Federal Reserve Bulletin, 1978-08

A U G U S T 1978 FEDERAL RESERVE BULLETIN D om estic Financial D evelopm ents in the Second Quarter of 1978 Survey of Tim e and Savings D eposits, A pril 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

NUM BER 8 □ VO LUM E 64 □ AUG UST 1978 FEDERAL RESERVE BULLETIN B oard o f G overn ors o f th e F ed eral R eserv e S y stem W ash in gton , D .C . PUBLICATIONS COMMITTEE Joseph R. Coyne, Chairman □ Stephen H. Axilrod □ John M. Denkler Janet O. Hart a James L. Kichline □ Neal L. Petersen □ Edwin M. Truman 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 Mendelle T. Berenson. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Table of Contents 615 Domestic Financial Developments in 636 Chairman G. William Miller expresses the the Second Quarter of 1978 support of the Federal Reserve for legisla­ tion that would promote competitive eq­ According to the Board’s quarterly report uity between banks that are members of to the Congress, credit flows to private the System and other depositary institu­ nonfinancial sectors of the economy tions and that would strengthen the Na­ picked up in the second quarter. tion’s financial system by stemming the attrition of banks from the System in tes­ 623 Survey of Time and Savings Deposits timony before the Committee on Banking, at Commercial Banks, April 1978 Finance and Urban Affairs, U.S. House The volume of time and savings deposits of Representatives, July 27, 1978. Similar at insured commercial banks expanded testimony was presented by Chairman slightly more than 3 per cent over the most Miller before the Committee on Banking, recent survey period. Housing and Urban Affairs, U.S. Senate, on August 14, 1978. 629 Statements to Congress 642 Chairman Miller reports that economic Governor Henry C. Wallich states that the growth has continued at a good pace into Board of Governors generally considers the fourth year of expansion and that the desirable the goals of a bill to amend the growth ranges for the monetary aggregates Small Business Investment Act of 1958, are identical to those announced 3 months and suggests amendment to permit banks earlier, even though a longer-range effort to make direct small business investments to treat the structural problem of inflation up to 10 per cent of their Capital and also is necessary, before the Committee surplus and to protect the safety and on Banking, Finance and Urban Affairs, soundness of the banking system, before U.S. House of Representatives, July 28, the Subcommittee on Capital, Investment 1978. and Business Opportunities of the Com­ mittee on Small Business, U.S. Senate, 647 Governor Philip E. Coldwell testifies on July 20, 1978. his concern about the continuing erosion of membership in the Federal Reserve and 631 Governor Philip C. Jackson, Jr., presents the belief that pricing for Federal Reserve the views of the Board on proposed regu­ services without reducing the burden of lations under the Community Reinvest­ membership will further contribute to ment Act, on the usefulness of the Home banks leaving the System, before the Mortgage Disclosure Act, on the extension Committee on Banking, Finance and for 1 year of Regulation Q authority, and Urban Affairs, U.S. House of Repre­ on establishing a proposed liquidity facil­ sentatives, July 31, 1978. ity for credit unions in testimony before the Subcommittee on Financial Institutions 651 Chairman Miller states that the Board has Supervision, Regulation and Insurance of found compliance with the letter and spirit the Committee on Banking, Finance and of the Government in the Sunshine Act Urban Affairs, U.S. Senate, July 26, not to be unreasonably burdensome al­ 1978. though there have been additional costs Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

and some procedural difficulties and sug­ a permissible activity for bank holding gests certain amendments to the act, be­ company subsidiaries. It has also proposed fore the Subcommittee on Federal Spend­ a rule under Regulation Q that would ing Practices and Open Government of the lighten the penalty required for early Committee on Governmental Affairs, U.S. withdrawal of time deposits at member Senate, August 4, 1978. banks. The Board has approved an exemption 656 Record of Policy Actions of the from the requirements of the Federal Federal Open Market Committee Home Mortgage Disclosure Act for State- At the meeting on June 20, 1978, the chartered banks and other depositary in­ Committee decided that the ranges of tol­ stitutions in Connecticut and has annulled erance for the annual rates of growth over the exemption for similar institutions in the June-July period should be 5 to 10 Illinois. per cent for M-l and 6 to 10 per cent for The Board has extended its monthly sur­ M-2. The Committee agreed that during vey of consumer credit at commercial the coming inter-meeting period opera­ banks and has made a number of changes tions should be directed initially toward in the reporting form. a Federal funds rate of 73A per cent, slightly above the prevailing level of IV2 per cent. Subsequently, if the 2-month 699 Industrial Production growth rates of M-l and M-2 appeared to Output increased an estimated 0.5 per cent be significantly above or below the mid­ in July. points of the indicated ranges, the objec­ tive for the funds rate was to be raised 700 Index of the W eighted-Average or lowered in an orderly fashion within Exchange V alue of the a range of IV2 to 8 per cent. It was U.S. Dollar: Revision understood that in assessing the behavior Description of the nature of this revision. of the aggregates the Manager should continue to give approximately equal weight to the behavior of M-l and M-2. 670 Law Department Al Financial and Business Statistics Various regulatory amendments and inter­ A3 Domestic Financial Statistics pretations, bank holding company and A46 Domestic Nonfinancial Statistics bank merger orders, and pending cases. A54 International Statistics 697 Announcements A69 Guide to Tabular Presentation and Statistical Releases The Board is seeking suggestions from the public as to qualified persons to fill up­ A70 Board of Governors and Staff coming vacancies on its Consumer Advi­ A72 Open Market Committee and sory Council. Staff; Advisory Councils Regulation Z has been amended in regard A73 Federal Reserve Banks, to the “cooling off” period for consumers Branches, and Offices who pledge their home as security in open-end credit arrangements. A74 Federal Reserve Board Publications The Board has proposed an amendment to A76 Index to Statistical Tables Regulation Y to make check verification A78 M ap of Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Developments in 1978 the Second Quarter of This report, which was sent to the Joint Eco­ of late last year. The Treasury moderated its nomic Committee of the U.S. Congress, high­ net borrowing on a seasonally adjusted basis, lights the important developments in domestic but bond issuance by State and local govern­ financial markets during the spring and early ments increased slightly, bolstered by a large summer. volume of advance refunding issues in early May. Credit flows to private nonfinancial sectors of The strong rise of spending in the second the economy picked up in the second quarter quarter was accompanied by a marked acceler­ of 1978, as over-all economic activity re­ ation of quarterly growth in M-l to a record bounded from the weather- and strike-depressed annual rate of 9V2 per cent, well above the upper pace of the first quarter. Nonfinancial corpora­ end of the longer-run range established by the tions increased their reliance on short- and in­ Federal Open Market Committee for the year termediate-term borrowing, while their offer­ extending from the first quarter of 1978 to the ings of long-term securities remained moderate. first quarter of 1979. Broader measures of In the household sector, consumer credit con­ money, M-2 and M-3, grew a little faster than tinued to expand strongly, supporting the ad­ in the first quarter but remained well within their vance in purchases of durable goods—especially respective longer-run ranges; interest-bearing automobiles. The volume of mortgage financing deposits included in these broader aggregates grew somewhat from the rate of the first quarter grew more slowly than in the earlier quarter. when it had been especially affected by the harsh In June, however, expansion of deposits subject weather, but it was still well below the record to regulatory ceilings on interest rates was Interest rates Per cent per annum NOTES: SHORT-TERM LONG-TERM Monthly averages except for F.R. discount rate and conven­ tional mortgages (based on quota­ tions for one day each month). mortgages 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. Government Dept, of Housing and Urban De­ velopment; Aaa utility bonds, weighted averages of new publicly offered bonds rated Aaa, Aa, and State and local A by Moody’s Investors Service government Federal funds and adjusted to Aaa basis; U.S. Govt, bonds, market yields ad­ justed to 20-year constant maturity by U.S. Treasury; State and local 75 1976 1977 govt, bonds (20 issues, mixed quality), Bond Buyer. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

616 Federal Reserve Bulletin □ August 1978 buoyed by the introduction of the new “money in other short-term market interest rates of 60 market” time certificate. to 130 basis points during the second quarter. Efforts by the Federal Reserve to restrain Rates in intermediate- and longer-term credit rapid growth in the monetary aggregates re­ markets moved 35 to 75 basis points higher, sulted in a further upward movement of the rate reflecting not only the increases in short-term on Federal funds (overnight loans of immedi­ rates but apparently also some upward re-evalu­ ately available bank funds) amounting to about ation in general expectations as to longer-run 1 percentage point over the quarter. Beginning inflationary prospects. in mid-April, the gradually rising rate on Fed­ eral funds prompted member banks to increase their borrowing at the discount window. In MONETARY AGGREGATES response to sizable member bank borrowings as AND BANK CREDIT well as to general interest rate developments, the Federal Reserve boosted the discount rate Much of the pick-up in growth of the key V2 of a percentage point in mid-May and a monetary aggregates in the second quarter was further lA of a percentage point in early July. accounted for by a surge in demand deposits The rise in the Federal funds rate, in an at commercial banks occurring in April. The environment of continued strong demand for bulge in checking account balances that month short-term credit, was accompanied by advances was related in part to the processing of an Changes in selected monetary aggregates Per cent, seasonally adjusted annual rates 1977 1978 Item 1975 1976 1977 Q2 | Q3 Q4 Ql | Q2 Member bank reserves: Total ................................................ -.3 1.0 5.2 2.9 7.3 6.1 8.5 6.5 Nonborrowed .................................... 3.2 1.2 2.7 1.8 1.7 3.5 14.5 .5 Concepts of money:1 M-l ................................................ 4.4 5.7 7.9 8.1 8.1 7.5 5.6 9.5 M-2 ............................................... 8.3 10.9 9.8 9.9 9.9 8.2 6.9 8.3 M-3 ................................................. 11.1 12.8 11.7 10.2 11.9 10.7 7.7 8.0 M-4 ................................................. 6.5 7.1 10.1 8.2 9.5 10.9 10.4 10.4 M-5 ................................................. 9.6 10.3 11.8 9.6 11.6 12.3 9.8 9.3 Time and savings deposits at commercial banks: Total (excluding large negotiable CD’s) .. 11.7 15.0 11.2 9.7 11.2 8.6 7.9 7.4 Savings ......................................... 17.5 25.0 11.1 8.8 7.3 5.4 2.6 1.6 Other time .................................... 7.8 7.4 11.4 10.5 14.6 11.6 12.7 12.3 Deposits at thrift institutions2 .................. 15.6 15.8 14.6 11.9 15.0 14.4 8.9 7.5 Memo (change in billions of dollars, seasonally adjusted): Large negotiable CD’s at large banks ... -5.6 -19.1 8.0 -.2 .7 7.1 8.8 6.5 All other large time deposits3 .............. -3.7 -1.0 10.9 -.5 5.2 5.6 5.4 3.5 Small time deposits ........................... 18.6 16.5 14.9 6.6 3.3 1.4 2.5 4.3 Nondeposit sources of funds4 ............... -2.9 16.6 11.0 1.8 4.5 4.5 5.0 2.7 1 M-l is currency plus private demand deposits adjusted. mercial banks from other than commercial banks in the form M-2 is M-l plus bank time and savings deposits other than of Federal funds purchased, securities sold under agreements large negotiable CD’s. M-3 is M-2 plus deposits at mutual to repurchase, and other liabilities to own foreign branches savings banks and savings and loan associations and credit (Euro-dollar borrowings), loans sold to affiliates, loan repur­ union shares. M-4 is M-2 plus large negotiable CD’s. M-5 chase agreements, borrowings from Federal Reserve Banks, is M-3 plus large negotiable CD’s. and other minor items. 2 Savings and loan associations, mutual savings banks, and credit unions. Note.—Changes are calculated from the average amounts 3 Total large time deposits less negotiable CD’s at weekly outstanding in each quarter. Annual rates of change in reserve reporting banks. measures have been adjusted for changes in reserve require­ 4 Nondeposit sources of funds include borrowings by com- ments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Developments, Q2 1978 617 Changes in income velocity of M-l and M-2 inflows of savings deposits at banks slowed a Percentage rate of chan little from the already reduced pace of the pre­ ceding quarter, growth of small-denomination time deposits rose sharply, reflecting in part the introduction in June of new 6-month and 8-year time certificates. Survey data for June suggest that most of the pick-up in the expansion of small-denomination time deposits was attributable to the 6-month money market certificate, which attracted a siz­ able volume of funds in the first month it was 10 offered. By the end of the month commercial banks had issued around $2 billion of these certificates, the interest rate ceiling on which + 0 varies with the discount yield in the weekly auctions of 6-month Treasury bills. As antici­ pated, sales of money market certificates were 10 even stronger at thrift institutions, owing to the advantage of the higher rate ceiling of % of a Seasonally adjusted annual rates. Money stock data are quar­ percentage point permitted those institutions as terly averages. well as to their generally more vigorous promo­ tional efforts. Roughly $5 billion of the certifi­ unusually large volume of personal income tax cates were issued by savings and loan associa­ payments. The rate of expansion of M-l fell tions in June; sales by mutual savings banks oft substantially in May and June, but the rapid amounted to around $1.6 billion. The new cer­ average pace for the 3 months as a whole tificates boosted net inflows of deposits to thrift appears to have indicated continuing strong institutions substantially in June by attracting needs for transactions balances associated with the rebound in economic activity. Treasury yield curves and deposit rate ceilings Growth in M-l over the second quarter, Per cent per annum however, was well below that of nominal GNP, and the rate of increase of M-l velocity, esti­ mated at 1XA per cent, was the largest since early 1976. The marked acceleration of velocity'ap­ parently reflected the usual delay in the adjust­ ment of cash balances to abrupt changes in spending as well as the depressing effect on money demand of recent increases in interest rates. Although M-2 expanded somewhat faster in the second quarter than in the first, growth in the interest-bearing component of this measure moderated as the result of a slackening in the expansion of large-denomination time deposits. + Maximum yield on “money market” time deposits at In contrast, growth in the total of small-denom- thrift institutions for June 30, 1978. * Maximum yield on “money market” time deposits at ination time and savings deposits at banks re­ commercial banks for June 30, 1978. covered somewhat during the quarter, despite Data reflect annual effective yields. Ceiling rates are yields a further increase in market yields above the derived from continuous compounding of the nominal ceiling rates. Market yield data are on an investment yield basis. regulatory ceiling rates on these deposits. While Higher ceiling on 8-year certificate effective June 1, 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

618 Federal Reserve Bulletin □ August 1978 some new funds, especially to savings and The expansion in bank credit exceeded the loans, as well as by making possible the reten­ growth of deposits subject to rate ceilings, so tion of funds that otherwise might have been banks continued to rely on managed liabilities withdrawn for placement in the securities mar­ over the second quarter, albeit to a lesser extent ket. Nevertheless, because the new certificates than in the previous two quarters. Large time were not introduced until June, and because deposits increased about $10 billion in the sec­ market interest rates continued to move higher ond quarter, compared with $14 billion in the throughout the second quarter, the growth of previous 3 months, as growth of both negotiable deposits at thrift institutions on average over the CD’s at weekly reporting banks and other large quarter slowed somewhat from the already re­ time deposits abated. The increase in nondeposit duced pace of the first quarter. borrowings from nonbank sources also mod­ Growth in commercial bank credit accelerated erated in the second quarter, to about $2% to an annual rate of 13V2 per cent in the second billion, largely because of a slowing in pur­ quarter as banks added to their loans and in­ chases of Federal funds and in borrowings se­ vestments by more than in the previous 3 cured by Treasury securities under repurchase months. Total lending was spurred by a rapid agreements. increase of 19 per cent in business loans; Despite this slowing, the ratio of managed growth of real estate and consumer loans also liabilities (large CD’s and nondeposit borrow­ was quite strong, as it had been for more than ings) to total assets at large banks rose further a year. Holdings of Treasury securities in­ during the second quarter, continuing a trend— creased somewhat, at both large and small begun in early 1977—toward greater depend­ banks, marking the first quarterly expansion of ence on these sources of funds to finance asset such investments since the second quarter of growth. By the end of June this ratio had nearly 1977. returned to its 1974 peak. Since late last year these banks also have been reducing the share of their asset portfolios held in liquid form. But despite some deterioration in the last three Components of Major categories of bank credit bank loans quarters, liquidity in the banking system gener­ ally has remained comfortable relative to its low Change, billions of dollars point in late 1974. 12 8 4 BUSINESS FINANCE 0 The external financing requirements of nonfi­ REAL ESTATE 12 n nancial corporations remained large in the sec­ n “ — 8 ond quarter, despite a sharp rebound in cor­ I 4 porate profits from the depressed levels of the i 0 first quarter that added substantially to the vol­ ume of funds generated internally. Capital ex­ 8 penditures rose and, in association with the 4 pick-up in spending throughout the economy, 0 firms granted substantially larger amounts of g NONBANK FINANCIAL 4 trade credit and expanded their holdings of other + LJ ^ r~1— ..« 0 financial assets. To fill their financing gap, cor­ 4 porations continued to rely heavily on shorter- Q2 Q3 Q4 Ql Q2 Q2 Q3 Q4 Ql Q2 term credit; their use of longer-term funds in­ 1977 1978 1977 1978 creased somewhat from the first quarter but Seasonally adjusted. Total loans and business loans adjusted remained below the average for last year. for transfer between banks and their holding companies, affili­ ates, subsidiaries, or foreign branches. Short- and intermediate-term borrowing by Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Developments, Q2 1978 619 businesses in the second quarter was the largest Gross offerings of new security issues in 4 years. At banks, business loans net of Billions of dollars, seasonally adjusted annual rates bankers acceptances rose at an annual rate of 1977 1978 nearly 20 per cent, the most rapid expansion Type since the second quarter of 1974. Moreover, Q2 Q3 Q4 Qir Q2e nonfinancial firms issued commercial paper at Corporate securities—Total 50 61 59 39 41 the fastest rate in a year. 40 49 43 32 33 Publicly offered ............. 20 33 24 16 20 With banks increasing their reliance on high- Privately placed ............. 20 16 19 16 13 Stocks ........................... 10 12 16 7 8 cost managed liabilities in an environment of strong demand for business loans, many institu­ Foreign securities ................. 13 13 5 4 11 tions moved to tighten price and nonprice terms State and local government..... 50 47 46 43 48 of lending. Successive increases in the bank prime rate cumulated to a rise of 1 percentage r Revised. e Estimated. point over the quarter to 9 per cent. Moreover, many bankers, especially those outside the the pace in 1977. Public offerings of corporate major money centers, reported higher standards bonds rose to an annual rate of $20 billion, but of creditworthiness for both prime and nonprime this increase was nearly offset by a somewhat loans as well as a firming of compensating- slower pace of takedowns of privately placed balance requirements. bonds, estimated at $13 billion. Total offerings of bonds and stocks by finan­ The increase in the volume of gross public cial and nonfinancial corporations were rela­ sales of corporate bonds can be attributed to a tively light in the second quarter. In all, gross rise in offerings by both nonfinancial and finan­ issues of bonds and stocks are estimated to have cial concerns. Nonetheless, offerings by utilities remained about unchanged at a seasonally ad­ and industrial companies remained modest by justed annual rate of $41 billion, well below recent historical standards. The comparative strength of bond issuance by financial corpora­ Business loans and short- tions reflected mainly the continued heavy pace and intermediate-term business credit of intermediate- and long-term offerings by fi­ Seasonally adjusted changes at annual percentage rates nance and bank holding companies and the sales Business loans of mortgage-backed bonds by savings and loan at banks1 Total short- and associations. Whereas bond offerings by Excluding Period Total bank holdings in b t u e s r i m ne e s d s i a c te r - e t d e i r t m 2 higher-rated large industrial corporations were of bankers especially light during the quarter, an increased acceptances number of lower-rated (below Baa) issues were 1975—Ql .... -5.2 -7.4 -4.4 marketed successfully by underwriters. These Q2 .... -8.7 -9.0 -8.9 Q3 . .. -2.4 -2.9 -.5 latter issues offset to some extent the apparently Q4 .... -2.3 -3.9 reduced flow of credit in the private placement 1976—Ql .... -6.9 -6.6 -1.2 market, a major source of funds for lower-rated Q2 1.6 2.1 5.9 Q3 .... 5.3 2.8 2.3 borrowers. Q4 .... 10.6 9.7 12.8 Interest rates on long-term corporate bonds 1977—Ql .... 11.2 13.3 14.6 continued to rise throughout the second quarter. Q2 .... 12.8 12.9 16.1 Q3 .... 11.2 10.4 10.4 The Federal Reserve index of yields on recently Q4 .... 11.7 12.6 16.4 issued Aaa-rated utility bonds rose from 8% per 1978—Ql .... 16.3 17.8 15.5 cent in late March to about 9Vs per cent in early Q2 .... 19.0 19.5 18.6 July, its highest reading since late 1975. Also, 1 Based on data for last Wednesday of month, adjusted for for the first quarter since the beginning of the outstanding amounts of loans sold to affiliates. recent economic expansion, yield spreads be­ 2 Short- and intermediate-term business credit is business loans at commercial banks excluding bank holdings of bankers tween Aaa-rated and lower-rated bonds wi­ acceptances plus nonfinancial company commercial paper and dened, although they remained quite small. The finance company loans to businesses measured from end of quarter to end of quarter. higher level of long-term interest rates may have Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

620 Federal Reserve Bulletin □ August 1978 contributed to the increased reliance on short- ruling by the Internal Revenue Service that and intermediate-term finance in the second would curtail invested sinking fund issues. The quarter by discouraging a number of corpora­ major purchasers of tax-exempt issues continued tions—large industrial concerns in particu­ to be property-casualty insurance companies and lar—from raising money in the bond market. commercial banks. As a result of the emphasis on shorter-term The Treasury borrowed a total of only $2.5 credit and the limited acquisitions of liquid billion (not seasonally adjusted) during the sec­ assets, corporate liquidity (as measured by the ond quarter, a period in which large tax receipts ratio of liquid assets to short-term liabilities) is usually reduce Treasury financing needs. State estimated to have moved lower over the quarter, and local governments, using the proceeds of although, at the current level, it remains well their advance refundings, made sizable pur­ above the record low in 1974. chases of nonmarketable debt, more than off­ Stock prices surged in mid-April and early- setting paydowns of special foreign issues. In May and continued to move higher throughout all, outstanding nonmarketable debt, including most of the rest of the quarter. The New York savings bonds, increased by just over $3 billion. Stock Exchange index of industrial stock prices Total marketable debt outstanding was reduced increased almost 10 per cent over the quarter slightly, reflecting a $6 billion decrease in the (more than reversing the first-quarter decline), stock of outstanding Treasury bills that was only while average stock prices on the American partly offset by an increase of $5.3 billion in Exchange and in the over-the-counter market outstanding coupon issues. Net financing by rose more than 12 per cent. The major exception Federally sponsored credit agencies reached al­ to this general pattern was the prices of utility most $6 billion, the largest for any quarter since stocks, which were largely unchanged over the mid-1974. As in the first quarter of 1978 and quarter, perhaps in response to generally rising in the 1973-74 period, most of the surge in interest rates. The volume of common and pre­ agency borrowing was related to housing, with ferred stock offerings continued light during the the Federal National Mortgage Association second quarter and was well below its average (FNMA) and the Federal home loan banks level during 1977. Even though price-earnings seeking to offset the depressing effects on mort­ ratios rose somewhat over the quarter, they gage lending of slower flows of deposits into remained quite low and may have been largely thrift institutions. responsible for the continued slow pace of new Increases in Treasury coupon yields were equity sales. generally in line with yield increases on private longer-term securities, but upward movements in bill rates were moderate in comparison with second-quarter increases in the Federal funds GOVERNMENT FINANCE rate and in yields on commercial paper. The Gross bond sales by State and local governments smaller increase in bill rates appears to reflect increased during the second quarter to a season­ a decline in the supply of these issues available ally adjusted annual rate of $48 billion, just to private investors. As part of an effort to below the record level in the second quarter of lengthen the maturity of its outstanding debt, 1977. At the same time, the Bond Buyer index the Treasury for several quarters has not allowed of tax-exempt bond yields rose sharply, from the stock of bills to increase significantly, except 5.69 per cent at the beginning of April to 6.29 for seasonal cash management purposes; during per cent at the end of June. The substantial the second quarter it redeemed nearly $6 billion increase in the volume of tax-exempt offerings of outstanding bills. In addition, the demand for largely reflected a surge in advance refundings bills was boosted earlier in the year by the in late-April and early-May, undertaken in an­ acquisitions of foreign official accounts in con­ ticipation of the mid-May effective date of a junction with efforts to damp fluctuations in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Developments, Q2 1978 621 Federal Government borrowing and cash balance Quarterly totals, billions of dollars, not seasonally adiusted 1976 1977 1978 Item Q3 Q4 Ql Q2 Q3 Q4 Qlr Q2 Treasury financing: Budget surplus, or deficit (-) .............................. -13.0 -22.8 -18.7 8.6 -12.2 -28.8 -25.8 14.0 Off-budget deficit 1 .............................................. -1.8 .4 -4.3 .1 -4.9 -1.3 -3.7 -2.2 Net cash borrowings, or repayments (—) ............ 18.0 17.4 17.6 -1.1 419.5 20.7 20.8 2.5 Other means of financing 2 .................................. -.7 -.8 2.7 -.4 .4 2.6 2.8 -3.2 Change in cash balance ...................................... 2.6 -5.7 -2.6 7.2 4 2.8 -6.8 -5.9 11.1 Federally sponsored credit agencies, net cash borrowings 3 .................................... 1.7 .4 .7 3.0 1.8 2.0 4.5 6.2 1 Includes outlays of the Pension Benefit Guaranty Corpora­ poration, Federal home loan banks, Federal land banks, Federal tion, Postal Service Fund, Rural Electrification and Telephone intermediate credit banks, banks for cooperatives, and Federal Revolving Fund, Rural Telephone Bank, Housing for the National Mortgage Association (including discount notes and Elderly or Handicapped Fund, and Federal Financing Bank. securities guaranteed by the Government National Mortgage All data have been adjusted to reflect the return of the Export- Association). Import Bank to the unified budget. 4 Includes $2.5 billion of borrowing from the Federal Re­ 2 Checks issued less checks paid, accrued items, and other serve on September 30, which was repaid October 4 after the transactions. new debt ceiling bill became law. 3 Includes debt of the Federal Home Loan Mortgage Cor- r Revised. exchange rates. In the second quarter, the Fed­ account of the declining trend in deposit in­ eral Reserve System made substantial purchases flows. Although the introduction late in the as it supplied reserves to the banking system, period of new 6-month and 8-year certificates which more than offset a decline in holdings led to increased deposit flows in June, deposits by foreign official institutions. grew only 9 per cent in the first quarter and 8 per cent during the second quarter, on sea­ sonally adjusted annual bases, substantially less than during 1977. Because savings and loans MORTGAGE AND relied heavily on advances from Federal home CONSUMER CREDIT loan banks and on other borrowings to help Net mortgage lending increased during the sec­ sustain mortgage lending, borrowings as a per ond quarter, thus recovering somewhat from the cent of total assets approached the high levels weather-depressed rate in the first quarter. In­ of 1974. In addition, the liquidity ratio at in­ creased net lending by commercial banks, and sured savings and loans—as measured by the greater support from secondary market institu­ ratio of cash and liquid assets to the sum of tions like FNMA, more than offset reduced deposits plus short-term borrowings—have demortgage lending at savings and loan associa­ tions and mutual savings banks. Even so, net Deposits at savings and loans new mortgage formation remained approxi­ Annual rate of change, per cent mately 10 per cent below the peak volume in the final quarter of 1977. Almost all of the 16 decline in net mortgage lending during the first half of 1978 was attributable to the weakness in residential mortgage lending, which depends most heavily on savings and loans. In contrast, net flows of commercial mortgage credit are estimated to have remained relatively strong. The slower growth of mortgage credit at Q2 Q3 Q4 Ql Q2 1977 1978 savings and loan associations was due primarily to adjustments in lending policies that took Seasonally adjusted. Quarterly averages at annual rates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

622 Federal Reserve Bulletin □ August 1978 Net change in mortgage debt outstanding their generally slower deposit inflows by con­ Billions of dollars, seasonally adjusted annual rates tinuing to decrease their outstanding mortgage commitments, which by the end of June were 1977r 1978 about 9 per cent below their peak of more than Q2 Q3 Q4 QF Q2e $34 billion at the end of 1977. By type of property: The average interest rate on new commit­ Total ............................... 136 142 152 132 136 Residential ................... 113 115 117 99 102 ments at savings and loans for conventional Other1 .......................... 23 27 35 33 34 home mortgages with 80 per cent loan-to-value By type of holder: ratios rose from 9.3 per cent at the end of the Commercial banks ............. 27 32 31 25 31 Savings and loans ............. 59 62 63 53 51 first quarter to around 9.7 per cent at the end Mutual savings banks ........ 6 8 8 7 6 of May, but remained stable throughout June Life insurance companies ..................... 4 5 9 6 7 and into July. This stabilization of the rate on FNMA and GNMA .......... 6 -3 * 6 12 Other2 .............................. 34 38 41 35 29 new residential mortgages may have been due in part to the stimulative effect that the new 1 Includes commercial and other nonresidential as well as deposit instruments had on the supply of deposit farm properties. money to thrift institutions during these months. 2 Includes mortgage pools backing securities guaranteed by the Government National Mortgage Association, Federal Home The strong expansion of consumer instalment Loan Mortgage Corporation, or Farmers Home Administration, credit, the other major form of household in­ some of which may have been purchased by the institutions shown separately. debtedness, continued unabated during the sec­ * Less than $500 million. ond quarter of 1978, as the annual rate of growth r Revised. e Partially estimated. apparently exceeded the first quarter pace of 17 per cent. The major stimulus to instalment bor­ clined for the three consecutive quarters, reach­ rowing continued to be automobile sales, credit ing a seasonally adjusted level of 8.3 per cent for which accounted for nearly half of all new at midyear, only 0.7 of a percentage point above instalment credit. With the further growth in its trough in the third quarter of 1974. The credit, measures of household debt burdens minimum required liquidity ratio, which is set generally increased during the quarter. The ratio by the Federal Home Loan Bank Board, was of mortgage and consumer credit to disposable reduced to 6.5 per cent, effective May 1. Sav­ income, for example, reached a record level at ings and loan associations also responded to midyear. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

623 Survey of Time and Savings Deposits 1978 at Commercial Banks, April Over the 3-month interval ended April 26, 1978, April 1977 survey. Over the year, net savings the volume of time and savings deposits at inflows averaged less than $2Vi billion per insured commercial banks, not adjusted for sea­ quarter, and small time deposits grew only $l1/2 sonal variation, expanded slightly more than 3 billion on average; in contrast, large time de­ per cent. This increase, although smaller than posits rose an average $11 billion per quarter. in the preceding 3 months, was the strongest Moreover, within the category of small time growth during a February-April period since deposits all growth was concentrated among 1974.1 As in 1974, relatively high market inter­ deposits with long maturities, while such de­ est rates limited net inflows to savings and posits maturing in less than 4 years registered small-denomination (less than $100,000) time net outflows. Inflows to the long-maturity de­ deposits, which are subject to Federal regulatory posits have remained strong in the latest survey ceilings on rates payable. To help finance a rapid interval despite continued increases in compet­ expansion of bank credit in the face of less-than- ing market rates; by the end of April, yields seasonal growth of deposits subject to interest on Treasury securities of comparable maturities rate ceilings, banks sold a substantial volume surpassed bank rates even on time deposits of of large-denomination ($100,000 or more) time the longest maturity—6 years or more.2 deposits. Growth patterns of the various types of time and savings deposits in the February-April pe­ SAVINGS DEPOSITS riod closely resembled those evident since the Although market rates on alternative short-term investments, such as 90-day Treasury bills, ex­ Note.—John R. Williams of the Board’s Division ceeded by more than 1 percentage point the of Research and Statistics prepared this article. 1 Surveys of time and savings deposits (STSD) at all maximum allowable savings deposit yield member banks were conducted by the Board of Gover­ throughout the latest intersurvey period, a mod­ nors in late 1965, in early 1966, and quarterly in 1967. erate pick-up in savings deposit growth, not In January and July 1967 the surveys also included data seasonally adjusted, occurred at commercial for all insured nonmember banks collected by the Fed­ eral Deposit Insurance Corporation (FDIC). Since the banks. Still, the IV2 per cent increase was the beginning of 1968 the Board of Governors and the FDIC smallest recorded between the January and April have conducted the joint quarterly surveys to provide surveys since 1973, suggesting that investor estimates for all insured commercial banks based on a probability sample of banks. The results of all earlier interest in alternative short-term instruments, surveys have appeared in previous Bulletins from including money market mutual funds and 1966 to 1978, the most recent being May 1978. The current sample—designed to provide estimates Treasury bills, retarded savings inflows. of the composition of deposits—includes about 560 in­ sured commercial banks. For details of the statistical methodology, see “Survey of Time and Savings De­ posits, July 1976” in the Bulletin for December 1976. 2 Effective June 1, 1978, two new categories of time Detailed data for the current survey (formerly con­ deposits became available at banks. One is an 8-year tained in appendix tables) are available on request from minimum-maturity account having a maximum allow­ Publications Services, Division of Administrative Serv­ able interest rate of 8 per cent. The other has a maturity ices, Board of Governors of the Federal Reserve Sys­ of exactly 6 months with the ceiling interest rate tied tem, Washington, D.C. 20551. to the discount yield on 6-month Treasury bills. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

624 Federal Reserve Bulletin □ August 1978 Compared with the preceding 3 months, the SMALL-DENOMINATION stepped-up growth in savings deposits during TIME DEPOSITS the February-April period reflected somewhat faster growth in accounts held by individuals By the end of April, market yields had moved and nonprofit institutions, as well as a net inflow above the maximum allowable returns that to accounts of business following net outflows commercial banks could offer on small time the preceding 3 months. Governmental units deposits issued to individuals and to businesses increased their holdings of savings deposits Al/i for all comparable maturities. Nevertheless, per cent, about matching the change in the with more than 90 per cent of offering banks October-January period. Like that in January, paying the ceiling rates of interest on most the April survey indicates that a few large banks deposit categories, banks experienced continued raised offering rates on savings deposits. As a strong inflows to the popular long-maturity de­ result of these increases, the average rate paid posits on which regulatory ceilings were closest on savings deposits, weighted by the dollar to competing market yields. In the Febru­ amounts outstanding, edged up to 4.93 per cent ary-April period, deposits maturing in 6 years from 4.92 per cent in January. or more continued to lead the expansion of small 1. Types of time and savings deposits held by insured commercial banks on survey dates, October 26, 1977, and January 25, and April 26, 1978 Deposits Number of issuing banks Type of deposit In millions of dollars Percentage change Oct. 26 Jan. 25 Apr. 26 Oct. 26 Jan. 25 Apr. 26 Oct. 26- Jan. 25- Jan. 25 Apr. 26 Total time and savings deposits.......................... 14,409 14,245 14,339 529,862 548,142 565,130 3.4 3.1 Sayings.............................................................. 14,409 14,245 14,339 216,896 218,390 222,065 0.7 1.7 Issued to: Individuals and nonprofit organizations... 14,409 14,245 14,339 201,011 202,513 205,828 0.7 1.6 Partnerships and corporations operated for profit (other than commercial banks). 9,141 9,374 9,754 10,808 10,558 10,678 -2.3 1.1 Domestic governmental units..................... 7,891 8,391 8,361 4,968 5,206 5,443 4.8 4.6 All other....................................................... 724 1,251 1,081 108 112 116 3.5 3.9 IRA and Keogh Plan time deposits with original maturities of 3 years or more... 8,808 9,088 9,434 1,546 2,084 2,562 34.8 22.9 Other interest-bearing time deposits in de­ nominations of less than $100,000............ 14,166 14,090 14,102 165,097 166,717 170,191 1.0 2.1 Issued to: Domestic governmental units....................... 10,838 10,688 11,135 4,334 4,118 4,244 -5.0 3.1 Accounts with original maturity of: 30 up to 90 days....................................... 5,147 5,201 5,153 949 862 870 -9.1 0.9 90 up to 180 days..................................... 8,008 7,367 8,658 1,396 1,243 1,281 -10.9 3.0 4,802 4,882 5,134 823 854 830 3.7 -2.8 1 year and over........................................ 8,431 8,680 8,750 1,166 1,159 1,263 -0.6 9.0 Other than domestic governmental units.... 14,166 14,090 14,102 160,764 162,598 165,946 1.1 2.1 Accounts with original maturity of: 6,638 6,629 6,439 7,327 6,250 5,838 -14.7 -6.6 90 up to 180 days..................................... 11,699 11,751 11,635 30,626 31,459 30,791 2.7 -2.1 180 days up to 1 year............................... 8,999 8,808 8,605 3,539 3,587 3,114 1.4 -13.2 1 up to 2Vi years..................................... 13,825 13,508 13,832 34,601 33,977 34,075 -1.8 0.3 2 l/i up to 4 years1................................... 12,549 12,476 12,750 18,539 18,463 19,181 -0.4 3.9 12,401 12,390 12,610 50,366 50,848 52,251 1.0 2.8 6 years and over1..................................... 8,894 9,198 9,455 15,766 18,016 20,697 14.3 14.9 Interest-bearing time deposits in denomina­ tions of $100,000 or more........................ 11,636 11,747 11,369 140,451 156,122 164,868 11.2 5.6 Non-interest-bearing time deposits.............. 1,686 1,625 1,650 4,052 4,019 3,937 -0.8 -2.0 In denominations of: Less than $100,000................................... 1,381 1,379 1,377 862 692 617 -19.8 -10.8 720 623 668 3,190 3,327 3,320 4.3 -0.2 Club accounts (Christmas savings, vacation, or similar club accounts)......................... 8,929 9,124 9,245 1,820 811 1,507 -55.4 85.8 1 Excludes all IRA and Keogh Plan accounts with original maturity as issuing banks. However, small amounts of deposits held at banks of 3 years or more. that had discontinued issuing certain types of deposit are included in the amounts outstanding. Note.—All banks that had either discontinued offering or never Details may not add to totals because of rounding. offered certain types of deposit as of the survey date are not counted Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Survey of Time and Savings Deposits 625 2. Small-denomination time and savings deposits held by insured commercial banks on April 26, 1978, compared with January 25, 1978, 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 Apr. 26 Jan. 25 Apr. 26 Jan. 25 Apr. 26 Jan. 25 Apr. 26 Jan. 25 Apr. 26 Jan. 25 Apr. 26 Jan. 25 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............ 14,339 14,245 13,255 13,212 1,084 1,033 205,828 202,513 77,861 76,786 127,967 125,727 Distribution, total... 100 100 100 100 100 100 100 100 100 100 100 100 4.3 4.4 4.3 4.4 5.1 4.1 3.4 3 1 3.6 3.4 3.3 3.0 4.01-4.50............... 9.4 9.6 9.8 9.8 4.5 6.7 7.5 9.5 9.9 9.6 6.0 9.4 4.51-5.00............... 86.3 86.0 86.0 85.8 90.4 89.1 89.1 87.4 86.5 87.0 90.7 87.5 Paying ceiling rate1... 86.3 86.0 86.0 85.8 90.4 89.1 89.1 87.4 86.5 87.0 90.7 87.5 Partnerships and cor­ porations 9,754 9,374 8,683 8,356 1,071 1,019 10,678 10,558 3,366 3,195 7,312 7,363 Distribution, total. .. 100 100 100 100 100 100 100 100 100 100 100 100 1.4 1.3 1.4 1.4 .8 .5 .5 6 1 2 1 l . l 4 4.01-4.50............... 8.0 7.6 8 5 8.0 3.7 4.7 4.8 5.7 6^4 5'.8 4.0 5i7 4.51-5.00............... 90.7 91.0 90.1 90.6 95.5 94.7 94.7 93.6 92.4 93.1 95.8 93.8 Paying ceiling rate1... 90.4 90.8 89.8 90.3 95.5 94.7 94.7 93.6 92.4 93.0 95.8 93.8 Domestic govt, units 8,361 8,391 7,627 7,690 734 701 5,443 5,206 3,062 2,760 2,381 2,447 Distribution, total... 100 100 100 100 100 100 100 100 100 100 100 100 3.7 3.7 4.0 4.0 1 7 1.0 1 4 1.7 1.8 .2 .9 4.01-4.50............... 10.9 10.7 11.7 11.3 3^3 4i2 3.3 7.1 5.1 11.0 i!i 2.6 4.51-5.00............... 85.3 85.6 84.3 84.7 96.5 95.1 95.6 91.5 93.3 87.2 98.7 96.5 Paying ceiling rate1... 85.0 85.3 83.9 84.4 96.5 95.1 95.5 91.5 93.0 87.1 98.7 96.5 All other Issuing banks............ 1,081 1,251 912 1,104 169 147 116 112 29 37 87 75 Distribution, total... 100 100 100 100 100 100 100 100 100 100 100 100 4.00 or less............ 10.6 9.8 12.2 10.9 1.9 2.0 1.1 1.4 1.9 1.7 .9 1.3 4.01-4.50................ 19.6 18.9 22.2 21.4 5.5 (2) .4 .1 (2) .3 .5 (2) 4.51-5.00................ 69.8 71.3 65.6 67.7 92.6 98.0 98.5 98.5 98.1 98.0 98.6 98.7 Paying ceiling rate1... 69.8 71.3 65.6 67.7 92.6 98.0 98.5 98.5 98.1 98.0 98.6 98.7 IRA and Keogh Plan time deposits with original maturities of 3 years or more Issuing banks................ 9,434 9,088 8,456 8,151 978 938 2,562 2,082 1,039 846 1,523 1,236 Distribution, total........ 100 100 100 100 100 100 100 100 100 100 100 100 6.00 or less................ 5.8 7.9 5.9 8.2 5.1 4.5 2.6 2.5 1.6 2.0 3.3 2.8 6.01-7.00.................. 9.9 5.5 10.6 5.7 3.2 3.9 2.8 2.7 5.4 4.1 1.1 1.7 7.01-7.50.................. 44.4 48.1 45.6 49.2 34.0 37.7 38.2 39.0 49.3 52.1 30.6 30.1 7.51-7.75 .................. 39.9 38.6 37.8 36.9 57.7 53.9 56.4 55.8 43.7 41.8 65.0 65.3 Paying ceiling rate1... 39.9 38.6 37.8 36.9 57.7 53.9 56.4 55.8 43.7 41.8 65.0 65.3 Time deposits in denomina­ tions of less than $100,000 Domestic govt, units: Maturing in— 30 up to 90 days Issuing banks............ 5,153 5,201 4,446 4,540 708 661 843 862 465 532 378 330 Distribution, total... 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less............ 2.5 3.1 2.8 3.3 .8 2.4 .1 .6 (2) (2) .1 1.6 4.51-5.00............... 60.5 64.9 58.4 63.9 73.2 72.2 51.9 57.7 42.7 55.6 63.3 61.1 5.01-5.50................ 9.2 10.0 9.9 10.7 5.1 5.6 8.4 11.4 5.6 10.9 11.7 12.2 5 51 7.75................ 27.8 21.9 28.9 22.2 20.9 19.8 39.7 30.3 51.7 33.6 24.8 25.1 Paying ceiling rate1... .1 1.2 (2) 1.4 .5 (2) (2) 3.2 (2) 5.2 (2) (2) 90 up to 180 days Issuing banks....... 8,658 7,367 7,833 6,563 825 804 1,280 1,224 944 903 336 321 Distribution, total... 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less............ .4 1.0 .5 .9 .3 1.6 (2) .1 (2) (2) (2) .2 4.51 5.00............... 8.6 11.4 9.0 11.9 5.1 6.6 7.6 9.4 8.3 10.4 5.8 6.7 5.01-5.50............... 75.4 76.4 75.0 76.1 79.2 78.6 72.2 69.2 71.7 67.9 73.4 73.0 5.51-7.75............... 15.5 11.3 15.5 11.0 15.3 13.3 20.2 21.3 20.0 21.7 20.8 20.1 Paying ceiling rate1... .1 (2) (2) (2) .8 (2) .1 (2) (2) (2) .5 (2) 180 days up to 1 year Issuing banks............ 5,134 4,882 4,521 4,299 613 583 823 853 564 612 259 241 Distribution, total... 100 100 100 100 100 100 100 100 100 100 100 100 4 50 or less............ (2) .1 (2) (2) (2) .7 (2) (2) (2) (2) (2) (2) 4 51-5.00............... 2.1 7.7 1.5 7.8 6.7 6.8 12.1 19.1 .2 10.2 38.1 41.6 5 01 5.50............... 69.3 67.0 68.7 66.7 74.2 69.6 35.8 40.8 31.7 41.9 44.6 37.8 5 51 7.75................ 28.6 25.2 29.9 25.5 19.2 22.9 52.1 40.1 68.0 47.8 17.3 20.6 Paying ceiling rate1... .1 (2) (2) (2) .9 (2) .1 (2) (2) (2) .4 (2) For notes see page 628. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

626 Federal Reserve Bulletin □ August 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 Apr. 26 Jan. 25 Apr. 26 Jan. 25 Apr. 26 Jan. 25 Apr. 26 Jan. 25 Apr. 26 Jan. 25 Apr. 26 Jan. 25 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............ 8,750 8,680 7,911 7,875 840 805 1,253 1,152 994 945 259 207 Distribution, total. . . 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less............ 1.4 1.1 1.1 .8 3.4 4.3 .5 .4 .2 .1 2.0 2.1 5.01-5.50............... 3.1 7.1 2.7 7.0 6.6 8.7 5.2 5.9 1.0 2.9 21.1 19.8 5.51-6.00............... 61.8 62.9 61.9 63.0 60.5 62.0 59.7 60.1 61.1 61.4 54.3 54.4 6.01-7.75................ 33.8 28.8 34.3 29.2 29.4 25.0 34.6 33.5 37.7 35.7 22.7 23.7 Paying ceiling rate1... .2 (2) (2) (2) 1.7 .2 .6 (2) (2) (2) 2.9 (2) Other than domestic govt, units: Maturing in— 30 up to 90 days Issuing banks............ 6,439 6,629 5,514 5,741 925 888 5,812 6,229 1,062 1,507 4,750 4,722 Distribution, total. . . 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less............ 2.1 2.5 2.2 2.6 1.3 1.7 .9 .8 .1 (2) 1.1 1.1 4.51-5.00............... 97.9 97.5 97.8 97.4 98.7 98.3 99.1 99.2 99.9 100.0 98.9 98.9 Paying ceiling rate1... 97.9 97.5 97.8 97.4 98.7 98.3 99.1 99.2 99.9 100.0 98.9 98.9 90 up to 180 days Issuing banks............ 11,635 11,751 10,570 10,733 1,065 1,018 30,689 31,459 12,107 12,356 18,582 19,103 Distribution, total. . . 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less............ .6 .5 .6 .6 (2) (2) (2) (2) (2) (2) (2) (2) 4.51-5.00............... 5.0 8.2 5.3 8.7 3.0 3.6 4.7 6.6 3.8 5.3 5.3 7.4 5.01-5.50............... 94.4 91.2 94.1 90.7 97.0 96.4 95.3 93.4 96.2 94.7 94.7 92.6 Paying ceiling rate1... 94.3 91.1 94.1 90.7 96.1 95.4 94.7 92.5 96.2 94.7 93.7 91.2 180 days up to 1 year Issuing banks............ 8,605 8,808 7,709 7,933 896 875 3,092 3,579 1,612 2,158 1,479 1,421 Distribution, total. . . 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less............ .6 .5 .4 .4 2.0 1.4 .2 (2) (2) (2) .3 .1 4.51-5.00............. 7.3 7.0 7.8 7.4 2.9 3.1 3.0 1.4 1.4 1.9 4.6 .6 5.01-5.50............... 92.1 92.5 91.7 92.2 95.1 95.5 96.9 98.6 98.6 98.1 95.0 99.3 Paying ceiling rate1... 91.8 91.1 91.4 90.7 95.1 94.5 96.9 97.8 98.6 96.9 95.0 99.3 1 up to 2 Vi years Issuing banks............ 13,832 13,508 12,772 12,485 1,060 1,023 33,900 33,973 21,215 20,984 12,685 12,990 Distribution, total. . . 100 100 100 100 100 100 100 100 100 100 100 100 .5 .7 .5 .7 .3 .1 .6 .1 .1 .1 1.3 .1 5.01-5.50............... 2.5 2.0 2.6 2.1 1.3 1.2 1.1 .9 1.3 1.0 .8 .6 5.51-6.00............... 97.0 97.3 96.9 97.2 98.4 98.7 98.3 99.0 98.6 98.8 97.9 99.3 Paying ceiling rate*... 96.9 96.9 96.9 96.9 97.0 97.3 98.0 98.7 98.6 98.8 97.0 98.7 2 Vi up to 4 years Issuing banks............ 12,750 12,476 11,697 11,474 1,053 1,002 19,181 18,428 11,263 10,637 7,918 7,791 Distribution, total. . . 100 100 100 100 100 100 100 100 100 100 100 100 6.00 or less............ 4.0 2.0 4.1 2.0 2.8 2.2 5.1 1.2 6.2 .5 3.6 2.2 6.01-6.50............... 96.0 98.0 95.9 98.0 97.2 97.8 94.9 98.8 93.8 99.5 96.4 97.8 Paying ceiling rate1... 95.7 97.5 95.7 97.6 95.4 96.8 94.3 97.9 93.4 98.7 95.7 96.8 4 up to 6 years Issuing banks............ 12,610 12,390 11,567 11,390 1,044 1,001 52,107 50,599 28,101 26,930 24,006 23,669 Distribution, total... 100 100 100 100 100 100 100 100 100 100 100 100 6.50 or less............ 1.3 .9 1.1 .7 3.5 2.9 1.4 1.3 .2 .4 2.9 2.4 6.51-7.00............... 12.3 13.0 12.9 13.6 5.4 6.0 9.8 9.0 14.9 12.9 3.8 4.6 7.01-7.25............... 86.4 86.1 86.0 85.7 91.1 91.1 88.8 89.7 84.9 86.7 93.4 93.0 Paying ceiling rate1... 85.9 86.1 85.4 85.7 90.7 91.1 88.7 89.7 84.7 86.7 93.3 93.0 6 years and over Issuing banks............ 9,455 9,198 8,494 8,285 961 913 20,433 17,739 8,632 7,222 11,801 10,517 Distribution, total... 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less............ .6 .6 .6 .6 .3 .2 (2) (2) (2) (2) (2) (2) 5.01-7.25............... 5.6 6.1 5.4 5.8 7.0 8.7 3.4 4.4 1.3 1.0 4.9 6.7 7.26-7.50............... 93.8 93.3 94.0 93.6 92.7 91.1 96.6 95.6 98.7 99.0 95.1 93.3 Paying ceiling rate1... 93.8 93.3 94.0 93.6 92.2 91.0 94.0 93.0 98.7 99.0 90.7 88.9 Club accounts Issuing banks............ 9,245 9,124 8,417 8,340 828 784 1,499 808 640 355 858 453 Distribution, total.. . 100 100 100 100 100 100 100 100 100 100 100 100 0.00......................... 44.6 45.5 46.2 47.0 28.4 29.6 22.5 23.3 30.7 32.2 16.5 16.3 0.01-4.00............... 14.7 15.4 14.8 15.6 13.6 12.7 14.4 15.0 18.8 19.1 11.1 11.7 4.01-4.50............... 7.5 7.5 7.6 7.3 7.0 9.2 12.3 14.2 13.3 14.5 11.6 14.0 4.51-5.50............... 33.1 31.6 31.4 30.0 51.0 48.5 50.8 47.6 37.3 34.2 60.9 58.0 For notes see page 628. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Survey of Time and Savings Deposits 627 Average of most common interest rates paid on various categories of time and savings deposits at insured commercial banks on April 26, 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..................... 5.61 5.78 5.75 5.67 5.56 5.52 5.45 Savings, total............................................................................ 4.93 4.94 4.91 4.91 4.94 4.89 4.95 Individuals and nonprofit organizations............................ 4.93 4.94 4.90 4.91 4.94 4.88 4.95 Partnerships and corporations............................................ 4.97 5.00 4.92 4.97 4.98 4.98 4.97 Domestic governmental units............................................ 4.97 4.93 4.97 4.97 5.00 4.99 4.99 All other............................................................................... 4.98 4.72 5.00 5.00 4.98 5.00 5.00 IRA and Keogh Plan time deposits with maturity of 3 years or more............................................................................. 7.54 7.51 7.48 7.48 7.56 7.58 7.58 Other time deposits in denominations of less than $100,000, total................................................................................... 6.46 6.40 6.56 6.55 6.45 6.43 6.38 Domestic governmental units, total................................... 5.92 5.99 6.08 5.84 5.63 6.24 5.67 Maturing in— 30 up to 90 days.............................................................. 5.67 6.04 5.65 5.62 5.48 5.88 5.32 90 up to 180 days............................................................. 5.66 5.57 5.74 5.60 5.70 6.10 5.75 180 days up to 1 year..................................................... 5.96 6.02 6.34 5.83 5.34 6.66 5.97 1 year and over................................................................ 6.31 6.33 6.38 6.40 5.98 6.53 6.38 Other than domestic governmental units, total................. 6.47 6.43 6.57 6.56 6.47 6.43 6.38 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............................................................ 5.47 5.48 5.49 5.47 5.49 5.49 5.44 180 days up to 1 year...................................................... 5.48 5.49 5.49 5.49 5.47 5.41 5.50 1 up to 2 Vi years.............................................................. 5.99 5.98 6.00 6.00 5.99 5.93 5.99 2Vi up to 4 years............................................................. 6.47 6.49 6.43 6.49 6.49 6.45 6.47 4 up to 6 years................................................................. 7.21 7.22 7.19 7.23 7.21 7.24 7.21 Over 6 years..................................................................... 7.48 7.49 7.50 7.50 7.48 7.47 7.46 Memo: Club accounts1........................................................... 3.58 3.11 2.76 3.33 3.87 3.75 4.16 1 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 types of deposit as Note.—The average rates were calculated by weighting the most of the survey date were excluded from the calculations for those common rate reported on each type of deposit at each bank by the specific types of deposit. time deposits, registering a net inflow of $23A posits issued to governmental units rose 8 basis billion. In this period, deposits maturing in 4 points to 5.92 per cent. For issues maturing in to 6 years contributed $1^ billion to total small 1 year or more, which accounted for most of time deposit inflows, following no net expansion the deposit inflows, the average rate paid also over the preceding three survey quarters. Banks rose 8 basis points, to 6.31 per cent. Offering also issued %l/z billion in deposits to individual rates at banks still remain well below the 73A retirement and Keogh accounts maturing in 3 per cent ceiling applicable to all maturities of years or more, bringing the total outstanding in time deposits held by governments. Apparently such accounts to more than %2Vi billion. About the fact that banks must pledge securities against two-fifths of banks offering these deposits paid such deposits limits their willingness to raise the maximum allowable 73A per cent rate of rates to acquire additional funds. interest during April.3 Most banks paid 1XA or IV2 per cent. Moderate inflows of small time deposits held OTHER TIME DEPOSITS by governmental units resumed in the Febru­ ary-April period, following net outflows during With continued rapid expansion in the volume each of the preceding three intersurvey inter­ of bank lending and rather slow growth in vals. During the 3 months ending in April the savings and small time deposits, banks again weighted-average offering rate on all time de­ turned to large-denomination time deposits dur­ ing the January-April period. Total interestbearing large time deposits outstanding rose 5]/2 3 Effective June 1, the maximum allowable rate of per cent, about half the increase of the preceding interest on all IRA and Keogh accounts maturing in 3 years or more became 8 per cent. 3 months, but still more than in any Febru­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

