176 592,054 604,175 595,343 595,746 614,853 606,236 611,223 602,366 Deposits: 41 Demand deposits.................................................. 191,532 175,897 191,386 178,321 177,269 193,949 185,761 189,474 184,443 42 Individuals, partnerships, and corps........... 136,346 128,210 135,366 128,802 128,408 135,717 136,595 135,453 132,836 43 States and political subdivisions.................... 6,360 5,437 5,944 6,018 5,665 5,738 5,767 5,743 6,103 44 U.S. Govt......................................................... 2,745 1,052 5,730 1,829 2,702 3,281 1.783 4,662 2,853 Domestic interbank: 45 Commercial.................................................. 29,172 26,028 28,036 25,858 24,482 29,496 25,450 27,114 25,959 46 Mutual savings............................................ 885 845 908 737 757 1,057 893 872 853 Foreign: 47 Governments, official institutions, etc..., 1,238 1,227 1,149 1,167 1,359 1,652 1,629 1,198 1,382 48 Commerial banks....................................... 7,139 6,720 6,655 7,459 7,130 6,568 6,554 6,898 6,883 49 Certified and officers’ checks....................... 7,647 6,378 7,598 6,451 6,766 10,440 7,090 7,534 7,574 50 Time and savings deposits3................................. 254,902 257,096 257,648 259,176 260,621 259,556 259,080 258,866 260,069 51 Savings4............................................................ 92,642 93,089 93,265 93,524 94,014 94,494 94,057 93,351 93,156 52 Time: 162,260 164,007 164,383 165,652 166,607 165,062 165,023 165,515 166,913 53 Individuals, partnerships, and corps. 122,255 123,820 124,362 125,654 126,549 125,898 125,884 125,747 126,722 54 States and political subdivisions.............. 24,891 24,968 24,827 24,954 24,916 24,648 24,804 25,363 25,657 55 Domestic interbank.................................... 5,233 5,464 5,495 5,435 5,524 5,218 5,143 5,201 5,317 56 Foreign govts., official institutions, etc.. 8,461 8,272 8,241 8,162 8,160 7,841 7,690 7,618 7,556 57 Federal funds purchased, etc.5............................ 76,734 79,137 76,753 78,878 78,930 81,651 81,389 82,974 76,451 58 Bo F rr .R ow . i B n a g n s k fr s o .. m ... : ....................................................... 574 651 232 165 119 29 68 435 1,450 59 Others..................................................................... 5,022 5,476 5,123 5,189 5,496 5,854 5.783 5,673 5,949 60 Other liabilities, etc.6.............................................. 28,092 28,406 27,795 28,309 27,943 28,427 28,648 28,412 28,444 61 Total equity capital and subordinated notes/debentures7............................................ 45,320 45,391 45,238 45,305 45,368 45,387 45,507 45,389 45,560 * Includes securities purchased under agreements to resell. * 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 Digitized for FRAS4E FRor amounts of these deposits by ownership categories, see Table l.JU. for loans. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Banks A21 1.128 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1978 Account Mar. 1 Mar. 8 Mar. 15 Mar. 22 Mar. 29 Apr. 5p Apr. 12» Apr. 19^ Apr. 26p 1 Total loans and investments..................................... 92,146 92,153 93,766 91,505 90,049 94,070 93,178 94,706 92,394 Loans: 2 Federal funds sold1................................................ 3,870 3,839 4,552 5,042 4,704 4,427 4,560 4,388 5,028 3 To commercial banks....................................... 2,383 2,141 2,653 3,456 3,178 2,080 2,652 1,859 2,801 To brokers and dealers involving— 4 U.S. treasury securities................................ 766 898 1,242 892 793 1,231 1,480 2,119 1,751 2 2 4 1 1 1 6 To others............................................................. 721 800 657 692 731 1,112 427 409 475 7 Other gross.............................................................. 69,562 69,319 70,144 68,435 68,083 70,334 68,706 69,236 67,846 8 Commercial and industrial.............................. 34,297 34,194 34,602 34,377 34,628 34,552 34,508 34,391 33,951 9 Agricultural........................................................ 161 165 167 171 166 164 156 155 157 For purchasing or carrying securities: To brokers and dealers: 10 U.S. Treasury securities.......................... 1,052 1,864 1,653 962 679 2,200 1,388 1,729 1,189 11 Other securities.......................................... 4,733 4,615 5,212 4,550 4,083 4,777 4,562 4,873 4,467 To others: 12 U.S. Treasury securities.......................... 26 26 25 25 25 25 25 25 25 13 Other securities.......................................... 351 345 342 339 339 342 344 355 356 To nonbank financial institutions: 14 Personal and sales finance cos., etc........... 2,416 2,405 2,477 2,435 2,382 2,513 2,387 2,415 2,501 15 Other............................................................... 4,921 A,912 4,925 4,899 4,874 4,895 4,869 4,851 4,801 16 Real estate........................................................... 9,049 9,065 9,035 9,033 8,986 8,986 8,976 8,982 8,998 To commercial banks: 17 Domestic......................................................... 832 590 555 610 523 669 571 589 637 18 Foreign............................................................ 2,911 2,720 2,663 2,630 2,922 2,765 2,645 2,461 2,456 19 Consumer instalment........................................ 4,319 4,328 4,329 4,333 4,336 4,345 4,355 4,394 4,409 20 Foreign govts, official institutions, etc.......... 234 265 236 258 244 323 289 223 294 21 All other loans................................................... 4,260 3,765 3,923 3,813 3,896 3,778 3,631 3,793 3,605 22 Less: Loan loss reserve and unearned income on loans.................................................... 1,709 1,720 1,718 1,718 1,677 1,645 1,685 1,686 1,686 23 Other loans, net...................................................... 67,853 67,599 68,426 66,717 66,406 68,689 67,021 67,550 66,160 Investments: 24 U.S. Treasury securities........................................ 10,365 10,669 10,547 9,591 9,162 11,106 11,481 11,240 10,178 25 Bills...................................................................... 1,413 1,597 1,598 1,218 1,071 2,251 2,497 2,522 1,682 Notes and bonds, by maturity: 26 Within 1 year................................................. 1,593 1,590 1,560 1,292 1,251 1,199 1,239 1,206 1,178 27 1 to 5 years..................................................... 6,329 6,437 6,406 6,192 6,051 6,569 6,468 6,446 6,350 28 After 5 years................................................... 1,030 1,045 983 889 789 1,087 1,277 1,066 968 29 Other securities....................................................... 10,058 10,046 10,241 10,155 9,777 9,848 10,116 11,528 11,028 Obligations of States and political subdivisions: 30 Tax warrants, short-term notes, and bills. 1,154 1,118 1,157 1,137 144 745 940 2,238 1,967 31 Allother......................................................... 6,809 6,831 6,961 6,884 6,930 6,996 7,074 7,271 7,208 Other bonds, corporate stocks, and securities: 32 Certificates of participation2...................... 402 402 402 414 425 425 425 449 452 33 All other, including corporate stocks.... 1,693 1,695 1,721 1,720 1,678 1,682 1,677 1,570 1,401 34 Cash items in process of collection....................... 15,674 12,191 15,149 13,206 12,688 16,670 13,100 13,032 14,144 35 Reserves with F.R. Banks....................................... 5,829 3,955 5,520 3,838 5,361 4,154 5,023 5,454 3,755 36 Currency and coin..................................................... 918 913 916 969 1,025 955 972 960 952 37 Balances with domestic banks................................ 7,242 6,281 6,706 7,379 6,197 8,037 6,413 6,894 6,719 38 Investments in subsidiaries not consolidated.... 1,549 1,557 1,556 1,561 1,571 1,591 1,602 1,613 1,619 39 Other assets................................................................. 26,243 25,635 24,550 26,541 25,964 27,228 26,841 25,766 25,198 149,601 142,685 148,163 144,999 142,855 152,705 147,129 148,425 144,781 Deposits: 41 Demand deposits..................................................... 56,549 47,583 54,834 51,121 49,459 55,996 50,091 50,971 51,109 42 Individuals, partnerships, and corps............. 30,526 25,877 28,801 27,219 26,790 27,645 27,448 26,302 27,403 43 States and political subdivisions................... 737 445 649 623 563 442 451 478 518 44 U.S. Govt............................................................ 368 91 1,237 203 437 656 342 784 581 Domestic interbank: 45 Commercial.................................................... 14,386 11,967 13,871 12,980 11,280 14,084 11,809 13,081 12,313 46 Mutual savings.............................................. 453 427 489 351 399 586 473 445 446 Foreign: 47 Governments, official institutions, etc.... 1,012 972 936 937 1,140 1,401 1,416 999 1,151 48 Commercial banks........................................ 5,638 5,142 5,107 5,947 5,625 5,040 5,049 5,398 5,230 49 Certified and officers’ checks......................... 3,429 2,662 3,744 2,861 3,225 6,142 3,103 3,484 3,467 50 Time and savings deposits3.................................. 45,400 45,309 44,955 45,013 45,478 45,289 45,416 45,641 45,702 9,910 9,926 9,917 9,908 9,973 10,012 10,000 9,947 9,934 35,490 35,383 35,038 35,105 35,505 35,277 35,416 35,694 35,768 53 Individuals, partnerships and corps.......... 26,336 26,410 26,195 26,351 26,747 26,859 26,949 27,230 27,338 54 States and political subdivisions............... 1,700 1,685 1,701 1,673 1,679 1,690 1,672 1,724 1,744 55 Domestic interbank...................................... 1,600 1,557 1,532 1,492 1,533 1,444 1,496 1,543 1,572 56 Foreign govts., official institutions, etc... 5,135 4,963 4,910 4,896 4,855 4,600 4,583 4,392 4,295 20,042 21,812 21,260 21,613 20,497 23,335 23,472 23,780 19,485 Borrowings from: 58 F R Banks . . .......................... 80 540 35 410 2,213 2,401 2,244 2,242 2,505 2,893 2,943 2,910 2,836 12,278 12,010 11,791 11,969 11,887 12,262 12,248 12,179 12,284 61 Total equity capital and subordinated notes/ 13,039 13,030 13,044 13,041 13,029 12,930 12,959 j 12,944 12,955 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

A22 Domestic Financial Statistics □ May 1978 1.29 LARGE WEEKLY REPORTING COMMERCIAL BANKS OUTSIDE NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1978 Account Mar. 1 Mar. 8 Mar. 15 Mar. 22 Mar. 29 Apr. 5p Apr. 12 p Apr. 19 p Apr. 26*> 1 Total loans and investments..................................... 353,286 357,648 359,080 356,512 357,596 365,268 361,920 366,266 361,135 Loans: 2 Federal funds sold1................................................ 19,765 22,039 22,373 19,887 20,567 25,716 21,373 23,688 18,941 3 To commercial banks...................................... 16,494 17,289 17,452 16,426 17,036 19,212 16,711 19,697 15,349 To brokers and dealers involving— 4 U.S. treasury securities................................ 1,495 2,613 2,548 1,534 1,481 3,713 2,223 1,737 1,325 5 Other securities.............................................. 460 601 582 530 505 687 646 661 672 6 To others............................................................. 1,316 1,536 1,791 1,397 1,545 2,104 1,793 1,593 1,595 7 Other, gross............................................................. 251,016 251,572 252,684 253,240 254,013 256,111 256,638 258,513 258,677 8 Commercial and industrial.............................. 92,476 92,943 93,440 93,985 94,176 95,012 95,519 96,340 96,658 9 Agricultural......................................................... 4,396 4,430 4,482 4,506 4,545 4,576 4,590 4,622 4,636 For purchasing or carrying securities: To brokers and dealers: 10 U.S. treasury securities........................... 137 261 137 140 139 163 170 111 165 11 Other securities.......................................... 4,024 4,070 4,345 4,166 3,961 4,399 4,343 4,573 4,178 To others: 12 U. S. Treasury securities.......................... 80 78 75 74 75 76 76 75 76 13 Other securities.......................................... 2,261 2,234 2,242 2,205 2,220 2,242 2,239 2,242 2,253 To nonbank financial institutions: 14 Personal and sales finance cos., etc........... 4,901 4,988 5,042 5,075 5,104 5,172 5,179 5,109 5,089 15 Other............................................................... 10,173 10,125 10,121 10,111 10,230 10,387 10,287 10,204 10,228 16 Real estate.......................................................... 66,830 66,996 67,356 67,552 67,802 67,951 68,263 68,580 68,715 To commercial banks: 17 Domestic......................................................... 1,446 1,440 1,325 1,392 1,467 1,429 1,398 1,367 1,417 18 Foreign............................................................ 3,517 3,344 3,321 3,250 3,316 3,479 3,353 3,256 3,181 19 Consumer instalment........................................ 42,465 42,442 42,549 42,653 42,898 43,037 43,203 43,451 43,689 20 Foreign govts., official institutions, etc........ 1,418 1,474 1,391 1,423 1,492 1,363 1,341 1,371 1,360 21 All other loans.................................................. 16,892 16,747 16,858 16,708 16,588 16,825 16,677 17,052 17,032 22 Less: Loan reserve and unearned income on loans.............................................................. 7,835 7,908 7,947 7,976 7,952 7,942 7,991 8,060 8,078 23 Other loans, net...................................................... 243,181 243,664 244,737 245,264 246,061 248,169 248,647 250,453 250,599 Investments: 24 U.S. Treasury securities........................................ 34,604 36,117 35,750 35,163 34,876 35,299 35,217 34,831 34,346 25 Bills...................................................................... 5,176 6,153 5,856 5,488 5,257 5,492 5,229 4,863 3,977 Notes and bonds, by maturity: 26 Within 1 year................................................. 7,186 7,184 7,185 7,134 7,142 7,111 7,237 7,227 7,271 27 1 to 5 years..................................................... 18,752 19,367 19,483 19,317 19,170 19,177 19,088 19,059 19,264 28 After 5 years................................................... 3,490 3,413 3,226 3,224 3,307 3,519 3,663 3,682 3,834 29 Other securities....................................................... 55,736 55,828 56,220 56,198 56,092 56,084 56,683 57,294 57,249 Obligations of States and political sub­ divisions : 30 Tax warrants, short-term notes, and bills. 5,732 5,788 6,113 5,923 5,788 5,788 5,938 6,163 6,151 31 Allother......................................................... 36,360 36,440 36,580 36,560 36,539 36,428 36,699 37,054 37,154 Other bonds, corporate stocks, and securities: 32 Certificates of participation2...................... 2,339 2,337 2,339 2,337 2,361 2,313 2,314 2,366 2,350 33 All other, including corporate stocks.... 11,305 11,263 11,188 11,378 11,404 11,555 11,732 11,711 11,594 34 Cash items in process of collection....................... 31,749 25,425 30,204 26,437 24,628 29,791 29,053 29,023 27,503 35 Reserves with F.R. Banks....................................... 15,766 14,998 14,498 15,976 17,831 14,345 14,714 15,005 16,270 36 Currency and coin..................................................... 5,139 4,870 5,102 5,180 5,547 4,704 5,313 5,354 5,502 37 Balances with domestic banks................................ 7,725 7,203 7,172 6,868 7,202 7,253 6,791 7,149 6,759 38 Investments in subsidiaries not consolidated.... 1,523 1,561 1,554 1,495 1,498 1,518 1,540 1,519 1,554 39 Other assets................................................................. 37,387 37,664 38,402 37,876 38,589 39,269 39,776 38,482 38,862 40 Total assets/total liabilities...................................... 452,575 449,369 456,012 450,344 452,891 462,148 459,107 462,798 457,585 Deposits: 41 Demand deposits..................................................... 134,983 128,314 136,552 127,200 127,810 137,953 135,670 138,503 133,334 42 Individuals, partnerships, and corps............. 105,820 102,333 106,565 101,583 101,618 108,072 109,147 109,151 105,433 43 States and political subdivisions................... 5,623 4,992 5,295 5,395 5,102 5,296 5,316 5,265 5,585 44 U.S. Govt............................................................ 2,377 961 4,493 1,626 2,265 2,625 1,441 3,878 2,272 Domestic interbank: 45 Commercial.................................................... 14,786 14,061 14,165 12,878 13,202 15,412 13,641 14,033 13,646 46 Mutual savings.............................................. 432 418 419 386 358 471 420 427 407 Foreign: 47 Governments, official institutions, etc---- 226 255 213 230 219 251 213 199 231 48 Commercial banks........................................ 1,501 1,578 1,548 1,512 1,505 1,528 1,505 1,500 1,653 49 Certified and officers’ checks......................... 4,218 3,716 3,854 3,590 3,541 4,298 3,987 4,050 4,107 50 Time and savings deposits*.................................. 209,502 211,787 212,693 214,163 215,143 214,267 213,664 213,225 214,367 51 Savings4.............................................................. 82,732 83,163 83,348 83,616 84,041 84,482 84,057 83,404 83,222 52 Time..................................................................... 126,770 128,624 129,345 130,547 131,102 129,785 129,607 129,821 131,145 53 Individuals, partnerships, and corps......... 95,919 97,350 98,167 99,303 99,802 99,039 98,935 98,517 99,384 54 States and political subdivisions............... 23,191 23,283 23,126 23,281 23,237 22,958 23,132 23,639 23,913 55 Domestic interbank...................................... 3,633 3,907 3,963 3,943 3,991 3,774 3,647 3,658 3,745 56 Foreign govts., official institutions, etc... 3,326 3,309 3,331 3,266 3,305 3,241 3,107 3,226 3,261 57 Federal funds purchased, etc. 5............................... 56,692 57,325 55,493 57,265 58,433 58,316 57,917 59,194 56,966 Borrowings from: 58 F.R. Banks.............................................................. 494 111 197 165 119 29 68 435 1,040 59 Others...................................................................... 2,809 3,075 2,879 2,947 2,991 2,961 2,840 2,763 3,113 60 Other liabilities, etc.6................................................ 15,814 16,396 16,004 16,340 16,056 16,165 16,400 16,233 16,160 61 Total equity capital and subordinated notes/debentures 7.............................................. 32,281 32,361 32,194 32,264 32,339 32,457 32,548 32,445 32,605 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 Digitized for FRASE4 RFo r amounts of these deposits by ownership categories, see Table 1.30. for loans. 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 1978 Account Mar. 1 Mar. 8 Mar. 15 Mar. 22 Mar. 29 Apr. 5p Apr. 12*> Apr. 19^ Apr. 26^ Total loans (gross) and investments adjusted1 433,821 437,969 440,526 435,827 435,070 445,535 443,442 447,206 443,089 90,640 91,142 92,276 89,157 88,025 92,966 91,640 93,944 90,642 343,181 346,827 348,250 346,670 347,045 352,569 351,802 353,262 352,447 Total loans (gross), adjusted 323,058 175,309 327,768 324,720 325,163 333,198 329,945 332,313 330,288 70,217 70,427 71,488 69,411 69,086 72,012 70,043 11,116 69,436 252,841 254,882 256,280 255,309 256,077 261,186 259,902 261,137 260,852 Demand deposits, adjusted2 112,192 111,201 112,267 110,991 112,769 114,711 116,375 115,643 113,984 26,121 73 334 24,577 24,732 25,054 24,586 24,840 24,074 24,071 8876,,806771 87,690 86,259 87,715 90,125 91,535 91,569 89,913 Large negotiable time CD’s included in time and savings deposits3 Total: 78,148 79,640 79,956 81,111 82,293 80,977 81,059 80,756 81,866 24,490 24,474 24,136 24,301 24,737 24,504 24,633 24,822 24,896 53,658 55,166 55,820 56,810 57,556 56,473 56,426 55,934 56,970 Issued to IPC’s: 52,506 53,931 54,292 55,533 56,476 55,884 56,180 55,836 56,739 16,817 17,029 16,729 16,960 17,380 17,444 17,576 17,855 17,992 35,689 36,902 37,563 38,573 39,096 38,440 38,604 37,981 38,747 Issued to others: 25,642 25,709 25,664 25,578 25,817 25,093 24,879 24,920 25,127 7,673 7,445 7,407 7,341 7,357 7,060 7,057 6,961 6,904 18 Banks outside New York City....................... 17,969 18,264 18,257 18,237 18,460 18,033 17,822 17,953 18,223 All other large time deposits4 Total: 31,660 31,722 31,716 31,727 31,477 31,290 31,497 32,050 32,317 20 New York City banks...................................... 6,118 6,018 6,001 5,920 5,829 5,828 5,906 5,970 5,977 21 Banks outside New York City....................... 25,542 25,704 25,715 25,807 25,648 25,462 25,591 26,080 26,340 Issued to IPC’s: 18,035 17,978 18,079 18,062 18,001 17,979 18,019 17,983 18,053 4,782 4,694 4,705 4,644 4,576 4,625 4,648 4,642 4,627 24 Banks outside New York City....................... 13,253 13,284 13,374 13,418 13,425 13,354 13,371 13,341 13,426 Issued to others: 13,625 13,744 13,637 13,665 13,476 13,311 13,478 14,067 14,264 26 New York City banks...................................... 1,336 1,324 1,296 1,276 1,253 1,203 1,258 1,328 1,350 12,289 12,420 12,341 12,389 12,223 12,108 12,220 12,739 12,914 Savings deposits, by ownership category Individuals and nonprofit organizations: 86,218 86,628 86,881 87,187 87,601 88,087 87,707 86,947 86,766 9,111 9,201 9,191 9,217 9,273 9,316 9,300 9,214 9,193 77,041 77,427 77,684 77,970 78,328 78,771 78,407 77,733 77,573 Partnerships and corporations for profit:5 4,897 4,923 4,875 4,898 4,968 4,976 4,942 4,900 4,920 484 480 473 470 478 485 478 470 473 4,413 4,443 4,402 4,428 4,490 4,491 4,464 4,430 4,447 Domestic governmental units: 1,495 1,499 1,477 1,412 1,414 1,405 1,375 1,477 1,441 230 218 225 201 205 200 205 252 254 1,265 1,281 1,252 1,211 1,209 1,205 1,170 1,225 1,187 All other: 6 32 39 32 27 31 26 33 27 29 38 New York City banks...................................... 19 21 22 20 11 11 11 11 14 13 12 10 7 14 15 16 16 15 Gross liabilities of banks to their foreign branches 4,765 4,958 5,887 4,645 4,494 4,145 4,202 4,443 4,249 2,424 2,521 3,573 2,239 2,619 2,195 2,253 2,435 2,290 2,341 2,437 2,314 2,406 1,875 1,950 1,949 2,008 1,959 Loans sold outright to selected institutions by all large banks7 43 Commercial and industrial8................................ 2,307 2,217 2,251 2,236 2,230 2,163 2,214 2,219 2,254 236 239 236 237 237 237 245 242 246 45 All other8................................................................ 2,088 2,097 2,123 2,139 2,051 2,040 1,996 1,991 1,991 1 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 m denominations of $100,000 or filiates of the bank, the bank’s holding company (if not a bank), and nonconsolidated nonbank subsidiaries of the holding company. m°^,l other time deposits issued in denominations of $100,000 or more 8 Data revised beginning July 7, 1977, due to reclassifications at one not included in large negotiable (CD’s). large bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Financial Statistics □ May 1978 1.31 LARGE WEEKLY REPORTING COMMERCIAL BANKS Commercial and Industrial Loans Millions of dollars Outstanding Net change during— Adjust­ Industry classification 1978 1977 1978 1978 ment bank A Mar. 29 Apr. 5 Apr. 12 Apr. 19 Apr. 26? Q4 Ql Feb. Mar. Apr.P Total loans classified2 1Total........................................................... 104,768 105,360 105,608 106,077 105,799 4,395 2,023 1,198 2,481 1,031 745 Durable goods manufacturing: 2 Primary metals...................................... 2,754 2,743 2,775 2,778 2,800 256 -86 119 68 46 90 3 Machinery.............................................. 5,234 5,188 5,167 5,263 5,294 -4 491 288 276 60 176 4 Transportation equipment................. 2,723 2,686 2,649 2,717 2,644 -89 447 155 168 -79 -21 5 Other fabricated metal products.... 2,272 2,348 2,423 2,435 2,444 -26 351 76 193 172 -28 6 Other durable goods............................ 3,533 3,526 3,579 3,600 3,615 -231 52 39 145 82 -20 Nondurable goods manufacturing: 7 Food, liquor, and tobacco................. 3,853 3,815 3,799 3,851 3,845 324 52 11 76 -8 21 8 Textiles, apparel, and leather............ 3,572 3,649 3,720 3,652 3,686 -663 280 165 231 114 -65 9 Petroleum refining................................ 2,478 2,469 2,458 2,487 2,569 235 -221 -41 -181 91 -249 10 Chemicals and rubber......................... 3,415 3,527 3,534 3,504 3,475 -37 532 244 270 60 39 11 Other nondurable goods..................... 2,206 2,220 2,234 2,225 2,183 74 -62 -17 -33 -23 26 12 Mining, including crude petroleum and natural gas................................. 9,526 9,648 9,703 9,843 9,853 537 451 88 395 327 306 Trade: 13 Commodity dealers............................. 2,251 2,261 2,189 2,209 2,169 502 300 -19 78 -82 125 14 Other wholesale.................................... 8,486 8,618 8,626 8,587 8,687 439 787 227 487 201 390 15 Retail...................................................... 7,626 7,764 7,740 7,815 7,806 -235 565 284 297 180 96 16 Transportation.......................................... 5,602 5,499 5,539 5,307 5,29,8 17 378 54 326 -304 239 17 Communication........................................ 1,416 1,562 1,508 1,552 1,535 115 11 57 -96 149 22 18 Other public utilities................................ 4,971 4,910 4,915 4,982 5,026 290 -569 -178 -375 55 210 19 Construction.............................................. 4,634 4,702 4,704 4,739 4,771 -31 200 -14 170 137 -39 20 Services....................................................... 12,304 12,406 12,535 12,638 12,664 286 675 179 263 360 330 21 All other domestic loans......................... 7,450 7,627 7,771 7,777 7,822 419 -34 178 -174 372 -857 22 Bankers acceptances................................ 3,690 3,465 3,353 3,439 2,906 2,455 -2,533 -574 -114 -784 2 23 Foreign commercial and industrial 4,772 4,727 4,687 4,677 4,677 -238 -54 -123 11 -95 -48 Memo Items: 24 Commercial paper included in total classified loans 1................................ 131 124 -75 —27 -11 — 5 — 7 25 Total commercial and industrial loans of all large weekly reporting banks.................................................. 128,804 129,564 130,027 130,731 130,609 5,622 2,975 1,633 '3,195 1,805 -13 1977 1978 1977 1978 1978 Adjust­ ment bank A Dec. 28 Jan. 25 Feb. 22 Mar. 29 Apr. 26* Q4 Ql Feb. Mar. June “Terms” loans classified3 26 Total............................................................ 46,626 48,215 48,818 r49,369 49,989 352 rl,903 603 r551 620 840 Durable goods manufacturing: 27 Primary metals...................................... 1,546 1,559 1,564 '1,579 1,671 120 r—13 5 r15 92 46 28 Machinery.............................................. 2,286 2,403 2,473 2,529 2,488 -51 203 70 56 -41 40 29 Transportation equipment................. 1,317 1,432 1,466 1,489 1,449 -112 152 34 23 -40 20 30 Other fabricated metal products----- 834 882 877 902 964 59 50 -5 25 62 18 31 Other durable goods........................... 1,698 1,630 1,602 1,572 1,603 -76 -105 -28 -30 31 -21 Nondurable goods manufacturing: 32 Food, liquor, and tobacco................. 1,498 1,436 1,492 1,522 1,638 98 69 56 30 116 -45 33 Textiles, apparel, and leather............ 1,058 973 983 1,038 1,068 -96 40 10 55 30 -60 34 Petroleum refining................................ 2,268 2,136 2,000 1,873 1,850 271 -174 -136 -127 -23 -221 35 Chemicals and rubber......................... 1,727 1,926 2,017 2,116 2,127 -18 215 91 99 11 174 36 Other nondurable goods..................... 1,147 1,198 1,182 1,169 1,083 53 2 -16 -13 -86 20 37 Mining, including crude petroleum and natural gas................................ 6,501 6,569 6,811 7,084 7,429 217 530 242 273 345 53 Trade: 38 Commodity dealers............................. 236 294 262 254 244 42 -16 -32 -8 -10 34 39 Other wholesale.................................... 1,665 1,874 1,928 1,993 2,068 125 202 54 65 75 126 40 2,448 2,476 2,539 2,554 2,689 48 54 63 15 135 52 41 Transportation.......................................... 3,484 3,726 3,747 3,885 3,623 -141 233 21 138 -262 168 42 Communication........................................ 840 901 908 924 964 54 47 7 16 40 37 43 Other public utilities................................ 3,266 3,802 3,855 3,822 3,723 -36 -34 53 -33 -99 590 44 Construction.............................................. 1,990 2,002 1,973 2,066 2,081 -21 165 -29 93 15 -89 45 Services....................................................... 5,366 5,746 5,807 5,880 6,031 85 307 61 73 151 207 46 All other domestic loans........................ 2,726 2,627 2,750 2,457 2,576 184 -57 123 -293 119 -212 47 Foreign commercial and industrial loans.................................................... 2,725 2,623 2,582 2,661 2,620 -453 33 -41 79 -41 -97 1 Reported for the last Wednesday of each month. ▲ These amounts represent accumulated adjustments originally made 2 Includes “term” loans, shown below. to offset the cumulative effects of mergers. A “positive” adjustment bank 3 Outstanding loans with an original maturity of more than 1 year and should be added to, and a “negative” adjustment bank substracted from, all outstanding loans granted under a formal agreement—revolving credit outstanding data for any date in the year to establish comparability with or standby—on which the original maturity of the commitment was in any date in the subsequent year. Changes shown have been adjusted for Digitized for FRAexSceEssR o f 1 year. these amounts. 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 Type of holder 1976 1977 1978 1973 1974 1975 Dec. Dec. Dec. Sept. Dec. Mar. June Sept. Dec. Mar. 220.1 225.0 236.9 236.1 250.1 242.3 253.8 252.7 274.4 262.5 2 Financial business....................................................... 19.1 19.0 20.1 19.7 22.3 21.6 25.9 23.7 25.0 24.5 3 Nonfinancial business................................................ 116.2 118.8 125.1 122.6 130.2 125.1 129.2 128.5 142.9 131.5 70.1 73.3 78.0 80.0 82.6 81.6 84.1 86.2 91.0 91.8 2.4 2.3 2.4 2.3 2.7 2.4 2.5 2.5 2.5 2.4 12.4 11.7 11.3 11.5 12.4 11.6 12.2 11.8 12.9 12.3 At weekly reporting banks 1977 1978 1974 1975 1976 Dec. Dec. Dec. Sept. Oct. Nov. Dec. Jan. Feb. Mar. 7 All holders, IPC.......................................................... 119.7 124.4 128.5 129.2 131.4 133.0 139.1 137.1 132.5 131.9 8 Financial business....................................................... 14.8 15.6 17.5 17.4 18.0 17.9 18.5 18.3 18.1 18.2 9 Nonfinancial business................................................ 66.9 69.9 69.7 70.0 72.1 72.2 76.3 73.8 70.7 68.9 29.0 29.9 31.7 32.8 32.4 33.4 34.6 35.2 34.4 35.4 11 Foreign.......................................................................... 2.2 2.3 2.6 2.4 2.3 2.5 2.4 2.4 2.4 2.3 12 Other.............................................................................. 6.8 6.6 7.1 6.6 6.7 7.0 7.4 7.4 6.9 7.0 Note.—Figures include cash items in process of collection. Estimates of banks. Types of depositors in each category are described in the June 1971 gross deposits are based on reports supplied by a sample of commercial Bulletin, p. 466. 1.33 COMMERCIAL PAPER AND BANKERS ACCEPTANCES OUTSTANDING Millions of dollars, end of period 1977 1978 1975 1976 1977 Instrument Dec. Dec. Dec. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Commercial paper (seasonally adjusted) 1AU issuers...................................................................... 48,459 53,025 65,112 61,542 62,724 62,753 65,112 65,488 65,477 67,354 Financial companies:1 Dealer-placed paper:2 2 Total...................................................................... 6,202 7,250 8,871 8,471 8,540 8,497 8,871 9,018 8,918 8,889 3 1,762 1,900 2,132 1,846 1,961 1,980 2,132 2,035 1,997 1,993 Directly-placed paper:3 4 Total...................................................................... 31,374 32,500 40,399 37,850 38,803 38,954 40,399 41,586 42,137 42,781 5 6,892 5,959 7,003 7,069 7,012 6,567 7,003 7,109 7,616 8,031 10,883 13,275 15,842 15,221 15,381 15,302 15,842 14,884 14,422 15,684 Dollar acceptances (not seasonally adjusted) 7 Total.............................................................................. 18,727 22,523 25,654 23,317 23,908 24,088 25,654 25,252 25,411 26,181 Held by: 8 Accepting banks....................................................... 7,333 10,442 10,434 7,473 8,673 8,952 10,434 7,785 7,513 7,375 9 5,899 8,769 8,915 6,566 7,248 7,702 8,915 6,772 6,583 6,375 10 1,435 1,673 1,519 907 1,424 1,251 1,519 1,013 931 1,000 F.R. Banks: 11 Own account....................................................... 1,126 991 954 482 248 954 1 12 Foreign correspondents.................................... ’293 375 362 287 422 392 362 371 456 522 13 Others........................................................................ 9,975 10,715 13,904 15,075 14,813 14,495 13,904 17,096 17,442 18,283 Based on: 14 3,726 4,992 6,532 5,654 5,886 5,973 6,532 6,637 6,842 6,979 15 Exports from United States................................. 4,001 4,818 5,895 5,544 5,584 5,803 5,895 5,840 5,739 6,034 16 All other.................................................................... 