628 Federal Reserve Bulletin □ August 1978 ary-April period since 1974. Comparable data, clined slightly to just under $4 billion. Mean­ not seasonally adjusted, for large weekly re­ while, club accounts increased seasonally $700 porting banks indicate that large negotiable cer­ million to $1V£ billion at the end of April— tificates of deposit at such banks accounted for about the same level attained a year earlier, just under two-thirds of the total advance. indicating a lack of secular expansion in these Non-interest-bearing time deposits, accounts. About 45 per cent of offering banks, principally escrow accounts and compensating holding nearly a quarter of outstanding deposits, balances held in conjunction with loans, de­ paid no interest on club accounts. □ 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 types of deposit 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 Details may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

629 Statements to Congress Statement by Henry C. Wallich, Member, Banks, of course, are in the business of Board of Governors of the Federal Reserve making loans rather than investments, and banks System, before the Subcommittee on Capital, provide a substantial volume of funds to small Investment and Business Opportunities of the businesses in the form of loans. Bank loans to Committee on Small Business, U.S. Senate, small businesses that were guaranteed by the July 20, 1978. SBA totaled $2.7 billion in 1977. Loans made with SBA participation or guarantee, moreover, I appreciate the opportunity to appear before this represent a very small proportion of the total subcommittee today to present the views of the lending by banks to small businesses. In fact, Board of Governors of the Federal Reserve according to estimates from the Federal Reserve System on H.R. 12666, a bill to amend the Survey of the Terms of Bank Lending, more Small Business Investment Act of 1958. than half of the dollar amount, and 99 per cent The Board of Governors generally favors the of the number, of all commercial and industrial enactment of legislation that encourages finan­ loans made by commercial banks represent cial assistance to small businesses. The original loans of less than $500,000, which is the maxi­ version of the Small Business Investment Act mum size of SBA loans to business. This survey contained a provision that allowed banks to covers business loan activity during one week invest an amount equal to 1 per cent of their of each quarter, and, based on the most recent capital and surplus in the stock of small business such survey, commercial banks are estimated investment companies. Since then, we have to have made—in that one week—231,000 seen the amount increase to 2 per cent in 1961 loans in amounts of less than $500,000 for a and to 5 per cent in 1967. Although bank and total amount of $5.3 billion. bank holding company investment in small It is our understanding that this bill is in­ business investment companies represents a tended to remove legal impediments that may departure from the traditional separation of prevent banks, savings and loan associations, banking and commerce, and such investments pension funds, and insurance companies from often involve a fair amount of risk, the Board making investments in small businesses. It is has supported this type of investment because also our understanding that, with respect to of the desire to encourage bank assistance to financial institutions, the bill’s provision per­ small businesses. mitting an investment of up to 5 per cent of Today, small business investment companies an investor’s net worth directly in small business have, in the aggregate, total resources of ap­ concerns is intended to strike a balance between proximately $1.1 billion, of which bank-con­ the funding needs of small businesses and the trolled companies hold $282 million and com­ necessity of maintaining the soundness of fi­ panies in which banks have a minority interest nancial institutions. As I noted previously, have an additional $60 million. While $637 however, banks and bank holding companies are million of the $1.1 billion total is derived from now allowed to invest up to 5 per cent of their Small Business Administration (SBA) funds, capital and surplus in small businesses through approximately one-third of all private invest­ the medium of small business investment com­ ment in small business investment companies, panies. While the statute conferring this author­ or $160 million, has been provided by banking ity refers only to banks, it also extends to bank organizations. holding companies, because under the Bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

630 Federal Reserve Bulletin □ August 1978 Holding Company Act, legislation that enlarges in any one small business concern. Thus, the the investment authority of national banks auto­ present law has the advantage of insuring some matically enlarges the powers of bank holding diversification of the total amount of equity companies to the same extent. Of course, bank capital committed to small business concerns by holding companies, with regulatory approval, banks. Allowing direct investments in small can invest in any company that engages in business concerns, however, as is proposed by activities that are closely related to banking, and H.R. 12666, would permit banking organi­ they may purchase up to 5 per cent of the shares zations to invest an additional 5 per cent of their of any company regardless of its activities. This net worth altogether in a single small business bill would not curtail that authority. concern, and this amount could conceivably be One result of the enactment of this bill would augmented by indirect investments by a bank be that the total authorized equity exposure in in the same concern through a small business small businesses would double. Banks might investment company. Although the business invest up to 5 per cent of their capital and judgment of bankers and the bill’s requirement surplus in small business investment companies that an investor not acquire control of a small and, additionally, up to 5 per cent of their net business concern would reduce the likelihood worth directly in small business concerns. The that a bank or bank holding company would Board believes that bank support of this place the entire 5 per cent amount in one small country’s small businesses is a particularly im­ business, the Board believes that in view of the portant goal, and it is willing to support a uncertainty associated with investment in small modest increase in the pool of bank funds le­ business concerns, the amount that may be gally available for equity investment, particu­ invested in any one such company need not be larly since our experience has been that super­ increased fivefold. Instead, the Board recom­ visory problems associated with existing small mends that the aggregate investment, direct and business investment company activity by banks indirect, in any one small business concern have been rare. Therefore, the Board would should not exceed 2 per cent of the bank’s favor allowing banks to make direct small busi­ capital and surplus, or $50,000, whichever is ness investments that, when aggregated with greater. Such limitations would be similar to the their indirect investments under present law, diversification requirements now applicable to would not exceed 10 per cent of capital and small business investment companies. surplus. This would afford banks a considerable The proposed bill would also affect the trust degree of flexibility in fashioning their small activities of banks by modifying the standard business investment programs and would in­ of prudence to which trust fund managers are crease the aggregate amount that might be in­ held. Although this modification will cover only vested. However, in order to facilitate the use 5 per cent of available trust assets in a particular of this new authority by banks, the Board be­ trust, we are concerned that, as written, this lieves that it is important that the tax advantages legislation would supersede common law and applicable to investment in small business in­ statutory law prohibitions against self-dealing, vestment companies should also be available for conflicts of interest, and similar potential abuses direct investment in small business concerns. by trust fund managers. While the Board is not H.R. 12666 would also make another signifi­ certain that creation of a new fiduciary standard cant alteration in the authority of banks and bank is the preferable method of encouraging addi­ holding companies to invest in small businesses. tional investment in small businesses, we be­ Currently, the 5 per cent of capital and surplus lieve that if this method is adopted, additional that banking organizations are allowed to invest language should be added to prevent such po­ in small businesses may be so invested only tential abuses. indirectly through the medium of small business The Board believes that several other provi­ investment companies, and a small business sions of the bill also should be modified to avoid investment company as a rule may invest no certain problems, and I will briefly enumerate more than 20 per cent of its capital and surplus them. First, the Board would not consider it Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 631 appropriate and does not expect that it is the priate to do so by specific authorization as the bill’s intention to permit a bank to become the Congress did in connection with small business general partner of a small business concern. investment companies rather than using the Second, the Board considers it particularly im­ phrase currently in the bill, “Notwithstanding portant that banks not acquire control of small any provision of State or Federal law.” For businesses in which they invest. For that reason, example, the authority of State member banks the bill’s provision regarding control of a small of the Federal Reserve System to purchase business concern should be clarified by provid­ shares of small business investment companies ing a standard for determining the existence of is subject to concurrent State authorization and control. The Bank Holding Company Act con­ restrictions in the field. H.R. 12666 departs trol standards might appropriately be used as from this principle, however, since its provi­ a model for such a clarification. Moreover, sions will specifically supersede any conflicting although present regulations of the SBA may provisions of State or Federal law. The Board already preclude investment in financial institu­ believes that, unless the Congress finds an tions, such as savings and loan associations, the overriding national need for different treatment, Board wishes to make it clear that it does not it would be appropriate to respect the traditional believe banks or bank holding companies should prerogatives of the States to determine and limit be permitted to invest in financial institutions the powers of banks chartered by them. on the basis of this bill. Third, in order to avoid In conclusion, the Board believes that while conflict among regulatory agencies, we believe the goals of H.R. 12666 are desirable, certain that responsibility for regulation of bank invest­ modifications of the bill are in order, principally ment in small business concerns should be to protect the safety and soundness of the bank­ vested in the relevant bank regulatory agency ing system, to encourage bank equity invest­ rather than in the SBA. Fourth, the present use ment in small businesses, to integrate better the of “capital and surplus” as a base for comput­ bill’s provisions with those of existing law re­ ing permissible investment in small business garding small business investment companies, investment companies should be carried over in and to reflect traditional State prerogatives with this bill. respect to State banks under the dual banking Finally, the Board has a strong concern that system. If the subcommittee would find it use­ the pre-emption of all Federal and State law by ful, I will be glad to direct the Board’s staff this bill may have unforeseen consequences. If to draft for the subcommittee’s consideration the Congress enlarges bank investment author­ technical amendments regarding any of the ity, the Board believes it would be more appro­ points I have raised. □ Statement by Philip C. Jackson, Jr., Member, sion of Regulation Q authority, and a central Board of Governors of the Federal Reserve liquidity facility for credit unions. System, before the Subcommittee on Financial At the outset, let me say that the general Institutions Supervision, Regulation and Insur­ intent of the Congress in enacting the Commu­ ance of the House Committee on Banking, Fi­ nity Reinvestment Act (CRA) seems reasonably nance and Urban Affairs, July 26, 1978. clear. The “convenience and needs” standard has been included for many years in Federal banking statutes, such as the Bank Merger and It is a pleasure to appear before this distin­ Bank Holding Company Acts, and this standard guished subcommittee to present the views of has been one of the factors taken into account the Board of Governors of the Federal Reserve by the Federal bank and thrift regulators in System on the Community Reinvestment Act, decisions on applications for expansion by reg­ the Home Mortgage Disclosure Act, the exten­ ulated financial institutions. In enacting the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

632 Federal Reserve Bulletin □ August 1978 CRA, the Congress presumably wished to em­ lation a requirement that financial institutions phasize to insured financial institutions and their make specific types of credit available to certain Federal regulators that the convenience and parts of the community. Such views, in the needs of the community include credit as well Board’s judgment, do not conform with con­ as deposit and other services. The timing of this gressional intent. On the contrary, there is clear emphasis coincides with greater concern over evidence in the legislative history of the CRA the economic well-being of the inner cities and that no significant reporting or recordkeeping the need for revitalization of inner-city neigh­ requirements are to be imposed on the regulated borhoods. financial institutions. It also appears to be the Nonetheless, the statute created a number of intent of the Congress to avoid any regulatory issues that needed resolution by the agencies requirements that might result in credit alloca­ responsible for writing regulations to implement tion. the CRA. As you know, earlier this year the More generally, a number of the witnesses four Federal regulators of banks and thrift insti­ at the hearings and in written submissions inter­ tutions held joint hearings to obtain public preted the CRA as placing rather specific re­ comments and suggestions on how we might quirements on financial institutions. Our reading best implement the CRA. To provide a focus of the statute suggests that the intent of the CRA for the hearings, a series of questions dealing is to emphasize to covered financial institutions with the issues that the statute raised were that they have an obligation to help meet the included with the public notice of the hearings. credit needs of all parts of the communities in The responses we received during testimony at which their depositary facilities are located, the hearings and in written comments have been giving special attention to low- and moderatehelpful to the agencies in developing regulations income neighborhoods. To accomplish this pur­ to implement the act. pose, the operative sections of the CRA place As those questions indicated, the four agen­ rather specific requirements on the four Federal cies have been particularly troubled by the ab­ regulatory agencies. First, they are to “encour­ sence of statutory definitions for such terms as age” financial institutions to help meet their “entire community,” “credit needs,” and local communities’ credit needs, consistent with “low- and moderate-income neighborhoods.” the safe and sound operation of those institutions The comments received confirmed that the pub­ (Section 802(b)). Second, they are required to lic too was concerned about how the agencies “assess” financial institutions’ records of meet­ might deal with these terms in the regulations. ing those credit needs (Section 804(1)). Third, Numerous definitions for these and other terms the supervisory agencies are to “take such re­ in the act were suggested by the witnesses, but cord [s] into account” in evaluating applications no consensus on the definitions emerged at the by insured financial institutions for charters, hearings. deposit insurance, branches, office relocations, What did emerge from the hearings, however, mergers, and holding company acquisitions was the concern of the insured financial institu­ (Section 804(2)). tions that the regulatory agencies, in order to Thus, given the approach called for by the offset the vagueness of various parts of the CRA, the Board believes that it would be con­ statute, might impose a heavy reporting and trary to both the spirit and letter of the CRA recordkeeping burden on them. In particular, to impose by regulation numerous or burden­ reservations were expressed that the agencies’ some requirements on the financial institutions. efforts to define community credit needs could The proposed CRA regulations recently pub­ result in an indirect form of credit allocation. lished for public comment by the four Federal These fears were not entirely without foun­ financial supervisory agencies are designed to dation because comments received from some encourage banks and thrift institutions to in­ of the community groups did indeed urge that crease their involvement in community affairs the agencies impose substantial reporting and and to take actions, within their changing lend­ recordkeeping burdens and include in the regu­ ing capacities, to help meet the credit needs of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 633 their communities. Although some requirements It should be recognized, however, that precise are imposed on the financial institutions in the measures of performance cannot be achieved in proposed regulation, those requirements were dealing with a matter as complex as a financial thought to be the best means by which to pro­ institution’s record of service to its community. vide a reasonable basis for communication Rather, in making an assessment of this kind, among financial institutions, members of their a considerable element of judgment necessarily communities, and the regulatory agencies. Pro­ enters into an agency’s deliberations. This kind viding for that communication will help identify of evaluation is not capricious, however, and community credit needs and will increase the banks are accustomed to this type of regulatory amount of information flowing to members of review. It is based on years of experience in the community regarding the types of credit dealing with financial institutions and assessing available from the financial institutions. their strengths, weaknesses, and capabilities. It The “assess” and “take into account” re­ is the same type of judgment that comes into quirements of the statute also pose something play when financial regulatory agencies evaluate of a dilemma for the agencies. Under the act, an institution’s capital level, portfolio quality, the regulators must determine after the fact how and caliber of management. well a bank, bank holding company, or thrift The necessity of making judgments becomes institution submitting an application has served even more apparent when we consider that an its community’s credit needs. This could tempt institution’s record under the CRA is only one the agencies to give the financial institutions factor that must be weighed in evaluating an elaborate guidelines on how they will be judged application. By law, the agencies must also take in order to help develop a detailed record to into account an institution’s financial condition, assess and to take into account at the time an future prospects, management, and any com­ application is submitted. The danger is that such petitive implications. The agencies, therefore, guidelines can easily become requirements or must balance these factors not only against each lead to the perception on the part of regulated other but also against the newly emphasized institutions that specific types of lending and CRA factor. other community service actions must be con­ In addition, the Board wishes to note that it ducted. plans to consider any views expressed by State While we do not favor the imposition of bank supervisors on the extent to which Stateextensive and rigid guidelines, it is helpful to chartered, member banks involved in applica­ provide covered financial institutions with sug­ tions have been serving the credit needs of their gested assessment factors as guidelines to enable communities. Also, since we routinely provide them to comply with the act. In the proposed copies of our examination reports to State regulations, the agencies have provided a list supervisors, the State authorities will be ap­ of factors that may be considered in assessing prised of the Federal Reserve’s assessments of the record of financial institutions in meeting the extent to which State member banks are the credit needs of their communities. Given the meeting the credit needs of their communities. great variety of local conditions, the list of The second topic on which the subcommittee factors is intended to be illustrative. Consid­ requested comment is the Home Mortgage Dis­ erable latitude is given to the banks and thrifts closure Act of 1975 (HMDA). This act is an to choose the ways in which they will fulfill experiment to discover if public disclosure by their obligations to their communities. depositary institutions of mortgage and home Over all, the Board expects that the regula­ improvement lending patterns in metropolitan tions that have been published for comment will areas will, as the preamble to the act states, meet the intent of the Congress in passing this provide . . citizens and public offi­ statute, while avoiding the imposition of credit cials . . . with sufficient information to en­ allocation or burdensome recordkeeping or re­ able them to determine whether depository porting requirements on Federally insured fi­ institutions are filling their obligations to nancial institutions. serve the housing needs of the communities Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

634 Federal Reserve Bulletin □ August 1978 and neighborhoods in which they are lo­ private depositors who are deciding where to cated. deposit their funds. While there have been Midway through the experiment, no defini­ isolated instances, we know of no concerted tive judgment regarding the act’s usefulness can effort by nongovernmental depositors to per­ be made since relevant evidence is still being suade banks or thrifts to change their credit collected and analyzed. Three studies are cur­ policies through “greenlining,” that is, shifting rently under way. The Federal Home Loan Bank deposits based upon disclosure statements. The Board and the Federal Deposit Insurance Cor­ few State and municipal governments—for ex­ poration are sponsoring jointly a study to deter­ ample, California and Chicago—that have in­ mine the accuracy, completeness, cost, and stituted “greenlining” programs have adopted usefulness of disclosure data based upon disclo­ disclosure schemes tailored to meet their needs sures made in three metropolitan areas—Buf­ and have not relied upon the Federal act. falo, Chicago, and San Diego. The Federal Given the limited use of HMDA information Reserve is conducting a study of the feasibility to date, there remains the question of whether and usefulness of extending the act’s disclosure the data will be helpful to the agencies in requirements to nonmetropolitan areas. Finally, assessing a regulated institution’s community the Department of Housing and Urban Devel­ investment efforts. Two limitations in the opment is funding a study of the uses to which HMDA reports suggest that these data may not disclosure information has been put by commu­ be of significant help in that task. First, the CRA nity groups and local governmental units. The requires an assessment of the degree to which results of these studies should be available by a bank or thrift is helping to meet the broad the end of the year and will greatly enhance range of a community’s credit needs, not just our understanding of how well the act serves housing credit needs. In the case of commercial its stated purpose. banks, however, residential mortgage lending is In the interim, however, several general ob­ only one of many lending activities. Second, servations can be offered based upon what is the required disclosures reveal nothing about now known. The initial disclosures, which were effective loan demand by geographic area, and available in September 1976, drew a flurry of we know of no satisfactory way of measuring interest. There were a number of media reports accurately that demand without expending sub­ and analyses prepared by community-consumer stantial resources. organizations across the country. Since then, Assuming that the Federal bank and thrift from a national perspective, there has been a regulators encourage their supervised lenders to very limited degree of interest in disclosure develop outreach programs pursuant to the statements. CRA, the focus will be on how well the lender For example, the United States League of sells its credit services to the community and Savings Associations reported in May 1977 that, whether it actively seeks to engage in a partner­ of 1,725 members out of 2,775 responding to ship with community residents, businessmen, a questionnaire, 1,039 (60 per cent of the re­ and local public officials to help tackle the spondents) did not receive any requests to re­ community’s problems. We believe that foster­ view their disclosure reports and another 369 ing positive outreach on the part of financial (21 per cent) received only one or two requests. institutions, tailored to local circumstances, is The limited degree of interest also was con­ a much better way to help the Nation’s commu­ firmed in an informal survey of lenders in 10 nities than devoting resources to determining the major cities in January 1977 (American Banker, significance of limited disclosure data or to January 24, 1977, page 1). This conclusion was collecting additional data. also reinforced by several members of the In our view, community investment programs Board’s Consumer Advisory Council at its re­ and monitoring schemes, such as residential cent meeting on June 1. mortgage disclosure, are best developed at the There has been little use of disclosure data local level, where they can be fashioned to meet by the act’s intended beneficiaries—public and local circumstances. In accord with this policy Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 635 of fostering local solutions to community credit depositary institutions, including credit unions, problems, the Board has granted exemptions on any interest-bearing transactions accounts under the HMDA in situations where State- and on savings-type accounts that are tied to chartered depositary institutions comply with third-party transfer accounts. The appropriate State disclosure laws that are comparable in rate ceiling for such accounts at this time would purpose to the Federal act, even if the details be the ceiling on commercial bank savings ac­ of disclosure vary. Similarly, the Board en­ counts. dorses the continuation and expansion of the Such an approach would be similar to that Urban Reinvestment Task Forces’s Neighbor­ in effect for NOW accounts in New England hood Housing Services and Neighborhood and would also be similar to the proposal on Preservation programs. These programs, rate ceilings in the nationwide NOW account operating as of June in 56 neighborhoods in 47 bill approved by the Senate Banking Committee cities, owe their success to the broad-based last year. With that modification to existing law, cooperation of financial institutions, local gov­ a 1-year extension would provide time for the ernment, and neighborhood residents. We be­ Congress to review other basic issues involved lieve that these localized services should serve in deposit rate ceilings and the rate differential as a model of the type of approach that should between commercial banks and thrifts. be taken in community investment endeavors. On the broader issue, the Board continues to Turning to the extension of the currrent de­ believe that it would be desirable to restore to posit ceiling rate authority, the Board continues the agencies the flexibility to prescribe and ad­ to believe that such rate ceilings—and the man­ just deposit rate ceilings without congressional dated deposit rate differentials between banks approval of changes in differentials. The Board and thrifts—should be removed over the long believes that consideration of this basic issue run to promote equity for small savers and by the Congress can await broad review of the economic efficiency. Although, in practice, rate deposit rate structure. However, steps should be ceilings probably can be removed only gradu­ taken now to eliminate the disparity in treatment ally, growing competitive inequities under the that exists because of differentials among insti­ present rate structure make it imperative that the tutions that are offering comparable transactions process of removing artificial rate and differen­ account services. tial restrictions begin soon. For example, more Finally, the Board supports the establishment and more thrift institutions are offering some of a central liquidity facility for credit unions. type of third-party payment services and are We believe that there is a need for a lending competing actively and effectively with com­ fund to deal with temporary liquidity problems mercial banks for these services. Mutual savings experienced by credit unions. The possibility of banks and other thrifts in New England, New such difficulties arises partly because, under the York, Pennsylvania, and elsewhere have been common-bond principle, the membership of an successful in offering checking or check-like individual credit union tends to be subject to transaction accounts. The ceiling rate differen­ similar economic pressures. In many cases, the tial favoring nonbank depositary institutions members of a credit union work for the same with transactions account powers is likely to employer so that a plant closing or seasonal produce further competitive distortion in our swing in employment or hours can result in institutional structure. sizable deposit outflows at the same time that While the Board recommends that the current loan demand rises and loan repayments lag. Regulation Q rate authority be extended for 1 The Board has discussed a few modifications year, the Board believes that action also should and clarifications to the proposed legislation be taken by the Congress to eliminate the com­ with the National Credit Union Administration petitive inequities that have developed as a (NCUA). During those discussions, the Admin­ result of thrifts offering transactions-type ac­ istrator of the NCUA indicated that he agrees counts. The Board urges that legislation be that these changes would improve the bill. One adopted to require rate ceiling parity among all amendment would clarify that the private bor­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

636 Federal Reserve Bulletin □ August 1978 rowings of the facility would not have the U.S. We especially commend the very limited pur­ Government’s guarantee. Another would reduce pose of meeting liquidity needs for which funds the borrowing leverage on capital to ten times may be advanced, but also believe that the bill capital, which would make the facility’s size should be clarified to reflect that limitation more reasonable in relation to industry assets. expressly. □ Statement by G. William Miller, Chairman, statistic probably understates the trend because Board of Governors of the Federal Reserve many member banks appear to be delaying their System, before the Committee on Banking, Fi­ plans for withdrawal from membership until nance and Urban Affairs, House of Repre­ they see what action the System takes to resolve sentatives, July 21, 1978. the membership problem. Most of the banks withdrawing from membership have been small, It is a pleasure to testify today on behalf of the with total deposits under $50 million. But a Federal Reserve System on the bills before your disturbing tendency has developed recently for committee that would promote competitive eq­ larger banks also to leave the System. Fifteen uity between member banks and other deposi­ of the 69 banks that left the System in 1977 tary institutions and that would strengthen the had deposits of more than $100 million, a record Nation’s financial system by stemming the attri­ number for that size of bank. tion of banks from the Federal Reserve. We are The steady downward trend in the number grateful to this committee and to its distin­ of member banks has been accompanied, of guished chairman for considering the proposed course, by a decline in the proportion of bank legislation so late in the session. deposits subject to Federal Reserve reserve re­ Attrition of membership in the Federal Re­ quirements. As of the end of 1977, member serve System is occurring because member banks held less than 73 per cent of total com­ banks are at a serious competitive disadvantage mercial bank deposits, down about 8 percentage relative to other depositary institutions. This points in the last 8 years. Thus, more than attrition, as it continues, dilutes the effec­ one-fourth of commercial bank deposits—and tiveness with which the Federal Reserve can over three-fifths of all banks—are outside the fulfill its monetary and other objectives. There­ Federal Reserve System. fore, I should like, first, to discuss the dimen­ In New England, where the development of sions and effects of the decline in membership, negotiable orders of withdrawal (NOW) ac­ and then to offer comments on the specific counts in the past 5 years has greatly sharpened legislation you are considering. competition among depositary institutions, the decline in membership and in deposits held by Membership in the System continues to de­ member banks has been even more dramatic. cline. The problem facing us is the continuing The share of deposits in New England held by decline in System membership in recent years. member banks fell by 11 percentage points in Over the past 8 years 430 member banks have the last 3 years alone—from 73 per cent at the withdrawn from the System, while only 103 end of 1974 to less than 62 per cent at the end nonmember banks have joined, as illustrated in of 1977. Chart l.1 In 1977, 69 banks chose to give up their membership, and 39 more banks have Due to the excessive cost of membership. The withdrawn in the first half of 1978. This last basic reason for the decline in membership is the financial burden that membership entails. 1 The attachments to this statement are available on Most nonmember banks and thrift institutions request from Publications Services, Division of Admin­ may hold their required reserves in the form of istrative Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. earning assets or in the form of deposits, such Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 637 as correspondent balances, that would be held have access to sources of funds or to activi­ in the normal course of business. Member ties—such as participation in international banks, by contrast, must keep their required banking, making repurchase agreements with reserves entirely in nonearning form. In conse­ business corporations, and borrowing Federal quence, member banks hold a greater percent­ funds—that are either free of reserve require­ age of their total assets in nonearning form than ments or involve relatively small reserve re­ do nonmembers. quirements. Moreover, such banks are usually The cost burden of Federal Reserve member­ large correspondents that provide services to ship thus consists of the earnings that member smaller banks, including those services based banks must forego because of the extra amount on access to Federal Reserve facilities. of nonearning assets that they are required to Furthermore, requiring sterile reserves from hold. Of course, member banks are provided member banks only is an inefficient way to raise with services by Federal Reserve Banks, but the revenue for the Treasury because it leads to value of these services does not close by any withdrawals from the System, resulting in re­ means the earnings gap between member and duction in Treasury revenues. For example, nonmember banks. And, as a result, the earn­ withdrawals since 1970 have reduced Federal ings rate for member banks runs persistently Reserve earnings in 1977 by nearly $220 million below that for nonmembers. from what they would have been otherwise and The Board staff estimates that the aggregate have reduced net Treasury revenues by about cost burden to member banks of Federal Reserve $100 million. membership may exceed $650 million annually, based on data for the year ending in September Increased competition for deposits heightens 1977, or about 9 per cent of member bank awareness of burden. It is obvious from the profits before income tax. The burden of mem­ continuing erosion in Federal Reserve member­ bership is not distributed equally across all sizes ship that more and more banks are becoming of member banks. According to our estimates, acutely aware of the cost burden of membership the relative burden is greatest for small banks— and of the competitive handicap arising from exceeding 20 per cent of profits for banks with that burden. The cost of membership is due, less than $10 million in deposits. in part, to the high interest rates induced by inflation in recent years. With market interest Inequity of cost burden borne by member rates exceeding 5 per cent for much of the past banks. The competitive inequality caused by decade, the earning opportunities foregone by sterile reserve balances can be regarded as an holding required reserves at Reserve Banks have additional “tax” levied upon member banks. become painfully clear to member banks. This tax produces Federal Reserve earnings that At the same time, competitive pressures on are paid over to the Treasury and thereby be­ banks have increased. Banks once had a virtual come additional revenue to the U.S. Govern­ monopoly on transactions accounts because of ment. But this tax is inherently unfair because their ability to offer demand deposits. But this it falls only on member banks. Nonmember unique position is being eroded. Financial inno­ banks and thrift institutions, both of which vations have led to widespread use of interestcompete with members in many of the same bearing accounts at nonbank depositary institu­ markets for deposits and loans, do not bear this tions as well as at banks for transactions pur­ tax. poses. Since 1970, these innovations have in­ Member banks naturally attempt to minimize cluded the following: limited preauthorized the added burden of sterile reserves that they “bill-payer” transfers from savings accounts at bear, but there are practical limitations on their banks and savings and loan associations, NOW ability to do so. Those banks most successful accounts at practically all depositary institutions in taking such steps are the very largest banks. in New England, credit union share drafts, tele­ Because of their size, character of their busi­ phone transfers from savings deposits, and the ness, and managerial resources, these banks use of electronic terminals to make immediate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

638 Federal Reserve Bulletin □ August 1978 transfers to and from savings accounts. Growth one reason or another, not to convert to State of these transactions-related interest-bearing de­ charters. The monetary and other policies of the posits has been most dramatic in recent years. Federal Reserve would then have their most For example, NOW accounts have grown from immediate impact on a relatively small part of almost zero in 1974 to nearly 8 per cent of our financial system. household deposit balances in New England in 1977. Monetary management weakened. As fewer There is no sign that the intense competition and fewer banks, and a smaller share of the for transactions accounts will abate. These Nation’s deposits, remain with the Federal Re­ heightened competitive forces are compelling all serve System, the ability of the System to influ­ depositary institutions to be more cost sensitive ence the Nation’s money and credit becomes and to seek ways to maintain their profitability. weaker. The discount window provides an im­ Experience shows that withdrawal from the portant safety-valve function, which enables the Federal Reserve System is a strategy that many Federal Reserve to conduct monetary policy bank managements have chosen in these cir­ effectively. Member bank attrition means that cumstances. fewer banks have immediate access to the dis­ count window on a day-to-day basis. As attrition Reduced membership in the Federal Reserve continues, we could reach the point where there weakens the financial system. The declining would be a significant reduction in the financial trend in membership is of great concern be­ system’s flexibility in adapting to, for example, cause, as it continues, it inevitably will weaken a tightening of credit policies. The discount our financial system in a number of ways. window provides individual member banks with Declining membership threatens to alter the a reasonable period of time to make orderly character of the Federal Reserve System as an adjustments in their lending and investment institution from that which the Congress origi­ policies. The cushion provided by the window nally intended. The Congress intended the Na­ facilitates implementation of a restrictive mone­ tion’s central bank to provide needed liquidity tary policy in a period of inflationary demands. and to establish an efficient national payments The attrition in deposits subject to reserve system, among other purposes. All commercial requirements set by the Federal Reserve also banks were made eligible to participate in the weakens the linkage between bank reserves and governance and the services of the regional the monetary aggregates. As a larger and larger Reserve Banks. Membership in the System was fraction of deposits becomes subject to the di­ not restricted to national banks alone because verse reserve requirements set by the 50 States the System’s designers considered broad repre­ rather than by the Federal Reserve, the relation­ sentation from all classes of banks located in ship between money supply and reserves pro­ every region of the Nation to be essential to vided by the Federal Reserve becomes less and the System’s functioning in the public interest. less predictable. They especially wished to avoid overrepresen­ Our staff has attempted to assess the extent tation by the largest banks. Moreover, in to which growth in nonmember bank deposits founding the System, the Congress hoped would weaken the relationship between reserves State-chartered banks would join in order to and money. Their tentative results are shown strengthen both the System and the ability of in a chart, which depicts the greater range of the State banks to serve their communities. short-run variability in M-l and M-2, with a These purposes are as valid today as they given level of bank reserves, that would develop were 65 years ago, but continued attrition of as the percentage of deposits held by non­ membership could defeat these congressional members rises. As more and more deposits are goals. If current trends continue, membership held outside the System, this chart suggests that in the Federal Reserve will consist predomi­ control of money through the reserve base be­ nantly of the very largest banks and of the comes increasingly uncertain. smaller national banks that might choose, for Finally, it should be pointed out that fewer Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 639 banks within the Federal Reserve mean that flows. Changes in the ceiling rate on time de­ fewer institutions can be influenced by changes posits are only the most obvious of such poli­ in reserve requirements set by the Federal Re­ cies; others concern capital adequacy, bank li­ serve. Changes in reserve requirements have not quidity, international banking, and the quality been a very active instrument of monetary pol­ of loan portfolios. icy in recent years, due, in part, to a desire to avoid worsening the membership problem if Potential deterioration in the payments sys­ reserve requirements were raised. If the mem­ tem. Attrition of membership, as it continues, bership problem could be resolved, possibly also threatens to lead to a deterioration in the through universal reserve requirements, adjust­ quality of the payments mechanism that under­ ments in reserve ratios might be made with more lies all of the Nation’s economic transactions. flexibility when needed to affect bank credit Reserve balances held at Federal Reserve Banks throughout the country or to influence banks’ are the foundation of the payments mechanism efforts to attract particular types of deposits. because these balances are used for making Moreover, while open market operations in payments and settling accounts between banks. U.S. Government securities provide the Federal Nonmember deposits at correspondent banks Reserve with a powerful policy instrument, it can serve the same purpose, but as more and is possible that conditions could develop in the more of the deposits used for settlement pur­ future—such as a less active market for U.S. poses are held outside the Federal Reserve, the Government securities in a period of reduced banking system increasingly becomes exposed Federal budgetary deficits—when more flexible to the risk that such funds might be immobilized adjustment of reserve requirements might be a if a large correspondent bank experienced sub­ desirable adjunct in efforts to control the mone­ stantial operating difficulties or liquidity prob­ tary aggregates. lems. A liquidity crisis affecting a large clearing bank would have widespread damaging effects Adverse impacts on quality of banking sys­ on the banking system as a whole because tem. Not only is monetary control made more smaller banks might become unable to use their difficult by membership attrition, but the quality clearing balances in the ordinary course of of the banking system is also adversely affected. business. The Federal Reserve, of course, is not The Federal Reserve Act authorizes Reserve subject to liquidity risk and therefore serves, as Banks to discount paper for nonmembers, but the Congress intended, as a completely safe only under “unusual and exigent” circum­ foundation for the payments mechanism. stances. By the time such an emergency loan These various problems that either cause or were made, therefore, the bank would have result from member bank attrition could be encountered serious difficulties, and more prob­ solved in a variety of ways, and a number of lems could be expected as it became known that bills are before you. We believe our approach it was in an “emergency” condition. As a is the most effective one under existing circum­ member, on the other hand, the bank probably stances. would have begun to borrow under regular pro­ cedures, and the development of an emergency Universal reserve requirements. The Univer­ might have been forestalled. sal Reserve Requirements Act of 1978, intro­ The presence of the Federal Reserve in the duced as H.R. 13476, was submitted by the bank supervisory and regulatory area—a pres­ Board to reduce competitive inequality between ence that becomes diluted with membership banks and other institutions insofar as transac­ attrition—also enhances the quality of the tions accounts are concerned and to lay the basis banking system. The activities of the System for more effective monetary control. Universal in that area cannot be readily separated from reserve requirements can eliminate the competi­ its job of conducting monetary policy. Regula­ tive inequality by imposing a similar reserve tory and supervisory policies can have important requirements structure on similar institutions. implications for monetary policy and credit H.R. 13476 imposes reserve requirements set Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

640 Federal Reserve Bulletin □ August 1978 by the Federal Reserve on transactions balances Apart from universal reserves, the Board’s at all depositary institutions. The first $5 million proposal has four other major features: reduc­ of such balances would be exempt from reserve tion and restructuring of demand deposit reserve requirements, although a relatively small re­ requirements, payment of compensation on re­ quirement could be imposed if it proved neces­ quired reserve balances, charges for services sary in the public interest. This exemption provided by Reserve Banks—along with slightly would mean that about one-third of present broadened access to those services, and transfer member banks and about two-thirds of non­ of a portion of System surplus to the Treasury members would not be subject to reserve re­ during the transition period in order to preserve quirements on transactions accounts. This lim­ the Treasury’s revenue position while the plan ited extension of universal reserves would sig­ is being implemented. All of the provisions of nificantly reduce competitive inequality. the Board’s plan are described in some detail The Board favors universal reserve require­ in the “Preliminary Proposal” (July Bulletin, ments for reasons quite apart from the member­ pages 607-10), which we would appreciate ship problem. Universal reserves would con­ having made part of this record. tribute to improving monetary management and The reduction in reserve requirements, to­ to ensuring the stability of the payments mech­ gether with the proposed payment of interest on anism. In doing so, the Board’s bill, it should reserves, would about offset the membership be stressed, does not authorize any supervisory burden as presently measured, after allowing for role for the Federal Reserve System with respect charges for services to members. The net annual to nonmembers. Indeed, the bill does not even cost to the Treasury of this program, in the require nonmember institutions to establish an absence of universal reserve requirements, account relationship with the Reserve Bank. A would be about $300 million, based on deposits nonmember’s reserves can be held at a corre­ and reserves in 1977. This figure, of course, spondent bank—or at a Federal home loan bank, assumes that part of the reduction in Federal in the case of savings and loan associa­ Reserve earnings is recouped by the Treasury tions—and merely passed through to the Federal from banks, their stockholders, and customers Reserve on a one-to-one basis by the corre­ in the form of taxes on increased earnings and spondent. However, nonmembers would have capital gains. to report data on their deposits and certain other During a 3-year phase-in period for the pro­ items to the local Reserve Bank for monetary gram, there would be no loss in Treasury reve­ management purposes. nues since the System would reimburse the We realize that universal reserve require­ Treasury from its accumulated surplus. After ments have been proposed before and that the that period, the actual loss would be consid­ proposal raises a number of difficult problems. erably less than the estimated $300 million cost The Board continues to believe, however, that of the Board’s plan. Membership attrition would such requirements are necessary to help correct continue in the absence of a program to resolve the competitive imbalances in our financial sys­ the problem. Without the program, by the fourth tem and to assure an effective monetary policy. year continued attrition probably would be costing the Treasury between $80 million and Other program elements. The Board’s other $210 million as a result of further declines in proposal is presented separately and is recom­ member bank reserves held at the Federal Re­ mended for prompt congressional approval serve. Thus, the true cost of the program is through passage of H.R. 13477, even if the considerably lower than $300 million. More­ Congress does not enact universal reserve re­ over, should the program increase membership, quirements in this session. However—for rea­ the cost would be reduced even further. sons discussed later—the Board urges deletion of the last sentence of that legislation, which Interest on Reserves Act. The Board’s pro­ imposes a limitation of 2 per cent on required posed Interest on Reserves Act of 1978 would reserve balances in excess of $25 million. limit the amount of interest paid, after deducting Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 641 the total amount of charges imposed for serv­ realities of the competitive marketplace and the ices, to no more than 7 per cent of net earnings responsibility of the System to provide a basic of the Federal Reserve Banks in any one year. level of service nationwide. (During 1977, net earnings were about $6 bil­ The proposed amendment to the Stanton bill lion.) Within this limitation, the Board proposes is broad in scope, seeks major changes in the to pay close to a market rate of interest on powers and responsibilities of the Federal Re­ required reserve balances up to $25 million in serve, and would affect adversely the System’s size. The proposed rate would be V2 of a per­ ability to carry out its responsibilities. More­ centage point below the average return on the over, the amendment, if adopted, would not System’s portfolio; in 1977, the return on port­ provide a solution to the membership problem; folio would have permitted a 6 per cent rate rather, it would make the problem much worse. on such reserve balances. Larger balances Under the amendment, open access to all Sys­ would earn interest at a 2 per cent rate. tem services, except the discount window, The Board’s proposal is embodied in H.R. would be available to all institutions, and the 13477, but that bill also imposes a 2 per cent rate of interest on reserve balances would be limitation on reserve balances in excess of $25 limited so that the amount of interest paid could million. The Board does not believe that the be no greater than the total amount collected 2 per cent limitation should be written into law. by the Federal Reserve in payment for services H.R. 13477 in any event contains an over-all plus the small amount of interest earned at the percentage limitation on the amount of interest discount window. In consequence, interest pay­ payments the Federal Reserve can make, and able on reserves would be substantially less than it is essential to retain administrative flexibility a market rate. Therefore, a bank willing to in setting interest rates within the over-all limi­ forego access to the discount window could tation so that adjustments can be made as cir­ withdraw from membership and retain access cumstances change and experience is gained. to all Federal Reserve operating services, while also investing the reserve balances released by Legislative proposals advanced by others. withdrawal from the System so as to earn a full The remainder of my testimony will discuss the market rate of interest. If the proposed amend­ Stanton bill and Chairman Reuss’ proposed ment were enacted, we would expect the rate amendment to it. of loss of membership to accelerate. In the Board’s view, H.R. 12706, the Stanton The amendment also proposes legislating bill, is a constructive approach to dealing with specific reserve requirement ratios on demand the membership problem. Indeed, by permitting deposits and tying the discount rate to the payment of a market rate of interest on reserve Treasury bill rate. Such action would not be balances, the bill would likely make member­ desirable since it would reduce the policy in­ ship in the System attractive to virtually all struments available to carry out the Nation’s banks that are now nonmembers. In the context monetary policy and effectively limit the System of this bill, open access to Federal Reserve to open market operations for that purpose. The services could then be provided to all depositary Board continues to believe that effective mone­ institutions without risking adverse effects on tary management requires the option of having membership. more than one instrument at hand, and thus The Board is concerned, however, that the recommends that the proposed amendment not specific provisions regarding charges for Federal be enacted. Reserve services in H.R. 12706 may be unduly As noted earlier, reserve requirement changes restrictive. For example, the bill requires that may become a more useful instrument once the the Federal Reserve price services to take ac­ membership problem is resolved. In any event, count of capital and other costs that would have they are needed if action is to be taken that been paid by a private firm. However, we be­ emphasizes credit availability at member banks lieve that any provision requiring the System throughout the country or if conditions require to charge for services should also recognize the that open market operations be supplemented in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

642 Federal Reserve Bulletin □ August 1978 order to attain monetary policy objectives. eral Reserve to transfer $575 million of its Moreover, reserve requirement changes can also earned surplus to the Treasury over 2 years. This serve, at times, as a useful signal of change amount appears in the Board’s plan. But the in the System’s policy stance. It should be noted program in the Reuss amendment, since it does also that the reserve requirement proposals on not offset the membership burden, would be less transactions accounts in the amendment apply costly than the Board’s plan. Therefore, the to member banks only. This would tend to amount needed to maintain Treasury revenues increase existing inequities because member in a transition period would be less than the bank savings accounts subject to automatic $575 million required by the proposed amend­ transfer would bear a higher reserve require­ ment. In any event, the Board does not believe ment—equal to that on demand deposits—than a specific transfer of Federal Reserve surplus similar accounts at nonmember institutions. should be legislated but should be left to the The discount rate, too, has a useful role to Board and the Treasury, since the effect on play as a signal of policy. For instance, it can Treasury revenues will depend on the particular be held back when market rates are rising to plan chosen and the period of time over which suggest a certain caution about future rate de­ it is practical to implement it fully. velopments to the market. The stated reason for Finally, the amendment provides for the col­ tying the discount rate to a market rate is to lection from nonmember institutions of data reduce the possibility of arbitrage profits when needed to control the monetary aggregates. The the discount rate is below market rates. How­ reports are to be made through the relevant ever, the Reserve Banks already have careful regulatory agencies. It is important to note, administrative controls that keep arbitrage op­ however, that such data are needed on a timely portunities to a minimum. Moreover, tying the basis if they are to be useful for monetary policy discount rate to the Treasury bill rate makes the operations. The amendment should, therefore, cost of member borrowing depend, in part, on allow flexibility in handling the flow of data, Treasury debt management, and the rate could as might be worked out by the agencies. be high or low relative to other opportunities Mr. Chairman, thank you for the opportunity the bank has for investment. Even if it were to present the Federal Reserve’s views this desirable to tie the discount rate to a market morning. The problems with which your com­ rate, the shifting structure of market rates makes mittee is dealing this morning are of crucial it very difficult to find any single rate that is importance to the long-run viability of the Na­ satisfactory. In any event, the Board believes tion’s central bank and to the health of the its flexibility with regard to the discount rate Nation’s depositary institutions and indeed to should not be limited in view of the unpredicta­ the national economy. The problems are ex­ bility of changing market circumstances and ceedingly difficult, but I am confident we can international and domestic economic conditions. together find solutions that will serve the public The amendment also would require the Fed­ interest well. □ Chairman Miller presented similar testimony before the Committee on Banking, Housing and Urban Affairs, U.S. Senate, on August 14, 1978. Statement by G. William Miller, Chairman, you to present the report of the Federal Reserve Board of Governors of the Federal Reserve on the outlook for the economy and monetary System, before the Committee on Banking, Fi­ policy. nance and Urban Affairs, House of Repre­ sentatives, July 28, 1978. Economic gains continued at a good pace into fourth year of expansion. The current economic Mr. Chairman and members of this distin­ expansion, which began in early 1975, is now guished committee, it is a pleasure to meet with into its fourth year. Only one postwar up­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 643 swing—that beginning in 1961—has lasted sig­ conditions prevailing in the mortgage market. nificantly longer. Thus, we have had an unus­ And growth in State and local government ex­ ually durable expansion, and it has been well penditures probably will remain modest, in light sustained thus far this year, as may be seen in of the increasing pressure for restraint in public attached Chart l.1 spending. Especially encouraging has been the per­ On balance, the various indicators of spend­ formance of the labor market. Payrolls have ing and activity suggest that the current expan­ swelled by more than 2 million workers since sion will continue in the year ahead. As an last December. The over-all unemployment rate expansion matures, however, growth can be has dropped below 6 per cent, and the rate for expected to moderate, and I think it is likely heads of households is 3.6 per cent. Joblessness that over the next four quarters real GNP will among youths and minorities remains disturb­ grow by about 3lA to 33A per cent. Such a pace ingly high, but these groups, too, have experi­ should be adequate to keep unemployment from enced appreciably improved employment op­ rising; during the second quarter of 1979, the portunities in recent months. unemployment rate may average 5 3k to 6 per cent. And economic indicators point to further growth. The willingness of businessmen across Inflation, however, is a serious concern. As the country to hire in such large numbers sug­ an expansion continues, there is also always the gests that they are looking forward to further danger that developing imbalances will weaken growth of production. And indeed, economic and ultimately dissipate its forward thrust. The indicators generally point in that direction. greatest threat to the present expansion lies in Buying sentiment still is at a high level, and accelerating inflation. Price increases have with recent employment gains providing an im­ stepped up sharply so far this year—through petus to income, consumer spending should May consumer prices rose at an annual rate in continue to rise. excess of 10 per cent. To be sure, much of this In the business sector, cautious inventory surge is attributable to adverse developments in management has kept stocks in good balance the volatile agricultural sector, and relief from in most sectors; rising sales are therefore likely double-digit food price increases should be to prompt further advances in inventory invest­ forthcoming later this year. But the prices of ment. Various surveys of business intentions— other goods and services also have been rising as well as data on equipment orders and con­ briskly recently, and the advance in unit labor struction contracts—suggest moderate increases costs—a key determinant of price trends—has in capital spending in the months ahead. In accelerated. My best guess is that during the addition, our net export balance, which has four quarters ahead prices in general will rise deteriorated over the past 2 years, is beginning at an average rate of 7 to 7% per cent. to improve. Imports are likely to rise less rapidly With the economy moving into a period of during the next year. At the same time, exports heavy collective bargaining, the intensified in­ should pick up if activity abroad increases as flation we have been experiencing and the expected and as the changes in exchange rates greater tautness of labor markets could be re­ that have occurred since last fall improve the flected in higher wage demands, and if they are competitive position of U.S. goods. met, labor costs would rise even more rapidly. The increase in housing starts last month As it is, these costs will be boosted early next suggests that construction activity will remain year by additional mandated hikes in social at a high level over the near term, but it appears security taxes and in the minimum wage. The likely that building will begin to taper off later continued interplay of wage and price rises, this year, partly as a consequence of the firmer coupled with the legislated cost increases, will make it difficult to achieve much relief from 1 The attachments to this statement are available on underlying inflationary pressures over the next request from Publications Services, Division of Admin­ year. istrative Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. The strong momentum of inflation must be Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

644 Federal Reserve Bulletin □ August 1978 a central consideration for Government policy­ So, too, does the apparently declining level makers today. If we pursue a course that does of corporate liquidity. During the past 2 years not soon contain the forces accelerating the profits and other internal funds of businesses advance of prices, the result will be increasing have fallen increasingly short of the sums economic disruption and distortion, ending in needed for investment in inventories and fixed all probability in serious recession. Monetary capital. The result has been a rising volume of policy has been—and will continue to be—de­ borrowing and a declining volume of liquid signed to restrain inflation. But monetary policy asset accumulation; balance sheet ratios have cannot do the job alone. Placing too great a been deteriorating since late 1976. burden on monetary policy would entail dangers On top of these private credit demands have of severe financial dislocation that could have come sizable public demands. State and local unfortunate longer-run consequences for the governments have issued bonds in record vol­ domestic and international economies. ume during the past couple of years, but these governmental units also have provided funds to Financial markets showing inflationary pres­ credit markets through a record accumulation sures. Financial markets have already begun to of financial assets. The same cannot be said for show the strains of inflationary pressures. Debt the Federal Government. In financing the Fed­ burdens have grown tremendously as house­ eral budget deficit, the Treasury has competed holds and also businesses have borrowed to actively with the private sector for credit and finance desired real outlays at rapidly rising has added to the general upward pressure on prices. Financial institutions meanwhile have interest rates. experienced declining liquidity as they have attempted to accommodate heavy loan demands. Liquidity of depositary institutions has de­ The most obvious sign of these mounting pres­ clined. During the early stages of economic sures of supply and demand in credit markets recovery, commercial banks and thrift institu­ has been the upward path of interest rates since tions were able readily to satisfy the loan de­ the spring of 1977. The increase in interest rates mands of households and businesses while at can be attributed in good part to the diminishing the same time adding large amounts of Govern­ confidence of borrowers and lenders that infla­ ment securities to their portfolios. In the past tion will slow in the future. year, by contrast, there has been a fairly steady The willingness of households to go heavily decline in liquidity ratios of these institutions. into debt at relatively high interest rates in some With rising yields on Treasury bills and other degree reflects a feeling that it is best to buy market instruments diverting funds from savings now before prices rise still further. This senti­ and small-denomination time deposits, com­ ment undoubtedly has been a major factor in mercial banks, besides curtailing security ac­ the demand for houses throughout the past few quisitions, have issued a substantial volume of years, and it seems to have played an important large certificates of deposit (CD’s) and other role in the burst of sales of cars and other short-term liabilities. Meanwhile, savings and consumer durable goods during the first half of loan associations—the leading home mortgage 1978. The volume of consumer and mortgage lenders—have reduced their holdings of Treas­ credit extended in connection with these pur­ ury securities and have borrowed heavily from chases has been growing rapidly and so has the Federal home loan banks and other sources. ratio of debt repayment obligations to disposable personal income; both have reached unprece­ Growth in M-l high relative to long-run dented heights. To date, loan delinquency ex­ ranges, but M-2 and M-3 within them. The perience has not deteriorated significantly, so Federal Reserve might have attempted to allevi­ households evidently have not encountered ate some of the liquidity pressures in the econ­ serious problems in meeting scheduled pay­ omy by aggressively providing bank reserves ments; however, this situation bears careful and money. But at best this would have offered watching. no more than a temporary palliative. And it Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 645 would have set the stage for an explosion of to pay a rate equal to the average discount yield monetary expansion and exacerbated our prob­ in the auction, and thrift institutions lA of a lem of inflation. percentage point more. As it is, since early 1977 there has been a A noticeable pick-up in inflows to savings and rather persistent tendency for growth in the small-denomination time deposits in June is narrowly defined money stock, M-l, to run evidence of the success of depositary institutions above the rates the System had projected. Over in exploiting the new certificates. The 6-month the past four quarters, for example, M-l— floating-ceiling certificate appears to have been which includes only currency and demand de­ quite effective in stemming the outflow of funds posits—increased 7.9 per cent, well above the into market investments. An estimated $8V2 range of 4 to 6V2 per cent reported to this billion of the new instruments were issued in committee a year ago. June alone—$6% billion at thrift institu­ Over the same four-quarter span, however, tions—and growth has continued brisk this the broader monetary aggregates—M-2 and M- month. 3—recorded net increases that were well within their announced ranges. A chart depicts the Need to restrain inflation. The Federal Open behavior of M-2, which is M-l plus time and Market Committee at its meeting last week savings deposits at commercial banks (other considered carefully these recent patterns of than large negotiable CD’s). M-3 includes also monetary expansion, as well as the prospects time and savings deposits at thrift institutions. for the economy, in deciding on the appropriate The fact that growth rates of M-2 and M-3 longer-term ranges for the monetary aggregates. remained within their ranges over the past year, Although, as always, members of the committee while M-l growth was strong, is attributable to differed somewhat in their appraisal of the out­ the slowing in expansion of the interest-bearing look, there was a broad consensus that infla­ components of the broader aggregates. A year tionary pressures would remain strong, if not ago, yields on shorter-term market debt instru­ strengthen, in the year ahead. While the recently ments were below those that depositary institu­ published 5.7 per cent unemployment rate is not tions are permitted to pay on savings and small- low by historical standards, most analysts agree denomination time deposits. But as market rates that the unemployment levels at which infla­ rose, they surpassed the regulatory ceilings, tionary pressures are likely to mount have been prompting many savers to divert funds from raised substantially by compositional changes in deposits to Treasury securities, money market the labor force and by the effects of unemploy­ mutual funds, and other higher yielding invest­ ment compensation and other institutional fac­ ments. tors on decisions regarding work. Under the circumstances, it is critical that macroeconomic New certificates enhance growth of time and policy be conducted most prudently at this savings deposits. To help preserve the competi­ juncture to assure that economic expansion tiveness of depositary institutions—and thus to continues at an appropriate pace without fueling avoid the distortion of credit flows that might the already unacceptable intensity of inflation­ occur if these intermediaries were unable to ary pressure. accommodate borrowers who do not have access to open market sources of funds—the Federal Monetary growth ranges unchanged. Growth regulatory agencies created two new deposit ranges for the monetary aggregates selected by categories, effective June 1. One is an 8-year the FOMC for the year ending with the second time deposit on which banks may pay up to 13A quarter of 1979 are identical to those announced per cent and thrift institutions up to 8 per cent. 3 months earlier. The range for M-l is 4 to The other is a 6-month, $10,000 minimum 6V2 per cent; for M-2, 6V2 to 9 per cent; and balance account whose ceiling is determined by for M-3, 7Vi to 10 per cent. The growth range the results of the most recent weekly auction for bank credit, though, was raised to 8V2 to of 6-month Treasury bills. Banks are permitted IIV2 per cent in recognition of the greater share Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

646 Federal Reserve Bulletin □ August 1978 of borrower demands being directed ' toward cannot report that the committee expects a dim­ banks. inution of inflationary pressure over the coming The committee discussed at some length ar­ year. A reduction in the rate of price advance guments in favor of raising the upper limit of will require more time if it is to be accomplished the range for M-l. A major part of the discus­ in an orderly manner, given the present built-in sion focused on the question of whether the biases toward inflation in the country. persistent tendency over recent quarters for M-1 These biases—regulatory, legislated, and exgrowth, on average, to overshoot the FOMC’s pectational—prevented the committee from tak­ longer-run range represented a fundamental shift ing a further step at this time toward the lower­ in the demand for M-l relative to GNP that ing of the monetary growth ranges—a process should be accommodated. The committee con­ that must be continued over time if the Nation cluded that an upward adjustment in the range is to achieve reasonable price stability. In any at this time would be undesirable in light of event, under current circumstances, continu­ continuing inflationary pressures. Nonetheless, ation of the present growth ranges for the ag­ it was recognized that, in light of the recent gregates implies a continued posture of restraint behavior of money demand, growth in this ag­ against inflationary pressures and probably in­ gregate over the year ahead might well be volves some additional—but tolerable— around its upper limit. liquidity pressure on financial intermediaries. Scheduled regulatory changes could lead to a lower measured growth in M-l, however. Need for a longer-range effort to treat struc­ Once the new regulation allowing automatic tural problems. These observations underscore transfers of funds from savings to checking the limitations of monetary policy as the main accounts goes into effect this coming No­ bulwark against inflation and the need to mount vember, the public can be expected to econo­ a broad attack on the economic problems we mize more on demand balances and to shift face. A significant reduction in the Federal bud­ some funds from demand deposits to savings get deficit would be an important first step in deposits. Such shifts would tend to reduce reducing inflationary pressures. But a longergrowth in M-l during a transition period in range effort to treat the structural problem of which bank customers adjust to the new service. inflation also is necessary. But the extent to which such a shift in funds We must reshape our tax laws to make certain will occur over the year ahead is quite uncertain. that there are adequate incentives for saving and It will depend on the structure of charges posted investment. The Nation has for many years now by banks for the new service and on the speed devoted too large a proportion of its production with which the public takes advantage of the to consumption and too small a share to the added flexibility in cash management. In the expansion and modernization of its industrial transition period, therefore, M-l will become plant. As a result, growth in productivity has a less reliable indicator of monetary conditions. languished, with serious consequences for in­ The broader monetary aggregates are not flationary trends and our standard of living. likely to be affected significantly by the auto­ We must take steps as well to bolster our matic transfer regulation. They are expected to position in international trade and thereby to grow well within their current ranges in the strengthen the dollar. We should continue to months ahead, with growth sustained in part by seek freer access to world markets and should the availability of the new certificate accounts. attempt to make American businessmen more Thus, a generally ample flow of credit through aware of opportunities for sales abroad. banks and thrift institutions can be expected. We must seek ways of training and placing There are always great uncertainties sur­ those individuals who, because of lack of skills rounding monetary projections, but the FOMC or limited knowledge of employment opportu­ believes that these ranges for the four quarters nities, are not readily absorbed into the work ahead are consistent with further moderate ex­ force. pansion of economic activity. Unfortunately, I And we must remove the impediments to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 647 competition, relieve the undue regulatory bur­ eration of the administration, the Congress, the dens, and avoid the costly governmental actions Federal Reserve, and the private sectors of the that have contributed importantly to inflationary economy, I believe that within the next several pressures in recent years. years we can establish an economic environment It is important to take strong measures now conducive to full employment with price to curb inflation, and with the continued coop­ stability. □ Statement by Philip E. Coldwell, Member, System. I want to stress the point that increased Board of Governors of the Federal Reserve competition for transaction accounts—particu­ System, before the Committee on Banking, Fi­ larly interest-bearing transaction accounts—has nance and Urban Affairs, House of Repre­ forced all financial institutions to become in­ sentatives, July 31, 1978. creasingly cost conscious. In turn, member banks facing this and other challenges to profit­ I am pleased to testify today on two important ability have been forced to weigh carefully the issues, membership in the Federal Reserve Sys­ costs of retaining their membership. tem and pricing of Federal Reserve services. In addition, Chairman Miller’s testimony First, I would like to express my concern about provides a review of the adverse implications the continuing erosion of membership in the that declining membership has for monetary Federal Reserve and the need to solve this management and the quality of the banking problem. Next, I want to discuss the issue of system. He stressed the importance of bringing pricing for Federal Reserve services. Most of equity among financial institutions. Let me em­ my testimony will be devoted to discussing phasize two factors he mentioned. First, the pricing because of its potential impact on mem­ ability of the Federal Reserve to guide innova­ bership and on the Nation’s payments mecha­ tion and to foster constructive competition in nism. The Congress should be fully aware that the payments mechanism among financial insti­ pricing for services without reducing the burden tutions will be enhanced. Second, at such time of membership will further contribute to banks as all financial institutions are bearing an equi­ leaving the Federal Reserve. table reserve burden, there will be no unfavor­ As a member of the Board and former Presi­ able economic effects to allowing uniform dent of the Federal Reserve Bank of Dallas, I access to Federal Reserve services at equal costs have observed the withdrawal of banks from the and under equal conditions. Federal Reserve System for nearly 27 years. At It is important for the United States to have first the banks withdrawing from the System a strong central bank and certainly in the current were generally rather small. But in recent years economic situation steps should be taken larger ones—even large correspondent banks promptly to offset any contrary trend. I am sure and frequent users of Federal Reserve serv­ that the Congress is as concerned as we are ices—have found the burden of membership too about the inflationary pressures evident in our great to justify remaining in the System, and economy and therefore will be interested in others have indicated intentions to withdraw assuring the strength of one of its primary agents unless the burden of membership is relieved. for resisting inflation. Over the years, the Board has expressed its This line of thought leads me to hope that concern to the Congress about the loss of mem­ the Congress will be willing to stop the erosion ber banks and has recommended ways to reverse of membership. The most evident and clear-cut membership loss. Chairman Miller again support the Congress could enact would be stressed this concern in his testimony last week. legislation requiring universal reserves. In his testimony he explained the reasons why It is essential for everyone to understand that banks are withdrawing from the Federal Reserve monetary policy is not developed for banks or Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

648 Federal Reserve Bulletin □ August 1978 for even the limited number of member banks, would follow a conservative and flexible ap­ so there appears to be no good reason for the proach in establishing charges for Federal Reserve services. To this end, the System has Nation’s central bank to operate under the concluded that its charges should be compet­ shackles of a voluntary membership structure. itive with those for comparable services We can debate a specific monetary policy on (when available) in the private sector. How­ ever, the Board would retain flexibility to its merits, but from any standpoint I can see alter charges or service policies in order to no public purpose to be served by limiting the meet its responsibilities to maintain a satis­ effectiveness of the central bank. Monetary pol­ factory, basic level of service for the Nation as a whole and to encourage innovations. icy is made for the entire Nation, not a limited sector of the banking community. All depositary I would like to elaborate on this statement and institutions are chartered in the public interest, explain why the Federal Reserve believes it has and all should be directly supportive of, and a responsibility to retain an ability to perform participants in, the implementation of policy. a “basic level of service” nationwide in pay­ I would like to express my views on the part ments activities. of the Board’s plan and the parts of the proposed Payments mechanism activities are an impor­ legislation that deal with charging for Federal tant aspect of the functioning of the Nation’s Reserve services. I will explore with you possi­ economy. The Federal Reserve through its cur­ ble impacts that charging will have on the Na­ rency and coin distribution, check collection, tion’s payments mechanism. funds transfer, and U.S. Government security You are no doubt aware that the System has transfer services is actively involved in all vital been considering for over 2 years the subject components of money supply and money of charging for its services. As studies have movement through the Nation’s payments sys­ progressed, we have become increasingly aware tem. that there are problems in the application of the The payments mechanism of the United theory that pricing should result in a more States functions quite well today. Enormous efficient allocation of total resources to pay­ amounts of money flow among financial institu­ ments mechanism activities. I believe there is tions each day. Much of the Nation’s business a much more important goal than attaining opti­ is carried out with check payments, and, as you mum allocation of resources. That goal should know, the Federal Reserve is a major participant be the continuing ability of the Federal Reserve in the check collection system. Orderly markets to assure the Congress and the Nation of a in Federal funds and Government securities are smoothly functioning payments mechanism. important to the Government and the banking In considering pricing legislation, the Con­ industry and to monetary policy. The Federal gress should be fully aware that the Federal Reserve Communications System plays a vital Reserve has no intention of enlarging its role role in supporting these markets. in the payments mechanism to the exclusion of The Government in protecting the public in­ the correspondent banks of the Nation. Neither, terest has a substantial concern with the smooth however, does it intend to allow a few very large functioning of financial markets and payments private sector firms to dominate services now mechanism activities. I believe those interests provided by the Federal Reserve. This could can be protected in only two ways, either ex­ result, ultimately, in problems similar to those clusively through regulation or through limited in existence when the Congress created the regulation and an operational presence such as Federal Reserve System and gave it the power the Federal Reserve currently has in the check to establish clearinghouse services. collection system. In its proposal to the Congress, the Board If the Federal Reserve’s operational presence made the following statement: in payments mechanism functions were materi­ ally reduced, then regulation of payments In order to assure continued efficient func­ operations probably would be needed to protect tioning of the payments mechanism and to the safety and soundness of depositary institu­ avoid major disruption during the transition to a more competitive environment, the Board tions or to avoid payments practices that are Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 649 contrary to the public interest. Who, for ex­ 4. Efficiency. For items drawn on distant ample, would enforce standards such as mag­ banks the Federal Reserve collection system netic ink character recognition (MICR) encod­ helps assure a minimum number of institutional ing and routing number systems? Who would handlings. Balances maintained solely for set­ ensure that funds availability is maintained at tlement are also minimized because of the use a reasonable level so that checks would remain of reserve accounts for settlement. as acceptable as they are today? If Federal 5. Optional collection channels available. It Reserve operational presence were reduced, it is possible for a bank to collect items through would be necessary to establish a body of regu­ a number of options in the current system. lations and examination, investigation, and en­ Federal Reserve collection channels are used forcement mechanisms to ensure an efficient and primarily by member correspondent banks. equitable payments mechanism. The costs and Smaller banks, both members and nonmembers, burden of such a program should be a significant use a correspondent bank as their primary col­ factor in determining the pricing and operational lecting agent. posture of the Federal Reserve. 6. Nationwide scope. A similar level of We believe that the Congress looks to the service is available to all collecting and paying Federal Reserve to protect the public interest banks wherever located. in payments mechanism functions, and we be­ In operating the collection service, a public lieve that the public interest can best be served institution can assure that all regions of the by continued operational functions that are per­ country are provided a basic level of service formed by the Federal Reserve Banks. There­ at a reasonable price. Federal Reserve opera­ fore, while pricing of Federal Reserve services tions in the check collection system assure that is intended to bring about efficient allocation of clearing time is relatively fast to all areas. And resources, sufficient pricing flexibility is needed they assure that terms of access to the check for the Federal Reserve to maintain its opera­ collection system are equitable. However, this tional presence in payments operations. In par­ is done by providing subsidies to low-volume ticular, the Federal Reserve should continue to and remote financial institutions. The private provide a basic level of service and to protect sector could provide such cross-subsidies only the public interest in the safety and soundness if it earns excessive profits in high-volume, of the Nation’s payments mechanism. As an high-profit regions. example, consider that through the participation The Federal Reserve Banks pass credit to of both the Federal Reserve and the private depositors on a predetermined schedule that is sector the check collection system has evolved intended to approximate collection times for the into a system with the following desirable fea­ items deposited. The fact that these schedules tures: are fixed provides a firm basis upon which 1. Certainty. Checks and other cash items depositing banks can plan their cash positions drawn on any financial depositary institution are and manage their funds. This certainty also collectible. There is almost universal payment provides a way for commercial banks to pass for checks at face value by paying banks. credit to their depositors in an orderly fashion 2. Speed. Checks represent money to the without accepting undue costs or risks. payee and the collecting bank. Current arrange­ This certainty is financed by the quantity ments allow for availability of funds to collect­ known as Federal Reserve check collection ing banks for any checks in 2 to 3 business days. float, the difference at any time between the Rules also exist to assure prompt notice of value of credit for deposits given by the Reserve nonpayment of items. Banks and the value of checks collected. If the 3. Accuracy. The incidence of error is rela­ private sector were to assume the responsibility tively small and not readily visible to the public. of passing credit for checks on the same sched­ Procedures exist to assure maintenance of suffi­ ule as the Reserve Banks, the expense of fi­ cient records to correct mistakes (lost items, nancing the float would be a substantial cost to missent items, and so forth). the banking system that it does not now bear. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

650 Federal Reserve Bulletin □ August 1978 If the Federal Reserve is not given the flexi­ ployed in processing commercial checks to as­ bility to adjust its prices to the marketplace, sist in processing Government checks. If com­ there is a possibility that the private sector will mercial check volume were reduced to a point skim off only the most profitable services leav­ where employment and equipment is cut back, ing the Federal Reserve with the least profitable these resources would no longer be available services and significantly higher average costs. to assist in processing Government checks. For example, in the check area the Federal The Federal Reserve uses the same courier Reserve could be left collecting checks drawn service to deliver Treasury electronic funds on low-volume and remote banks. Since the cost transfer payments that it uses to deliver checks of providing only this service would be ex­ to financial institutions. If the number of banks tremely high, it would then have to be decided to which we deliver commercial checks were whether users of Federal Reserve services reduced, the courier service would also be re­ should be subsidized in order to assure contin­ duced. Without the courier service, the Treasury ued acceptability of these checks. would have to rely on other means for delivering It is vitally important that the Nation have Federal Government payments. available a fast, reliable, and accurate payments Given the Federal Reserve’s role as a provider network to support the Nation’s monetary policy of a basic level of service nationwide, which as well as the needs of banking and commerce. I believe is a major factor contributing to the Implementation of monetary policy is facilitated smooth functioning of the payments mecha­ through Federal Reserve payments mechanism nism, let me caution against any constraining operations. For example, the wire transfer of legislation that could disrupt money flow opera­ funds and securities capabilities of the System tions. A provision in the Stanton bill, H.R. provide a fast, reliable, and accurate vehicle for 12706, would require the Federal Reserve to the effects of open market operations to flow adhere to a fixed formula in setting prices. The across the banking industry. Our extensive in­ provision that requires the Federal Reserve to volvement in check collection operations allows base its prices on direct and indirect costs as us early warning of bank liquidity problems that well as costs that would have been incurred by become evident when settlement for checks a private firm might place the Federal Reserve presented each day appears to be increasingly Banks at a competitive disadvantage in relation difficult for a bank. Also, if normal payments to private firms. Private firms rarely have their mechanism services are interrupted by severe prices bound to a fixed formula. It is my im­ weather or other emergencies, these circum­ pression that complete cost accounting in the stances are reported to the Open Market staff banking system is a little-used procedure when who can forecast monetary policy implementa­ pricing individual services. In most cases, ad­ tion strategy utilizing data derived from internal justments are simply made to prevailing market operating reports. prices, with the only price constraint being A substantial reduction in the role of the coverage of all costs in the long run. It is a Federal Reserve in the check collection system common practice for correspondent banks that could have an impact on Federal Reserve pay­ provide services somewhat comparable to those ments services provided to the Treasury offered by the Federal Reserve to cross-subsi- Department. Currently, the Federal Reserve dize their service lines. Banks may suffer losses provides many services that facilitate the pay­ on payments services, for example, while re­ ment of Government obligations. Financial in­ covering those losses from earnings from other stitutions deposit Treasury checks with the Fed­ bank services such as lines of credit and loan eral Reserve for payment. The largest number participations. My concern is that, unless the of these checks are social security and other Federal Reserve utilizes similar flexibility, it benefit payments. For the most part, these will not be able to adjust to the realities of the checks are issued and cleared during the first competitive marketplace and may be forced to few days of each month. The Federal Reserve reduce or abandon its role as the provider of uses employees and equipment that are em­ a basic level of service nationwide. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 651 Let me make it clear that I have no problem checks to banks. It should be made clear that with using pricing to define the terms of access Federal Reserve check-clearing operations and to Federal Reserve services, to bring about a commercial bank operations currently differ in more efficient use of those services, or even to many respects. A considerable proportion of determine the role the Federal Reserve should Federal Reserve expense is related to delivery play in the payments mechanism as long as we of checks to all banks in the Nation each day do not allow private concentrations to be sub­ and to transportation of checks among zones stituted for the Federal Reserve. I do not believe nationwide. Commercial banks expedite collec­ that it would be in the best interest of our tion of checks based on the dollar amount of country to have the payments mechanism in the the items whereas the Federal Reserve generally hands of a severely limited number of private does not discriminate based on dollar value. The institutions, and I suspect that this concern is Federal Reserve sets rather stringent presorting shared by a great many smaller banks and other requirements on depositing banks and requires nonbank financial institutions. all items to be fully encoded prior to deposit It is not absolutely necessary for the Federal whereas commercial banks are much more lib­ Reserve to price many of its services in order eral in sorting requirements and will perform to allow the private sector to compete. The encoding operations for a price. private sector is able to compete with the Fed­ My recommendation is that we take a cau­ eral Reserve because we have exercised restraint tious approach toward pricing of Federal Re­ in our involvement in the payments mechanism. serve services so that we do not unduly affect For example, correspondent banks and service the performance of the payments mechanism. organizations offer significantly broader check I believe that it is important for us at least to processing services including dollar amount en­ see how pricing works and for the Federal coding, proof of deposits, transit check pro­ Reserve to gain experience in pricing before we cessing (including both collection of some become bound to a formula that may do more checks and routing others on for collection harm than good. I think this argues for flexi­ through other banks and the Federal Reserve), bility in establishing prices so that pricing can and demand deposit accounting (posting of help bring about a more efficient use of pay­ checks to customer accounts). In providing ments services while at the same time acknowl­ transit check processing, the organizations are edging the role of the Federal Reserve to con­ frequently able to improve upon the availability tinue to set the rules of the road and to provide of Federal Reserve funds by direct routing of a basic level of service nationwide. □ Statement by G. William Miller, Chairman of In the period of approximately 16 months of the Board of Governors of the Federal Reserve operation under the Sunshine Act, the Board has System, before the Subcommittee on Federal found compliance with the letter and spirit of Spending Practices and Open Government of the act not to be unreasonably burdensome, the Committee on Governmental Affairs, U.S. although there have been additional costs and Senate, August 4, 1978. some procedural difficulties. The ability to function under the act has been due in large Thank you for the opportunity to appear before measure to action by the Congress, strongly your subcommittee to discuss the Government supported by the Board, in formulating provi­ in the Sunshine Act as it applies to the Board sions designed to address the specific problems of Governors of the Federal Reserve System and of agencies that deal with sensitive financial to give you some of the Board’s experiences information and the supervision and regulation and views relating to the implementation of the of financial institutions. Important among these act. provisions are exemptions from the open meet­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

652 Federal Reserve Bulletin □ August 1978 ing requirements for confidential financial infor­ or further bank acquisition; other bank regula­ mation, information contained in bank exami­ tory matters such as applications for member­ nation reports, and information the release of ship, issuance of capital notes, and investments which could lead to financial speculation in in bank premises; foreign banking matters; and currencies or securities or that could threaten bank supervisory and enforcement actions such the stability of financial institutions. as cease-and-desist and officer removal pro­ Given the Board’s unique respon­ ceedings. sibilities—particularly for the conduct of mone­ In adopting the Board’s regulation providing tary policy but also for supervision of State for the use of expedited procedures, it was member banks and regulation of all bank hold­ ascertained that of the 493 meetings of the ing companies—these exemptions probably Board held in the three calendar years prior to apply to the Board’s meetings more often than enactment of the Sunshine law, 94 per cent to those of any other covered agency. could have been properly closed pursuant to The Board’s effective consideration of many exemptions that would sanction use of these issues in the financial and supervisory area also procedures. Because of the nature of the Board’s has been enhanced by the authority to use sum­ activities and the nature of the exemptions that maries of minute entries, rather than a verbatim authorize the use of expedited procedures, it recording, for agenda items closed under several may be expected that a substantial percentage of these exemptions. This authority has en­ of the Board’s agenda items will continue to couraged a continuation of the free and open be closed under these procedures. discussion of sensitive matters that is so impor­ tant to the deliberations of a collegial body such as the Board. Later, two additional subjects for BOARD RECORD OF OPEN which minutes may be used will be suggested AND CLOSED MEETINGS since the Board believes free discussion of these Operating under the Government in the Sun­ subjects has been somewhat impeded by the shine Act during 1977, 27 per cent of the current recording requirement. Board’s 114 meetings were either open or par­ Also, the authority to close meetings dealing tially open. At these meetings the Board con­ with recurring items under certain exemptions sidered 638 individual agenda items, of which by regulation rather than by requiring individual 17.5 per cent were open and 82.5 per cent advance vote—the so-called “expedited proce­ closed. For many of the closed items, tape dures” provision—has simplified the Board’s recordings of the Board’s discussions were operations under the Sunshine law, without any placed in the Board’s Freedom of Information disadvantage to the public. Office soon after the meeting, thus making these discussions available to the public. Taking into account the release of these recordings, another EXPEDITED PROCEDURES 5.3 per cent of the items considered by the Board in 1977 are now open to the public. The Board’s regulation provides for a meeting For 1978 through June 30, 43 per cent of to be closed by a vote of at least four members the Board’s meetings were either open or par­ at the beginning of the meeting if the subjects tially open. The Board has considered a total to be discussed fall within specified exemptions. of 377 agenda items during this period; 26 per Typically, such closed meetings deal with sub­ cent in open sessions and 74 per cent in closed jects involving monetary policy matters, such meetings. as the setting of discount rates, use of the discount window, changes in the limitation on payment of interest on time and savings ac­ OPEN MEETING PROCEDURES counts, and changes in reserve requirements or margin regulations; proposals involving a spe­ The Board has put a good deal of effort into cific bank or bank holding company formation developing a program to aid the public in un­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 653 derstanding and obtaining the maximum possi­ sentatives who regularly attend such sessions ble benefit from its open meetings. A pamphlet and individuals known to have an interest in has been prepared to increase the public’s un­ particular matters on the Board’s agenda are derstanding of the application of the Sunshine advised of the change by telephone. When the Act to the Board’s meetings. change is significant, calls are also made to each The Board makes most staff memoranda con­ of the persons on the Board’s Sunshine mailing sidered at open meetings available to the public list—approximately 40 in number. upon request submitted prior to the meeting. Such requests are given priority treatment by the Board’s Secretary. Before presentation of RECORDS OF MEETINGS an item on the agenda at an open meeting, a brief statement of the issues involved is usually As indicated earlier, the Board has also made made for the benefit of the public. Members of a conscientious effort to comply with the spirit the public attending the meeting are provided of the Sunshine Act with respect to the avail­ with an agenda summarizing the issues to be ability of minutes, transcripts, and recordings. discussed. Photographs of Board members and The record of each closed Board meeting is seating charts are available in the Board room. made available to the public in the Board’s Following each meeting a representative of the Freedom of Information Office promptly after Public Affairs Office is available for further the meeting, unless the Board has voted to questioning about the proceedings. In short, the withhold part or all of the discussion under the Board endeavors to help the public understand act’s exemptions. For closed meetings there are the proceedings at open meetings. either minutes or recordings that may be listened Twenty-five persons attended the first open to by members of the public. Transcripts of meeting of the Board on March 28, 1977. Since recordings may be obtained upon request. Cover then attendance has varied widely, depending sheets attached to the released material indicate on the public interest in the subjects to be whether the entire record is available and list considered. Attendance was large at one recent any subjects withheld. Material that is withheld meeting in which the Board’s proposed mem­ temporarily is released as soon as it is deter­ bership program, the proposed Community mined that the exemptions under which it was Reinvestment Act regulation, and aspects of the withheld no longer apply. The public may come International Banking Act legislation were con­ into the Freedom of Information Office and sidered. That meeting was attended by about obtain immediate access to pertinent files, min­ 85 members of the public. Otherwise, attend­ utes, and records. ance has ranged from 0 to 39, averaging 9 per meeting. The Board maintains a mailing list for notices COSTS OF GOVERNMENT of meetings. In addition to printing notices in IN THE SUNSHINE the Federal Register, the Board makes advance notices of meetings available to the public at While we have endeavored to maximize the the Board’s Freedom of Information and Public benefits to be derived from implementation of Affairs Offices and at the Treasury Department’s the act, it should be noted that such efforts are press room. Also, notices of open meetings are not without associated costs. We have had to provided to a news wire service for use on its reassign resources within our staff so that two Washington “city wire.” All notices invite the persons now work solely on Sunshine matters, public to address inquiries to the Board’s Public one processing public announcements and the Affairs Office, which is prepared to provide other processing the recordings and minutes of details about any meeting. In the event of an closed meetings. In order to meet our open unexpected change in an open agenda item, meeting and recording obligations, it has been when advance written notice is unlikely to be necessary to install a public address and multi­ received in time by the public, media repre­ track recording system at a substantial cost to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

654 Federal Reserve Bulletin □ August 1978 the Board. Compliance with the substantive and vored by the Board. For example, the Board technical requirements of the act continues to may decide to support a particular legislative place heavy additional demands on staffs of the proposal but determine at the same time to Secretary, the General Counsel, and others. We support various alternative proposals should the estimate that the cost to the Board of complying Board’s preferred position prove unacceptable with the Sunshine Act is approximately $100,- to the Congress. Premature disclosure of the fact 000 per year. that the Board is willing to support alternative Another cost, of a somewhat different nature, proposals could significantly frustrate the but of particular concern to me, relates to the Board’s ability to obtain support for its primary delay in processing of matters before the Board objective. as a result of compliance with procedural re­ Second, the Congress often expects that quirements of the act. For instance, some items views on legislative matters will first be given that prior to the act were brought to the Board to the Congress. The important working rela­ at a moment’s notice are now delayed as much tionship between the Congress and the agencies as 2 weeks to accommodate the Sunshine public could be significantly frustrated if agency views notice and voting requirements. Items ready for on legislative matters were prematurely dis­ Board action at an open meeting have been closed to the press and to the public. deferred in order that a grouping of such matters Nevertheless, the Board’s application of ex­ may be presented at one open meeting, rather emption (9)(B) to legislative discussions has than requiring the public to attend a series of been questioned by parties asserting that it was meetings, each with only one or two open items improper to use this section to close a meeting on the agenda. The Board continues to consider considering testimony to be given to the Con­ appropriate steps that might be taken to mini­ gress. For this reason, the Board urges your mize such delay. subcommittee to take action in the form of either an amendment or a clear statement in support of the Board’s interpretation. Even if the authority to close the discussion SUGGESTED AMENDMENTS of legislative matters under exemption (9)(B) is TO THE ACT clarified, another basic problem remains—the The Board has previously written to you about inhibiting effect that a requirement for verbatim its concern as to any requirement that the recording has on the Board’s consideration of Board’s discussion of legislative matters be held legislative matters. According to my colleagues in open meetings prior to their presentation to on the Board, the free and spontaneous ex­ the Congress. It is the Board’s belief that the changes that were formerly present in Board Congress dealt with this question by adopting discussions of legislative matters have been exemption (9)(B) under which an agency’s de­ somewhat constrained by the recording require­ liberations may be closed if public discussion ments for such a meeting. It would seem that would make known information, the premature the Board and other collegial agencies should disclosure of which would be likely to frustrate be able to communicate to the Congress posi­ significantly the implementation of a proposed tions that have been formulated during a meet­ agency action. Two reasons support closing of ing that has permitted uninhibited expression of legislative items on the basis of this exemption. each member’s views. The public interest would First, the legislative process usually contains not be harmed if agency deliberations were elements of negotiation and compromise, and conducted in closed nonrecorded sessions, the .premature disclosure of positions on legislative results of which are later exposed to the public matters could significantly frustrate the attain­ in the course of committee hearings. The Board ment of legislative goals sought by an agency. recommends that the law be amended to permit Discussion of legislative matters often involves legislative discussions to be subject only to the the consideration of strategy to be pursued in maintenance of minutes. the accomplishment of legislative objectives fa­ Discussion of sensitive personnel matters has Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 655 also been hampered by the act’s recording re­ agency to discuss individual personnel matters quirements. Board members, meeting in colle­ in closed session subject to the maintenance of gial fashion, cannot be expected to express in minutes rather than the verbatim transcript or complete candor their views regarding candi­ recording now required. dates for senior Federal Reserve positions when Mr. Chairman, I assure you that the Board each word spoken is recorded. The creation and intends to continue to carry out the letter and retention for at least 2 years of substantial num­ spirit of the Government in the Sunshine Act bers of recordings reporting such sensitive de­ to the best of its ability. I hope these comments liberations seem unwise and, moreover, unnec­ have been responsive to the subcommittee’s essary. Accordingly, the Board also recom­ request, and I will be pleased to answer any mends that the act be amended to enable an questions you may have. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

656 Federal Reserve Bulletin □ August 1978 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON JUNE 20, 1978 1. Domestic Policy Directive The information reviewed at this meeting suggested that output of goods and services had expanded rapidly on the average in the second quarter, reflecting the economy’s rebound in late winter and early spring from the effects of the unusually severe winter weather and the lengthy coal strike. More recently, however, the rate of expansion appeared to have slowed. The rise in average prices—as measured by the fixed-weighted price index for gross domestic business product—accelerated markedly in the second quarter, due in large measure to substantial increases in food prices. Staff projections continued to suggest moderate expansion in output over the year ahead. The anticipated rate of growth was slightly lower than that projected a month earlier, mainly because the assumptions regarding fiscal policy were modified to reflect the administration’s decision to delay the proposed tax cut from October 1 to January 1 and to reduce its size. The projected rate of price advance had been raised slightly from that of a month earlier, but it was still well below the rate in the second quarter. The projections also suggested that the unemployment rate would decline a bit further over the coming year. Growth in production and employment moderated in May from the rapid rates of preceding months. Thus, the industrial production index increased 0.6 per cent, compared with gains of 1.2 and 1.4 per cent in March and April, respectively; and the rise in nonfarm payroll employment in May was less than one-half the average increase earlier in the year. In manufacturing, the gain in employ­ ment was relatively small and the average workweek declined. The labor force continued to grow substantially, and the unemployment rate edged up to 6.1 per cent from 6.0 per cent in April. Total retail sales were about unchanged in May, following 3 months of exceptionally large gains. Unit sales of new automobiles Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 657 rose slightly further to a new high for the current expansion. It appeared that some consumers were buying new cars in anticipation of further price increases. The latest Department of Commerce survey of business spending plans, taken in late April and May, suggested that outlays for plant and equipment would expand 11.2 per cent in 1978; this rate was marginally above that reported in the February survey. Other indi­ cators of capital spending plans, such as manufacturers’ capital appro­ priations, contracts for commercial and industrial buildings, and new orders for nondefense capital goods, appeared generally con­ sistent with continued moderate expansion in investment outlays. The index of average hourly earnings for private nonfarm pro­ duction workers rose at an annual rate of about 3 per cent in May, following increases averaging close to 10 per cent in earlier months of 1978. For the first 5 months of the year the index had increased at a somewhat faster rate than it had on the average in 1977. The advance in the wholesale price index for all commodities also slowed in May, reflecting smaller increases in prices of farm and food products as of the time of the survey. Later in the month, however, prices of a number of farm products advanced. In April the consumer price index for all urban consumers rose at an accelerated annual rate of nearly 11 per cent, owing to further large increases in food prices and to higher service costs, especially those relating to homeowner ship. In general, prices had increased considerably faster in early 1978 than during the year 1977. In foreign exchange markets the trade-weighted value of the dollar reached a peak for 1978 in late May. Subsequently the dollar declined by about 2 per cent, but it remained above the low for the year that had been recorded in early April. The renewed downward pressure on the dollar appeared to reflect market concern about the high rate of inflation in the United States relative to rates in other industrial countries and about the continu­ ation of large deficits in U.S. foreign trade and surpluses in the trade of Germany and Japan. The deficit in April was about the same as that in March but lower than the high level of the first quarter. Both exports and imports rose considerably in April. The rate of expansion in total bank credit, which had accelerated sharply in April, slackened somewhat in May but remained above the average for other recent months. Bank holdings of securities Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

658 Federal Reserve Bulletin □ August 1978 changed little, but total loans, led by a surge in business loans, grew at an exceptional pace. Outstanding commercial paper of nonfinancial businesses declined slightly in May. Growth in the narrowly defined money supply (M-l) moderated in May to an annual rate of about 6V2 per cent from the extraor­ dinarily rapid rate of 19 per cent in April. Growth in M-2 and M-3 also slowed in May, reflecting the deceleration in M-l. Inflows of the interest-bearing deposits included in M-2 generally were greater than in April as commercial banks issued a substantial volume of large-denomination time deposits to finance the sharp increase in business loans. However, inflows of funds into savings deposits and small-denomination time deposits remained slow both at banks and at thrift institutions. Preliminary data for the first part of June suggested that growth in M-l and M-2 would accelerate in that month. At its meeting on May 16 the Committee had decided that the ranges of tolerance for the annual rates of growth in M-1 and M-2 during the May-June period should be 3 to 8 per cent and 4 to 9 per cent, respectively, and it had judged that such growth rates were likely to be associated with a weekly-average Federal funds rate slightly above the level of 7 Vi to 7% per cent prevailing at that time. The Committee had agreed that if growth rates in the aggregates over the 2-month period appeared to be deviating signi­ ficantly from the midpoints of the indicated ranges, the operational objective for the weekly-average Federal funds rate should be mod­ ified in an orderly fashion within a range of 7Vi to 73A per cent. In accordance with the Committee’s decision, the Manager of the System Open Market Account began after the May meeting to seek bank reserve conditions consistent with a firming of the Federal funds rate to around IV2 per cent. Incoming data throughout most of the inter-meeting period suggested that growth in the monetary aggregates would be well within the ranges specified by the Committee, and the Manager continued to seek conditions consistent with a Federal funds rate of IV2 per cent. Data that became available a few days before this meeting suggested that M-l would grow in the May-June period at an annual rate of about IV2 per cent, close to the upper limit of its range. M-2 also was projected to grow in the 2-month period at a IV2 per cent rate, in the upper half of the range specified for that Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 659 aggregate. These data suggested the need for Committee consulta­ tion, and on June 16, in view of the proximity of the meeting scheduled for June 20, the Committee voted to direct the Manager to continue for the time being to aim for a Federal funds rate of IV2 per cent. Other market interest rates had risen further in recent weeks. Reflecting not only the rise in the funds rate but also substantial business credit demands, market rates on short-term securities had increased from 30 to 60 basis points since mid-May, and commer­ cial banks had raised the rate on loans to prime business borrowers in two steps from 8V4 to 83A per cent. Yields on long-term securities rose 5 to 20 basis points over the same period, apparently in response to the rise in short-term rates and investor concerns about the prospects for inflation. Conditions in mortgage markets had continued to tighten recently as strong demands for credit pressed against reduced availability of funds at lending institutions. At savings and loan associations, net mortgage lending activity in April—the latest month for which data were available—was close to its reduced rate in the weatheraffected first quarter, and mortgage commitments outstanding de­ clined further. During the inter-meeting period there were further increases in interest rates on new commitments for conventional home loans at the associations and, in most regions, a tightening of nonrate terms as well. Yields in the secondary market for home mortgages also had generally increased in recent weeks. In the Committee’s discussion of the economic situation and outlook, the members generally agreed that the growth in real output of goods and services over the coming three quarters would be substantially slower on the average than it had been in the unusually strong quarter just ending. However, they still expected real GNP to grow at a moderate, average rate during the year ending with the second quarter of 1979. While some members thought that average growth for that period would probably be at or a little below the rate projected by the staff, others expected somewhat faster growth. A majority feared that the rise in prices would be greater than the staff anticipated. Most members thought that the unemployment rate at the end of the period would be little changed from the rates recently prevailing. With respect to the months immediately ahead, a majority of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

660 Federal Reserve Bulletin □ August 1978 the Committee members thought that the economy was likely to show more strength than the staff projection suggested. These members noted that both consumer and business sentiment appeared to be strong, and they interpreted the latest data on consumer behavior as evidence that many households were adopting a specu­ lative approach to spending—anticipating needs for housing and other durables, and in the process adding willingly to already heavy debt burdens. While these members acknowledged that national economic data did not yet suggest similar anticipatory spending on the part of businesses, several noted that many businessmen appeared to be optimistic about the prospects for their own firms and industries and that such optimism might soon be reflected in a step-up in over-all business inventory accumulation and invest­ ment outlays. A number of these members expressed concern about the indications that inflationary expectations were strengthening and that both business and labor were intensifying their efforts to protect themselves through price and wage increases. Two of the members who anticipated relatively strong growth in the near term thought that the economy was likely to generate sufficient momentum to maintain a favorable rate of expansion beyond mid-1979. Others in this group were concerned, however, that insofar as near-term spending of consumers and businesses embodied speculative tendencies, the resulting economic distortions might lead to significantly slower growth in 1979. Of the Committee members who anticipated less near-term strength in the economy, some suggested that current business optimism might well reflect an overemphasis on the sharp rebound that had occurred in recent months rather than a considered assess­ ment by businessmen of prospects for the future. These members thought it unlikely that growth in consumer outlays would continue at the recent rate, and they saw no obvious source of offsetting strength. They expected outlays for housing to slacken; they noted that surveys of business investment plans did not reflect much ebullience; and they thought businessmen would follow a cautious approach to inventory expansion. Finally, they noted that Federal fiscal policy would be less stimulative than anticipated earlier in the year. Several members of the Committee observed that relatively slow economic growth would tend to dampen inflationary pressures and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 661 to bolster the position of the dollar in foreign exchange markets. One of these members noted that economic activity in major industrial countries abroad was expected to strengthen, and that such a development would help to limit any deceleration in the U.S. expansion. He added that a failure of activity abroad to strengthen as expected would increase the chances of unsatisfactory growth in the United States and would create additional problems with respect to the U.S. current account. At its meeting in April the Committee had agreed that from the first quarter of 1978 to the first quarter of 1979 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 IV2 to IOV2 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. At this meeting, in discussing policy for the period immediately ahead, Committee members expressed considerable concern about recent rates of growth in the monetary aggregates, particularly in light of the continuing strength of inflationary pressures and expec­ tations. The members agreed that open market operations in the inter-meeting period should be directed initially toward achieving slightly firmer money market conditions, and that later in the period the objectives of operations should depend on incoming data for M-l and M-2. As at the preceding meeting, there were differences of view with respect to the degree of firming that might be undertaken. These differences were reflected in opinions on such issues as the magni­ tude and speed of the initial move toward firmer money market conditions and the amount of leeway—in terms of the inter-meeting range specified for the Federal funds rate—for further firming later in the period. As to the initial move, most members favored seeking an increase in the Federal funds rate to 7% per cent from the prevailing level of IV2 per cent within a few days after this meeting. However, one member suggested that this quarter-point increase be achieved over a somewhat longer period, and another proposed that the initial Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

662 Federal Reserve Bulletin □ August 1978 increase be limited to one-eighth of a point. With respect to the inter-meeting range for the Federal funds rate, most members fa­ vored IV2 to 8 per cent, but a number preferred IV2 to 8lA per cent. There was greater diversity of views with respect to the ranges of tolerance to be specified for the annual rates of growth in M-l and M-2 in the June-July period. Of the ranges suggested for M-l, the lowest was 3l/i to 8V2 per cent, and the highest was 6V2 to IOV2 per cent; for M-2 the suggestions covered a similar span. It was noted during the discussion that if the monetary aggregates accelerated in June, as suggested by early data, growth over the June-July period at rates near the midpoints of some of the lower ranges proposed could be achieved only if there were to be a sharp slowing in July. Some members, who were inclined to stress the risks to the economy of rapid firming of money market conditions, saw this circumstance as an argument for specifying relatively high 2-month ranges for M-l and M-2. Other members, who placed more stress on the importance at this time of limiting growth in the aggregates for the sake of moderating inflationary pressures and expectations, thought such firming would be called for if the growth in the aggregates did not in fact slow sharply. At the conclusion of the discussion the Committee decided that the ranges of tolerance for the annual rates of growth over the June-July period should be 5 to 10 per cent for M-l and 6 to 10 per cent for M-2. The Committee agreed that during the coming inter-meeting period operations should be directed initially toward a Federal funds rate of 13A per cent, slightly above the prevailing level of IV2 per cent. Subsequently, if the 2-month growth rates of M-l and M-2 appeared to be significantly above or below the midpoints of the indicated ranges^ the objective for the funds rate was to be raised or lowered in an orderly fashion within a range of IV2 to 8 per cent. It was understood that in assessing the behavior of the aggregates the Manager should continue to give approxi­ mately equal weight to the behavior of M-l and M-2. It was also understood that the Chairman might call upon the Committee to consider the need for supplementary instructions if the rates of growth in the aggregates appeared to be above the upper limit or below the lower limit of the indicated ranges at a time when the objective for the funds rate had already been moved to the corresponding limit of its range. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 663 At this meeting the Committee considered certain proposed modifications in the language customarily employed in the con­ cluding paragraphs of the domestic policy directive. It was noted that, perhaps because of the manner in which the directive was worded, the 2-month ranges of tolerance for M-l and M-2 were subject to misinterpretation as embodying the Committee’s shortrun targets for these aggregates, intended to be achieved by appro­ priate changes in the Federal funds rate. In fact, however, the Manager could not be expected regularly to achieve 2-month growth rates in M-l and M-2 within the specified ranges for various reasons—including the lag between changes in the Federal funds rate and changes in these growth rates, and the brevity of the period to which the operational paragraphs of any single directive applied. It was noted in the discussion that the Committee’s objectives for the monetary aggregates were embodied in the 1-year ranges established at quarterly intervals, and that the adjustments made from time to time in the Federal funds rate were intended to increase the likelihood that the longer-run growth rates would fall within these ranges. The purpose of the 2-month ranges was to provide the Manager with an indicator for determining when changes in the funds rate were appropriate; specifically, the Manager was expected to adjust the funds rate within its range when the latest projections of 2-month growth rates in M-l and M-2 deviated significantly from the midpoints of their ranges (or, if the Commit­ tee so indicated in the directive, when the projections for the aggregates approached or moved beyond the limits of their ranges). At the May meeting, following a preliminary discussion of this matter, the Committee had deleted one potentially misleading phrase from the language previously employed, to the effect that the Committee “expects” the 2-month growth rates to be within the indicated ranges. At this meeting the Committee agreed upon a more thorough revision of the customary language, in an effort to reduce the chances of misinterpretations. The following domestic policy directive was issued to the Federal Reserve Bank of New York: The information reviewed at this meeting suggests that real output of goods and services has grown rapidly on the average in the current quarter as activity rebounded from the effects of the unusually severe winter weather and the lengthy coal strike, but the rate of advance Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

664 Federal Reserve Bulletin □ August 1978 most recently appears to be slowing. Following substantial gains in March and April, increases in industrial production and nonfarm payroll employment moderated in May and retail sales changed little. The unemployment rate edged up from 6.0 to 6.1 per cent in association with a large increase in the civilian labor force. Average wholesale prices rose somewhat less rapidly in May than earlier in 1978, reflecting smaller reported increases in farm products and processed foods. So far this year prices have increased at a considerably faster rate than they had on average during 1977. The index of average hourly earnings also has increased at a somewhat faster pace so far in 1978 than during 1977. Since the end of May the trade-weighted value of the dollar against major foreign currencies has declined about 2 per cent, but it remains above its early-April low. The trade deficit in April was down somewhat from its very high first-quarter rate. Growth in M-l moderated in May from the extraordinarily rapid pace in April, and as a result growth in M-2 and M-3 also slowed. Inflows of the interest-bearing deposits included in M-2 picked up somewhat as commercial banks increased their reliance on large-de­ nomination time deposits to finance an unusually sharp increase in business loans. Market interest rates have risen somewhat further in recent weeks. In light of the foregoing developments, it is the policy of the Federal Open Market Committee to foster monetary and financial conditions that will resist inflationary pressures while encouraging continued moderate economic expansion and contributing to a sus­ tainable pattern of international transactions. At its meeting on April 18, 1978, the Committee agreed that these objectives would be furthered by growth of M-l, M-2, and M-3 from the first quarter of 1978 to the first quarter of 1979 at rates within ranges of 4 to 6V2 per cent, 6V2 to 9 per cent, and IV2 to 10 per cent, respectively. The associated range for bank credit is IV2 to 10V2 per cent. These ranges are subject to reconsideration at any time as conditions warrant. In the short run, the Committee seeks to achieve bank reserve and money market conditions that are broadly consistent with the longer-run ranges for monetary aggregates cited above, while giving due regard to developing conditions in financial markets more generally. During the period until the next regular meeting, System open market operations shall be directed initially at attaining a weekly-average Federal funds rate slightly above the current level. Subsequently, operations shall be directed at maintaining the weekly Federal funds rate within the range of IV2 to 8 per cent. In deciding Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 665 on his specific objective for the Federal funds rate the Manager shall be guided mainly by the relationship between the latest esti­ mates of annual rates of growth in the June-July period of M-l and M-2 and the following ranges of tolerance: 5 to 10 per cent for M-l and 6 to 10 per cent for M-2. If, giving approximately equal weight to M-l and M-2, their rates of growth appear to be significantly above or below the midpoints of the indicated ranges, the objective for the funds rate shall be raised or lowered in an orderly fashion within its range. If the rates of growth in the aggregates appear to be above the upper limit or below the lower limit of the indicated ranges at a time when the objective for the funds rate has already been moved to the corresponding limit of its range, 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, Gardner, Jackson, Partee, and Wallich. Votes against this action: Messrs. Willes and Winn. Messrs. Willes and Winn dissented from this action because they favored more vigorous measures to curb the rate of growth in the monetary aggregates. Both preferred ranges of tolerance for the 2-month growth rates in M-l and M-2 lower than those approved by the majority; in addition, Mr. Willes favored an upper limit for the funds rate range of 8lA per cent. Mr. Willes, citing strong consumer and business credit demands at prevailing interest rates, felt that a further rise in short-term interest rates would not significantly damage economic prospects and that, to the extent that such a rise tended to moderate inflation­ ary expectations, it would have a positive impact on the economy. Mr. Winn felt that if the Committee did not act now to assure a reduction in the rates of growth of the aggregates, an excessively restrictive policy would be required later on if the Committee’s longer-range objectives were to be achieved. 2. Operations in Federal Agency Securities At this meeting the Committee discussed its procedures with respect to open market operations in Federal agency securities. The dis­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

666 Federal Reserve Bulletin □ August 1978 cussion arose because of a potential problem posed by a statutory requirement that Federal Reserve note liabilities be collateralized by eligible assets, which included direct obligations of the Treasury but not Federal agency issues. At times recently, the margin of actual collateral over that required had been relatively small. The Board of Governors had proposed legislation that would make Federal agency issues eligible as collateral, but the Congress had not yet acted on the proposal. It was noted that the problem of maintaining sufficient collateral for Federal Reserve notes could become critical at some point before the enactment of such legislation if, for example, a need arose to sell a substantial volume of Treasury securities to absorb redundant member bank reserves. It was also noted that the problem would be mitigated by some slowing of the rate of growth in System holdings of agency securities and a correspondingly larger increase in holdings of Treasury securities. Paragraph 1(a) of the Committee’s authorization for domestic open market operations authorizes the Federal Reserve Bank of New York to sell, as well as to buy, Federal agency securities for the System Open Market Account. Historically, however, sales of such securities have been quite infrequent. It was the sense of the Committee that modest sales of agency issues would be appro­ priate from time to time, but only when market circumstances permitted and when sales of securities were consistent with the objectives of open market operations. It was noted in the discussion that, even apart from the problem of collateral requirements, occasional sales of agency issues would help enhance the flexibility of open market operations. The Committee also agreed that the Desk should reduce somewhat the volume of agency issues it purchased when supplying reserves, and that occasionally, when there was a need to absorb reserves, it should redeem maturing agency issues for cash rather than routinely exchange them for new issues. 3. Authorization for Foreign Currency Operations At this meeting the Committee approved a technical amendment to paragraph ID of the authorization for foreign currency opera­ tions, under which the definition contained in the second sentence Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 667 of that paragraph of “over-all open position in all foreign curren­ cies” is given as “the sum (disregarding signs) of net positions in individual currencies” rather than as “the sum (disregarding signs) of open positions in each currency.” This change was approved in the interest of clarity, and to make the language of this paragraph conform to certain new language concurrently intro­ duced in the procedural instructions governing foreign currency operations, as described below. With this amendment, paragraph ID read as follows: To maintain an over-all open position in all foreign currencies not exceeding $1.0 billion, unless a larger position is expressly authorized by the Committee. For this purpose, the over-all open position in all foreign currencies is defined as the sum (disregarding signs) of net positions in individual currencies. The net position in a single foreign currency is defined as holdings of balances in that currency, plus outstanding contracts for future receipt, minus outstanding contracts for future delivery of that currency, i.e., as the sum of these elements with due regard to sign. Votes for this action: Messrs. Miller, Volcker, Baughman, Cold well, Eastburn, Jackson, Partee, Wallich, Willes, and Winn. Votes against this ac­ tion: None. Absent and not voting: Mr. Gardner. Under the first sentence of paragraph ID, which was not affected by the foregoing amendment, the Federal Reserve Bank of New York is authorized, for System Open Market Account, to maintain an over-all open position in all foreign currencies not exceeding $1.0 billion, unless a larger position is expressly authorized by the Committee. On March 21, 1978, the Committee had authorized an open position of $2.25 billion in view of the scale of recent and potential System operations in foreign currencies. On May 16, 1978, the Committee had reduced this limit to $2.0 billion, in light of decreases in the System’s open position. Against the background of further decreases in the open position, the Commit­ tee reduced the limit to $1.5 billion at this meeting. 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: Mr. Gardner. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

668 Federal Reserve Bulletin □ August 1978 4. Procedural Instructions with Respect to Operations Under the Foreign Currency Documents In December 1976 the Committee had adopted certain procedural instructions for the purpose of clarifying the respective roles of the Committee, the Foreign Currency Subcommittee designated in paragraph 6 of the authorization for foreign currency operations, and the Chairman in providing guidance to the Manager of the System Open Market Account with respect to proposed or ongoing foreign currency operations under the authorization and the foreign currency directive. Paragraph IB of the instructions called for clearance of any transactions that would result in gross transactions in a single foreign currency exceeding $100 million on any day or $300 million since the most recent regular meeting of the Committee. At its meeting in March 1978 the Committee amended paragraph IB to increase these dollar limits, which had occasionally hampered ongoing operations, and to remove an ambiguity in the language. At this meeting the Committee decided to discontinue the use of the concept of gross transactions in the procedural instructions. In its stead it introduced (a) a clearance requirement formulated in terms of daily and inter-meeting changes in the System’s net position in a single foreign currency and (b) a requirement for clearance of any operation that might generate a substantial volume of trading in a particular currency by the System, regardless of the effect on the System’s net position in that currency. The purpose of these changes was to improve the effectiveness of the consulta­ tion procedure. In addition, for the sake of clarity the word “transaction” was replaced by the word “operation” wherever the former had occurred in the instructions. The two new provisions were identified as paragraphs IB and 1C. Paragraph 1A, which refers to daily and inter-meeting changes in the System’s over-all open position in foreign currencies, was retained, and the paragraph previously designated 1C, which relates to swap drawings by foreign central banks, was redesignated ID. With these changes, the procedural instructions read as follows: In conducting operations pursuant to the authorization and direc­ tion of the Federal Open Market Committee as set forth in the Authorization for Foreign Currency Operations and the Foreign Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 669 Currency Directive, the Federal Reserve Bank of New York, through the Manager of the System Open Market Account, shall be guided by the following procedural understandings with respect to consul­ tations and clearance with the Committee, the Foreign Currency Subcommittee, and the Chairman of the Committee. All operations undertaken pursuant to such clearances shall be reported promptly to the Committee. 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): A. Any operation which would result in a change in the System’s over-all open position in foreign currencies exceeding $100 million on any day or $300 million since the most recent regular meeting of the Committee. B. Any operation which would result in a change in the System’s net position in a single foreign currency exceeding $100 million on any day or $300 million since the most recent regular meeting of the Committee. C. Any operation which might generate a substantial volume of trading in a particular currency by the System, even though the change in the System’s net position in that currency might be less than the limits specified in IB. D. Any swap drawing proposed by a foreign bank not exceed­ ing the larger of (i) $200 million or (ii) 15 per cent of the size of the swap arrangement. 2. The Manager shall clear with the Committee (or with the Subcommittee, if the Subcommittee believes that consultation with the full Committee is not feasible in the time available, or with the Chairman, if the Chairman believes that consultation with the Subcommittee is not feasible in the time available): A. Any operation which would result in a change in the System’s over-all open position in foreign currencies exceeding $500 million since the most recent regular meeting of the Committee. B. Any swap drawing proposed by a foreign bank exceeding the larger of (i) $200 million or (ii) 15 per cent of the size of the swap arrangement. 3. The Manager shall also consult with the Subcommittee or the Chairman about proposed swap drawings by the System, and about any operations that are not of a routine character. 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: Mr. 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