11,000 12,713 13,227 12,119 12,438 12,312 13,227 12,774 13,026 13,168 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 a 11 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 Financial Statistics □ May 1978 1.34 PRIME RATE CHARGED BY BANKS on Short-term Business Loans Per cent per annum Month Average Month Average Effective date Rate Effective date Rate rate rate 1976—June 1.............. 7 1977—May 13............ 6Vz 1976—Sept........................ 7.00 1977—July........................ 6.75 7.............. 7% 31............ 63/4 Oct......................... 6.78 Aug........................ 6.83 Nov........................ 6.50 Sept........................ 7.13 Aug. 2.............. 7 Aug. 22............. 7 Dec......................... 6.35 Oct.......................... 7.52 Nov........................ 7.75 Oct. 4.............. 6V4 Sept. 16.............. IVa 1977—Jan.......................... 6.25 Dec......................... 7.75 Feb........................ 6.25 Nov. 1.............. 61/2 Oct. 7.............. 7% Mar....................... 6.25 1978—Jan........................ 7.93 Oct. 24.............. m Apr........................ 6.25 Feb......................... 8.00 Dec. 13.............. 6% May....................... 6.41 Mar........................ 8.00 1978—Jan. 10............. 8 June........................ 6.75 Apr.............. 8.00 1.35 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, Feb. 6-11, 1978 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)........................ 7,401,695 1,095,609 689,553 729,562 1,984,349 530,499 2,372,123 2 Number of loans................................................................... 200,127 154,809 20,931 11,570 11,080 859 878 3 Weighted-average maturity (months).............................. 3.1 3.2 3.3 2.6 3.0 2.8 3.1 4 Weighted-average interest rate (per cent per annum).. 8.95 9.65 9.44 9.26 9.03 8.78 8.34 5 Interquartile range 1........................................................ 8.24-9.60 8.77-10.47 8.50-10.01 8.50-10.00 8.27-9.84 8.24-9.25 8.00-8.75 Percentage of amount of loans: 6 With floating rate............................................................. 51.5 34.9 40.8 40.6 60.3 46.9 59.3 7 Made under commitment............................................... 37.9 14.9 20.3 25.9 38.0 59.1 52.7 Long-term commercial and industrial loans ---------------- 8 Amount of loans (thousands of dollars)......................... 1,311,928 361,327 420,109 69,872 460,620 9 Number of loans.................................................................. 31,161 28,547 2,364 105 144 10 Weighted-average maturity (months).............................. 40.0 28.6 39.0 45.5 49.1 11 Weighted-average interest rate (per cent per annum).. 9.19 9.54 9.37 8.87 8.81 12 Interquartile range 1........................................................ 8.50-9.92 8.50-10.47 9.00-9.92 8.00-9.61 8.00-9.20 Percentage of amount of loans: 13 With floating rate............................................................. 42.3 15.6 30.2 72.4 69.6 14 Made under commitment............................................... 54.7 18.6 74.1 53.5 65.6 Construction and land development loans 15 Amount of loans (thousands of dollars)......................... 803,264 82,792 126,435 222,919 127,991 112,423 16 Number of loans.................................................................. 20,791 13,375 3,737 2,901 637 141 17 Weighted-average maturity (months).............................. 10.6 6.5 20.5 3.2 10.6 13.8 18 Weighted-average interest rate (per cent per annum).. 9.69 9.67 9.62 9.33 9.70 10.07 19 Interquartile range 1....................................................... 9.00-10.34 9.20-10.34 9.20-9.92 8.36-10.00 9.17-10.29 9.27-10.78 Percentage of amount of loans: 20 With floating rate............................................................. 38.7 18.4 11.3 8.0 53.8 80.2 21 Secured by real estate..................................................... 92.1 85.7 87.3 97.3 87.8 94.3 22 Made under commitment............................................... 42.8 56.3 17.8 27.3 65.6 53.4 23 Type of construction: 1-to 4-family......................... 38.7 61.6 54.6 55.1 31.7 11.5 24 Multifamily.............................. 6.4 5.8 2.1 2.2 12.0 9.6 25 Nonresidential........................ 54.9 32.6 43.3 42.7 56.3 78.9 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)......................... 796,500 162,130 168,848 135,149 83,650 117,118 129,604 27 Number of loans.................................................................. 64,797 46,784 11,355 4,219 1,224 942 272 28 Weighted-average maturity (months).............................. 10.0 7.8 11.3 13.0 9.0 10.9 8.4 29 Weighted-average interest rate (per cent per annum).. 9.16 9.13 9.16 9.11 9.26 9.22 9.15 30 Interquartile range i....................................................... 8.75-9.50 8.68-9.40 8.68-9.50 8.75-9.46 9.00-9.50 8.91-9.38 8.50-9.69 By purpose of loan: 31 Feeder livestock........................................................... 9.17 9.09 8.97 8.89 9.39 9.31 9.77 32 Other livestock............................................................. 9.07 9.07 9.37 8.73 9.53 9.12 8.92 33 Other current operating expenses............................ 9.14 9.03 9.26 9.24 9.17 9.15 9.06 34 Farm machinery and equipment.............................. 9.31 9.40 9.35 9.47 9.44 (2) (2) 35 Other.............................................................................. 9.16 9.29 9.01 9.20 9.27 9.43 8.96 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 A ll 1.36 INTEREST RATES Money and Capital Markets Averages, per cent per annum 1978 1978, week ending— 1975 1^76 1977 Jan. Feb. Mar. Apr. Apr. 1 Apr. 8 Apr. 15Apr. 22Apr. 29 Money market rates 1 Federal funds 1..................... 5.82 5.05 5.54 6.70 6.78 6.79 6.89 6.82 6.86 6.74 6.78 7.00 Prime commercial paper 2 90- to 119-day. 6.26 5.24 5.54 6.75 6.76 6.75 6.82 6.75 6.78 6.80 6.82 6.87 4- to 6-month. 6.33 5.35 5.60 6.79 6.80 6.80 6.86 6.80 6.83 6.85 6.86 6.91 4 Finance company paper, directly placed, 3- to 6-month 3...................................... 6.16 5.22 5.49 6.69 6.74 6.73 6.74 6.75 6.75 6.75 6.72 6.74 5 Prime bankers acceptances, 90-day 4... 6.30 5.19 5.59 6.86 6.82 6.79 6.92 6.80 6.85 6.84 6.92 7.06 Large negotiable certificates of deposit 6 3-month, secondary market 5.............. 6.43 5.26 5.58 6.71 6.89 6.85 7.04 6.86 6.95 6.99 6.94 7.14 7 3-month, primary market 6................. 5.15 5.52 6.83 6.77 6.75 6.83 6.74 6.80 6.83 6.82 6.95 8 Euro-dollar deposits, 3-month 6.97 5.57 6.05 7.32 7.28 7.27 7.38 7.34 7.40 7.35 7.30 7.43 U.S. Govt, securities Bills: 8 Market yields: 9 3-month............................. 5.80 4.98 5.27 6.44 6.45 6.29 6.29 6.34 6.37 6.29 6.22 6.26 10 6-month............................. 6.11 5.26 5.53 6.70 6.74 6.63 6.73 6.66 6.73 6.70 6.70 6.80 11 1-year................................. 6.30 5.52 5.71 6.80 6.86 6.82 6.96 6.89 6.94 6.91 6.93 7.06 Rates on new issue: 12 3-month............................. 5.838 4.989 5.265 6.448 6.457 6.319 6.306 6.310 6.417 6.373 6.140 6.294 13 6-month............................. 6.122 5.266 5.510 6.685 6.740 6.644 6.700 6.666 6.717 6.743 6.563 6.777 Constant maturities:9 14 1-year......................... 6.76 6.09 7.28 7.34 7.31 7.45 7.39 7.43 7.40 7.42 7.57 Capital market rates Government notes and bonds U.S. Treasury Constant maturities:9 15 2-year.................................................... 6.45 7.49 7.57 7.58 7.74 7.65 7.71 7.68 7.72 7.87 16 7.49 6.77 6.69 7.61 7.67 7.70 7.85 7.79 7.82 7.81 7.83 7.95 17 7.77 7.18 6.99 7.77 7.83 7.86 7.98 7.94 7.97 7.95 7.96 8.05 18 7.90 7.42 7.23 7.86 7.94 7.95 8.06 8.02 8.04 8.04 8.04 8.13 19 7.99 7.61 7.42 7.96 8.03 8.04 8.15 8.12 8.14 8.15 8.12 8.21 20 8.19 7.86 7.67 8. 14 8.22 8.21 8.32 8.27 8.31 8.33 8.30 8.36 21 30-year.................................................. 8.18 8.25 8.23 8.34 8.30 8.32 8.35 8.31 8.38 Notes and bonds maturing in 10— 22 3 to 5 years.......................................... 7.55 6.94 6.85 7.71 7.76 7.76 7.90 7.83 7.87 7.87 7.87 7.98 23 Over 10 years (long-term)................ 6.98 6.78 7.06 7.50 7.60 7.63 7.74 7.68 7.72 7.74 7.72 7.78 State and local: Moody’s series:11 24 6.42 5.66 5.20 5.20 5.24 5.11 5.41 5.10 5.40 5.40 5.40 5.45 25 Baa......................................................... 7.62 7.49 6.12 5.91 5.82 5.85 5.88 5.75 5.75 5.80 5.90 6.05 26 Bond Buyer series 12.............................. 7.05 6.64 5.68 5.71 5.62 5.61 5.80 5.69 5.76 5.74 5.79 5.89 Corporate bonds Seasoned issues 13 27 9.57 9.01 8.43 8.74 8.78 8.80 8.88 8.81 8.85 8.87 8.89 8.93 By rating groups: 28 8.83 8.43 8.02 8.41 8.47 8.47 8.56 8.48 8.53 8.56 8.57 8.59 29 9.17 8.75 8.24 8.59 8.65 8.66 8.73 8.67 8.70 8.72 8.72 8.77 30 A............................................................. 9.65 9.09 8.49 8.76 8.79 8.83 8.93 8.85 8.88 8.91 8.93 8.98 31 10.61 9.75 8.97 9.17 9.20 9.22 9.32 9.25 9.27 9.30 9.33 9.38 Aaa utility bonds:14 32 9.40 8.48 8.19 8.68 8.69 8.71 8.90 8.83 8.88 8.88 8.93 8.92 33 9.41 8.49 8.19 8.60 8.67 8.67 8.85 8.75 8.82 8.84 8.84 8.91 Dividend/price ratio 34 Preferred stocks...................................... 8.38 7.97 7.60 7.93 7.99 8.07 8.06 8.13 8.13 8.07 8.04 7.99 35 4.31 3.77 4.56 5.32 5.49 5.68 5.42 5.63 5.58 5.55 5.34 5.19 1 Weekly figures are 7-day averages of daily effective rates for the week 7 Averages of daily quotations for the week ending Wednesday. ending Wednesday; the daily effective rate is an average of the rates on 8 Except for new bill issues, yields are computed from daily closing a given day weighted by the volume of transactions at these rates. bid prices. Yields for all bills are quoted on a bank-discount basis. 2 Beginning Nov. 1977, unweighted average of offering rates quoted 9 Yields on the more actively traded issues adjusted to constant by five dealers. Previously, most representative rate quoted by those maturities by the U.S. Treasury, based on daily closing bid prices. dealers. I o Unweighted averages for all outstanding notes and bonds in maturity 3 Averages of the most representative daily offering rates published by ranges shown, based on daily closing bid prices. “Long-term” includes finance companies for varying maturities in this range. all bonds neither due nor callable in less than 10 years, including a num­ 4 Beginning Aug. 15, 1974, the rate is the average of the midpoint of ber of very low yielding “flower” bonds. the range of daily dealer closing rates offered for domestic issues; prior II General obligations only, based on figures for Thursday, from data are averages of the most representative daily offering rate quoted by Moody’s Investors Service. dealers. 12 Twenty issues of mixed quality. 5 Weekly figures (week ending Wednesday) are 7-day averages of the 13 Averages of daily figures from Moody’s Investors Service. daily midpoints as determined from the range of offering rates at large 14 Compilation of the Board of Governors of the Federal Reserve New York City banks; monthly figures are averages of total days in the System. month. Issues included are long-term (20 years or more). New-issue yields are 6 Posted rates, which are the annual interest rates most often quoted based on quotations on date of offering; those on recently offered issues on new offerings of negotiable CD’s in denominations of $100,000 or (included only for first 4 weeks after termination of underwriter price more by large New York City banks. Rates prior to 1976 not available. restrictions), on Friday close-of-business quotations. Digitized for WFReeAklSy EfiRgu res are for Wednesday dates. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Financial Statistics □ May 1978 1.37 STOCK MARKET Selected Statistics 1977 1978 Indicator 1975 1976 1977 Oct. Nov. Dec. Jan. Feb. Mar. Apr. Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31,1965 = 50). 45.73 54.45 53.67 51.37 51.87 51.83 49.89 49.41 49.50 51.75 2 Industrial................................................................. 51.88 60.44 57.84 54.99 55.62 55.55 53.45 52.80 52.77 55.48 3 Transportation........................................................ 30.73 39.57 41.07 38.33 39.30 39.75 39.15 38.90 38.95 41.19 4 Utility....................................................................... 31.45 36.97 40.91 40.38 40.33 40.36 39.09 39.02 39.26 39.69 5 Finance..................................................................... 46.62 52.94 55.23 53.24 54.04 53.85 50.91 50.60 51.44 55.04 6 Standard & Poor’s Corporation (1941-43 = 10)1., 85.17 102.01 98.18 93.78 94.28 93.82 90.28 88.98 88.82 92.71 7 American Stock Exchange (Aug. 31,1973 = 100), 83.15 101.63 116.18 115.41 117.80 124.88 121.73 123.35 126.11 133.67 Volume of trading (thousands of shares)2 New York Stock Exchange. 18,568 21,189 20,936 19,689 23,557 21,475 20,388 19,400 22,617 34,780 American Stock Exchange.. 2,150 2,565 2,514 2,080 2,061 3,008 2,254 2,300 2,940 4,151 Customer financing (end-of-period balances, in millions of dollars) 10 Regulated margin credit at brokers/dealers and banks3................................................. 6,500 9,011 10,866 10,583 10,680 10,866 10.690 10,901 11,027 11 Brokers, total................................................ 5,540 8,166 9,993 9,756 9,859 9,993 9,839 10,024 10,172 12 Margin stock4.............................................. 5,390 7,960 9,740 9,560 9,610 9,740 9,590 9,780 9,920 13 Convertible bonds........................................ 147 204 250 192 246 250 246 242 250 14 Subscription issues...................................... 3 2 3 4 3 3 3 2 2 15 Banks, total................................................... 960 845 873 827 822 873 851 877 855 16 Margin stocks............................................... 909 800 827 783 778 827 809 838 824 17 Convertible bonds........................................ 36 30 30 27 28 30 27 25 24 18 Subscription issues...................................... 15 15 16 17 16 16 15 14 7 19 Unregulated nonmargin stock credit at banks5 2,281 2,817 2,568 2,579 2,604 2,568 2,565 2,544 2,544 Memo: Free credit balances at brokers6 20 Margin-account................................................ 475 585 640 615 630 640 660 635 630 21 Cash-account..................................................... 1,525 1,855 2,060 1,850 1,845 2,060 1,925 1,875 1,790 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):7 23 Under 40................................. 24.0 12.0 18.0 27.0 17.0 19.0 25.0 25.0 21.0 24 40-49........................................ 28.8 23.0 36.0 35.0 33.0 34.0 34.0 34.0 33.0 25 50-59....................................... 22.3 35.0 23.0 18.0 26.0 24.0 20.0 20.0 24.0 26 60-69........................................ 11.6 15.0 11.0 9.8 12.0 11.0 10.0 10.0 11.0 27 70-79........................................ 6.9 8.7 6.0 6.0 7.0 7.0 6.0 6.0 6.0 28 80 or more.............................. 5.3 6.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 Special miscellaneous-account balances at brokers (end of period) 29 Total balances (millions of dollars)8... 7,290 8,776 9,910 9,640 9,710 9,910 9,880 10,150 10,190 Distribution by equity status (per cent) 30 Net credit status.................................... 43.8 41.3 43.4 42.8 41.8 43.4 42.4 42.0 42.6 Debit status, equity of— 31 60 per cent or more.......................... 40.8 47.8 44.9 43.8 45.5 44.9 43.6 43.0 43.7 32 Less than 60 per cent....................... 15.4 10.9 11.7 13.4 12.7 11.7 14.0 14.0 13.5 1 Effective July 1976, includes a new financial group, banks and in­ 5 Nonmargin stocks are those not listed on a national securities ex­ surance 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 ^-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 and 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 re­ data 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 on lines 23-28. 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 1978 1974 1975 1976 July Aug. Sept. Oct. Nov. Dec. Jan. Feb.' Mar.23 Savings and loan associations 295,545 338,233 391,907 433,728 440,101 444,383 450,563 455,644 459,282 464,279 469,726 475,315 2 Mortgages................................ 249,301 278,590 323,005 355,856 361,582 366,838 371,714 376,468 381,216 384,235 387,644 392,438 3 Cash and investment 23,251 30,853 35,724 41,057 41,069 39,709 40,642 40,522 39,197 40,356 41,646 41,904 22,993 28,790 33,178 36,815 37,450 37,836 38,207 38,654 38,869 39,688 40,436 40,973 5 Liabilities and net worth........ 295,545 338,233 391,907 433,728 440,101 444,383 450,563 455,644 459,282 464,279 469,726 475,315 242,974 285,743 335,912 368,385 371,247 377,208 379,604 381,333 386,875 389,620 391,917 399,032 7 Borrowed money...................... 24,780 20,634 19,083 20,960 22,026 22,920 24,206 25,547 27,803 27,906 28,673 29,319 8 FHLBB................................. 21,508 17,524 15,708 15,724 16,255 16,908 17,546 18,282 19,952 20,136 20,609 21,076 3,272 3,110 3,375 5,236 5,771 6,012 6,660 7,265 7,851 7,770 8,064 8,243 10 Loans in process..................... 3,244 5,128 6,840 9,338 9,662 9,741 9,856 9,924 9,932 9,849 9,924 10,437 11 Other.......................................... 6,105 6,949 8,074 11,280 13,053 10,176 12,226 13,839 9,491 11,464 13,449 10,495 12 Net worth2............................... 18,442 19,779 21,998 23,765 24,113 24,338 24,671 25,001 25,181 25,440 25,763 26,032 13 Memo: Mortgage loan com­ mitments outstanding3.. 7,454 10,673 14,826 21,907 21,901 21,631 21,555 21,270 19,886 19,534 20,625 22,233 Mutual savings banks 14 Assets. 109,550 121,056 134.812 143.036 143,815 144,666 145,651 146,346 147,190 148,415 149,437 Loans: 15 Mortgage....................... 74,891 77,221 81,630 84,700 85,419 86,079 86,769 87,333 88,104 88,815 89,159 16 Other............................... 3,812 4,023 5,183 7,176 7,119 6,878 7,115 7,241 6,240 6,843 7,448 Securities: 17 U.S. Govt.............................. 2,555 4,740 5,840 6,101 6,019 6,192 6,101 6,071 5,901 5,883 5,939 18 State and local government. 930 1,545 2,417 2,594 2,762 2,777 2,808 2,809 2,828 2,887 2,809 19 Corporate and other4........ 22,550 27,992 33,793 36,674 36,878 36,927 37,073 37,221 37,909 38,260 38,421 20 Cash.................................... 2,167 2,330 2,355 2,001 1,857 1,992 2,011 1,887 2,416 1,896 1,845 21 Other assets....................... 2,645 3,205 3,593 3,789 3,760 3,821 3,773 3,783 3,792 3,832 3,817 22 Liabilities. 109,550 121,056 134.812 143.036 143,815 144,666 145,651 146,346 147,190 148,415 149,437 23 Deposits.............................. 98,701 109,873 122,877 130,111 130,381 131,688 132,250 132,537 133,892 134,685 135,084 24 Regular:5........................ 98,221 109,291 121,961 128,748 129,030 130,230 130,913 131,319 132,608 133,236 133,716 25 Ordinary savings----- 64,286 69,653 74,535 77,069 77,163 77,640 77,503 77,460 77,930 77,680 77,767 26 Time and other......... 33,935 39,639 47,426 51,679 51,867 52,590 53,410 53,859 54,678 55,556 55,949 27 Other............................... 480 582 916 1,363 1,351 1,458 1,337 1,208 1,284 1,450 1,386 28 Other liabilities................. 2,888 2,755 2,884 3,379 3,779 3,254 3,632 3,938 3,319 3,665 4,177 29 General reserve accounts----- 7,961 8,428 9,052 9,546 9,654 9,723 9,769 9,882 9,980 10,065 10,175 30 Memo : Mortgage loan com­ mitments outstanding*.. 2,040 1,803 2,439 4,049 4,198 4,254 4,423 4,458 4,066 3,998 4,027 Life insurance companies 31 Assets........................ 263,349 289,304 321,552 336,651 338,964 341,382 343,738 347,182 350,506 352,914 355,068 Securities: 32 Government......... 10,900 13,758 17,942 18,916 19,174 19,515 19,519 19,681 19,508 19,579 19,677 33 United States7. 3,372 4,136 5,368 5,628 5,831 5,883 5,810 5,993 5,693 5,717 5,748 34 State and local. 3,667 4,508 5,594 5,847 5,881 5,994 5,979 5,967 6,016 6,009 6,073 35 Foreign 8........... 3,861 4,514 6,980 7,441 7,462 7,638 7,730 7,721 7,799 7,853 7,856 36 Business................. 119,637 135,317 157,246 168,498 169,747 170,606 172,005 174,109 175,204 177,134 178,718 37 Bonds............... 97,717 107,256 122,984 135,262 136,752 138,046 139,909 141,354 142,095 145,244 147,202 38 Stocks............... 21,920 28,061 34,262 33,236 32,995 32,560 32,096 32,755 33,109 31,890 31,516 39 Mortgages.. 86,234 89,167 91,552 93,106 93,326 94,070 94,684 95,110 96,765 97,171 97,475 40 Real estate.. 8,331 9,621 10,476 10,901 10,926 10,930 11,024 11,113 11,201 11,252 11,318 41 Policy loans. 22,862 24,467 25,834 26,780 26,946 27,087 27,220 27,355 27,508 27,628 27,762 42 Other assets. 15,385 16,971 18,502 18,450 18,845 19,174 19,286 19,814 20,320 20,150 20,118 Credit unions 43 Total assets/liabilities and 31,948 38,037 45,225 50,218 50,904 52,136 52,412 53,141 54,084 r53,982 54,989 56,703 44 Federal.................................. 16,715 20,209 ,24,396 27,290 27,632 28,384 28,463 28,954 29,574 '29,579 30,236 31,274 15,233 17,828 20,829 22,928 23,272 23,752 23,949 24,187 24,510 '24,403 24,753 25,429 46 Loans outstanding................... 24,432 28,169 34,384 38,657 39,711 40,573 40,865 41,427 42,055 r41,876 42,331 43,379 12,730 14,869 18,311 20,591 21,194 21,692 21,814 22,224 22,717 '22,590 22,865 23,555 48 State...................................... 11,702 13,300 16,073 18,066 18,517 18,881 19,051 19,203 19,338 '19,286 19,466 19,824 49 Savings...................................... 27,518 33,013 39,173 43,658 43,982 45,103 45,441 45,977 46,832 '47,317 48,093 49,706 50 Federal (shares)................... 14,370 17,530 21,130 23,873 24,080 24,775 24,945 25,303 25,849 '26,076 26,569 27,514 51 State (shares and deposits). 13,148 15,483 18,043 19,785 19,902 20,328 20,496 20,674 20,983 '21,241 21,524 22,192 For notes see bottom of page A30. 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A30 Domestic Financial Statistics □ May 1978 1.39 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year Transition Fiscal quarter Fiscal Type of account or operation year (July- year 1976 1977 1978 1976 Sept. 1977 1976) H2 H2 Jan. Feb. U.S. Budget 1 Receipts 1............................................ 299,197 81,687 356,861 157.868 189,410 175,787 33,201 26,795 24,879 2 Outlays l,2,*...................................... 365,643 94,657 401,902 193,629 199,482 216,747 36,918 33,787 40,004 3 Surplus, or deficit (—).................. -66,446 -12,970 -45,041 -35,761 -10,072 -40,961 -3,717 -6,992 -15,125 4 Trust funds..................................... 2,409 -1,952 7,833 -4,621 7,332 4,293 -3,946 2,850 -1,147 5 Federal funds 4............................... -68,855 -11,018 -52,874 -31,140 -17,405 -45,254 230 -9,843 -13,978 Off-budget entities surplus, or deficit (—) 6 Federal Financing Bank outlays.., -5,915 -2,575 -8,415 -5,176 -2,075 -6,663 -907 -1,084 -1,149 7 Other 2,5............................................ -1,355 793 -269 3,809 -2,086 428 -267 -209 -16 U.S. Budget plus off-budget, in­ cluding Federal Financing Bank 8 Surplus, or deficit ( —)...................... -73,716 -14,752 -53,725 -37,125 -14,233 -47,196 -4,891 -8,285 -16,290 Financed by: 9 Borrowing from the public 3. . . 82,922 18,027 53,516 35,457 16,480 40,284 6,027 5,108 9,656 10 Cash and monetary assets (de­ crease, or increase ( —)) -7,796 -2,899 -2,238 2,153 -4,666 4,317 -229 5,171 993 11 Other 6............................................ -1,396 -373 2,440 -485 2,420 2,597 -907 -1,993 5,640 Memo items : 12 Treasury operating balance (level, end of period)........................................ 14,836 17,418 19,104 11,670 16,255 12,274 12,481 7,391 6,407 13 F.R. Banks........................................ 11,975 13,299 15,740 10,393 15,183 7,114 11,228 3,615 4,705 14 Tax and loan accounts.................... 2,854 4,119 3,364 1,277 1,072 5,160 1,253 3,776 1,702 15 Other demand accounts 7............... 7 1 Effective June 1977, earned income credit payments in excess of an Electrification; Telephone Revolving Fund, Rural Telephone Bank; and individual’s tax liability formerly treated as outlays, are classified as 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 1978 1976 Sept. 1977 1976) HI H2 Jan. Feb. Mar. Receipts 1 All sources 1........................................ 299,197 81,687 356,861 157,868 189,410 175,787 33,201 26,795 24,879 2 Individual income taxes, net........... 130,794 38,715 156,725 75,899 77,948 82,877 20,217 10,620 5,258 3 Withheld......................................... 123,408 32,949 144,820 68,023 73,303 75,480 13,111 12,811 14,469 4 Presidential Election Campaign Fund....................................... 34 1 37 1 37 1 1 6 9 5 Nonwithheld.................................. 35,528 6,809 42,062 8,426 32,959 9,397 7,154 905 2,537 6 Refunds 1........................................ 28,175 1,043 30,194 1,541 28,350 2,001 48 3,102 11,756 7 Corporation income taxes: 8 Gross receipts................................ 46,783 9,808 60,057 20,706 37,133 25,121 2,273 1,521 8,682 9 Refunds.......................................... 5,374 1,348 5,164 2,886 2,324 2,819 282 508 659 10 Social insurance taxes and contribu­ tions, net..................................... 92,714 25,760 108,683 47,596 58,099 52,347 7,997 12,427 8,560 11 Payroll employment taxes and contributions 2...................... 76,391 21,534 88,196 40,427 45,242 44,384 6,898 10,479 7,616 12 Self-employment taxes and contributions 3..................... 3,518 269 4,014 286 3,687 316 259 266 322 13 Unemployment insurance........... 8,054 2,698 11,312 4,379 6,575 4,936 403 1,192 144 14 Other net receipts 4..................... 4,752 1,259 5,162 2,504 2,595 2,711 437 490 478 15 Excise taxes........................................ 16,963 4,473 17,548 8,910 8,432 9,284 1,492 1,259 1,395 16 Customs.............................................. 4,074 1,212 5,150 2,361 2,519 2,848 494 441 603 17 Estate and gift................................... 5,216 1,455 7,327 2,943 4,332 2,837 447 434 462 18 Miscellaneous receipts 5................. 8,026 1,612 6,536 3,236 3,269 3,292 563 602 577 Outlays9 19 All types 1,6........................................ 365,643 94,657 401,902 193,629 199,482 216,747 36,918 33,787 40,004 20 National defense................................. 89,430 22,307 97,501 45,002 48,721 50,873 7,974 8,676 10,701 21 International affairs 6..................... 5,567 2,180 4,831 3,028 2,522 2,896 300 -110 -795 22 General science, space, and technology.................................... 4,370 1,161 4,677 2,377 2,108 2,318 370 392 433 23 Energy................................................... 3,127 794 4,172 319 542 24 Natural resources and environment 8,124 2,532 10,000 641 841 25 Agriculture........................................... 2,502 584 5,526 2,019 2,628 5,477 *' i ,*790* -57 680 26 Commerce and housing credit......... 3,795 1,391 -31 -626 52 27 Transportation................................ 13,438 3,306 14,636 1,076 991 28 Community and regional development................................ 4,709 1,340 6,283 3,192 3,149 4,924 755 773 1,461 29 Education, training, employment, and social services..................... 18,737 5,162 20,985 9,083 9,775 10,800 1,996 2,058 2,214 30 Health................................................... 33,448 8,720 38,785 19,329 18,654 19,422 2,680 3,635 3,895 31 Income security i............................... 126,598 32,710 137,004 65,367 69,917 71,047 12,912 12,073 13,109 32 Veterans benefits and services......... 18,432 3,962 18,038 8,542 9,382 9,864 686 1,529 2,662 33 Administration of justice.................. 3,320 859 3,600 1,839 1,783 1,723 307 326 290 34 General government.......................... 2,927 878 3,357 1,734 1,587 1,749 166 355 374 35 General-purpose fiscal assistance... 7,235 2,092 9,499 4,729 4,333 4,926 2,317 52 43 36 Interest 7.............................................. 34,589 7,246 38,092 18,409 18,927 19,962 2,628 3,353 3,091 37 Undistributed offsetting receipts 78 -14,704 -2,567 -15,053 -7,869 -6,803 -8,506 -475 -677 -581 1 Effective June 1977, earned income credit payments in excess of an Receipts” reflect the accounting conversion for the interest on special individual’s tax liability, formerly treated as outlays, are classified as in­ issues for U.S. Govt, accounts from an accrual basis to a cash basis. come tax refunds retroactive to January 1976. 8 Consists of interest received by trust funds, rents and royalties on 2 Old-age, disability and hospital insurance, and Railroad Retirement the Outer Continental Shelf, and U.S. Govt, contributions for em­ accounts. ployee retirement. 3 Old-age, disability, and hospital insurance. 9 For some types of outlays the categories are new or represent re­ 4 Supplementary medical insurance premiums, Federal employee re­ groupings; data for these categories are from the Budget of the United tirement contributions, and Civil Service retirement and disability fund. States Government, Fiscal Year 1979; data are not available for half years 5 Deposits of earnings by F.R. Banks and other miscellaneous receipts. or for months prior to February 1978. 6 Outlay totals reflect the reclassification of the Export-import Bank Two categories have been renamed: “Law enforcement and justice” from off-budget status to unified budget status. Export-import Bank has become “Administration of justice” and “Revenue sharing and certificates of beneficial interest (effective July 1, 1975) and loans to the general purpose fiscal assistance” has become “General purpose fiscal Private Export Funding Corp. (PEFCO), a wholly owned subsidiary of assistance.” the Export-import Bank, are treated as debt rather than asset sales. In addition, for some categories the table includes revisions in figures 7 Effective September 1976, “Interest” and “Undistributed Offsetting published earlier. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Financial Statistics □ May 1978 1.41 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1974 1975 1976 1977 Item Dec. 31 June 30 Dec. 31 June 30 Sept. 30 Dec. 31 June 30 Sept. 30 Dec. 31 1 Federal debt outstanding....................... 504.0 544.1 587.6 631.9 2 646.4 665.5 685.2 709.1 729.2 2 Public debt securities.............................. 492.7 533.7 576.6 620.4 634.7 653.5 674.4 698.8 718.9 3 Held by public.................................... 351.5 387.9 437.3 470.8 488.6 506.4 523.2 543.4 564.1 4 Held by agencies................................. 141.2 145.3 139.3 149.6 146.1 147.1 151.2 155.5 154.8 11.3 10.9 10.9 11.5 11.6 12.0 10.8 10.3 10.2 6 Held by public.................................... 9.3 9.0 8.9 9.5 29.7 10.0 9.0 8.5 8.4 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.............. 493.0 534.2 577.8 621.6 635.8 654.7 675.6 700.0 720.1 490.5 532.6 576.0 619.8 634.1 652.9 673.8 698.2 718.3 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................. 495.0 577.0 595.0 636.0 636.0 682.0 700.0 700.0 752.0 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 1978 Type and holder 1973 1974 1975 1976 Dec. Jan. Feb. Mar. Apr. 1 Total gross public debt............................................. 469.1 492.7 576.6 653.5 718.9 721.6 729.8 738.0 736.6 By type: 2 Interest-bearing debt.................................................. 467.8 491.6 575.7 652.5 715.2 720.6 728.5 736.9 733.1 3 Marketable.............................................................. 270.2 282.9 363.2 421.3 459.9 466.8 470.8 478.3 472.2 4 Bills...................................................................... 107.8 119.7 157.5 164.0 161.1 161.2 161.8 165.7 159.6 5 Notes................................................................... 124.6 129.8 167.1 216.7 251.8 257.1 258.5 262.2 262.2 6 37.8 33.4 38.6 40.6 47.0 48.5 50.5 50.4 50.4 7 197.6 208.7 212.5 231.2 255.3 253.8 257.7 258.7 260.9 8 Convertible bonds 2........................................... 2.3 2.3 2.3 2.3 2.2 2.2 2.2 2.2 2.2 9 State and local govt, series.................................. * .6 1.2 4.5 13.9 14.8 15.4 16.4 17.6 10 Foreign issues3................................................... 26.0 22.8 21.6 22.3 22.2 22.8 22.6 23.6 23.4 11 Savings bonds and notes................................. 60.8 63.8 67.9 72.3 77.0 11A 77.8 78.2 78.6 12 Govt, account series4....................................... 108.0 119.1 119.4 129.7 139.8 136.4 139.4 138.0 138.8 13 Non-interest-bearing debt........................................ 1.2 1.1 1.0 1.1 3.7 1.0 1.3 1.0 3.5 By holder:5 14 U.S. Govt, agencies and trust funds................. 123.4 138.2 145.3 149.6 154.8 151.5 154.2 15 F.R. Banks............................................................. 75.0 80.5 84.7 94.4 102.5 97.0 95. 5 16 Private investors..................................................... 260.9 271.0 349.4 409.5 461.3 473.1 477.1 17 Commercial banks............................................ 60.3 55.6 85.1 103.8 102.4 102.2 103.5 18 Mutual savings banks...................................... 2.9 2.5 4.5 5.7 6.0 5.9 5.9 19 Insurance companies........................................ 6.4 6.2 9.5 12.5 15.6 15.3 15. 3 20 Other corporations........................................... 