670 Law Department Statutes, regulations, interpretations, and d ecisions LOANS TO EXECUTIVE OFFICERS CREDIT BY BROKERS AND DEALERS OF MEMBER BANKS The Board of Governors has amended its provi­ The Board of Governors has amended its Regu­ sion of Regulation T concerning subordinated lation O in order to clarify a type of indebtedness credit for capital purposes to relax the rule cover­ that is excluded from the definition of extension ing subordinated loans between brokers and of credit. dealers so as to permit any individual or firm Effective June 30, 1978, Section 215.2(c) is subject to Regulation T to extend and maintain amended to read as follows: subordinated credit to another broker or dealer for capital purposes. Section 215.2— D efinitions Effective July 12, 1978, Section 220.4 is amended to read as follows: Section 220.4— Special A ccounts (c) “Extension of credit” and “extend credit.” *** (f) special miscellaneous account. In a special miscellaneous account, a creditor may: Such terms, however, do not include: jfc jfc (2) *** (ii) Extend and maintain a subordinated loan (iv) indebtedness arising by reason of general to another creditor for capital purposes: Provided, arrangements 3 under which a bank (a) acquires That charge or time credit accounts or (b) makes pay­ (a) Either the lender or the borrower is a firm ments to or on behalf of participants in a bank or corporation which is a member of a national credit card plan, check credit plan, or similar plan, securities exchange or national securities associa­ except that this subdivision (iv) shall not apply tion, the other party to the credit is an affiliated to indebtedness of an executive officer to his own corporation of such firm or corporation, the credit bank to the extent that the aggregate amount is not in contravention of any rule of the exchange thereof exceeds $5,000 or to any such indebt­ or association and the credit has the approval of edness to his own bank that involves prior indi­ appropriate committees of the exchange or associ­ vidual clearance or approval by the bank other than ation, or for the purpose of determining whether his partic­ (b) The lender as well as the borrower is a ipation in the arrangement is authorized or whether creditor as defined in section 220.2(b), the subor­ any dollar limit under the arrangement has been dinated loan agreement has the approval of the or would be exceeded. appropriate Examining Authority as defined in Securities and Exchange Commission Rule 15c3- 1 (c)( 12) (12 CFR 240.15c3-l(c)(12)) and such 3 The expression “general arrangement” is not intended to Examining Authority is satisfied, in the case of include an arrangement whereby an executive officer incurs a borrower who would be considered a customer indebtedness under a bank credit card plan, check credit plan, of the lender apart from the subordinated loan, or similar plan under terms more favorable than those offered to the general public. that the loan will not be used to increase the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 671 amount of dealing in securities for the account of the line of credit of the customer’s account; the the borrower, his firm or corporation or an affi­ fact that the account is secured by the customer’s liated corporation of such firm or corporation. real property; and the fact that the customer may refuse the change in terms and repay any existing obligation under the then existing terms of the account, or refuse the increase in the line of credit, TRUTH IN LENDING by giving the creditor written notice within three business days of the date of the disclosure. (iv) That at least once each calendar year the The Board of Governors has amended its Regu­ creditor furnishes to the customer a disclosure of lation Z to create an exception to the rescission the fact that the customer’s account is secured by provisions of the regulation for individual transac­ the customer’s real property and that failure to pay tions under certain open end-credit plans secured any outstanding balance in accordance with the by consumers’ residences. terms of the account could result in the loss of the customer’s real property. Section 226.9— R ight to Rescind C ertain Transactions (v) That each disclosure provided pursuant hereto is made on one side of a statement separate from any other documents, that the disclosure sets forth the name of the creditor and, in the case (g) Exceptions to general rule.*** of the disclosures required by subparagraph (iii) (6) Individual transactions under an open end hereof, the creditor’s address, the date on which credit account; provided: the disclosure is furnished to the customer, the date by which the customer should give notice of (i) That the creditor and the seller are not the refusal of the increase in the line of credit or the same or related persons.143 change in terms of the account, and the fact that one copy of the disclosure can be used for that (ii) That the creditor provides the disclosure purpose. required by § 226.9(b) at the time the disclosures required under § 226.7(a) are required to be made, or, if the security interest is not retained or ac­ quired at the time the § 226.7(a) disclosures are required to be made, at the time the security INTERPRETATION OF REGULATION Z interest is retained or acquired. (iii) That the creditor does not change the terms Section 226.904— R ight of Rescission for of a customer’s account within the meaning of C ertain Open End Credit A ccounts § 226.7(f) or increase the customer’s line of credit Section 226.9(g)(6) provides an exception to the without affording the customer the opportunity to right of rescission for individual transactions on refuse the change in terms or the increase. If the an open credit account provided, among other customer refuses the change in terms, the creditor things, that the disclosures required by that section need not extend any further credit on the account; are made at the times specified. The question arises however, the customer shall have the right to repay as to what disclosures will satisfy the requirements any existing obligation on the account under the of §§ 226.9(g)(6)(iii) and (iv). then existing terms of the account. At the time The disclosures set forth in sample “notices to a disclosure of a change in terms under § 226.7(f) customers required by Federal law,” if accurate is required to be made or prior to an increase in and when properly completed, will satisfy the the customer’s line of credit, the creditor shall requirements, as to form and content, of the indi­ provide the customer with two copies of a disclo­ cated sections of the regulation. No specific type sure setting forth, as applicable: the fact that the size or style is required. If the real property on creditor intends to change the terms or increase which the security interest may arise does not include a dwelling, the creditor may substitute such words as “the property you are purchasing” 14a For purposes of § 226.9(g)(6) a person is related to a for “your home” or “lot” for “home” where creditor if that person would be deemed related to the creditor under footnote 9b to § 226.7(k). these words appear in the disclosures. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

672 Federal Reserve Bulletin n August 1978 Section 226.9(g)(6)(iii) (Increase in line of credit) NOTICE TO CUSTOMER REQUIRED BY FEDERAL LAW: ____________________________(name of creditor)_____________________________ has approved an increase in the amount of credit available to you on your open-end account secured by your home. Any additional credit you use will also be secured by your home. You have a right to refuse to accept this increase. You may exercise this right within three business days from ________(date disclosure delivered to customer)_________by notifying us at____________________________ ____________________(address of creditor s place of business)_________________mail or telegram sent not later than midnight of______________________ (date)____________________ y ou may ajso use any other form of written notice to refuse the increase if it is delivered to the above address not later than that time. This notice may be used for that purpose by dating and signing below. I hereby refuse the increase in the credit available on my account. _________________________(date)__________________________ _________________(customer’s signature)_____ Section 226.9(g)(6)(iii) (Change in term s) NOTICE TO CUSTOMER REQUIRED BY FEDERAL LAW: ____________________________________(name of creditor)___________________________________________________ intends to change the terms of your open-end credit account which is secured by your home. You have a right to refuse to accept this change in terms. If you refuse this change in terms, we have the right to refuse to extend any further credit on your open-end account and may require you to repay any existing obligation on your account under the present terms of the account. You may exer­ cise your right to refuse the change in terms within three business days from___________________ ________(date disclosure delivered to customer)_______by notifying us at_______________________________ _ (address of creditor’s place of business)_________by maii Gr telegram sent not later than midnight of _____________________(date)______________________You may also use any other form of written notice to "refuse the change in terms if it is delivered to the above address not later than that time. This notice may be used for that purpose by dating and signing below. I hereby refuse the change in the terms of my account. _____________________(date)________________________ (customer’s signature) Section 226.9(g)(6)(iv) (A nnual disclosure) NOTICE TO CUSTOMER REQUIRED BY FEDERAL LAW: This is to remind you that your open-end credit account with___________________________________ -----------------------(n3me °f creditor)________________ is secured by a lien, mortgage, or other security interest on your home. This means that your failure to pay any outstanding balance in accordance with the terms of the account could result in the loss of your home. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 673 BANK HOLDING COMPANY AND BANK MERGER ORDERS ISSUED BY THE BOARD OF GOVERNORS Orders Under Section 3 spectively, of market deposits. The subject pro­ of Bank Holding Company Act posal involves a restructuring of Banks’ owner­ ship.3 Since Dickinson Bank was established de American Bancor, Ltd., novo by Applicant’s principals in 1964, there was Dickinson, North Dakota no elimination of existing competition at that time. However, when Killdeer Bank was acquired in Order Approving 1977, some existing competition was eliminated. Formation of Bank Holding Company Killdeer Bank is located approximately 33 miles American Bancor, Ltd., Dickinson, North Da­ north of Dickinson Bank, and New England Bank kota, has applied for prior approval under section is located approximately 26 miles south of Dick­ 3(a)(1) of the Bank Holding Company Act (12 inson Bank. Upon consummation of the proposal, U.S.C. § 1842(a)(1) to become a bank holding Applicant would become the third largest banking company through the acquisition of stock interests organization in the market, controlling 23.3 per in the following North Dakota banks: 97.75 per cent of market deposits. Moreover, there are a cent of the voting shares of American State Bank number of banking alternatives remaining in the of Dickinson, Dickinson (“Dickinson Bank”); relevant market that serve as alternate sources of 100 per cent of the voting shares of American State banking services. While approval of the subject Bank of New England, New England (“New proposal would further solidify the existing rela­ England Bank”); and 100 per cent of the voting tionship between the three affiliated banks and shares of American State Bank of Killdeer, Kill- reduce the likelihood that the banks would become deer (“Killdeer Bank”). independent competitors in the future, based upon Notice of the application, affording opportunity the facts of record, including the small size of each for interested persons to submit comments and of the three banks to be acquired, their distances views, has been given in accordance with section from each other, their rank in the market, and the 3(b) of the Act. The time for filing comments and presence of banking alternatives in the Dickinson views has expired, and the application and all banking market, it appears that consummation of comments received have been considered by the the proposal would have only slight adverse effects Board in light of the factors set forth in section upon competition. 3(c) of the Act (12 U.S.C. § 1842(c)). The financial and managerial resources and fu­ Applicant is a nonoperating corporation organ­ ture prospects of Applicant are dependent upon ized for the purpose of becoming a bank holding those of its subsidiary banks. Applicant’s projected company through the acquisition of Dickinson twelve-year amortization schedule for the retire­ Bank ($13.4 million in deposits), New England ment of its acquisition debt appears to provide Bank ($7.7 million in deposits), and Killdeer Bank Applicant with the necessary financial flexibility ($7.1 million in deposits.)1 Upon acquisition of to meet its annual debt servicing requirement and the three banks, Applicant would become the 17th to maintain an adequate capital position for its largest banking organization in North Dakota, subsidiary banks. The managerial resources of controlling 0.8 per cent of the total deposits in Applicant and its three subsidiary banks are con­ commercial banks in the State. sidered satisfactory and the future prospects of Dickinson Bank, New England Bank, and Kill­ each appear favorable. Accordingly, consid­ deer Bank are all located in the predominately rural erations relating to banking factors are consistent and agricultural Dickinson banking market,2 and with approval of the application. rank, respectively, as the third, fifth, and sixth 3 Dickinson Bank and Killdeer Bank are controlled by Ap­ largest of eight banking organizations in the mar­ plicant’s principals. New England Bank is controlled by ket, controlling 10.7, 6.5, and 6.1 per cent, re­ Trans-Western Corporation, Dickinson, North Dakota (“T- W”), which is wholly-owned by Applicant’s principals. T-W proposes a pro rata distribution of New England Bank’s shares 1 Unless otherwise indicated, all deposit data are as of to T-W’s two shareholders. Following such distribution, Ap­ December 31, 1977. plicant’s principals (and certain officers/directors of its subsid­ 2 The Dickinson banking market is approximated by all of iary banks) would then directly own all of the voting shares Stark County, the southwestern half of Dunn County, and the of each of the three banks. Applicant will then exchange its northwestern quarter of Hettinger County, in North Dakota. shares for the voting shares of New England Bank and Dickin­ All market data are as of June 30, 1977. son Bank and purchase the shares of Killdeer Bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

674 Federal Reserve Bulletin □ August 1978 Although consummation of the proposal would Notice of the application, affording opportunity effect no further changes in the banking services for interested persons to submit comments and offered by Banks in the immediate future, since views, has been given in accordance with § 3(b) acquiring Dickinson Bank Applicant’s principals of the Act. The time for filing comments and views have improved and enlarged that bank’s physical has expired, and the Board has considered the facilities to better serve the needs of the commu­ application and all comments received in light of nity. In addition, Applicant’s principals plan to the factors set forth in § 3(c) of the Act (12 U.S.C. move Killdeer Bank to a new facility in the fall § 1842(c)). These comments include, but are not of 1978. Applicant’s principals have also installed limited to, those submitted on behalf of Bank of a data processing system to serve all three banks. Dothan, Dothan, Alabama (“Protestant Bank”). It is contemplated that following consummation Applicant, the fourth largest banking organi­ of the proposal Applicant will continue to expand zation in Alabama, controls ten banks with total and improve the facilities and services of the three deposits of approximately $1.3 billion, repre­ banks. Thus, it appears that convenience and needs senting 11.8 per cent of total deposits in commer­ factors are sufficient to outweigh the slight adverse cial banks in the State.1 Because Bank is a pro­ competitive effects that might result from this posed new bank, Applicant’s acquisition of Bank proposal. Based upon the foregoing and other would not cause any immediate increase in Appli­ considerations reflected in the record, it is the cant’s share of commercial bank deposits in the Board’s judgment that the proposed acquisitions State. would be in the public interest and that the appli­ Bank is to be located in downtown Dothan in cation should be approved. the Houston County banking market,2 which is On the basis of the record, the application is served by eight commercial banking institutions, approved for the reasons summarized above. The including four of Alabama’s five largest bank transaction shall not be consummated (a) before holding companies. Inasmuch as Bank is a pro­ the thirtieth calendar day following the effective posed new bank and Applicant is not currently date of this Order or (b) later than three months represented in the market, consummation of the after the effective date of this Order, unless such proposal would not eliminate any existing compe­ period is extended for good cause by the Board, tition, nor does it appear that it would eliminate or by the Federal Reserve Bank of Minneapolis any potential competition or increase the concen­ pursuant to delegated authority. tration of banking resources in any relevant area. By order of the Board of Governors, effective Thus, the Board concludes that the effects of the July 17, 1978. proposal on competition are consistent with ap­ proval of the application. Voting for this action: Governors Wallich, Coldwell, The Comptroller of the Currency has granted Jackson, and Partee. Absent and not voting: Chairman preliminary approval of a charter for Bank, which, Miller and Governor Gardner. as noted above, is a proposed new bank. Protestant (Signed) G riffith L. G arw ood, Bank claims that there is no need for an additional [seal] Deputy Secretary of the Board. bank in Dothan and that approval of this applica­ tion would affect the viability of Protestant Bank, which opened for business in December 1976. Central Bancshares of the South, Inc., The record in this case reflects that the Comp­ Birmingham, Alabama troller of the Currency declined to grant prelimi­ Order Approving Acquisition of Bank nary approval of a charter for Bank until March 7, 1978, after Protestant Bank had been in opera­ Central Bancshares of the South, Inc., Bir­ tion for more than one year. In August 1977 the mingham, Alabama, a bank holding company Comptroller held a hearing on Applicant’s petition within the meaning of the Bank Holding Company for a charter for Bank in which Protestant Bank Act, has applied for the Board’s approval under participated, and the Comptroller determined that § 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to a charter for Bank would be appropriate at this acquire all of the voting shares, less directors’ time. No information has been submitted indicat­ qualifying shares, of Central Bank of Dothan, N.A., Dothan, Alabama (“Bank”), a new bank 1 Banking data are as of December 31, 1977. that Applicant proposes to open no sooner than 2 The Houston County banking market is approximated by January 1979. Houston County. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 675 ing that Protestant Bank has experienced any un­ Voting for this action: Chairman Miller and Gover­ usual difficulties in establishing itself in the Dothan nors Wallich and Coldwell. Present and abstaining: Governor Jackson. Absent and not voting: Governors area. The record does reflect that between the years Gardner and Partee. 1970 and 1975 the population in the Dothan area grew by an estimated 22.1 per cent. During the (Signed) G riffith L. G arw ood, same period, the population of Alabama grew by [seal] Deputy Secretary of the Board. an estimated 5 per cent. In view of growth trends in the Dothan area, the fact that the Comptroller of the Currency has already delayed the chartering Central National Bancshares, Inc., of Bank in order to allow Protestant Bank to Des Moines, Iowa establish itself in the market and the fact that Bank Order Approving Acquisition of Bank will not open before January 1, 1979, it does not appear that approval of the application would Central National Bancshares, Inc., Des Moines, endanger the viability of Protestant Bank. Fur­ Iowa, a bank holding company within the meaning thermore, it appears that approval of the applica­ of the Bank Holding Company Act, has applied tion would increase available banking services by for the Board’s approval under § 3(a)(3) of the providing an additional banking alternative in the Act (12 U.S.C. § 1842(a)(3)) to acquire 80 per Houston County market. Considerations relating cent or more of the voting shares of Union Trust to the convenience and needs of the community & Savings Bank, Fort Dodge, Iowa (“Bank”). to be served lend some weight toward approval Notice of the application, affording opportunity of the application. for interested persons to submit comments and Protestant Bank also has suggested that the views, has been given in accordance with § 3(b) proposed management of Bank has circumvented of the Act. The time for filing comments and views regulatory authorities by engaging in activities that has expired, and the Board has considered the should not be undertaken until Bank is fully ap­ application and all comments received in light of proved and ready to operate. However, no infor­ the factors set forth in § 3(c) of the Act (12 U.S.C. mation of record indicates that Applicant has done § 1842(c)). anything more than take preliminary steps towards Applicant, the fifth largest banking organization its establishment, and the Regional Administrator in Iowa, controls nine subsidiary banks with ag­ of National Banks has found no impropriety in gregate deposits of approximately $435.4 million, Applicant’s activities. The financial and manage­ representing 3.1 per cent of total deposits in com­ rial resources of Applicant, its subsidiaries, and mercial banks in the State. 1 Acquisition of Bank, Bank are regarded as generally satisfactory, and with deposits of $71.5 million, would make Ap­ their future prospects appear favorable. These fac­ plicant the fourth largest banking organization in tors are consistent with approval of the application. the State and would increase Applicant’s share of It is the Board’s judgment that the proposed ac­ deposits in commercial banks in Iowa by 0.5 per quisition would be in the public interest and that cent. the application should be approved. Bank is the second largest of eight banks com­ On the basis of the record, the application is peting in the Fort Dodge banking market,2 holding approved for the reasons summarized above. The 29.8 per cent of deposits in commercial banks in transaction shall not be made (a) before the thir­ that market. None of Applicant’s banking subsidi­ tieth calendar day following the effective date of aries competes in the relevant market and the this Order or (b) later than three months after that office of Applicant’s subsidiary bank closest to an date, and (c) Central Bank of Dothan, N.A., office of Bank is separated by approximately 34 Dothan, Alabama, shall be opened for business miles. From the record, it appears that there is not later than nine months after the effective date currently no meaningful competition between of this Order. It is understood that Bank is not Bank and any of Applicant’s banking or nonbank­ to open before January 1979. Each of the periods ing subsidiaries and it appears unlikely that any described in (b) and (c) may be extended for good significant competition would develop between cause by the Board, or by the Federal Reserve Bank of Atlanta pursuant to delegated authority. 1 All banking data are as of December 31, 1977. 2 The Fort Dodge banking market is approximated by Web­ By order of the Board of Governors, effective ster County and Cedar and Reading townships in adjoining July 25, 1978. Calhoun County, all in Iowa. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

676 Federal Reserve Bulletin □ August 1978 them in the future, particularly in light of Iowa’s On the basis of the record, the application is branching law. Accordingly, consummation of the approved for the reasons summarized above. The proposal will have no significant adverse effect on transaction shall not be made (a) before the thir­ existing competition or on concentration of bank­ tieth calendar day following the effective date of ing resources in the relevant banking market. this Order or (b) later than three months after the While Applicant could enter the Fort Dodge effective date of this Order, unless such period banking market by establishing a de novo bank, is extended for good cause by the Board or by that market does not appear to be attractive for the Federal Reserve Bank of Chicago pursuant to de novo entry. In its Order of November 21, 1977, delegated authority. approving the application of Northwest Bancor­ By order of the Board of Governors, effective poration, Minneapolis, Minnesota, to acquire First July 31, 1978. National Bank, Fort Dodge, Iowa, which is lo­ Voting for this action: Chairman Miller and Gover­ cated in the same relevant market involved in this nors Wallich, Coldwell, and Partee. Absent and not proposal, the Board determined that the Fort voting: Governors Gardner and Jackson. Dodge banking market is relatively unattractive for de.novo entry.3 In particular, the Board found, (Signed) G riffith L. Garwood, based on the record of that application, which [seal] Deputy Secretary of the Board. included a field study conducted by the Federal Reserve Bank of Minneapolis, that the population Dakota Bankshares, Inc., of Webster County decreased 2.8 per cent from Fargo, North Dakota 1970 to 1975 and that new construction projects in the area were not likely to have a significant Order Granting Request for Reconsideration and impact on the local economy. The record with Approving Formation of Bank Holding Company respect to this proposal indicates that the Fort Dakota Bankshares, Inc., Fargo, North Dakota Dodge banking market continues to remain unat­ (“Dakota”), has applied for the Board’s approval tractive for de novo entry. The ratio of population under section 3(a)(1) of the Bank Holding Com­ per banking office in the relevant market is below pany Act (12 U.S.C. § 1842(a)(l))(“Act”), of the State average. Moreover, the population of formation of a bank holding company by acquiring Webster County is projected to decline further 90 per cent or more of the voting shares of The through 1980. Accordingly, the Board concludes Dakota National Bank and Trust Company of that although consummation of the subject pro­ Fargo, Fargo, North Dakota (“Bank”).1 posal will eliminate a slight amount of potential Notice of the application, affording opportunity competition, it would not have a significant ad­ for interested persons to submit comments and verse effect on competition. views, has been given in accordance with section The financial and managerial resources of Ap­ 3(b) of the Act. The time for filing comments and plicant and its subsidiaries, as well as those of views has expired, and the Board has considered Bank, are regarded as satisfactory and their future the application and all comments received in light prospects appear favorable. Thus, banking factors of the factors set forth in section 3(c) of the Act are consistent with approval of the application. If (12 U.S.C. § 1842(c)).2 the application is approved, Applicant proposes to make available to customers of Bank some new 1 In conjunction with this application, two registered bank services, including a full range of trust services, holding companies, Otto Bremer Foundation (“Foundation”) and international banking, investment advisory, and its wholly-owned subsidiary, Otto Bremer Company and data processing services. These considerations (“Company”), both of St. Paul, Minnesota, have applied for the Board’s approval under section 3(a)(3) of the Act to acquire relating to convenience and needs of the commu­ shares of Dakota. Foundation indirectly owns, through Com­ nity to be served lend weight toward approval of pany, 21.77 per cent of the outstanding voting shares of Bank. See the Board’s Order of today’s date approving that applica­ the application and outweigh any adverse compet­ tion. itive effects that might result from consummation 2 During the course of its initial consideration of this appli­ of the subject proposal. Therefore, it is the Board’s cation, the Board received comments in opposition to the subject proposal from David G. Hammel of Sherborn, Massa­ judgment that the proposed acquisition is in the chusetts (“Protestant”), a shareholder of Bank. In summary, public interest and that the application should be Protestant alleged that the management practices of certain of approved. Dakota’s principals would work to the detriment of minority shareholders of Bank. The Board determined that in view of the decision in Western Bancshares v. Board of Governors, 3 Federal Reserve Bulletin 1096 (1977). 480 F.2d 749 (10th Cir. 1973), and the Board’s denial of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 677 By Order dated March 9, 1978, the Board approximately $3.4 million, representing 0.6 per denied Dakota’s application to become a bank cent of the market’s deposits, and is the smallest holding company by acquiring Bank. Dakota has bank located in the market. In view of the size requested reconsideration of that Order. The re­ and the number of competitors in the market, it quest for reconsideration is filed pursuant to sec­ does not appear that consummation of the subject tion 262.3(g)(5) of the Board’s Rules of Proce­ proposal would have any significant effects on dure, which provides that the Board will not grant competition or further an undue concentration of any request for reconsideration “unless the request banking resources in any relevant area. Thus, the presents relevant facts that, for good cause shown, Board finds that competitive considerations are were not previously presented to the Board, or consistent with approval of the application. unless it otherwise appears to the Board that re­ Under section 3(c) of the Act, the Board must consideration would be appropriate.” Dakota consider the financial and managerial resources predicates its request upon more current informa­ and future prospects of both the applicant and the tion relating to the financial condition of Bank, bank to be acquired. As noted, in its Order of additional information with respect to managerial March 9, 1978, the Board found that it could not considerations, and commitments to reduce Da­ conclude that Dakota’s overall financial plan kota’s acquisition debt and increase the capital at would enable Dakota to serve as a source of another bank with which Dakota’s principal is financial strength for Bank, if it became necessary. associated. The Board finds that the request for However, Dakota has committed to reduce by reconsideration presents relevant facts or issues $150,000 the amount of debt Dakota would incur that appear appropriate in the public interest for as a result of its purchase of Bank’s shares. Con­ the Board to consider. Accordingly, the request sequently, based upon this commitment and the for reconsideration is granted and the Board’s improved condition of Bank the Board concludes Order of March 9, 1978, relating to Dakota is that Dakota’s projected income should be suffi­ hereby vacated. cient to service its acquisition of Bank as well as Dakota, a nonoperating corporation with no to provide it with the financial flexibility to address subsidiaries, was organized for the purpose of any difficulties that Bank might encounter. There­ becoming a bank holding company through the fore, the Board finds that financial considerations acquisition of Bank. Bank holds deposits of ap­ are now consistent with approval. proximately $74.6 million, representing 2.1 per With respect to managerial resources, the Board cent of total commercial bank deposits in North noted in its March 9, 1978 Order, that one of Dakota.3 Upon acquisition of Bank, Dakota would Applicant’s principals holds interests in three onebecome the sixth largest banking organization in bank holding companies,6 and that this principal, the State. in acquiring control over one of those holding Bank controls 10.8 per cent of total deposits companies, engaged in practices that adversely in commercial banks in the relevant banking mar­ affected the capital of that holding company. Thus, ket, making it the fourth largest of 23 banking the Board was unable to conclude that the facts organizations in the market.4 The subject proposal of record supported a finding that Applicant could is essentially a restructuring of Bank’s ownership serve as a source of managerial strength for Bank. into corporate form. However, in order to analyze That principal has committed to purchase $250,the competitive effects of the subject proposal, it 000 of notes from that holding company, which, is necessary to consider that one of Applicant’s in turn, is to be contributed to the capital of the principals is also a principal of another bank lo­ holding company’s subsidiary bank. Thus, the cated in the relevant market.5 The bank, First State Board concludes that managerial resources and Bank, Buffalo, North Dakota, holds deposits of future prospects of Dakota and Bank are satis­ factory and consistent with approval. application, it was unnecessary for the Board to make findings with respect to Protestant’s allegations. In its reconsideration of this application, the Board finds no evidence in the record 6 The Board has previously stated that in considering an to support Protestant’s allegations. application involving a bank whose principals control another 3 All banking data are as of December 31, 1977. bank or bank holding company, it should look beyond the bank 4 The relevant banking market is approximated by Cass that is the subject of the application and analyze the financial County, North Dakota, and Clay County, Minnesota. and managerial resources of the other bank or bank holding 5 This principal also holds interests in two other banks, both, company. (See Board’s Order of June 14, 1976, denying of which are located outside the relevant banking market. It formation of a bank holding company by Nebraska Banco, does not appear that there is any meaningful competition Inc., Ord, Nebraska, 62 Federal Reserve Bulletin 638 between either of those two banks and Bank. (1976)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

678 Federal Reserve Bulletin □ August 1978 Although Applicant proposes no changes in Board has considered the application and the Bank’s operations or services, considerations re­ comments received from the Massachusetts Com­ lating to the convenience and needs of the com­ missioner of Banks in light of the factors set forth munity to be served are consistent with approval in § 3(c) of the Act (12 U.S.C. § 1842(c)). of the application. Accordingly, it is the Board’s Applicant is the largest banking organization in judgment that, upon consideration of all of the the State of Massachusetts with six subsidiary facts of record, approval of the application would banks and total commercial bank deposits of $3.6 be in the public interest and that the application billion, representing 22.4 per cent of the total should be approved. deposits in commercial banks in the State.1 Appli­ On the basis of the facts of record, the applica­ cant is the largest banking organization in the tion is approved for the reasons summarized Boston market,2 and holds 27.1 per cent of the above. The transaction shall not be made (a) before total commercial bank deposits in that market. In the thirtieth calendar day following the effective light of the condition of Bank and the fact that date of this Order or (b) later than three months new financial and managerial resources must be after the effective date of this Order, unless such added to Bank immediately, and in view of the period is extended for good cause by the Board, fact that the proposed acquisition would increase or by the Federal Reserve Bank of Minneapolis Applicant’s market share by only 0.1 per cent, pursuant to delegated authority. the Board finds that any adverse effects on compe­ By Order of the Board of Governors, effective tition that would result from consummation of the July 31, 1978. acquisition are outweighed by the public interest considerations relating to the proposal. Consid­ Voting for this action: Chairman Miller and Gover­ erations relating to the convenience and needs of nors Wallich, Coldwell, and Partee. Absent and not voting: Governors Gardner and Jackson. the community to be served lend very strong weight toward approval of the application, since (Signed) G riffith L. Garwood, the proposal will protect all depositors of Bank [seal] Deputy Secretary of the Board. and will insure the continued availability of bank­ ing services and the preservation of a viable bank­ ing competitor in the community. The financial and managerial resources and fu­ First National Boston Corporation, ture prospects of Applicant and Bank are regarded Boston, Massachusetts as generally satisfactory. In light of the financial condition of Bank and the financial and managerial Order Approving Acquisition of Bank assistance that Applicant would provide Bank, First National Boston Corporation, Boston, banking factors lend support for the approval of Massachusetts, a bank holding company within the the application. meaning of the Bank Holding Company Act, has On the basis of the information before the applied for the Board’s approval under § 3(a)(3) Board, it is apparent that an emergency situation of the Act (12 U.S.C. § 1842(a)(3)) to acquire exists so as to require that the Board act immedi­ all of the voting shares of The Marblehead Bank ately pursuant to the emergency provisions of and Trust Company, Marblehead, Massachusetts §§ 3(b) and 11(b) of the Act. It is the Board’s, (“Bank”). judgment that any disposition of the application In view of the emergency situation involving other than by approval would be inconsistent with Bank, the Massachusetts Commissioner of Banks, the public interest and that the proposed transac­ the primary supervisory authority for Bank, has tion should be approved on a basis that would not recommended immediate action by the Board in preclude immediate consummation of the pro­ accordance with the provisions of § 3(b) of the posal. Accordingly, the application is approved for Act (12 U.S.C. § 1842(b)) permitting immediate the reasons summarized above. The transaction action by the Board in order to prevent the proba­ may be consummated immediately but in no event ble failure of a bank. Public notice of the applica­ later than three months after the effective date of tion before the Board is not required by the Bank this Order, unless such period is extended for good Holding Company Act, and in view of the emer­ gency situation, the Board has not followed its 1 All banking data, other than market data, are as of De­ cember 31, 1977. Market data are as of June 30, 1977. normal practice of affording interested parties the 2 The Boston banking market is approximated by the Boston opportunity to submit comments and views. The Ranally Metro Area. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 679 cause by the Board, or by the Federal Reserve and chairman of the board of directors of Applicant Bank of Boston pursuant to delegated authority. is also chairman of the board of directors of By order of the Board of Governors, effective another bank located in the Danville banking mar­ July 31, 1978. ket, as well as the president and a principal share­ holder of that bank’s holding company, West- Voting for this action: Chairman Miller and Gover­ banco, Inc. The other bank, The First National nors Wallich, Coldwell, and Partee. Absent and not voting: Governors Gardner and Jackson. Bank of Westville, Westville, Illinois (“Westville Bank”), holds deposits of $14 million, repre­ (Signed) G riffith L. Garwood, senting 3.7 per cent of the market’s total deposits, [seal] Deputy Secretary of the Board. and ranks as the fifth largest bank in the market.3 The Danville banking market is viewed as highly concentrated, with the three largest banks in the Illini Bancorp, Inc., market controlling approximately 75 per cent of Danville, Illinois the market’s deposits.4 Together, Bank and West­ Order Approving ville Bank control 33.5 per cent of the market Formation of Bank Holding Company deposits. As part of its analysis of the competitive effects Illini Bancorp, Inc., Danville, Illinois, has ap­ of a proposal to become a bank holding company, plied for prior approval under section 3(a)(1) of the Board takes into consideration the competitive the Bank Holding Company Act (12 U.S.C. effects of the transaction(s) whereby common § 1842(a)(1)) and section 225.3(a) of Regulation share ownership and/or an interlocking direc­ Y (12 C.F.R. § 225.3(a)) to become a bank hold­ tor/officer relationships were established between ing company through the acquisition of 80 per cent the subject bank and one or more other banks in or more, less directors’ qualifying shares, of the the same market.5 In this case, the Board consid­ voting shares of The First National Bank of Dan­ ered the competitive effects of certain interlocking ville, Danville, Illinois (“Bank”). relationships that were established in 1977 be­ Notice of the application, affording opportunity tween Bank and Westville Bank. At that time, the for interested persons to submit comments and chairman of the board of Westville Bank, who is views has been given in accordance with section president and chairman of the board of Applicant, 3(b) of the Act (43 Fed. Reg. 12755 (1978)). The became a director of Bank. The Board finds that time for filing comments and views has expired, the effect of establishing the above-described in­ and the application and all comments received terlocking officer/director relationships between have been considered in light of the factors set Bank and Westville Bank was to eliminate signifi­ forth in section 3(c) of the Act (12 U.S.C. cant competition that existed between those Banks, § 1842(c)). Applicant is a nonoperating corporation organ­ upon this review and upon its analysis of all facts of record, ized for the purpose of becoming a bank holding including advertising, consumer trade information, and other economic data, the Board concludes that the appropriate market company through the acquisition of Bank. Bank for analyzing the competitive effects of the subject proposal holds deposits of $113.6 million, representing is approximated by the Danville banking market as described 0.17 per cent of the total deposits in commercial above. 3 Certain officer/directors of Applicant are officer/directors banks in Illinois.1 Upon acquisition of Bank, Ap­ as well as principal shareholders of two other bank holding plicant would control the 68th largest bank in companies, each with one subsidiary bank, and a third bank in Illinois, in addition to Bank and Westville Bank. However, Illinois. it does not appear that any significant competition currently Bank is the largest of thirteen banks located in exists between these other three banks and Bank. the Danville banking market; it controls 29.8 per 4 In addition, it should be noted that the fourth largest bank in the market is affiliated with the second largest bank in the cent of the deposits in the market.2 The president market. The sixth and eighth largest banks in the market are affiliated with the third largest bank in the market. 1 All banking data are as of June 30, 1977. 5 See the Board’s Order of May 11, 1977, denying the 2 The relevant banking market for the purposes of analyzing application to become a bank holding company by Mahaska the competitive effects of the proposed transaction is approxi­ Investment Company, Oskaloosa, Iowa (63 Federal Reserve mated by all of Vermilion County, with the exception of Butler, Bulletin 579 (1977)), the Board’s Order of November 18, Grant, and Sidell townships. Applicant contends that the rele­ 1977, denying the application to become a bank holding vant market should include all of Vermilion County, Illinois, company by Citizens Bancorp, Inc., Hartford City, Indiana as well as the towns of Chrisman in Illinois and Covington (63 Federal Reserve Bulletin 1083 (1977), and the Board’s and Williamsport in Indiana. The Federal Reserve Bank of Order of March 27, 1978, denying the application to become Chicago and Board staff have reviewed and analyzed all facts a bank holding company by Midwest Bancorp, Inc., Gardner, of record relating to the definition of the relevant market. Based Illinois (64 Federal Reserve Bulletin 317 (1978)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

680 Federal Reserve Bulletin □ August 1978 increase the concentration of banking resources effective date of this Order, unless such period within the Danville banking market, and eliminate is extended for good cause by the Board, or by an independent banking competitor in the market. the Federal Reserve Bank of Chicago pursuant to However, as part of the subject application, Ap­ delegated authority. plicant’s president and chairman of the board has By order of the Board of Governors, effective committed to terminate his interlocking officer- July 31, 1978. ships, directorships, and ownership interests be­ Voting for this action: Chairman Miller and Gover­ tween Bank and Westville Bank, including its nors Wallich, Coldwell, and Partee. Absent and not holding company, Westbanco, Inc. Applicant has voting: Governors Gardner and Jackson. also committed not to have any such relationships. (Signed) G riffith L. Garwood, In light of these commitments, the Board con­ [seal] Deputy Secretary of the Board. cludes that approval of this proposal would not have any significant adverse competitive effects. Accordingly, the Board concludes that competitive Mercantile Bancorporation Inc., considerations are consistent with approval of the St. Louis, Missouri application to become a bank holding company. Order Approving Acquisition of Bank The financial and managerial resources and fu­ ture prospects of Applicant are dependent upon Mercantile Bancorporation Inc., St. Louis, Bank.6 Applicant projects a 12-year amortization Missouri, a bank holding company within the period for its acquisition debt and it appears that meaning of the Bank Holding Company Act, has Applicant would have the necessary financial flex­ applied for the Board’s approval under section ibility to meet its annual debt servicing require­ 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to ment and to maintain an adequate capital position acquire 90 per cent of the voting shares of First for Bank. The financial and managerial resources National Bank of Doniphan (“Bank), Doniphan, of Applicant and Bank and the affiliated banks and Missouri. bank holding companies are considered generally Notice of the application, affording opportunity satisfactory, and the future prospects for each for interested persons to submit comments and appear favorable. Accordingly, considerations re­ views, has been given in accordance with section lating to banking factors are consistent with ap­ 3(b) of the Act. The time for filing comments and proval of the application. Upon approval of the views has expired, and the Board has considered subject proposal, Applicant proposes to expand the application and all comments received, in­ Bank’s hours of operation and provide additional cluding those of S. Lloyd Snodgrass (“Protes­ physical facilities. The Board finds that consid­ tant”) opposing the proposal, in light of the factors erations relating to the convenience and needs of set forth in section 3(c) of the Act (12 U.S.C. the community to be served lend some weight § 1842(c)). toward approval and are sufficient to outweigh any Applicant, the largest banking organization in adverse competitive effects that might result from Missouri, controls 28 subsidiary banks with ag­ consummation of the subject proposal. Based upon gregate deposits of $2.26 billion, representing the foregoing and other considerations reflected in 10.6 per cent of the total deposits in commercial the record, it is the Board’s judgment that the banks in the State.1 Acquisition of Bank, with proposed acquisition is in the public interest and deposits of $22.9 million, would increase Appli­ that the application should be approved. cant’s share of commercial bank deposits in Mis­ On the basis of the record, the application is souri by one-tenth of one per cent and would not approved for the reasons summarized above. The have an appreciable effect upon the concentration transaction shall not be made (a) before the thir­ of banking resources in the State. tieth calendar day following the effective date of Bank is the third largest of five commercial this Order or (b) later than three months after the banking organizations in the relevant banking market,2 with 18.3 per cent of deposits in com­ 6 Where principals of an Applicant are associated with mercial banks in that market. None of Applicant’s another bank or bank holding company, the Board has indicated subsidiary banks competes in the relevant banking that it is appropriate to analyze such organizations by the standards normally applied to multibank holding companies. See Board’s Order dated June 14, 1976, denying the applica­ tion of Nebraska Banco, Inc., Ord, Nebraska, to become a 1 All banking data are as of December 31, 1977. bank holding company (62 Federal Reserve Bulletin 638 2 The relevant banking market is approximated by Ripley (1976)). and Butler Counties, Missouri. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 681 market, and the nearest office of Applicant’s sub­ With respect to the allegation that there may sidiary banks is located approximately 76 miles have been offers for the purchase of Bank’s shares west of Bank. From the record, it appears that by individuals at a higher per share price than the no significant competition presently exists between offer made by Applicant, a dispute of fact exists. Applicant’s banking subsidiaries and Bank. While Even if this dispute were resolved in the way most Applicant could establish a de novo bank in the favorable to Protestant’s contention, however, the relevant market, it does not appear that the market Board believes the matter would not constitute a is particularly attractive for de novo entry. Ac­ material adverse reflection on the managerial re­ cordingly, consummation of proposal would not sources of Bank. The offer Protestant claims was have a significant effect upon competition, nor made was only slightly higher than that accepted, would it increase the concentration of resources and there were sufficient material differences in in any relevant area. Therefore, the Board con­ the advantages likely to accrue to Bank and its cludes that competitive considerations are consist­ shareholders under the two offers, that the Board ent with approval of the application. believes no adverse inferences regarding Bank’s The financial and managerial resources of Ap­ managerial resources could be drawn from its plicant and its subsidiaries, as well as those of decision, even accepting the set of facts described Bank, are regarded as generally satisfactory, and by Protestant. their future prospects appear favorable. Therefore, The Board has also considered Protestant’s al­ considerations relating to banking factors are con­ legation regarding a single loan made by Bank sistent with approval of the application. several years ago. There appears to be no material Protestant, in opposing approval of this appli­ factual dispute regarding the circumstances of this cation, has raised several questions regarding the loan and, upon review, the Board does not con­ present managerial resources of Bank and the sider those circumstances to be a material adverse effect of the proposal on the convenience and reflection on Bank’s managerial resources. Neither needs of the community served by Bank. Specifi­ of these two allegations, in any event, reflects cally, Protestant asserts that (1) the purchase price adversely on Applicant’s managerial resources or offered by Applicant was not the highest offer suggests that the public interest would not be made; (2) Bank’s president had shown favoritism served by Applicant’s acquisition of Bank. in making a loan; and (3) the community would The Board has also considered Protestant’s be best served if Bank were controlled locally contention that Bank should be controlled locally, rather than by a St. Louis holding company. Fi­ rather than by a large St. Louis based bank holding nally, Protestant has requested that a formal hear­ company. While Protestant has stated a preference ing be held in connection with these issues. that Bank’s shares be purchased by persons other Section 3(b) of the Act requires the Board to than Applicant, he has submitted no evidence that hold a formal hearing when the primary supervisor the convenience and needs of the community of the bank to be acquired (in this case, the served by Bank would not be better served after Comptroller of the Currency) recommends disap­ consummation of this proposal than they are being proval of the application (12 U.S.C. § 1842(b)). served now. Applicant, on the other hand, has Since the Comptroller of the Currency has sub­ stated in its application that it intends to replace mitted no such objection, there is no statutory certain members of Bank’s board of directors with requirement that the Board hold a formal hearing individuals from the local community, thus main­ in this matter.3 The Board has reviewed the entire taining local participation in Bank’s management. record of this application, including the views In addition, the record reflects that Applicant will expressed in the written submissions of Protestant extend, through the expertise of its lead bank and and Applicant’s response to those submissions, other subsidiaries, expanded services to Bank and and concludes that the record is sufficiently com­ its customers. Thus, the Board concludes that plete to render a decision on the application and considerations relating to the convenience and that no useful purpose would be served by holding needs of the community to be served are consistent a formal hearing. Accordingly, Protestant’s re­ with approval. The Board finds that approval of quest for a hearing is denied. the proposed application would be in the public interest and that the application should be ap­ proved. 3 See, Farmers and Merchants Bank of Los Cruces v. Board On the basis of the record, the application is of Governors of the Federal Reserve System, 567 F.2d 1082, 1087 (D.C. Cir. 1977). approved for the reasons summarized above. The Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

682 Federal Reserve Bulletin □ August 1978 transaction shall not be made before the thirtieth is president and controlling shareholder of a onecalendar day following the effective date of this bank holding company that controls a bank located Order, or later than three months after the effective in a banking market separate from Bank. How­ date of this Order unless such period is extended ever, in order to analyze the competitive effects for good cause by the Board, or by the Federal of the subject proposal it is necessary to consider Reserve Bank of St. Louis pursuant to delegated that another of Applicant’s principals is the con­ authority. trolling shareholder and president of the fourth By order of the Board of Governors, effective largest bank in the market, Farmers National Bank July 21, 1978. of Ridgeway, Ridgeway, Missouri ($5 million in deposits) (“Ridgeway Bank”), which controls 8.1 Voting for this action: Chairman Miller and Gover­ per cent of market deposits. This principal of nors Wallich, Coldwell, and Jackson. Absent and not voting: Governors Gardner and Partee. Applicant acquired control of Ridgeway Bank in July 1977 which resulted in the elimination of (Signed) G riffith L. Garwood, some existing competition between Bank and [seal] Deputy Secretary of the Board. Ridgeway Bank.2 In view of all the facts of record, including the relative sizes of Bank and Ridgeway Bank, that Bank is over 15 miles southwest of New Hampton Bancshares, Inc., Ridgeway Bank, and that in the intervening area New Hampton, Missouri are the market’s two significantly larger banking organizations controlling nearly 67 per cent of total Order Approving market deposits, it appears that consummation of Formation of a Bank Holding Company this proposal would have only slight adverse com­ New Hampton Bancshares, Inc., New Hamp­ petitive effects. ton, Missouri (“Applicant”), has applied for the The financial and managerial resources and fu­ Board’s approval under section 3(a)(1) of the Bank ture prospects of Applicant are entirely dependent Holding Company Act (12 U.S.C. § 1842(a)(1)) upon those of Bank. Although Applicant would (the “Act”), to become a bank holding company incur some debt in connection with this proposal, by acquiring 87.2 per cent of the voting shares Applicant’s projected schedule for the retirement of First State Bank of New Hampton, New of acquisition debt and anticipated income from Hampton, Missouri (“Bank”). Bank appear to provide Applicant with the neces­ Notice of the application, affording opportunity sary financial flexibility to meet its annual debt for interested persons to submit comments and servicing requirement without unduly burdening views, has been given in accordance with section the financial condition of either Bank or Applicant. 3(b) of the Act. The time for filing comments and The managerial resources of Applicant and Bank views has expired, and the application and all are considered satisfactory and the future prospects comments received have been considered in light of each appear favorable. The financial and mana­ of the factors set forth in section 3(c) of the Act gerial resources and future prospects of the affi­ (12 U.S.C. § 1842(c)). liated banks and the bank holding company are Applicant is a nonoperating corporation organ­ generally satisfactory. Accordingly, the banking ized for the purpose of becoming a bank holding factors associated with this proposal are consistent company through the acquisition of Bank. Upon with approval of the application. acquisition of Bank ($4.7 million in deposits), Although consummation of the proposal would Applicant would control the 616th largest of 712 effect no further changes in the banking services banks in Missouri, holding .02 per cent of the total offered by Bank in the immediate future, Appli­ deposits in commercial banks in the State.1 cant’s principals since taking control of Bank have Bank is the smallest of six banks in the relevant expanded the services available to the community banking market (approximated by Harrison by lengthening banking hours, paying maximum County, Missouri) and controls 7.5 per cent of the market’s commercial bank deposits. The sub­ 2 Whenever principals of an applicant are associated with several banking organizations, the Board has indicated that it ject proposal involves a restructuring of Bank’s is necessary and appropriate to analyze such organizations by ownership from individuals to a corporation owned applying the more stringent standards applied to multibank holding company acquisitions. See, e.g., the Board’s Order by the same individuals. A principal of Applicant of June 14, 1976, denying the applications of Nebraska Banco, Inc., Ord, Nebraska, to become a bank holding company (62 1 All banking data are are as of December 31, 1977. Federal Reserve Bulletin 638 (1976)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 683 interest rates on deposits, instituting a student loan views, has been given in accordance with section program, and initiating an EDP system. Since 3(b) of the Act (12 U.S.C. § 1842(b)). The time acquiring Ridgeway Bank, Applicant’s principal for filing comments and views has expired, and has strengthened the managerial capabilities of that the Board has considered the application and all institution and, further, intends to provide it with comments received in light of the factors set forth additional capital. In view of these improvements in section 3(c) of the Act (12 U.S.C. § 1842(c)). and the anticipated continuation of these benefits, Foundation and Company are both registered convenience and needs considerations lend such bank holding companies with majority voting weight toward approval as to outweigh the slight share interests in 29 banks in Minnesota, North adverse competitive effects associated with this Dakota, and Wisconsin, with total deposits of proposal. It has been determined that consumma­ $738.8 million as of June 30, 1977. In addition tion of the transaction would be in the public to their interests in the 29 banks, Company owns interest and that the application should be ap­ directly, and Foundation owns indirectly, 21.77 proved. per cent of the outstanding shares of The Dakota On the basis of the record, the application is National Bank and Trust Company of Fargo, approved for the reasons summarized above. The Fargo, North Dakota (“Bank”). Foundation and transaction shall not be consummated (a) before Company are requesting prior approval to ex­ the thirtieth day following the effective date of this change the 21.77 per cent interest in Bank for Order, or (b) later than three months after the 21.77 per cent of the outstanding shares of Da­ effective date of this Order, unless such period kota.2 is extended for good cause by the Board or by Foundation and Company control nine banks in the Federal Reserve Bank of Kansas City, pursuant North Dakota with $192.2 million, representing to delegated authority. 6.3 per cent of the total commercial bank deposits By order of the Secretary of the Board, acting in North Dakota.3 They rank as the State’s fourth pursuant to delegated authority from the Board of largest banking organization. Bank is the ninth Governors, effective July 24, 1978. largest banking organization in the State, with deposits of $74.6 million, or 2.1 per cent of the (Signed) G riffith L. Garwood, State’s total deposits. [seal] Deputy Secretary of the Board. Foundation and Company control one bank in the relevant banking market.4 That bank is the Otto Bremer Foundation and eighth largest bank in the market, holding $12.4 Otto Bremer Company, million (2.3 per cent) of the market deposits. That St. Paul, Minnesota bank and Bank, with 10.8 per cent of market deposits, appear to derive some loans and deposits Order Approving from each other’s service area. Further, Founda­ Acquisition of Bank Holding Company tion and Company are currently represented on Otto Bremer Foundation (“Foundation”) and its Bank’s board of directors. Following consumma­ wholly-owned subsidiary, Otto Bremer Company tion of the subject proposal, however, the interlock (“Company”), both of St. Paul, Minnesota, have would be terminated. It appears that consumma­ applied for the Board’s approval under section tion of this proposal would lessen the influence 3(a)(3) of the Bank Holding Company Act (12 of Foundation and Company over Bank and may U.S.C. § 1842(a)(3)) (“Act”) to acquire 21.77 increase the likelihood of increased competition per cent of Dakota Bankshares, Inc., Fargo, North between the two banks. The Board finds that Dakota (“Dakota”).1 consummation of the subject proposal would not Notice of the applications, affording opportunity increase the concentration of banking resources or for interested persons to submit comments and have any adverse effects on competition in any 1 These applications were previously made moot by the 2 See the Board’s Order of this date approving the applica­ Board’s Order of March 9, 1978, denying the application of tion of Dakota Bankshares, Inc., Fargo, North Dakota, to Dakota Bankshares, Inc., Fargo, North Dakota (“Dakota”), become a bank holding company by acquiring The Dakota to become a bank holding company by acquiring The Dakota National Bank and Trust Company of Fargo, Fargo, North National Bank and Trust Company of Fargo, Fargo, North Dakota. Dakota (64 Federal Reserve Bulletin 310). By its Order of 3 All banking data are as of December 31, 1977, unless this date, the Board has granted Dakota’s request that the Board otherwise noted. reconsider its Order of March 9, 1978, and has approved that 4 The relevant banking market is approximated by Cass application. County, North Dakota, and Clay County, Minnesota. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