10.9 11.0 20.2 26.5 22.2 22.9 21.8 21 State and local governments.......................... 29.2 29.2 34.2 41.6 55.1 56.4 58.3 Individuals: 22 Savings bonds................................................ 60.3 63.4 67.3 72.0 76.7 77.1 77.6 23 Other securities.............................................. 16.9 21.5 24.0 28.8 28.6 29.0 29.1 24 Foreign and international6............................. 54.7 58.8 66.5 78.1 109.6 112.5 115.5 25 Other miscellaneous investors7...................... 19.3 22.8 38.0 40.5 45.0 51.7 50.3 1 Includes (not shown separately): Securities issued to the Rural 6 Consists of the investments of foreign balances and international Electrification Administration and to State and local governments, de­ accounts in the United States. Beginning with July 1974, the figures exclude positary bonds, retirement plan bonds, and individual retirement bonds. non-interest-bearing notes issued to the International Monetary Fund. 2 These nonmarketable bonds, also known as Investment Series B 7 Includes savings and loan associations, nonprofit institutions, cor­ Bonds, may be exchanged (or converted) at the owner’s option for IVi porate pension trust funds, dealers and brokers, certain Govt, deposit per cent, 5-year marketable Treasury notes. Convertible bonds that have accounts, and Govt.-sponsored agencies. been so exchanged are removed from this category and recorded in the notes category above. Note.—Gross public debt excludes guaranteed agency securities and, 3 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 4 Held almost entirely by U.S. Govt, agencies and trust funds. the United States (U.S. Treasury Dept.); data by holder from Treasury 5 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 1978 1978 Type of holder 1976 1977 1976 1977 Feb. Mar. Feb. Mar. All maturities 1 to 5 years 1All holders....................................................................................... 421,276 459,927 470,766 478,252 141,132 151,264 164,317 167,661 2 U.S. Govt, agencies and trust funds......................................... 16,485 14,420 13,996 13,982 6,141 4,788 A,119 4,774 3 96,971 101,191 98,450 101,576 31,249 21,Oil 28,824 30,386 307,820 344,315 358,320 362,693 103,742 119,464 130,715 132,581 5 78,262 75,363 74,761 73,852 40,005 38,691 40,583 41,251 6 4,072 4,379 4,251 4,200 2,010 2,112 2,218 2,243 7 10,284 12,378 12,146 11,902 3,885 A,129 5,126 5,063 8 14,193 9,474 9,297 8,197 2,618 3,183 3,430 3,537 9 4,576 4,817 4,954 5,014 2,360 2,368 2,438 2,495 10 12,252 15,495 15,883 16,564 2,543 3,875 4,023 4,911 11 184,182 222,409 237,028 242,963 50,321 64,505 72,796 72,991 Total, within 1 year 5 to 10 years 12 All holders....................................................................................... 211,035 230,691 228,805 232,997 43,045 45,328 41,554 41,554 13 U.S. Govt, agencies and trust funds......................................... 2,012 1,906 1,171 1,163 2,879 2,129 2,129 2,129 14 51,569 56,702 52,438 53,360 9,148 10,404 9,571 10,010 15 Private investors............................................................................. 157,454 172,084 175,195 178,474 31,018 32,795 29,853 29,414 16 31,213 29,477 26,553 25,237 6,278 6,162 6,149 5,957 17 1,214 1,400 1,233 1,162 567 584 507 507 18 2,191 2,398 2,096 1,905 2,546 3,204 2,906 2,909 19 11,009 5,770 5,239 4,168 370 307 299 267 20 1,984 2,236 2,313 2,267 155 143 130 171 21 6,622 7,917 8,190 7,587 1,465 1,283 1,272 1,253 22 103,220 122,885 129,572 136,148 19,637 21,112 18,589 18,350 Bills, within 1 year 10 to 20 years 163,992 161,081 161,817 165,652 11,865 12,906 14,356 14,325 449 32 12 2 3,102 3,102 3,102 3,102 41,279 42,004 38,537 38,809 1,363 1,510 1,536 1,588 26 122,264 119,035 123,269 126,842 7,400 8,295 9,719 9,635 27 17,303 11,996 9,479 9,236 339 456 732 611 28 454 484 343 327 139 137 139 135 29 1,463 1,187 990 900 1,114 1,245 1,172 1,163 30 9,939 4,329 3,625 2,628 142 133 130 148 31 1,266 806 876 889 64 54 56 63 32 5,556 6,092 6,189 5,414 718 890 995 1,296 33 All others.................................................................................... 86,282 94,152 101,766 107,448 4,884 5,380 6,494 6,217 Other, within 1 year Over 20 years 47,043 69,610 66,988 67,344 14,200 19,738 21,734 21,715 1,563 1,874 1,159 1,161 2,350 2,495 2,814 2,814 10,290 14,698 13,901 14,551 3,642 5,564 6,081 6,233 37 35,190 53,039 51,927 51,632 8,208 11,679 12,838 12,669 38 13,910 15,482 17,074 16,001 All 578 744 191 39 760 916 890 835 143 146 153 152 40 728 1,211 1,106 1,005 548 802 844 862 41 Nonfinancial corporations....................................................... 1,070 1,441 1,613 1,540 55 81 99 76 42 718 1,430 1,437 1,378 13 16 17 17 43 State and local governments................................................... 1,066 3,875 2,001 2,173 904 1,530 1,404 1,516 44 16,938 28,733 27,806 28,700 6,120 8,526 9,576 9,248 Note.—Direct public issues only. Based on Treasury Survey of Owner­ banks, 465 mutual savings banks, and 728 insurance companies, each ship from Treasury Bulletin (U.S. Treasury Dept.). about 90 per cent; (2) 436 nonfinancial corporations and 485 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) 495 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 Mar. 31, 1978; (1) 5,480 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 Financial Statistics □ May 1978 1.44 U.S. GOVERNMENT SECURITIES DEALERS Transactions Par value; averages of daily figures, in millions of dollars 1978 1978, week ending Wednesday— Item 1975 1976 1977 Jan. Feb. Mar. 1 Mar. 8 Mar. 15 Mar. 22 Mar. 29 Apr. 5 1 U.S. Govt, securities............... 6,027 10,449 10,838 10,740 10,200 10,620 11,895 10,463 9,180 8,876 12,186 12,968 By maturity: 2 Bills........................................ 3,889 6,676 6,746 6,956 5,835 6,678 6,833 7,244 5,322 5,697 7,187 8,600 3 Other within 1 year........... 223 210 237 400 317 345 503 328 391 332 249 377 4 1-5 years.............................. 1,414 2,317 2,318 1,923 2,240 1,923 2,911 1,736 1,810 1,462 2,531 1,984 5 5-10 years............................ 363 1,019 1,148 720 1,169 1,027 1,007 670 915 739 1,507 1,337 6 Over 10 years...................... 138 229 388 741 640 648 641 486 741 646 712 669 By type of customer: 7 U.S. Govt, securities dealers.......................... 885 1,360 1,267 1,358 1,509 1,320 1,835 1,400 1,119 1,163 1,402 1,666 8 U.S. Govt, securities brokers......................... 1,750 3,407 3,709 3,663 2,962 3,324 3,578 3,069 2,829 2,688 4,029 4,119 9 Commercial banks............. 1,451 2,426 2,295 2,180 2,069 2,134 2,248 2,125 1,882 1,731 2,553 2,413 10 All others i........................... 1,941 3,257 3,567 3,540 3,661 3,842 4,234 3,869 3,350 3,293 4,202 4,770 11 Federal agency securities.... 1,043 1,548 693 1,460 1,668 1,847 2,697 '1,782 1,805 1,545 1,862 1,732 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 1978 1978, week ending Wednesday— Item 1975 1976 1977 Jan. Feb. Mar. Feb. 8 Feb. 15 Feb. 22 Mar. 1 Mar. 8 Mar. 15 Positions2 1 U.S. Govt, securities............... 5,884 7,592 5,172 4,373 4,845 3,519 5,728 5,457 4,194 3,896 4,244 3,916 2 Bills........................................ 4,297 6,290 4,772 4,052 3,351 2,773 3,682 4,193 3,185 2,317 2,923 2,923 3 Other within 1 year........... 265 188 99 91 68 226 165 86 21 -14 193 221 4 1-5 years.............................. 886 515 60 120 792 460 744 358 594 1,330 975 597 5 5-10 years............................ 300 402 92 -117 387 67 725 495 198 155 133 53 6 Over 10 years...................... 136 198 149 227 248 -7 412 325 155 107 21 20 7 Federal agency securities.... 943 729 693 504 622 794 576 619 519 765 801 867 Sources of financing3 8 All sources................................ 6,666 8,715 9,877 9,976 9,695 9,586 9,197 10,558 9,929 8,862 9,366 10,431 Commercial banks: 9 New York City................... 1,621 1,896 1,313 926 533 777 857 458 534 360 1,010 1,189 10 Outside New York City... 1,466 1,660 1,987 2,342 2,377 2,067 2,396 2,644 2,426 2,075 2,005 2,522 11 Corporations1......................... 842 1,479 2,358 2,492 2,299 2,406 2,134 2,303 2,316 2,407 2,334 2,565 12 All others................................ 2,738 3,681 4,170 4,216 4,485 4,335 3,810 5,153 4,653 4,021 4,018 4,155 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 1978 Agency 1974 1975 1976 Sept. Oct. Nov. Dec. Jan. Feb. 89,381 97,680 103,325 108,379 109,046 109,427 110,409 111,520 112,945 2 Federal agencies......................................................... 12,719 19,046 21,896 23,055 23,143 23,257 23,245 23,293 23,284 3 Defense Department1.......................................... 1,312 1,220 1,113 1,016 1,006 991 983 974 963 4 Export-Import Bank2,3........................................ 2,893 7,188 7,801 9,246 9,246 9,246 9,156 9,156 9,156 5 Federal Housing Administration4..................... 440 564 575 579 583 585 581 599 602 6 Government National Mortgage Association participation certificates5............................ 4,280 4,200 4,120 3,768 3,768 3,768 3,743 3,743 3,743 7 Postal Service6....................................................... 721 1,750 2,998 2,431 2,431 2.431 2,431 2,431 2,431 8 Tennessee Valley Authority................................ 3,070 3,915 5,185 5,705 5,785 5,905 6,015 6,045 6,045 3 209 104 310 324 331 336 345 344 10 Federally sponsored agencies.................................... 76,662 78,634 81,429 85,324 85,903 86,170 87,164 88,227 89,661 11 Federal home loan banks.................................... 21,890 18,900 16,811 17,162 17,325 17,867 18,345 18,692 19,893 12 Federal Home Loan Mortgage Corporation.. 1,551 1,550 1,690 1,686 1,686 1,686 1,686 1,768 1,768 13 Federal National Mortgage Association........ 28,167 29,963 30,565 31,491 31,572 31,333 31,890 32,024 32,553 14 Federal land banks............................................... 12,653 15,000 17.127 18,719 19,118 19,118 19,118 19,498 19,350 15 Federal intermediate credit banks..................... 8,589 9,254 10,494 11,693 11,623 11,421 11,174 11,103 10,958 16 Banks for cooperatives......................................... 3,589 3,655 4,330 4,061 4,052 4,208 4,434 4,625 4,622 220 310 410 510 525 535 515 515 515 18 Other........................................................................ 3 2 2 2 2 2 2 2 2 Memo items : 4,474 17,154 28,711 35,418 36,722 37,095 38,580 39,522 40,605 Lending to Federal and Federally sponsored agencies: 20 Export-Import Bank3.......................................... 4,595 5,208 5,924 5,924 5,924 5,834 5,834 5,834 21 Postal Service6....................................................... 500 1,500 2,748 2,181 2,181 2,181 2,181 2,181 2,181 22 Student Loan Marketing Association7............. 220 310 410 510 525 535 515 515 515 23 Tennessee Valley Authority................................ 895 1,840 3,110 3,880 3,960 4,080 4,190 4,220 4,220 24 United States Railway Association6................. 3 209 104 310 324 331 336 345 344 Other lending: 9 25 Farmers Home Administration......................... 2,500 7,000 10.750 14,615 15,295 15,295 16,095 16,760 17,545 26 Rural Electrification Administration................ 566 1,415 2,382 2,467 2,535 2 M l 2,809 2,947 27 Other........................................................................ 356 1,134 4,966 5,616 6,046 6,214 6,782 6,858 7,019 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 Financial Statistics □ May 1978 1.47 NEW SECURITY ISSUES of State and Local Governments Millions of dollars 1977 1978 Type of issue or issuer, 1975 1976 1977 or use Sept. Oct. Nov. Dec. Jan. Feb. 1 All issues, new and refunding 1................. 30,607 35,313 46,769 4,022 3,816 3,338 3,655 3,283 2,716 By type of issue: 2 General obligation............................. 16,020 18,040 18,042 1,267 1,521 982 1,372 1,875 1,128 3 Revenue................................................ 14,511 17,140 28,655 2,746 2,286 2,350 2,274 1,408 1,588 4 Housing Assistance Administration 2. 5 U.S. Govt, loans................................. 76 133 72 By type of issuer: 6 State............................................................................................ 7,438 7,054 6,354 401 837 299 517 833 311 7 Special district and statutory authority.............................. 12,441 15,304 21,717 2,364 1,607 1,592 1,846 1,122 1,264 8 Municipalities, counties, townships, school districts.... 10,660 12,845 18,623 1,247 1,363 1,441 1,283 1,328 1,140 9 Issues for new capital, total........................................................ 29,495 32,108 36,189 2,376 3,082 2,514 2,343 2,904 1,990 By use of proceeds: 10 Education.................................................................................. 4,689 4,900 5,076 356 352 381 348 560 414 11 Transportation.......................................................................... 2,208 2,586 2,951 176 327 113 184 224 56 12 Utilities and conservation...................................................... 7,209 9,594 8,119 659 402 474 525 481 377 13 Social welfare............................................................................ 4,392 6,566 8,274 672 1,069 691 659 855 509 14 Industrial aid........................................................................... 445 483 4,676 313 455 589 282 245 304 15 Other purposes......................................................................... 10,552 7,979 7,093 200 477 266 345 539 330 1 Par amounts of long-term issues based on date of sale. Source.—Public Securities Association. 2 Only bonds sold pursuant to the 1949 Housing Act, which are secured by contract requiring the Housing Assistance Administration to make annual contributions to the local authority. 1.48 NEW SECURITY ISSUES of Corporations Millions of dollars 1977' 1978 Type of issue or issuer, 1975 1976' 1977' or use Sept. Oct. Nov. Dec. Jan. Feb. 1 All issues 1........................................ 53,619 53,488 54,205 4,177 4,221 5,331 6,531 3,013 2 Bonds................................................ 42,756 42,380 42,193 3,477 3,093 3,411 5,362 2,380 By type of offering: 3 Public............................................ 32,583 26,453 24,186 1,908 2,114 2,211 1,542 1,382 4 Private placement..................... 10,172 15,927 18,007 1,569 979 1,200 3,820 998 By industry group: 5 Manufacturing............................ 16,980 13,264 12,510 795 648 726 2,375 268 6 Commercial and miscellaneous 2,750 4,372 5,887 672 571 546 753 280 7 Transportation........................... 3,439 4,387 2,033 138 120 178 345 123 8 Public utility................................ 9,658 8,297 8,261 1,023 854 851 476 284 9 Communication.......................... 3,464 2,787 3,059 319 8 288 189 519 10 Real estate and financial.......... 6,469 9,274 10,438 530 892 821 1,223 907 11 Stocks............................................... 10,863 11,108 12,013 700 1,128 1,920 1,169 633 By type: 12 Preferred...................................... 3,458 2,803 3,878 421 304 364 473 171 13 Common...................................... 7,405 8,305 8,135 279 824 1,556 696 462 By industry group: 14 M anufacturing............................ 1,670 2,237 1,265 38 83 56 166 5 15 Commercial and miscellaneous 1,470 1,183 1,838 86 325 122 124 138 16 Transportation............................ 1 24 418 40 50 17 Public utility................................ 6,235 6,121 6,058 478 583 878 604 360 18 Communication.......................... 1,002 776 1,379 3 725 110 19 Real estate and financial.......... 488 771 1,054 55 * i 3*7 165 m i Figures, which represent gross proceeds of issues maturing in more companies other than closed-end, intracorporate transactions, and sales to than 1 year, sold for cash in the United States, are principal amount or foreigners. number of units multiplied by offering price. Excludes offerings of less than $100,000, secondary offerings, undefined or exempted issues as Source.—Securities and Exchange Commission. defined in the Securities Act of 1933, employee stock plans, investment Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Corporate Finance A37 1.49 OPEN-END INVESTMENT COMPANIES Net Sales and Asset Position Millions of dollars 1977 1978 Item 1976 1977 Sept. Oct. Nov. Dec. Jan. Feb. Mar. INVESTMENT COMPANIES excluding money market funds 1 Sales of own shares1........................................ 4,226 6,401 558 542 511 557 638 451 613 2 Redemptions of own shares2.......................... 6,802 6,027 469 519 430 562 465 348 459 3 -2,496 357 89 23 81 5 173 103 154 4 Assets 3.............................................................. 47,537 45,049 45,046 43,435 45,050 45,049 43,000 M2,747 43,984 5 Cash position4.............................................. 2,747 3,274 3,403 3,481 3,487 3,274 3,608 4,258 4,331 6 Other............................................................. 44,790 41,775 41,643 39,954 41,563 41,775 39,392 r38,489 39,653 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 mem­ to 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. 1.50 CORPORATE PROFITS AND THEIR DISTRIBUTION Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1976 1977 Account 1975 1976 1977 Q2 Q3 Q4 Ql Q2 Q3 Q4 1 Profits before tax..................................................... 123.5 156.9 171.7 159.2 159.9 154.8 161.7 174.0 172.8 178.3 50.2 64.7 69.2 66.1 65.9 63.9 64.4 69.7 69.3 73.3 3 Profits after tax........................................................ 73.3 92.2 102.5 93.1 94.0 90.9 97.3 104.3 103.5 105.0 4 Dividends.................................................................. 32.4 35.8 41.2 35.0 36.0 38.4 38.5 40.3 42.3 43.6 5 Undistributed profits............................................... 40.9 56.4 61.3 58.1 58.0 52.5 58.8 64.0 61.2 61.4 6 Capital consumption allowances............................. 89.5 97.2 104.7 95.9 98.2 100.4 102.0 103.5 105.8 107.6 7 Net cash flow............................................................ 130.4 153.6 166.0 154.0 156.2 152.9 160.8 167.5 167.0 169.0 Source.—Survey of Current Business (U.S. Dept, of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Financial Statistics □ May 1978 1.51 NONFINANCIAL CORPORATIONS Current Assets and Liabilities Billions of dollars, end of period 1976 1977 Account 1972 1973 1974 1975 Q2 Q3 Q4 Ql Q2 Q3 1Current assets......................................................... 574.4 643.2 712.2 731.6 775.4 791.8 816.8 845.3 874.7 909.8 2 Cash.................................................................... 57.5 61.6 62.7 68.1 70.8 71.1 77.0 75.0 77.9 79.1 3 U.S. Govt, securities......................................... 10.2 11.0 11.7 19.4 23.3 23.9 26.4 27.3 24.1 24.1 4 Notes and accounts receivable............................ 243.4 269.6 293.2 298.2 321.8 328.5 328.2 346.6 361.4 379.1 5 U.S. Govt.1.................................................... 3.4 3.5 3.5 3.6 3.7 4.3 4.3 4.7 4.8 5.3 6 Other............................................................... 240.0 266.1 289.7 294.6 318.1 324.2 323.9 342.0 356.6 373.8 7 Inventories.......................................................... 215.2 246.7 288.0 285.8 295.6 302.1 315.4 322.1 332.5 343.1 8 Other................................................................... 48.1 54.4 56.6 60.0 63.9 66.3 69.8 74.3 78.8 84.5 9 352.2 401.0 450.6 457.5 475.9 484.1 499.9 516.6 532.0 556.3 10 Notes and accounts payable............................... 234.4 265.9 292.7 288.0 293.8 291.7 302.9 309.0 318.9 329.7 11 U.S. Govt.1.................................................... 4.0 4.3 5.2 6.4 6.8 7.0 7.0 6.8 5.7 6.2 12 Other............................................................... 230.4 261.6 287.5 281.6 287.0 284.7 295.9 302.2 313.2 323.5 13 Accrued Federal income taxes......................... 15.1 18.1 23.2 20.7 22.0 24.9 26.8 28.6 24.5 26.9 14 Other.................................................................. 102.6 117.0 134.8 148.8 160.1 167.5 170.2 179.0 188.6 199.7 IS Net working capital............................................... 222.2 242.3 261.5 274.1 299.5 307.7 316.9 328.7 342.8 353.5 i Receivables from, and payables to, the U.S. Govt, exclude amounts Source.—Securities and Exchange Commission, offset against each other on corporations’ books. 1.52 BUSINESS EXPENDITURES on New Plant and Equipment Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1976 1977 1978 Industry 1976r 1977r Q2 Q3 Q4 Ql Q2 Q3 Q4r Q12 1 All industries.......................................................... 120.15 135.72 118.12 122.55 125.22 130.16 134.24 140.38 138.11 146.25 Manufacturing 2 Durable goods industries................................... 23.57 27.75 22.54 24.59 25.50 26.30 27.26 29.23 28.19 29.81 3 Nondurable goods industries............................ 28.70 32.33 28.09 30.20 28.93 30.13 32.19 33.79 33.22 33.18 Nonmanufacturing 4 Mining................................................................ 4.00 4.49 3.83 4.21 4.13 4.24 4.49 4.74 4.50 5.24 Transportation: 5 Railroad.......................................................... 2.51 2.82 2.64 2.69 2.63 2.71 2.57 3.20 2.80 3.38 6 Air................................................................... 1.29 1.63 1.44 1.12 1.41 1.62 1.43 1.69 1.76 2.42 7 Other............................................................... 3.60 2.55 4.16 3.44 3.49 2.96 2.96 1.96 2.32 2.32 Public utilities: 8 Electric............................................................ 18.77 21.57 18.82 18.22 19.49 21.19 21.14 21.90 22.05 23.70 9 Gas and other................................................ 3.45 4.21 3.03 3.45 3.96 4.16 4.16 4.32 4.18 4.99 1 11 0 C Co o m m m m e u r n c i i c a a l t a io n n d . . o .. t .. h .. e .. r .. 1 . . .. . . . . . . . . .. .. . . . . . . . . .. .. . . . . . . . . .. .. . . . . . . . . .. .. . . . . . . . . .. .. . . . . . . . . .. . 2 1 0 3 . . 9 2 9 8 2 1 2 5 . . 9 4 5 3 2 1 0 2 . . 9 62 4 2 1 0 3 . . 9 6 9 4 2 1 1 4 . . 3 3 6 0 2 1 2 4 . . 6 1 7 9 2 1 2 5 . . 7 3 3 2 2 1 3 6 . . 1 4 4 0 2 1 3 5 . . 2 8 7 2 | 41.21 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 Account 1972 1973 1974 1975 Q3 Q4 Ql Q2 Q3 Q4 ASSETS Accounts receivable, gross 1 Consumer................................................................. 31.9 35.4 36.1 36.0 37.6 38.6 39.2 40.7 42.3 44.0 2 Business.................................................................... 27.4 32.3 37.2 39.3 42.4 44.7 47.5 50.4 50.6 55.2 3 Total...................................................................... 59.3 67.7 73.3 75.3 80.0 83.4 86.7 91.2 92.9 99.2 4 Less : Reserves for unearned income and losses 7.4 8.4 9.0 9.4 10.2 10.5 10.6 11.1 11.7 12.7 5 Accounts receivable, net........................................... 51.9 59.3 64.2 65.9 69.9 72.9 76.1 80.1 81.2 86.5 6 Cash and bank deposits............................................ 2.8 2.6 3.0 2.9 2.6 2.6 2.7 2.5 2.5 2.6 7 Securities....................................................................... .9 .8 .4 1.0 1.2 1.1 1.0 1.2 1.8 .9 8 All other........................................................................ 10.0 10.6 12.0 11.8 12.7 12.6 13.0 13.7 14.2 14.3 9 Total assets................................................................... 65.6 73.2 79.6 81.6 86.4 89.2 92.8 97.5 99.6 104.3 LIABILITIES 10 Bank loans.................................................................... 5.6 7.2 9.7 8.0 5.5 6.3 6.1 5.7 5.4 5.9 11 Commercial paper...................................................... 17.3 19.7 20.7 22.2 21.7 23.7 24.8 27.5 25.7 29.6 Debt: 12 Short-term, n.e.c..................................................... 4.3 4.6 4.9 4.5 5.2 5.4 4.5 5.5 5.4 6.2 13 Long-term, n.e.c...................................................... 22.7 24.6 26.5 27.6 31.0 32.3 34.0 35.0 34.8 36.0 14 Other.......................................................................... 4.8 5.6 5.5 6.8 9.5 8.1 9.5 9.4 13.7 11.5 15 Capital, surplus, and undivided profits................. 10.9 11.5 12.4 12.5 13.4 13.4 13.9 14.4 14.6 15.1 16 Total liabilities and capital........................................ 65.6 73.2 79.6 81.6 86.4 89.2 92.8 97.5 99.6 104.3 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 Accounts receivable during— receivable Type outstand­ ing Feb. 28, 1977 1978 1977 1978 1977 1978 19781 Dec. Jan. Feb. Dec. Jan. Feb. Dec. Jan. Feb. 1 Total........................................................................ 56,564 906 777 461 13,386 12,707 13,468 12,480 11,930 13,007 2 Retail automotive (commercial vehicles)........ 12,123 332 161 161 1,156 1,023 1,038 824 862 877 3 Wholesale automotive......................................... 12,620 294 285 86 5,731 5,141 5,436 5,437 4,856 5,350 4 Retail paper on business, industrial, and farm equipment............................................ 14,588 96 311 72 1,003 1,004 1,258 907 693 1,186 5 Loans on commercial accounts receivable... 3,899 53 -35 75 2,334 2,411 2,508 2,281 2,446 2,433 6 Factored commercial accounts receivable.... 2,206 -43 -7 -2 1,599 1,591 1,694 1,642 1,598 1,696 7 All other business credit................................... 11,128 174 62 69 1,563 1,537 1,534 1,389 1,475 1,465 1 Not seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Financial Statistics □ May 1978 1.53 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1977 1978 Item 1975 1976 1977 Oct. j Nov. Dec. Jan. Feb. Mar. Terms and yields in primary and secondary markets PRIMARY MARKETS Conventional mortgages on new homes Terms:1 1 Purchase price (thous. dollars)....................... 44.6 48.4 54.3 54.0 56.4 57.7 58.0 '59.9 58.8 2 Amount of loan (thous. dollars)................... 33.3 35.9 40.5 40.2 42.0 42.6 43.3 '44.0 43.5 74.7 74.2 76.3 76.1 76.5 75.5 76.4 '75.3 75.5 4 Maturity (years)................................................. 26.8 27.2 27.9 27.6 28.2 28.0 28.3 '27.3 27.4 5 Fees and charges (per cent of loan amount)2. 1.54 1.44 1.33 1.35 1.38 1.32 1.41 '1.32 1.37 6 Contract rate (per cent per annum)............. 8.75 8.76 8.80 8.84 8.85 8.87 8.93 8.96 9.03 Yield (per cent per annum): 7 FHLBB series 3.............................................9....0..1. 8.99 9.01 9.07 9.07 9.09 9.15 9.18 9.26 8 HUD series4....................................................... 9.10 8.99 8.95 9.00 9.05 9.10 9.15 9.25 9.30 SECONDARY MARKETS Yields (per cent per annum) on— 9.19 8.82 7.96 8.78 8.78 8.91 9.11 9.29 10 GNMA securities6............................................ 8.52 8.17 8.04 8.16 8.19 8.29 8.56 8.64 8.60 FNMA auctions:7 11 Government-underwritten loans............... 9.26 8.99 8.73 8.74 8.85 8.94 9.17 9.31 9.35 12 Conventional loans....................................... 9.37 9.11 8.98 9.05 9.16 9.19 9.32 9.49 9.61 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 13 Total......................................................................... 31,824 32,904 34,370 34,123 34,192 34,370 34,756 35,408 36,030 14 FHA-insured....................................................... 19,732 18,916 18,457 18,602 18,535 18,457 18,500 18,664 18,759 15 VA-guaranteed................................................... 9,573 9,212 9,315 9,287 9,267 9,315 9,398 9,599 9,727 2,519 4,776 6,597 6,234 6,389 6,597 6,858 7,146 7,543 Mortgage transactions (during period) 17 Purchases................................................................. 4,263 3,606 4,780 251 352 497 636 879 891 18 Sales.......................................................................... 2 86 67 5 4 Mortgage commitments:8 19 Contracted (during period)................................ 6,106 6,247 9,729 897 975 1,333 1,810 1,942 1,563 20 Outstanding (end of period)................................ 4,126 3,398 4,698 3,702 4,192 4,698 5,781 6,851 7,445 Auction of 4-month commitments to buy— Government-underwritten loans : 21 Offered9............................................................... 7,042.6 4,929.8 7,974.1 613.2 105.2 1,184.5 1,779.8 1,199.1 523.7 22 Accepted............................................................. 3,848.3 2,787.2 4,846.2 400.5 152.7 794.0 970.9 623.1 334.9 Conventional loans: 23 Offered9............................................................... 1,401.3 2,595.7 5,675.2 758.1 537.6 591.6 949.9 1,214.1 823.5 24 Accepted............................................................. 765.0 1,879.2 3,917.8 529.0 386.3 359.4 449.6 566.0 512.5 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)10 25 Total...4..,.2..6...9............3..,.2...7..6................................3..,..2..6..6.. 43,,928776 3,163 3,044 33,4,30722 26 FHA/VA............................................................. 1,824 1,618 1,395 1,424 1,406 1,395 1,382 1,381 1,388 27 Conventional...................................................... 3,163 2,651 1,881 1,978 1,860 1,881 1,782 1,663 1,985 Mortgage transactions (during period) 28 Purchases................................................................. 1,716 1,175 3,900 428 576 489 401 363 344 29 Sales.......................................................................... 1,020 1,396 4,131 354 677 477 503 470 120 Mortgage commitments:11 30 Contracted (during period)................................ 982 1,477 5,546 465 574 361 367 363 593 31 Outstanding (end of period)................................ 111 333 1,063 1,329 1,233 1,063 961 1,021 1,233 1 Weighted averages based on sample surveys of mortgages originated securities, assuming prepayment ini 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 FNMA 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 1977 1978 Type of holder, and type of property 1973 1974 1975 1976 Q2 Q3 Q4 1 682,321 742,512 801,537 889,327 '948,826 '985,607 1,021,169 1,048,380 2 1- to 4-family............................................ 416,211 449,371 490,761 556,557 '600,262 '627,770 652,405 671,050 3 Multifamily................................................ 93,132 99,976 100,601 104,516 '107,094 '108,957 111,286 113,137 4 Commercial............................................... 131,725 146,877 159,298 171,223 '179,578 '184,815 191,593 195,899 5 Farm........................................................... 41,253 46,288 50,877 57,031 61,892 64,080 65,885 68,294 6 Maior financial institutions......................... SOS,400 542,560 581,193 647,650 '690,340 '717,365 742,763 761,276 7 Commercial banks1.................................. 119,068 132,105 136,186 151,326 162,778 170,378 176,678 181,178 8 1- to 4-family........................................ 67,998 74,758 77,018 86,234 93,393 97,746 101,361 103,942 9 Multifamily............................................ 6,932 7,619 5,915 8,082 8,003 8,383 8,692 8,914 10 Commercial........................................... 38,696 43,679 46,882 50,289 54,038 56,565 58,657 60,151 11 Farm....................................................... 5,442 6,049 6,371 6,721 7,344 7,684 7,968 8,171 12 Mutual savings banks.............................. 73,230 74,920 77,249 81,639 84,076 86,079 88,104 89,687 13 1- to 4-family........................................ 48,811 49,213 50,025 53,089 55,000 56,313 57,637 58,673 14 Multifamily............................................ 12,343 12,923 13,792 14,177 14,602 14,952 15,304 15,579 15 Commercial........................................... 12,012 12,722 13,373 14,313 14,422 14,762 15,110 15,381 16 Farm....................................................... 64 62 59 60 52 52 53 54 17 Savings and loan associations................. 231,733 249,301 278,590 323,130 '350,632 '366,838 381,216 392,438 18 1- to 4-family........................................ 187,078 200,987 223,903 260,895 '284,433 '298,459 310,729 319,876 19 Multifamily........................................... 22,779 23,808 25,547 28,436 '30,505 '31,585 32,518 33,475 20 Commercial........................................... 21,876 24,506 29,140 33,799 '35,694 '36,794 37,969 39,087 21 81,369 86,234 89,168 91,555 92,854 94,070 96,765 97,973 22 1- to 4-family........................................ 20,426 19,026 17,590 16,088 15,418 15,022 14,727 14,427 23 Multifamily........................................... 18,451 19,625 19,629 19,178 18,891 18,831 18,807 18,857 24 Commercial........................................... 36,496 41,256 45,196 48,864 50,405 51,742 54,388 55,546 25 Farm....................................................... 5,996 6,327 6,753 7,425 8,140 8,475 8,843 9,143 26 Federal and related agencies...................... 46,721 58,320 66,891 66,753 68,338 69,068 70,006 71,849 27 Government National Mortgage Assn... 4,029 4,846 7,438 4,241 3,912 3,599 3,660 3,342 28 1- to 4-family........................................ 1,455 2,248 4,128 1,970 1,654 1,522 1,548 1,414 29 Multifamily............................................ 2,574 2,598 2,710 2,271 2,258 2,077 2,112 1,928 30 Farmers Home Admin.............................. 1,366 1,432 1,109 1,064 1,043 1,292 1,353 1,413 31 1- to 4-family........................................ 743 759 208 454 410 548 626 654 32 29 167 215 218 97 192 275 287 33 Commercial........................................... 