684 Federal Reserve Bulletin □ August 1978 relevant area. Therefore, competitive consid­ views has expired, and the Board has considered erations are consistent with approval. the application and all comments received in light The financial and managerial resources of Foun­ of the factors set forth in section 3(c) of the Act dation and Company, including their subsidiaries, (12 U.S.C. § 1842(c)). as well as those of Dakota and Bank, are consid­ Applicant is a nonoperating Missouri corpora­ ered generally satisfactory, and future prospects tion organized for the purpose of becoming a bank for each appears favorable. Thus, the banking holding company by acquiring Dearborn Bank and factors are consistent with approval of the appli­ Camden Point Bank, which hold deposits of $5.2 cation. Although no changes are proposed in million and $3.2 million, respectively.1 Upon ac­ Bank’s services or operations, convenience and quisition of the banks, Applicant would control needs considerations are also consistent with ap­ approximately .05 per cent of the total commercial proval. Accordingly, it is the Board’s judgment bank deposits in the State. that approval of these applications would be in Dearborn Bank and Camden Point Bank control the public interest and that the applications should .09 per cent and .06 per cent of total deposits in be approved. commercial banks in the Kansas City banking On the basis of the facts of record, the applica­ market.2 Upon consummation of the proposal Ap­ tions are approved for the reasons summarized plicant would rank 15th of 16 multi-bank holding above. The transaction shall not be made (a) before companies in the Kansas City banking market. The the thirtieth calendar day following the effective two banks have been under common ownership date of this Order or (b) later than three months since 1961, are managed by members of the same after the effective date of this Order, unless such family, and have directors in common, and it period is extended for good cause by the Board, appears that no meaningful competition exists be­ or by the Federal Reserve Bank of Minneapolis tween them. In view of the small size and long­ pursuant to delegated authority. standing affiliation of the banks to be acquired and By order of the Board of Governors, effective the large number of banking organizations com­ July 31, 1978. peting in the relevant market, it appears that their original affiliation did not, and their continued Voting for this action: Chairman Miller and Gover­ affiliation would not have any significant adverse nors Wallich, Coldwell, and Partee. Absent and not voting: Governors Gardner and Jackson. effect on competition or further any undue con­ centration of banking resources in any relevant (Signed) G riffith L. Garwood, area. [seal] Deputy Secretary of the Board Two of Applicant’s directors are associated with several other banks and bank holding companies in Missouri, one of which, United Missouri Bank of Kansas City, N.A., also operates in the Kansas Platte County Bancshares, Inc., City banking market. A'principal of Applicant Dearborn, Missouri serves as an officer of United Missouri Bank, which controls 8.79 per cent of total market de­ Order Approving posits, and a director of Applicant is a member Formation of Bank Holding Company of the board of directors and holds director’s Platte County Bancshares, Inc., Dearborn, qualifying shares of that bank. In view of the Missouri, has applied for the Board’s approval limited nature of the relationship between Appli­ under section 3(a)(1) of the Bank Holding Com­ cant and United Missouri Bank, the small com­ pany Act (12 U.S.C. § 1842(a)(1)) of formation bined market share of that Bank and Applicant, of a bank holding company by acquiring 91.6 per and the large number of banking alternatives in cent of the voting shares of Platte County Bank the market, it appears that consummation of the of Dearborn (“Dearborn Bank”), Dearborn, Mis­ proposed transaction would have no significant souri, and 83 per cent of the voting shares of Platte adverse effect on competition or concentration in County Bank of Camden Point (“Camden Point any relevant area. Thus, the Board concludes that Bank”), Camden Point, Missouri. Notice of the application, affording opportunity 1 Banking data are as of June 30, 1977. for interested persons to submit comments and 2 The Kansas City banking market is approximated by the northern half of Cass County, all of Clay, Jackson, and Platte views, has been given in accordance with section Counties in Missouri and Johnson and Wyandotte Counties 3(b) of the Act. The time for filing comments and in Kansas. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 685 the effects of the proposal on competition are for interested persons to submit comments and consistent with approval of this application. views, has been given in accordance with § 3(b) The financial and managerial resources of Ap­ of the Act. The time for filing comments and views plicant, Dearborn Bank, and Camden Point Bank has expired, and the application and all comments are considered satisfactory, and the future pros­ received have been considered in light of the pects of each appear favorable. In addition, the factors set forth in § 3(c) of the Act (12 USC financial and managerial resources and future § 1842(c)). prospects of the affiliated banking organizations Applicant is a nonoperating corporation organ­ with which Applicant’s directors are associated are ized for the purpose of becoming a bank holding consistent with approval of the application. Thus, company by acquiring Bank. Bank has total de­ banking factors are consistent with approval of the posits of $18.6 million, representing 0.2 per cent application. of total deposits in commercial banks in Colo­ Although consummation of the transaction rado.1 Upon acquisition of Bank, Applicant would would effect no immediate changes in the services control the 103rd largest bank in Colorado. Bank offered by the Banks, considerations relating to is one of the smaller banks in the Denver banking the convenience and needs of the community to market 2 and holds approximately .37 per cent of be served are consistent with approval. The Board the total deposits in commercial banks in that concludes that consummation of the proposal to market. form a bank holding company would be consistent This proposal represents a restructuring of with the public interest and that the application Bank’s ownership from individuals to a corpora­ should be approved. tion owned by the same individuals. One of Ap­ On the basis of the record, the application is plicant’s principals is a principal of another oneapproved for the reasons summarized above. The bank holding company and its subsidiary bank, transaction shall not be made before the thirtieth located in the Denver banking market. That bank calendar day following the effective date of this holds deposits of $7.1 million, representing .14 Order, or later than three months after the effective per cent of the market’s total deposits. In light date of this Order unless such period is extended of the small shares of market deposits controlled for good cause by the Board, or by the Federal by Bank and by the affiliated one-bank holding Reserve Bank of Kansas City pursuant to delegated company, consummation of the proposal will not authority. have a significantly adverse effect on competition By order of the Board of Governors, effective in any relevant area. July 5, 1978. On November 3, 1977, the Board denied a previous application by Applicant to become a Voting for this action: Chairman Miller and Gover­ bank holding company by acquiring Bank.3 The nors Wallich, Coldwell, Jackson, and Partee. Absent and not voting: Governor Gardner. Board’s decision was based in part on its findings that a principal of Applicant controlled another (Signed) G riffith L. Garwood, bank holding company and that the operations of [seal] Deputy Secretary of the Board. that bank holding company had failed to meet the Board’s expectations at the time it approved for­ mation of that bank holding company and that these results were due in part to certain practices Republic Bancorporation, Inc., of the principal of Applicant.4 In addition, the Englewood, Colorado Board concluded that it was unlikely, based on Order Approving Formation of Bank Holding Company 1 All banking data are as of June 30, 1977. 2 The Denver banking market is approximated by Denver, Republic Bancorporation, Inc., Englewood, Adams, Arapahoe, and Jetterson Counties and the City of Broomfield in Boulder County. Colorado, has applied for the Board’s approval 3 63 Federal Reserve Bulletin 1098 (1977). under § 3(a)(1) of the Bank Holding Company Act 4 In considering an application involving a bank that is part (12 U.S.C. § 1842(a)(1)) of formation of a bank of a chain of one-bank holding companies, the Board looks beyond the subject bank involved in the application and ana­ holding company by acquiring 80 per cent or more lyzes the financial and managerial resources of the other banks of the voting shares of Republic National Bank that are part of the chain. See the Board’s Order denying the application of Nebraska Banco, Inc., Ord. Nebraska, to be­ of Englewood, Englewood, Colorado (“Bank”). come a bank holding company (62 Federal Reserve Bulletin Notice of the application, affording opportunity 638 (1976)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

686 Federal Reserve Bulletin □ August 1978 realistic projections of Bank’s earnings, that Ap­ date of this Order, unless such period is extended plicant would have been able to service the debt for good cause by the Board of Governors or by to be incurred in connection with the acquisition the Federal Reserve Bank of Kansas City pursuant while maintaining the capital adequacy of Bank to delegated authority. and flexibility to meet any unexpected problems By order of the Board of Governors, effective that might arise at Bank. The Board also noted July 31, 1978. that the affiliated bank holding company controlled Voting for this action: Chairman Miller and Gover­ by a principal of Applicant had not met the debt nors Wallich, Cold well, and Partee. Absent and not retirement schedule set forth in its application to voting: Vice Chairman Gardner and Governor Jackson. the Board. (Signed) G riffith L. Garwood, Based on information contained in the present [seal] Deputy Secretary of the Board. application and other factors of record, the Board concludes that financial and managerial resources Republic of Texas Corporation, of Bank, Applicant, and the affiliated one-bank Dallas, Texas holding company now appear to be generally satisfactory and their future prospects appear to Order Approving Acquisition of Bank be consistent with approval of the application. The record indicates that Applicant’s principals, who Republic of Texas Corporation, Dallas, Texas, acquired Bank in May 1976, have significantly a bank holding company within the meaning of improved the earnings and other financial re­ the Bank Holding Company Act, has applied for sources of Bank and now suggests that Applicant the Board’s approval under § 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to acquire all of the will be able to service the debt to be incurred in voting shares of the successor by merger to connection with the proposal without an adverse Greenville Avenue Bank and Trust, Dallas, Texas effect on the capital adequacy of Bank. Bank has (“Bank”). Applicant presently controls 24.9 per experienced good earnings through the first half cent of Bank. The bank into which Bank is to of 1978 and Applicant has committed to increase be merged has no significance except as a means the equity capital of Bank upon consummation of to facilitate the acquisition of the voting shares the proposal. In addition, the record indicates that of Bank. Accordingly, the proposed acquisition of the affiliated bank holding company controlled by shares of the successor organization is treated a principal of Applicant is now currently meeting herein as the proposed acquisition of the shares its projected debt retirement schedule and has of Bank. taken steps to correct the criticized management Notice of the application, affording opportunity practices noted in the Board’s Order denying Ap­ for interested persons to submit comments and plicant’s previous application to form a bank views, has been given in accordance with § 3(b) holding company. Therefore, the considerations of the Act. The time for filing comments and views relating to banking factors are consistent with has expired, and the Board has considered the, approval of the application. application and all comments received, including Since acquisition of Bank in 1976, Applicant’s those submitted on May 22, 1978, by Mr. H. F. principals have substantially increased Bank’s loan Pappas, Garland, Texas (“Protestant”), in light portfolio and affiliation with Applicant would en­ of the factors set forth in § 3(c) of the Act (12 able Bank to continue to offer expanded loan U.S.C. § 1842(c)). services to its community. Accordingly, consid­ Applicant is the fourth largest banking organi­ erations relating to the convenience and needs of zation in Texas and controls 14 banking subsidi­ the community to be served lend weight for ap­ aries with aggregate deposits of approximately proval of the application. The Board concludes $3.4 billion, representing 6.3 per cent of total that consummation of the proposal to form a bank deposits in commercial banks in the State.1 Bank, holding company would be consistent with the with deposits of $52.8 million, is the 110th largest public interest and that the application should be banking organization in the State, and its acquisi­ approved. tion by Applicant would increase Applicant’s share On the basis of the record, the application is of commercial bank deposits in Texas by one-tenth approved for the reasons summarized above. The transaction shall not be made (a) before the thir­ 1 All banking data are as of June 30, 1977 and reflect bank tieth day following the effective date of this Order, holding company acquisitions and formations approved as of or (b) later than three months after the effective April 30, 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 687 of one per cent and would not alter Applicant’s light of that relationship the effects are only slight. ranking in the State. Moreover, while Applicant is the largest organi­ By Order dated October 25, 1973, the Board zation in the banking market, in view of the facts approved the application of Applicant to become presented in the record of this application, the a bank holding company through the direct acqui­ Board does not regard the slight increase in con­ sition of Republic National Bank of Dallas centration of market deposits as significant. Ac­ (“Republic Bank”) and the indirect acquisition of cordingly, the Board concludes that tf^e proposed 29.9 per cent of the voting shares of Oak Clift acquisition of Bank of Applicant would have only Bank & Trust Company, Dallas, Texas. In addi­ slightly adverse effects on competition. tion to its interest in Bank, Republic Bank at the The financial and managerial resources of Ap­ time also owned indirectly between 5 and 24.99 plicant and its subsidiaries are regarded as gener­ per cent of the shares of twenty other banks, ally satisfactory and their future prospects appear seventeen of which were in the Dallas banking favorable. The financial and managerial resources market.2 Applicant represented to the Board that and future prospects of Bank are likewise regarded it would file separate applications for prior ap­ as generally satisfactory, and should be improved proval by the Board for acquisition of additional significantly, particularly in light of Applicant’s shares in each of certain of those banks, and would commitment to inject additional capital into Bank divest completely its interests in others. In its upon consummation of the proposal. In addition, Order the Board stated that each such application the proposed affiliation will provide Bank with filed by Applicant would be considered on its own access to Applicant’s managerial resources, merits in light of the statutory standards set forth thereby assuring a continuity of management at in § 3 of the Act. Since that time Applicant has Bank.4 Thus, considerations relating to banking sold its interests in nine of the Dallas-area banks, factors lend some weight toward approval of the and has, with the Board’s approval, acquired all application. In 1976, Bank relocated its banking the shares of four of the Dallas-area banks.3 facilities to a rapidly developing area, and accord­ Bank is the 21st largest banking organization ingly, much of its banking business is presently in the Dallas banking market and controls approx­ oriented toward construction and development ac­ imately 0.5 per cent of the total deposits in com­ tivity. While no immediate changes in Bank’s mercial banks in the market. With six subsidiary services are contemplated upon consummation of banks, Applicant is the largest banking organi­ the proposal, Applicant has indicated that it will zation in the Dallas banking market and controls assist Bank in more effectively serving the banking $2,663 million in deposits, representing 26.3 per needs of the increasing numbers of consumers, cent of total deposits in commercial banks in the retail businesses and health professionals located market. in Bank’s primary service area, thereby providing Inasmuch as Applicant and Bank operate in the Bank with a more permanent source of banking same market, consummation of the proposed business. Toward this end, Applicant will furnish transaction would appear to eliminate some exist­ Bank with the financial and managerial resources ing competition. However, the Board notes that necessary to serve the changing banking needs of Applicant, or its predecessor in interest, Republic its primary service area. Therefore, considerations Bank, has controlled 24 per cent or more of the relating to the convenience and needs of the com­ shares of Bank since its formation in 1945, and munity to be served lend weight toward approval that the nature of the relationship between Appli­ of the transaction and outweigh the slightly ad­ cant, Republic Bank, and Bank is such that little, verse competitive effects. Accordingly, it is the if any, meaningful competition currently exists Board’s judgment that the proposed acquisition between Bank and Applicant’s subsidiary banks would be in the public interest, and that the appli­ in the Dallas market. But for the history of the cation should be approved. long-established relationship between Applicant On the basis of the record, the application is and Bank, the effects on existing competition would be viewed as more serious, but viewed in 4 Protestant contends that Applicant’s acquisition of Bank may result in extensive personnel shifts that would disrupt 2 The Dallas banking market is approximated by the Dallas normal customer-Bank relations. While Applicant has indicated RMA. that it intends to make some changes in the management of 3 By Order dated January 20, 1978 the Board approved Bank, from the record it appears that these changes would Applicant’s acquisition of the successor by merger to First not be detrimental to the operations of Bank. Thus, it is the National Bank of Duncanville, Duncanville, Texas. However, Board’s assessment that the Protest does not present any Applicant has not consummated that acquisition. substantive issues that would warrant a denial of this proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

688 Federal Reserve Bulletin □ August 1978 approved for the reasons summarized above. The also principals of Milco Bancorporation, Inc., a transaction shall not be made before the thirtieth one-bank holding company with respect to Bank calendar day following the effective date of this of Iberia, Iberia, Missouri (“Iberia Bank”). Iberia Order or later than three months after the effective Bank is located 25 miles north of Bank in a date of this Order, unless such period is extended separate banking market. Although both Bank and for good cause by the Board, or by the Federal Iberia Bank derive some deposits and loans from Reserve Bank of Dallas pursuant to delegated the service area of the other, there does not appear authority. to be any substantial competition presently existing By order of the Board of Governors, effective between the two banks. Therefore, it appears that July 21, 1978. consummation of the subject proposal would not have any significant adverse effects on competition Voting for this action: Chairman Miller and Gover­ nors Wallich and Jackson. Present and abstaining: in any relevant area. Thus, the Board concludes Governor Coldwell. Absent and not voting: Governors that competitive considerations are consistent with Gardner and Partee. approval of the application. (Signed) G riffith L. Garwood, As the Board has indicated on previous occa­ [seal] Deputy Secretary of the Board. sions, a holding company should serve as a source of financial and managerial strength to its subsidi­ Triro Bancorporation, Inc., ary bank(s), and the Board closely examines the St. Robert, Missouri condition of an applicant in each case with this consideration in mind.3 With respect to financial Order Denying considerations, the Board notes that Applicant Formation of Bank Holding Company would incur a sizeable debt in connection with the Triro Bancorporation, Inc., St. Robert, Mis­ proposed acquisition of Bank’s shares. Applicant souri, has applied for the Board’s approval under proposes to service this debt over a 12-year period section 3(a)(1) of the Bank Holding Company Act primarily with dividends to be paid by Bank. (12 U.S.C. § 1842(a)(1)) (“Act”) of formation Although Applicant’s projections for Bank’s asset of a bank holding company by acquiring 86 per growth and earnings appear reasonable in view of cent or more of the voting shares of First National the historical performance of Bank and other banks Bank, St. Robert, Missouri (“Bank”). in the market, the Board is of the view that Notice of the application, affording opportunity Applicant’s projected income is not sufficient to for interested persons to submit comments and service its acquisition debt while maintaining an views, has been given in accordance with section adequate capital position for Bank. Moreover, the 3(b) of the Act. The time for filing comments and level of dividend payout necessary from Bank to views has expired, and the Board has considered service Applicant’s debt does not provide Appli­ the application and all comments received in light cant with the financial flexibility to meet any of the factors set forth in section 3(c) of the Act unexpected problems that might arise at Bank. The (12 U.S.C. § 1842(c)). Board is of the view that Applicant’s overall Applicant is a nonoperating Missouri corpora­ financial plan would not enable Applicant to serve tion organized for the purpose of becoming a bank as a source of financial strength to Bank and that holding company by acquiring Bank. The pro­ such plan would not enhance Bank’s future pros­ posed transaction represents a restructuring of pects. Thus, the Board concludes that consid­ Bank’s ownership from individuals to a corpora­ erations relating to the financial resources and tion owned by the same individuals. Bank holds future prospect of Applicant and Bank weigh deposits of approximately $7.6 million, repre­ against approval of the subject transaction. senting 0.04 per cent of total deposits in commer­ With respect to managerial resources, it is noted cial banks in Missouri.1 Bank controls 15.6 per cent of the deposits in 3 While the subject proposal involves the restructuring of commercial banks in the Pulaski County banking Bank’s ownership into a corporate form, the Act requires that market and ranks as the fourth largest of five banks an organization must secure the Board’s approval prior to located in the market.2 Principals of Applicant are becoming a bank holding company and obtaining the benefits of a bank holding company structure. In this regard, section 3(c) of the Act requires that the Board must consider, among 1 All banking data are as of December 31, 1977. other things, the financial and managerial resources and future 2 The relevant banking market for purposes of analyzing the prospects of both the applicant and the bank to be acquired. competitive effects of the subject proposal is approximated by The Board’s action in this case is based upon its consideration all of Pulaski County, Missouri. of such factors. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 689 that principals of Applicant presently manage Weatherford Bancshares, Inc., Bank as well as Iberia Bank.4 Management’s per­ Weatherford, Texas formance, while evidencing recent improvement, Order Approving does not establish a history of managerial per­ Formation of Bank Holding Company formance that would significantly improve the fu­ ture prospects of Bank so as to offset the adverse Weatherford Bancshares, Inc., Weatherford, considerations associated with Applicant’s debt Texas, has applied for prior approval under section service plan. Thus the Board concludes that the 3(a)(1) of the Bank Holding Company Act (12 managerial resources of Applicant lend no weight U.S.C. § 1842(a)(1)) and section 225.3(a) of toward approval of the application. Regulation Y (12 CFR § 225.3(a)) to become a As stated previously, the proposed formation of bank holding company by acquiring 80 per cent Applicant represents a restructuring of Bank’s or more of the voting shares of The First National present ownership into corporate form. Applicant Bank of Weatherford, Weatherford, Texas proposed no changes in Bank’s operations or (“Bank”). services. Consequently, considerations relating to Notice of the application, affording opportunity the convenience and needs of the community to for interested persons to submit comments and be served lend no weight toward approval of the views has been given in accordance with section application. Moreover, in view of Applicant’s debt 3(b) of the Act. The time for filing comments and servicing requirements, consummation of the pro­ views has expired, and the application and all posal could diminish Bank’s ability to continue comments received have been considered in light to serve the area as a viable banking alternative. of the factors set forth in section 3(c) of the Act Based on all of the facts of record, the Board (12 U.S.C. § 1842(c)). concludes that the financial resources and future Applicant is a nonoperating corporation , organ­ prospects of Applicant and Bank are adverse to ized for the purpose of becoming a bank holding approval. These factors are not outweighed by any company through the acquisition of Bank. Bank procompetitive effects or by benefits that would holds deposits of $33.9 million.1 result in Bank being better able to serve the bank­ Bank, which controls approximately 1.0 per ing needs of the community. Therefore, it is the cent of the commercial bank deposits in the Fort Board’s judgment that approval of the application Worth banking market, is the 15th largest of 41 would not be in the public interest and that the banking organizations operating in the market.2 application should be denied. The subject proposal represents a restructuring of For the reasons summarized above, the applica­ Bank’s ownership from individuals to a corpora­ tion is denied. tion owned by the same individuals. However, in By order of the Board of Governors, effective order to analyze the competitive effects of the July 14, 1978. subject proposal it is necessary to consider that principals of Applicant are also principals in an­ other one-bank holding company that controls Fort Worth Bank and Trust, Fort Worth, Texas (“Fort Voting for this action: Governors Wallich, Coldwell, Worth Bank”),3 which is located 33 miles east Jackson, and Partee. Absent and not voting: Chairman of Bank, though in the same banking market. Fort Miller and Governor Gardner. Worth Bank holds deposits of $43.9 million, rep­ 1 All banking data are as of June 30, 1977, and reflect bank holding company formations and acquisitions approved as of April 30, 1978. (Signed) G riffith L. Garwood, 2 The Fort Worth banking market is the relevant market and [seal] Deputy Secretary of the Board. is approximated by the Fort Worth, Texas, Rand McNally Metro Area (“RMA”), which includes all of Tarrant County and portions of Denton, Johnson, Parker, and Wise Counties 4 The Board has previously stated that in considering an in Texas. application involving a bank, the principals of which control 3 In assessing the competitive effects of a proposal involving another bank or bank holding company, the Board should look the restructuring of a bank’s ownership into corporate form, beyond the bank that is the subject of the application and the Board takes into consideration the competitive effects of analyze the financial and managerial resources of the other bank the transaction whereby common share ownership was estab­ or bank holding company. (See the Board’s Order of June lished between the subject bank and one or more banks in 14, 1976, denying the formation of a bank holding company the same market. See the Board’s Order of May 11, 1977, by Nebraska Banco, Inc., Ord, Nebraska, 62 Federal Reserve denying the application to become a bank holding company Bulletin 638 (1976)). (Footnote continued on following page.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

690 Federal Reserve Bulletin □ August 1978 resenting 1.4 per cent of the market’s total depos­ Although consummation of the proposal would its, and ranks 12th in the Fort Worth banking effect no changes in the banking services offered market. by Bank, considerations relating to the conven­ Although acquisition of control of Bank by ience and needs of the community to be served principals of Applicant in 1977 eliminated some are also consistent with approval. It has been competition that existed between Bank and Fort determined that consummation of the transaction Worth Bank, such acquisition had no significant would be in the public interest and that the appli­ adverse effects upon competition in the market. cation should be approved. Together, the two banks controlled by Applicant’s On the basis of the record, the application is principals hold aggregate deposits representing approved for the reasons summarized above. The only 2.4 per cent of the total deposits in the transaction shall not be consummated (a) before market. Moreover, there are numerous banking the thirtieth calendar day following the effective alternatives remaining in the market that serve as date of this Order or (b) later than three months alternate sources of banking services. In view of after the effective date of this Order, unless such the relative sizes of the banks controlled by Ap­ period is extended for good cause by the Board plicant’s principals, the number of other banks or by the Federal Reserve Bank of Dallas pursuant operating in the market, and their distances from to delegated authority. each other, it appears that consummation of the By order of the Secretary, acting pursuant to subject proposal would not have any significant delegated authority from the Board, effective July adverse effects upon competition in any relevant 5, 1978. area. Thus, competitive considerations are con­ (Signed) G riffith L. G arw ood, sistent with approval of the application.4 [seal] Deputy Secretary of the Board. The financial and managerial resources and fu­ ture prospects of Applicant are dependent upon Bank. Applicant’s projected 12-year amortization schedule for its acquisition debt appears to provide Order U nder Sections 3 and 4 Applicant with the necessary financial flexibility of Bank Holding Company Act to meet its annual debt servicing requirements and to maintain an adequate capital position for Bank, Gering National Company, based upon all the facts of record, including certain Gering, Nebraska commitments by Applicant that have been made Order Approving Formation a part of this record. The managerial resources of Bank Holding Company and Retention of Applicant, Bank and the affiliated banks and of Pioneer Savings Company bank holding companies are considered satis­ factory, and the future prospects of each appear Gering National Company, Gering, Nebraska, favorable. Accordingly, considerations relating to has applied for the Board’s approval under banking factors are consistent with approval of the § 3(a)(1) of the Bank Holding Company Act application.5 (“Act”) (12 U.S.C. § 1842(a)(1)) of formation of a bank holding through acquisition of 80 per by Mahaska Investment Company, Oskaloosa, Iowa (63 Fed­ cent or more of the voting shares of The Gering eral Reserve Bulletin 579 (1977)); the Board’s Order of November 18, 1977, denying the application to become a bank National Bank & Trust Company, Gering, Ne­ holding company by Citizens Bancorp, Inc., Hartford City, braska (“Bank”). At the same time, Applicant has Indiana (63 Federal Reserve Bulletin 1983 (1977)); and the Board’s Order of March 27, 1978, denying the application applied, pursuant to § 4(c)(8) of the Act (12 to become a bank holding company by Midwest Bancorp, Inc., U.S.C. § 1843(c)(8)) and § 225.4(b)(2) of the Gardner, Illinois (64 Federal Reserve Bulletin 317 (1978)). Board’s Regulation Y (12 CFR § 225.4(b)(2)) 4 Principals of Applicant are also principals of Deport Banc­ shares, Inc., Deport, Texas. Its sole banking subsidiary, First for permission to retain Pioneer Savings Company, National Bank of Deport, Deport, Texas, is in a separate Gering, Nebraska (“Pioneer”), and thereby to banking market. There does not appear to be any existing competition between this bank and Bank. continue to engage in industrial loan and invest­ 5 Where principals of an Applicant are engaged in establish­ ment activities and to continue the sale of credit ing a chain of one-bank holding companies, the Board has life and credit accident and health insurance di­ indicated that it is appropriate to analyze such organizations by the standards normally applied to multi-bank holding com­ rectly related to extensions of credit by Pioneer. panies. See Board’s Order dated June 14, 1976, denying the Such activities have been determined by the Board application of Nebraska Banco, Inc., Ord, Nebraska, to be­ to be closely related to banking (12 CFR come a bank holding company (62 Federal Reserve Bulletin 638 (1976)). §§ 225.4(a)(2) and (9)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 691 Notice of the applications, affording opportunity ture prospects of Applicant and Bank are regarded for interested persons to submit comments and as generally satisfactory. Although Applicant will views, has been given in accordance with §§3 incur some debt in connection with this proposal, and 4 of the Act (43 Fed. Reg. 19720 (1978)). revenues derived from its ownership of Bank The time for filing comments and views has ex­ should enable Applicant to service its debt without pired, and the Board has considered the applica­ adversely affecting Bank’s financial condition. tions and all comments received in light of the Therefore, considerations relating to banking fac­ factors set forth in § 3(c) of the Act and the tors in regard to the acquisition of Bank are con­ considerations specified in § 4(c)(8) of the Act. sistent with approval of the application. Applicant is a recently-chartered corporation, While no significant changes are contemplated organized under the laws of Nebraska for the in Bank’s services, Applicant intends to increase purpose of acquiring Bank which holds deposits Bank’s capital, thereby indirectly increasing that amount to approximately $33.4 million,1 and Bank’s lending limits. Accordingly, consid­ operating Pioneer. Upon consummation of the erations relating to convenience and needs of the proposal, Applicant would control a bank ranking, community to be served appear consistent with on the basis of deposits, 35th of the 450 commer­ approval. It is the Board’s judgment that consum­ cial banks in Nebraska with 0.49 per cent of the mation of the proposal to form a bank holding total commercial bank deposits in the State. company would be in the public interest and the Bank is the fifth largest of nine banks in the application should be approved. relevant banking market,2 controlling 7.2 per cent In connection with the application to become of the total deposits in commercial banks in that a bank holding company, Applicant has also ap­ market. A principal of Applicant is associated with plied, pursuant to §§ 225.4(a)(2) and (9) of Regu­ two other one-bank holding companies, both of lation Y to retain Pioneer and thereby continue which are located outside the relevant banking to engage in the activities of an industrial loan market. These two companies are part of a chain and investment company and continue to sell credit of thirteen one-bank holding companies controlled life and credit accident and health insurance di­ by a group apparently not associated with Appli­ rectly related to extensions of credit by Pioneer. cant. Although he is a director of each of the two Pioneer is an industrial loan and investment com­ other bank holding companies and of the subsidi­ pany, chartered under the laws of Nebraska, that ary bank of one of these companies, his stock started de novo by Applicant on April 3, 1978. ownership in these two other holding companies It offers consumer, commercial, and first and sec­ is small and his influence appears minimal; fur­ ond mortgage loans and issues “certificates of thermore, the individual holds only an 11 per cent indebtedness,” which are, in effect, uninsured interest in Applicant, control of which appears to deposits yielding interest rates greater than those rest with three other individuals who are members paid on insured deposits.3 The recent opening of of the same family. In view of these facts, the Pioneer provided the public an alternative source proposal is not viewed as an extension of a chain of deposit and loan services with credit-related of one-bank holding companies and therefore need insurance services in the market, and the Board not be analyzed on the basis of multi-bank holding views these results as being procompetitive and company standards. in the public interest. Furthermore, there is no The proposed transaction represents a restruc­ evidence in the record indicating that consumma­ turing of the ownership of Bank from individual tion of the proposal would result in any undue to corporate ownership. It does not appear that concentration of resources, decreased or unfair consummation of the proposal would eliminate any competition, conflicts of interests, or other adverse existing or potential competition between banks, effects on the public interest. increase the concentration of banking resources or Based on the foregoing and other considerations have any other adverse effects on other banks in reflected in the record, the Board has determined the market. Accordingly, the Board concludes that that the considerations affecting the competitive competitive considerations are consistent with ap­ factors under § 3(c) of the Act and the balance proval of the application to acquire Bank. 3 Although “certificates of indebtedness” are not insured, The financial and managerial resources and fu­ the Nebraska Department of Banking and Finance closely supervises industrial loan company operations. Such companies 1 All deposit data are as of June 30, 1977. are examined at least annually and must file annual financial 2 The relevant banking market is approximated by Scotts reports. Minimum capital standards and reserve levels are Bluff County, Nebraska. required and State law regulates the payment of dividends. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

692 Federal Reserve Bulletin □ August 1978 of the public interest factors the Board must con­ proximately 72 per cent of Agency’s outstanding sider under § 4(c)(8) of the Act both favor ap­ shares. proval of Applicant’s proposals. Under the provisions of section 2(g)(3) of the Accordingly, the applications are approved for Act, shares transferred after January 1, 1966, by the reasons summarized above. The acquisition of any bank holding company to a transferee that has Bank shall not be made (a) before the thirtieth one or more officers, directors, trustees, or benefi­ calendar day following the effective date of this ciaries in common with or subject to control by Order; nor (b) later than three months after the the transferor are deemed to be indirectly owned effective date of this Order unless such period is or controlled by the transferor unless the Board, extended for good cause by the Board or by the after opportunity for hearing, determines that the Federal Reserve Bank of Kansas City pursuant to transferor is not in fact capable of controlling the delegated authority. The determination as to Ap­ transferee. In a January 26, 1978 interpretation of plicant’s industrial loan and insurance activities is this section of the Act, the Board stated that the subject to the conditions set forth in § 225.4(c) transfer of such a significant volume of assets that of Regulation Y and to the Board’s authority to the transfer may in effect constitute the disposition require reports by, and make examinations of, of a separate activity of a company, is deemed holding companies and their subsidiaries and to by the Board to involve a transfer of “shares” require such modification or termination of the of that company, for purposes of section 2(g)(3) activities of a bank holding company or any of of the Act (64 Federal Reserve B ulletin 211 its subsidiaries as the board finds necessary to (1978)). assure compliance with the provisions and pur­ Notice of an opportunity for hearing with re­ poses of the Act and the Board’s regulations and spect to Agency’s request for a determination orders issued thereunder or to prevent evasion under section 2(g)(3) was published in the Federal thereof. Register (42 Fed. Reg. 62,047 (1977)). The time By order of the Board of Governors, effective provided for requesting a hearing has expired. No July 14, 1978. such request has been received by the Board, nor has any evidence been received to show that Voting for this action: Governors Wallich, Coldwell, Agency will in fact be capable of controlling Jackson, and Partee. Absent and not voting: Chairman Miller and Governor Gardner. Purchaser. It is hereby determined that Agency will not, (Signed) G riffith L. Garwood, in fact, be capable of controlling Purchaser. This [seal] Deputy Secretary of the Board. determination is based upon the evidence of record in this matter, including that establishing the fol­ lowing facts. Purchaser will incur no debt in acquiring the Order Under Section 2 insurance business assets from Agency. In addi­ of Bank Holding Company Act tion, the board of directors of Agency has submit­ ted a resolution disclaiming its capability of con­ Community State Agency, Inc., trolling Purchaser upon consummation of the Bloomington, Minnesota transaction, and Purchaser has submitted an affi­ Community State Agency, Inc., Bloomington, davit stating that Agency will not in fact be capable Minnesota (“Agency”), a bank holding company of controlling him. Furthermore, rather than being within the meaning of § 2(a) of the Bank Holding subject to control of Agency, Purchaser, as an Company Act of 1956, as amended, (12 U.S.C. individual, in fact controls Agency. § 1841 et seq.) (the “Act”) by virtue of its own­ Accordingly, it is ordered, that the request of ership of a controlling interest in Community State Agency for a determination pursuant to section Bank, Bloomington, Minnesota, has requested a 2(g)(3) be, and hereby is, granted. This determi­ determination pursuant to the provisions of nation is based upon the representations made to § 2(g)(3) of the Act that Agency would not be the Board by Agency and Purchaser. In the event capable of controlling Mr. Clifford R. Jerpbak the Board should hereafter determine that facts (“Purchaser”) after his purchase of the insurance material to this determination are otherwise than business assets of Agency, notwithstanding the as represented, or that Agency or Purchaser failed fact that Purchaser is the president and the to disclose to the Board other material facts, this principal shareholder of Agency, controlling ap­ determination may be revoked, and any change Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 693 in the facts or circumstances relied upon by the and it registered as such with the Board on June Board in making this determination could result 21, 1971. T-W would have been a bank holding in the Board reconsidering the determination made company on July 7, 1970, if the BHC Act herein. Amendments of 1970 had been in effect on such By order of the Board of Governors, acting date by virtue of its ownership and control on that through its General Counsel, pursuant to delegated date of more than 25 per cent of the outstanding authority (12 CFR § 265.2(b)(1)), effective July voting shares of Bank. 3, 1978. 4. T-W holds property acquired by it on or before July 7, 1970, the disposition of which, but (Signed) G riffith L. Garwood, for clause (ii) of section 4(c) of the BHC Act and [seal] Deputy Secretary of the Board. the proviso of section 4(a)(2) that Act, would be necessary or appropriate to effectuate section 4 of the BHC Act if Agency were to continue to be a bank holding company beyond December 31, Certifications Pursuant to the Bank H olding Company Tax A ct of 1976. 1980, and which property, but for such clause and such proviso, would be “prohibited property” within the meaning of section 1103(c) of the Code. Trans-Western Corp., Sections 1103(g) and 1103(h) of the Code provide Dickinson, North Dakota that any bank holding company may elect, for [Docket No. TCR 76-163] purposes of Part VIII of subchapter 0 of chapter 1 of the Code, to have the determination whether Trans-Western Corp., Dickinson, North Dakota property is “prohibited property,” or is property (“T-W”), has requested a prior certification pur­ eligible to be distributed without recognition of suant to section 1101(b) of the Internal Revenue gain under section 1101(b)(1) of the Code, made Code (“Code”), as amended by section 2(a) of under the BHC Act as if that Act did not contain the Bank Holding Company Tax Act of 1976 clause (ii) of section 4(c) or the proviso of section (“Tax Act”), that its proposed divestiture of all 4(a)(2). T-W represented that it will make such of the voting shares of American State Bank of an election.2 New England, New England, North Dakota On the basis of the foregoing information, it (“Bank”) currently held by T-W, through the pro is hereby certified that: rata distribution of such shares to the shareholders (A) T-W is a qualified bank holding corporation, of T-W, is necessary or appropriate to effectuate within the meaning of section 1103(b) of the Code, the policies of the Bank Holding Company Act and satisfies the requirements of that section; (12 U.S.C. § 1841 et seq.) (“BHC Act”). (B) the 5820 shares of Bank that T-W proposes In connection with this request, the following to distribute to its shareholders are all or part of information is deemed relevant for the purpose of the property by reason of which T-W controls issuing the requested certification:1 (within the meaning of section 2(a) of the BHC 1. T-W is a corporation organized under the Act) a bank or bank holding company; and laws of the State of North Dakota on February (C) the distribution of the shares of Bank is 4, 1955. necessary or appropriate to effectuate the policies 2. On March 7, 1963, T-W acquired ownership of the BHC Act. and control of 5920 shares, representing 59.2 per This certification is based upon the repre­ cent of the outstanding voting shares of Bank, sentations made to the Board by T-W and upon which was then named Citizens State Bank of New the facts set forth above. In the event the Board England. should hereafter determine the facts material to this 3. T-W became a bank holding company on certification are otherwise than as represented by December 31, 1970, as a result of the 1970 T-W, or that T-W has failed to disclose to the Amendments to the BHC Act, by virtue of its Board other material facts, it may revoke this ownership and control at that time of more than certification. This certification is granted upon the 25 per cent of the outstanding shares of Bank, 2 Sections 1103(g) and 1103(h) of the Code require that an 1 This information derives from T-W’s communications with election thereunder be made “at such time and in such manner the Board concerning its request for this certification, T-W’s as the Secretary [of the Treasury] or his delegate may by registration statement filed with the Board pursuant to the BHC regulations prescribe.” As of this date no such regulations have Act, and other records of the Board. been promulgated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

694 Federal Reserve Bulletin □ August 1978 condition that T-W make the elections required organized under the laws of the State of Florida by sections 1103(g) and 1103(h) of the Code at on February 19, 1958. UniCapital is a corporation such time and in such manner as the Secretary organized under the laws of the State of Delaware of the Treasury or his delegate may by regulation on May 9, 1969. prescribe. 6. Neither UniCapital nor any subsidiary of By order of the Board of Governors, acting UniCapital holds any interest in First Bankers or through its General Counsel, pursuant to delegated Bank. authority, (12 CFR § 265.2(b)(3)), effective July 8. No officer, director (including honorary or 13, 1978. advisory director) or employee with policy-making functions of UniCapital or any subsidiary of Uni­ (Signed) Theodore E. A llison, Capital also holds any such position with First [seal] Secretary of the Board. Bankers, or any subsidiary of First Bankers, in­ cluding Bank. Unicapital Corporation, The above information is not regarded as a Atlanta, Georgia material alteration of the information previously [Docket No. TCR 76-148] set forth and relied upon in issuing the certification to UniCapital on March 31, 1978, and does not CORRECTION modify in any manner that certification. By Order In the prior and final certification issued on of the Board of Governors, acting through its March 31, 1978, to UniCapital Corporation, At­ Acting General Counsel pursuant to delegated au­ lanta, Georgia (“UniCapital”), items 1, 6 and 8 thority (12 CFR § 265.2(b)(3)), effective April 7, of the second paragraph of the certification should 1978. be corrected to read as follows: 1. United States Finance Company, Inc., At­ (Signed) Theodore E. A llison, lanta, Georgia (“Finance”), was a corporation [seal] Secretary of the Board. Orders Approved Under Bank Holding Company Act By the Board of Governors During July 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) El Paso Bancshares, Inc., The El Paso County Bank, July 26, 1978 Monument, Colorado Monument, Colorado First Hays Bancshares, Inc., The First National Bank of July 25, 1978 Hays, Kansas Hays City, Hays, Kansas First Bank Holding Company, Westland National Bank, July 14, 1978 Lakewood, Colorado Arvada, Colorado Galveston County Bancshares, Inc. The Texas City National July 28, 1978 Texas City, Texas Bank, Texas City, Texas Hawkeye Bancorporation, First State Bank, July 14, 1978 Des Moines, Iowa Chariton, Iowa Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 695 Section 3—Continued Board action (effective Applicant Bank(s) date) HaleCo BancShares, Inc., Hale County State Bank, July 19, 1978 Plain view, Texas Plainview, Texas Muyskens Corporation, Tropic Bank of Seminole, July 17, 1978 Casselberry, Florida Casselberry, Florida Oakland Financial Services, Inc. Citizens State Bank, July 31, 1978 Oakland, Iowa Oakland, Iowa Phelps County Bancshares, Inc., Phelps County Bank, July 14, 1978 Rolla, Missouri Rolla, Missouri Strawn Bancshares, Inc., Strawn Security Bank, July 19, 1978 Strawn, Texas Strawn, Texas Woodford Investment Company, First National Bank of Eureka, July 31, 1978 Eureka, Illinois Eureka, Illinois By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies oi the orders are available upon request to the Reserve Banks. Nonbanking Company Reserve Effective Applicant Bank(s) (or activity) Bank date First and Merchants Reinsuring credit Richmond July 6, 1978 Corporation, life and credit Richmond, Virginia accident and health insurance sold in the State of N.C. PENDING CASES INVOLVING THE BOARD OF GOVERNORS Does not include suits against the Federal Reserve Banks in which the Board of Governors is not named a party. Independent Bankers Association of Texas v. First United States League of Savings Associations v. National Bank in Dallas, et al., filed July 1978, Board of Governors, filed May 1978, U.S.D.C. U.S.C.A. for the Northern District of Texas. for the District of Columbia. Mid-Nebraska Bancshares, Inc. v. Board of Gov­ Hawkeye Bancorporation v. Board of Governors, ernors, filed July 1978, U.S.C.A. for the Dis­ filed April 1978, U.S.C.A. for the Eighth Cir­ trict of Columbia. cuit. NCNB Corporation v. Board of Governors, filed Dakota Bankshares, Inc. v. Board of Governors, June 1978, U.S.C.A. for the Fourth Circuit. filed April 1978, U.S.C.A. for the Eighth Cir­ NCNB Corporation v. Board of Governors, filed cuit. June 1978, U.S.C.A. for the Fourth Circuit. Citicorp v. Board of Governors, filed March 1978, Ellis Banking Corporation v. Board of Governors, U.S.C.A. for the Second Circuit. filed May 1978, U.S.C.A. for the Fifth Circuit. Security Bancorp and Security National Bank v. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

696 Federal Reserve Bulletin □ August 1978 Pending Cases—Continued Board of Governors, filed March 1978, BankAmerica Corporation v. Board of Gover­ U.S.C.A. for the Ninth Circuit. nors, filed May 1977, U.S.C.A. for the Ninth Michigan National Corporation v. Board of Gov­ Circuit. ernors, filed January 1978, U.S.C.A. for the Central Wisconsin Bankshares, Inc. v. Board of Sixth Circuit. Governors, filed June 1976, U.S.C.A. for the Wisconsin Bankers Association v. Board of Gov­ Seventh Circuit. ernors, filed January 1978, U.S.C.A. for the Memphis Trust Company v. Board of Governors, District of Columbia. filed February 1976, U.S.D.C. for the Western Vickars-Henry Corp. v. Board of Governors, filed District of Tennessee. December 1977, U.S.C.A. for the Ninth Cir­ First Lincolnwood Corporation v. Board of Gov­ cuit. ernors, filed February 1976, U.S.C.A. for the Emch v. The United States of America, et al., Seventh Circuit. filed November 1977, U.S.D.C. for the Eastern Roberts Farms, Inc. v. Comptroller of the Cur­ District of Wisconsin. rency, et. al., filed November 1975, U.S.D.C. Corbin v. Federal Reserve Bank of New York, for the Southern District of California. Board of Governors, et. al., filed October 1977, Florida Association of Insurance Agents, Inc. v. U.S.D.C. for the Southern District of New Board of Governors, and National Association York. of Insurance Agents, Inc. v. Board of Gover­ Central Bank v. Board of Governors, filed Oc­ nors, filed August 1975, actions consolidated tober 1977, U.S.C.A. for the District of Co­ in U.S.C.A. for the Fifth Circuit. lumbia. David R. Merrill, et. al. v. Federal Open Market Investment Company Institute v. Board of Gover­ Committee of the Federal Reserve System, filed nors, filed September 1977, U.S.C.A. for the May 1975, U.S.D.C. for the District of Colum­ District of Columbia. bia. BankAmerica Corporation v. Board of Gover­ Bankers Trust New York Corporation v. Board nors, filed May 1977, U.S.C.A. for the North­ of Governors, filed May 1973, U.S.C.A. for ern District of California. the Second Circuit. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

697 Announcements CONSUMER ADVISORY COUNCIL: Reece A. Overcash, Jr. President Suggestions for Membership Associates Corporation of North America Dallas, Texas The Board of Governors of the Federal Reserve System has announced that it is asking the public James E. Sutton Secretary and Corporate Counsel for suggestions as to qualified persons to fill up­ Chilton Corporation coming vacancies on the Board’s Consumer Advi­ Dallas, Texas sory Council. The Board asked for suggestions by Richard L. Wheatley, Jr. September 1, 1978. Chairman and Chief Executive Officer The terms of 9 of the 28 current members of University Bank Stillwater, Oklahoma the Council expire December 31, 1978. New ap­ pointments will be for terms of 3 years. The Consumer Advisory Council, representative of the interests of both consumers and creditors, REGULATION Z: Amendment advises the Board on its responsibilities under the The Board of Governors has amended its Regula­ Consumer Credit Protection Act and other con­ tion Z (Truth in Lending) concerning the “cooling sumer-related matters. The Council generally off” period for consumers who pledge their home meets with the Board four times yearly. Its meet­ as security in open-end credit arrangements. ings are open to the public. Truth in Lending requires that when a home is The Board asked that suggestions be accom­ used as collateral for a consumer loan the lender panied by biographical data. With certain excep­ must give notice that the borrower has a 3-day tions pertaining to privacy, this information will period in which to cancel the arrangement. be available to the public, upon request, for Lenders have asked the Board how this notice inspection and copying. should be given when they extend open-end credit The members of the Council whose terms expire that is secured by an interest in a consumer’s at the end of 1978 are: home. Credit-card and overdraft checking ar­ rangements are examples of open-end credit. The Honorable Leonor K. Sullivan St. Louis, Missouri The amendment exempts from the notice re­ quirement of Regulation Z individual transactions Agnes H. Bryant, Director under an open-end credit arrangement when the City of Detroit Human Rights Department Detroit, Michigan creditor and the seller are not the same or related persons. The exemption applies, for example, to Linda M. Cohen use of a bank credit card to purchase merchandise Credit Committee Member National Organization for Women from a retail seller. Washington, D.C. To qualify for this exemption under arrange­ ments when the creditor and seller are not the same Anne G. Draper, Economist AFL-CIO person, the amendment requires that customers Washington, D. C. must be notified of their right to cancel mortgage- Joseph F. Holt III secured open-end credit plans in the following Special Projects Officer instances: Weyerhaeuser Mortgage Company 1. When an open-end credit plan is first opened. Los Angeles, California 2. Whenever the credit limit is increased. Richard F. Kerr 3. Whenever the terms of the account are Operating Vice President Federated Department Stores changed. Cincinnati, Ohio 4. Whenever a security interest in a home is Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

698 Federal Reserve Bulletin □ August 1978 added to an existing open-end credit arrange­ 1976. The Illinois Supreme Court has declared the ment. Illinois Financial institutions Disclosure Act, on Customers must also be reminded annually that which the Board based its exemption, to be un­ their homes have been pledged as security for such constitutional and void. The Board has conse­ accounts. quently annulled the exemption. Illinois institu­ When the creditor and seller of goods and serv­ tions subject to the act must begin within 90 days ices are the same or related persons (for example, to comply with HMDA and the Board’s Regulation in the case of a revolving charge account estab­ C (Home Mortgage Disclosure). lished with a merchant under which the customer In another action, the Board of Governors ap­ may buy goods or services only from that mer­ proved an exemption from the requirements of the chant), Regulation Z specifies that notice of the Federal Home Mortgage Disclosure Act and the right of rescission must be given whenever a Board’s Regulation C for State-chartered banks transaction occurs on an open-end account secured and other depositary institutions in Connecticut, by the customer’s home. effective September 11, 1978. The change in Regulation Z adopted by the The exemption will apply to State-chartered Board is a modification of an amendment proposed depositories that are subject to the Connecticut by the Board on December 5, 1977. Home Mortgage Disclosure Act and the related regulations of the Connecticut Banking Depart­ ment. PROPOSED ACTIONS The Board of Governors has proposed adoption CONSUMER CREDIT: of an amendment to its Regulation Y (Bank Hold­ Extension of Survey ing Companies) to make check verification an activity permissible for bank holding company The Board of Governors has approved the exten­ subsidiaries. Comment will be received through sion for 3 years of its monthly survey of consumer September 13, 1978. credit at commercial banks. The Board has also proposed to lighten the At the same time the Board approved a number penalty required for early withdrawal of certain of changes in the report (Commercial Bank Report types of time deposits at member banks under of Consumer Credit—FR 571) designed to reduce Regulation Q (Interest on Deposits). The proposal substantially the reporting burden on banks while is expected to benefit particularly time deposits in retaining the major aspects of the analytical use­ long-term individual retirement accounts (IRA’s) fulness of the information gathered. and Keogh Plan retirement accounts, thus further­ Some of the data are used by the Board in ing the congressional aim of promoting retirement preparing its monthly releases on consumer instal­ savings. The Board asked for comment by August ment credit [421 (G.19)] and automobile credit 15, 1978. [428 (G.26)]. The revisions were in large part necessitated by the fact that distinctions among certain types of REGULATION C: Exemption Actions consumer credit are becoming blurred by changing market practices. The revisions will eliminate re­ The Board of Governors annulled an exemption porting of the number of loans made by the re­ previously granted to depositary institutions char­ porting banks for automobile and mobile homes tered by the State of Illinois under the Federal and data for new and used automobile loans, and Home Mortgage Disclosure Act (HMDA), effec­ consolidate check-credit and credit-card figures. tive July 26, 1978. The reporting panel of banks will be reduced to The HMDA authorizes the Board to exempt 298 from 567. State-chartered institutions subject to a State law The title of the revised report (Commercial Bank imposing requirements substantially similar to the Report of Consumer Instalment Credit—FR 2571) Federal law and with adequate provision for en­ reflects elimination of the only item in the old forcement. report that did not involve consumer credit. The Board had granted such an exemption to The new form will be used first for the October Illinois-chartered depositories on December 21, report. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

699 Industrial Production Released for publication August 15 per cent in July, reflecting continued gains in steel and equipment parts. Nondurable goods materials Industrial production increased an estimated 0.5 output was unchanged, as the decline in strike-af­ per cent in July, following revised 0.5 per cent fected paper materials offset gains in other non­ rises in both May and June and a 1.6 per cent durable goods materials. The output of materials gain in April. Increases in output of equipment, was 5.8 per cent higher than in July 1977. construction supplies, and durable goods materials Seasonally adjusted, ratio scale, 1967=100 continued to be large in July; and there was a moderate rise in production of consumer goods, following declines in the two preceding months. At 145.3 per cent of the 1967 average, the July index is 4.8 per cent higher than a year earlier; the index for consumer goods is 1.3 per cent higher, and the index for equipment is 7.2 per cent higher than a year earlier. Output of consumer goods in July increased 0.3 per cent, as auto assemblies—at a seasonally ad­ justed annual rate of 9.4 million units—increased fractionally from the 9.3-million rate in June. Production of home goods rose further in July but by less than in the preceding month; output of consumer nondurable goods increased in July fol­ lowing 2 months of decline, but the level remained below that of April. Output of business equipment increased 0.9 per cent in July, and production of intermediate products, especially construction supplies, continued to rise. F.R. indexes, seasonally adjusted. Latest figures: July. Auto Output of durable goods materials increased 1.0 sales and stocks include imports. 1967 = 100 Percentage change from preceding month to— Percentage change Industrial production 1978 1978 7/77 to Junep Julye Feb. Mar. Apr. May June July 7/78 Total ................................ 144.6 145.3 .3 1.2 1.6 .5 .5 .5 4.8 Products, total .................... 143.7 144.3 .8 1.4 1.0 .1 .4 .4 4.0 Final products ................ 140.9 141.6 1.1 1.8 1.2 .0 .3 .5 3.5 Consumer goods 146.9 147.3 1.4 1.5 1.1 -.3 -.1 .3 1.3 Durable ................... 161.2 161.6 3.2 4.2 2.7 -.9 .6 .2 2.3 Nondurable ............ 141.1 141.6 .6 .4 .4 -.1 -.4 .4 .9 Business equipment .. 161.3 162.8 1.0 2.1 1.2 .6 .7 .9 7.7 Intermediate products .. 154.3 154.8 -.1 .0 .5 .5 .9 .3 5.8 Construction supplies 151.3 152.4 -.4 -.5 .4 1.3 .6 .7 7.9 Materials .............................. 146.2 146.9 -.4 .9 2.7 1.0 .7 .5 5.8 p Preliminary. e Estimated. Note.—Indexes are seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