218 156 190 72 126 142 149 156 34 376 350 496 320 410 410 303 316 35 Federal Housing and Veterans Admin... 3,476 4,015 4,970 5,150 5,259 5,130 5,212 5,212 36 1- to 4-family........................................ 2,013 2,009 1,990 1,676 1,711 1,566 1,627 1,578 37 1,463 2,006 2,980 3,474 3,548 3,564 3,585 3,634 38 Federal National Mortgage Assn...... 24,175 29,578 31,824 32,904 33,918 34,148 34,369 36,029 39 20,370 23,778 25,813 26,934 27,933 28,178 28,504 30,208 40 Multifamily............................................ 3,805 5,800 6,011 5,970 5,985 5,970 5,865 5,821 41 11,071 13,863 16,563 19,125 20,818 21,523 22,136 22,925 42 1- to 4-family........................................ 123 406 549 601 628 649 670 691 43 10,948 13,457 16,014 18,524 20,190 20,874 21,466 22,234 44 Federal Home Loan Mortgage Corp.... 2,604 4,586 4,987 4,269 3,388 3,376 3,276 2,928 45 1- to 4-family........................................ 1,446 4,217 4,588 3,889 2,901 2,818 2,738 2,441 46 Multifamily............................................ 158 369 399 380 487 558 538 481 47 Mortgage pools or trusts2........................... 18,040 23,799 34,138 49,801 58,748 64,667 70,289 73,557 48 Government National Mortgage Assn... 7,890 11,769 18,257 30,572 36,573 41,089 44,896 46,357 49 1- to 4-family........................................ 7,561 11,249 17,538 29,583 35,467 39,865 43,555 44,906 50 Multifamily............................................ 329 520 719 989 1,106 1,224 1,341 1,451 51 Federal Home Loan Mortgage Corp... 76,6 757 1,598 2,671 4,460 5,332 6,610 7,917 52 1- to 4-family........................................ 617 608 1,349 2,282 3,938 4,642 5,621 6,733 53 Multifamily............................................ 149 149 249 389 522 690 989 1,184 54 Farmers Home Admin.............................. 9,384 11,273 14,283 16,558 17,715 18,426 18,783 19,283 55 1- to 4-family........................................ 5,458 6,782 9,194 10,219 10,814 11,127 11,379 11,700 56 Multifamily............................................ 138 116 295 532 111 768 759 780 57 Commercial........................................... 1 ,124 1,473 1,948 2,440 2,680 2,824 2,945 3,024 58 Farm....................................................... 2,664 2,902 2,846 3,367 3,444 3,527 3,682 3,779 59 Individuals and others3................................ 112,160 117,833 119,315 125,123 131,400 '134,507 138,111 141,698 60 1- to 4-family........................................ 51 ,112 53,331 56,268 62,643 66,592 '69,315 71,665 73,801 61 Multifamily............................................ 23,982 24,276 22,140 20,420 20,313 '20,163 20,501 20,746 62 Commercial........................................... 21 ,303 23,085 22,569 21,446 22,213 '21,986 22,375 22,554 63 Farm....................................................... 15,763 17,141 18,338 20,614 22,312 '23,043 23,570 24,597 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 Financial Statistics □ May 1978 1.55 CONSUMER INSTALMENT CREDIT Total Outstanding, and Net Change Millions of dollars 1977 1978 Holder, and type of credit 1975 1976 1977 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Amounts outstanding (end of period) 1 164,955 185,489 216,572 207,294 209,141 212,074 216,572 215,925 216,297 219,203 By holder: 2 78,667 89,511 105,291 101,564 102,504 103,469 105,291 105,466 105,663 107,166 3 35,994 38,639 44,015 42,333 42,704 43,322 44,015 43,970 44,107 44,486 4 25,666 30,546 37,036 35,779 35,993 36,488 37,036 36,851 37,217 38,185 5 18,002 19,052 21,082 18,725 18,961 19,629 21,082 20,525 20,060 19,920 6 6,626 7,741 9,149 8,894 8,978 9,166 9,149 9,114 9,250 9,446 By type of credit: 7 55,879 66,116 79,352 77,207 77,845 78,757 79,352 79,376 79,984 81,666 8 31,553 37,984 46,119 44,933 45,399 45,845 46,119 46,247 46,547 47,534 9 Indirect........................................ 18,353 21,176 25,370 24,717 24,972 25,228 25,370 25,476 25,696 26,327 10 13,200 16,808 20,749 20,216 20,427 20,616 20,749 20,'771 20,851 21,207 11 11,155 12,489 14,263 13,930 13,998 14,205 14,263 14,260 14,374 14,577 12 12,741 15,163 18,385 17,761 17,867 18,113 18,385 18,293 18,475 18,955 13 430 480 585 584 581 594 585 576 588 600 14 Mobile homes...................................... 14,423 14,572 15,014 14,880 14,929 14,999 15,014 14,978 14,973 15,062 15 Commercial banks........................ 8,649 8,734 8,862 8,828 8,839 8,856 8,862 8,819 8,807 8,845 16 Finance companies....................... 3,451 3,273 3,109 3,119 3,116 3,123 3,109 3,115 3,098 3,085 17 9,405 10,990 12,952 12,532 12,703 12,879 12,952 12,904 12,968 13,162 18 Commercial banks........................ 4,965 5,554 6,473 6,265 6,377 6,447 6,473 6,445 6,436 6,479 Revolving credit: 19 Bank credit cards.......................... 9,501 11,351 14,262 12,651 12,829 13,096 14,262 14,369 14,174 14,142 20 Bank check credit......................... 2,810 3,041 3,724 3,504 3,551 3,601 3,724 3,776 3,822 3,844 21 72,937 79,418 91,269 86,519 87,283 88,743 91,269 90,522 90,376 91,327 22 Commercial banks, total............. 21,188 22,847 25,850 25,383 25,510 25,626 25,850 25,809 25,877 26,322 23 Personal loans............................ 14,629 15,669 17,740 17,373 17,452 17,555 17,740 17,708 17,769 18,002 24 Finance companies, total............. 21,238 22,749 26,498 25,143 25,448 25,850 26,498 26,452 26,489 26,675 25 Personal loans............................ 17,263 18,554 21,302 20,256 20,498 20,852 21,302 21,248 21,283 21,416 26 Credit unions.................................. 10,754 12,799 15,518 14,991 15,081 15,289 15,518 15,440 15,594 15,999 27 Retailers.......................................... 18,002 19,052 21,082 18,725 18,961 19,629 21,082 20,525 20,060 19,920 28 Others............................................... 1,755 1,971 2,321 2,277 2,283 2,350 2,321 2,296 2,356 2,411 Net change (during period) 3 29 Total......................................................... 7,504 20,533 31,090 2,351 2,626 2,853 2,736 2,424 2,661 4,068 By holder: 30 Commercial banks............................ 2,821 10,845 15,779 1,228 1,315 1,384 1,611 1,115 1,280 2,021 31 Finance companies............................ -90 2,644 5,376 378 487 543 500 460 418 662 32 Credit unions...................................... 3,771 4,880 6,490 458 469 566 641 495 603 836 33 Retailers i............................................ 69 1,050 2,032 144 280 184 -12 309 202 367 34 Others 2................................................ 933 1,115 1,413 143 75 111 -3 44 158 182 By type of credit: 35 Automobile.......................................... 3,007 10,238 13,235 1,105 850 1,241 1,297 1,185 1,104 1,522 36 Commercial banks........................ 559 6,431 8,135 714 587 725 835 637 599 882 37 Indirect........................................ -334 2,823 4,194 466 295 444 486 407 389 564 38 Direct.......................................... 894 3,608 3,941 248 292 281 349 230 210 318 39 Finance companies....................... 532 1,334 1,774 128 52 242 111 247 201 238 40 Credit unions.................................. 1,872 2,422 3,222 228 222 263 328 244 300 406 41 Other................................................ 44 50 105 34 -11 10 7 56 4 -4 42 Mobile homes...................................... -195 150 441 32 44 74 76 52 23 108 43 Commercial banks........................ -323 85 128 10 15 23 60 2 2 46 44 Finance companies....................... -73 -111 -164 -3 -11 4 -8 36 -9 2 45 Home improvement............................ 881 1,585 1,967 143 201 211 173 105 171 217 46 Commercial banks........................ 271 588 920 11 115 99 110 70 69 74 Revolving credit: 47 Bank credit cards.......................... 1,220 1,850 2,911 219 287 243 250 160 285 448 48 Bank check credit......................... 14 231 683 49 57 27 46 65 87 120 49 All other............................................... 2,577 6,479 11,853 743 1,188 1,057 895 857 991 1,653 50 Commercial banks, total............. 1,080 1,659 3,003 99 254 267 310 180 238 451 51 Personal loans........................... 858 1,040 2,070 56 142 183 235 81 167 263 52 Finance companies, total............. -348 1,509 3,749 251 448 293 378 111 223 419 53 Personal loans............................ 279 1,290 2,748 223 353 235 254 162 183 309 54 Credit unions.................................. 1,580 2,045 2,719 197 204 252 252 205 252 358 55 Retailers.......................................... 69 1,050 2,032 144 280 184 -12 309 202 367 56 Others............................................... 196 211 350 52 2 61 -33 -15 76 58 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 $44.2 billion at the end 3 Net change equals extensions minus liquidations (repayments, charge- of 1977, $38.7 billion at the end of 1976, $35.7 billion at the end of 1975, offs, and other credits); figures for all months are seasonally adjusted. and $33.8 billion at the end of 1974. Comparable data for Dec. 31, 1978, will be published in the February 1979 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 1978 Holder, and type of credit 1975 1976 1977 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Extensions 3 1 164,169 193,328 225,645 19,164 19,787 19,680 20,138 19,586 20,179 21,595 By holder: 2 77,312 94,220 110,777 9,442 9,802 9,688 10,226 9,625 9,905 10,608 3 31,173 36,028 41,770 3,514 3,653 3,602 3,743 3,575 3,691 3,914 4 Credit unions...................................... 24,096 28,587 33,592 2,773 2,858 2,920 3,093 2,820 3,028 3,309 5 27,049 29,188 33,202 2,860 2,961 2,857 2,647 3,102 2,976 3,148 6 4,539 5,305 6,303 575 512 612 428 464 579 616 By type of credit: 7 51,413 62,988 72,888 6,109 6,083 6,330 6,721 6,263 6,400 6,822 8 28,573 36,585 42,570 3,640 3,642 3,717 3,941 3,650 3,700 3,924 9 Indirect........................................ 15,766 19,882 22,904 2,028 1,976 2,076 2,153 2,026 2,065 2,173 10 12,807 16,704 19,666 1,612 1,666 1,641 1,788 1,624 1,635 1,751 11 Finance companies....................... 9,674 11,209 12,635 1,013 989 1,097 1,143 1,088 1,080 1,173 12 12,683 14,675 17,041 1,376 1,414 1,458 1,581 1,421 1,565 1,679 13 Others.............................................. 483 518 642 80 38 58 55 105 55 46 14 4,323 4,841 5,244 424 457 464 460 449 406 502 15 Commercial banks........................ 2,622 3,071 3,153 261 270 280 300 250 236 284 16 Finance companies....................... 764 690 615 51 61 54 60 101 62 74 17 5,556 6,736 8,066 679 718 761 722 618 710 770 18 Commercial banks........................ 2,722 3,245 3,968 340 373 370 384 327 338 352 Revolving credit: 19 Bank credit cards.......................... 20,428 25,862 31,761 2,847 2,973 2,828 2,973 2,948 3,143 3,231 20 4,024 4,783 5,886 485 487 492 531 556 535 608 21 78,425 88,117 101,754 8,620 9,067 8,804 8,731 8,751 8,985 9,662 22 18,944 20,673 23,439 1,870 2,056 2,001 2,096 1,893 1,953 2,209 23 13,386 14,480 16,828 1,346 1,463 1,434 1,518 1,338 1,405 1,537 24 20,657 24,087 28,349 2,440 2,596 2,441 2,530 2,380 2,541 2,659 25 Personal loans............................ 16,944 19,579 22,323 1,938 2,044 1,914 1,975 1,851 1,989 2,105 26 Credit unions............................. 10,134 12,340 14,604 1,240 1,282 1,285 1,326 1,236 1,288 1,429 27 27,049 29,188 33,202 2,860 2,961 2,857 2,647 3,102 2,976 3,148 28 Others............................................... 1,642 1,830 2,160 211 172 221 131 138 227 217 Liquidations 3 29 Total......................................................... 156,665 172,795 194,533 16,814 17,160 16,826 17,402 17,162 17,518 17,527 By holder: 30 Commercial banks............................ 74,491 83,376 94,998 8,214 8,487 8,305 8,615 8,509 8,625 8,587 31 Finance companies........................... 31,263 33,384 36,372 3,135 3,166 3,059 3,244 3,114 3,273 3,252 32 Credit unions...................................... 20,325 23,707 27,103 2,316 2,389 2,354 2,452 2,325 2,425 2,473 33 26,980 28,138 31,170 2,716 2,681 2,673 2,659 2,793 2,774 2,781 34 Others2................................................. 3,606 4,191 4,890 432 437 435 432 420 421 434 By type of credit: 35 48,406 52,750 59,610 5,005 5,234 5,089 5,424 5,078 5,296 5,300 36 Commercial banks........................ 28,014 30,154 34,435 2,926 3,055 2,991 3,106 3,013 3,101 3,042 37 16,101 17,059 18,710 1,562 1,681 1,632 1,667 1,619 1,676 1,609 38 11,913 13,095 15,726 1,364 1,374 1,360 1,439 1,394 1,425 1,433 39 Finance companies....................... 9,142 9,875 10,819 885 937 855 1,017 841 879 935 40 Credit unions.................................. 10,811 12,253 13,819 1,148 1,193 1,195 1,253 1,177 1,265 1,273 41 Others.............................................. 439 468 536 46 49 48 48 48 51 50 42 Mobile homes...................................... 4,517 4,691 4,793 392 413 390 384 398 383 394 43 Commercial banks........................ 2,944 2,986 3,025 251 255 257 240 248 234 238 44 Finance companies....................... 837 867 806 54 72 50 68 65 71 72 45 4,675 5,151 6,098 536 517 550 549 514 539 553 46 Commercial banks........................ 2,451 2,657 3,048 263 257 272 274 257 269 278 Revolving credit: 47 Bank credit cards.......................... 19,208 24,012 28,851 2,567 2,687 2,585 2,723 2,788 2,858 2,783 48 4,010 4,552 5,202 436 430 466 485 491 448 488 49 75,849 81,638 89,977 7,877 7,880 7,747 7,836 7,894 7,994 8,009 50 Commercial banks, total............. 17,864 19,014 20,436 1,771 1,802 1,734 1,786 1,713 1,715 1,758 51 Personal loans............................ 12,528 13,439 14,757 1,291 1,321 1,250 1,284 1,258 1,238 1,274 52 21,005 22,578 24,676 2,189 2,148 2,148 2,152 2,203 2,318 2,240 53 16,665 18,289 19,596 1,714 1,692 1,678 1,722 1,688 1,806 1,796 54 Credit unions.................................. 8,554 10,295 11,884 1,043 1,078 1,033 1,075 1,031 1,036 1,071 55 26,980 28,138 31,170 2,716 2,681 2,673 2,659 2,793 2,774 2,781 56 Others............................................... 1,446 1,613 1,811 158 170 159 165 153 151 159 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 Financial Statistics □ May 1978 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS Billions of dollars; half-year data are at seasonally adjusted annual rates. 1975 1976 1977 1974 1975 1976 1977 Transaction category, or sector HI H2 HI H2 HI H2 Nonfinancial sectors 1Total funds raised................................................... 189.6 205.6 268.3 335.9 180.8 230.4 254.5 282.1 306.2 365.6 1 2 Excluding equities............................................... 185.8 195.5 257.8 327.4 170.3 220.8 241.1 274.4 297.3 357.5 2 By sector and instrument: 3 U.S. Govt.............................................................. 11.8 85.4 69.0 56.8 79.6 91.2 73.1 64.9 40.3 73.2 3 4 12.0 85.8 69.1 57.6 80.4 91.3 73.0 65.3 40.9 74.4 4 5 -.2 -.4 -.1 -.9 -.8 -.1 .1 -.3 -.6 -1.2 5 6 177.8 120.2 199.2 279.1 101.1 139.2 181.4 217.1 265.9 292.4 6 7 Corporate equities......................................... 3.8 10.0 10.5 8.5 10.5 9.6 13.3 7.6 8.9 8.1 7 8 Debt instruments........................................... 174.0 110.1 188.8 270.6 90.7 129.6 168.0 209.5 257.0 284.3 8 9 Private domestic nonfinancial sectors......... 162.4 107.0 179.0 266.9 93.1 120.9 166.2 191.7 260.9 272.9 9 10 4.1 9.9 10.5 8.1 10.3 9.5 13.3 7.7 8.2 8.0 10 11 Debt instruments........................................ 158.3 97.1 168.4 258.8 82.8 111.4 152.9 184.0 252.7 265.0 11 12 Debt capital instruments....................... 98.7 95.8 122.7 172.8 93.8 97.8 111.7 133.7 159.3 186.2 12 13 State and local obligations.............. 17.1 13.6 15.1 28.1 12.3 14.9 14.7 15.5 28.3 27.9 13 14 Corporate bonds................................ 19.7 27.2 22.8 18.0 33.4 21.1 20.4 25.3 14.4 21.6 14 Mortgages: 15 Home............................................... 34.8 39.5 63.6 90.0 33.4 45.6 57.1 70.2 85.5 94.5 15 16 Multifamily residential................. 6.9 * 1.6 7.0 .4 -.4 .6 2.6 5.3 8.8 16 17 Commercial.................................... 15.1 11.0 13.4 20.9 9.4 12.6 13.9 12.9 16.7 25.0 17 18 Farm................................................. 5.0 4.6 6.1 8.7 5.1 4.0 5.0 7.3 9.0 8.5 18 19 Other debt instruments.......................... 59.6 1.3 45.7 86.1 -11.0 13.6 41.2 50.3 93.4 78.7 19 20 Consumer credit................................ 10.2 9.4 23.6 35.6 2.2 16.6 22.9 24.2 35.5 35.7 20 21 Bank loans n.e.c................................. 29.1 -14.5 3.7 30.0 -20.9 -8.2 -.3 7.8 37.4 22.5 21 22 Open market paper........................... 6.6 -2.6 4.0 2.5 -1.4 -3.8 6.4 1.6 4.4 .6 22 23 13.7 9.0 14.4 18.0 9.0 9.0 12.2 16.7 16.0 19.9 23 24 By borrowing sector................................... 162.4 107.0 179.0 266.9 93.1 120.9 166.2 191.7 260.9 272.9 24 25 State and local governments............... 16.2 11.2 14.6 24.8 10.0 12.3 13.0 16.3 21.7 27.9 25 26 49.2 48.6 89.8 130.9 37.3 59.9 83.9 95.6 129.6 132.2 26 27 Farm......................................................... 7.9 8.7 11.0 15.1 8.7 8.8 10.6 11.6 16.6 13.6 27 28 Nonfarm noncorporate........................ 7.4 2.0 5.2 10.8 -1.1 5.1 2.7 7.6 10.9 10.7 28 29 Corporate................................................. 81.8 36.6 58.3 85.3 38.3 34.8 56.1 60.5 82.1 88.4 29 30 Foreign............................................................. 15.4 13.2 20.3 12.2 8.0 18.3 15.2 25.4 5.0 19.5 30 31 Corporate equities..................................... -.2 .1 * .4 .1 .1 * -.1 .6 .2 31 32 Debt instruments........................................ 15.7 13.0 20.3 11.8 7.9 18.2 15.1 25.5 4.3 19.3 32 33 Bonds....................................................... 2.1 6.2 8.4 5.0 5.7 6.8 7.3 9.5 4.3 5.7 33 34 Bank loans n.e.c..................................... 4.7 3.7 6.7 .6 -.4 7.8 3.4 10.0 -5.8 7.0 34 35 Open market paper............................... 7.3 .3 1.9 2.8 -.8 1.4 1.5 2.4 2.7 3.0 35 36 U.S. Govt, loans.................................... 1.6 2.8 3.3 3.4 3.4 2.2 2.9 3.6 3.1 3.6 36 Financial sectors 37 Total funds raised................................................... 39.4 14.0 28.6 62.7 15.1 12.8 27.8 29.4 63.1 62.3 37 By instrument: 38 U.S. Govt, related............................................... 23.1 13.5 18.6 26.1 14.5 12.6 18.6 18.6 25.7 26.6 38 39 Sponsored credit agency securities............. 16.6 2.3 3.3 6.9 1.9 2.8 4.5 2.1 10.1 3.7 39 40 Mortgage pool securities.............................. 5.8 10.3 15.7 20.4 11.5 9.2 14.2 17.2 17.9 22.9 40 41 Loans from U.S. Govt.................................. .7 .9 -.4 -1.2 1.1 .6 * -.7 -2.3 ...............41 42 16.3 .4 10.0 36.5 .6 .2 9.1 10.8 37.4 35.7 42 43 Corporate equities......................................... .3 * .1 -.1 .1 -.1 -.7 2.2 -.3 .1 43 44 Debt instruments............................................. 16.0 .4 9.2 36.6 .6 .3 9.8 8.6 37.7 35.6 44 45 Corporate bonds........................................ 2.1 2.9 5.8 8.7 2.3 3.5 7.0 4.5 8.1 9.2 45 46 Mortgages................................................... -1.3 2.3 2.1 3.1 1.4 3.2 1.4 2.8 3.1 3.1 46 47 Bank loans n.e.c......................................... 4.6 -3.6 -3.7 -.2 -4.7 -2.5 -3.0 -4.4 -2.7 2.3 47 48 Open market paper and Rp’s................. 3.9 2.8 7.1 20.8 8.2 -2.6 6.1 8.1 25.8 15.7 48 49 Loans from FHLB’s.................................. 6.7 -4.0 -2.0 4.3 -6.6 -1.3 -1.6 -2.4 3.5 5.2 49 By sector: 50 Sponsored credit agencies................................ 17.3 3.2 2.9 5.7 3.0 3.4 4.5 1.4 7.8 3.7 50 51 Mortgage pools................................................... 5.8 10.3 15.7 20.4 11.5 9.2 14.2 17.2 17.9 22.9 51 52 Private financial sectors..................................... 16.3 .4 10.0 36.5 .6 .2 9.1 10.8 37.4 35.7 52 53 Commercial banks......................................... -1.1 1.7 7.4 11.1 5.7 -2.3 9.0 5.9 14.7 7.5 53 54 Bank affiliates................................................. 3.5 .3 -.8 1.3 .9 -.3 -1.3 -.3 1.3 1.2 54 55 Savings and loan associations..................... 6.3 -2.2 * 11.9 -6.8 2.3 .5 -.5 11.0 12.8 55 56 Other insurance companies.......................... .9 1.0 1.0 1.0 .9 1.0 1.0 1.0 1.0 1.0 56 57 Finance companies........................................ 4.5 .5 6.4 15.1 -1.4 2.4 5.7 7.1 14.3 15.9 57 58 REIT’s.............................................................. .6 -2.0 -2.8 -2.4 -2.0 -1.9 -2.5 -3.0 -2.9 -1.8 58 59 Open-end investment companies............... -.7 -.1 -1.0 -1.5 .7 -.9 -2.5 .5 -1.4 -1.6 59 60 Money market funds.................................... 2.4 1.3 -.3 .1 2.6 * -.7 .2 -.5 .8 60 All sectors 61 229.0 219.5 296.8 398.6 195.9 243.2 282.2 311.4 369.2 427.9 61 62 -.7 -.1 -1.0 -1.5 .7 -.9 -2.5 .5 -1.4 -1.6 62 63 Other corporate equities.................................. 4.8 10.2 12.2 9.9 9.8 10.5 15.1 9.3 10.0 9.8 63 64 Debt instruments................................................ 224.9 209.5 285.6 390.2 185.4 233.6 269.6 301.6 360.7 419.7 64 65 U.S. Govt, securities..................................... 34.3 98.2 88.1 84.2 93.1 103.2 91.9 84.3 68.4 99.9 65 66 17.1 13.6 15.1 28.1 12.3 14.9 14.7 15.5 28.3 27.9 66 67 Corporate and foreign bonds...................... 23.9 36.3 37.0 31.7 41.3 31.3 34.7 39.3 26.8 36.5 67 68 Mortgages........................................................ 60.5 57.2 86.8 129.7 49.5 65.0 77.9 95.7 119.5 139.8 68 69 Consumer credit............................................. 10.2 9.4 23.6 35.6 2.2 16.6 22.9 24.2 35.5 35.7 69 70 Bank loans n.e.c.............................................. 38.4 -14.4 6.7 30.4 -25.9 -2.9 .1 13.4 28.9 31.8 70 71 17.8 .5 13.0 26.1 6.1 -5.0 14.0 12.0 32.9 19.3 71 72 Other loans...................................................... 22 J 8.7 15.3 24.5 6.9 10.5 13.4 17.2 20.2 28.7 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 Transaction category, or sector 1974 1975 1976 1977 HI H2 HI H2 HI H2 1 Total funds advanced in credit markets to nonfinancial sectors........................................ 185.8 195.5 257.8 327.4 170.3 220.8 241.1 274.4 297.3 357.5 1 By public agencies and foreign: 52.7 44.3 54.6 84.6 55.0 33.6 53.2 56.0 73.6 95.5 2 11.9 22.5 26.8 39.7 33.4 11.6 27.1 26.5 30.6 48.8 3 4 Residential mortgages....................................... 14.7 16.2 12.8 20.4 16.9 15.5 12.1 13.5 20.1 20.8 4 6.7 -4.0 -2.0 4.3 -6.6 -1.3 -1.6 -2.4 3.5 5.2 5 6 Other loans and securities................................ 19.5 9.5 16.9 20.2 11.3 7.8 15.6 18.3 19.5 20.8 6 Totals advanced, by sector 7 U.S. Govt............................................................. 9.8 15.1 8.9 10.9 15.9 14.3 6.4 11.4 6.0 15.8 7 25.6 14.5 20.6 26.8 16.5 12.6 20.7 20.6 27.5 26.1 8 9 Monetary authorities........................................ 6.2 8.5 9.8 7.1 7.6 9.5 14.5 5.2 11.6 2.7 9 10 Foreign.................................................................. 11.2 6.1 15.2 39.7 15.0 -2.7 11.6 18.8 28.5 50.9 10 11 Agency borrowing not included in line 1......... 23.1 13.5 18.6 26.1 14.5 12.6 18.6 18.6 25.7 26.6 11 Private domestic funds advanced 12 Total net advances................................................... 156.1 164.8 221.8 269.0 129.8 199.7 206.6 237.0 249.4 288.6 12 22.4 75.7 61.3 44.5 59.7 91.6 64.8 57.8 37.9 51.2 13 14 State and local obligations.............................. 17.1 13.6 15.1 28.1 12.3 14.9 14.7 15.5 28.3 27.9 14 20.9 32.8 30.3 19.2 38.8 26.8 26.8 33.9 15.6 22.7 15 26.9 23.2 52.4 76.5 16.7 29.6 45.5 59.2 70.7 82.4 16 17 Other mortgages and loans............................. 75.4 15.6 60.8 105.0 -4.3 35.5 53.2 68.3 100.3 109.7 17 18 Less: FHLB advances...................................... 6.7 -4.0 -2.0 4.3 -6.6 -1.3 -1.6 -2.4 3.5 5.2 18 Private financial intermediation 19 Credit market funds advanced by private 126.3 119.9 187.2 242.7 99.8 140.0 167.6 206.8 235.5 250.0 19 20 Commercial banking......................................... 64.6 27.6 58.0 79.8 14.4 40.7 44.5 71.5 80.6 79.1 20 21 Savings institutions............................................ 26.9 52.0 71.7 86.4 48.5 55.4 71.8 71.7 84.7 88.0 21 22 Insurance and pension funds.......................... 30.0 41.5 47.6 61.1 38.3 44.7 47.8 47.3 58.2 63.9 22 23 Other finance....................................................... 4.7 -1.1 9.9 15.5 -1.4 -.7 3.4 16.3 11.9 19.0 23 126.3 119.9 187.2 242.7 99.8 140.0 167.6 206.8 235.5 250.0 24 69.4 90.9 122.8 135.4 90.3 91.5 106.1 139.5 122.9 147.8 25 26 Credit market borrowing................................. 16.0 .4 9.2 36.6 .6 .3 9.8 8.6 37.7 35.6 26 40.9 28.6 55.1 70.7 9.0 48.2 51.7 58.7 74.9 66.6 27 28 Foreign funds................................................. 14.5 -.4 3.1 1.3 -5.6 4.8 -2.6 8.8 -2.9 5.5 28 29 Treasury balances.......................................... -5.1 -1.7 -.1 4.2 -3.5 .1 2.9 -3.1 -1.1 9.5 29 30 Insurance and pension reserves.................. 26.0 29.0 35.8 48.6 26.4 31.5 35.1 36.5 47.2 50.0 30 5.4 1.7 16.4 16.6 -8.3 11.7 16.2 16.6 31.7 1.5 31 Private domestic nonfinancial investors 45.9 45.3 43.8 62.9 30.6 60.0 48.8 38.8 51.6 74.2 32 18.2 22.2 19.4 23.8 6.0 38.4 22.6 16.1 11.3 36.3 33 10.0 6.3 4.7 5.6 7.2 5.5 3.9 5.5 7.0 4.3 34 35 Corporate and foreign bonds.......................... 4.7 8.2 4.0 .2 10.8 5.6 4.9 3.1 -1.9 2.2 35 36 Commercial paper............................................. 4.8 3.1 4.0 16.6 1.5 4.7 6.7 1.3 18.8 14.4 36 37 Other..................................................................... 8.2 5.5 11.8 16.6 5.1 6.0 10.8 12.8 16.4 16.9 37 75.7 97.1 130.1 143.6 96.0 98.2 111.0 149.3 127.2 160.0 38 66.1 84.8 113.0 120.9 73.0 96.5 98.3 127.6 106.7 135.1 39 40 Large negotiable CD’s.................................. 18.8 -14.0 -14.2 10.8 -27.8 -.2 -18.0 -10.4 -2.7 24.2 40 41 Other at commercial banks......................... 26.1 39.4 58.1 40.4 39.3 39.4 50.2 66.0 41.9 38.9 41 42 At savings institutions.................................. 21.8 59.4 69.1 69.7 61.5 57.4 66.1 72.1 67.4 72.0 42 8.9 12.3 17.2 22.7 23.0 1.7 12.7 21.6 20.5 25.0 43 44 Demand deposits........................................... 2.6 6.1 9.9 14.5 17.3 -5.0 7.8 11.9 16.2 12.8 44 6.3 6.2 7.3 8.2 5.7 6.7 4.9 9.8 4.3 12.2 45 46 Total of credit market instruments, deposits and currency.................................................... 121.5 142.4 174.0 206.5 126.6 158.2 159.8 188.1 178.8 234.2 46 47 Public support rate (in per cent).................... 28.4 22.7 21.2 25.8 32.3 15.2 22.1 20.4 24.8 26.7 47 48 Private financial intermediation (in per cent) 80.9 72.8 84.4 90.2 76.9 70.1 81.1 87.3 94.4 86.6 48 49 Total foreign funds............................................ 25.7 5.8 18.3 41.0 9.4 2.1 9.0 27.6 25.6 56.4 49 Memo: Corporate equities not included above 4.1 10.0 11.2 8.4 10.5 9.5 12.6 9.8 8.5 8.2 50 51 Mutual fund shares........................................... -.7 -.1 -1.0 -1.5 .7 -.9 -2.5 .5 -1.4 -1.6 51 4.8 10.2 12.2 9.9 9.8 10.5 15.1 9.3 10.0 9.8 52 53 Acquisitions by financial institutions................. 5.8 9.4 12.3 6.7 10.7 8.1 12.6 12.0 4.4 9.1 53 -1.6 .6 -1.1 1.6 -.2 1.4 * -2.2 4.1 -.9 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 □ May 1978 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures 1967 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1977 1978 Measure 1975 1976 Sept. Oct. Nov. Dec. Jan. Feb. Apr.6 1 Industrial production.................................. 117.8 129.8 137.0 138.5 138.9 139.3 139.7 138.8 139.2 141.0 142.5 Market groupings: 2 Products, total..................................... 119.3 129.3 137.1 138.8 138.9 139.5 140.3 138.5 139.6 141.5 142.6 3 Final, total...................................... 118.2 127.2 134.9 136.8 136.5 137.0 137.6 134.9 136.4 138.8 140.0 4 Consumer goods........................ 124.0 136.2 143.4 144.9 144.9 145.2 145.8 141.8 143.7 146.1 147.3 5 Equipment................................... 110.2 114.6 123.2 125.6 125.0 125.8 126.2 125.4 126.3 128.8 129.9 6 Intermediate.................................... 123.1 137.2 145.1 146.5 147.8 148.4 150.4 151.6 151.5 151.8 152.6 7 Materials.............................................. 115.5 130.6 136.9 137.9 138.9 139.0 138.8 139.2 138.6 140.1 142.4 Industry groupings: 8 Manufacturing.................................... 116.3 129.5 137. 1 139.0 139.4 139.9 140.5 138.7 139.3 141.3 142.7 Capacity utilization (per cent)1 in— 9 Manufacturing........................................ 73.6 80.2 82.4 82.9 82.9 82.9 83.0 81.7 81.8 82.7 84.6 10 Industrial materials industries............. 73.6 80.4 81.9 82.0 82.4 82.3 81.9 81.9 81.4 82.0 83.2 11 Construction contracts2............................ 162.3 190.2 253.0 279.0 244.0 258.0 299.0 270.0 266.0 254.0 12 Nonagricultural employment, total3........ 117.0 120.6 124.7 125.7 125.9 126.4 126.7 127.1 127.6 128.4 129.3 13 Goods-producing, total......................... 97.1 100.3 104.1 104.7 105.0 105.4 105.4 105.7 106.3 107.1 108.9 14 Manufacturing, total......................... 94.3 97.5 100.6 100.8 101.1 101.4 102.2 102.7 103.2 103.7 104.0 15 Manufacturing, production-worker 91.3 95.2 98.3 98.5 98.8 99.1 100.0 100.7 101.3 101.7 101.9 16 Service-producing................................... 127.8 131.7 136.0 137.1 137.3 137.9 138.3 138.8 139.3 140.0 140.5 17 Personal income, total4.............................. 200.0 220.7 245.1 249.2 252.8 255.7 259.0 259.4 260.9 263.7 18 Wages and salary disbursements........ 188.5 208.6 231.5 235.2 239. 1 240.9 242.2 244.7 246.8 250.5 19 Manufacturing........................................ 157.3 177.7 199.3 202.2 205.3 206.9 209.7 211.3 214.5 219.4 20 Disposable personal income..................... 199.2 217.8 239.0 245.3 21 Retail sales 5................................................. 184.6 203.5 224.4 225.4 232.2 235.3 237.1 228.8 235.6 238.2 242.9 Prices:6 22 Consumer7.............................................. 161.2 170.5 181.6 184.0 184.5 185.4 186.1 187.2 188.4 189.8 23 Wholesale................................................. 174.9 183.0 194.2 195.8 196.3 197.0 198.2 199.9 202.0 203.8 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 7 Beginning Jan. 1978, based on new index for all urban consumers. Informations Systems Company, F. W. Dodge Division. 3 Based on data in Employment and Earnings (U.S. Dept, of Labor). Note.—Basic data (not index numbers) for series mentioned in notes Series covers employees only, excluding personnel in the Armed Forces. 3, 4, and 5, and indexes for series mentioned in notes 2 and 6 may also be 4 Based on data in Survey of Current Business (U.S. Dept, of Com­ found in the Survey of Current Business (U.S. Dept, of Commerce). merce). Series for disposable income is quarterly. Figures for industrial production for the last 2 months are preliminary 5 Based on Bureau of Census data published in Survey of Current and estimated, respectively. Business (U.S. Dept, of Commerce). 2.11 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION Seasonally adjusted 1977 1978 1977 1978 1977 1978 Series Q2 Q3 Q4 Qlr Q2 Q3 Q4 Ql Q2 Q3 Q4 Qlr Output (1967 = 100) Capacity (per cent of 1967 output) Utilization rate (per cent) 1 Manufacturing................................................... 136.9 138.7 139.9 139.8 165.6 167.1 168.7 170.3 82.7 83.0 82.9 82.1 2 Primary processing...................................... 146.3 147.3 148.2 148.1 171.8 173.5 175.1 176.8 85.1 84.9 84.6 83.8 3 Advanced processing.................................. 132.0 129.3 135.6 135.4 162.2 163.8 165.3 166.9 81.4 81.9 82.0 81.1 137.7 138.1 138.9 139.3 166.6 167.8 168.9 170.4 82.6 82.3 82.2 81.7 5 Durable goods.............................................. 135.1 136.0 137.7 138.0 170.3 171.6 172.8 174.0 79.4 79.2 79.6 79.3 6 Basic metal............................................... 116.4 109.4 109.4 110.7 145.1 145.3 145.5 145.8 80.2 75.3 75.2 75.9 7 Nondurable goods...................................... 154.6 154.4 155.0 157.6 177.2 178.8 180.4 182.3 87.2 86.3 85.9 86.5 8 Textile, paper, and chemical................ 159.9 159.2 159.5 162.5 185.4 187.1 188.9 190.8 86.3 85.1 84.5 85.2 9 Textile.................................................... 110.9 112.3 117.9 115.5 141.9 142.5 143.0 143.5 78.1 78.8 82.4 80.5 10 Paper...................................................... 134.3 135.1 132.3 137.1 150.1 151.3 152.5 153.6 89.5 89.3 86.7 89.3 11 Chemical............................................... 191.8 189.5 188.9 193.7 218.7 221.2 223.6 226.6 87.7 85.7 84.5 85.5 12 Energy............................................................ 122.6 123.4 121.9 119.9 144.7 145.2 145.7 147.2 84.8 85.0 83.7 81.4 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 1978 Category 1975 1976 1977 Oct. Nov. Dec. Jan. Feb.' Mar.' Apr.P Household survey data 1 Noninstitutional population1................ 153,449 156,048 158,559 159,334 159,522 159,736 159,937 160,128 160,313 160,504 2 Labor force (including Armed 94,793 96,917 99,534 100,205 101,009 101,048 101,228 101,217 101,536 101,902 92,613 94,773 97,401 98,071 98,877 98,919 99,107 99,093 99,414 99,784 Employment: 4 Nonagricultural industries2........ 81,403 84,188 87,302 88,140 88,857 89,286 89,527 89,761 89,956 90,526 5 Agriculture...................................... 3,380 3,297 3,244 3,243 3,357 3,323 3,354 3,242 3,310 3,526 Unemployment: 7,830 7,288 6,855 6,688 6,663 6,310 6,226 6,090 6,148 5,983 7 Rate (per cent of civilian labor force)........................................ 8.5 7.7 7.0 6.8 6.7 6.4 6.3 6.1 6.2 6.0 8 Not in labor force.................................. 58,655 59,130 59,025 59,130 58,512 58,688 58,709 58,911 58,776 58,602 Establishment survey data 9 Nonagricultural payroll employment3 17,051 79,443 82,142 82,902 83,245 83,429 83,719 84,046 84,537 85,156 10 Manufacturing.................................... 18,347 18,956 19,555 19,666 19,715 19,868 19,972 20,075 20,164 20,224 11 Mining................................................. 745 783 831 859 863 711 705 24,733 24,933 25,334 12 3,512 3,594 3,845 3,911 3,950 3,947 3,916 711 725 893 13 Transportation and public utilities. 4,498 4,509 4,589 4,610 4,634 4,652 4,628 4,651 4,674 4,700 14 Trade.................................................... 17,000 17,694 18,291 18,414 18,512 18,610 18,744 18,744 18,843 18,902 15 Finance................................................ 4,223 4,316 4,508 4,572 4,597 4,611 4,630 4,647 4,672 4,696 16 Service.................................................. 14,006 14,644 15,333 15,533 15,608 15,663 15,693 15,791 15,882 15,953 17 Government........................................ 14,720 14,948 15,190 15,337 15,366 15,367 15,431 15,480 15,533 15,571 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 □ May 1978 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value Monthly data are seasonally adjusted. 1967 1977 1978 Grouping pro­ 1977 por­ aver­ tion age Feb. Mar. Apr. Sept. Oct. Nov. Dec. Jan.r Feb. Mar.p Apr.e Index (1967 == 100) MAJOR MARKET 1Total index.................................................................... 100.00 137.1 133.2 135.3 136.1 138.5 138.9 139.3 139.7 138.8 139.2 141.0 142.5 60.71 137.1 133.6 135.1 135.8 138.8 138.9 139.5 140.3 138.5 139.6 141.5 142.6 3 Final products........................................................... 47.82 134.9 131.6 133.3 134.1 136.8 136.5 137.0 137.6 134.9 136.4 138.8 140.0 4 Consumer goods................................................. 27.68 143.4 140.5 142.9 142.9 144.9 144.9 145.2 145.8 141.8 143.7 146.1 147.3 5 Equipment............................................................ 20.14 123.2 119.2 120.0 122.1 125.6 125.0 125.8 126.2 125.4 126.3 128.8 129.9 6 Intermediate products............................................ 12.89 145.1 141.6 141.8 142.3 146.5 147.8 148.4 150.4 151.6 151.5 151.8 152.6 39.29 136.9 132.7 135.5 136.5 137.9 138.9 139.0 138.8 139.2 138.6 140.1 142.4 Consumer goods 8 Durable consumer goods........................................ 7.89 153.1 146.1 152.4 151.5 155.6 156.8 155.2 155.8 146.5 151.3 157.5 161.1 9 Automotive products......................................... 2.83 174.2 161.7 178.3 173.9 177.0 179.4 173.6 172.4 157.5 162.7 176.2 185.1 10 Autos and utility vehicles............................. 2.03 169.2 152.7 176.1 171.2 172.6 176.1 167.6 165.5 145.5 153.9 171.0 183.5 11 Autos............................................................. 1.90 148.4 132.8 155.8 150.6 151.6 154.3 147.5 143.6 127.4 131.5 149.7 159.1 12 Auto parts and allied goods........................ .80 186.8 184.3 184.1 181.3 188.1 187.6 188.7 190.4 187.8 185.3 189.1 189.0 13 5.06 141.3 137.3 137.9 138.8 143.6 144.2 145.0 146.6 140.3 144.7 147.2 147.7 14 1.40 127.3 118.5 124.1 126.4 129.4 128.6 131.4 132.8 116.1 133.3 135.4 136.1 15 Appliances and TV.................................... 1.33 no, 5 121.1 126.5 129.9 134.1 131.6 133.0 134.6 117.4 135.7 138.0 16 Carpeting and furniture................................ 1.07 15? 2 146.0 144.6 145.0 159.0 160.5 i6o!o 161.5 159.1 160.2 161 ^5 17 Misc. home goods.......................................... 2.59 144.3 144.0 142.7 143.0 144.9 145.8 146 *.3 147.7 145.9 144! 6 147! 8 148.5 18 Nondurable consumer goods.................................. 19.79 139.6 138.3 139.1 139.4 140.7 140.1 141.2 141.8 139.9 140.6 141.5 141.8 19 Clothing................................................................ 4.29 125.2 123.6 123.9 124.4 128.3 128.0 126.4 126.9 118.3 121.9 20 Consumer staples................................................ 15.50 143.6 142.2 143.3 143.6 144.1 143.5 145.3 145.9 145.9 145.7 i46! 3 *i46!5 ?1 Consumer foods and tobacco..................... 8.33 135.5 133.3 136.0 136.1 137.1 135.2 136.7 137.9 136.5 138.1 139.1 22 Nonfood staples.............................................. 7.17 152.9 152.6 151.8 152.5 152.4 153.4 155.1 155.2 156.6 154.6 154.6 155.1 23 Consumer chemical products................... 2.63 180.5 175.7 175.9 178.1 182.5 183.7 186.9 186.5 187.4 184.3 184.9 24 Consumer paper products........................ 1.92 117.1 113.3 117.4 116.6 116.4 117.6 118.5 119.8 121.4 118! 9 X19 ] 7 25 Consumer energy products....................... 2.62 151.4 158.3 152.8 153.0 148.6 149.1 149.9 149.7 1515 15ll2 149^8 26 Residential utilities................................ 1.45 159.0 161.8 157.4 158.5 153.8 155.8 155.6 158.5 161.1 Equipment 27 Business equipment.................................................. 12.63 149.2 143.5 144.8 147.1 152.1 152.6 153.5 154.0 152.6 154.2 157.4 158.9 28 Industrial equipment.......................................... 6.77 138.5 133.2 134.4 136.3 141.4 141.8 142.6 143.0 144.3 144.8 146.8 148.0 29 Building and mining equipment.................. 1.44 202.5 192.9 197.9 200.5 204.5 205.7 206.7 208.3 211.1 214.9 221.2 224.6 30 Manufacturing equipment............................ 3.85 113.9 108.5 109.0 112.0 117.6 118.5 118.7 118.2 118.8 118.0 118.5 119.0 31 Power equipment............................................ 1.47 140.2 139.3 138.3 136.7 141.4 139.8 142.1 143.7 146.1 145.7 148.0 148.9 32 Commercial transit, farm equipment............. 5.86 161.6 155.3 156.9 159.5 164.4 165.1 165.9 166.9 162.2 165.3 169.8 171.5 33 Commerical equipment................................. 3.26 191.6 185.6 186.1 189.7 193.7 195.4 197.4 198.8 198.5 200.9 203.3 205.1 34 Transit equipment........................................... 1.93 117.8 108.7 113.0 115.2 125.1 122.3 118.9 121.1 111.1 115.8 124.4 126.5 35 Farm equipment............................................. .67 142.3 142.5 141.8 141.0 134.9 142.1 147.8 144.5 131.4 134.4 137.0 36 Defense and space equipment................................ 7.51 79.6 78.5 78.5 79.9 80.9 78.9 79.3 79.5 79.7 79.1 80.6 81.2 Intermediate products 37 6.42 140.8 135.6 136.4 137.2 143.2 144.9 146.5 148.3 149.2 148.7 149.3 150.1 38 Business supplies.................................................... 6.47 149.5 147.6 147.3 147.5 149.7 150.5 150.1 152.6 153.8 154.2 154.2 39 Commercial energy products........................... 1.14 164.6 164.9 163.6 164.6 162.7 163.0 160.9 165.6 165.5 164.9 164.5 Materials 40 Durable goods materials......................................... 20.35 134.5 128.4 131.9 133.8 135.7 137.1 137.2 138.7 138.2 137.0 138.7 141.1 41 4.58 132.0 124.1 126.8 129.4 135.8 135.4 136.5 135.7 133.0 131.0 133.9 136.5 42 5.44 143.1 137.3 137.8 140.7 146.8 147.6 147.2 149.2 148.7 146.6 151.0 152.3 43 Durable materials n.e.c...................................... 10.34 131.1 125.5 131.1 132.2 129.8 132.4 132.3 134.3 134.9 134.7 134.6 137.4 44 Basic metal materials..................................... 5.57 110.9 105.5 113.6 115.0 106.8 110.0 107.9 110.3 110.2 111.0 110.9 45 Nondurable goods materials.................................. 10.47 153.5 150.4 153.3 153.7 153.9 154.4 155.4 155.3 155.0 158.5 159.3 159.5 46 Textile, paper, and chem. mat......................... 7.62 158.3 153.9 158.4 159.0 159.0 160.0 159.3 159.3 160.7 162.9 164.0 163.9 47 Textile materials.............................................. 1.85 113.0 109.8 113.2 111.8 114.5 118.5 117.8 117.3 114.9 115.8 115.7 48 Paper materials............................................... 1.62 133.5 133.5 133.9 132.2 135.2 134.4 132.2 130.2 135.0 137.8 138.5 49 Chemical materials......................................... 4.15 188.2 181.6 188.0 190.6 188.2 188.5 188.6 189.5 191.4 193.9 195.8 50 Containers, nondurable..................................... 1.70 150.9 150.2 148.9 148.5 151.2 148.9 156.7 154.4 150.4 158.7 158.2 51 Nondurable materials n.e.c.............................. 1.14 125.3 126.8 126.1 125.6 124.1 125.4 128.5 129.9 123.6 128.9 129.3 52 Energy materials..................................................... 8.48 122.4 120.8 121.8 121.3 123.5 124.0 123.0 118.7 122.2 117.7 119.7 124.3 53 Primary energy.................................................... 4.65 107.3 103.1 107.0 106.0 110.0 112.2 111.6 103.0 105.2 101.6 107.4 54 Converted fuel materials................................... 3.82 140.7 142.4 139.9 140.1 140.0 138.4 136.9 137.7 142.8 137.3 134.7 Supplementary groups 55 Home goods and clothing..................................... 9.35 133.9 131.0 131.5 132.2 136.5 136.8 136.5 137.5 130.2 134.3 136.8 137.2 56 Energy, total............................................................. 12.23 132.5 132.9 132.3 132.1 132.5 133.0 132.3 129.7 132.5 129.3 130.4 133.5 57 3.76 155.4 160.3 156.0 156.5 153.0 153.3 153.2 154.5 155.8 155.3 154.2 58 8.48 122.4 120.8 121.8 121.3 123.5 124.0 123.0 118.7 122.2 117.7 119.7 124.3 For Note see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Output A49 2.13 Continued 1967 1977 1978 Grouping SIC pro­ 1977 code por­ aver­ tion age Feb. Mar. Apr. Sept. Oct. Nov. Dec. Jan.r Feb. Mar.p Apr.* Index (1967 = 100) MAJOR INDUSTRY 12.05 136.2 137.1 136.6 135.7 135.1 135.8 135.5 133.9 137.4 136.9 138.6 141.6 9 6.36 117.8 116.3 120.6 119.2 118.0 119.6 118.8 113.4 115.0 114.9 121.0 127.3 5.69 156.5 160.3 154.8 154.0 154.1 154.0 154.2 156.7 162.3 161.3 158.1 157.6 4 3.88 175.5 179.1 175.8 170.4 173.7 173.6 173.3 175.9 183.6 87.95 137.1 132.6 135.1 135.8 139.0 139.4 139.9 140.5 138.7 139.3 141.3 142.7 6 35.97 148.1 145 3 147.0 147.0 149.5 149.6 150.1 150.9 149.8 150.5 151.5 152 0 7 51.98 129.5 124.0 126.8 128.0 131.7 132.4 132.7 133.4 131.1 131.6 134.3 136^ Mining 8 10 .51 105.4 128.5 133.8 126.1 71.4 80.0 84.8 104.3 121.4 119.9 127.9 9 Coal.............................................................. 11,12 .69 118.0 100.8 124.1 118.4 133.0 141.4 140.6 74.6 54.8 56.5 78.6 129.0 10 Oil and gas extraction.............................. 13 4.40 118.0 115.8 117.5 117.5 119.6 119.4 117.8 118.4 121.1 121.1 125.3 126.6 11 Stone and earth minerals........................ 14 .75 124.9 124.9 126.1 124.0 126.7 128.1 127.2 126.5 130.0 128.9 127.8 Nondurable manufactures 12 Foods........................................................... 20 8.75 137.9 136.4 138.7 138.0 138.3 137.3 139.4 140.4 139.3 140.6 141.1 13 Tobacco products............................... 21 .67 114.3 116.8 104.3 112.1 113.5 113.8 117.5 120.6 113.4 118.7 14 Textile mill products................................ 22 2.68 137.1 132.3 134.4 134.6 140.7 142.4 141.6 143.7 137.1 137.0 137.8 15 Apparel products...................................... 23 3.31 124.2 124.4 122.2 121.4 127.7 129.0 125.1 125.8 118.6 121.1 16 Paper and products.................................. 26 3.21 137.4 136.5 135.5 136.3 139.1 137.9 137.8 138.6 139.9 143.7 144.6 145.3 17 Printing and publishing........................... 27 4.72 124.7 122.4 124.8 123.4 124.2 125.7 126.2 127.5 129.9 127.8 128.3 129.1 18 Chemicals and products.......................... 28 7.74 180.7 174.9 180.0 180.6 181.3 182.3 183.1 183 0 184 4 183.5 184.5 19 Petroleum products.................................. 29 1.79 141.0 145.2 143.3 143.4 141.9 141.4 140.5 139.3 139.7 139.0 140.4 141.4 20 Rubber & plastic products.................... 30 2.24 232.2 220.3 225.6 226.0 239.5 236.3 238.5 240.1 238 7 240.0 243.5 21 Leather and products.............................. 31 .86 75.3 75.0 73.8 74.7 74.0 77.0 78.1 77.3 74.5 73.0 75.2 Durable manufactures 22 Ordnance, pvt. & govt............................. 19,91 3.64 73.9 72.6 72.8 74.6 75.1 74.4 74.1 73.8 72.3 71.2 72.5 73.0 23 Lumber and products.............................. 24 1.64 133.4 132.2 132.1 130.6 137.1 135.7 137.5 138.1 138.5 135.5 137.3 24 Furniture and fixtures.............................. 25 1.37 140.9 137.1 135.1 135.4 145.6 146.6 146.0 146.6 146.4 150.6 151.0 25 Clay, glass, stone products..................... 32 2.74 146.1 139.0 143.7 145.0 145.5 148.0 152.8 152.1 152.2 152.5 152.8 26 Primary metals.......................................... 33 6.57 110.2 100.2 108.3 112.2 109.0 113.5 111.2 111.0 107.4 106.2 106.6 110.6 27 Iron and steel........................................ 331,2 4.21 103.4 91.3 97.9 103.9 104.6 107.7 104.3 103.8 99.5 96.3 96.8 28 Fabricated metal products................... 34 5.93 130.9 125.8 127.5 127.6 133.6 133.8 135.8 136.4 136.9 136.7 138.3 * i 39!5 29 Nonelectrical machinery.......................... 35 9.15 144.8 139.8 139.8 142.9 147.4 148.9 149.7 151.7 150.1 150.2 151.5 152.8 30 Electrical machinery................................. 36 8.05 141.9 137.6 137.6 139.6 144.6 144.2 146.0 147.3 144.0 146.4 149.2 150.4 31 Transportation equipment...................... 37 9.27 121.1 120.5 120.5 119.8 125.5 124.3 122.0 122.2 116.2 118.4 127.5 130.7 32 Motor vehicles & parts....................... 371 4.50 159.7 161.2 161.2 158.1 165.6 168.4 163.0 161.8 146.6 153.0 167.0 173.2 33 Aerospace & misc. tr. eq.................... 372-9 4.77 84.7 82.3 82.3 83.8 87.7 82.8 83.3 84.9 87.6 85.8 90.5 90.7 34 Instruments................................................. 38 2.11 159.1 157.0 156.9 157.8 160.3 162.2 163.1 164.7 163.4 163.5 166.5 167.3 35 Miscellaneous mfrs................................... 39 1.51 149.1 147.9 147.4 145.6 150.7 151.0 151.8 152.5 153.0 151.8 153.5 154.4 Gross value (billions of 1972 dollars, annual rates) MAJOR MARKET Products, tnfnl............................................... 1507.4 583.9 569.4 578.2 578.3 590.1 591.3 591.3 594.7 582.0 590.4 601.2 605.9 37 Final products............................................. 1390.9 452.1 441.1 449.0 448.5 456.8 457.8 457.3 458.7 445.1 453.7 463.4 467.6 38 Consumer goods................................... 1277.5 317.5 312.2 316.8 316.1 319.1 319.5 320.0 320.4 311.2 318.1 321.9 325.4 39 Equipment.............................................. 1113.4 134.6 128.9 132.1 132.6 137.6 138.1 137.3 138.2 133.9 135.8 141.4 142.0 40 Intermediate products.............................. 1116.6 131.9 128.4 129.1 130.1 133.5 133.8 134.1 135.9 136.7 136.9 137.8 138.8 1 1972 dollars. separately. For description and historical data, see Industrial Production— 1976 Revision (Board of Governors of the Federal Reserve System: Note.—Published groupings include some series and subtotals not shown Washington, D.C.), Dec. 1977. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics □ May 1978 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates. Exceptions noted. 1977 1978 Item 1975 1976 1977 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized............ 927 1,296 18,133 1,695 1,850 1,893 1,811 1,496 ' 1,511 1,715 2 1-family.......................... 669 894 12,265 1,135 1,216 1,257 1,210 1,027 '954 1,075 3 2-or-more-family.......... 278 402 5,861 560 634 636 601 469 '557 640 4 Started. 1,160 1,540 1,986 2,012 2,139 2,096 2,203 ' 1,548 ' 1,574 2,074 1-famil y 892 1,163 1,451 1,508 1,532 1,544 1,574 '1,156 '1,100 1,439 2-or-more-family. 268 377 535 504 607 552 629 392 '474 635 7 Under construction, end of period 1 1,003 1,147 1,442 1,149 1,189 1,211 r1,249 ' 1,263 1,266 8 1-family......................................... 531 655 829 708 729 746 r770 '786 790 9 2-or-more-family......................... 472 492 613 442 460 466 '479 '478 476 10 Completed.......................................... 1,297 1,362 1,652 1,875 1,665 1,769 r1,641 '/,759 1,677 11 1-family......................................... 866 1,026 1,254 1,458 1,249 1,280 '1,299 '1,296 1,218 12 2-or-more-family......................... 430 336 398 417 416 489 342 '463 459 13 Mobile homes shipped................... 213 250 613 300 319 318 324 322 269 276 Merchant builder activity in 1-family units: 14 Number sold.................................... 544 639 819 845 870 819 '857 '806 '754 794 15 Number for sale, end of period i.. 383 433 407 389 398 401 403 '404 '407 406 Price (thous. of dollars)2 Median: 16 Units sold.................................. 39.3 44.2 48.9 48.5 51.4 51.8 '52.9 '51.1 '53.4 53.7 17 Units for sale........................... 38.9 41.6 48.2 45.9 46.7 46.7 47.7 48.2 Average: 18 Units sold................................. 42.5 48.1 54.4 53.9 57.2 57.8 57.6 58.5 '59.4 60.3 EXISTING UNITS (1-family) 19 Number sold.............................. 2,452 3,002 3,572 3,880 3,930 4,160 4,140 3,780 3,460 3,770 Price of units sold (thous. of dollars):2 20 Median.................................... 35.3 38.1 42.9 43.8 44.0 44.5 44.2 45.5 46.3 46.5 21 Average.................................. 39.0 42.2 47.9 47.9 48.2 48.5 48.3 50.3 51.3 51.1 Value of new construction 4 (millions of dollars) CONSTRUCTION 22 Total put in place...................... 134,293 147,481 170,685 175,065 174,409 173,104 176,734 171,249 178,204 184,478 23 Private......................................... 93,624 109,499 133,652 135,812 136,710 137,464 140,468 137,312 143,600 148,860 24 Residential............................. 46,472 60,519 81,067 81,677 83,022 84,005 87,246 81,111 86,922 89,954 25 Nonresidential, total............ 47,152 48,980 52,585 54,135 53,688 53,459 53,222 56,201 56,678 58,906 Buildings: 26 Industrial........................ 8,017 7,182 7,182 7,484 7,579 7,716 7,132 7,484 7,563 9,094 27 Commercial................... 12,804 12,757 14,604 16,054 15,846 15,404 14,627 14,986 15,043 15,940 28 Other............................... 5,585 6,155 6,226 6,370 6,337 6,437 6,200 6,065 5,806 6,316 29 Public utilities and other. 20,746 22,886 24,573 24,227 23,926 23,902 25,263 27,666 28,266 27,556 30 Public.......................................... 40,669 37,982 37,033 39,253 37,699 35,641 36,266 33,937 34,603 35,618 31 Military................................... 1,392 1,508 1,478 1,493 1,381 1,286 1,370 1,410 1,474 1,424 32 Highway.................................. 10,861 9,756 9,170 8,915 9,507 8,281 7,877 7,006 33 Conservation and developm 3,256 3,722 3,765 4,910 3,141 3,464 3,851 3,900 34 Other 3.................................. 25,160 22,996 22,620 23,925 23,670 22,610 23,168 21,621 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 Beginning Jan. 1977 Highway imputations are included in Other. factured Housing Institute and seasonally adjusted by the Census Bureau, 4 Value of new construction data in recent periods may not be strictly and (b) sales and prices of existing units, which are published by the comparable with data in prior periods due to changes by the Bureau of National Association of Realtors. All back and current figures are avail­ the Census in its estimating techniques. For a description of these changes able from originating agency. Permit authorizations are for 14,000 see Construction Reports (C-30-76-5), issued by the Bureau in July 1976. 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 1977 r 1978 1977 1978 Mar. 1977 1978 1978 Mar. Mar. (1967 June Sept. Dec. Mar. Nov. Dec. Jan. Feb. Mar. = 100)3 Consumer prices4 6.4 6.5 7.8 4.5 4.9 9.3 .4 .4 .8 .6 .8 189.8 5.9 5.7 6.7 2.5 4.9 9.3 .5 .5 .9 .5 .8 181.6 5.5 8.3 11.5 1.9 4.2 16.4 .5 .4 1.3 1.2 1.3 204.2 4 Commodities less food............................... 6.1 4.6 4.2 2.7 5.4 6.1 .5 .5 .7 .2 .6 170.0 6.9 4.7 3.5 1.5 5.2 8.7 .4 .5 1.0 .7 .5 168.3 6 Nondurable.............................................. 5.4 4.1 4.7 3.4 5.1 3.1 .5 .3 .4 -.3 .6 170.7 7.2 7.8 9.4 7.6 4.9 9.1 .4 .4 .6 .7 .8 204.9 8 Rent................................................................ 5.7 6.4 6.2 6.7 6.3 6.2 .6 .5 .6 .4 .6 160.5 9 Services less rent.......................................... 7.4 8.1 9.9 8.0 4.8 9.6 .4 .4 .6 .8 .9 213.0 Other groupings: 10 All items less food....................................... 6.6 6.2 6.8 5.3 5.0 8.1 .4 .4 .8 .5 .7 185.9 11 All items less food and energy................. 6.3 6.3 6.9 5.1 5.3 8.0 .4 .5 .9 .4 .7 183.4 12 Homeownership........................................... 5.6 9.5 10.4 8.5 7.1 12.2 .7 .7 1.0 .7 1.2 218.3 Wholesale prices 13 All commodities................................................ 6.8 6.1 4.0 2.1 6.7 12.0 r.8 .4 .9 1.0 1.0 203.8 14 Farm products, and processed foods and feeds........................................................... 6.1 4.9 -3.1 -14.8 14.5 28.8 2.3 .3 1.1 2.5 2.9 200.3 15 Farm products............................................. 8.6 1.4 -20.3 -21.3 17.9 44.0 r3.3 -.3 1.7 2.8 4.1 205.3 16 Processed foods and feeds......................... 4.6 7.0 8.2 -10.9 12.5 21.1 1.8 .6 .8 2.3 1.7 196.8 7.1 6.5 6.4 6.7 4.9 8.0 .3 .5 .7 .7 .5 204.1 Materials, supplies, and components of which: 18 Crude nonfood materials1..................... 19.8 4.9 -8.1 -5.3 18.5 17.3 r2.3 1.8 '1.5 1.0 1.5 275.9 19 Intermediate materials 2......................... 6.8 6.4 5.5 7.1 4.0 9.2 r.l .4 .9 .8 .5 211.5 Finished goods, excluding foods: 6.2 5.3 7.8 4.0 4.4 5.3 .3 .3 .5 .3 .5 178.2 21 Durable................................................. 4.6 6.1 6.9 5.6 5.3 6.8 .3 .4 .7 .3 .6 158.9 22 Nondurable.......................................... 7.3 4.8 7.7 3.0 4.3 4.1 r.3 .4 .4 .3 .3 191.0 23 Producer.................................................... 5.9 7.6 6.8 6.0 10.5 7.3 .5 .6 .5 .7 .6 194.5 Memo: 24 Consumer foods............................................... 4.5 7.2 4.3 -2.3 7.4 21.0 1.2 .5 1.1 2.9 .8 200.1 1 Excludes crude foodstuffs and feedstuffs. Source.—Bureau of Labor Statistics. 2 Excludes intermediate materials for food manufacturing and manu­ factured animal feeds. 3 Not seasonally adjusted. A Note.—The index level reported for Jan. 1978 (1967 = 100) for 4 Beginning Jan. 1978 figures for consumer prices are those for all urban all commodities (line 13) in the March Bulletin was incorrect. The consumers. figure should have been 199.9, rather than 199.1. 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 1978 1975 1976 1977 Account Q4 Ql Q2 Q3 Q4 Ql* Personal income and saving 1 Total personal income............................................... 1,253.4 1,382.7 1,536.7 1,432.2 1,476.8 1,517.2 1,549.8 1,603.0 1,636.7 2 Wage and salary disbursements............................... 805.7 891.8 990.0 923.2 951.3 980.9 998.9 1,029.1 1,057.4 3 Commodity-producing industries...................... 275.0 308.4 346.4 317.7 328.9 345.4 351.0 360.2 370.1 4 Manufacturing................................................... 211.0 238.2 267.3 245.1 255.4 265.9 270.0 278.0 288.5 5 Distributive industries.......................................... 195.4 217.1 242.8 226.4 234.5 240.5 244.4 251.8 260.6 6 Service industries................................................... 159.9 179.0 200.9 186.7 193.0 197.7 202.8 210.2 216.8 7 Government and government enterprises........ 175.4 187.2 199.9 192.5 194.8 197.2 200.6 206.9 209.9 8 Other labor income................................................... 64.9 75.9 88.6 80.0 83.2 86.7 90.3 94.0 97.8 9 Proprietors’ income1.................................................. 86.0 88.0 98.2 88.7 95.1 97.0 95.5 105.0 102.4 10 Business and professional1.................................. 62.8 69.4 78.5 72.0 74.3 77.3 80.0 82.4 82.8 11 Farm1...................................................................... 23.2 18.6 19.7 16.6 20.7 19.7 15.5 22.7 19.7 12 Rental income of persons 2...................................... 22.3 23.3 25.3 24.1 24.5 24.9 25.5 26.4 26.9 13 Dividends.................................................................... 32.4 35.8 41.2 38.4 38.5 40.3 42.3 43.6 43.8 14 Personal interest income.......................................... 115.6 130.3 147.8 136.4 140.3 145.4 150.3 155.2 159.8 15 Transfer payments..................................................... 176.8 192.8 206.9 198.0 203.5 203.0 208.7 212.6 216.1 16 Old-age survivors, disability, and health insurance benefits.......................................... 81.4 92.9 105.0 98.4 99.9 101.8 108.5 r110.0 111.7 17 Less: Personal contributions for social insurance......................................................... 50.4 55.2 61.3 56.6 59.6 60.8 61.7 62.9 67.5 18 Equals: Personal income....................................... 1,253.4 1,382.7 1,536.7 1,432.2 1,476.8 1,517.2 1,549.8 1,603.0 1,636.7 19 Less: Personal tax and nontax payments.... 169.0 196.9 227.5 209.5 224.4 224.8 226.1 234.7 236.3 20 Equals: Disposable personal income.................. 1,084.4 1,185.8 1,309.2 1,222.6 1,252.4 1,292.5 1,323.8 1,368.3 1,400.5 21 Less: Personal outlays........................................ 1,004.2 1,119.9 1,241.9 1,166.3 1,201.0 1,223.9 1,250.5 1,292.2 1,317.9 22 Equals : Personal saving......................................... 80.2 65.9 67.3 56.3 51.4 68.5 73.3 76.1 82.6 Memo items : Per capita (1972 dollars): 23 Gross national product........................................ 5,629 5,924 6,167 5,966 6,064 6,143 6,206 6,254 6,234 24 Personal consumption expenditures.................. 3,629 3,817 3,971 3,892 3,934 3,943 3,963 4,045 4,035 25 Disposable personal income....................... 4,014 4,137 4,293 4,177 4,202 4,268 4,305 4,394 4,401 26 Saving rate (per cent)............................................... 7.4 5.6 5.1 4.6 4.1 5.3 5.5 5.6 5.9 Gross saving 27 Gross private saving.................................................. 259.4 272.5 '293.9 261.6 262.9 292.1 310.5 '309.9 28 Personal saving...................................................... 80.2 65.9 67.3 56.3 51.4 68.5 73.3 76.1 82.6 29 Undistributed corporate profits1....................... 16.7 27.6 29.5 20.8 22.5 30.3 37.4 '27.9 30 Corporate inventory valuation adjustment.... -12.0 -14.1 -14.6 -16.9 -20.6 -17.8 -5.9 -14.1 —24.6 Capital consumption allowances: 31 Corporate............................................................ 101.7 111.8 121.9 115.2 117.6 119.4 123.7 127.0 130.1 32 Noncorporate..................................................... 60.8 67.2 75.1 69.2 71.4 73.8 76.2 78.9 80.7 33 Wage accruals less disbursements..................... 34 Government surplus, or deficit (—), national income and product accounts........................... -64.3 -35.6 -20.3 -29.4 -11.5 -14.9 -26.0 r—28.9 35 Federal.................................................................... -70.2 -54.0 -49.5 -55.9 -38.8 -40.3 -58.9 '-60.0 36 State and local....................................................... 5.9 18.4 29.2 26.5 27.3 25.4 32.9 31.1 37 Capital grants received by the United States, 38 Investment................................................................... 201.0 242.5 273.3 237.5 254.7 276.1 285.4 277.2 278.5 39 Gross private domestic........................................ 189.1 243.3 294.2 243.3 271.8 294.9 303.6 306.7 314.4 40 Net foreign............................................................. 11.8 -.9 -20.9 -5.9 -17.1 -18.8 -18.2 -29.5 -35.8 41 Statistical discrepancy.............................................. 5.9 5.5 -.2 5.3 3.3 -1.2 .9 '-3.9 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 □ May 1978 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 1975 1976 1977 Q3 Q4 Ql Q2 Q3 Q4 1 Merchandise exports................... 107,088 114,694 120,472 29,603 29,711 29,457 30,655 30,870 29,490 2 Merchandise imports................... 98,043 124,014 151,713 32,411 33,305 36,606 38,309 38,429 38,369 3 Merchandise trade balance 2. 9,045 -9,320 -31,241 -2,808 -3,594 -7,149 -7,654 -7,559 -8,879 4 Military transactions, net........... -876 366 1,432 235 235 514 309 559 50 5 Investment income, net............... 5,954 9,808 11,935 2,667 2,424 3,187 3,439 3,166 2,143 6 Other service transactions, net.. 2,042 2,743 2,460 781 598 330 546 845 740 7 Balance on goods and services 3. 16,164 3,596 -15,414 875 -337 -3,118 -3,360 -2,989 -5,946 8 Remittances, pensions, and other transfers......................... -1,719 -1,878 -2,008 -461 -473 -526 -492 -510 -480 9 U.S. Govt, grants (excluding military).................................. -2,893 -3,146 -2,787 -1,475 -572 -637 -723 -824 -604 10 Balance on current account....................................................... 11,552 -1,427 -20,209 -1,061 -1,382 -4,281 -4,575 -4,323 -7,030 11 Not seasonally adjusted.......................................................... -3,809 303 -3,404 -4,667 -6,844 -5,294 12 Change in U.S. Govt, assets, other than official reserve assets, net (increase, —)..................................................... -3,463 -4,213 -3,666 -1,405 -1,142 -909 -825 -1,169 -763 13 Change in U.S. official reserve assets (increase, —).............. -607 -2,530 -231 -407 228 -388 6 151 14 Gold............................................................................................ -118 -58 -60 15 Special Drawing Rights (SDR’s).......................................... -66 -78 -121 -18 -29 -83 -9 -29 16 Reserve position in International Monetary Fund (IMF). -466 -2,212 -294 -716 -461 -389 -80 133 42 17 Foreign currencies................................................................... -75 -240 302 327 718 59 169 27 47 18 Change in U.S. private assets abroad (increase, —). . . -27,478 -36,216 -22,162 -6,597 -13,108 1,627 -9,464 -3,405 -10,921 19 Bank-reported claims....................................................... -13,532 -20,904 -11,694 -3,372 -9,148 3,446 -4,553 -1,709 -8,878 20 Long-term..................................................................... -2,357 -2,124 -741 -978 -480 -306 23 -445 -13 21 Short-term..................................................................... -11,175 -18,780 -10,953 -2,394 -8,668 3,752 -4,576 -1,264 -8,865 22 Nonbank-reported claims............................ -1,447 -1,986 -96 723 -967 -722 -1,129 1,518 237 23 Long-term................................................ -432 10 350 66 -10 45 68 240 -3 24 Short-term................................................ -1,015 -1,996 -446 657 -957 -767 -1,197 1,278 240 25 U.S. purchase of foreign securities, net. -6,235 -8,730 -5,362 -2,743 -2,171 -692 -1,784 -2,156 -731 26 U.S. direct investments abroad, net -6,264 -4,596 -5,009 -1,205 -822 -404 -1,998 -1,058 -1,549 27 Change in foreign official assets in the United States (in­ crease', -(-)............................................................................ 6,960 17,945 37,419 3,070 6,977 5,719 7,908 8,249 15,542 28 U.S. Treasury securities....................................................... 4,408 9,333 30,091 1,260 3,909 5,149 5,124 6,950 12,868 29 Other U.S. Govt, obligations.............................................. 905 566 2,310 66 116 100 609 627 974 30 Other U.S. Govt, liabilities 4.............................................. 1,701 4,938 1,874 1,819 852 712 456 321 385 31 Other U.S. liabilities reported by U.S. banks................. -2,158 893 1,126 -599 1,769 -420 752 -150 944 32 Other foreign official assets 5.............................................. 2,104 2,215 2,018 524 331 178 967 501 372 33 Change in foreign private assets in the United States (in­ crease, +)............................................................................ 7,376 16,575 11,842 5,131 5,102 -3,209 5,873 5,671 3,508 34 U.S. bank-reported liabilities................................................. 628 10,982 6,751 1,774 5,008 -5,298 6,344 2,656 3,049 35 Long-term....................................................................... -280 175 366 75 221 47 105 194 20 36 Short-term.............................................................................. 908 10,807 6,385 1,699 4,787 -5,345 6,239 2,462 3,029 37 U.S. nonbank-reported liabilities........................................... 240 -616 2 -297 -242 -374 -405 629 152 38 Long-term.............................................................................. 334 -947 -448 -241 -311 -229 -183 56 -92 39 Short-term............................................................................. -94 331 450 -56 69 -145 -222 573 244 40 Foreign private purchases of U.S. Treasury securities, net....................................................................................... 2,590 2,783 628 3,026 -88 1,047 -1,370 1,250 -299 41 Foreign purchases of other U.S. securities, net................. 2,503 1,250 2,934 68 21 879 736 516 803 42 Foreign direct investments in the United States, net 1,414 2,176 1,527 561 403 537 568 619 -197 43 Allocation of SDR’s.................................................................... 44 Discrepancy.................................................................................... 5.660 9.866 -2,993 1,268 3,325 1,440 1,077 -5,173 -337 45 Owing to seasonal adjustments............................................ -2,622 1,780 652 -90 -2,388 1,826 46 Statistical discrepancy in recorded data before seasonal adjustment............................................................................. 5.660 9.866 -2,993 3,890 1,545 788 1,167 -2,785 -2,163 Memo items:................................................................................. Changes in official assets: 47 U.S. official reserve assets (increase, —)............................ -607 -2,530 -231 -407 228 -388 6 151 48 Foreign official assets in the United States (increase, -f). 5,259 13,007 35,545 1,251 6,125 5,007 7,452 7,928 15,157 49 Changes in Organization of Petroleum Exporting Coun­ tries (OPEC) official assets in the United States (part of line 27 above)................................................................. 7,092 9,324 6,758 1,774 805 3,249 1,073 1,438 998 50 Transfers under military grant programs (excluded from lines 1, 4, and 9 above)....................................................... 2,217 386 195 156 94 46 27 32 90 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 Cur­ rent 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 1978 Item 1975 1976 1977 Sept. Oct. Nov. Dec. Jan. Feb. Mar. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments............................................ 107,130 114,802 121,144 11,037 9,375 9,475 11,007 10,014 9,922 10,912 2 GENERAL IMPORTS including merchandise for immediate con­ sumption plus entries into bonded warehouses.......................................... 96,115 120,678 147,696 12,605 12,996 11,833 13,123 12,393 14,439 13,693 3 Trade balance.......................................... 11,014 -5,876 -26,552 -1,569 -3,621 -2,358 -2,116 -2,379 -4,516 -2,781 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. Effective January 1978, major changes were made in reported separately in the “service account”). On the import side, the coverage, reporting, and compiling procedures. Data for 1977 reflect largest single adjustment is the addition of imports into the Virgin Islands these changes. However, the quarterly international-accounts-basis data (largely oil for a refinery on St. Croix), which are not included in Census in Table 3.10 will not incorporate the 1977 revisions until June. The latter statistics. data 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 1978 Type 1974 1975 1976 Oct. Nov. Dec. Jan. Feb. Mar. Apr. 1 Total......................................................... 15,883 16,226 18,747 19,048 19,155 19,317 19,454 19,373 19,192 3 18,842 2 Gold stock, including Exchange Stabilization Fund1.......................... 11,652 11,599 11,598 11,658 11,658 11,719 11,718 11,718 11,718 11,718 3 Special Drawing Rights2..................... 2,374 2,335 2,395 2,530 2,548 2,629 2,629 2,671 2,693 3 2,669 4 Reserve position in International Monetary Fund.................................. 1,852 2,212 4,434 4,842 4,933 4,951 4,934 4,966 4,701 34,388 5 Convertible foreign currencies........... 5 80 320 18 16 18 173 18 80 67 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 Apr. amounted to $18,604; SDR holdings, $2,626, and reserve 1971; and $710 million on Jan. 1, 1972; plus net transactions in SDR’s. position in IMF, $4,193. 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 □ May 1978 3.13 SELECTED U.S. LIABILITIES TO FOREIGNERS Millions of dollars, end of period 1977 1978 Holder, and type of liability 1974 1975 1976 Sept. Oct. Nov. Dec. Jan. Feb.p Mar^ 1 Total..................... 119,164 126,552 151,356 174,709 178,937 184,720 192,270 194,021 197,280 207,070 2 Foreign countries. 115,842 120,929 142,873 167,295 171,541 177,087 184,625 186,320 189,682 199,155 3 Official institutions1............................... 76,823 80,712 91,975 111,208 117,057 123,142 126,032 129,782 132,651 140,545 4 Short-term, reported by banks in the United States.2................... 53,079 49,530 53,619 56,805 59,835 62,214 64,527 66,514 70,471 77.512 U.S. Treasury bonds and notes: 5 Marketable 3.................................... 5,059 6,671 11,788 25,581 28,633 31,519 32,116 33,830 33,554 34,538 6 Nonmarketable4........................... 16,339 19,976 20,648 21,128 20,351 20,462 20,443 20,473 19,602 19.513 7 Other readily marketable liabilities 5................................ 2,346 4,535 5,920 7,694 8,238 8,947 8,946 8,965 9,024 8,982 Commercial banks abroad: 8 Short-term, reported by banks in the United States2,6................. 30,106 29,516 37,329 40,414 38,755 37,981 42,510 40,329 40,758 42,280 9 Other foreigners...................................... 8,913 10,701 13,569 15,673 15,729 15,964 16,083 16,209 16,273 16,330 10 Short-term, reported by banks in the United States2.................... 8,415 10,000 12,592 14,046 14,038 14,196 14,325 14,391 14,347 14,383 11 Marketable U.S. Treasury bonds and notes3,7............................. 498 701 977 1,627 1,691 1,768 1,758 1,818 1,926 1,947 12 Nonmonetary international and regional organization8................. 3,322 5,623 8,483 7,414 7.396 7,633 7,645 7,701 7,598 7,915 13 Short-term, reported by banks in the United States2................. 3,171 5,292 5,450 3,555 3.396 3,258 2,898 3,248 2,697 3,160 14 Marketable U.S. Treasury bonds and notes3................................ 151 331 3,033 3,859 4,000 4,375 4,746 4,453 4,901 4,755 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 th$ United States. Data exclude the holdings of dollars of the Inter­ porations. 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 1978 Area 1974 1975 1976 Sept. Oct. Nov Dec. Jan. Feb.p Mar.p 1 Total......................................................... 76,823 80,712 91,975 111,208 117,057 123,142 126,032 129,782 132,651 140,545 44,328 45,701 45,882 60,724 65,039 68,147 70,707 72,557 74,401 76,219 3 Canada................................................ 3,662 3,132 3,406 2,508 1,863 1,919 2,334 2,078 1,389 1,633 4 Latin American republics................ 4,419 4,450 4,906 4,466 4,269 4,843 4,633 4,562 5,103 5,709 5 Asia...................................................... 18,627 22,551 34,108 40,333 42,700 45,450 45,676 48,084 49,154 54,187 6 Africa................................................... 3,160 2,983 1,893 2,144 2,027 1,792 1,742 1,706 1,899 1,769 7 Other countries 2............................... 2,627 1,895 1,780 1,033 1,159 991 940 795 705 1,028 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

A52 Domestic Nonfinancial Statistics □ May 1978 2.16 GROSS NATIONAL PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates. 1976 1977 1978 Account 1975 1976 1977 Q4 Ql Q2 Q3 Q4 Ql* Gross national product 1 1,528.8 1,706.5 1,889.6 1,755.4 1,810.8 1,869.9 1,915.9 1,961.8 1,992.9 By source: 2 Personal consumption expenditures................... 980.4 1,094.0 1,211.2 1,139.0 1,172.4 1,194.0 1,218.9 1,259.5 1,284.0 3 Durable goods................................................... 132.9 158.9 179.8 166.3 177.0 178.6 177.6 186.0 184.0 4 Nondurable goods............................................ 409.3 442.7 480.7 458.8 466.6 474.4 481.8 499.9 505.8 5 438.2 492.3 550.7 513.9 528.8 541.1 559.5 573.7 594.3 6 Gross private domestic investment.................... 189.1 243.3 294.2 243.4 271.8 294.9 303.6 306.7 314.4 7 Fixed investment............................................... 200.6 230.0 276.1 244.3 258.0 273.2 280.0 293.2 297.9 8 149.1 161.9 185.1 167.6 177.0 182.4 187.5 193.5 197.7 9 Structures.................................................... 52.9 55.8 61.5 57.0 57.9 61.0 62.6 64.5 65.1 10 Producers’ durable equipment............... 96.3 106.1 123.6 110.6 119.2 121.4 124.9 129.0 132.6 11 Residential structures.................................. 51.5 68.0 91.0 76.7 81.0 90.8 92.5 99.7 100.2 12 Nonfarm..................................................... 49.5 65.7 88.4 74.3 78.5 88.2 89.9 97.1 97 A 13 Change in business inventories...................... -11.5 13.3 18.2 -.9 13.8 21.7 23.6 13.5 16.5 14 Nonfarm......................................................... -15.1 14.9 17.1 1.4 14.1 22.4 23.1 9.0 15.5 15 c20.4 7.8 -10.9 3.0 -8.2 -9.7 -7.5 -18.2 -22.6 16 Exports................................................................ 147.3 162.9 174.7 168.5 170.4 178.1 179.9 170.6 178.3 17 Imports............................................................... 126.9 155.1 185.6 165.6 178.6 187.7 187.4 188.8 200.8 18 Govt, purchases of goods and services.............. 338.9 361.4 395.0 370.0 374.9 390.6 400.9 413.8 417.1 19 Federal................................................................. 123.3 130.1 145.4 134.2 136.3 143.6 148.1 153.8 153.1 20 State and local................................................... 215.6 231.2 249.6 235.8 238.5 247.0 252.9 260.0 264.1 By major type of product: 21 1,540.3 1,693.1 1,871.4 1,756.3 1,797.0 1,848.2 1,892.2 1,948.2 1,976.4 22 686.2 764.2 834.7 774.7 805.9 827.1 843.5 862.5 864.9 23 Durable goods............................................... 258.2 303.4 341.3 312.6 334.4 341.0 342.3 347.6 352.2 24 428.0 460.9 493.4 460.6 471.5 486.1 501.2 514.9 512.6 25 699.2 782.0 867.4 813.8 833.7 855.3 881.6 898.8 929.2 26 143.5 160.2 187.5 166.9 171.2 187.5 190.7 200.4 198.9 27 Change in business inventories.......................... -11.5 13.3 18.2 -.9 13.8 21.7 23.6 13.5 16.5 28 -9.2 4.1 9.1 .6 7.8 11.5 10.3 6.8 13.9 29 Nondurable goods............................................ -2.2 9.3 9.1 -3.1 6.0 10.2 13.4 6.8 2.6 30 1,202.1 1,274.7 1,337.3 1,287.4 1,311.0 1,330.7 1,347.4 1,360.2 1,358.3 National income 31 Total.............................................................................. 1,217.0 1,364.1 1,520.5 1.402.1 1,450.2 1.505.7 1,540.5 '1,585.7 ................................... 930.3 13,023 C6.o3mpe1n,s1a5t6io.3n of 1e.m07p4lo.2yees1,109.9 1.144.7 1,167.4 1,203.3 1,242.5 33 Wages and salaries............................................ 805.7 891.8 990.0 923.2 951.3 980.9 998.9 1,029.1 1,057.4 34 Government and Government enterprises.. 175.4 187.2 199.9 192.5 194.8 197.2 200.6 206.9 209.9 35 Other.................................................................... 630.3 704.6 790.1 730.7 756.4 783.6 798.3 822.2 847.5 36 Supplement to wages and salaries..................... 124.6 144.5 166.3 150.9 158.6 163.8 168.5 174.3 185.1 37 Employer contributions for social insurance.................................................... 59.8 68.6 77.7 70.9 75.4 77 A 78.2 80.2 87.4 64.9 75.9 88.6 80.0 83.2 86.7 90.3 94.0 97.8 86.0 88.0 98.2 88.7 95.1 97.0 95.5 105.0 102.4 40 Business and professional1.................................. 62.8 69.4 78.5 72.0 74.3 77.3 80.0 82.4 82.8 41 Farm1...................................................................... 23.2 18.6 19.7 16.6 20.7 19.7 15.5 22.7 19.7 42 Rental income of persons2...................................... 22.3 23.3 25.3 24.1 24.5 24.9 25.5 26.4 26.9 43 Corporate profits1..................................................... 99.3 128.1 r139.9 123.1 125.4 140.2 149.0 '144.8 44 Profits before tax3................................................ 123.5 156.9 '171.7 154.8 161.7 174.0 172.8 '178.3 45 Inventory valuation adjustment......................... -12.0 -14.1 -14.6 -16.9 -20.6 -17.8 -5.9 -14.1 -24.6 46 Capital consumption adjustment....................... -12.2 -14.7 -17.2 -14.6 -15.6 -15.9 -17.9 -19.4 -20.6 47 Net interest................................................................. 79.1 88.4 100.9 92.0 95.3 98.9 103.1 106.1 109.4 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

Bank-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 1978 Holder, and type of liability 1974 1975 1976 Sept. Oct. Nov. Dec. Jan. Feb.* Mar.p 1 All foreigners, excluding the International Monetary Fund................................................... 94,771 94,338 108,990 114,820 116,024 117,649 124,260 124,482 128,273 137,335 2 Payable in dollars................................................... 94,004 93,781 108,266 114,075 115,260 116,817 123,449 123,765 127,500 136,480 Deposits: 3 14,051 13,564 16,803 16,893 16,895 16,461 18,967 17,377 17,675 17,167 4 9,907 10,250 11,316 11,601 11,515 11,372 11,521 11,518 12,054 11,297 5 U.S. Treasury bills and certificates2.............. 35,662 37,414 40,744 43,207 44,700 47,130 48,906 51,094 54,233 61,077 6 Other short-term liabilities3............................ 34,384 32,552 39,403 42,373 42,150 41,854 44,054 43,776 43,539 46,939 7 Payable in foreign currencies................................ 766 558 724 745 764 832 812 717 772 854 8 Nonmonetary international and regional organizations4...................................................... 3,171 5,293 5,450 3,555 3,396 3,258 2,899 3,248 2,696 3,159 9 3,171 5,284 5,445 3,523 3,376 3,237 2,889 3,237 2,687 3,155 Deposits: 10 Demand........................................................... 139 139 290 214 173 173 231 186 180 245 11 Time1................................................................ 111 148 205 134 140 142 139 129 120 129 12 U.S. Treasury bills and certificates................ 497 2,554 2,701 1,875 802 767 706 959 1,111 1,317 13 2,424 2,443 2,250 1,300 2,261 2,155 1,813 1,963 1,277 1,464 14 Pnvnh/p in fnreian rurrenriex. .............................. 8 5 32 20 20 11 11 9 4 15 Official institutions, banks, and other foreigners.. 91,600 89,046 103,540 111,265 112,628 114,391 121,361 121,234 125,576 134,175 16 Payable in dollars................................................... 90,834 88,496 102,821 110,552 111,884 113,579 120,560 120,528 124,813 133,325 Deposits: 17 Demand........................................................... 13,912 13,426 16,513 16,679 16,722 16,288 18,736 17,191 17,495 16,922 18 Time1................................................................ 9,796 10,119 11,142 11,468 11,375 11,229 11,382 11,390 11,934 11,168 19 U.S. Treasury bills and certificates2.............. 35,165 34,860 38,042 41,331 43,898 46,364 48,200 50,135 53,122 59,759 20 Other short-term liabilities3............................ 31,961 30,092 37,123 41,073 39,889 39,699 42,242 41,813 42,262 45,475 21 Payable in foreign currencies................................ 766 549 719 713 744 812 801 706 763 850 22 Official institutions6................................................... 53,079 49,530 53,619 56,805 59,835 62,214 64,527 66,514 70,471 77,512 23 Payable in dollars................................................... 52,952 49,530 53,619 56,805 59,835 62,214 64,527 66,514 70,471 77,512 Deposits: 24 2,951 2,644 3,394 3,133 2,990 2,557 3,528 2,673 2,782 2,804 25 Time1............................................................... 4,167 3,423 2,321 1,987 1,903 1,848 1,797 1,788 2,532 1,718 26 U.S. Treasury bills and certificates2.............. 34,656 34,199 37,725 40,802 43,424 45,849 47,820 49,752 52,689 59,307 27 Other short-term liabilities5............................ 11,178 9,264 10,179 10,882 11,518 11,960 11,382 12,301 12,468 13,682 98 Psiunhlo in frtroion S'urrenr'i/?0 127 29 Banks and other foreigners........................................ 38,520 39,515 49,921 54,461 52,793 SI,111 56,834 54,721 55,105 56,663 30 Payable in dollars................................................... 37,881 38,966 49,202 53,747 52,049 51,365 56,033 54,014 54,342 55,813 31 Banks7.................................................................. 29,467 28,966 36,610 39,701 38,011 37,169 41,708 39,622 39,994 41,430 Deposits: 32 Demand....................................................... 8,231 7,534 9,104 9,676 9,677 9,666 10,933 10,274 10,570 10,118 33 Time1........................................................... 1,885 1,873 2,297 1,842 1,858 1,805 2,040 1,995 1,876 1,796 34 U.S. Treasury bills and certificates............ 232 335 119 125 127 141 141 152 165 161 35 Other short-term liabilities3........................ 19,119 19,224 25,089 28,057 26,349 25,557 28,595 27,202 27,383 29,354 36 Other foreigners................................................. 8,414 10,000 12,592 14,046 14,037 14,196 14,325 14,392 14,348 14,383 Deposits: 37 Demand....................................................... 2,729 3,248 4,015 3,870 4,055 4,065 4,275 4,245 4,143 4,000 38 3,744 4,823 6,524 7,638 1,614 7,576 7,546 7,606 7,526 7,654 39 U.S. Treasury bills and certificates............ 277 325 198 404 346 373 240 231 268 291 40 Other short-term liabilities5........................ 1,664 1,604 1,854 2,133 2,022 2,182 2,265 2,310 2,411 2,438 41 Payable in foreign currencies................................ 639 549 719 713 744 812 801 706 763 850 1 Excludes negotiable time certificates of deposit, which are included 4 Principally the International Bank for Reconstruction and Develop­ in “Other short-term liabilities.” ment, and the Inter-American and Asian Development Banks. 2 Includes nonmarketable certificates of indebtedness and Treasury 5 Principally bankers acceptances, commercial paper, and negotiable bills issued to official institutions of foreign countries. time certificates of deposit. 3 Includes liabilities of U.S. banks to their foreign branches, liabilities 6 Foreign central banks and foreign central governments and their of U.S. agencies and branches of foreign banks to their head offices and agencies, and Bank for International Settlements. foreign branches of their head offices, bankers acceptances, commercial 7 Excludes central banks, which are included in “Official institutions.” paper, and negotiable time certificates of deposit. Note.—“Short-term obligations” are those payable on demand, or 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 n May 1978 3.16 SHORT-TERM LIABILITIES TO FOREIGNERS Reported by Banks in the United States By Country Millions of dollars, end of period 1977 1978 Area and country 1974 1975 1976 Sept. Oct. Nov. Dec. Jan. Feb.*> Mar.p 1 94,771 94,338 108,990 114,820 116,024 117,649 124,260 124,482 128,273 137,335 2 Foreign countries......................................................... 91,600 89,046 103,540 111,265 112,628 114,391 121,361 121,234 125,576 134,175 3 48,813 43,988 46,938 51,457 52,910 54,369 60,052 59,407 60,798 63,586 4 607 754 348 448 410 375 319 302 302 420 5 2,506 2,898 2,275 2,667 2,736 2,662 2,547 2,680 2,796 3,041 6 Denmark.............................................................. 369 332 363 1,172 1,250 1,264 111 1,045 1,051 1,046 7 266 391 422 248 232 263 330 302 315 363 8 France................................................................... 4,287 7,733 4,875 4,799 5,006 4,683 5,248 5,141 4,660 5,026 9 9,429 4,357 5,965 4,289 5,280 5,580 7,030 8,599 10,366 11,313 10 248 284 403 629 648 643 603 538 547 570 11 2,577 1,072 3,206 5,792 6,320 6,778 6,862 6,207 5,952 5,637 12 Netherlands......................................................... 3,234 3,411 3,007 3,216 3,088 2,996 2,876 2,951 3,050 3,139 13 1,040 996 785 1,190 1,023 641 949 988 890 1,212 14 Portugal............................................................... 310 195 239 173 191 266 273 205 188 174 15 382 426 561 723 724 647 609 703 645 714 16 1,138 2,286 1,693 2,483 2,734 3,136 2,718 2,718 2,832 2,817 17 10,139 8,514 9,458 9,923 9,757 9,884 12,390 12,106 12,748 13,617 18 152 118 166 93 106 118 130 187 172 130 19 7,584 6,886 10,004 11,427 11,096 12,119 14,035 12,484 11,856 12,104 20 Yugoslavia....................................................... 183 126 188 119 130 171 232 219 195 138 21 Other Western Europe1.................................... 4,073 2,970 2,672 1,839 1,948 1,910 1,799 1,781 1,960 1,865 22 U.S.S.R................................................................. 82 40 51 53 68 66 99 68 98 72 23 Other Eastern Europe....................................... 206 200 255 173 162 167 234 184 173 191 24 3,520 3,076 4,784 4,492 4,913 4,686 4,668 5,351 4,788 4,595 25 11,754 14,942 19,026 24,478 22,354 22,417 23,575 23,149 24,167 25,223 26 Argentina............................................................. 886 1,147 1,538 2,187 2,421 2,594 1,466 1,796 1,978 1,860 27 Bahamas............................................................... 1,054 1,827 2,750 5,940 3,769 3,409 3,534 3,082 3,689 4,132 28 1,034 1,227 1,432 1,101 1,055 935 1,389 1,106 970 1,320 29 Chile...................................................................... 276 317 335 342 340 322 359 386 411 415 30 305 417 1,017 1,156 1,182 1,152 1,213 1,218 1,199 1,282 31 7 6 6 6 6 6 6 6 7 8 32 1,770 2,066 2,848 2,823 2,741 2,850 2,802 2,906 3,002 2,706 33 Panama................................................................. 510 1,099 1,140 947 946 986 2,302 2,170 2,101 2,113 34 Peru....................................................................... 272 244 257 288 259 235 286 264 266 261 35 Uruguay............................................................... 165 172 245 245 226 258 242 229 279 227 36 3,413 3,289 3,095 3,037 3,212 3,780 2,913 3,001 3,231 3,422 37 Other Latin American republics..................... 1,316 1,494 2,081 2,320 2,199 2,140 2,473 2,369 2,493 2,813 38 Netherlands Antilles2........................................ 158 129 140 169 156 184 188 187 185 189 39 Other Latin America......................................... 589 1,507 2,142 3,916 3,840 3,566 4,401 4,428 4,357 4,476 40 21,130 21,539 28,472 26,463 28,165 28,948 29,219 29,697 32,159 36,854 41 China, People’s Republic of (Mainland).... 50 123 Al 44 48 52 53 54 48 56 42 China, Republic of (Taiwan).......................... 818 1,025 989 924 899 926 1,012 1,040 994 1,026 43 Hong Kong......................................................... 530 623 892 1,153 993 971 1,091 1,033 1,118 1,157 44 India...................................................................... 261 126 648 850 886 980 975 1,025 1,011 957 45 Indonesia............................................................. 1,221 369 340 453 905 739 406 892 502 487 46 Israel..................................................................... 389 386 391 416 465 490 558 460 453 484 47 Japan.................................................................... 10,931 10,218 14,380 11,444 13,272 14,835 14,634 14,507 17,044 21,756 48 384 390 437 600 596 572 601 605 737 681 49 Philippines........................................................... 747 698 627 559 630 603 696 668 616 643 50 333 252 275 264 271 251 262 256 307 314 51 4,623 6,461 8,073 8,527 7,933 7,365 7,679 7,978 8,142 8,000 52 Other..................................................................... 845 867 1,372 1,230 1,267 1,164 1,252 1,178 1,187 1,292 53 3,551 3,373 2,300 3,023 2,786 2,560 2,532 2,503 2,643 2,469 54 Egypt.................................................................... 103 343 333 484 393 331 404 346 357 341 55 38 68 88 68 61 31 66 100 79 51 56 130 169 143 208 232 240 175 192 252 185 57 Zaire..................................................................... 84 63 35 36 33 30 39 41 50 45 58 2,814 2,239 1,116 1,564 1,403 1,214 1,154 1,178 1,264 1,225 59 Other.................................................................... 383 491 585 664 664 715 694 645 640 621 60 2,831 2,128 2,019 1,352 1,500 1,411 1,314 1,128 1,022 1,449 61 Australia.............................................................. 2,742 2,014 1,911 1,206 1,348 1,269 1,154 937 875 1,243 89 114 108 146 152 142 161 190 147 205 63 Nonmonetary international and regional 3,171 5,293 5,450 3,555 3,396 3,258 2,899 3,248 2,696 3,159 64 International............................................................ 2,900 5,064 5,091 3,186 3,079 2,922 2,636 2,998 2,435 2,966 65 202 187 136 157 134 128 98 79 73 63 66 Other regional5....................................................... 69 42 223 212 183 208 165 171 189 130 For notes see bottom of p. A59. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-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 1977 Area and country Area and country Apr. Dec. Apr. Dec. Dec. Apr. Dec. Apr. Dec. Other Western Europe Other Asia 1 Cyprus.......................... 38 69 58 25 Afghanistan................... 41 57 57 90 112 2 Iceland.......................... 30 40 32 26 Bangladesh.................... 54 44 54 55 51 3 Ireland, Republic of. 43 237 131 27 Burma............................. 31 34 13 9 28 Cambodia...................... 4 3 4 12 Other Eastern Europe 29 Jordan............................ 39 23 37 23 31 4 Bulgaria........................................ 19 14 34 34 30 Laos................................ 2 2 1 3 1 5 Czechoslovakia............................ 32 11 21 46 31 Lebanon......................... 117 132 140 133 143 6 German Democratic Republic. 17 3 11 15 32 Malaysia........................ 77 130 396 511 157 7 Hungary........................................ 13 11 19 17 33 Nepal.............................. 28 34 33 35 49 8 Poland........................................... 66 74 77 65 34 Pakistan......................... 74 92 189 135 253 9 Rumania....................................... 44 29 19 51 35 Singapore....................... 256 344 280 300 295 36 Sri Lanka (Ceylon).... 13 10 23 27 26 Other Latin American republics 37 Vietnam......................... 62 66 66 50 59 10 Bolivia......................................... 110 117 133 135 157 11 Costa Rica.................................. 124 134 146 170 175 Other Africa 12 Dominican Republic................ 169 170 275 280 326 38 Ethiopia (incl. Eritrea), 60 72 41 48 42 13 Ecuador....................................... 120 150 319 311 329 39 Ghana............................. 23 45 27 37 35 14 El Salvador................................ 171 212 178 214 227 40 Ivory Coast................... 18 17 10 26 65 15 Guatemala.................................. 260 368 409 392 513 41 Kenya............................. 19 39 46 185 46 16 Haiti............................................ 38 48 47 68 57 42 Liberia............................ 53 63 77 95 82 17 Honduras.................................... 99 137 137 210 152 43 Southern Rhodesia___ 1 1 1 1 1 18 Jamaica....................................... 41 59 35 43 32 44 Sudan.............................. 12 17 22 30 30 19 Nicaragua................................... 133 158 120 133 165 45 Tanzania........................ 30 20 48 57 46 20 Paraguay.................................... 43 50 49 60 59 46 Tunisia........................... 29 34 20 15 29 21 Surinam 2................................... 13 30 17 14 47 Uganda........................... 22 50 43 117 30 22 Trinidad and Tobago.............. 131 44 167 85 202 48 Zambia........................... 78 14 35 55 22 Other Latin America: All Other 23 Bermuda.................. 170 197 177 199 237 49 New Zealand................. 42 48 45 75 80 24 British West Indies. 1,311 2,284 1,874 2,4344,142 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 1978 Holder, and area or country 1974 1975 1976 Sept. Oct. Nov. Dec. Jan. Feb.* Mar.p 1 Total.............................................................................. 1,285 1,812 2,449 2,526 2,579 2,747 2,781 2,726 2,721 2,910 2 Nonmonetary international and regional 822 415 269 330 352 352 386 388 418 432 3 Foreign countries......................................................... 464 1,397 2,180 2,196 2,227 2,396 2,395 2,338 2,303 2,479 4 Official institutions, including central banks. .. 124 931 1,337 1,074 1,089 1,313 1,296 1,226 1,201 1,176 5 Banks, excluding central banks.......................... 261 366 621 713 715 707 716 719 705 749 6 Other foreigners...................................................... 79 100 222 409 422 376 384 393 397 553 Area or country: 7 226 330 570 708 719 704 696 701 679 845 8 146 214 346 307 308 309 307 313 310 321 9 United Kingdom................................................ 59 66 124 200 205 200 180 176 177 199 10 Canada...................................................................... 19 23 29 27 27 26 35 45 44 45 11 Latin America......................................................... 115 140 248 341 339 330 343 342 351 394 12 Middle East oil-exporting countries1................. 94 894 1,286 1,056 1,064 1,285 1,285 1,216 1,191 1,156 13 7 8 46 38 53 42 29 29 32 33 14 African oil-exporting countries 2......................... * * * * 1 1 * * * * 15 Other Africa........................................................;. 1 1 * 23 22 6 5 5 5 5 16 * * 1 1 2 1 1 * * * 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 □ May 1978 3.19 SHORT-TERM CLAIMS ON FOREIGNERS Reported by Banks in the United States By Country Millions of dollars, end of period 1977 1978 Area and country 1974 1975 1976 Sept. Oct. Nov. Dec. Jan. Feb.p Mar.P 1Total.............................................................................. 39,056 50,231 69,237 69,125 75,104 74,726 79,915 81,492 80,512 85,542 2 Foreign countries......................................................... 39,055 50,229 69,232 69,114 75,094 74,714 79,906 81,482 80,510 85,533 3 Europe........................................................................... 6,255 8,987 12,220 13,352 13,767 13,019 15,458 14,594 14,775 16,057 4 Austria...................................................................... 21 15 44 117 75 52 52 95 98 72 5 Belgium-Luxembourg............................................ 384 352 662 558 782 751 793 897 787 812 6 Denmark.................................................................. 46 49 85 140 126 107 130 140 127 121 7 122 128 139 95 111 106 101 104 108 115 8 France....................................................................... 673 1,471 1,445 1,356 1,341 1,320 1,616 1,367 1,598 1,852 9 Germany................................................................... 589 416 517 615 768 645 655 687 663 794 10 Greece....................................................................... 64 49 79 103 98 107 94 86 112 119 11 Italy........................................................................... 345 370 929 1,065 1,104 1,157 1,284 1,130 1,121 1,118 12 Netherlands............................................................. 348 300 304 447 304 352 352 373 379 468 13 119 71 98 109 120 122 131 141 162 140 14 Portugal.................................................................... 20 16 65 148 138 120 138 103 117 116 15 Spain......................................................................... 196 249 373 346 471 401 414 425 424 416 16 Sweden...................................................................... 180 167 180 139 172 143 169 182 158 127 17 Switzerland............................................................... 335 237 485 700 681 614 633 719 840 803 18 Turkey...................................................................... 15 86 176 337 329 344 312 .286 272 276 19 United Kingdom.................................................... 2,580 4,718 6,277 6,766 6,623 6,369 8,167 7,416 7,451 8,397 20 Yugoslavia............................................................... 22 38 41 34 28 29 56 42 36 34 21 Other Western Europe.......................................... 22 27 52 43 259 50 89 127 61 33 22 U.S.S.R..................................................................... 46 103 99 89 82 81 100 112 90 77 23 Other Eastern Europe........................................... 131 127 171 146 155 150 173 162 170 168 24 2,776 2,817 3,049 3,400 3,626 3,803 3,716 4,052 4,216 4,407 25 Latin America............................................................. 12,377 20,532 34,270 33,142 38,051 37,890 40,377 42,975 41,425 43,762 26 720 1,203 964 939 1,076 1,085 1,180 1,214 1,131 1,181 27 Bahamas................................................................... 3,405 7,570 15,336 13,593 18,930 18,115 19*678 22,131 21,310 22,529 28 Brazil......................................................................... 1,418 2,221 3,322 3,011 3,121 2,962 3,084 2,938 2,967 3,148 29 Chile......................................................................... 290 360 387 431 435 443 507 507 502 502 30 Colombia............................................................. 713 689 586 528 570 554 573 548 541 ‘ 480 31 Cuba......................................................................... 14 13 13 13 10 15 10 14 4 3 32 Mexico...................................................................... 1,972 2,802 3,432 3,488 3,261 3,201 2,997 2,993 2,791 2,851 33 Panama.................................................................... 505 1,052 1,257 1,063 1,431 1,652 1,262 1,801 1,673 1,544 34 Peru........................................................................... 518 583 704 785 737 735 769 774 760 767 35 Uruguay.................................................................... 63 51 38 42 Al 60 71 59 56 55 36 Venezuela................................................................. 704 1,086 1,564 1,656 1,654 1,714 1,840 1,736 1,891 1,823 37 Other Latin American republics......................... 852 967 1,125 1,224 1,290 1,316 1,466 1,491 1,461 1,472 38 Netherlands Antilles1............................................ 62 49 40 75 61 139 86 92 80 106 39 Other Latin America............................................. 1,142 1,885 5,503 6,293 5,426 5,898 6,854 6,678 6,259 7,301 40 16,226 16,057 17,672 16,566 16,856 17,315 17,766 17,289 17,524 18,594 41 China, People’s Republic of (Mainland)......... 4 22 3 27 20 22. 12 14 15 12 42 China, Republic of (Taiwan)............................... 500 736 991 1,303 1,321 1,275 1,371 1,265 1,308 1,302 43 Hong Kong............................................................. 223 258 271 360 357 466 465 435 420 497 44 India.......................................................................... 14 21 41 59 48 54 35 Al 54 80 45 Indonesia................................................................. 157 102 76 67 97 60 77 54 64 45 46 Israel.......................................................................... 255 491 551 304 348 347 441 368 362 351 47 Japan........................................................................ 12,518 10,776 10,997 9,303 9,341 9,578 9,778 9,476 9,708 10,252 48 Korea........................................................................ 955 1,561 1,714 2,001 1,998 1,876 2,070 2,208 2,066 1,844 49 Philippines............................................................... 372 384 559 477 489 508 470 476 528 554 50 Thailand................................................................... 458 499 422 617 612 594 616 618 630 641 51 Middle East oil-exporting countries2................ 330 524 1,312 1,340 1,531 1,783 1,583 1,525 1,570 2,035 52 Other......................................................................... 441 684 735 708 695 752 849 803 795 982 53 Africa............................................................................ 855 1,228 1,481 1,656 1,828 1,749 1,728 1,757 1,768 1,826 54 Egypt......................................................................... 111 101 127 134 155 130 114 122 111 103 55 Morocco................................................................... 18 9 13 48 44 31 30 48 34 29 56 South Africa............................................................ 329 545 763 802 881 823 840 868 882 944 57 Zaire......................................................................... 98 34 29 15 7 7 7 8 8 7 58 Oil-exporting countries3....................................... 115 231 253 306 378 358 321 312 360 318 59 Other......................................................................... 185 308 296 350 362 399 416 400 373 424 60 Other countries............................................................ 565 609 540 998 966 939 861 814 802 887 61 Australia................................................................... 466 535 441 863 839 815 743 687 661 125 62 All other................................................................... 99 73 99 135 127 124 117 127 141 162 63 Nonmonetary international and regional organizations........................................................... * 1 5 10 9 12 9 10 2 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