700 Index of the Weighted-Average Exchange Value of the U.S. Dollar: Revision The index of the weighted-average foreign ex­ been made. The weights have been recalculated change value of the U.S. dollar has been revised. by using average trade shares of the 10 countries Monthly average values of the revised index be­ for the 5 years 1972-76. The base period of the ginning with 1967 are shown in Table 1. index has also been updated to March 1973, the An index of the average exchange value of the start of the period of generalized floating of ex­ dollar summarizes in one number the various indi­ change rates. vidual exchange rates of the dollar against major The formula used to calculate the revised index foreign currencies. The index previously published is described in the Technical Note. The index is in the Bulletin was constructed by computing published in the table on Foreign Exchange Rates an arithmetic weighted average of the exchange on page A68 (line 25) of the Bulletin. values of the dollar against the 10 major foreign currencies listed in the Technical Note. The weight technical note of each currency in the index was equal to that The value of the index at time t is defined as: country’s share of total trade (imports plus exports) in 1972. Changes in the index were computed from 100 n RitWi a base period of May 1970=100. The major difference in the new index is a or alternatively, change in the mathematical averaging technique. The previously used arithmetic average had an 100 exp X w . loge Rit undesirable property; namely, as currencies di­ verged from each other over time, changes in where Rit = (Base period exchange rate of currency /)/ currencies that rose against the dollar had a re­ (Exchange rate of currency i at time t), with all exchange rates expressed in U.S. cents per unit of foreign currency. The base duced impact on the index while changes in cur­ period exchange rates and weights Wj are given below. rencies that fell against the dollar had an increased impact on the index. As a result, arithmetic March 1973 Weight Country/currency base period in index averaging imparted a systematic upward bias to exchange rate1 the measurement of changes in the dollar’s average Germany/deutsche mark 35.548 .208 exchange value. The geometric averaging tech­ Japan/yen .38190 .136 France/franc 22.191 .131 nique now being adopted is free from this problem United Kingdom/pound 247.24 .119 Canada/dollar 100.33 .091 since essentially it averages the percentage Italy/lira .17600 .090 Netherlands/guilder 34.834 .083 changes in the individual exchange rates to deter­ Belgium/franc 2.5377 .064 Sweden/krona 22.582 .042 mine the percentage change in the index. Switzerland/franc 31.084 .036 Along with this more substantive revision, a Sum .................................... 1.000 routine updating of the index’s trade weights has 1 Cents per unit of foreign currency. 1. Weighted-average exchange value of the U.S. dollar, March 1973=100 Year Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. 1967 119.89 119.81 119.79 119.72 119.64 119.63 119.70 119.75 119.74 119.73 120.27 121.79 1968 122.07 122.08 122.00 122.01 122.04 122.22 122.18 122.18 121.98 122.03 121.95 121.96 1969 122.08 122.19 122.29 122.26 122.24 122.34 122.36 123.46 123.82 122.18 121.77 121.74 1970 121.75 121.72 121.60 121.36 121.32 120.98 120.90 120.70 120.62 120.64 120.55 120.64 1971 120.40 120.23 120.18 120.23 119.39 119.28 118.98 117.82 115.78 114.70 114.43 112.28 1972 110.32 108.89 108.36 108.55 108.40 108.24 108.63 108.88 109.06 109.57 109.86 110.06 1973 109.98 104.36 100.00 101.27 100.01 96.49 92.71 95.02 95.11 94.48 98.73 101.48 1974 107.08 104.44 101.57 99.82 98.42 100.02 100.18 102.04 102.91 101.61 100.30 98.59 1975 96.35 94.77 93.93 95.39 94.81 94.79 98.73 101.58 103.04 102.53 102.58 103.51 1976 103.36 103.50 105.12 106.13 106.48 107.05 106.84 106.39 105.70 105.77 105.88 105.33 1977 105.24 105.43 105.19 104.69 104.50 104.35 102.54 103.24 103.77 102.15 100.73 98.36 1978 96.73 96.19 94.80 94.56 96.31 94.74 92.44 Note—Geometric weighted average of the exchange value of the dollar against currencies of the other Group of Ten countries plus Switzerland. Weights are 1972-76 average total trade shares of each of the 10 countries. 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 All 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 A31 U.S. Budget receipts and outlays A14 Money stock measures and components 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, Dec. 31, 1977 agencies—Debt outstanding Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A2 Federal Reserve Bulletin □ August 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 Foreign branches of U.S. banks— A37 Corporate profits and their distribution Balance sheet data A3 8 Nonfinancial corporations—Assets and A58 Selected U.S. liabilities to foreign liabilities official institutions A3 8 Business expenditures on new plant and equipment Reported by Banks in the United States: A39 Domestic finance companies—Assets and liabilities; business credit A59 Liabilities to foreigners A61 Banks’ own claims on foreigners A62 Banks’ own and domestic customers’ Real Estate claims on foreigners A40 Mortgage markets A63 Banks’ own claims on unaffiliated A41 Mortgage debt outstanding foreigners A63 Liabilities to and claims on foreigners Consumer Instalment Credit Securities Holdings and Transactions A42 Total outstanding and net change A43 Extensions and liquidations A64 Marketable U.S. Treasury bonds and notes—Foreign holdings and transactions Flow of Funds A64 Foreign official assets held at F.R. A44 Funds raised in U.S. credit markets banks A45 Direct and indirect sources of funds to A65 Foreign transactions in securities credit markets Reported by Nonbanking Concerns in DOMESTIC NONFINANCIAL STATISTICS the United States: A46 Nonfinancial business activity— A66 Short-term liabilities to and claims on Selected measures foreigners A46 Output, capacity, and capacity A67 Long-term liabilities to and claims on utilization foreigners A47 Labor force, employment, and unemployment Interest and Exchange Rates A48 Industrial production—Indexes and gross value A68 Discount rates of foreign central banks A50 Housing and construction A68 Foreign short-term interest rates A51 Consumer and wholesale prices A68 Foreign exchange rates A52 Gross national product and income A53 Personal income and saving A69 GUIDE TO TABULAR PRESENTATION AND STATISTICAL RELEASES Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Statistics A3 1.10 MONETARY AGGREGATES AND INTEREST RATES 1977 1978 1978 Item Q3 Q4 Ql Q2 Feb. Mar. Apr. May June Monetary and credit aggregates (annual rates of change, seasonally adjusted in per cent)12 Member bank reserves 1 Total.................................................................................... 7.3 6.1 8.5 6.3 10.9 -8.6 9.4 10.2 14.7 2 Required.............................................................................. 6.8 6.3 8.3 7.0 11.8 -7.3 11.1 7.9 16.2 3 Nonborrowed..................................................................... 1.7 3.5 14.5 .4 13.7 -6.2 1.9 -11.2 19.2 Concepts of money 1 4 M-l...................................................................................... 8.1 7.5 5.6 9.5 -0.7 3.5 19.0 8.0 5.9 5 M-2...................................................................................... 9.9 8.2 6.9 8.3 4.7 5.6 11.5 7.8 7.8 6 M-3...................................................................................... 11.9 10.7 7.7 8.0 5.7 6.5 9.8 r7.6 8.4 Time and savings deposits Commercial banks: 7 Total................................................................................ 10.3 13.1 13.4 11.0 14.2 11.6 8.3 14.4 6.7 8 Other than large CD’s.................................................... 11.2 8.6 7.9 7.4 8.6 7.0 6.2 7.7 8.9 9 Thrift institutions 2............................................................ 15.0 14.4 8.9 7.6 6.9 7.7 7.3 r7.2 9.2 11.1 9.9 9.6 13.0 7.9 6.9 18.5 r15.6 6.0 1977 1978 1978 Q3 Q4 Ql Q2 Mar. Apr. May June July Interest rates (levels, per cent per annum) Short-term rates 11 Federal funds 4...................................... 5.82 6.51 6.76 7.28 6.79 6.89 7.36 7.60 7.81 12 Federal Reserve discount 5................... 5.42 5.93 6.46 6.78 6.50 6.50 6.84 7.00 7.23 13 Treasury bills (3-month market yield) 6 5.50 6.11 6.39 6.48 6.29 6.29 6.41 6.73 7.01 14 Commercial paper (90- to 119-day) ?.. 5.74 6.56 6.76 7.16 6.75 6.82 7.06 7.59 7.85 Long-term rates Bonds: 15 U.S. Governments............................ 7.60 7.78 8.19 8.43 8.21 8.32 8.44 8.53 8.69 16 State and local government 9........... 5.59 5.57 5.65 6.02 5.61 5.80 6.03 6.22 6.28 17 Aaa utility (new issue) 1 o.................. 8.09 8.27 8.70 8.98 8.71 8.90 8.95 9.09 9.14 18 Conventional mortgages 11.................. 9.00 9.23 9.58 9.30 9.40 9.60 9.75 9.80 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. i o 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 □ August 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 May June July** June 14 June 21 June 28 July 5 July 12 July \9V July 26^ SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding.... 119,603 121,992 127,052 117,964 124,897 126,014 127,461 125,720 128,901 127,361 9 103,143 104,656 108,626 101,361 107,197 107,993 109,389 106,933 110,095 109,046 3 Bought outright......................... 102,431 103,763 107,350 101,361 105,957 106,241 106,793 106,710 108,162 107,417 4 Held under repurchase agree- 712 893 1,276 1,240 1,752 2,596 223 1,933 1,629 5 8,171 8,138 8,584 7,883 7,995 8,570 8,802 8,248 8,913 8,745 6 Bought outright......................... 7,907 7,897 8,166 7,883 7,867 7,867 8,168 8,168 8,168 8,164 7 Held under repurchase agree- 264 241 418 128 703 634 80 745 581 8 204 213 337 175 460 972 22 291 444 9 Loans............................................. 1,227 1,111 1,286 793 1,194 1,716 1,193 903 1,589 1,460 10 Float.............................................. 4,119 5,297 5,493 5,486 5,549 4,686 4,499 6,994 5,342 4,809 11 Other Federal Reserve assets.... 2,739 2,577 2,726 2,440 2,787 2,589 2,606 2,619 2,672 2,857 1? Gold stock......................................... 11,718 11,709 11,698 11,706 11,706 11,706 11,706 11,704 11,693 11,693 13 Special Drawing Rights certificate 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 14 Treasury currency outstanding........ 11,538 11,576 11,614 11,571 11,576 11,593 11,583 11,607 11,613 11,624 ABSORBING RESERVE FUNDS IS 104,389 105,661 107,057 105,830 105,668 105,550 106,589 107,624 107,342 106,760 16 Treasury cash holdings..................... 383 358 343 362 357 354 350 364 345 333 Deposits, other than member bank reserves with F.R. Banks: 17 Treasury......................................... 6,514 7,577 10,512 3,690 9,231 11,663 10,338 10,511 10,464 11,219 18 Foreign........................................... 341 266 281 258 258 238 304 299 256 279 19 Other2............................................ 639 776 709 870 912 648 798 727 662 699 20 Other F.R. liabilities and capital.... 3,954 4,049 4,047 3,919 4,371 4,071 4,166 3,778 4,002 4,170 21 Member bank reserves with F.R. Banks............................................. 27,890 27,840 28,664 27,560 28,632 28,038 29,457 26,978 30,386 28,468 End-of-month figures Wednesday figures 1978 1978 May June July? June 14 June 21 June 28 July 5 July 12 July \9p July 26p SITPPT YINf, RFSFRVF. FUNDS 22 Reserve Bank credit outstanding.... 119,193 126,893 126,148 115,246 131,218 131,211 120,258 129,562 135,534 121,488 23 U.S. Govt, securities1..................... 102,826 110,146 108,885 96,705 110,851 110,508 101,771 109,316 111,615 103,820 24 Bought outright........................ 102,395 107,859 108,149 96,705 108,069 106,918 100,010 107,754 108,017 103,281 25 Held under repurchase agree­ ment ....................................... 431 2,287 736 2,782 3,590 1,761 1,562 3,598 539 26 Federal agency securities................ 7,921 8,526 8,235 7.867 8,526 8,943 8,762 8,729 9,474 8,396 27 Bought outright......................... 7,895 8,168 8,164 7.867 7,867 7,867 8,168 8,168 8,168 8,164 28 Held under repurchase agree­ ment ....................................... 26 358 71 659 1,076 594 561 1,306 232 29 Acceptances................................... 274 1,021 268 436 720 784 157 668 119 30 Loans............................................. 1,167 1,428 1,132 1,553 2,574 2,648 648 1,097 5,274 1,325 31 Float.............................................. 4,419 3,318 4,726 6,683 6,200 5,845 5,279 7,635 5,704 4,902 32 Other Federal Reserve assets.... 2,586 2,454 2,902 2,438 2,631 2,547 3,014 2,628 2,799 2,926 33 Gold stock........................................ 11,718 11,706 11,693 11,706 11,706 11,706 11,706 11,695 11,693 11,693 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........ 11,526 11,565 11,630 11,571 11,578 11,594 11,607 11,607 11,622 11,626 ABSORBING RESERVE FUNDS 36 Currency in circulation.................... 105,443 106,288 106,589 106,060 105,793 106,233 107,446 107,919 107,300 106,914 37 Treasury cash holdings.................... 365 337 336 359 355 351 395 343 343 334 Deposits, other than member bank reserves with F.R. Banks: 38 Treasury........................................ 2,398 11,614 10,331 3,631 14,132 12,173 9,591 10,562 10,201 9,964 39 Foreign.......................................... 454 288 347 248 274 209 298 226 263 253 40 Other2............................................ 660 773 771 675 652 663 815 710 645 647 41 Other F.R. liabilities and capital... 4,235 4,193 4,247 4,294 3,987 4,167 3,701 3,930 4,150 4,211 42 Member bank reserves with F.R. Banks............................................. 30,135 27,920 28,100 24,505 30,559 31,965 22,575 30,424 37,198 23,735 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. Nov. Dec. Jan. Feb. Mar. Apr. May June Julyp All member banks Reserves: 1 At F.R. Banks.................. 26,430 26,783 27,057 28,129 27,337 27,155 27,776 27,890 27,840 28,664 2 Currency and coin.......... 8,548 8,932 9,351 9,980 9,320 8,992 9,028 9,151 9,345 9,539 3 Total held i........................... 35,136 35,782 36,471 38,185 36,738 36,231 36,880 37,119 37,262 38,271 4 Required....................... 34,964 35,647 36,297 37,880 36,605 35,925 36,816 36,867 37,125 38,069 5 Excess1......................... 172 135 174 305 133 306 64 252 137 202 Borrowings at F.R. Banks:2 6 Total................................. 62 840 558 481 405 344 539 1,227 1,111 1,286 7 Seasonal........................... 12 83 54 32 52 47 43 93 120 143 Large banks in New York City 8 Reserves held........................... 6,520 6,181 6,244 6,804 6,563 6,276 6,247 6,315 6,341 6,506 9 Required........................... 6,602 6,175 6,279 6,775 6,584 6,193 6,320 6,236 6,376 6,581 10 Excess............................... -82 6 -35 29 -21 83 -73 79 -35 -75 11 Borrowings2......................... 15 132 48 77 12 21 61 113 54 129 Large banks in Chicago 12 Reserves held.......................... 1,632 1,607 1,593 1,733 1,623 1,629 1,670 1,697 1,668 1,714 13 Required........................... 1,641 1,609 1,613 1,684 1,633 1,620 1,686 1,669 1,670 1,707 14 Excess............................... -9 -2 -20 49 -10 9 -16 28 -2 7 15 Borrowings2......................... 4 23 26 14 11 11 19 20 20 Other large banks 16 Reserves held.......................... 13,117 13,607 13,993 14,487 13,867 13,729 14,135 14,106 14,250 14,458 17 Required........................... 13,053 13,602 13,931 14,504 13,861 13,662 14,077 14,079 14,225 14,579 18 Excess............................... 64 5 62 -17 6 67 58 27 25 -121 19 Borrowings2......................... 14 355 243 164 150 92 249 500 536 498 All other banks 20 Reserves held.......................... 13,867 14,387 14,641 15,161 14,685 14,597 14,828 15,001 15,003 15,234 21 Required........................... 13,668 14,261 14,474 14,917 14,527 14,450 14,733 14,833 14,854 15,202 22 Excess............................... 199 126 167 244 158 147 95 118 149 32 23 Borrowings2......................... 29 330 241 226 243 220 218 595 501 639 Weekly averages of daily figures for weeks ending- 1978 May 31 June 7 June 14 June 21 June 28 July 5 July 12 July 19^ July 26p AH member banks Reserves: At F.R. Banks................ 27,635 26,844 27,560 28,632 28,038 29,457 26,978 30,386 28,468 Currency and coin......... 9,215 9,391 9,518 9,034 9,389 9,513 9,761 9,084 9,561 Total held1..................... 36,928 36,313 37,155 37,742 37,503 39,043 36,810 39,536 38,095 Required...................... 36,529 36,264 37,042 37,516 37,335 38,324 37,037 39,145 38,092 Excess1....................... 399 49 113 226 168 719 -227 391 3 Borrowings at F.R. Banks:: Total................................ 1,399 645 793 1,194 1,716 1,193 903 1,589 1,460 Seasonal.......................... 105 111 106 123 134 137 131 134 152 Large banks in New York City 31 Reserves held......................... 6,225 6,061 6,657 6,459 6,276 6,816 6,188 7,028 6,341 32 Required............................. 6,161 6,105 6,653 6,443 6,229 6,630 6,310 -7,122 6,428 33 Excess................................. 64 -44 4 16 47 186 -122 -94 -87 34 Borrowings2........................... 214 54 63 116 362 9 Large banks in Chicago 35 Reserves held.......... 1,636 1,699 1,690 1,693 1,597 1,784 1,594 1,854 1,691 36 Required................. 1,638 1,694 1,697 1,686 1,588 1,727 1,616 1,843 1,678 37 Excess..................... -2 5 -7 7 9 57 -22 11 13 38 Borrowings2............... 22 61 2 2 19 69 Other large banks 39 Reserves held. .. 14,097 13,808 14,087 14,499 14,410 14,911 13,997 , 14,982 14,478 40 Required....... 13,951 13,837 14,116 14,396 14,425 14,671 14,169 14,969 14,592 41 Excess............ 146 -29 -29 103 -15 240 -172 13 -114 42 Borrowings 2.... 537 247 335 630 905 491 437 511 696 All other banks 43 Reserves held. 14,970 14,745 14,721 15,091 15,220 15,532 15,031 15,199 15,374 44 Required... 14,779 14,628 14,576 14,991 15,093 15,296 14,942 15,211 15,394 45 Excess........ 191 117 145 100 127 236 89 -12 -20 46 Borrowings2.. 648 398 382 440 693 700 447 647 755 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 □ August 1978 1.13 FEDERAL FUNDS TRANSACTIONS Money Market Banks Millions of dollars, except as noted 1978, week ending— Type May 31 June 7 June 14 June 21 June 28 July 5 July 12 July 19 July 26 Total, 46 banks Basic reserve position 1 Excess reserves1............................... 231 49 -73 62 89 385 -60 141 -7 Less: 2 Borrowings at F.R. Banks.......... 580 3 146 355 339 168 144 522 114 3 Net interbank Federal funds transactions........................... 13,660 19,719 18,714 16,395 12,688 -11,149 16,201 13,573 12,827 Equals : Net surplus, or deficit (—): 4 Amount........................................ -14,009 -19,673 -18,932 -16,688 -12,938 -11,932 -16,405 -13,954 -12,949 5 Per cent of average required reserves.................................. 91.8 129.3 118.6 104.7 82.7 73.3 105.3 81.7 81.1 Interbank Federal funds transactions Gross transactions: 6 Purchases...................................... 22,915 26,944 25,547 23,710 21,515 22,683 24,235 23,133 21,181 7 Sales.............................................. 9,256 7,225 6,834 7,316 8,827 10,534 8,033 9,560 8,354 8 Two-way transactions2................... 6,090 5,146 4,599 5,130 5,609 6,676 5,810 6,878 6,172 Net transactions: 9 Purchases of net buying banks... 16,825 21,799 20,948 18,581 15,906 16,008 18,424 16,255 15,009 10 Sales of net selling banks............ 3,166 2,080 2,235 2,186 3,218 3,858 2,223 2,682 2,182 Related transactions with U.S. Govt, securities dealers 11 Loans to dealers 3............................. 4,220 5,883 4,885 4,449 3,261 3,695 3,600 2,649 3,051 12 Borrowing from dealers4................ 1,782 1,610 1,701 1,835 2,441 2,106 1,288 2,443 2,550 13 Net loans.......................................... 2,438 4,272 3,184 2,613 820 1,589 2,312 206 502 8 banks in New York City Basic reserve position 14 Excess reserves1............................... -121 12 -12 7 48 223 -7 52 -13 Less: 324 9 15 Borrowings at F R Banks.......... 214 54 63 73 16 Net interbank Federal funds transactions........................... 3,387 6,412 5,008 3,849 2,898 3,882 4,700 3,421 2,817 Equals : Net surplus, or deficit (—): 17 Amount......................................... -3,480 -6,400 -5,075 -3,905 -2,922 -3,659 -4,707 -3,693 -2,839 18 Per cent of average required 62.5 116.1 84.2 67.0 51.9 60.9 82.3 57.1 48.9 Interbank Federal funds transactions Gross transactions: 19 Purchases...................................... 4,778 7,194 5,818 5,039 4,491 5,177 5,678 5,091 4,426 20 Sales.............................................. 1,391 781 810 1,190 1,593 1,295 978 1,669 1,609 21 Two-way transactions2................... 1,391 781 810 1,190 1,593 1,295 978 1,324 1,529 Net transactions: 22 Purchases of net buying banks... 3,387 6,412 5,008 3,849 2,898 3,882 4,700 3,767 2,897 23 Sales of net selling banks........ 346 80 Related transactions with U.S. Govt, securities dealers 24 Loans to dealers 3............................. 2,421 3,395 2,817 2,863 1,959 2,426 2,468 1,504 1,859 25 Borrowing from dealers4................ 746 746 877 1,051 849 652 677 782 866 1,675 2,650 1,940 1,812 1,111 1,774 1,791 722 993 38 banks outside New York City Basic reserve position 27 Excess reserves1............................... 110 37 -61 55 41 162 -54 89 6 Less: 28 Borrowings at F.R. Banks.......... 366 3 92 293 266 168 144 198 105 29 Net interbank Federal funds transactions........................... 10,273 13,307 13,705 12,546 9,790 8,267 11,501 10,152 10,011 Equals : Net surplus, or deficit (—): 30 Amount........................................ -10,529 -13,273 -13,857 -12,784 -10,016 -8,273 -11,699 -10,261 -10,110 31 Per cent of average required 108.6 136.8 139.4 126.4 100.0 80.6 118.6 96.6 99.6 Interbank Federal funds transactions Gross transactions: 32 Purchases...................................... 18,138 19,751 19,729 18,672 17,024 17,506 18,557 18,043 16,755 7,865 6,444 6,024 6,125 7,234 9,239 7,055 7,891 6,744 4,699 4,364 3,789 3,940 4,015 5,381 4,832 5,555 4,643 Net transactions: 35 Purchases of net buying banks... 13,438 15,386 15,940 14,732 13,009 12,125 13,724 12,488 12,112 36 Sales of net selling banks............ 3,166 2,080 2,235 2,186 3,218 3,858 2,223 2,336 2,102 Related transactions with U.S. Govt, securities dealers 37 Loans to dealers3............................. 1,798 2,488 2,068 1,586 1,302 1,269 1,131 1,145 1,193 38 Borrowing from dealers4................. 1,036 865 824 784 1,592 1,454 610 1,661 1,684 39 Net loans.......................................... 763 1,623 1,244 801 -290 -185 521 -516 -491 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 May 31 June 7 June 14 June 21 June 28 July 5 July 12 July 19 July 26 5 banks in City of Chicago Basic reserve position 40 Excess reserves1.......................... 16 -2 7 15 60 -2 1 Less: 41 Borrowings at F.R. Banks... 22 61 19 68 42 Net interbank Federal funds transactions..................... 5,830 6,872 6,877 5,524 4,563 4,702 5,311 4,753 4,402 Equals: Net surplus, or deficit (—): 43 Amount................................. -5,814 -6,863 -6,901 -5,579 -4,549 -4,642 -5,332 -4,820 -4,393 44 Per cent of average required reserves.......................... 379.4 432.4 434.2 353.8 307.2 286.8 353.1 278.3 279.8 Interbank Federal funds transactions Gross transactions: 45 Purchases.................................... 7,126 7,743 7,817 6,630 5,963 6,099 6,707 6,105 5,937 46 Sales............................................. 1,296 872 940 1.105 1.400 1.396 1.395 1.352 1.535 47 Two-way transactions2................. 1,295 872 940 1.106 1.400 1.397 1.395 1.352 1.535 Net transactions: 48 Purchases of net buying banks.. 5,831 6,872 6,877 5,524 4,563 4,702 5,312 4,753 4,402 49 Sales of net selling banks.......... Related transactions with U.S. Govt, securities dealers 50 Loans to dealers3................. 488 647 579 508 397 275 161 245 296 51 Borrowing from dealers4... 75 76 83 262 556 477 51 374 309 52 Net loans............................... 414 571* 496 247 -159 -202 110 -129 -13 33 other banks Basic reserve position 5 3 Excess reserves1......................... 93 29 -59 48 27 102 -52 -4 54 Le B ss o : rrowings at F.R. Banks... 366 3 70 231 266 168 125 130 105 55 Net interbank Federal funds transactions..................... 4,442 6,435 6,828 7,022 5,227 3,565 6,190 5,399 5,608 Equals: Net surplus, or deficit (—): 56 Amount................................. -4,715 -6,409 -6,957 -7,205 -5,467 -3,631 -6,367 -5,441 -5,717 57 Per c r e e n se t r o v f e a s. v . e .. r . a ... g . e .. . r .. e .. q .. u .. i . r . e .. d .. 57.7 79.0 83.3 84.4 64.0 42.0 76.2 61.2 66.6 Interbank Federal funds transactions Gross transactions: Purchases.................................... 11,012 12,007 11,912 12,042 11,061 11,408 11,850 11,938 10,818 Sales............................................. 6,569 5,572 5,084 5,020 5,833 7,843 5,660 6,539 5,210 Two-way transactions2.................. 3,404 3,492 2,849 2,834 2,615 3,984 3,437 4,203 3,108 Net transactions: Purchases of net buying banks.. 7,608 8,515 9,063 9,208 8,446 7,423 8,413 7,735 7,710 Sales of net selling banks.......... 3,166 2,080 2,235 2,186 3,218 3,858 2,223 2,336 2,102 Related transactions with U.S. Govt, securities dealers 63 Loans to dealers3........................... 1,310 1,841 1,489 1,077 905 994 971 900 897 64 Borrowing from dealers4............... 961 789 741 523 1,036 977 559 1,287 1,375 65 Net loans.................................................... 349 1.052 748 555 -131 18 411 -387 -478 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 □ August 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 rate 3 Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous 7/31/78 date rate 7/31/78 date rate 7/31/78 date rate 7/31/78 date rate Boston................ 7% 7/3/78 IVa 7/3/78 71/2 8*4 7/3/78 1014 7/3/78 10 New York.......... 71/4 7/3/78 7Va 7/3/78 71/2 8*4 7/3/78 1014 7/3/78 10 Philadelphia........ 714 7/7/78 m 7/7/78 m 8!4 7/7/78 10V4 7/7/78 10 Cleveland............ IVa 7/3/78 IVa 7/3/78 71/2 8*4 7/3/78 1014 7/3/78 10 Richmond.......... IVa 7/3/78 IVa 7/3/78 71/2 8 Va 7/3/78 1014 7/3/78 10 Atlanta............... IVa 7/10/78 IVa 7/10/78 7!/2 8*4 7/10/78 1014 7/10/78 10 Chicago.............. IVa 7/3/78 IVa 7/3/78 7Vi 8*4 7/3/78 10y4 7/3/78 10 St. Louis............. IVa 7/3/78 7Va 7/3/78 71/2 814 7/3/78 IOV4 7/3/78 10 Minneapolis........ IVa 7/3/78 IVa 7/3/78 71/2 814 7/3/78 1014 7/3/78 10 Kansas City........ IVa 7/7/78 IVa 7/7/78 71/2 8!4 7/7/78 10V4 7/7/78 10 Dallas................. IVa 7/3/78 IVa 7/3/78 71/2 8*4 7/3/78 10y4 7/3/78 10 San Francisco. .. IVa 7/3/78 IVa 7/3/78 71/2 8*4 7/3/78 1014 7/3/78 10 Range of rates in recent years5 Range F.R. Range F.R. Range F.R. Effective date (or level)— Bank Effective date (or level)— Bank Effective date (or level)— Bank All F.R. of All F.R. of All F.R. of Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1970....... 51/2 51/2 1973—Apr. 23.................. 51/2-5% 51/2 1975—Mar. 10.................. 614-634 61/4 May 4.................. 5% 534 14.................. 614 614 1971 _jan. 8................... 514-51/2 514 11.................. 53/4-6 6 May 16.................. 6-6 Va 6 15................... 514 514 18.................. 6 6 23.................. 6 6 19................... 5 -514 514 June 11.................. 6-61/2 61/2 22................... 5 -514 5 15.................. 61/2 61/2 1976—Jan. 19.................. 5 Vi-6 51/2 29................... 5 5 July 2................. 7 7 23................. 5i/i 5i/i Feb. 13................... 434-5 5 Aug. 14................. 7-71/2 71/2 Nov. 22.................. 51/4-51/2 514 19................... 434 434 23................. 71/2 71/2 26.................. 514 514 July 16................... 43/4-5 5 23................... 5 5 1974—Apr. 25.................. 71/2-8 8 1977—Aug. 30.................. 514-534 51/4 Nov 11................... 434-5 5 30................. 8 8 31.................. 514-534 534 19.................... 434 434 Dec. 9................. 734-8 734 Sept. 2................. 534 534 Dec. 13.................... 41/2-434 434 16................. 734 734 Oct. 26................. 6 6 17.................... 41/2-43/4 41/2 24.................... 41/2 41/2 1975—Jan. 6................. 714-734 734 1978—Jan. 9................. 6-6i/2 61/2 10................. 714-734 714 20................. 6i/2 1973—Jan. 15.................. 5 5 24................. 714 714 May 11................. 6Vi-7 7 Feb. 26.................. 5-51/2 51/2 Feb. 5................. 634-714 634 12................. 7 7 Mar. 2.................. 51/2 51/2 7................. 634 634 July 3................. 7-714 714 10................. IVa 71/4 In effect July 31, 1978.... 714 714 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 July 31, 1978 Type of deposit, and deposit interval in millions of dollars Per cent Effective date Per cent Effective date Net demand:2 0-2................................................................................................... 7 12/30/76 7% 2/13/75 2-10................................................................................................. 9 Vi 12/30/76 10 2/13/75 10-100............................................................................................. 1134 12/30/76 12 2/13/75 100 400........................................................................................... 1234 12/30/76 13 2/13/75 16% 12/30/76 I6I/2 2/13/75 Time:2- 3 Savings............................................................................................ •3 3/16/67 3% 3/2/67 Other time: 0-5, maturing in— 30-179 days............................................................................ 3 3/16/67 3% 3/2/67 180 days to 4 years................................................................ 42y2 1/8/76 3 3/16/67 4 1 10/30/75 3 3/16/67 Over 5, maturing in— 6 12/12/74 5 10/1/70 180 days to 4 years................................................................ 4 2y2 1/8/76 3 12/12/74 4 years or more...................................................................... 41 10/30/75 3 12/12/74 Legal limits, July 31, 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 □ August 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 July 31,1978 Previous maximum In effect July 31,1978 Previous maximum Per cent Effective Per cent Effective Per cent Effective Per cent Effective date date date date 1 Savings....................................................... 5 7/1/73 4Vi 1/21/70 5'A (7) 5 (8) 2 Negotiable orders of withdrawal (NOW) accounts i......................... 5 1/1/74 (10) 5 1/1/74 (iO) 3 Variable-rate time deposit of less than $100,0002....................................... (9) (9) (9) (9) (9) (9) Other time (multiple- and single­ maturity unless otherwise indicated)3 30-89 days: 5 4 S M in u g lt l i e p - l m e- a m tu a r t i u ty ri .. t . y .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7/1/73 4 5 % 9 1 / / 2 2 6 1 / / 6 7 6 0 (10) (10) 90 days to 1 year: 7 6 S M in u g lt l i e p - l m e- a m tu a r t it u y r . i . t . y .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Vi 7/1/73 7 9 / / 2 2 0 6 / / 6 6 6 6 45V4 (7) 5% 1/21/70 8 9 2 1 t t o o 2 2 l/ y 2 e y ar e s a 4 rs .. . 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 7/1/73 5 5 V y4 i 1 1 / / 2 2 1 1 / / 7 7 0 0 6V2 (7) 6 5% 1 1 / / 2 2 1 1 / / 7 7 0 0 10 2l/i to 4 years4...................................... 6% 7/1/73 5V4 1/21/70 6V4 (7) 6 1/21/70 11 4 to 6 years 5.......................................... 7 y4 11/1/73 O1) m 11/1/73 (“) 12 6 to 8 years 5.......................................... m 12/23/74 m 11/1/73 73/4 12/23/74 71/2 11/1/73 13 8 years or more5................................... m 6/1/78 (10) 8 6/1/78 (10) 14 Governmental units (all maturities)... 8 6/1/78 m 12/23/74 6/1/78 73/4 12/23/74 15 Individual retirement accounts and Keogh (H.R. 10) plans*................ 8 6/1/78 7*/4 7/6/77 6/1/78 734 7/6/77 1 For authorized States only. Federally insured commercial banks, 10 No separate account category. savings and loan associations, cooperative banks, and mutual savings 11 Between July 1, 1973, and Oct. 31, 1973, there was no ceiling for banks were first permitted to offer NOW accounts on Jan. 1, 1974. certificates maturing in 4 years or more with minimum denominations Authorization to issue NOW accounts was extended to similar institu­ of $1,000; however, the amount of such certificates that an institution tions throughout New England on Feb. 27, 1976. could issue was limited to 5 per cent of its total time and savings deposits. 2 Must have a maturity of exactly 26 weeks and a minimum denomina­ Sales in excess of that amount, as well as certificates of less than $1,000, tion of $10,000, and must be nonnegotiable. were limited to the 6Vi per cent ceiling on time deposits maturing in 2Vi 3 For exceptions with respect to certain foreign time deposits see the years or more. Federal Reserve Bulletin for October 1962 (p. 1279), August 1965 (p. Effective Nov. 1, 1973, the present ceilings were imposed on certificates 1094), and February 1968 (p. 167). maturing in 4 years or more with minimum denominations of $1,000. 4 A minimum of $1,000 is required for savings and loan associations, There is no limitation on the amount of these certificates that banks can except in areas where mutual savings banks permit lower minimum de­ issue. nominations. This restriction was removed for deposits maturing in less than 1 year, effective Nov. 1, 1973. Note—Maximum rates that can be paid by Federally insured commer­ 5 $1,000 minimum except for deposits representing funds contributed cial banks, mutual savings banks, and savings and loan associations are to an Individual Retirement Account (IRA) or a Keogh (H.R. 10) Plan es­ established by the Board of Governors of the Federal Reserve System, tablished pursuant to the Internal Revenue Code. The $1,000 minimum the Board of Directors of the Federal Deposit Insurance Corporation, requirement was removed for such accounts in December 1975 and No­ and the Federal Home Loan Bank Board under the provisions of 12 vember 1976, respectively. CFR 217, 329, and 526, respectively. The maximum rates on time de­ 6 3-year minimum maturity. posits in denominations of $100,000 or more were suspended in mid- 7 July 1, 1973, for mutual savings banks; July 6, 1973, for savings and 1973. For information regarding previous interest rate ceilings on all loan associations. types of accounts, see earlier issues of the Federal Reserve Bulletin, 8 Oct. 1, 1966, for mutual savings banks; Jan. 21, 1970, for savings and the Federal Home Loan Bank Board Journal, and the Annual Report loan associations. of the Federal Deposit Insurance Corporation. 9 Ceiling rate for commercial banks is the discount rate on most recently issued 6-month U.S. Treasury bills. Ceiling rate for savings and loan associations and mutual savings banks is % per cent higher than the rate for commercial banks. The rates and effective dates for July were: June 29 July 6 July 13 July 20 July 27 Banks.......... 7.396 7.447 7.515 7.497 7.425 Thrifts......... 7.646 7.697 7.765 7.747 7.675 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 Al 1 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS Millions of dollars 1977 1978 Type of transaction 1975 1976 1977 Dec. Jan. Feb. Mar. Apr. May June U.S. GOVT. SECURITIES Outright transactions (excl. matched salepurchase transactions) Treasury bills: 1 Gross purchases........................................... 11,562 14,343 13,738 3,109 696 379 748 1,670 416 4,395 ? 5,599 8,462 7,241 311 1,323 1,974 50 737 3 26,431 2 5,017 2,136 1,100 31 300 Others within 1 year:1 4 3,886 472 3,017 99 56 288 100 53 135 S 6 Exchange, or maturity shift......................... -4 792 4,499 623 -511 -653 261 -292 -1,915 -380 7 3,549 2,500 1 to 5 years: 8 2 3,284 2 3,202 2,833 628 311 813 235 290 631 9 177 10 3,854 -2,588 -6,649 — 623 511 1,109 -261 292 -507 467 5 to 10 years: 11 Gross purchases........................................... 1,510 1,048 758 166 89 370 191 101 176 12 Gross sales.................................................. 13 Exchange, or maturity shift....................... -4,697 1,572 584 -906 1,526 -87 Over 10 years: 14 Gross purchases........................................... 1,070 642 553 108 100 147 145 74 115 15 Gross sales.................................................. 16 Exchange, or maturity shift........................ 848 225 1,565 450 895 All maturities:1 17 Gross purchases........................................... 221,313 219,707 20,898 4,110 1,252 379 2,367 2,341 935 5,451 18 Gross sales................................................... 5,599 8,639 7,241 311 1,323 1,974 50 737 19 Redemptions................................................. 2 9,980 25,017 4,636 1,100 31 300 Matched sale-purchase transactions 20 Gross sales........................................................ 151,205 196,078 425,214 32,320 54,859 40,128 44,976 42,262 40,634 52,544 21 Gross purchases............................................... 152,132 196,579 423,841 35,001 51,016 44,270 44,129 42,799 40,362 52,557 Repurchase agreements 22 Gross purchases.............................................. 140,311 232,891 178,683 18,071 10,229 16.057 13,155 8,044 11,517 14,956 23 Gross sales........................................................ 139,538 230,355 180,535 18,208 12,130 16.057 11,468 8,999 11,819 13,100 24 Net change in U.S. Govt, securities............... 7,434 9,087 5,798 6,342 -5,815 1,447 3,127 1,923 -674 7,320 FEDERAL AGENCY OBLIGATIONS Outright transactions: 25 Gross purchases............................................... 1,616 891 1,433 707 301 26 Gross sales........................................................ 27 Redemptions.................................................... 246 169 223 32 * 22 53 34 28 Repurchase agreements: 28 Gross purchases............................................... 15,179 10,520 13,811 2,712 1,680 1,966 2,638 1,282 3,927 3,421 29 Gross sales........................................................ 15,566 10,360 13,638 2,392 2,131 1,966 2,374 1,410 4,037 3,088 BANKERS ACCEPTANCES 30 Outright transactions, net................................... 163 -545 -196 31 Repurchase agreements, net............................... — 35 410 159 705 -954 770 -480 -17 747 32 Net change in total System Accnnnt ......................... 8,539 9,833 7,143 8,042 -7,220 1,425 4,107 1,315 -834 8,673 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. 2500IOWS (millions of dolIars>: I975» 3,549; 1976, none; Sept. 1977, 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 □ August 1978 1.18 FEDERAL RESERVE BANKS Condition and F.R. Note Statements Millions of dollars Wednesday End of month Account 1978 1978 June 28 July 5 July 12 July 19p July 26p May June Julyp Consolidated condition statement ASSETS 1 Gold certificate account......................................... 11,706 11,706 11,695 11,693 11,693 11,718 11,706 11,693 2 Special Drawing Rights certificate account......... 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 3 284 263 259 263 263 291 284 276 Loans: 4 Member bank borrowings................................. 2,648 648 1,097 5,274 1,325 1,167 1,428 1,132 5 Acceptances: 6 7 Held under repurchase agreements................... 720 784 157 668 119 274 1,021 268 Federal agency obligations: 8 7,867 8,168 8,168 8,168 8,164 7,895 8,168 8,164 9 Held under repurchase agreements................... 1,076 594 561 1,306 232 26 358 71 U.S. Government securities Bought outright: 10 Bills.................................................................. 43,139 36,231 43,975 44,238 39,502 39,673 44,080 44,370 11 12 13 52,997 52,997 52,997 52,997 52,997 52.055 52,997 52,997 14 10,782 10,782 10,782 10,782 10,782 10,667 10,782 10,782 15 Total i.................................................................. 106,918 100,010 107,754 108,017 103,281 102,395 107,859 108,149 16 Held under repurchase agreements................... 3,590 1,761 1,562 3,598 539 431 2,287 736 17 110,508 101,771 109,316 111,615 103,820 102,826 110,146 108,885 18 Total loans and securities....................................... 122,819 111,965 119,299 127,031 113,660 112,188 121,121 118,520 19 *■12,228 10,869 14,093 12,354 10,947 11,854 9,319 9,100 20 390 389 387 390 389 388 389 389 Other assets: 21 Denominated in foreign currencies................... 33 67 65 80 76 121 58 67 22 2,124 2,558 2,176 2,329 2,461 2,077 2,007 2,446 23 r150,834 139,067 149,224 155,390 140,739 139,887 146,134 143,741 LIABILITIES 24 95,274 96,497 96,914 96,283 95,884 94,570 95,345 95,571 Deposits: 25 Member bank reserves....................................... *■31,965 22,575 30,424 37,198 23,735 30,135 27,920 28,100 26 U.S. Treasury—General account..................... 12,173 9,591 10,562 10,201 9,964 2,398 11,614 10,331 27 209 298 226 263 253 454 288 347 28 663 815 710 645 647 660 773 771 29 *•45,010 33,279 41,922 48,307 34,599 33,647 40,595 39,549 30 6,383 5,590 6,458 6,650 6,045 7,435 6,001 4,374 31 Other liabilities and accrued dividends................ 1,569 1,465 1,568 1,634 1,539 1,514 1,559 1,469 32 *148,236 136,831 146,862 152,874 138,067 137,166 143,500 140,963 CAPITAL ACCOUNTS 33 1,056 1,056 1,057 1,058 1,057 1,053 1 ,.056 1,057 34 1,029 1,029 1,029 1,029 1,029 1,029 1,029 1,029 35 513 151 276 429 586 639 549 692 36 Total liabilities and capital accounts..................... *150,834 139,067 149,224 155,390 140,739 139,887 146,134 143,741 37 Memo: Marketable U.S. Govt, securities held in custody for foreign and inti, account............. 84,416 86,788 86,994 86,804 86,958 84,854 85,688 86,620 Federal Reserve note statement 38 105 623 105,789 106,306 106,845 107,462 105,008 105,651 107,558 Collateral held against notes outstanding: 39 11,706 11,706 11,695 11,693 11,693 11,718 11,706 11,693 40 Special Drawing Rights certificate account.... 1,250 1,250 1,250 1,250 1,250 1,250 1,250 1,250 41 2,476 613 1,073 3,249 1,249 1,107 1,368 1,056 42 90,191 92,220 92,288 90,653 93,270 90,933 91,327 93,559 43 105,623 105,789 106,306 106,845 107,462 105,008 105,651 107,558 1 Includes securities loaned—fully guaranteed by U.S. Govt, securities 2 Includes certain deposits of domestic nonmember banks and foreignpledged with F.R. Banks—and excludes (if any) securities sold and owned banking institutions voluntarily held with member banks and scheduled to be bought back under matched sale-purchase transactions. redeposited in full with F.R. Banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Reserve Banks A 13 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holdings Millions of dollars Wednesday End of month Type and maturity 1978 1978 June 28 July 5 July 12 July 19 July 26 May 31 June 30 July 31 2,648 647 1,099 5,274 1,325 1,167 1,428 1,132 2,610 569 1,030 5,242 1,262 1,120 1,343 1,055 3 16 days to 90 days............................................... 38 78 69 32 63 47 85 77 4 91 days to 1 year................................................. 720 784 157 668 119 274 1,021 268 6 Within 15 days..................................................... 720 784 157 668 119 274 1,021 268 7 16 days to 90 days............................................... 9 U.S. Government securities...................................... 110,508 101,771 109,316 111,615 103,820 102,826 110,146 108,885 10 Within 15 days1................................................... 8,243 4,459 5,527 7,749 3,962 2,956 4,958 6,094 11 16 days to 90 days............................................... 20,010 14,076 20,610 21,702 16,717 20,129 21,179 19,449 31,009 31,610 31,552 30,537 31,514 29,416 32,383 31,475 30,404 30,784 30,785 30,785 30,785 29,687 30,784 31,025 11,849 11,849 11,849 11,849 11,849 11,760 11,849 11,849 15 Over 10 years........................................................ 8,993 8,993 8,993 8,993 8,993 8,878 8,993 8,993 16 Federal agency obligations....................................... 8,943 8,762 8,729 9,474 8,396 7,921 8,526 8,235 17 Within 15 days1................................................... 1,107 622 589 1,373 272 168 389 114 18 16 days to 90 days............................................... 232 269 269 230 303 105 232 299 1,437 1,448 1,483 1,483 1,494 1,347 1,482 1,495 3,794 3,921 3,886 3,886 3,825 3,817 3,921 3,825 21 Over 5 years to 10 years...................................... 1,526 1,631 1,631 1,631 1,631 1,637 1,631 1,631 22 Over 10 years........................................................ 847 871 871 871 871 847 871 871 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. 1978 Bank group, or type 1975 1976 1977 of customer Feb. Mar. Apr. May June Debits to demand deposits 2 (seasonally adjusted) 1 All commercial banks............... 25,028.5 29,180.4 34,322.8 36.477.2 37,129.4 39,236.3 39,685.9 41.703.1 2 Major New York City banks.. 9,670.7 11.467.2 13,860.6 13.422.3 13,664.7 15,128.5 14.775.4 15.976.1 3 Other banks............................... 15,357.8 17.713.2 20,462.2 23,054.9 23,464.6 24,107.8 24.910.5 25,727.0 Debits to savings deposits 3 (not seasonally adjusted) 4 All customers............................. 174.0 317.6 380.8 424.5 395.6 442.8 5 Business 1................................... 21.7 42.3 48.1 49.3 51.2 60.3 6 Others......................................... 152.3 275.3 332.7 375.2 344.4 382.5 Demand deposit turnover 2 (seasonally adjusted) 7 All commercial banks............... 105.3 116.8 129.2 131.1 134.1 138.0 139.7 144.9 8 Major New York City banks.. 356.9 411.6 503.0 494.2 520.1 548.0 555.3 596.0 9 Other banks............................... 72.9 79.8 85.9 91.8 93.6 93.9 96.8 98.6 Savings deposit turnover 3 (not seasonally adjusted) 10 All customers............................. 1.6 1.5 1.7 1.9 1.8 2.0 11 Business 1................................... 4.1 4.0 4.6 4.7 4.7 5.5 12 Others......................................... 1.5 1.3 1.6 1.8 1.6 1.8 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 □ August 1978 1.21 MONEY STOCK MEASURES AND COMPONENTS Billions of dollars, averages of daily figures 1978 1974 1975 1976 1977 Dec. Dec. Dec. Dec. Item Jan. Feb. Mar. Apr. May June Seasonally adjusted MEASURES i 1 M-l...................................................... 282.9 294.5 312.6 337.2 340.1 339.9 340.9 346.3 348.6 350.3 2 M-2...................................................... 612.2 664.1 739.6 808.4 814.8 818.0 821.8 829.7 835.1 840.5 3 M-3...................................................... 981.2 1,091.8 1,235.6 1,375.0 1,385.4 1,392.0 1,399.5 1,410.9 rl,419.8 1,429.7 4 M-4...................................................... 701.2 745.4 802.3 882.4 891.1 897.4 903.9 913.2 922.2 927.2 5 M-5...................................................... 1,070.3 1,173.2 1,298.3 1,449.0 1,461.7 1,471.3 1,481.5 1,494.3 rl,506.9 1,516.4 COMPONENTS 6 Currency.............................................. 67.8 73.7 80.7 88.6 89.4 90.1 90.7 91.3 92.2 92.9 Commercial bank deposits: 7 Demand........................................... 215.1 220.8 231.9 248.6 250.7 249.8 250.2 255.1 256.4 257.4 418.3 450.9 489.7 545.2 551.0 557.5 562.9 566.8 573.6 576.8 9 Negotiable CD’s2........................ 89.0 81.3 62.7 74.0 76.3 79.4 82.0 83.4 87.1 86.7 10 Other............................................ 329.3 369.6 427.0 471.2 474.7 478.1 480.9 483.4 486.5 490.1 11 Nonbank thrift institutions3.............. 369.1 427.8 496.0 566.6 570.7 574.0 577.7 581.2 r584.7 589.2 Not seasonally adjusted MEASURES i 12 M-l...................................................... 291.3 303.2 321.7 346.9 345.9 334.1 336.2 348.7 343.3 349.3 13 M-2...................................................... 617.5 669.3 744.8 813.8 819.4 812.8 820.4 836.0 833.6 841.9 14 M-3...................................................... 983.8 1,094.3 1,237.5 1,376.3 1,387.8 1,384.9 1,399.5 1,420.7 rl,420.3 1,435.0 15 M-4...................................................... 708.0 752.8 809.1 889.7 895.8 889.7 900.6 917.4 918.2 928.1 16 M-5...................................................... 1,074.3 1,177.7 1,301.8 1,452.3 1,464.2 1,461.8 1,479.7 1,502.0 1,504.9 1,521.3 COMPONENTS 17 Currency............................................. 69.0 75.1 82.1 90.1 88.7 89.0 90.0 91.1 92.0 93.0 Commercial bank deposits: 18 Demand........................................... 222.2 228.1 239.5 256.8 257.2 245.0 246.2 257.6 251.3 256.3 19 Member....................................... 159.7 162.1 168.5 176.3 175.8 167.3 168.4 175.7 171.2 174.0 20 Domestic nonmember................ 58.5 62.6 67.5 r76.2 76.9 73.6 73.8 77.8 76.2 78.3 416.7 449.6 487.4 542.8 549.9 555.7 564.4 568.7 574.9 578.9 22 Negotiable CD’s2....................... 90.5 83.5 64.3 75.9 76.4 76.9 80.2 81.4 84.6 86.3 23 Other........................................... 326.3 366.2 423.1 466.9 473.5 478.8 484.2 487.3 490.3 492.6 24 Nonbank thrift institutions3.............. 366.3 424.9 492.7 562.5 568.4 572.1 579.1 584.6 586.7 593.2 25 U.S. Govt, deposits (all commercial banks).......................................... 4.9 4.1 4.4 5.1 4.3 4.3 4.7 4.9 3.9 6.1 1 Composition of the money stock measures is as follows: M-4: M-2 plus large negotiable CD’s. M-5: M-3 plus large negotiable CD’s. M-l: Averages of daily figures for (1) demand deposits at commercial For a description of the latest revisions in the money stock measures banks other than domestic interbank and U.S. Govt., less cash items in see “Money Stock Measures: Revision” in the 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 508 of commercial banks. (H.6) release. Back data are available from the Banking Section, Division M-2: M-l plus savings deposits, time deposits open account, and time of 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. of one large bank. Reductions in other items were: “Total loans,” $1.0 2 Loans sold are those sold outright to a bank’s own foreign branches, billion (of which $0.6 billion was in “Commercial and industrial loans”), nonconsolidated nonbank affiliates of the bank, the bank’s holding and “Other securities,” $0.5 billion. In late November “Commercial and company (if not a bank), and nonconsolidated nonbank subsidiaries of industrial loans” were increased by $0.1 billion as a result of loan re­ the holding company. Prior to Aug. 28, 1974, the institutions included classifications at another large bank. had been defined somewhat differently, and the reporting panel of banks 4 Reclassification of loans reduced these loans by about $1.2 billion was also different. On the new basis, both “Total loans” and “Com­ as of Mar. 31, 1976. mercial and industrial loans” were reduced by about $100 million. 5 Reclassification of loans at one large bank reduced these loans by 3 Data beginning June 30, 1974, include one large mutual savings about $200 million as of Dec. 31, 1977. bank that merged with a nonmember commercial bank. As of that date there were increases of about $500 million in loans, $100 million in Note.—Data are for last Wednesday of month except for June 30 “Other” securities, and $600 million in “Total loans and investments.” and Dec. 31; data are partly or wholly estimated except when June 30 As of Oct. 31, 1974, “Total loans and investments” of all commercial and Dec. 31 are call dates. banks were reduced by $1.5 billion in connection with the liquidation Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Aggregates A15 1.22 AGGREGATE RESERVES AND DEPOSITS Member Banks Billions of dollars, averages of daily figures 1977 1978 Item 1974 1975 1976 Dec. Dec. Dec. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Seasonally adjusted 1Reserves1...................................................... 36.57 34.68 34.93 35.81 35.96 36.14 36.60 36.93 36.67 36.95 37.27 37.73 2 Nonborrowed............................................. 35.84 34.55 34.89 34.50 35.10 35.57 36.12 36.53 36.34 36.40 36.06 36.63 3 Required..................................................... 36.31 34.42 34.29 35.60 35.71 35.95 36.33 36.69 36.47 36.81 37.05 37.55 4 Deposits subject to reserve requirements2. . 486.1 504.6 528.9 558.5 564.4 569.1 575.7 577.8 582.1 586.1 592.1 595.6 5 Time and savings....................................... 322.1 337.1 354.3 377.1 383.5 387.0 390.5 395.4 399.2 400.7 406.0 407.1 Demand: 6 160.6 164.5 171.4 178.3 178.0 178.5 182.1 179.5 179.6 182.0 183.5 184.6 7 U.S. Government................................... 3.3 2.9 3.2 3.1 3.0 3.6 3.1 3.0 3.4 3.3 2.6 3.9 Not seasonally adjusted 8 Deposits subject to reserve requirements2.. 491.8 510.9 534.8 558.2 562.1 575.3 581.3 572.5 579.4 588.6 588.3 596.8 9 Time ans savings...................................... 321.7 337.2 353.6 377.5 380.7 386.4 390.3 393.2 399.3 401.2 406.1 408.6 Demand: 10 Private................................................... 166.6 170.7 177.9 178.0 178.7 185.1 187.9 176.1 176.6 183.8 179.3 183.7 11 U.S. Government................................. 