Bank-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 1978 Type 1974 1975 1976 Sept. Oct. Nov. Dec. Jan. Feb.p Mar.p 1 39,056 50,231 69,237 69,125 75,104 74,726 79,915 81,492 80,512 85,542 37,859 48,888 67,592 67,375 73,104 72,849 77,813 79,361 78,442 83,470 3 11,287 13,200 18,016 18,135 18,040 17,486 19,962 18,484 18,603 21,230 4 Official institutions, including central banks. 381 613 1,448 1,007 1,085 1,048 1,019 1,101 1,093 1,023 5 Banks, excluding central banks....................... 7,332 7,635 10,974 11,736 11,305 11,103 12,979 11,517 11,773 14,211 6 All other, including nonmonetary interna­ tional and regional organizations----------- 3,574 4,951 5,594 5,392 5,649 5,335 5,964 5,866 5,737 5,995 7 Collections outstanding........................................ 5,637 5,467 5,756 6,025 6,005 6,045 6,184 6,342 6,365 6,680 8 Acceptances made for accounts of foreigners... 11,237 11,147 12,358 13,645 13,735 13,462 14,212 13,592 13,689 13,888 9 9,698 19,075 31,462 29,569 35,324 35,856 37,456 40,943 39,785 41,672 1,196 1,342 1,645 1,750 2,000 1,876 2,101 2,131 2,070 2,072 11 669 656 1,063 840 922 879 941 940 895 902 12 Foreign government securities, commercial 289 314 89 265 356 405 454 370 338 407 13 238 372 493 645 722 593 707 822 837 764 1 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 1 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 1978 Type, and area or country 1974 1975 1976 Sept. Oct. Nov. Dec. Jan. Feb.P Mar.p 1 7,179 9,536 11,898 12,631 12,716 12,338 12,644 12,754 12,840 12,946 By type: 2 Payable in dollars.................................................... 7,099 9,419 11,750 12,416 12,486 12,106 12,389 12,513 12,593 12,692 3 6,490 8,316 10,093 10,609 10,760 10,421 10,671 10,822 10,870 11,055 4 Official institutions, including central banks 1,324 1,351 1,407 1,761 1,777 1,794 1,918 1,911 1,961 1,956 5 Banks, excluding central banks.................. 929 1,567 2,232 2,321 2,419 2,289 2,385 2,405 2,385 2,466 6 All other, including nonmonetary interna­ tional and regional organizations.......... 4,237 5,399 6,454 6,527 6,564 6,338 6,368 6,506 6,524 6,633 7 Other long-term claims......................................... 609 1,103 1,656 1,807 1,726 1,685 1,718 1,691 1,723 1,637 8 Payable in foreign currencies................................ 80 116 148 216 229 232 254 240 247 254 By area or country: 9 Europe...................................................................... 1,908 2,704 3,328 3,707 3,664 3,402 3,484 3,436 3,429 3,370 10 Canada..................................................................... 501 555 637 456 461 424 434 425 414 407 11 Latin America........................................................ 2,614 3,468 4,856 5,381 5,542 5,572 5,776 5,915 6,076 6,270 12 Asia............................................................................ 1,619 1,795 1,904 1,872 1,768 1,742 1,776 1,800 1,760 1,738 13 Japan..................................................................... 258 296 382 359 339 320 317 337 297 304 14 Middle East oil-exporting countries1............ 384 220 146 161 173 154 181 193 211 195 15 Other Asia........................................................... 977 1,279 1,376 1,353 1,257 1,268 1,277 1,270 1,251 1,239 16 Africa........................................................................ 366 747 890 873 857 850 855 863 848 862 17 Oil-exporting countries2................................... 62 151 271 221 201 176 190 188 172 177 18 Other..................................................................... 305 596 619 651 657 674 664 675 677 685 19 All other countries3............................................... 171 267 282 343 423 348 319 316 313 301 1 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 □ May 1978 3.22 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data Millions of dollars, end of period 1977 1978 Asset account 1974 1975 1976 Dec. Aug. Sept. Oct. Nov. Dec.' Jan. Feb.p All foreign countries 1 151,905 176,493 219,420 234,592 '244,998 '247,023 '249,414 259,399 258,969 257,142 2 6,900 6,743 7,889 8,192 11,914 r8,233 9,074 11,764 10,012 9,530 3 Parent bank.................................... 4,464 3,665 4,323 4,630 8,231 4,535 5,238 7,810 5,932 5,410 4 Other................................................ 2,435 3,078 3,566 3,562 3,683 3,698 3,836 3,953 4,080 4,119 5 Claims on foreigners.......................... 138,712 163,391 204,486 218,869 r225,165 '230,333 '231,826 238,999 239,753 238,676 6 Other branches of parent bank. . 27,559 34,508 45,955 48,317 '52,074 '51,903 '54,285 56,058 55,359 54,501 7 Other banks.................................... 60,283 69,206 83,765 85,533 '87,746 '91,871 '89,213 91,884 92,214 92,278 8 Official institutions....................... 4,077 5,792 10,613 13,829 14,193 14,456 14,854 14,634 15,255 15,035 9 Nonbank foreigners..................... 46,793 53,886 64,153 71,190 '71,152 '72,103 '73,474 76,422 76,926 76,862 10 Other assets........................................ 6,294 6,359 7,045 7,530 7,919 '8,457 '8,514 8,637 9,204 8,937 11 Total payable in U.S. dollars.............. 105,969 132,901 167,695 179,034 '188,181 '187,511 '188,405 194,279 193,284 189,777 12 Claims on United States................... 6,603 6,408 7,595 7,748 11,434 7,690 r8,504 11,172 9,390 8,768 13 Parent bank.................................... 4,428 3,628 4,264 4,560 8,177 4,448 5,145 1,619 5,781 5,162 14 Other................................................ 2,175 2,780 3,332 3,188 3,257 '3,243 3,358 3,493 3,609 3,606 15 Claims on foreigners.......................... 96,209 123,496 156,896 167,716 '173,212 '175,858 '175,785 179,103 179,417 176,854 16 Other branches of parent bank.. 19,688 28,478 37,909 39,995 42,983 42,963 '44,338 44,560 43,924 42,965 17 Other banks.................................... 45,067 55,319 66,331 66,826 '68,790 '71,592 '68,925 70,787 70,520 69,657 18 3,289 4,864 9,022 12,232 12,705 12,779 12,887 12,621 13,078 13,029 19 Nonbank foreigners..................... 28,164 34,835 43,634 48,663 '48,734 '48,794 '49,634 51,135 51,895 51,204 20 Other assets........................................ 3,157 2,997 3,204 3,570 3,535 3,963 4,117 4,004 4,478 4,155 United Kingdom 21 Total, all currencies........................... 69,804 74,883 81,466 83,270 88,033 90,154 88,748 90,933 90,789 89,626 22 Claims on United States................. 3,248 2,392 3,354 2,307 3,422 2,729 2,955 4,341 3,701 2,577 23 Parent bank.................................. 2,412 1,449 2,376 1,397 2,556 1,789 2,123 3,518 2,928 1,775 24 Other.............................................. 116 943 978 910 866 940 833 823 773 801 25 Claims on foreigners...................... 64,111 70,331 75,859 78,607 82,154 84,766 83,331 84.016 84,346 84,393 26 Other branches of parent bank, 12,724 17,557 19,753 20,015 22,363 22,178 21,476 22.017 21,427 21,114 27 Other banks.................................. 32,701 35,904 38,089 38,784 39,576 41,923 40,530 39,899 40,605 40,996 28 Official institutions..................... 788 881 1,274 1,983 1,955 2,052 2,145 2,206 2,303 2,100 29 Nonbank foreigners................... 17,898 15,990 16,743 17,826 18,259 18,613 19,180 19,895 20,010 20,183 30 Other assets...................................... 2,445 2,159 2,253 2,355 2,458 2,659 2,462 2,576 2,742 2,656 31 Total payable in U.S. dollars........... 49,211 57,361 61,587 62,686 66,895 67,243 65,369 66,635 65,744 63,870 32 Claims on United States................. 3,146 2,273 3,275 2,130 3,259 2,545 2,744 4,100 3,443 2,186 33 Parent bank.................................. 2,468 1,445 2,374 1,348 2,527 1,748 2,062 3,431 2,815 1,558 34 Other.............................................. 678 828 902 781 732 797 682 669 628 628 35 Claims on foreigners....................... 44,694 54,121 57,488 59,419 62,584 63,596 61,587 61,408 61,094 60,521 36 Other branches of parent bank 10,265 15,645 17,249 17,550 19,865 19,497 18,539 18,947 18,102 17,782 37 Other banks................................. 23,716 28,224 28,983 29,199 29,808 31,134 29,560 28,530 28,661 28,641 38 Official institutions..................... 610 648 846 1,574 1,555 1,595 1,639 1,669 1,770 1,640 39 Nonbank foreigners.................. 10,102 9,604 10,410 11,095 11,355 11,370 11,849 12,263 12,560 12,457 40 Other assets..................................... 1,372 967 824 1,138 1,052 1,103 1,038 1,126 1,208 1,163 Bahamas and Caymans 41 Total, all currencies............ 31,733 45,203 66,114 73,284 78,430 75,962 76,769 79,053 80,040 79,662 42 Claims on United States. 2,464 3,229 3,508 4,875 7,455 4,687 5,259 5,765 4,994 5,837 43 Parent bank................. 1,081 1,477 1,141 2,465 4,861 2,104 2,552 3,038 2,097 2.918 44 Other............................. 1,383 1,752 2,367 2,410 2,595 2,583 2,707 2,728 2,897 2.919 45 Claims on foreigners........................ 28,453 41,040 62,048 67,124 69,680 69,685 69,839 71,672 73,431 72,224 46 Other branches of parent bank. 3,478 5,411 8,144 8,259 9,828 9,266 10,611 11,120 11,272 11,025 47 Other banks.................................. 11,354 16,298 25,354 25,482 26,368 27,131 25,912 27,940 28,795 28,156 48 Official institutions..................... 2,022 3,576 7,105 8,599 9,203 9,207 9,198 9,109 9,303 9,428 49 Nonbank foreigners................... 11,599 15,756 21,445 24,783 24,281 24,082 24,119 23,503 24,061 23,615 50 Other assets........................... 815 933 1,217 1,285 1,294 1,589 1,670 1,616 1,615 1,601 51 Total payable in U.S. dollars. 28,726 41,887 62,705 68,192 72,932 70,415 71,728 73,988 74,790 74,233 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Overseas Branches A63 3.22 Continued 1977 1978 Liability account 1974 1975 1976 Dec. Aug. Sept. Oct. Nov. Dec.' Jan. Feb.p All foreign countries 52 Total, all currencies............................. 151,905 176,493 219,420 234,592 '244,998 '247,023 '249,414 259,399 258,969 257,142 53 To United States.............................. 11,982 20,221 32,719 36,360 40,328 39,952 '42,572 44,495 46,113 46,101 54 Parent bank.................................. 5,809 12,165 19,773 19,438 20,073 22,706 25,037 24,882 28,636 27,304 55 Other.............................................. 6,173 8,057 12,946 16,922 20,255 17,246 17,535 19,613 17,477 18,798 56 To foreigners.................................... 132,990 149,815 179,954 189,743 r197,151 '/98,771 '198,866 206,496 204,435 202,935 57 Other branches of parent bank. 26,941 34,111 44,370 47,221 '49,963 '49,903 51,511 53,157 51,882 50,861 58 Other banks.................................. 65,675 72,259 83,880 86,457 91,124 '89,542 89,649 94,140 90,735 90,710 59 Official institutions..................... 20,185 22,773 25,829 27,776 28,014 29,888 28,667 28,110 28,677 28,840 60 20,189 20,672 25,877 28,289 '28,050 '29,437 '29,038 31,088 33,140 32,524 61 Other liabilities................................ 6,933 6,456 6,747 8,488 '7,519 '8,300 '7,977 8,408 8,421 8,106 62 Total payable in U.S. dollars............ 107,890 135,907 173,071 183,263 '192,943 '192,723 '193,246 199,047 198,199 194,871 63 To United States.............................. 11,437 19,503 31,932 35,482 39,403 38,915 41,476 43,230 44,895 44,763 64 Parent bank.................................. 5,641 11,939 19,559 19,168 19,759 22,398 24,745 24,562 28,333 26,993 65 Other.............................................. 5,795 7,564 12,373 16,314 19,644 16,517 16,731 18,669 16,562 17,771 66 To foreigners.................................... 92,503 112,879 137,612 142,684 '149,461 ' 149,417 '147,566 151,285 148,851 145,852 67 Other branches of parent bank. 19,330 28,217 37,098 39,483 '41,793 '41,543 '42,681 43,191 41,802 40,684 68 Other banks.................................. 43,656 51,583 60,619 61,117 65,547 62,892 62,094 64,872 61,562 60,621 69 Official institutions..................... 17,444 19,982 22,878 24,481 24,695 26,366 25,113 23,972 24,546 24,443 70 Nonbank foreigners................... 12,072 13,097 17,017 17,604 '17,427 '18,616 '17,679 19,250 20,940 20,103 71 Other liabilities................................ 3,951 3,526 3,527 5,097 4,079 4,391 4,204 4,532 4,454 4,256 United Kingdom 69,804 74,883 81,466 83,270 88,033 90,154 88,748 90,933 90,789 89,626 73 3,978 5,646 5,997 7,933 7,922 7,310 7,237 7,753 6,008 6,785 74 510 2,122 1,198 1,611 1,425 1,364 1,375 1,451 1,253 1,550 75 Other.............................................. 3,468 3,523 4,798 6,322 6,496 5,946 5,862 6,302 4,755 5,236 76 To foreigners.................................... 63,409 67,240 73,228 72,848 77,580 79,837 79,087 80,736 82,160 80,331 77 Other branches of parent bank. 4,762 6,494 7,092 8,395 8,934 9,187 9,491 9,376 9,999 9,037 78 Other banks.................................. 32,040 32,964 36,259 34,163 37,024 36,676 36,974 37,893 36,915 36,764 79 Official institutions..................... 15,258 16,553 17,273 17,366 18,553 20,366 19,555 18,318 19,309 19,580 80 11,349 11,229 12,605 12,923 13,070 13,608 13,066 15,149 15,937 14,950 81 2,418 1,997 2,241 2,488 2,532 3,007 2,424 2,445 2,621 2,509 49,666 57,820 63,174 63,334 67,689 68,594 66,289 67,573 66,619 65,021 83 3,744 5,415 5,849 7,676 7,622 7,004 7,012 7,480 5,737 6,479 84 484 2,083 1,182 1,563 1,363 1,288 1,339 1,416 1,222 1,524 85 3,261 3,332 4,666 6,113 6,259 5,716 5,673 6,063 4,515 4,955 86 To foreigners.................................... 44,594 51,447 56,372 54,539 58,962 60,304 58,285 58,977 59,671 57,386 87 Other branches of parent bank. 3,256 5,442 5,874 7,131 7,535 7,724 7,871 7,505 8,164 7,211 88 20,526 23,330 25,527 23,254 25,984 25,306 24,605 25,608 24,015 23,352 89 Official institutions..................... 13,225 14,498 15,423 15,252 16,430 18,053 17,171 15,482 16,459 16,541 90 Nonbank foreigners................... 7,587 8,176 9,547 8,902 9,013 9,221 8,638 10,382 11,033 10,282 91 1,328 959 953 1,119 1,105 1,286 991 1,116 1,210 1,156 1Bahamas anid Cayman:5 92 Total, all currencies........................... 31,733 45,203 66,774 73,284 78,430 75,962 76,769 79,053 80,040 79,662 93 To United States............................ 4,815 11,147 22,721 24,487 28,741 28,442 30,641 32,140 35,772 35,044 94 Parent bank................................ 2,636 7,628 16,161 15,288 16,524 18,538 20,572 20,921 24,713 23,372 95 Other............................................ 2,180 3,520 6,560 9,198 12,218 9,905 10,069 11,219 11,060 11,672 96 To foreigners.................................. 26,140 32,949 42,899 46,468 48,328 46,034 44,571 45,294 42,912 43,262 97 Other branches of parent bank 7,702 10,569 13,801 13,206 13,756 13,844 13,308 12,818 11,642 11,598 98 Other banks................................ 14,050 16,825 21,760 23,881 26,933 23,678 23,374 24,717 22,256 22,707 99 Official institutions................... 2,377 3,308 3,573 4,592 3,184 3,357 3,053 3,000 3,183 3,197 100 Nonbank foreigners................. 2,011 2,248 3,765 4,789 4,455 5,155 4,836 4,759 5,831 5,761 101 Other liabilities.............................. 778 1,106 1,154 2,330 1,361 1,485 1,557 1,619 1,356 1,356 102 Total payable in U.S. dollars.......... 28,840 42,197 63,417 68,627 73,733 71,187 72,286 74,464 75,438 75,204 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 International Statistics □ May 1978 3.23 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Holdings and Transactions Millions of dollars 1978 1977 1978 Country or area 1976 1977 Jan.- Mar.p Sept. Oct. Nov. Dec. Jan. Feb.*5 Mar.p Holdings (end of period) 4 1 Estimated total....................... 15,799 38,620 31,066 34,324 37,661 38,620 40,101 40,380 41,240 2 Foreign countries................... 12,765 33,874 27,207 30,323 33,285 33,874 35,648 35,479 36,485 3 Europe.............................. 2,330 13,916 10,163 12,603 14,003 13,916 15,044 14,895 15,206 4 • Belgium-Luxembourg.. 14 19 19 20 20 19 19 19 19 5 Germany......................... 764 3,168 1,957 2,165 2,742 3,168 3,373 3,494 3,816 6 Netherlands................... 288 911 719 821 911 911 930 954 1,029 7 Sweden............................ 191 100 125 125 100 100 125 125 155 8 Switzerland..................... 261 All 488 474 476 All 391 401 400 9 United Kingdom.......... 485 8,888 6,506 8,640 9,419 8,888 9,839 9,513 9,418 10 Other Western Europe. 323 349 343 353 331 349 362 384 363 11 Eastern Europe............. 4 4 4 4 4 4 4 4 4 12 Canada................................ 256 288 292 294 293 288 285 250 251 13 Latin America.................................. 313 551 516 519 533 551 543 587 551 14 Venezuela...................................... 149 199 183 183 199 199 201 241 200 15 Other Latin America republics. 36 17 18 21 11 17 10 14 8 16 Netherlands Antilles 1............... 118 170 158 158 167 170 162 162 162 17 Asia.................................................... 9,323 18,745 15,941 16,611 18,104 18,745 19,413 19,378 20,120 18 Japan.............................................. 2,687 6,860 5,635 5,958 6,547 6,860 7,463 7,617 8,313 19 Africa................................................. 543 362 279 279 348 362 362 362 351 20 All other........................................ * 11 16 18 5 11 2 7 6 21 Nonmonetary international and regional organizations......................................... 3,034 4,746 3,859 4,001 4,376 4,746 4,453 4,901 4,755 22 International...................... 2,906 4,646 3,759 3,900 4,276 4,646 4,358 4,781 4,640 23 Latin American regional. 128 100 100 100 100 100 95 120 115 Transactions (net purchases, or sales (—), during period) 24 Total.............................................................................. 8,096 22,823 2,260 3,483 3,257 3,337 959 1,481 278 861 25 Foreign countries........................................................ 5,393 21,110 2,611 2,564 3,116 2,962 589 1,774 -169 1,006 26 Official institutions................................................ 5,116 20,328 2,424 2,493 3,052 2,885 598 1,714 -277 986 27 Other foreign.......................................................... 276 782 189 71 65 76 -9 59 108 22 28 Nonmonetary international and regional 2,704 1,713 10 919 141 376 370 -292 447 -145 Memo: Oil-exporting countries 29 Middle East 2.......................................................... 3,887 4,451 -55 161 284 869 324 56 -184 72 30 Africa 3..................................................................... 221 -181 -10 69 13 -10 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 1978 Assets 1974 1975 1976 Oct. Nov. Dec. Jan. Feb. Mar. Apr. 1 Deposits....................................................................... 418 353 352 425 416 424 422 445 352 481 Assets held in custody: 2 U.S. Treasury securities1...................................... 55,600 60,019 66,532 83,832 89,497 91,962 95,945 98,465 105,362 102,044 3 Earmarked gold2................................................... 16,838 16,745 16,414 15,988 15,872 15,988 15,726 15,735 15,727 15,686 1 Marketable U.S. Treasury bills, certificates of indebtedness, notes, Note.—Excludes deposits and U.S. Treasury securities held for inter­ and 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 1978 1977 1978 Transactions, and area or country 1976 1977 Jan.- Mar.^ Sept. Oct. Nov. Deo. Jan. Feb.p Mar.p U.S. corporate securities Stocks 1 18,227 14,154 3,262 1,012 973 1,282 1,235 1,024 825 1,413 2 15,485 11,479 2,593 847 752 899 945 909 762 921 3 Net purchases, or sales (—).................................. 2,743 2,676 670 165 222 383 290 115 63 492 4 Foreign countries..................................................... 2,730 2,661 689 170 223 385 286 116 63 510 5 329 1,006 391 57 109 200 156 30 41 319 6 256 40 55 5 27 1 -3 -12 -2 68 7 68 291 130 14 37 64 58 45 33 52 8 -199 22 -27 -18 5 10 9 -4 -13 -9 9 -100 152 -58 6 2 34 -3 -54 -16 12 10 United Kingdom............................................ 333 613 311 80 52 106 109 60 57 194 11 Canada.................................................................. 324 65 -48 -3 20 21 14 -19 -26 -3 12 Latin America..................................................... 152 127 3 -3 -4 27 15 -9 -4 17 13 Middle East1....................................................... 1,803 1,389 325 108 93 128 100 107 48 170 14 Other Asia............................................................ 119 59 12 8 2 8 1 6 1 5 15 7 5 3 2 2 * * « 2 1 16 -4 8 2 1 2 2 * 1 1 * 17 Nonmonetary international and regional organizations................................................... 13 15 -19 -5 -1 -2 4 -1 1 -19 Bonds2 18 5,529 7,766 1,577 503 942 743 354 459 524 593 19 4,322 3,432 1,303 383 292 226 267 377 348 579 20 Net purchases, or sales (—)................................. 1,207 4,334 273 120 650 517 87 83 176 15 21 Foreign countries..................................................... 1,248 4,238 267 123 650 507 41 101 131 35 22 Europe.................................................................. 91 2,005 38 33 376 320 19 133 32 -127 23 France............................................................... 39 -39 3 1 * -5 -11 -4 1 5 24 Germany.......................................................... -49 59 27 3 5 4 9 1 7 19 25 Netherlands..................................................... -29 72 -12 21 2 20 * 7 1 -20 26 158 158 1 12 -7 -7 -6 -7 3 5 27 United Kingdom............................................ 23 1,702 18 6 324 324 28 125 22 -129 28 Canada................................................................. 96 141 19 15 4 1 -1 7 1 5 29 94 64 27 13 11 -1 3 11 6 11 30 1,179 1,695 153 79 124 159 4 -59 75 137 31 Other Asia............................................................ -165 338 29 -14 135 27 16 9 11 9 32 Africa.................................................................... -25 -6 -1 -3 * * * * -1 * 33 Other countries................................................... -21 * * * * * * * * * 34 Nonmonetary international and regional organizations................................................... -41 96 7 -2 * 10 46 -18 45 -20 Foreign securities -323 -404 330 30 106 34 59 103 113 114 36 1,937 2,265 872 168 247 214 291 255 280 337 37 2,259 2,669 542 • 138 141 180 232 152 167 223 38 Bonds, net purchases, or sales (—)......................... -8,730 -5,005 -1,243 -650 -281 -320 -330 -569 -176 -497 39 Foreign purchases................................................... 4,932 8,420 2,015 695 786 593 885 691 522 802 40 Foreign sales........................................................... 13,662 13,424 3,258 1,345 1,066 913 1,215 1,260 698 1,300 41 Net purchases, or sales (—) of stocks and bonds.. -9,053 -5,409 -913 -620 -175 -285 -271 -466 -64 -383 42 Foreign countries......................................................... -7,155 -3,852 -691 -613 -24 -308 -293 -473 17 -235 43 -843 -1,099 330 -24 -33 -260 108 98 95 137 44 -5,245 -2,402 -627 -573 45 9 -175 -446 -4 -177 45 Latin America........................................................ * -80 100 35 -170 -2 -68 -6 37 69 46 -699 -5 -498 29 136 -57 51 -114 -113 -270 47 Africa........................................................................ 48 2 -2 1 -2 * 1 -2 * * 48 -416 -267 6 -81 1 2 -210 -3 2 6 49 Nonmonetary international and regional organizations....................................................... -1,898 -1,557 -221 -6 -151 23 22 7 -80 -148 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 □ May 1978 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 Type, and area or country Dec. Mar. June Sept. Dec.p Dec. Mar. June Sept. Dec.p Liabilities to foreigners Claims on foreigners 1 '6,606 '6,604 '6,424 7,122 7,822 '14,162 '14,963 '16,166 14,983 15,887 By type: 2 Payable in dollars................................................... r5,894 r5,837 '5,772 6,329 7,078 '13,163 ' 13,947 r15,054 13,936 14,517 3 Payable in foreign currencies................................ 712 767 652 792 745 999 1,016 1,113 1,047 1,370 4 Deposits with banks abroad in reporter’s name............................................................. 442 431 448 414 620 5 Other..................................................................... 557 585 665 632 750 By area or country: 6 Foreign countries......................................................... '6,398 '6,412 '6,254 6,968 7,611 '14,161 14,961 '16,165 14,981 15,885 7 Europe....................................................................... '2,235 r2,144 2,208 2,314 2,526 5,282 5,232 5,820 5,057 5,653 8 10 9 10 12 21 21 23 26 24 24 9 Belgium-Luxembourg........................................ '169 m i 138 119 107 162 170 218 232 218 10 Denmark.............................................................. 7 15 14 16 14 56 48 40 44 56 11 2 2 10 11 9 77 40 90 59 13 12 France................................................................... 200 163 157 171 236 438 436 413 430 513 13 174 175 163 226 284 378 367 377 393 452 14 Greece................................................................... 48 80 73 78 85 51 90 86 52 41 15 Italy....................................................................... 131 135 154 139 161 384 473 440 342 387 16 Netherlands......................................................... 141 168 205 176 230 166 172 182 161 166 17 29 37 33 35 30 51 42 42 38 42 18 Portugal............................................................... 13 23 20 12 11 40 35 30 34 69 19 40 52 68 74 77 369 325 322 307 387 20 34 36 36 41 28 90 93 92 91 118 21 190 214 236 245 257 241 154 179 146 221 22 Turkey.................................................................. 13 12 21 97 108 25 32 37 32 39 23 United Kingdom................................................ '883 '698 730 736 733 2,446 2,475 3,027 2,469 2,674 24 Yugoslavia........................................................... 123 113 110 92 90 26 30 28 20 20 25 Other Western Europe...................................... 7 6 6 9 9 20 18 15 15 25 26 U.S.S.R................................................................. 9 15 16 11 24 156 105 76 62 55 27 Other Eastern Europe....................................... 13 13 10 14 12 85 103 102 96 134 28 Canada...................................................................... 400 427 r448 454 503 2,458 2,426 r2,573 2,501 2,612 29 Latin America......................................................... ' 1,040 '1,121 '1,020 1,027 1,189 r3,582 r4,408 4,938 4,535 4,333 30 Argentina............................................................. 44 42 50 50 42 44 46 51 53 53 31 Bahamas.............................................................. 260 256 216 222 300 '1,391 '1,881 '2,244 1,873 1,906 32 Brazil.................................................................... 72 49 37 76 49 682 535 457 414 517 33 Chile..................................................................... 17 16 24 13 17 34 35 28 40 45 34 Colombia............................................................. 13 18 22 24 42 59 75 72 85 84 35 Cuba..................................................................... * * * * * 1 1 1 * * 36 Mexico................................................................. '102 '121 '120 103 115 332 317 301 304 316 37 Panama................................................................. 34 12 11 12 22 74 105 121 221 88 38 Peru....................................................................... 25 24 21 13 15 42 32 28 30 33 39 Uruguay............................................................... 4 4 3 4 3 5 6 5 5 5 40 Venezuela............................................................. 219 260 208 225 222 190 210 240 256 275 41 Other Latin American republics..................... 141 148 141 122 126 276 237 237 257 280 42 10 11 17 9 25 9 14 8 8 12 43 Other Latin America........................................ 100 160 151 154 210 441 914 1,146 987 718 44 2,040 2,057 1,890 2,492 2,737 2,276 2,316 ' 2,315 2,388 2,746 45 China, People’s Republic of (Mainland).... 1 3 2 1 8 3 1 1 12 9 46 China, Republic of (Taiwan).......................... 110 113 138 152 156 197 130 131 139 157 47 Hong Kong......................................................... 40 42 27 25 40 96 107 93 73 98 48 23 39 41 44 37 55 35 51 42 37 49 98 94 80 60 60 179 206 184 185 378 50 Israel..................................................................... 37 37 45 58 63 41 51 70 46 38 51 Japan.................................................................... 193 172 183 604 695 912 969 '927 1,023 1,057 52 Korea................................................................... 76 96 95 81 108 117 130 158 153 173 53 Philippines........................................................... 53 59 73 78 74 86 86 90 111 99 54 24 19 11 17 17 22 27 22 24 23 55 Other Asia........................................................... 1,385 1,383 1,196 1,372 1,480 568 569 '582 579 679 56 606 591 589 568 563 393 429 370 346 397 57 Egypt.................................................................... 27 29 33 45 13 28 70 24 22 38 58 Morocco............................................................... 45 30 72 105 112 11 12 11 10 21 59 South Africa....................................................... 54 33 27 29 20 87 80 69 75 75 60 Zaire..................................................................... 36 39 39 48 46 21 19 17 19 15 61 Other Africa........................................................ 444 460 418 341 372 247 248 248 221 248 62 Other countries........................................................ 77 72 98 111 93 170 150 149 153 144 63 Australia............................................................... 59 53 78 93 75 105 114 110 113 110 64 All other............................................................... 19 19 20 18 18 65 36 40 41 34 65 Nonmonetary international and regional organizations....................................................... 208 192 170 154 212 1 2 1 1 1 Note.—Reported by exporters, importers, and industrial and com- Data exclude claims held through U.S. banks and intercompany accounts mercial concerns and other nonbanking institutions in the United States. 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 1978 Type and country 1973 1974 1975 1976 Sept.' Oct.' Nov. ' Dec.' Jan. Feb.p 1 Total.............................................................................. 