3.4 3.1 3.3 2.7 2.6 3.8 3.1 3.1 3.5 3.6 2.9 4.5 1 Series reflects actual reserve requirement percentages with no adjust­ 2 Includes total time and savings deposits and net demand deposits as ment to eliminate the effect of changes in Regulations D and M. There defined by Regulation D. Private demand deposits include all demand are breaks in series because of changes in reserve requirements effective deposits except those due to the U.S. Govt., less cash items in process of Dec. 12,1974; Feb. 13, May 22, and Oct. 30,1975; Jan. 8, and Dec. 30,1976. collection and demand balances due from domestic commercial banks. In addition, effective Jan. 1, 1976, statewide branching in New York was instituted. The subsequent merger of a number of bajnks 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 1978 1974 1975 1976 1977 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Category 3 Feb. 22 Mar. 29 Apr. 26 May 31 June 30 July 26 p p p p p p Seasonally adjusted 1 Loans and investments1......................................... 690.4 721.1 784.4 870.6 886.6 892.2 906.0 917.9 922.4 935.2 2 Including loans sold outright2.......................... 695.2 725.5 788.2 875.5 891.2 896.7 910.5 922.3 926.9 939.8 Loans: 3 Total.................................................................... 500.2 496.9 538.9 617.0 628.2 636.5 646.3 657.9 661.2 672.0 4 Including loans sold outright2...................... 505.0 501.3 542.7 621.9 632.8 641.0 650.8 662.3 665.7 676.6 5 183.3 176.0 4179.5 5201.4 206.1 210.3 213.3 219.2 220.4 222.3 6 Including loans sold outright2..................... 186.0 178.5 4181.9 5204.2 208.4 212.5 215.6 221.5 222.6 224.6 Investments: 7 U.S. Treasury..................................................... 50.4 79.4 97.3 95.6 99.0 95.6 97.6 97.1 98.4 99.7 8 Other................................................................. 139.8 144.8 148.2 158.0 159.4 160.1 162.1 162.9 162.8 163.5 Not seasonally adjusted 9 Loans and investments1......................................... 705.6 737.0 801.6 888.9 878.4 889.7 904.9 917.0 928.9 931.1 10 Including loans sold outright2.......................... 710.4 741.4 805.4 893.8 883.0 894.2 909.4 921.4 933.3 935.7 Loans: 11 Total i.................................................................. 510.7 507.4 550.2 629.9 620.3 631.6 642.3 657.1 669.2 672.6 12 Including loans sold outright2...................... 515.5 511.8 554.0 634.8 624.9 636.1 646.8 661.5 673.7 677.1 13 Commercial and industrial.............................. 186.8 179.3 4182.9 5205.0 204.2 210.0 213.8 219.2 223.0 222.4 14 Including loans sold outright2..................... 189.5 181.8 4185.3 5207.8 206.5 212.2 216.1 221.5' 225.2 224.7 Investments: 15 U.S. Treasury..................................................... 54.5 84.1 102.5 100.2 99.6 98.6 99.6 96.6 96.1 95.2 16 Other................................................................... 140.5 145.5 148.9 158.8 158.5 159.6 163.1 163.4 163.6 163.4 For notes see bottom of opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics □ August 1978 1.24 COMMERCIAL BANK ASSETS AND LIABILITIES Last-Wednesday-of-Month Series Billions of dollars except for number of banks 1976 19773 19783 Account Dec. 3 Oct. Nov. Dec. Jan.*5 Feb .p Mar.** Apr.? May.** JuneP Julyp All commercial 1 Loans and investments............... 846.4 898.9 916.5 939.1 921.6 926.0 936.0 947.7 967.4 966.8 972.1 2 Loans, gross........................... 594.9 643.4 659.3 680.1 664.9 668.0 677.8 685.0 707.4 707.8 713.5 Investments: 3 U.S. Treasury securities.. 102.5 98.2 98.5 100.2 97.9 99.6 98.6 99.6 96.6 95.9 95.2 4 Other................................. 148.9 157.3 158.8 158.8 158.8 158.5 159.6 163.1 163.4 163.2 163.4 5 Cash assets............................... 136.1 129.3 138.6 168.7 126.9 145.2 131.5 134.1 162.7 142.6 131.8 6 Currency and coin................ 12.1 13.8 14.6 13.9 14.0 13.8 14.3 14.1 14.3 14.6 14.6 7 Reserves with F.R. Banks... 26.1 28.3 26.3 29.3 26.6 31.0 30.2 27.6 30.3 30.8 23.6 8 49.6 44.4 46.8 59.0 42.4 46.9 44.1 44.7 53.3 45.5 46.3 9 Cash items in process of collection.. 48.4 42.8 50.9 66.4 43.9 53.5 43.0 47.6 64.7 51.6 47.3 10 Total assets/total liabilities and 1,030.7 1,085.2 1,119.3 1,166.0 1,113.7 1,136.4 1,136.7 1,151.2 1,199.5 1,177.3 1,170.4 11 838.2 861.5 887\2 939.4 883.6 899.7 896.2 910.3 946.1 926.2 924.0 Demand: 12 45.4 37.4 41.7 51.7 37.1 42.6 37.4 38.8 50.7 40.5 40.2 13 U.S. Govt.......................... 3.0 3.6 4.8 7.3 4.5 5.8 4.8 6.1 3.2 7.1 4.2 14 Other................................. 288.4 280.0 294.0 323.9 284.2 288.6 280.2 292.0 310.6 294.9 293.2 Time: 15 9.2 8.6 9.0 9.8 9.1 8.7 9.0 9.0 9.4 9.8 10.2 16 Other................................... 492.2 531.9 537.8 546.6 548.8 554.0 564.8 564.4 572.2 573.9 576.2 17 Borrowings................................. 80.2 95.6 99.4 96.2 99.9 103.7 105.7 104.5 111.4 109.0 102.3 18 78.1 80.7 81.6 85.8 82.4 82.8 83.3 83.7 84.6 84.7 85.4 19 Memo: Number of banks......... 14,671 14,718 14,718 14,707 14,703 14,682 14,689 14,697 14,702 14,701 14,701 Member 20 620.5 645.2 658.6 675.5 659.5 661.8 668.6 676.8 693.8 691.5 695.8 21 Loans, gross........................... 442.9 467.1 479.0 494.9 481.8 483.1 490.5 495.3 514.3 512.8 517.7 Investments: 22 U.S. Treasury securities... 74.6 68.9 69.2 70.4 67.7 69.2 68.2 68.8 66.9 66.2 65.7 23 103.1 109.3 110.3 110.1 110.0 109.5 109.9 112.7 112.7 112.5 112.5 24 Cash assets, total....................... 108.9 102.3 110.6 134.4 102.2 117.2 104.8 106.5 130.7 114.6 104.2 25 Currency and coin................. 9.1 10.2 10.8 10.4 10.4 10.2 10.6 10.5 10.6 10.8 10.8 26 Reserves with F.R. Banks... 26.0 28.3 26.3 29.3 26.6 31.0 30.2 27.6 30.3 30.8 23.6 27 Balances with banks.............. 27.4 22.8 24.7 30.8 23.0 24.6 22.9 22.7 28.1 23.6 24.3 28 Cash items in process of collection.. 46.5 41.0 48.9 63.9 42.2 51.4 41.2 45.7 61.7 49.4 45.4 29 Total assets/total liabilities and capital^................................... 772.9 796.5 823.9 861.8 818.0 835.3 833.2 843.3 884.7 864.5 857.3 30 618.7 620.9 641.8 683.5 636.8 649.2 645.1 655.1 686.7 668.4 666.1 Demand: 31 42.4 34.6 38.7 48.0 34.4 39.5 34.7 36.0 47.5 37.7 37.3 32 U.S. Govt........................... 2.1 2.6 3.6 5.4 3.4 4.4 3.7 4.5 2.2 5.1 3.1 33 Other................................... 215.5 205.3 216.4 239.4 208.4 211.8 205.1 213.4 229.1 216.2 214.6 Time: 34 Interbank............................ 7.2 6.5 6.8 7.8 7.1 6.7 7.0 6.9 7.3 7.7 8.2 35 Other................................... 351.5 372.0 376.2 382.9 383.5 386.9 394.7 394.3 400.5 401.7 402.9 36 Borrowings................................. 71.7 83.8 87.8 84.9 88.0 90.8 91.8 91.1 96.9 94.2 88.0 37 Total capital accounts2.............. 58.6 60.6 61.2 63.7 61.8 62.1 62.4 62.7 63.3 63.4 64.0 38 Memo: Number of banks........ 5,759 5,686 5,680 5,669 5,659 5,659 5,654 5,645 5,638 5,611 5,611 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 1.25 and are included with noninsured banks contingency portion (which is small) of “reserve for loan losses.” in Table 1.25: 1974—June, 2; December, 3; 1975—June and December, 3 Figures partly estimated except on call dates. 4; 1976 (beginning month shown)—July, 5; December, 7; 1977-January, 8. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A17 1.25 COMMERCIAL BANK ASSETS AND LIABILITIES Call-Date Series Millions of dollars except for number of banks 1976 1977 1976 1977 Account June 30 Dec. 31 June 30 Dec. 31 June 30 Dec. 31 June 30 Dec. 31 Total insured National (all insured) I 773,701 827,696 854,734 914,783 443,959 476,610 488,240 523,000 Loans: 2 Gross............................................................... 539,021 578,734 601,122 657,513 315,628 340,691 351,311 384,722 3 Net................................................................... 520,976 560,076 581,143 636,323 305,280 329,971 339,955 372,702 Investments: 4 U.S. Treasury securities................................. 90,947 101,461 100,568 99,333 49,688 55,727 53,345 52,244 5 143,731 147,500 153,053 157,937 78,642 80,191 83,583 86,033 6 124,072 129,562 130,726 159,264 75,488 76,072 74,641 92,050 7 Total assets/total liabilities1................................... 942,519 1,003,969 1,040,945 1,129,711 548,702 583,304 599,743 651,360 8 776,957 825,003 847,372 922,664 444,251 469,377 476,381 520,167 Demand: 9 U.S. Govt........................................................ 4,622 3,022 2,817 7,310 2,858 1,676 1,632 4,172 10 Interbank........................................................ 37,502 44,064 44,965 49,849 20,329 23,149 22,876 25,646 11 265,671 285,200 284,544 319,873 152,383 163,346 161,358 181,821 Time: 12 9,406 8,248 7,721 8,731 5,532 4,907 4,599 5,730 13 459,753 484,467 507,324 536,899 263,147 276,296 285,915 302,795 14 63,828 75,291 81,137 89,332 45,187 54,421 57,283 63,218 15 68,988 72,061 75,503 79,084 39,501 41,319 43,142 44,994 16 Memo: Number of banks..................................... 14,373 14,397 14,425 14,397 4,747 4,735 4,701 4,654 State member (all insured) Insured nonmember 17 Loans and investments, gross................................. 136,915 144,000 144,597 152,518 192,825 207,085 221,896 239,265 Loans: 18 Gross................................................................ 98,889 102,277 102,117 110,247 124,503 135,766 147,694 162,543 19 Net................................................................... 96,037 99,474 99,173 107,210 119,658 130,630 142,015 156,411 Investments: 20 U.S. Treasury securities................................. 16,323 18,849 19,296 18,179 24,934 26,884 27,926 28,909 21 21,702 22,874 23,183 24,091 43,387 44,434 46,275 47,812 22 30,422 32,859 35,918 42,305 18,161 20,631 20,166 24,908 23 179,649 189,578 195,452 210,441 214,167 231,086 245,749 267,910 24 142,061 149,491 152,472 163,443 190,644 206,134 218,519 239,053 Demand: 25 U.S. Govt........................................................ 869 429 371 1,241 894 917 813 1,896 26 Interbank......................................................... 15,833 19,295 20,568 22,353 1,339 1,619 1,520 1,849 27 49,659 52,204 52,570 57,605 63,629 69,648 70,615 80,445 Time: 28 3,074 2,384 2,134 2,026 799 956 988 973 29 72,624 75,178 76,827 80,216 123,980 132,993 144,581 153,887 30 15,300 17,310 19,697 21,729 3,339 3,559 4,155 4,384 31 12,791 13,199 13,441 14,184 16,696 17,542 18,919 19,905 32 1,029 1,023 1,019 1,014 8,597 8,639 8,705 8,729 Noninsured nonmember Total nonmember 33 15,905 18,819 22,940 24,415 208,730 225,904 244,837 263,681 Loans: 34 Gross................................................................ 13,209 16,336 20,865 22,686 137,712 152,103 168,559 185,230 35 Net................................................................... 13,092 16,209 20,679 22,484 132,751 146,840 162,694 178,896 Investments: 36 U.S. Treasury securities................................. 472 1,054 993 879 25,407 27,938 28,919 29,788 37 2,223 1,428 1,081 849 45,610 45,863 47,357 48,662 38 4,362 6,496 8,330 9,458 22,524 27,127 28,496 34,367 39 21,271 26,790 33,390 36,433 235,439 257,877 279,139 304,343 40 11,735 13,325 14,658 16,844 202,380 219,460 233,177 255,898 Demand: 41 U.S. Govt........................................................ 4 4 8 10 899 921 822 1,907 42 1,006 1,277 1,504 1,868 2,346 2,896 3,025 3,718 43 2,555 3,236 3,588 4,073 66,184 72,884 74,203 84,518 Time: 44 1,292 1,041 1,164 1,089 2,092 1,997 2,152 2,063 45 6,876 7,766 8,392 9,802 130,857 140,760 152,974 163,690 46 3,372 4,842 7,056 6,908 6,711 8,401 11,212 11,293 47 Total capital accounts............................................. 663 818 893 917 17,359 18,360 19,812 20,823 48 Memo: Number of banks..................................... 270 275 293 310 8,867 8,914 8,998 9,039 1 Includes items not shown separately. For Note see Table 1.24. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Financial Statistics □ August 1978 1.26 COMMERCIAL BANK ASSETS AND LIABILITIES Detailed Balance Sheet, December 31, 1977 Asset and liability items are shown in millions of dollars. Member banks1 All Insured Non­ Asset account commercialcommercial Large banks member banks banks banks1 Total All other New York City of Other City Chicago large2 1 Cash bank balances, items in process.................... 168,723 159,264 134,355 39,317 5,664 48,457 40,918 34,368 2 Currency and coin................................................ 13,925 13,916 10,379 1,004 231 3,551 5,592 3,546 3 Reserves with F.R. Banks................................... 29,338 29,338 29,338 5,073 1,476 11,549 11,240 * 4 Demand balances with banks in United States. 44,654 39,075 22,984 8,925 387 3,530 10,142 21,671 5 Other balances with banks in United States___ 7,050 5,722 3,264 407 14 1,075 1,768 3,786 6 Balances with banks in foreign countries.......... 7,324 4,932 4,526 786 169 2,146 1,424 2,798 7 Cash items in process of collection.................... 66,432 66,281 63,866 23,123 3,387 26,605 10,751 2,566 8 Total securities held—Book value........................... 257,353 255,660 179,183 21,786 8,487 57,684 91,227 78,170 9 U.S. Treasury........................................................ 100,213 99,333 70,424 10,959 3,458 23,017 32,990 29,789 10 Other U.S. Govt, agencies................................... 36,689 36,389 23,049 1,639 928 6,458 14,025 13,639 11 States and political subdivisions......................... 113,834 113,587 81,386 8,829 3,811 26,912 41,835 32,447 12 All other securities................................................ 6,520 6,254 4,259 360 290 1,271 2,338 2,261 n 98 97 64 * 26 38 34 14 Trading-account securities.................................... 6,404 6,403 6,266 2,938 838 2,261 230 138 15 U.S. Treasury.................................................... 3,871 3,871 3,859 2,204 487 1,110 58 11 16 Other U.S. Govt, agencies............................... 629 629 625 220 72 283 50 3 17 States and political subdivisions..................... 1,211 1,211 1,191 392 151 565 83 19 18 All other trading acct. securities..................... 597 597 526 121 129 276 1 71 19 98 97 64 * 26 38 34 20 Bank investment portfolios................................... 250,949 249,257 172,917 18,848 7,648 55,423 90,997 78,032 21 U.S. Treasury.................................................... 96,342 95,463 66,565 8,755 2,971 21,906 32,933 29,777 22 Other U.S. Govt, agencies............................... 36,060 35,760 22,424 1,418 856 6,175 13,975 13,636 23 States and political subdivisions..................... 112,623 112,377 80,195 8,437 3,660 26,347 41,751 32,428 24 5,923 5,657 3,733 238 162 995 2,337 2,190 25 F.R. stock and corporate stock.............................. 1,647 1,610 1,366 305 103 502 456 281 26 Federal funds sold and securities resale agreement.. 53,854 49,690 38,889 3,359 1,354 20,136 14,040 14,964 27 44,988 41,177 30,701 1,315 1,180 15,328 12,877 14,287 28 Brokers and dealers............................................. 5,451 5,443 5,232 1,186 122 2,947 977 220 29 Others................................................................... 3,415 3,069 2,957 859 52 1,861 186 458 626,347 607,824 456,080 78,064 23,869 169,778 184,368 170,266 31 14,619 14,564 9,801 602 97 3,171 5,930 4,818 32 Reserves for loan loss............................... 6,773 6,626 5,257 1,197 312 1,977 1,772 1,517 33 604,955 586,634 441,023 76,266 23,461 164,630 176,666 163,932 Other loans, gross, by category 34 Real estate loans................................................... 177,172 176,916 122,044 9,482 2,360 44,851 65,351 55,128 35 Construction and land development............... 20,724 20,709 15,640 2,206 492 7,569 5,373 5,084 36 Secured by farmland........................................ 7,750 7,731 3,330 19 8 335 2,968 4,420 37 100,996 100,847 70,852 4,668 1,263 26,393 38,528 30,144 38 1- to 4-family residences............................... 96,102 95,961 67,318 4,133 1,159 25,099 36,926 28,785 39 7,657 7,601 6,612 564 51 3.514 2,483 1,045 40 Conventional............................................ 88,445 88,361 60,705 3,569 1,108 21,585 34,443 27,740 41 4,894 4,886 3,535 536 104 1,294 1,601 1,359 42 408 401 336 129 23 99 85 72 43 Conventional............................................ 4,486 4,485 3,199 407 81 1,195 1,517 1,287 44 Secured by other properties............................. 47,701 47,630 32,221 2,588 596 10,555 18,482 15,480 45 43,663 36,703 34,585 12,292 4,242 15,035 3,016 9,079 46 To REIT’s and mortgage companies.............. 9,050 9,036 8,684 2,547 923 4,520 694 366 47 To domestic commercial banks....................... 5,200 3,149 2,500 838 111 1,324 228 2.700 48 To banks in foreign countries......................... 11,408 7,244 6 j 995 3,254 348 2,783 610 4,414 49 To other depository institutions..................... 1,935 1,747 1,595 224 31 1,044 295 340 50 16,069 15,527 14,811 5,428 2,829 5,365 1,189 1,258 51 Loans to security brokers and dealers............... 13,060 12,781 12,440 7,760 1,791 2,561 328 620 52 Other loans to purch./carry securities................ 4,350 4,329 3,596 440 349 1,815 992 754 53 Loans to farmers—except real estate................. 25,730 25,704 14,183 169 149 3,365 10,500 11,548 54 Commercial and industrial loans........................ 205,014 195,455 158,823 38,763 11,613 61,462 46,985 46,191 55 140,392 140,273 97,074 6,479 2,159 34,723 53,714 43,317 56 112,439 112,370 77,717 4,804 1,380 28,330 43,203 34,722 57 Passenger automobiles................................. 49,586 49,571 31,708 893 156 9,362 21,297 17,878 58 Residential-repair/modernize....................... 7,283 7,283 4,846 296 67 1,768 2,715 2,437 59 Credit cards and related plans.................... 18,375 18,367 16,187 2,119 975 8,840 4,253 2,188 60 Charge-account credit cards.................... 14,608 14,608 13,064 1,419 935 7,319 3,391 1,544 61 Check and revolving credit plans............ 3,767 3,758 3,123 700 40 1,521 861 644 62 Other retail consumer goods....................... 17,449 17,443 11,871 367 55 4,383 7,067 5,578 63 Mobile homes........................................... 9,125 9,125 6,401 176 22 2,343 3,860 2,724 64 8,324 8,319 5,471 191 33 2,039 3,207 2,853 65 Other instalment loans................................. 19,745 19,706 13,105 1,129 127 3,977 7,872 6,641 66 Single-payment loans to individuals................ 27,953 27,903 19,357 1,675 778 6,393 10,511 8,596 67 16,965 15,661 13,335 2,678 1,207 5,967 3,482 3,630 917,808 893,594 660,461 101,716 33,405 242,951 282,389 257,347 69 Direct lease financing.............................................. 5,807 5,807 5,458 1,002 139 3,379 937 349 70 Fixed assets—Buildings, furniture, real estate.... 21,359 21,241 15,817 2,308 762 5,941 6,807 5,541 71 Investment in unconsolidated subsidiaries............ 2,972 2,958 2,918 1,397 245 1,185 91 54 72 Customer acceptances outstanding......................... 12,549 11,486 11,018 5,141 750 4,817 310 1,532 73 36,928 35,362 31,775 13,166 1,021 13,103 4,485 5,153 1,166,146 1,129,712 861,802 164,045 41,986 319,834 335,937 304,344 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 All Insured Non­ Liability or capital account commercial commercial Large banks member banks banks banks1 Total All other New York City of Other City Chicago large2 75 Demand deposits.................................................. 382,987 377,034 292,842 68,192 11,825 104,931 107,895 90,145 76 Mutual savings banks...................................... 1,646 1,382 1,203 564 3 276 361 443 77 Other individuals, partnerships, and corpora­ tions........................................................... 286,551 285,167 213,875 34,768 8,481 82,096 88,530 72,676 78 U.S. Govt.......................................................... 7,322 7,311 5,415 600 173 2,085 2,557 1,907 79 States and political subdivisions..................... 19,026 18,948 12,922 702 247 3,824 8,149 6,104 80 Foreign governments, central banks, etc........ 2,228 1,724 1,684 1,379 34 239 32 544 81 Commercial banks in United States............... 41,394 40,535 39,097 19,760 2,293 12,170 4,873 2,298 82 Banks in foreign countries............................... 8,678 7,932 7,700 6,306 219 1,031 143 978 83 Certified and officers’ checks, etc................... 16,141 14,034 10,946 4,112 376 3,209 3,249 5,195 84 Time deposits........................................................ 337,137 326,837 238,124 35,766 13,922 85,562 102,874 99,013 85 Accumulated for personal loan payments---- 100 100 78 1 77 23 86 Mutual savings banks......................................, 334 319 310 120 84 84 21 24 87 Other individuals, partnerships, and corpora­ tions........................................................... 262,918 256,880 185,763 26,922 10,417 64,962 83,462 77,155 88 U.S. Govt........................................................... 820 820 681 37 30 390 225 139 89 States and political subdivisions...................... 52,396 52,123 35,922 1,679 1,038 15,307 17,898 16,474 90 Foreign governments, central banks, etc......... 11,088 8,189 7,927 4,666 1,456 1,756 49 3,161 91 Commercial banks in United States................ 7,419 6,789 6,002 1,580 822 2,830 770 1,417 92 Banks in foreign countries................................ 2,061 1,617 1,442 762 76 232 371 620 93 Savings deposits.................................................... 219,386 218,793 152,645 11,070 2,945 55,225 83,405 66,741 94 Individuals and nonprofit organizations......... 203,790 203,232 141,948 10,276 2,768 51,442 77,463 61,842 95 Corporations and other profit organizations., 10,723 10,705 7,540 542 168 3,128 3,703 3,183 96 U.S. Government.............................................. 58 58 48 4 18 27 10 97 States and political subdivisions....................... 4,786 4,770 3,083 234 9 629 2,211 1,703 98 All other............................................................. 29 29 26 14 * 8 3 4 99 Total deposits....................................................... 939,509 922,665 683,611 115,027 28,692 245,718 294,174 255,898 100 Federal funds purchased and securities sold under agreements to repurchase............................. 86,171 82.772 78,691 21,219 8,385 38,034 11,054 7,480 101 Commercial banks............................................ 46,893 44,242 42,640 8,837 6,137 22,569 5,096 4,253 102 Brokers and dealers........................................... 7,772 7,759 7,384 1,364 1,029 4,035 956 388 103 Others................................................................. 31,507 30.772 28,667 11,018 1,218 11,430 5,002 2,839 104 Other liabilities for borrowed money 3................. 10,070 6,560 6,257 2,597 111 2,646 902 3,813 105 Mortgage indebtedness3........................................ 1,021 1,014 747 203 16 317 212 274 106 Bank acceptances outstanding.............................. 13,146 12,078 11,610 5,716 754 4,828 312 1,537 107 Other liabilities...................................................... 30,452 19,827 17,231 5,919 1,148 6,481 3,684 13,220 108 Total liabilities....................................................... 1,080,370 1,044,917 798,148 150,681 39,105 298,024 310,337 282,222 109 Subordinated notes and debentures..................... 5,774 5,711 4,475 1,110 81 2,013 1,271 1,299 110 Equity capital......................................................... 80,002 79.084 59,179 12,254 2,800 19,797 24,328 20,823 111 Preferred stock................................................... 85 79 32 2 30 53 112 Common stock................................................... 17,276 17,177 12,503 2,645 570 3,895 5,394 4,773 113 Surplus................................................................ 31,495 30,994 22,570 4,517 1,404 7,951 8,697 8,925 114 Undivided profits............................................... 29,327 29.084 22,840 4,959 773 7,569 9,539 6,487 115 Other capital reserves........................................ 1,820 1,750 1,234 132 53 380 669 586 116 Total liabilities and equity capital......................... 1,166,146 1,129,712 861,802 164,045 41,986 319,834 335,937 304,344 Memo items: 117 Demand deposits adjusted4................................... 267,839 262,907 184,465 24,709 5,973 64,070 89,712 83,374 Average for last 15 or 30 days: 118 Cash and due from bank................................... 146,725 139,805 119,239 33,743 5,401 44,467 35,627 27,486 119 Federal funds sold and securities purchased under agreements to resell......................... 55,860 50,507 39,035 4,308 1,666 18,803 14,259 16,825 120 Total loans.......................................................... 620,399 601,938 438,957 75,204 23,171 163,726 176,856 181,442 121 Time deposits of $100,000 or more.................. 161,461 153,976 126,665 30,220 11,333 52,845 32,268 34,796 122 Total deposits..................................................... 901,295 884,377 651,801 104,506 26,934 234,120 286,242 249,494 123 Federal funds purchased and securities sold under agreements to repurchase............... 93,688 89,925 85,687 23,974 9,971 39,994 11,748 8,001 124 Other liabilities for borrowed money............... 10,736 6,930 6,572 2,885 150 2,889 648 4,165 125 Standby letters of credit outstanding................... 16,889 16,008 15,100 8,759 1,130 4,165 1,046 1,788 126 Time deposits of $100,000 or more...................... 165,793 158,867 130,705 30,344 11,606 55,555 33,200 35,088 127 Certificates of deposit........................................ 139,596 134,850 110,418 25,951 9,885 46,062 28,520 29,177 128 Other time deposits............................................ 26,198 24,016 20,287 4,393 1,721 9,493 4,680 5,911 129 Number of banks.................................................. 14,707 14,397 5,668 12 9 153 5,494 j 9,039 1 Member banks exclude and nonmember banks include 11 noninsured commercial interbank and U.S. Govt., less cash items reported as in trust companies that are members of the Federal Reserve System, and process of collection. member banks exclude 2 national banks outside the continental United States. Note.—Data include consolidated reports, including figures for all 2 Data for one large national bank have been estimated. bank-premises subsidiaries and other significant majority-owned do­ 3 Note for Dec. 31, 1977, reporting only, national banks reported mestic subsidiaries. Securities are reported on a gross basis before deduc­ capitalized lease balances under “Other liabilities for borrowed money” tions of valuation reserves. Holdings by type of security will be reported while State member and nonmember banks reported these balances as soon as they become available. under “Mortgage indebtedness.” Back data in lesser detail were shown in previous Bulletins. Details 4 Demand deposits adjusted are demand deposits other than domestic 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 □ August 1978 1.27 ALL LARGE WEEKLY REPORTING COMMERCIAL BANKS Assets and Liabilities Millions of dollars, Wednesday figures 1978 Account May 31 June 7 June 14 June 21 June 28 July 5^ July 12» July 19p July 26p 468,035 467,777 466,781 464,816 464,623 473,375 465,227 463,038 467,773 Loans: 2 Federal funds sold1............................................ 31,150 28,456 28,786 25,140 25,790 31,647 25,644 22,951 26,864 3 To commercial banks................................... 24,739 20,465 19,915 19,519 20,435 22,972 19,963 17,820 20,055 To brokers and dealers involving— 4 U.S. Treasury securities........................... 3,384 5,285 5,612 3,459 2,842 5,642 2,841 2,734 3,502 5 Other securities.......................................... 493 520 578 587 546 632 487 486 538 2,534 2,186 2,681 1,575 1,967 2,401 2,353 1,911 2,769 7 Other, gross........................................................ 335,620 336,660 335,334 338,067 338,792 342,449 340,047 340,648 341,273 8 Commercial and industrial........................... 134,552 133,709 133,702 135,113 135,508 135,597 135,081 134,922 134,753 5,001 5,019 5,120 5,082 5,094 5,088 5,121 5,134 5,155 For purchasing or carrying securities: To brokers and dealers: 10 U.S. Treasury securities........................ 1,255 2,222 1,571 1,243 899 1,563 1,051 832 1,945 11 Other securities...................................... 8,160 9,007 8,271 8,591 8,680 8,896 8,618 8,654 8,162 To others: 12 U.S. Treasury securities........................ 102 100 101 100 100 100 100 100 100 2,695 2,683 2,662 2,653 2,656 2,663 2,652 2,643 2,628 To nonbank financial institutions: 14 Personal and sales finance cos., etc.......... 7,932 8,283 7,949 7,882 7,915 8,615 8,200 8,042 7,909 15 Other.......................................................... 15,122 15,122 15,073 14,992 15,078 15,254 15,266 15,108 15,298 79,142 79,300 79,812 80,213 80,530 80,922 81,322 81,780 82,220 To commercial banks: 2,372 2,283 2,319 2,489 2,478 2,591 2,132 2,354 2,297 18 Foreign...................................................... 6,316 6,109 5,896 6,120 6,125 6,348 6,173 6,333 5,976 49,246 49,401 49,705 50,041 50,448 50,628 50,777 51,010 51,356 20 Foreign govts., official institutions, etc........ 1,561 1,530 1,531 1,530 1,565 1,550 1,555 1,593 1,536 21 All other loans.............................................. 22,164 21,892 21,622 22,018 21,716 22,634 21,999 22,143 21,938 22 Less : Loan loss reserve and unearned income on loans........................................... 10,030 10,140 10,192 10,254 10,222 10,187 10,264 10,342 10,387 325,590 326,520 325,142 327,813 328,570 332,262 329,783 330,306 330,886 Investments: 43,424 44,479 44,577 44,247 42,742 42,556 42,501 42,445 42,560 25 Bills................................................................ 4,922 5,721 6,037 6,164 4,731 4,132 4,130 4,059 4,321 Notes and bonds, by maturity: 7,621 7,595 7,547 7,542 7,379 7,466 7,440 7,472 7,501 25,899 26,203 25,965 25,667 25,754 26,241 25,837 25,829 25,667 4,982 4,960 5,028 4,874 4,878 4,717 5,094 5,085 5,071 67,871 68,322 68,276 67,616 67,521 66,910 67,299 67,336 67,463 Obligations of States and political subdivisions: 30 Tax warrants, short-term notes, and 7,027 7,090 6,765 6,308 6,245 6,056 6,323 6,271 6,202 44,608 44,923 44,875 44,592 44,519 44,410 44,651 44,713 44,800 Other bonds, corporate stocks, and securities: 32 Certificates of participation2.................... 2,893 2,879 2,888 2,888 2,868 2,857 2,846 2,852 2,886 33 All other, including corporate stocks.... 13,343 13,430 13,748 13,828 13,889 13,587 13,479 13,500 13,575 55,797 42,304 45,795 45,549 43,789 54,024 44,515 46,558 41,123 22,551 18,928 18,262 23,305 24,252 17,422 22,412 29,937 16,302 6,525 6,183 6,518 6,563 6,651 5,923 6,677 6,653 6,648 37 Balances with domestic banks............................. 17,748 14,366 14,542 14,368 14,422 18,247 15,795 14,569 15,224 38 Investments in subsidiaries not consolidated.... 3,194 3,259 3,266 3,191 3,188 3,195 3,238 3,315 3,309 64,742 63,948 63,033 62,723 63,291 64,874 64,033 62,810 62,289 638,592 616,765 618,197 620,515 620,216 637,060 621,897 626,880 612,668 Deposits: 206,915 185,624 191,835 191,728 187,760 212,329 191,762 191,751 185,763 42 Individuals, partnerships, and corps............ 144,860 133,875 139,590 136,447 133,823 148,554 139,769 136,769 134,571 43 States and political subdivisions................... 6,144 5,460 5,472 6,049 6,182 6,546 5,932 5,905 5,884 1,325 1,150 1,575 4,241 2,909 1,849 1,763 2,908 2,111 Domestic interbank: 45 Commercial................................................ 35,972 27,817 28,576 28,258 27,540 36,392 28,331 28,428 27,404 893 810 836 800 792 1,234 957 921 838 Foreign: 47 Governments, official institutions, etc.... 1,639 1,124 1,151 1,154 1,392 1,105 889 1,495 1,180 48 Commerial banks...................................... 7,782 7,364 6,651 6,720 6,959 7,470 6,924 6,026 6,675 49 Certified and officers’ checks....................... 8,300 8,024 7,984 8,059 8,163 9,179 7,197 9,299 7,100 50 Time and savings deposits 3............................... 265,176 266,088 265,404 264,068 266,884 266,706 266,969 267,044 267,332 93,404 93,375 93,006 92,872 92,878 93,179 92,695 92,436 92,137 52 Time: 171,772 172,713 172,398 171,196 174,006 173,527 174,274 174,608 175,195 53 Individuals, partnerships, and corps........ 131,673 132,690 132,810 132,050 134,287 134,194 135,163 135,441 135,838 54 States and political subdivisions............... 25,684 25,524 24,982 24,757 24,795 24,446 24,537 24,852 25,243 55 Domestic interbank................................. 5,695 5,821 5,826 5,855 6,329 6,326 6,301 6,172 6,015 56 Foreign govts., official institutions, etc... 7,198 7,185 7,231 6,983 7,005 6,977 6,694 6,564 6,510 57 Federal funds purchased, etc.5............................ 82,451 81,802 76,134 78,530 78,381 72,914 78,280 77,842 73,628 Borrowings from: 667 250 1,240 2,172 1,962 287 661 4,612 697 6,164 6,036 6,687 6,374 7,182 6,825 6,082 6,104 6,154 31,231 30,953 30,840 31,654 31,912 31,715 31,689 33,224 32,643 61 Total equity capital and subordinated 45,988 46,012 46,057 45,989 46,135 46,284 46,454 46,303 46,451 1 Includes securities purchased under agreements to resell. 5 Includes securities sold under agreements to repurchase. 2 Federal agencies only. 6 Includes minority interest in consolidated subsidiaries and deferred 3 Includes time deposits of U.S. Govt, and of foreign banks, which are tax portion of reserves for loans. not shown separately. 7 Includes reserves for securities and contingency portion of reserves 4 For amounts of these deposits by ownership categories, see Table 1.30. for loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Banks A21 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1978 Account May 31 June 7 June 14 June 21 June 28 July 5* July 12* July 19* July 26* 1 Total loans and investments. 96,108 95,337 94,507 94,865 93,415 96,623 93,627 92,993 94,499 Loans: Federal funds sold1................................ 6,240 4,376 5,891 5,873 5,493 6,591 5,173 4,410 5,543 To commercial banks........................ 3,717 2,045 3,771 3,598 3,361 4,195 2,745 2,614 3,685 To brokers and dealers involving— U.S. treasury securities................. 1,666 1,774 1,457 1,821 1,352 1,470 1,516 1,269 1,410 Other securities.............................. 13 22 27 19 10 3 1 5 19 To others............................................ 844 535 636 435 770 923 911 522 429 Other gross..................................................... 70,830 71,722 69,535 70,378 70,265 72,183 70,314 70,590 70,842 Commercial and industrial......................... 35,705 35,210 35,000 35,418 35,653 35,530 35,276 35,374 35,207 Agricultural.................................................. 188 176 176 161 156 159 160 150 151 For purchasing or carrying securities: To brokers and dealers: 10 U.S. Treasury securities...................... 1,141 2,067 1,415 1,092 774 1,421 881 691 1,810 11 Other securities.................................... 4,226 4,790 4,228 4,575 4,493 4,742 4,515 4,613 4,164 To others: 12 U.S. Treasury securities...................... 25 25 25 25 26 25 25 25 25 13 Other securities.................................... 354 346 357 357 361 355 351 359 357 To nonbank financial institutions: 14 Personal and sales finance cos., etc........ 2,691 2,916 2,605 2,693 2,691 3,141 2,834 2,718 2,694 15 Other................................-....................... 4,744 4,720 4,674 4,624 4,647 4,711 4,664 4,627 4,805 16 Real estate.................................................... 9,014 9,012 9,074 9,067 9,078 9,122 9,137 9,202 9,255 To commercial banks: 17 Domestic.................................................. 872 694 718 826 770 866 620 736 736 18 Foreign..................................................... 2,848 2,796 2,558 2,715 2,731 2,852 2,827 2,941 2,621 19 Consumer instalment.................................. 4,485 4,508 4,551 4,565 4,608 4,626 4,660 4,685 4,706 20 Foreign govts, official institutions, etc....... 249 272 251 281 291 296 305 351 354 21 All other loans.............................................. 4,288 4,190 3,903 3,979 3,986 4,337 4,059 4,118 3,957 22 Less: Loan loss reserve and unearned income on loans............................................... 1,754 1,794 1,792 1,792 1,754 1,747 1,761 1,772 1,784 23 Other loans, net................................................ 69,076 69,928 67, 743 68,586 68,511 70,436 68,553 68,818 69,058 Investments: U.S. Treasury securities................................... 9,856 10,122 10,044 9,652 8,770 8,984 9,129 9,109 9,324 Bills.............................................................. 1,592 1,973 2,153 1,970 1,103 1,064 1,173 1,285 1,569 Notes and bonds, by maturity: Within 1 year........................................... 1,089 1,031 996 1,093 1,002 972 929 912 935 1 to 5 years.............................................. 6,024 6,093 5,809 5,639 5,725 6,022 5,906 5,844 5,797 After 5 years............................................ 1,151 1,025 1,086 950 940 926 1,121 1,068 1,023 Other securities................................................ 10,936 10,911 10,829 10,754 10,641 10,612 10,772 10,656 10,574 Obligations of States and political subdivisions: Tax warrants, short-term notes, and bills 1,508 1,543 1,500 1,604 1,631 1,568 1,744 1,717 1,660 All other................................................... 7,173 7,234 7,069 6,932 6,861 6,841 7,003 6,895 6,884 Other bonds, corporate stocks, and securities: Certificates of participation2.................. 451 454 479 462 458 476 476 479 496 All other, including corporate stocks 1,804 1,680 1,781 1,756 1,691 1,727 1,549 1,565 1,534 34 Cash items in process of collection............... 18,791 14,007 15,153 15,350 15,393 17,087 13,775 16,527 12,978 35 Reserves with F.R. Banks.............................. 8,025 5,039 4,171 5,472 5,849 4,896 6,701 8,359 3,957 36 Currency and coin.......................................... 950 927 975 937 917 881 923 942 934 37 Balances with domestic banks....................... 9,008 7,454 7,528 6,855 7,026 9,590 8,754 7,827 8,593 38 Investments in subsidiaries not consolidated., 1,641 1,654 1,652 1,653 1,653 1,688 1,700 1,714 1,715 39 Other assets...................................................... 25,803 24,987 25,109 24,760 25,521 25,937 25,322 23,381 23,897 40 Total assets/total liabilities. 160,326 149,405 149,095 149,892 149,774 156,702 150,802 151,743 146,573 Deposits: Demand deposits.............................................. 63,243 51,004 53,652 54,052 53,312 61,727 53,339 54,742 51,493 Individuals, partnerships, and corps.......... 31,909 26,964 28,518 28,369 27,783 31,153 28,981 28,294 27,512 States and political subdivisions................ 533 506 481 609 559 490 458 548 569 U.S. Govt..................................................... 146 115 181 783 429 155 275 483 322 Domestic interbank: Commercial.............................................. 19,130 12,928 14,299 13,882 13,794 18,481 14,248 14,349 13,678 Mutual savings......................................... 483 411 437 390 404 690 499 491 440 Foreign: Governments, official institutions, etc... 1,407 888 940 931 1,177 884 677 1,240 882 Commercial banks................................... 5,963 5,444 5,009 5,144 5,204 5,678 5,237. 4,349 5,005 Certified and officers’ checks..................... 3,672 3,748 3,787 3,944 3.962 4,196 2,964 4,988 3,085 Time and savings deposits3............................. 46,566 46,390 46,088 45,807 46,656 46,452 46,587 46,366 46,236 Savings4....................................................... 9,908 9,935 9,915 9,932 9,888 9,881 9,805 9,746 9,703 Time............................................................. 36,658 36,455 36,173 35,875 36,768 36,571 36,782 36,620 36,533 Individuals, partnerships and corps....... 28,083 28,012 27,737 27,558 28,270 28,169 28,385 28,269 28,262 States and political subdivisions............ 1,871 1,840 1,791 1,730 1,752 1,595 1,648 1,695 1,706 Domestic interbank................................. 1,869 1,878 1,818 1,803 1.962 2,066 2,169 2,112 2,039 Foreign govts., official institutions, etc.. 4,125 4,028 4,121 4,075 4,074 4,051 3,873 3,824 3,795 57 Federal funds purchased, etc. 5........................... 21,264 22,572 19,705 19,691 18,839 18,506 20,821 17,675 18,094 Borrowings from: 58 F.R. Banks........................................................ 380 440 510 2,420 65 59 Others................................................................ 2,823 2,950 3,173 3,144 3,386 3,033 2,926 2,879 3,012 60 Other liabilities, etc.6........................................... 13,355 13,398 12,998 13,663 13,991 13,870 13,986 14,534 14,542 61 Total equity capital and subordinated notes/ debentures7.................................................... 13,075 13,091 13,099 13,095 13,080 13,114 13,143 13,127 13,131 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 □ August 1978 1.29 LARGE WEEKLY REPORTING COMMERCIAL BANKS OUTSIDE NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1978 May 31 June 7 June 14 June 21 June 28 July 5p July 12 p July 19 p July 26*> 1 Total loans and investments.................................. 371,927 372,440 372,274 369,951 371,208 376,752 371,600 370,045 373,274 Loans : 2 Federal funds soldi............................................ 24,910 24,080 22,895 19,267 20,297 25,056 20,471 18,541 21,321 3 To commercial banks................................... 21,022 18,420 16,144 15,921 17,074 18,777 17,218 15,206 16,370 To brokers and dealers involving— 4 U.S. treasury securities............................. 1,718 3,511 4,155 1,638 1,490 4,172 1,325 1,465 2,092 5 Other securities.......................................... 480 498 551 568 536 629 486 481 519 6 To others........................................................ 1,690 1,651 2,045 1,140 1,197 1,478 1,442 1,389 2,340 7 Other, gross........................................................ 264, 790 264,938 265,799 267,689 268,527 270,266 269,733 270,058 270,431 8 Commercial and industrial........................... 98,847 98,499 98,702 99,695 99,855 100,067 99,805 99,548 99,546 9 Agricultural.................................................... 4,813 4,843 4,944 4,921 4,938 4,929 4,961 4,984 5,004 For purchasing or carrying securities : To brokers and dealers: 10 U.S. treasury securities......................... 114 155 156 151 125 142 170 141 135 11 Other securities...................................... 3,934 4,217 4,043 4,016 4,187 4,154 4,103 4,041 3,998 To others: 12 U.S. Treasury securities........................ 77 75 76 75 74 75 75 75 75 13 Other securities...................................... 2,341 2,337 2,305 2,296 2,295 2,308 2,301 2,284 2,271 To nonbank financial institutions: 14 Personal and sales finance cos., etc.......... 5,241 5,367 5,344 5,189 5,224 5,474 5,366 5,324 5,215 15 Other.......................................................... 10,378 10,402 10,399 10,368 10,431 10,543 10,602 10,481 10,493 16 Real estate...................................................... 70,128 70,288 70,738 71,146 71,452 71,800 72,185 72,578 72,965 To commercial banks: 17 Domestic.................................................... 1,500 1,589 1,601 1,663 1,708 1,725 1,512 1,618 1,561 18 Foreign....................................................... 3,468 3,313 3,338 3,405 3,394 3,496 3,346 3,392 3,355 19 Consumer instalment.................................... 44,761 44,893 45,154 45,476 45,840 46,002 46,117 46,325 46,650 20 Foreign govts., official institutions, etc........ 1,312 1,258 1,280 1,249 1,274 1,254 1,250 1,242 1,182 21 All other loans.............................................. 17,876 17,702 17,719 18,039 17,730 18,297 17,940 18,025 17,981 22 Less: Loan reserve and unearned income on loans......................................................... 8,276 8,346 8,400 8,462 8,468 8,440 8,503 8,570 8,603 23 Other loans, net.................................................. 256,514 256,592 257,399 259,227 260,059 261,826 261,230 261,488 261,828 Investments: 24 U.S. Treasury securities.................................... 33,568 34,357 34,533 34,595 33,972 33,572 33,372 33,336 33,236 25 Bills................................................................ 3,330 3,748 3,884 4,194 3,628 3,068 2,957 2,774 2,752 Notes and bonds, by maturity: 26 Within 1 year............................................. 6,532 6,564 6,551 6,449 6,377 6,494 6,511 6,560 6,566 27 1 to 5 years................................................ 19,875 20,110 20,156 20,028 20,029 20,219 19,931 19,985 19,870 28 After 5 years............................................... 3,831 3,935 3,942 3,924 3,938 3,791 3,973 4,017 4,048 29 Other securities.................................................. 56,935 57,411 57,447 56,862 56,880 56,298 56,527 56,680 56,889 Obligations of States and political sub­ divisions : 30 Tax warrants, short-term notes, and bills. 5,519 5,547 5,265 4,704 4,614 4,488 4,579 4,554 4,542 31 All other.................................................... 37,435 37,689 37,806 37,660 37,658 37,569 37,648 37,818 37,916 Other bonds, corporate stocks, and securities: 32 Certificates of participation2.................... 2,442 2,425 2,409 2,426 2,410 2,381 2,370 2,373 2,390 33 All other, including corporate stocks---- 11,539 11,750 11,967 12,072 12,198 11,860 11,930 11,935 12,041 34 Cash items in process of collection..................... 37,006 28,297 30,642 30,199 28,396 36,937 30,740 30,031 28,145 14,526 13,889 14,091 17,833 18,403 12,526 15,711 21,578 12,345 36 Currency and coin................................................. 5,575 5,256 5,543 5,626 5,734 5,042 5,754 5,711 5,714 37 Balances with domestic banks............................. 8,740 6,912 7,014 7,513 7,396 8,657 7,041 6,742 6,631 38 Investments in subsidiaries not consolidated.... 1,553 1,605 1,614 1,538 1,535 1,507 1,538 1,601 1,594 39 Other assets........................................................... 38,939 38,961 37,924 37,963 37,770 38,937 38,711 39,429 38,392 478,266 467,360 469,102 470,623 470,442 480,358 471,095 475,137 466,095 Deposits: 41 Demand deposits............................................... 143,672 134,620 138,183 137,676 134,448 150,602 138,423 137,009 134,270 42 Individuals, partnerships, and corps............ 112,951 106,911 111,072 108,078 106,040 117,401 110,788 108,475 107,059 43 States and political subdivisions.................. 5,611 4,954 4,991 5,440 5,623 6,056 5,474 5,357 5,315 44 U.S. Govt....................................................... 1,179 1,035 1,394 3,458 2,480 1,694 1,488 2,425 1,789 Domestic interbank: 45 Commercial................................................ 16,842 14,889 14,277 14,376 13,746 17,911 14,083 14,079 13,726 46 Mutual savings........................................... 410 399 399 410 388 544 458 430 398 Foreign: 47 Governments, official institutions, etc.... 232 236 211 223 215 221 212 255 298 48 Commercial banks................................... 1,819 1,920 1,642 1,576 1,755 1,792 1,687 1,677 1,670 49 Certified and officers’ checks....................... 4,628 4,276 4,197 4,115 4,201 4,983 4,233 4,311 4,015 218,610 219,698 219,316 218,261 220,228 220,254 220,382 220,678 221,096 51 Savings4......................................................... 83,496 83,440 83,091 82,940 82,990 83,298 82,890 82,690 82,434 52 Time............................................................... 135,114 136,258 136,225 135,321 137,238 136,956 137,492 137,988 138,662 53 Individuals, partnerships, and corps........ 103,590 104,678 105,073 104,492 106,017 106,025 106,778 107,172 107,576 54 States and political subdivisions.............. 23,813 23,684 23,191 23,027 23,043 22,851 22,889 23,157 23,537 55 Domestic interbank................................... 3,826 3,943 4,008 4,052 4,367 4,260 4,132 4,060 3,976 56 Foreign govts., official institutions, etc... 3,073 3,157 3,110 2,908 2,931 2,926 2,821 2,740 2,715 57 Federal funds purchased, etc. 5............................ 61,187 59,230 56,429 58,839 59,542 54,408 57,459 60,167 55,534 Borrowings from: 58 F.R. Banks......................................................... 667 250 860 1,732 1,452 287 661 2,192 632 59 Others................................................................ 3,341 3,086 3,514 3,230 3,796 3,792 3,156 3,225 3,142 60 Other liabilities, etc. 6............................................ 17,876 17,555 17,842 17,991 17,921 17,845 17,703 18,690 18,101 61 Total equity capital and subordinated notes/debentures 7.......................................... 32,913 32,921 32,958 32,894 33,055 33,170 33,311 33,176 33,320 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. i Includes reserves for securities and contingency portion of reserves 4 For amounts of these deposits by ownership categories, see Table 1.30. for loans. 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Weekly Reporting Banks A23 1.30 LARGE WEEKLY REPORTING COMMERCIAL BANKS Balance Sheet Memoranda Millions of dollars, Wednesday figures 1978 Account May 31 June 7 June 14 June 21 June 28 July 5® July \2p July 19^ July 26p Total loans (gross) and investments adjusted1 1 Large Banks....................................................... 450,954 455,169 454, 739 453,062 451,932 457,999 453,396 453,206 455,808 2 New York City banks................................... 93,273 94,392 91,810 92,233 91,038 93,309 92,023 91,415 91,862 3 Banks outside New York City..................... 357,681 360,777 362,929 360,829 360,894 364,690 361,373 361,791 363,946 Total loans (gross), adjusted 339,659 342,368 341,886 341,199 341,669 348,533 343,596 343,425 345,785 5 New York City banks................................... 72,481 73,359 70,937 71,827 71,627 73,713 72,122 71,650 71,964 6 Banks outside New York City..................... 267,178 269,009 270,949 269,372 270,042 274,820 271,474 271,775 273,821 Demand deposits, adjusted2 7 Large Banks....................................................... 113,821 114,353 115,889 113,680 113,522 120,064 117,153 113,857 115,125 8 New York City banks................................... 25,176 23,954 24,019 24,037 23,696 26,004 25,041 23,383 24,515 9 Banks outside New York City..................... 88,645 90,399 91,870 89,643 89,826 94,060 92,112 90,474 90,610 Large negotiable time CD’s included in time and savings deposits3 Total: 86,075 86,741 86,234 85,004 87,491 87,156 87,315 87,325 87,427 25,672 25,464 25,076 24,871 25,820 25,566 25,682 25,487 25,328 60,403 61,277 61,158 60,133 61,671 61,590 61,633 61,838 62,099 Issued to IPC’s: 60,723 61,315 61,045 60,033 61,998 61,898 62,319 62,432 62,475 14 New York City Banks.................................. 18,457 18,319 17,918 17,795 18,540 18,384 18,616 18,424 18,405 15 Banks outside New York City..................... 42,266 42,996 43,127 42,238 43,458 43,514 43,703 44,008 44,070 Issued to others: 25,352 25,426 25,189 24,971 25,493 25,258 24,996 24,893 24,952 17 New York City banks................................... 7,215 7,145 7,158 7,076 7,280 7,182 7,066 7,063 6,923 18 Banks outside New York City..................... 18,137 18,281 18,031 17,895 18,213 18,076 17,930 17,830 18,029 All other large time deposits4 Total: 32,881 32,851 32,749 32,709 32,843 32,731 33,254 33,330 33,668 6,229 6,153 6,215 6,148 6,119 6,199 6,280 6,286 6,352 21 Banks outside New York City..................... 26,652 26,698 26,534 26,561 26,724 26,532 26,974 27,044 27,316 Issued to IPC’s: 18,910 19,022 19,167 19,265 19,359 19,353 19,938 19,837 20,005 23 New York City banks................................... 5,013 4,997 5,065 5,027 5,001 5,074 5,136 5,131 5,140 24 Banks outside New York City..................... 13,897 14,025 14,102 14,238 14,352 14,279 14,802 14,706 14,865 Issued to others: 13,971 13,829 13,582 13,444 13,484 13,378 13,316 13,493 13,663 1,216 1,156 1,150 1,121 1,112 1,125 1,144 1,155 1,212 27 Banks outside New York City..................... 12,755 12,673 12,432 12,323 12,372 12,253 12,172 12,338 12,451 Savings deposits, by ownership category Individuals and nonprofit organizations: 28 Large banks........................................................ 87,018 86,890 86,565 86,399 86,460 86,858 86,536 86,298 85,979 9,171 9,160 9,118 9,106 9,125 9,155 9,114 9,068 9,024 30 Banks outside New York City..................... 77,847 77,730 77,447 77,293 77,335 77,703 77,422 77,230 76,955 Partnerships and corporations for profit:5 5,066 5,072 5,008 4,966 4,986 5,031 4,933 4,926 4,965 486 489 481 476 414 468 465 458 451 33 Banks outside New York City..................... 4,580 4,583 4,527 4,490 4,512 4,563 4,468 4,468 4,508 Domestic governmental units: 1,302 1,387 1,396 1,482 1,404 1,271 1,208 1,189 1,151 35 New York City banks................................. 244 271 290 334 270 241 215 211 192 1,058 1,116 1,106 1,148 1,134 1,024 993 978 959 All other:6 18 26 37 25 28 19 18 23 42 1 15 26 16 19 11 11 9 30 39 Banks outside New Yotk City..................... 11 11 11 9 9 8 7 14 12 Gross liabilities of banks to their foreign branches 40 Large banks........................................................ 4,983 4,763 5,228 4,699 5,618 4,692 4,908 5,948 5,507 41 New York City banks................................... 2,785 2,914 2,785 2,560 2,493 2,378 2,356 3,628 3,094 42 Banks outside New York City..................... 2,198 1,849 2,443 2,139 3,125 2,314 2,552 2,320 2,413 Loans sold outright to selected institutions by all large banks7 43 Commercial and industrial8............................. 