3,185 3,357 3,799 5,468 6,921 7,694 7,575 6,769 7,324 7,937 By type: 2 Payable in dollars................................................... 2,641 2,660 3,042 4,788 6,225 6,972 6,652 5,804 6,310 6,947 3 Deposits............................................................... 2,604 2,591 2,710 4,415 5,783 6,468 6,207 5,402 5,856 6,462 4 Short-term investments 1.................................. 37 69 332 373 442 504 445 402 454 485 5 Payable in foreign currencies................................ 544 697 757 680 695 722 924 965 1,014 990 6 Deposits.................................................. 431 429 511 373 358 374 489 552 561 541 7 Short-term investments 1.................................. 113 268 246 302 337 348 435 413 453 449 By country: 8 United Kingdom.................................................... 1,128 1,350 1,306 1,837 1,799 1,882 2,098 1,989 1,680 1,787 9 Canada...................................................................... 775 967 1,156 1,539 1,627 1,956 1,863 1,706 2,108 2,228 10 Bahamas.................................................................. 597 391 546 1,264 1,784 2,383 2,086 1,781 2,217 2,507 11 Japan......................................................................... 336 398 343 113 143 150 220 139 197 258 12 All other................................................................... 349 252 446 715 1,568 1,323 1,308 1,154 1,122 1,157 1 Negotiable and other readily transferable foreign obligations payable Note.—Data represent the assets abroad of large nonbanking con­ on 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 1977 1976 1977 Area and country Dec. Mar. June Sept. Dec.P Dec. Mar. June Sept. Dec.P Liabilities to foreigners Claims on foreigners 1 '3,564 r3,501 '3,336 , 3,327 3,119 4,922 4,891 '4,827 4,625 4,631 2 Europe.......................................................................... '2,723 '2,653 '2,497 2,555 2,385 851 844 827 754 742 3 Germany.................................................................. 396 391 370 407 255 72 84 76 76 70 4 Netherlands............................................................. 277 272 262 272 288 156 154 147 81 82 5 Switzerland............................................................. 260 178 177 224 241 57 53 43 42 49 6 United Kingdom.................................................... rl,418 rl,386 '1,273 1,251 1,229 '238 204 219 215 204 7 Canada......................................................................... r87 r80 '79 76 71 1,530 1,475 1,486 1,462 1,473 8 Latin America............................................................ '271 r274 '283 276 261 1,521 1,489 1,457 1,371 1,404 9 Bahamas................................................................... 163 163 167 159 156 36 34 34 36 40 10 Brazil.................................................................... 5 5 7 7 7 133 125 125 134 144 11 Chile......................................................................... 1 1 1 1 1 248 210 208 201 203 12 Mexico..................................................................... r18 r23 '26 30 30 195 180 178 187 176 13 Asia............................................................................... 423 432 408 358 338 775 817 '833 809 797 14 Japan........................................................................ 397 413 386 319 305 77 96 '111 94 66 15 Africa........................................................................... 2 2 3 3 2 187 199 158 165 157 16 Allother1..................................................................... 58 59 67 59 60 58 67 67 63 59 1 Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 International Statistics □ May 1978 3.29 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Per cent per annum Rate on Apr. 30, 1978 Rate on Apr. 30, 1978 Rate on Apr. 30, 1978 Country Country Country Per Month Per Month Per Month cent effective cent effective cent effective Argentina 18.0 Feb. 1972 France.............................. 9.5 Aug. 1977 Norway............... 7.0 Feb. 1978 Austria... 5.5 June 1977 Germany, Fed. Rep. of. 3.0 Dec. 1977 Sweden................. 7.0 Apr. 1978 Belgium. . 5.5 Mar. 1978 Italy.................................. 11.5 Aug. 1977 Switzerland......... 1.0 Feb. 1978 Brazil___ 28.0 May 1976 Japan................................ 3.5 Mar. 1978 United Kingdom 7.5 Apr. 1978 Canada.. 8.5 Apr. 1978 Mexico............................. 4.5 June 1942 Venezuela............ 5.0 Oct. 1970 Denmark. 9.0 Mar. 1977 Netherlands.................... 4.0 Apr. 1978 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 1978 Country, or type 1975 1976 1977 Nov. Dec. Jan. Feb. Mar. Apr. 1 Euro-dollars 7.02 5.58 6.03 7.09 7.12 7.32 7.28 7.27 7.38 2 United Kingdom 10.63 11.35 8.07 5.32 6.76 6.23 6.82 6.72 7.47 3 Canada................ 8.00 9.39 7.47 7.34 7.20 7.08 7.14 7.44 8.14 4 Germany............. 4.87 4.19 4.30 4.09 3.94 3.52 3.45 3.49 3.54 5 Switzerland......... 3.01 1.45 2.56 2.32 2.20 .92 .50 .46 .40 6 Netherlands........ 5.17 7.02 4.73 5.94 6.65 5.01 5.28 5.35 4.62 7 France................. 7.91 8.65 9.20 9.28 9.88 9.25 10.45 9.86 8.35 8 Italy..................... 10.37 16.32 14.26 11.74 11.38 10.99 O) 0) 11.75 9 Belgium............... 6.63 10.25 6.95 6.38 7.75 8.29 6.75 6.41 5.55 10 Japan................... 11.64 7.70 6.22 5.37 5.75 5.33 5.25 4.86 4.50 1 Unquoted. over; and Japan, loans and discounts that can be called after being held Note.—Rates are for 3-month interbank loans except for—Canada, over a minimum of two month-ends. finance company paper; Belgium, time deposits of 20 million francs and 3.31 FOREIGN EXCHANGE RATES Cents per unit of foreign currency 1977 1978 Country/currency 1975 1976 1977 Nov. Dec. Jan. Feb. Mar. Apr. 1 Australia/dollar................... 130.77 122.15 110.82 112.70 113.36 113.82 113.56 113.83 113.97 2 Austria/shilling..................... 5.7467 5.5744 6.0494 6.2551 6.4734 6.5698 6.6893 6.8221 6.8081 3 Belgium/franc....................... 2.7253 2.5921 2.7911 2.8396 2.9608 3.0425 3.0930 3.1589 3.1419 4 Canada/dollar....................... 98.30 101.41 94.112 90.145 91.132 90.810 89.850 88.823 87.592 5 Denmark/krone................... 17.437 16.546 16.658 16.327 16.833 17.324 17.610 17.839 17.807 6 Finland/markka................... 27.285 25.938 24.913 23.986 24.299 24.816 24.527 24.013 23.900 7 France/franc......................... 23.354 20.942 20.344 20.614 20.844 21.196 20.628 21.256 21.803 8 Germany/deutsche mark... 40.729 39.737 43.079 44.633 46.499 47.220 48.142 49.181 48.964 9 India/rupee........................... 11.926 11.148 11.406 11.576 11.712 12.195 12.331 12.185 11.815 10 Ireland/pound....................... 222.16 180.48 174.49 181.78 185.46 193.53 193.96 190.55 184.97 11 Italy/lira................................. .15328 .12044 .11328 .11388 .11416 .11469 .11619 .11692 .11644 12 Japan/yen.............................. .33705 .33741 .37342 .40872 .41491 .41481 .41603 .43148 .45084 13 Malaysia/ringgit................... 41.753 39.340 40.620 41.910 42.201 42.230 42.374 42.428 42.057 8.0000 6.9161 4.4239 4.4096 4.4059 4. 3963 4.3972 4.3928 4.3945 15 Netherlands/guilder............. 39.632 37.846 40.752 41.366 42.955 44.084 44.880 45.994 45.865 16 New Zealand/dollar............. 121.16 99.115 96.893 99.392 100.59 101.95 102.07 102.20 101.92 17 Norway/krone...................... 19.180 18.327 18.789 18.328 19.056 19.401 19.025 18.775 18.621 18 Portugal/escudo................... 3.9286 3.3159 2.6234 2.4575 2.4755 2.4840 2.4806 2.4483 2.4075 19 South Africa/rand............... 136.47 114.85 114.99 115.04 115.04 115.02 115.05 115.05 115.05 20 Spain/peseta......................... 1.7424 1.4958 1.3287 1.2060 1.2237 1.2397 1.2394 1.2497 1.2475 21 Sri Lanka/rupee................... 14.385 11.908 11.964 8.7721 6.2000 6.2167 6.4028 6.5000 6.4950 24.141 22.957 22.383 20.848 21.044 21.413 21.554 21.693 21.731 23 Switzerland/franc................. 38.743 40.013 41.714 45.507 48.168 50.353 52.422 52.693 52.511 24 United Kingdom/pound... 222.16 180.48 174.49 181.78 185.46 193.53 193.96 190.55 184.97 Memo: 25 United States/dollar 1........ 82.20 89.68 89.10 87.29 85.52 84.05 83.74 82.94 83.10 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

A 69 Guide to Tabular Presentation and Statistical Releases GUIDE TO TABULAR PRESENTATION Symbols and Abbreviations p Preliminary SMSA’s Standard metropolitan statistical areas r Revised (Notation appears on column heading REIT’s Real estate investment trusts when more than half of figures in that * Amounts insignificant in terms of the partic­ column are changed.) ular unit (e.g., less than 500,000 when e Estimated the unit is millions) c Corrected (1) Zero, (2) no figure to be expected, or n.e.c. Not elsewhere classified (3) figure delayed or, (4) no change (when Rp’s Repurchase agreements figures are expected in percentages). IPC’s Individuals, partnerships, and corporations 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 Page Anticipated schedule of release dates for individual releases ............................................... December 1977 A-76 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Federal Reserve Board of Governors G. W illiam M iller, Chairman Henry C. W allich Stephen S. G ardner, Vice Chairman Philip E. C oldw ell OFFICE OF BOARD MEMBERS OFFICE OF STAFF DIRECTOR FOR MONETARY POLICY Thomas J. O’C onnell, Counsel to the Chairman Joseph R. Coyne, Assistant to the Board Stephen H. Axilrod, Staff Director Kenneth A. G uenther, Assistant to the Board Arthur L. Broida, Deputy Staff Director Sidney L. Jones, Assistant to the Board Murray Altm ann, 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 LEGAL DIVISION James L. K ichline, Director Joseph S. Zeisel, Deputy Director N eal L. Petersen, General Counsel Edward C. Ettin, Associate Director Robert E. M annion, Associate General Counsel John H. K alchbrenner, Associate Director A llen L. Raiken, Associate General Counsel John J. Mingo, Senior Research Division Officer Charles R. M cN eill, Assistant to the General Eleanor J. Stockw ell, Senior Research Division Counsel Officer James R. W etzel, Senior Research Division Officer Robert A. Eisenbeis, Associate Research Division OFFICE OF THE SECRETARY Officer Jared J. Enzler, Associate Research Division Theodore E. A llison, Secretary Officer G riffith L. Garwood, Deputy Secretary J. C ortland G. Peret, Associate Research *Cathy E. M inehan, Assistant Secretary Division Officer Richard H. Puckett, Associate Research Division Officer DIVISION OF CONSUMER AFFAIRS IHelm ut F. W endel, Associate Research Division Officer Janet O. H art, Director N athaniel E. B utler, Associate Director James M. Brundy, Assistant Research Division Officer Jerauld C. Kluckman, Associate Director Robert M. Fisher, Assistant Research Division Officer DIVISION OF BANKING Stephen P. Taylor, Assistant Research Division Officer SUPERVISION AND REGULATION Levon H. Garabedian, Assistant Director John E. Ryan, Director ^Frederick C. Schadrack, Deputy Director DIVISION OF INTERNATIONAL FINANCE Frederick R. Dahl, Associate Director W illiam W. W iles, Associate Director Edwin M. Truman, Director Jack M. Egertson, Assistant Director John E. Reynolds, Counselor Don E. K line, Assistant Director Robert F. Gemmill, Associate Director Robert S. Plotkin, Assistant Director George B. Henry, Associate Director Thomas A. Sidman, Assistant Director Charles J. Siegman, Associate Director Samuel H. T alley, Assistant Director Samuel Pizer, Senior International Division W illiam Taylor, Assistant Director Officer Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A71 and Official Staff Philip C. Jackson, Jr. J. Charles Partee OFFICE OF OFFICE OF STAFF DIRECTOR FOR STAFF DIRECTOR FOR MANAGEMENT FEDERAL RESERVE BANK ACTIVITIES John M. Denkler, Staff Director W illiam H. W allace, Staff Director Robert J. Lawrence, Deputy Staff Director Donald E. Anderson, Assistant Director for DIVISION OF FEDERAL RESERVE Construction Management BANK EXAMINATIONS AND BUDGETS Joseph W. Daniels, Sr., Assistant Director and Director of Equal Employment Opportunity Albert R. Ham ilton, Director Gordon B. Grim wood, Assistant Director and Clyde H. Farnsworth, Jr., Associate Director Program Director for Contingency Planning John F. Hoover, Assistant Director P. D. Ring, Assistant Director DIVISION OF DATA PROCESSING DIVISION OF Charles L. Hampton, Director FEDERAL RESERVE BANK OPERATIONS Bruce M. Beardsley, Associate Director U yless D. Black, Assistant Director James R. Kudlinski, Director Glenn L. Cummins, Assistant Director W alter A lthausen, Assistant Director Robert J. Zemel, Assistant Director Brian M. Carey, Assistant Director Harry A. Guinter, Assistant Director DIVISION OF PERSONNEL David L. Shannon, Director John R. Weis, Assistant Director Charles W. Wood, Assistant Director OFFICE OF THE CONTROLLER John Kakalec, Controller Edward T. M ulrenin, Assistant Controller DIVISION OF ADMINISTRATIVE SERVICES W alter W. Kreimann, Director John L. Grizzard, Assistant Director John D. Smith, Assistant Director *On loan from the Federal Reserve Bank of New York. tOn leave of absence. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Federal Reserve Bulletin □ May 1978 FOMC and Advisory Councils FEDERAL OPEN MARKET COMMITTEE G. W illiam M iller, Chairman Paul A. V olcker, Vice Chairman Ernest T. Baughm an Stephen S. G ardner Henry C. W allich Philip E. Coldwell Philip C. Jackson, Jr. Mark H. Willes David P. Eastburn J. Charles Partee W illis J. Winn A rthur L. Broida, Secretary Richard G. Davis, Associate Economist M urray A ltm ann, Deputy Secretary Edward C. E ttin, Associate Economist Normand R. V. Bernard, Assistant Secretary Ira Kaminow, Associate Economist Thomas J. O’C onnell, General Counsel Peter M. Keir, Associate Economist Edward G. Guy, Deputy General Counsel James L. K ichline, Associate Economist Robert E. M annion, Assistant General Counsel John Paulus, Associate Economist Stephen H. A xilrod, Economist John E. R eynolds, Associate Economist Joseph Burns, Associate Economist Edwin M. Truman, Associate Economist John M. Davis, Associate Economist Joseph S. Z eisel, Associate Economist A lan R. Holm es, M anager, System Open M arket Account Peter D. Sternlight, Deputy M anager for Domestic Operations Scott E. Pardee, Deputy Manager for Foreign Operations FEDERAL ADVISORY COUNCIL G ilbert F. B radley, tw elfth federal reserve district, President J. W. M cLean, tenth federal reserve district, Vice President Henry S. W oodbridge, first district Frank A. Plummer, sixth district Walter B. W riston, second district Edward Byron Smith, seventh district William B. Eagleson, Jr., third district Clarence C. Barksdale, eighth district M. Brock W eir, fourth district Richard H. Vaughan, ninth district John H. Lumpkin, fifth district James D. Berry, eleven th district H erbert V. Prochnow, Secretary W illiam J. Korsvik, Associate Secretary CONSUMER ADVISORY COUNCIL Leonor K. Sullivan, St. Louis, Missouri, Chairman W illiam D. W arren, Los Angeles, California, Vice Chairman R oland E. B randel, San Francisco, California Richard F. K err, Cincinnati, Ohio Agnes H. B ryant, Detroit, Michigan Robert J. K lein, New York, New York John G. B u ll, Fort Lauderdale, Florida Percy W. Loy, Portland, Oregon R obert V. B ullock, Frankfort, Kentucky R. C. M organ, El Paso, Texas Linda M. Cohen, Washington, D.C. Reece A. O vercash, 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 C arl Felsenfeld, New York, New York B lair C. Shick, Cambridge, Massachusetts Jean A. Fox, Pittsburgh, Pennsylvania James E. Sutton, Dallas, Texas M arcia A. H akala, Omaha, Nebraska Thomas R. Swan, Portland, Maine Joseph F. H olt III, Oxnard, California Anne Gary T aylor, Alexandria, Virginia Richard H. H olton, Berkeley, California Richard D. W agner, Simsbury, Connecticut Edna DeCoursey Johnson, Baltimore, Maryland Richard L. W heatley, 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 Robert H. Knight Paul A. Volcker Boris Yavitz Thomas M. Timlen Buffalo .................... .14240 Donald R. Nesbitt John T. Keane PHILADELPHIA 19105 John W. Eckman David P. Eastburn Werner C. Brown Richard L. Smoot CLEVELAND* 44101 Robert E. Kirby Willis J. Winn Otis A. Singletary Walter H. MacDonald Cincinnati ............... 45201 Lawrence H. Rogers, II Robert E. Showalter Pittsburgh ............... 15230 G. Jackson Tankersley Robert D. Duggan RICHMOND* .............23261 E. Angus Powell Robert P. Black Maceo A. Sloan 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 Clifford M. Kirtland, Jr. Monroe Kimbrel William A. Fickling, Jr. Kyle K. Fossum Birmingham ............ 35202 Harold B. Blach, Jr. Hiram J. Honea Jacksonville ............ 32203 James E. Lyons Edward C. Rainey Miami ...................... 33152 Alvaro L. Carta F. J. Craven, Jr. Nashville ................. 37203 John C. Bolinger Jeffrey J. Wells New Orleans .......... 70161 Edwin J. Caplan George C. Guynn CHICAGO* ............... 60690 Robert H. Strotz Robert P. Mayo John Sagan Daniel M. Doyle Detroit ...................... 48231 Jordan B. Tatter William C. Conrad ST. LOUIS ................. 63166 Armand C. Stalnaker Lawrence K. Roos William B. Walton Donald W. Moriarty Little Rock ............. 72203 G. Larry Kelley John F. Breen Louisville ............... 40201 James H. Davis Donald L. Henry Memphis ................. 38101 Jeanne L. Holley 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 Christine H. Anthony 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 Josefina Salas-Porras Fredric W. Reed Houston ................... 77001 Alvin I. Thomas J. Z. Rowe San Antonio ............ 78295 Pete Morales, Jr. Carl H. Moore SAN FRANCISCO ....94120 Joseph F. Alibrandi John J. Balles Cornell C. Maier John B. Williams Los Angeles ............ 90051 Caroline L. Ahmanson 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 Gerald R. Kelly ♦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 Bank Credit-Card and Check-Credit Plans. 1968. Functions. 1974. 125 pp. 102 pp. $1.00 each; 10 or more to one address, Annual Report $.85 each. Federal Reserve Bulletin. Monthly. $20.00 per Survey of Changes in Family Finances. 1968. 321 year or $2.00 each in the United States, its posses­ pp. $1.00 each; 10 or more to one address, $.85 sions, Canada, and Mexico; 10 or more of same each. issue to one address, $18.00 per year or $1.75 each. Elsewhere, $24.00 per year or $2.50 each. Report of the Joint Treasury-Federal Reserve Bank (R in e g p rin a t n d of P M ar o t ne 1 t o a n r ly y ) S 19 t 7 a 6 t . i s 6 t 8 i 2 c s p , p. 19 $ 1 5 4 .0 -1 0 9 . 41. S M t a u r d k y e t o . f 1 t 96 h 9 e . 4 U 8 . p S p . . G $. o 2 v 5 e r ea n c m h e ; n 1 t 0 S o e r c m ur or it e ie to s one address, $.20 each. Banking and Monetary Statistics, 1941-1970. 1976. 1,168 pp. $15.00. Joint Treasury-Federal Reserve Study of the Annual Statistical Digest, 1971-75. 1976. 339 pp. Government Securities Market: Staff Stud­ $4.00 per copy for each paid subscription to Fed­ ies—Part 1. 1970. 86 pp. $.50 each; 10 or more eral Reserve Bulletin. All others, $5.00 each. to one address, $.40 each. Part 2. 1971. 153 pp. Annual Statistical Digest, 1972-76. 1977. 388 pp. and Part 3. 1973. 131 pp. Each volume $1.00; $10.00 per copy. 10 or more to one address, $.85 each. Federal Reserve Monthly Chart Book. Subscrip­ Open Market Policies and Operating Proce­ tion includes one issue of Historical Chart Book. dures—Staff Studies. 1971. 218 pp. $2.00 $12.00 per year or $1.25 each in the United States, each; 10 or more to one address, $1.75 each. its possessions, Canada, and Mexico; 10 or more Reappraisal of the Federal Reserve Discount of same issue to one address, $1.00 each. Else­ Mechanism. Vol. 1. 1971. 276 pp. Vol. 2. 1971. where, $15.00 per year or $1.50 each. 173 pp. Vol. 3. 1972. 220 pp. Each volume $3.00; Historical Chart Book. Issued annually in Sept. 10 or more to one address, $2.50 each. Subscription to Monthly Chart Book includes one issue. $1.25 each in the United States, its posses­ The Econometrics of Price Determination Con­ sions, Canada, and Mexico; 10 or more to one ference, October 30-31, 1970, Washington, D.C. 1972. 397 pp. Cloth ed. $5.00 each; 10 or more address, $1.00 each. Elsewhere, $1.50 each. to one address, $4.50 each. Paper ed. $4.00 each; Capital Market Developments. Weekly. $15.00 per 10 or more to one address, $3.60 each. year or $.40 each in the United States, its posses­ sions, Canada, and Mexico; 10 or more of same Federal Reserve Staff Study: Ways to Moderate issue to one address, $13.50 per year or $.35 each. Fluctuations in Housing Construction. 1972. Elsewhere, $20.00 per year or $.50 each. 487 pp. $4.00 each; 10 or more to one address, $3.60 each. Selected Interest and Exchange Rates—Weekly Series of Charts. Weekly. $15.00 per year or Lending Functions of the Federal Reserve $.40 each in the United States, its possessions, Banks. 1973. 271 pp. $3.50 each; 10 or more Canada, and Mexico; 10 or more of same issue to one address, $3.00 each. to one address, $13.50 per year or $.35 each. Improving the Monetary Aggregates (Report of the Elsewhere, $20.00 per year or $.50 each. Advisory Committee on Monetary Statistics). The Federal Reserve Act, as amended through De­ 1976. 43 pp. $1.00 each; 10 or more to one cember 1976, with an appendix containing provi­ address, $.85 each. sions of certain other statutes affecting the Federal Annual Percentage Rate Tables (Truth in Lend­ Reserve System. 307 pp. $2.50. ing—Regulation Z) Vol. I (Regular Transactions). Regulations of the Board of Governors of the 1969. 100 pp. Vol. II (Irregular Transactions). Federal Reserve System 1969. 116 pp. Each volume $1.00, 10 or more Published Interpretations of the Board of Gov­ of same volume to one address, $.85 each. ernors, as of June 30, 1977. $7.50. Federal Reserve Measures of Capacity and Capac­ Industrial Production—1976 Edition. 1977. 304 pp. ity Utilization. 44 pp. $1.75 each, 10 or more to one $4.50 each; 10 or more to one address, $4.00 each. address, $1.50 each. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve Board Publications A 75 CONSUMER EDUCATION PAMPHLETS Measures of Security Credit. 12/70. Revised Measures of Manufacturing Capacity (Short pamphlets suitable for classroom use. Multiple Utilization. 10/71. copies available without charge.) Revision of Bank Credit Series. 12/71. Assets and Liabilities of Foreign Branches of The Equal Credit Opportunity Act and . . . Age U.S. Banks. 2/72. The Equal Credit Opportunity Act and . . . Bank Debits, Deposits, and Deposit Turnover— Credit Rights in Housing Revised Series. 7/72. The Equal Credit Opportunity Act and . . . Yields on Newly Issued Corporate Bonds. 9/72. Doctors, Lawyers, Small Retailers, and Recent Activities of Foreign Branches of U.S. Others Who May Provide Incidental Credit Banks. 10/72. The Equal Credit Opportunity Act and . Revision of Consumer Credit Statistics. 10/72. Women One-Bank Holding Companies Before the 1970 Fair Credit Billing Amendments. 12/72. A Guide to Federal Reserve Regulations Yields on Recently Offered Corporate Bonds. If You Borrow To Buy Stock 5/73. Truth in Leasing 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. STAFF ECONOMIC STUDIES U.S. Energy Supplies and Uses, Staff Economic Study by Clayton Gehman. 12/73. Studies and papers on economic and financial subjects Inflation and Stagnation in Major Foreign In­ that are of general interest in the field of economic dustrial Countries. 10/74. research. The Structure of Margin Credit. 4/75. New Statistical Series on Loan Commitments at Summaries Only Printed in the Bulletin Selected Large Commercial Banks. 4/75. (Limited supply of mimeographed copies of full text Recent Trends in Federal Budget Policy. 7/75. available upon request for single copies.) Recent Developments in International Financial Markets. 10/75. The Performance of Bank Holding Company- MINNIE: A Small Version of the Affiliated Finance Companies, by Stephen A. MIT-PENN-SSRC Econometric Model, Staff Rhoades and Gregory E. Boczar. Aug. 1977. 19 pp. Economic Study by Douglas Battenberg, Jared J. Enzler, and Arthur M. Havenner. 11/75. Greeley in Perspective, by Paul Schweitzer and Joshua Greene. Sept. 1977. 17 pp, An Assessment of Bank Holding Companies, Staff Structure and Performance Studies in Banking: A Economic Study by Robert J. Lawrence and Samuel H. Talley. 1/76. Summary and Evaluation, by Stephen A. Rhoades. Dec. 1977. 45 pp. Industrial Electric Power Use. 1/76. Revision of Money Stock Measures. 2/76. An Analysis of Federal Reserve Attrition Since 1960, by John T. Rose. Jan. 1978. 44 pp. Survey of Finance Companies, 1975. 3/76. Problems in Applying Discriminant Analysis in Revised Series for Member Bank Deposits and Credit Scoring Models, by Robert A. Eisenbeis. Aggregate Reserves. 4/76. Jan. 1978. 28 pp. Industrial Production—1976 Revision. 6/76. External Capital Financing Requirements of Federal Reserve Operations in Payment Mecha­ Commercial Banks: 1977-81, by Gerald A. Han- nisms: A Summary. 6/76. weck and John J. Mingo. Feb. 1978. 34 pp. Recent Growth in Activities of U.S. Offices of Mortgage Borrowing Against Equity in Existing Banks. 10/76. Homes: Measurement, Generation, and Im­ New Estimates of Capacity Utilization: Manu­ plications for Economic Activity, by David F. facturing and Materials. 11/76. Seiders. May 1978. 42 pp. U.S. International Transactions in a Recovering Printed in Full in the Bulletin Economy. 4/77. Staff Economic Studies shown in list below. Bank Holding Company Financial Developments in 1976. 4/77. REPRINTS Changes in Bank Lending Practices, 1976. 4/77. Survey of Terms of Bank Lending—New Series. (Except for Staff Papers, Staff Economic Studies, and 5/77. some leading articles, most of the articles reprinted do The Commercial Paper Market. 6/77. not exceed 12 pages.) Consumption and Fixed Investment in the Eco­ A Revised Index of Manufacturing Capacity, nomic Recovery Abroad. 10/77. Staff Economic Study by Frank de Leeuw with Recent Developments in U.S. International Frank E. Hopkins and Michael D. Sherman. 11/66. Transactions. 4/78. U.S. International Transactions: Trends in Survey of Time and Savings Deposits at All Com­ 1960-67. 4/68. mercial Banks, January 1978. 5/78. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Index to Statistical Tables References are to pages A-3 through A-68 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 d>eposits)\ 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 Turnover, 13 BANKERS balances, 16, 18, 20, 21, 22 Discount rates at F.R. Banks (See Interest rates) (See also Foreigners) Discounts and advances by F.R. Banks (See Loans) ' Banks for cooperatives, 35 Dividends, corporate, 37 Bonds (See also U.S. Govt, securities): New issues, 36 EMPLOYMENT, 46, 47 Yields, 3 Euro-dollars, 27 Branch banks: 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 grpss debt, 32 Receipts and outlays, 30, 31 loans) Treasury operating balance, 30 Federal Financing Bank, 30, 35 CAPACITY utilization, 46 Federal funds, 3, 6, 18, 20, 21, 22, 27, 30 Capital accounts: Federal home loan banks, 35 Banks, by classes, 16, 17, 19, 20 Federal Home Loan Mortgage Corp., 35, 40, 41 Federal Reserve Banks, 12 Federal Housing Administration, 35, 40, 41 Central banks, 68 Federal intermediate credit banks, 35 Certificates of deposit, 23, 27 Federal land banks, 35, 41 Commercial and industrial loans: Federal National Mortgage Assn., 35, 40, 41 Commercial banks, 15, 18, 23, 26 Federal Reserve Banks: Weekly reporting banks, 20, 21, 22, 23, 24 Condition statement, 12 Commercial banks: Discount rates (See Interest rates) Assets and liabilities, 3, 15-19, 20-23 U.S. Govt, securities held, 4, 12, 13, 32, 33 Business loans, 26 Federal Reserve credit, 4, 5, 12, 13 Commercial and industrial loans, 24, 26 Federal Reserve notes, 12 Consumer loans held, by type, 42, 43 Federally sponsored credit agencies, 35 Loans sold outright, 23 Finance companies: Number, by classes, 16, 17, 19 Assets and liabilities, 39 Real estate mortgages held, by type of holder and Business credit, 39 property, 41 Loans, 20, 21, 22, 42, 43 Commercial paper, 3, 24, 25, 27, 39 Paper, 25, 27 Condition statements (See Assets and liabilities) Financial institutions, loans to, 18, 20-22 Construction, 46, 50 Float, 4 Consumer instalment credit, 42, 43 Flow of funds, 44, 45 Consumer prices, 46, 51 Foreign: Consumption expenditures, 52, 53 Currency operations, 12 Corporations: Deposits in U.S. banks, 4, 12, 19, 20, 21, 22 Profits, taxes, and dividends, 37 Exchange rates, 68 Security issues, 36, 65 Trade, 55 Cost of living (See Consumer prices) Foreigners: Credit unions, 29, 42, 43 Claims on, 60, 61, 66, 67 Currency and coin, 5, 16, 18 Liabilities to, 23, 56-59, 64-67 Currency in circulation, 4, 14 Customer credit, stock market, 28 GOLD: 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

Federal Reserve Bulletin □ May 1978 All 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, 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 markets, 3, 27 Retail credit and retail sales, 42, 43, 46 Mortgages, 3, 40 Prime rate, commercial banks, 26 SAVING: Time and savings deposits, maximum rates, 10 Flow of funds, 44, 45 International capital transactions of the United National income accounts, 53 States, 56-67 Savings and loan assns., 3, 10, 29, 33, 41, 44 International organizations, 56-61, 64-67 Savings deposits Time deposits) Inventories, 52 Savings institutions, selected assets, 29 Investment companies, issues and assets, 37 Securities (See also U.S. Govt, securities): Investments (See also specific types of investments): Federal and Federally sponsored agencies, 35 Banks, by classes, 16, 17, 18, 20, 21, 22, 29 Foreign transactions, 65 Commercial banks, 3, 15, 16, 17, 18 New issues, 36 Federal Reserve Banks, 12, 13 Prices, 28 Life insurance companies, 29 Special Drawing Rights, 4, 12, 54, 55 Savings and loan assns., 29 State and local govts.: Deposits, 19, 20, 21, 22 LABOR force, 47 Holdings of U.S. Govt, securities, 32, 33 Life insurance companies (See Insurance companies) New security issues, 36 Loans (See also specific types of loans): Ownership of securities of, 18, 20, 21, 22, 29 Banks, by classes, 16, 17, 18, 20-23, 29 Yields of securities, 3 Commercial banks, 3, 15-18, 20-23, 24, 26 State member banks, 17 Federal Reserve Banks, 3, 4, 5, 8, 12, 13 Stock market, 28 Insurance companies, 29, 41 Stocks also Securities); Insured or guaranteed by U.S., 40, 41 New issues, 36 Savings and loan assns., 29 Prices, 28 MANUFACTURING: TAX receipts, Federal, 31 Capacity utilization, 46 Time deposits, 3, 10, 13, 15, 16, 17, 19, 20, 21, 22, 23 Production, 46, 49 Trade, foreign, 55 Margin requirements, 10 Treasury currency, Treasury cash, 4 Member banks: Treasury deposits, 4, 12, 30 Assets and liabilities, by classes, 16, 17, 18 Treasury operating balance, 30 Borrowings at Federal Reserve Banks, 5, 12 Number, by classes, 16, 17, 19 UNEMPLOYMENT, 47 Reserve position, basic, 6 Reserve requirements, 9 U.S. balance of payments, 54 U.S. Govt, balances: Reserves and related items, 3, 4, 5, 15 Mining production, 49 Commercial bank holdings, 19, 20, 21, 22 Member bank holdings, 15 Mobile home shipments, 50 Treasury deposits at Reserve Banks, 4, 12, 30 Monetary aggregates, 3,15 U.S. Govt, securities: Money and capital market rates (See Interest rates) Bank holdings, 16, 17, 18, 20, 21, 22, 29, Money stock measures and components, 3, 14 32, 33 Mortgages (See Real estate loans) Dealer transactions, positions, and financing, 34 Mutual funds (See Investment companies) Federal Reserve Bank holdings, 4, 12, 13, 32, 33 Mutual savings banks, 3, 10, 20-22, 29, 32, 33, 41 Foreign and international holdings and transactions, 12, 32, 64 NATIONAL banks, 17, 19 Open market transactions, 11 National defense outlays, 31 Outstanding, by type of security, 32, 33 National income, 52 Ownership, 32, 33 Nonmember banks, 17, 18, 19 Rates in money and capital markets, 3, 27 Yields, 3 OPEN market transactions, 11 Utilities, production, 49 PERSONAL income, 53 VETERANS Administration, 40, 41 Prices: Consumer and wholesale, 46, 51 WEEKLY reporting banks, 20-24 Stock market, 28 Wholesale prices, 46 Prime rate, commercial banks, 26 Production, 46, 48 YIELDS (See Interest rates) Profits, corporate, 37 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 The Federal Reserve System B o u n d a ries o f F ed eral R e serv e D istricts an d T h eir B ra n c h T errito ries February 1978 — Boundaries of Federal Reserve Districts ® Federal Reserve Bank Cities ----- Boundaries of Federal Reserve Branch • Federal Reserve Branch Cities Territories 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