2,251 2,314 2,282 2,303 2,237 2,314 2,302 2,307 2,317 249 250 253 256 258 259 258 261 246 45 All other8.......................................................... 1,930 1,963 1,933 1,945 2,004 1,982 1,999 2,012 2,012 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 in denominations of $100,000 or filiates of the bank, the bank’s holding company (if not a bank), and more. nonconsolidated nonbank subsidiaries of the holding company. 4 All other time deposits issued in denominations of $100,000 or more 8 Data revised beginning July 7, 1977, due to reclassifications at one not included in large negotiable (CD’s). large bank. 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A24 Domestic Financial Statistics □ August 1978 1.31 LARGE WEEKLY REPORTING COMMERCIAL BANKS Commercial and Industrial Loans Millions of dollars Outstanding Net change during— Industry classification 1978 1978 1978 June 28 July 5 July 12 July 19 July 26* Qlr Q2 May June July* Total loans classified2 1 Total.................................................... 110,274 110,388 109,947 109,622 109,586 2,804 5,470 3,815 639 -688 Durable goods manufacturing: 2,798 2,759 2,715 2,696 2,703 6 42 99 -98 -95 5,404 5,286 5,347 5,351 5,406 667 170 163 -32 2 4 Transportation equipment............. 2,799 2,787 2,787 2,708 2,730 426 76 88 77 -69 5 Other fabricated metal products... 2,453 2,457 2,483 2,423 2,408 323 181 25 -25 -45 6 Other durable goods....................... 3,909 3,937 3,962 3,933 3,895 32 376 177 117 -14 Nondurable goods manufacturing: 7 Food, liquor, and tobacco............. 4,260 4,206 4,180 4,223 4,074 73 407 368 27 -186 8 Textiles, apparel, and leather........ 4,139 4,225 4,247 4,263 4,268 215 567 218 228 129 2,637 2,650 2,593 2,574 2,562 -470 159 22 48 -75 3,569 3,582 3,632 3,529 3,514 571 154 -3 99 -55 2,267 2,288 2,320 2,344 2,323 -36 61 62 20 56 12 Mining, including crude petroleum and natural gas........................... 10,405 10,335 10,361 10,378 10,372 753 883 301 247 -33 Trade: 2,067 2,018 1,989 2,021 1,981 428 -187 357 -473 -86 8,938 9,011 8,967 8,965 9,019 1,190 449 89 152 81 8,274 8,230 8,286 8,219 8,260 660 649 420 18 -14 5,441 5,286 5,241 5,227 5,263 603 -147 62 126 -178 1,665 1,723 1,715 1,717 1,682 33 249 114 -14 17 5,010 5,091 5,087 5,139 5,176 -358 38 124 -150 166 5,110 5,125 5,150 5,196 5,196 162 475 222 111 86 13,471 13,470 13,485 13,518 13,536 1,042 1,130 467 344 65 7,844 8,013 8,041 7,966 8,006 -883 386 61 -35 162 22 Bankers acceptances........................... 3,261 3,321 2,820 2,723 2,634 -2,531 -429 399 -45 -627 23 Foreign commercial and industrial 4,553 4,588 4,539 4,509 4,578 -102 -219 -20 -103 25 Memo Items: 24 Commercial paper included in total classified loans1........................... 71 64 -27 -60 -27 -26 -7 25 Total commercial and industrial loans of all large weekly re- 135,508 135,597 135,081 134,922 134,753 2,966 6,699 4,006 956 -755 1978 1978 1978 Mar. 29 Apr. 26 May 31 June 28 July 26* Ql* Q2 May June July* “Term” loans classified3 26 Total.................................................... 49,368 50,159 51,204 51,369 51,992 2,742 2,001 1,045 165 623 Durable goods manufacturing: 27 Primary metals................................ 1,579 1,671 1,736 1,706 1,695 33 127 65 -30 -11 28 Machinery....................................... 2,531 2,542 2,622 2,576 2,712 245 45 80 -46 136 29 Transportation equipment............. 1,489 1,462 1,460 1,420 1,439 172 -69 8 -40 19 30 Other fabricated metal products.., 902 960 968 994 1,000 68 92 8 26 6 31 Other durable goods....................... 1,572 1,603 1,625 1,678 1,718 -126 106 22 53 40 Nondurable goods manufacturing: 32 Food, liquor, and tobacco............. 1,522 1,649 1,676 1,671 1,691 24 149 27 -5 20 33 Textiles, apparel, and leather........ 1,038 1,083 1,097 1,122 1,138 -20 84 14 25 16 34 Petroleum refining.......................... 1,873 1,850 1,962 1,947 1,882 -395 74 112 -15 -65 35 Chemicals and rubber.................... 2,116 2,147 2,229 2,412 2,418 389 296 82 183 6 36 Other nondurable goods................ 1,169 1,093 1,093 1,091 1,103 22 -78 -2 12 37 Mining, including crude petroleum and natural gas......................... 7,084 7,443 7,604 7,760 7,660 583 676 161 156 -100 Trade: 38 Commodity dealers....................... 252 244 254 229 233 16 -23 10 -25 4 39 Other wholesale........................... 1,992 2,084 2,141 2,176 2,233 327 184 57 35 57 40 Retail............................................. 2,559 2,703 2,855 2,835 2,782 111 276 152 -20 -53 41 Transportation.................................. 3,871 3,627 3,702 3,738 3,678 387 -133 75 36 -60 42 Communication................................ 924 965 980 1,009 1,059 84 85 15 29 50 43 Other public utilities......................... 3,822 3,723 3,770 3,529 3,714 556 -293 47 -241 185 44 Construction..................................... 2,066 2,085 2,101 2,117 2,177 76 51 16 16 60 45 Services.............................................. 5,881 6,039 6,300 6,505 6,592 515 624 261 205 87 46 All other domestic loans.............. 2,465 2,576 2,525 2,378 2,525 -261 -87 -51 -147 147 47 Foreign commercial and industrial loans.......................................... 2,661 2,620 2,504 2,476 2,543 -64 -185 -116 -28 67 1 Reported for the last Wednesday of each month. all outstanding loans granted under a formal agreement—revolving credit 2 Includes “term” loans, shown below. or standby—on which the original maturity of the commitment was in 3 Outstanding loans with an original maturity of more than 1 year and excess of 1 year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Deposits and Commercial Paper A25 1.32 GROSS DEMAND DEPOSITS of Individuals, Partnerships, and Corporations Billions of dollars, estimated daily-average balances At commercial banks Type of holder 1976 1977 1978 1973 1974 1975 Dec. Dec. Dec. Dec. Mar. June Sept. Dec. Mar. June 220.1 225.0 236.9 250.1 242.3 253.8 252.7 274.4 262.5 271.2 2 Financial business................................................ 19.1 19.0 20.1 22.3 21.6 25.9 23.7 25.0 24.5 25.7 3 Nonfinancial business............................................ 116.2 118.8 125.1 130.2 125.1 129.2 128.5 142.9 131.5 137.7 4 Consumer.............................................................. 70.1 73.3 78.0 82.6 81.6 84.1 86.2 91.0 91.8 92.9 5 Foreign.................................................................... 2.4 2.3 2.4 2.7 2.4 2.5 2.5 2.5 2.4 2.4 6 Other....................................................................... 12.4 11.7 11.3 12.4 11.6 12.2 11.8 12.9 12.3 12.4 At weekly reporting banks 1977 1978 1974 1975 1976 Dec. Dec. Dec. Dec. Jan. Feb. Mar. Apr. May June 7 AH holders, IPC..................................................... 119.7 124.4 128.5 139.1 137.1 132.5 131.9 135.6 134.3 136.9 8 Financial business...................................... 14.8 15.6 17.5 18.5 18.3 18.1 18.2 17.9 18.1 19.0 9 Nonfinancial business........................................... 66.9 69.9 69.7 76.3 73.8 70.7 68.9 70.9 70.7 71.9 10 Consumer.............................................................. 29.0 29.9 31.7 34.6 35.2 34.4 35.4 37.6 36.0 36.6 11 Foreign.................................................................... 2.2 2.3 2.6 2.4 2.4 2.4 2.3 2.2 2.4 2.3 12 Other....................................................................... 6.8 6.6 7.1 7.4 7.4 6.9 7.0 7.0 7.1 7.1 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 Instrument Dec. Dec. Nov. Dec. Jan. Feb. Mar. Apr. May June Commercial paper (seasonally adjusted) 1All issuers................................... 48,459 53,025 62,753 65,112 65,488 65,477 67,354 70,183 71,213 74,536 Financial companies:1 Dealer-placed paper:2 2 Total................................................................ 6,202 7,250 8,497 8,871 9,018 8,918 8,889 9,670 10,314 10,327 3 Bank-related.................................................... 1,762 1,900 1,980 2,132 2,035 1,997 1,993 2,078 2,217 2,442 Directly-placed paper: 3 4 Total................................................................ 31,374 32,500 38,954 40,399 41,586 42,137 42,781 44,220 44,664 47,315 5 Bank-related.................................................... 6,892 5,959 6,567 7,003 7,109 7,616 8,031 7,889 9,258 9,585 6 Nonfinancial companies4...................................... 10,883 13,275 15,302 15,842 14,884 14,422 15,684 16,293 16,235 16,894 Dollar acceptances (not seasonally adjusted) 7 Total........................................................................ 18,727 22,523 24,088 25,654 25,252 25,411 26,181 26,256 26,714 28,289 Held by: 8 Accepting banks................................................. 7,333 10,442 8,952 10,434 7,785 7,513 7,375 7,091 7,286 7,502 9 Own bills......................................................... 5,899 8,769 7,702 8,915 6,772 6,583 6,375 6,117 6,365 6,520 10 Bills bought.................................................... 1,435 1,673 1,251 1,519 1,013 931 1,000 974 921 983 F.R. Banks: 11 Own account................................................... 1,126 991 248 954 1 1,021 12 Foreign correspondents................................. ’293 375 392 362 371 456 522 550 679 625 13 Others.................................................................. 9,975 10,715 14,495 13,904 17,096 17,442 18,283 18,614 18,749 20,160 Based on: 14 Imports into United States............................... 3,726 4,992 5,973 6,532 6,637 6,842 6,979 7,108 7,027 7,578 15 Exports from United States.............................. 4,001 4,818 5,803 5,895 5,840 5,739 6,034 6,216 6,494 6,906 16 All other.............................................................. 11,000 12,713 12,312 13,227 12,774 13,026 13,168 12,932 13,193 13,805 1 Institutions engaged primarily in activities such as, but not limited to, 3 As reported by financial companies that place their paper directly commercial, savings, and mortgage banking; sales, personal, and mortgage with investors. financing; factoring, finance leasing, and other business lending; insurance 4 Includes public utilities and firms engaged primarily in activities such underwriting; and other investment activities. as communications, construction, manufacturing, mining, wholesale and 2 Includes all financial company paper sold by dealers in the open retail trade, transportation, and services, market. 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A26 Domestic Financial Statistics □ August 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—Nov. 1............. 61/2 I977—Oct. 7........... 7 Vi 1977—Nov...................... 7.75 Oct. 24........... 73/4 1977—Jan....................... 6.25 Dec....................... 7.75 Dec. 13............. 6% Feb...................... 6.25 1978—Jan. 10............ 8 Mar................. 6.25 1978—Jan....................... 7.93 1977_May 13............. 6 y2 Apr...................... 6.25 Feb....................... 8.00 31............. 6% May 5........... 8Va May..................... 6.41 Mar..................... 8.00 May 26........... 8i/2 June..................... 6.75 Apr...................... 8.00 1977—Aug. 22............. 7 July...................... 6.75 May..................... 8.27 June 16........... 8 Va Aug...................... 6.83 June..................... 8.63 Sept. 16............. 71/4 June 30........... 9 Sept...................... 7.13 July...................... 9.00 7.52 1.35 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 1-6, 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)...................... 9,522,014 1,180,739 738,576 928,657 2,238,701 767,846 3,667,496 2 Number of loans............................................................. 217,426 165,335 22,850 14,211 12,443 1,211 1,376 3 Weighted-average maturity (months)............................ 2.7 2.7 2.9 2.3 2.8 3.0 2.6 4 Weighted-average interest rate (per cent per annum).. 9.01 9.82 9.63 9.37 9.04 8.90 8.53 5 Interquartile range 1................................................... 8.25-9.46 9.00-10.70 8.77-10.47 8.30-9.84 8.30-9.50 8.27-9.31 8.21-8.75 Percentage of amount of loans: 6 With floating rate........................................................ 54.7 31.9 33.0 51.2 60.1 52.0 64.6 7 Made under commitment........................................... 39.9 12.9 21.6 23.0 39.3 63.6 51.9 Long-term commercial and industrial loans . --------, 8 Amount of loans (thousands of dollars)....................... 1,897,435 474,261 421,282 92,982 908,911 9 Number of loans............................................................. 39,810 37,035 2,420 139 216 10 Weighted-average maturity (months)............................ 47.6 37.8 40.5 41.0 56.7 11 Weighted-average interest rate (per cent per annum).. 9.67 10.23 10.29 9.11 9.15 12 Interquartile range *................................................... 8.75-10.47 9.00-10.47 8.75-10.47 8.50-9.92 8.50-10.000 Percentage of amount of loans: 38.7 14.8 51.5 66.1 42.5 14 Made under commitment........................................... 42.9 24.3 39.4 66.7 51.8 Construction and land development loans 15 Amount of loans (thousands of dollars)....................... 905,900 170,034 117,084 163,826 263,323 191,632 16 Number of loans............................................................. 26,806 19,511 3,330 2,263 1,551 152 17 Weighted-average maturity (months)............................ 10.2 5.7 8.6 13.6 10.1 11.7 18 Weighted-average interest rate (per cent per annum).. 9.83 9.53 10.05 10.08 9.99 9.55 9.24-10.21 9.03-9.92 9.00-10.60 9.27-11.85 9.95-10.04 8.75-10.73 Percentage of amount of loans: 20 With floating rate........................................................ 34.6 16.4 12.8 37.6 28.7 69.4 21 Secured by real estate................................................. 94.3 94.5 96.7 97.7 95.5 88.0 22 Made under commitment........................................... 60.0 60.9 41.6 21.8 86.9 66.2 23 Type of construction: 1-to 4-family....................... 41.5 74.8 86.1 40.9 17.8 17.9 6.4 2.8 1.2 3.2 5.3 16.7 52.1 22.4 12.7 55.9 76.8 65.5 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)....................... 995,247 185,866 174,508 140,998 114,506 140,316 239,051 27 Number of loans............................................................ 70,014 51,013 11,734 4,239 1,766 968 293 28 Weighted-average maturity (months)............................ 9.1 8.7 7.6 10.1 10.2 5.7 11.4 29 Weighted-average interest rate (per cent per annum).. 9.31 9.24 9.21 9.28 9.22 9.34 9.46 30 Interquartile range 1................................................... 6.71-9.73 8.75-9.73 8.75-9.58 8.75-9.58 8.75-9.54 8.71-9.76 8.68-10.16 By purpose of loan: 31 Feeder livestock...................................................... 9.39 9.16 8.98 9.06 9.19 9.72 9.88 32 Other livestock........................................................ 9.08 9.33 9.46 9.12 9.72 9.51 * 33 Other current operating expenses.......................... 9.19 9.12 9.29 9.26 8.98 9.32 9.15 34 Farm machinery and equipment........................... 9.37 9.47 9.28 9.04 9.29 9.86 * 35 Other........................................................................ 9.54 9.48 9.23 9.64 9.51 9.08 9.97 1 Interest rate range that covers the middle 50 per cent of the total Note.—For more detail, see the Board’s 416 (G.14) statistical release, dollar amount of loans made. 2 Fewer than three sample loans. 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Securities Markets A ll 1.36 INTEREST RATES Money and Capital Markets Averages, per cent per annum 1978 1978,week ending— 1975 1976 1977 Apr. May June July July 1 July 8 July 15 July 22 July 29 Money market rates 1Federal funds 1........................... ...... 5.82 5.05 5.54 6.89 7.36 7.60 7.81 7.78 7.72 7.72 7.94 7.88 Prime commercial paper 2 ? 6.26 5.24 5.54 6.82 7.06 7.59 7.85 7.76 7.82 7.85 7.88 7.86 3 4- to 6-month.............................................. 6.33 5.35 5.60 6.86 7.11 7.63 7.91 7.80 7.88 7.91 7.93 7.92 4 Finance company paper, directly placed, 6.16 5.22 5.49 6.74 6.98 7.41 7.66 7.58 7.63 7.66 7.67 7.67 5 Prime bankers acceptances, 90-day 4........ 6.30 5.19 5.59 6.92 7.32 7.75 8.02 7.94 8.01 8.06 8.05 7.97 Large negotiable certificates oi deposit 6 3-month, secondary market 5.................. 6.43 5.26 5.58 7.04 7.42 7.82 9.00 8.04 8.07 8.11 8.16 8.17 7 5.15 5 52 6.85 7.24 7.68 8.00 8.00 8.00 8.00 8.00 8.00 8 Euro-dollar deposits, 3-month 7................. 6.97 5.57 6.05 7.38 7.82 8.33 8.52 8.65 8.63 8.46 8.58 8.50 U.S. Government securities Bills: 8 Market yields: 9 5.80 4.98 5.27 6.29 6.41 6.73 7.01 6.93 7.05 7.16 7.05 6.83 10 6.11 5.26 5.53 6.73 7.02 7.23 7.44 7.38 7.43 7.51 7.47 7.38 11 6.30 5.52 5.71 6.96 7.28 7.53 7.79 7.72 7.75 7.82 7.82 7.78 Rates on new issue:9 12 5.838 4.989 5.265 6.306 6.430 6.707 7.074 6.967 7.058 7.188 7.113 6.935 13 6.122 5.266 5.510 6.700 7.019 7.200 7.471 7.396 7.447 7.515 7.497 7.425 Constant maturities:10 14 1-year................................... .... 6.76 5.88 6.09 7.45 7.82 8.09 8.39 8.32 8.34 8.42 8.42 8.39 Capital market rates Government notes and bonds U.S. Treasury Constant maturities:10 15 2-year.................................................... 6.45 7.74 8.01 8.24 8.49 8.45 8.45 8.49 8.50 8 51 16 3-year.................................................... 7.49 6.77 6.69 7.85 8.07 8.30 8.54 8.51 8.51 8.56 8.55 8.55 17 5-year.................................................... 7.77 7.18 6.99 7.98 8.18 8.36 8.54 8.49 8.50 8.56 8.56 8.53 18 7.90 7.42 7.23 8.06 8.25 8.40 8.55 8.50 8.52 8.57 8.56 8.55 19 10-year.................................................. 7.99 7.61 7.42 8.15 8.35 8.46 8.64 8.59 8.62 8.68 8.65 8.63 20 8.19 7.86 7.67 8.32 8.44 8.53 8.69 8.63 8.68 8.72 8.69 8.67 21 30-year.................................................. 8.34 8.43 8.50 8.65 8.59 8.63 8.69 8.66 8.63 Notes and bonds maturing in —11 22 3 to 5 years.......................................... 7.55 6.94 6.85 7.90 8.10 8.31 8.54 8.50 8.52 8.56 8.55 8.53 23 6.98 6.78 7.06 7.74 7.87 7.94 8.09 8.02 8.06 8.13 8.10 8.08 State and local: Moody’s series:12 24 Aaa........................................................ 6.42 5.66 5.20 5.41 5.57 5.73 5.80 5.85 5.85 5.85 5.75 5.74 25 7.62 7.49 6.12 5.88 6.14 6.44 6.45 6.50 6.50 6.52 6.40 6.38 26 Bond Buyer series 13............................. 7.05 6.64 5.68 5.80 6.03 6.22 6.28 6.29 6.31 6.32 6.26 6.24 Corporate bonds Seasoned issues 14 27 All industries........................................... 9.57 9.01 8.43 8.88 9.02 9.13 9.22 9.16 9.18 9.21 9.24 9.23 By rating groups: 28 8.83 8.43 8.02 8.56 8.69 8.76 8.88 8.82 8.85 8.90 8.89 8.88 29 9.17 8.75 8.24 8.73 8.84 8.95 9.07 9.00 9.01 9.06 9.08 9.10 30 A............................................................ 9.65 9.09 8.49 8.93 9.05 9.18 9.33 9.22 9.26 9.31 9.37 9.36 31 10.61 9.75 8.97 9.32 9.49 9.60 9.60 9.58 9.60 9.59 9.59 9.61 Aaa utility bonds:15 32 New issue................................................. 9.40 8.48 8.19 8.90 8.95 9.09 9.14 9.16 9.18 9.17 9.12 9.08 33 Recently offered issues......................... 9.41 8.49 8.19 8.85 8.98 9.07 9.18 9.18 9.20 9.22 9.19 9.10 Dividend/price ratio 34 Preferred stocks...................................... 8.38 7.97 7.60 8.06 8.11 8.31 8.42 8.38 8.39 8.48 8.38 8.42 35 4.31 3.77 4.56 5.42 5.20 5.19 5.25 5.32 5.38 5.28 5.18 5.14 1 Weekly figures are 7-day averages of daily effective rates for the week 8 Except for new bill issues, yields are computed from daily closing ending Wednesday; the daily effective rate is an average of the rates on bid prices. Yields for all bills are quoted on a bank-discount basis. a given day weighted by the volume of transactions at these rates. 9 Rates are recorded in the week in which bills are issued. 2 Beginning Nov. 1977, unweighted average of offering rates quoted !0 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. 11 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 ip this range. all bonds neither due nor callable in less than 10 years, including a num­ 4 Average of the midpoint of the range of daily dealer closing rates ber of very low yielding “flower” bonds. offered for domestic issues; prior data are averages of the most repre­ 12 General obligations only, based on figures for Thursday, from sentative daily offering rate quoted by dealers. Moody’s Investors Service. 5 Weekly figures (week ending Wednesday) are 7-day averages of the 13 Twenty issues of mixed quality. daily midpoints as determined from the range of offering rates; monthly 14 Averages of daily figures from Moody’s Investors Service. figures are averages of total days in the month. Beginning Apr. 5, 1978, 15 Compilation of the Board of Governors of the Federal Reserve weekly figures are simple averages of offering rates. System. 6 Posted rates, which are the annual interest rates most often quoted Issues included are long-term (20 years or more). New-issue yields are on new offerings of negotiable CD’s in denominations of $100,000 or based on quotations on date of offering; those on recently offered issues more by large New York City banks. Rates prior to 1976 not available. (included only for first 4 weeks after termination of underwriter price Digitized foWr FeeRklAy SfiEguRre s are for Wednesday dates. restrictions), on Friday close-of-business quotations. 7 Averages of daily quotations for the week ending Wednesday. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Financial Statistics □ August 1978 1.37 STOCK MARKET Selected Statistics 1978 Indicator 1975 1976 1977 Jan. Feb. Mar. Apr. May June July 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 49.89 49.41 49.50 51.75 54.49 54.83 54.61 2 Industrial................................................................ 51.88 60.44 57.84 53.45 52.80 52.77 55.48 59.14 59.63 59.35 3 Transportation...................................................... 30.73 39.57 41.07 39.15 38.90 38.95 41.19 44.21 44.19 44.74 4 Utility...................................................................... 31.45 36.97 40.91 39.09 39.02 39.26 39.69 39.47 39.41 39.28 5 Finance................................................................... 46.62 52.94 55.23 50.91 50.60 51.44 55.04 57.95 58.31 57.97 6 Standard & Poor’s Corporation (1941-43 = 10)1. 85.17 102.01 98.18 90.28 88.98 88.82 92.71 97.41 97.66 97.19 7 American Stock Exchange (Aug. 31,1973 = 100) 83.15 101.63 116.18 121.73 123.35 126.11 133.67 142.26 147.64 149.87 Volume of trading (thousands of shares)2 8 New York Stock Exchange................................ 18,568 21,189 20,936 20,388 19,400 22,617 34,780 35,261 30,514 27,074 9 American Stock Exchange................................. 2,150 2,565 2,514 2,254 2,300 2,940 4,151 4,869 4,220 3,496 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 10,690 10,901 11,027 11,424 11 Brokers, total..................................................... 5,540 8,166 9,993 9,839 10,024 10,172 10,510 10,910 11,332 12 Margin stock4.............................................. 5,390 7,960 9,740 9,590 9,780 9,920 10,260 10,660 11,090 13 Convertible bonds........................................ 147 204 250 246 242 250 248 245 242 14 Subscription issues...................................... 3 2 3 3 2 2 2 1 15 Banks, total....................................................... 960 845 873 851 877 855 914 16 Margin stocks............................................... 909 800 827 809 838 824 882 17 Convertible bonds........................................ 36 30 30 27 25 24 25 18 Subscription issues...................................... 15 15 16 15 14 7 7 19 Unregulated nonmargin stock credit at banks5 2,281 r2,283 2,568 2,565 2,544 2,544 2,560 Memo: Free credit balances at brokers6 20 Margin-account................................................ 475 585 640 660 635 630 715 755 21 Cash-account..................................................... 1,525 1,855 2,060 1,925 1,875 1,795 2,170 2,395 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 25.0 25.0 21.0 15.0 15.0 16.0 24 40-49........................................ 28.8 23.0 36.0 34.0 34.0 33.0 32.0 33.0 34.0 25 50-59........................................ 22.3 35.0 23.0 20.0 20.0 24.0 27.0 26.0 26.0 26 60-69........................................ 11.6 15.0 11.0 10.0 10.0 11.0 13.0 13.0 12.0 27 70-79........................................ 6.9 8.7 6.0 6.0 6.0 6.0 7.0 7.0 7.0 28 80 or more.............................. 5.3 6.0 5.0 5.0 5.0 5.0 6.0 6.0 5.0 Special miscellaneous-account balances at brokers (end of period) 29 Total balances (millions of dollars) *___ 7,290 8,776 9,910 9,880 10,150 10,190 10,212 10,516 Distribution by equity status (per cent) 30 Net credit status...................................... 43.8 41.3 43.4 42.4 42.0 42.6 41.9 42.6 Debit status, equity of— 31 60 per cent or more............................ 40.8 47.8 44.9 43.6 43.0 43.7 46.2 46.0 32 Less than 60 per cent......................... 15.4 10.9 11.7 14.0 14.0 13.5 11.9 11.4 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 Vi-hour day. 6 Free credit balances are in accounts with no unfulfilled commitments 3 Margin credit includes all credit extended to purchase or carry to the brokers and are subject to withdrawal by customers on demand. stocks or related equity instruments 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 Account Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June* Savings and loan associations 1 Assets......................................... 295,545 338,233 391,907 450,563 455,644 459,282 464,279 469,726 475,320 480,986 487,091 491,724 2 Mortgages................................ 249,301 278,590 323,005 371,714 376,468 381,216 384,235 387,644 392,479 397,335 402,356 407,943 3 Cash and investment securities1............................. 23,251 30,853 35,724 40,642 40,522 39,197 40,356 41,646 41,870 41,901 42,493 41,656 4 Other.......................................... 22,993 28,790 33,178 38,207 38,654 38,869 39,688 40,436 40,971 41,750 42,242 42,125 5 Liabilities and net worth........ 295,545 338,233 391,907 450,563 455,644 459,282 464,279 469,726 475,320 480,986 487,091 491,724 6 Savings capital......................... 242,974 285,743 335,912 379,604 381,333 386,875 389,620 391,917 399,070 399,628 402,008 408,659 7 Borrowed money...................... 24,780 20,634 19,083 r24,199 r25,540 *27,796 *27,899 r28,666 29,274 31,838 32,689 34,258 8 FHLBB................................. 21,508 17,524 15,708 r17,539 r18,275 r19,945 >•20,129 r20,602 21,030 22,692 23,323 24,962 9 Other...................................... 3,272 3,110 3,375 6,660 7,265 7,851 7,770 8,064 8,244 9,146 9,366 9,296 10 Loans in process..................... 3,244 5,128 6,840 9,856 9,924 9,932 9,849 9,924 10,435 10,959 11,408 11,659 11 Other.......................................... 6,105 6,949 8,074 r12,233 r13,846 r9,498 '•ll ,471 >■13,456 10,511 12,194 14,252 10,105 12 Net worth2............................... 18,442 19,779 21,998 24,671 25,001 25,181 25,440 25,763 26,030 26,367 26,734 27,043 13 Memo : Mortgage loan com­ mitments outstanding3.. 7,454 10,673 14,826 21,555 21,270 19,886 19,534 20,625 22,320 23,409 23,951 22,834 Mutual savings banks 14 Assets........................................ 109,550 121,056 134,812 145,651 146,346 147,287 148,511 149,528 150,962 151,383 152,202 Loans: 15 Mortgage.............................. 74,891 77,221 81,630 86,769 87,333 88,195 88,905 89,247 89,800 90,346 90,915 3,812 4,023 5,183 7,115 7,241 6,210 6,803 7,398 7,782 7,422 7,907 Securities: 17 U.S. Government............... 2,555 4,740 5,840 6,101 6,071 5,895 5,785 5,737 5,677 5,670 5,491 18 State and local government. 930 1,545 2,417 2,808 2,809 2,828 2,886 2,808 2,850 2,915 2,994 19 Corporate and other4........ 22,550 27,992 33,793 37,073 37,221 37,918 38,360 38,605 38,964 39,146 39,225 20 Cash........................................... 2,167 2,330 2,355 2,011 1,887 2,401 1,889 1,838 1,990 1,940 1,798 21 Other assets.............................. 2,645 3,205 3,593 3,773 3,783 3,839 3,882 3,895 3,899 3,945 3,873 22 Liabilities.................................. 109,550 121,056 134,812 145,651 146,346 147,287 148,511 149,528 150,962 151,383 152,202 23 Deposits..................................... 98,701 109,873 122,877 132,250 132,537 134,017 134,771 135,200 136,997 136,931 137,307 24 Regular:5.............................. 98,221 109,291 121,961 130,913 131,319 132,744 133,370 133,846 135,558 135,349 135,785 25 Ordinary savings............. 64,286 69,653 74,535 77,503 77,460 78,005 77,754 77,837 78,783 78,170 78,273 26 Time and other............... 33,935 39,639 47,426 53,410 53,859 54,739 55,616 56,009 56,775 57,179 57,512 27 Other...................................... 480 582 916 1,337 1,208 1,272 1,401 1,354 1,439 1,582 1,521 28 Other liabilities....................... 2,888 2,755 2,884 3,632 3,938 3,292 3,676 4,155 3,735 4,152 4,481 29 General reserve accounts___ 7,961 8,428 9,052 9,769 9,882 9,978 10,064 10,174 10,230 10,301 10,414 30 Memo : Mortgage loan com­ mitments outstanding6.. 2,040 1,803 2,439 4,423 4,458 4,066 3,998 4,027 4,185 4,342 4,606 Life insurance companies 31 Assets........................ 263,349 289,304 321,552 343,738 347,182 350,506 352,914 355,068 357,925 361,848 Securities: 32 Government......... 10,900 13,758 17,942 19,519 19,681 19.508 19,579 19,677 19,560 19,391 33 United States7 3,372 4,736 5,368 5,810 5,993 5,693 5,717 5,748 5,629 5,214 34 State and local 3,667 4,508 5,594 5,979 5,967 6,016 6,009 6,073 6,015 5,868 35 Foreign8.......... 3,861 4,514 6,980 7,730 7,721 7,799 7,853 7,856 7,916 8,309 36 Business............... 119,637 135,317 157,246 172,005 174,109 175,204 177,134 178,718 180,688 183,922 37 Bonds............... 97,717 107,256 122,984 139,909 141,354 142,095 145,244 147,202 148,754 150,057 38 Stocks............... 21,920 28,061 34,262 32,096 32,755 33,109 31,890 31,516 31,934 33,865 39 Mortgages............... 86,234 89,167 91,552 94,684 95,110 96,765 97,171 97,475 97,963 98,533 40 Real estate............... 8,331 9,621 10,476 11,024 11,113 11,201 11,252 11,318 11,310 11,307 41 Policy loans............. 22,862 24,467 25,834 27,220 27,355 27.508 27,628 27,762 27,951 28,169 42 Other assets............. 15,385 16,971 18,502 19,286 19,814 20,320 20,150 20,118 20,453 20,526 Credit unions 43 Total assets/liabilities and 31,948 38,037 45,225 52,412 53,141 54,084 53,982 54,989 56,703 56,827 58,018 59,381 44 Federal.................................. 16,715 20,209 24,396 28,463 28,954 29,574 29,579 30,236 31,274 31,255 31,925 32,793 15,233 17,828 20,829 23,949 24,187 24,510 24,403 24,753 25,429 25,572 26,093 26,588 24,432 28,169 34,384 40,865 41,427 42,055 41,876 42,331 43,379 44,133 45,506 47,118 47 Federal.................................. 12,730 14,869 18,311 21,814 22,224 22,111 22,590 22,865 23,555 23,919 24,732 25,672 48 State...................................... 11,702 13,300 16,073 19,051 19,203 19,338 19,286 19,466 19,824 20,214 20,774 21,356 27,518 33,013 39,173 45,441 45,977 46,832 47,317 48,093 49,706 49,931 50,789 52,076 50 Federal (shares)................... 14,370 17,530 21,130 24,945 25,303 25,849 26,076 26,569 27,514 27,592 28,128 28,903 51 State (shares and deposits). 13,148 15,483 18,043 20,496 20,674 20,983 21,241 21,524 22,192 22,339 22,661 23,173 For notes see bottom of page A30. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Financial Statistics □ August 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 1977 1978 1978 1976 Sept. 1977 1976) HI H2 HI Apr. May June U.S. Budget 1 Receipts1............................................ 300,005 81,772 357,762 190,278 175,820 210,650 42,546 35,091 47,657 2 Outlays1,2,3......................................... 366,451 94,742 402,803 200,350 216,781 222,518 35,927 36,800 38,602 3 Surplus, or deficit (—).................. -66,446 -12,970 - 45,041 -10,072 -40,961 -11,870 6,618 -1,709 9,055 4 Trust funds..................................... 2,409 -1,952 7,833 7,332 4,293 4,334 -990 5,970 1,597 5 Federal funds 4.............................. -68,855 -11,018 -52,874 -17,405 -45,254 -16,204 7,608 -7,679 7,458 Off-budget entities surplus, or deficit (—) 6 Federal Financing Bank outlays.. -5,915 -2,575 -8,415 -2,075 -6,663 -5,105 -671 -795 -499 7 Other2,5............................................ -1,355 793 -269 -2,086 428 -790 102 -245 -155 U.S. Budget plus off-budget, in­ cluding Federal Financing Bank 8 Surplus, or deficit ( —)..................... -73,716 -14,752 53,725 -14,233 -47,196 -17,765 6,049 -2,749 8.401 Financed by: 9 Borrowing from the public 3.. . 82,922 18,027 53,516 16,480 40,284 23,374 -2,263 -555 5.401 10 Cash and monetary assets (de­ crease, or increase ( —)).... -7,796 -2,899 -2,238 -4,666 4,317 -5,098 -3,345 6,403 -14,091 11 Other 6............................................ -1,396 -373 2,440 2,420 2,597 -511 -442 -3,099 289 Memo items : 12 Treasury operating balance (level, end of period)........................................ 14,836 17,418 19,104 16,255 12,274 17,526 9,281 3,726 17,526 13 F.R. Banks........................................ 11,975 13,299 15,740 15,183 7,114 11,614 7,177 2,398 11,614 14 Tax and loan accounts.................... 2,854 4,119 3,364 1,072 5,160 5,912 2,104 1,328 5,912 15 Other demand accounts 7............... 7 1 Effective June 1978, earned income credit payments in excess of Electrification; Telephone Revolving Fund, Rural Telephone Bank; and an individual’s tax liability, formerly treated as income tax refunds, are Housing for the Elderly or Handicapped Fund until October 1977. classified as outlays 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 1977, 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 1977 1978 1978 1976 Sept. 1977 1976) HI H2 HI Apr. May June Receipts 1All sources1.............................................. 300,005 81,772 357,762 190,278 175,820 210,650 42,546 35,091 47,657 2 Individual income taxes, net.................. 131,602 38,800 157,626 78,816 82,911 90,336 19,036 14,423 20,301 3 Withheld............................................. 123,408 32,949 144,820 73,303 75,480 82,784 13,095 14,808 14,490 4 Presidential Election Campaign Fund........................................... 34 1 37 37 1 36 10 6 5 5 Non withheld...................................... 35,528 6,809 42,062 32,959 9,397 37,584 13,611 6,750 6,627 6 Refunds1.............................................. 27,367 958 29,293 27,482 1,967 30,068 7,680 7,142 820 7 Corporation income taxes: 8 Gross receipts.................................... 46,783 9,808 60,057 37,133 25,121 38,496 9,342 1,624 15,054 9 Refunds............................................... 5,374 1,348 5,164 2,324 2,819 2,782 492 441 399 10 Social insurance taxes and contribu­ tions, net......................................... 92,714 25,760 108,683 58,099 52,347 66,191 11,828 16,092 9,287 11 Payroll employment taxes and contributions 2.......................... 76,391 21,534 88,196 45,242 44,384 51,668 7,495 10,796 8,383 12 Self-employment taxes and contributions 3......................... 3,518 269 4,014 3,687 316 3,892 2,492 288 265 13 Unemployment insurance............... 8,054 2,698 11,312 6,575 4,936 7,800 1,393 4,499 169 14 Other net receipts 4......................... 4,752 1,259 5,162 2,595 2,711 2,831 448 508 470 15 Excise taxes............................................ 16,963 4,473 17,548 8,432 9,284 8,835 1,368 1,670 1,651 16 Customs.................................................. 4,074 1,212 5,150 2,519 2,848 3,320 545 584 653 17 Estate and gift....................................... 5,216 1,455 7,327 4,332 2,837 2,587 296 512 436 18 Miscellaneous receipts 5...................... 8,026 1,612 6,536 3,269 3,292 3,667 622 629 674 Outlays 9 19 All types1,6.............................................. 366,451 94,742 402,803 200,350 216,781 222,518 35,927 36,800 38,602 20 National defense.................................. 89,430 22,307 97,501 48,721 50,873 52,979 8,492 9,107 9,120 21 International affairs 6......................... 5,567 2,180 4,831 2,522 2,896 2,904 1,259 60 1,099 22 General science, space, and technology...................................... 4,370 1,161 4,677 2,108 2,318 2,395 379 428 393 23 Energy..................................................... 3,127 794 4,172 2,487 165 550 627 24 Natural resources and environment. 8,124 2,532 10,000 4,959 771 848 990 25 Agriculture............................................. 2,502 584 5,526 2,628 5,477 2,353 23 82 -165 26 Commerce and housing credit........... 3,795 1,391 -31 -946 -22 216 -121 27 Transportation...................................... 13,438 3,306 14,636 7,723 1,153 1,114 1,585 28 Community and regional development.................................. 4,709 1,340 6,283 3,149 4,924 5,928 771 1,185 983 29 Education, training, employment, and social services....................... 18,737 5,162 20,985 9,775 10,800 12,792 1,913 2,389 2,222 30 Health..................................................... 33,448 8,720 38,785 18,654 19,422 21,391 3,589 3,716 3,876 31 Income security1.................................... 127,406 32,795 137,905 70,785 71,081 75,201 11,754 12,360 12,512 32 Veterans benefits and services........... 18,432 3,962 18,038 9,382 9,864 9,603 567 1,726 2,433 33 Administration of justice.................... 3,320 859 3.600 1,783 1,723 1,946 340 371 312 34 General government................................. 2,927 878 3,357 1,587 1,749 1,803 131 484 293 35 General-purpose fiscal assistance.... 7,235 2,092 9,499 4,333 4,926 4,665 2,050 153 50 36 Interest 7................................................ 34,589 7,246 38,092 18,927 19,962 22,280 3,295 3,296 6,617 37 Undistributed offsetting receipts 7,8 -14,704 -2,567 -15,053 -6,803 -8,506 -7,945 -703 -1,284 -4,225 1 Effective June 1978, 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 income tax refunds, are issues for U.S. Govt, accounts from an accrual basis to a* cash basis. classified as outlays 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 □ August 1978 1.41 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1975 1976 1977 1978 Item June 30 Dec. 31 June 30 Sept. 30 Dec. 31 June 30 Sept. 30 Dec. 31 Mar. 31 1 Federal debt outstanding....................... 544.1 587.6 631.9 2646.4 665.5 685.2 709.1 729.2 747.8 2 Public debt securities.............................. 533.7 576.6 620.4 634.7 653.5 674.4 698.8 718.9 738.0 3 Held by public.................................... 387.9 437.3 470.8 488.6 506.4 523.2 543.4 564.1 585.2 4 Held by agencies................................ 145.3 139.3 149.6 146.1 147.1 151.2 155.5 154.8 152.7 10.9 10.9 11.5 11.6 12.0 10.8 10.3 10.2 9.9 6 Held by public.................................... 9.0 8.9 9.5 29.7 10.0 9.0 8.5 8.4 8.1 7 Held by agencies................................ 1.9 2.0 2.0 1.9 1.9 1.8 1.8 1.8 1.8 8 Debt subject to statutory limit.............. 534.2 577.8 621.6 635.8 654.7 675.6 700.0 720.1 737.7 532.6 576.0 619.8 634.1 652.9 673.8 698.2 718.3 736.0 1.6 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.8 II Memo: Statutory debt limit................. 577.0 595.0 636.0 636.0 682.0 700.0 700.0 752.0 752.0 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 1978 Type and holder 1974 1975 1976 1977 Mar. Apr. May June July 492.7 576.6 653.5 718.9 738.0 736.6 741.6 749.0 750.5 By type: 491.6 575.7 652.5 715.2 736.9 733.1 740.6 748.0 749.5 3 Marketable.............................................................. 282.9 363.2 421.3 459.9 478.3 472.2 473.7 477.7 481.0 4 Bills...................................................................... 119.7 157.5 164.0 161.1 165.7 159.6 159.4 159.8 160.1 5 129.8 167.1 216.7 251.8 262.2 262.2 261.6 265.3 266.6 6 33.4 38.6 40.6 47.0 50.4 50.4 52.7 52.6 54.4 7 208.7 212.5 231.2 255.3 258.7 260.9 266.9 270.3 268.4 8 Convertible bonds 2........................................... 2.3 2.3 2.3 2.2 2.2 2.2 2.2 2.2 2.2 9 State and local government series................. .6 1.2 4.5 13.9 16.4 17.6 18.6 20.6 20.8 10 Foreign issues3................................................... 22.8 21.6 22.3 22.2 23.6 23.4 22.4 21.5 20.8 11 Savings bonds and notes................................. 63.8 67.9 72.3 77.0 78.2 78.6 79.0 79.4 79.7 12 Government account series4.......................... 119.1 119.4 129.7 139.8 138.0 138.8 144.4 146.4 144.7 13 Non-interest-bearing debt........................................ 1.1 1.0 1.1 3.7 1.0 3.5 1.0 1.0 1.0 By holder:5 14 U.S. Government agencies and trust funds. .. 138.2 145.3 149.6 154.8 152.7 153.6 159.1 15 F.R. Banks............................................................. 80.5 84.7 94.4 102.5 101.6 103.1 102.8 16 Private investors..................................................... 271.0 349.4 409.5 461.3 483.7 479.5 479.7 17 Commercial banks............................................ 55.6 85.1 103.8 102.4 102.3 100.7 99.0 18 Mutual savings banks...................................... 2.5 4.5 5.7 6.0 5.8 5.7 5.6 19 Insurance companies........................................ 6.2 9.5 12.5 15.5 15.0 14.9 15.0 20 Other corporations........................................... 11.0 20.2 26.5 22.2 20.4 19.4 19.2 21 State and local governments.......................... 29.2 34.2 41.6 55.1 60.3 60.3 59.3 Individuals: 22 Savings bonds................................................ 63.4 67.3 72.0 76.7 78.0 78.4 78.8 23 Other securities.............................................. 21.5 24.0 28.8 28.6 28.9 28.7 28.9 24 Foreign and international ............................. 58.8 66.5 78.1 109.6 124.5 120.4 119.7 25 Other miscellaneous investors7...................... 22.8 38.0 40.5 45.1 48.5 51.1 54.2 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 I ft 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 May June May June All maturities 1 to 5 years 1 421,276 459,927 473,684 477,699 141,132 151,264 170,122 174,302 2 U.S. Govt, agencies and trust funds......................................... 16,485 14,420 13,967 13,904 6,141 4,788 A,112 4,856 96,971 101,191 101,329 110,134 31,249 27,012 28,329 31,903 4 Private investors.............................................................................. 307,820 344,315 358,388 353,660 103,742 119,464 137,020 137,543 5 78,262 75,363 71,530 71,675 40,005 38,691 42,214 42,198 6 Mutual savings banks............................................................... 4,072 4,379 4,004 3,736 2,010 2,112 2,257 2,077 7 Insurance companies................................................................ 10,284 12,378 11,855 11,531 3,885 A,129 5,149 5,316 8 14,193 9,474 7,028 6,390 2,618 3,183 3,359 3,280 9 Savings and loan associations................................................. 4,576 4,817 4,540 4,342 2,360 2,368 2,569 2,503 10 State and local governments................................................... 12,252 15,495 14,646 15,446 2,543 3,875 4,453 4,792 11 184,182 222,409 244,785 240,540 50,321 64,505 17,019 77,377 Total, within 1 year 5 to 10 years 211,035 230,691 219,559 220,683 43,045 45,328 45,690 44,443 2,012 1,906 1,150 1,145 2,879 2,129 2,129 1,989 51,569 56,702 52,314 57,005 9,148 10,404 11,802 11,995 15 Private investors.............................................................................. 157,454 172,084 166,094 162,533 31,018 32,795 31,758 30,458 16 31,213 29,477 20,831 20,988 6,278 6,162 6,567 6,538 17 1,214 1,400 934 903 567 584 537 527 18 2,191 2,398 1,623 1,455 2,546 3,204 3,017 2,616 19 11,009 5,770 3,147 2,597 370 307 307 293 20 1,984 2,236 1,765 1,656 155 143 133 112 21 6,622 7,917 5,953 6,235 1,465 1,283 1,305 1,257 22 103,220 122,885 131,842 128,700 19,637 21,112 19,892 19,114 Bills, within 1 year 10 to 20 years 23 All holders....................................................................................... 163,992 161,081 159,391 159,757 11,865 12,906 14,927 14,894 24 U.S. Govt, agencies and trust funds......................................... 449 32 2 1 3,102 3,102 3,273 3,273 25 41,279 42,004 39,867 44,597 1,363 1,510 1,806 1,855 26 Private investors.............................................................................. 122,264 119,035 119,522 115,158 7,400 8,295 9,847 9,766 27 Commercial banks.................................................................... 17,303 11,996 6,773 7,010 339 456 811 798 28 454 484 256 233 139 137 130 123 29 1,463 1,187 810 565 1,114 1,245 1,197 1,232 30 9,939 4,329 1,797 1,309 142 133 153 130 31 Savings and loan associations................................................. 1,266 806 562 401 64 54 57 56 32 State and local governments................................................... 5,556 6,092 3,898 4,123 718 890 1,043 1,040 33 All others.................................................................................... 86,282 94,152 105,426 101,516 4,884 5,380 6,456 6,387 Other, within 1 year Over 20 years 34 All holders....................................................................................... 47,043 69,610 60,168 60,926 14,200 19,738 23,387 23,377 35 U.S. Govt, agencies and trust funds......................................... 1,563 1,874 1,149 1,144 2,350 2,495 2,642 2,641 36 F. R. Banks..................................................................................... 10,290 14,698 12,447 12,408 3,642 5,564 7,077 7,376 37 Private investors............................................................................. 35,190 53,039 46,572 47,375 8,208 11,679 13,668 13,360 38 Commercial banks.................................................................... 13,910 15,482 14,058 13,978 427 578 1,107 1,153 39 Mutual savings banks............................................................... 760 916 678 670 143 146 146 106 40 Insurance companies................................................................. 728 1,211 813 890 548 802 869 911 41 1,070 1,441 1,350 1,288 55 81 62 89 42 718 1,430 1,203 1,255 13 16 16 16 43 State and local governments................................................... 1,066 3,875 2,055 2,112 904 1,530 1,891 2,123 44 All others.................................................................................... 16,938 28,733 26,416 27,184 6,120 8,526 9,577 8,962 Note.—Direct public issues only. Based on Treasury Survey of Owner­ banks, 464 mutual savings banks, and 728 insurance companies, each ship from Treasury Bulletin (U.S. Treasury Dept.). about 90 per cent; (2) 435 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) 493 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 June 30, 1978; (1) 5,473 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 n August 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 April May June May 24 May 31 June 7 June 14 June 21 June 28 1 U.S. Govt, securities............... 6,027 10,449 10,838 11,163 10,609 9,704 9,008 10,458 10,389 8,107 9,273 10,072 By maturity: 2 Bills........................................ 3,889 6,676 6,746 6,947 6,483 5,982 5,929 6,998 6,590 4,945 5,853 6,425 3 Other within 1 year........... 223 210 237 465 388 386 312 546 351 376 419 339 4 1-5 years.............................. 1,414 2,317 2,318 1,921 1,599 1,931 1,516 1,828 2,152 1,658 1,901 1,960 5 5-10 years............................ 363 1,019 1,148 1,107 1,156 675 722 592 669 598 599 734 6 Over 10 years...................... 138 229 388 724 984 730 529 494 627 530 501 614 By type of customer: 7 U.S. Govt, securities dealers.......................... 885 1,360 1,267 1,346 1,110 1,210 819 1,327 1,515 1,020 1,037 1,176 8 U.S. Govt, securities brokers......................... 1,750 3,407 3,709 3,882 4,002 3,393 3,589 3,191 3,176 2,829 3,624 3,467 9 Commercial banks............. 1,451 2,426 2,295 2,157 1,867 1,687 1,585 1,924 1,868 1,398 1,602 1,783 1,941 3,257 3,567 3,777 3,631 3,414 3,015 4,017 3,830 2,860 3,010 3,645 11 Federal agency securities.... 1,043 1,548 693 1,603 1,587 1,828 1,665 2,045 2,307 1,498 1,401 2,003 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 April May June May 3 May 10 May 17 May 24 May 31 June 7 Positions2 1 U.S. Govt, securities............... 5,884 7,592 5,172 3,063 822 2,942 1,450 1,508 -351 103 2,049 4,641 2 Bills........................................ 4,297 6,290 4,772 3,249 1,109 2,862 1,718 1,312 386 639 1,998 3,879 3 Other within 1 year........... 265 188 99 239 312 477 378 320 174 365 409 554 4 1-5 years.............................. 886 515 60 -139 -622 38 -151 -443 -937 -884 -369 369 5 300 402 92 -166 68 -85 -95 262 38 -18 -4 18 6 Over 10 years...................... 136 198 149 -121 -46 -350 -399 57 -12 1 15 -178 7 Federal agency securities.... 943 729 693 749 1,043 894 985 931 1,003 1,136 1,234 1,171 Sources of financing3 8 All sources................................ 6,666 8,715 9,877 9,099 8,397 11,120 8,194 8,725 8,321 7,914 8,494 11,832 Commercial banks: 9 New York City................... 1,621 1,896 1,313 698 249 995 205 52 142 365 434 1,499 10 Outside New York City... 1,466 1,660 1,987 2,106 1,649 2,728 1,791 1,590 1,529 1,540 1,871 2,970 11 Corporations1......................... 842 1,479 2,358 2,190 1,823 2,276 1,751 1,771 1,819 1,867 1,910 2,284 12 All others................................ 2,738 3,681 4,170 4,105 4,677 5,121 4,447 5,312 4,831 4,142 4,279 5,080 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 Dec. Jan. Feb. Mar. Apr. May 1 Federal and Federally sponsored agencies............ 89,381 97,680 103,325 110,409 111,520 112,945 114,371 115,903 119,728 12,719 19,046 21,896 23,245 23,293 23,284 23,695 23,766 23,864 3 Defense Department1.......................................... 1,312 1,220 1,113 983 974 963 954 949 935 4 Export-Import Bank2,3........................................ 2,893 7,188 7,801 9,156 9,156 9,156 9,416 9,416 9,416 5 Federal Housing Administration4..................... 440 564 575 581 599 602 607 607 608 6 Government National Mortgage Association participation certificates5............................ 4,280 4,200 4,120 3,743 3,743 3,743 3,743 3,701 3,701 7 Postal Service6....................................................... 721 1,750 2,998 2,431 2,431 2,431 2,431 2,431 2,364 3,070 3,915 5,185 6,015 6,045 6,045 6,195 6,310 6,485 9 United States Railway Association6................. 3 209 104 336 345 344 349 352 355 10 Federally sponsored agencies.................................... 76,662 78,634 81,429 87,164 88,227 89,661 90,676 92,137 95,864 11 Federal home loan banks.................................... 21,890 18,900 16,811 18,345 18,692 19,893 20,007 20,163 22,217 12 Federal Home Loan Mortgage Corporation.. 1,551 1,550 1,690 1,686 1,768 1,768 1,768 1,639 1,637 13 Federal National Mortgage Association......... 28,167 29,963 30,565 31,890 32.024 32,553 33,350 34,024 35,297 14 Federal land banks............................................... 12,653 15,000 17,127 19,118 19,498 19,350 19,350 19,686 19,686 8,589 9,254 10,494 11,174 11,103 10,958 10,881 10,977 11,081 16 Banks for cooperatives......................................... 3,589 3,655 4,330 4,434 4,625 4,622 4,728 5,046 5,264 17 Student Loan Marketing Association7............. 220 310 410 515 515 515 590 600 680 18 Other........................................................................ 3 2 2 2 2 2 2 2 2 Memo items : 19 Federal Financing Bank debt6,8............................. 4,474 17,154 28,711 38,580 39,522 40,605 42,169 42,964 43,871 Lending to Federal and Federally sponsored agencies: 20 Export-Import Bank3........................................... 4,595 5,208 5,834 5,834 5,834 6,094 6,094 6,094 500 1,500 2,748 2,181 2,181 2,181 2,181 2,181 2,114 220 310 410 515 515 515 590 600 680 895 1,840 3,110 4,190 4,220 4,220 4,370 4,485 4,660 3 209 104 336 345 344 349 352 355 Other lending:9 25 Farmers Home Administration......................... 2,500 7,000 10,750 16,095 16,760 17,545 18,050 19,120 20,090 26 Rural Electrification Administration................ 566 1,415 2,647 2,809 2,947 3,124 3,323 3,498 27 Other........................................................................ 356 1,134 4,966 6,782 6,858 7,019 7,411 6,809 6,380 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 « 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 □ August 1978 1.47 NEW SECURITY ISSUES of State and Local Governments Millions of dollars 1978 Type of issue or issuer, 1975 1976 1977 or use Jan. Feb.r Mar. Apr.r Mayr June 1All issues, new and refunding *.................................................. 30,607 35,313 46,769 3,300 2,748 r4,748 3,810 5,401 4,192 By type of issue: 2 General obligation................................................................... 16,020 18,040 18,042 1,877 1,024 1,425 1.362 2,211 1,965 3 Revenue...................................................................................... 14,511 17,140 28,655 1,418 1,719 3,319 2,437 3,169 2,221 4 Housing Assistance Administration 2.................................. 5 76 133 72 r5 5 r4 11 21 6 By type of issuer: 6 State............................................................................................ 7,438 7,054 6,354 833 311 r409 237 873 912 7 Special district and statutory authority.............................. 12,441 15,304 21,717 1,124 1,268 r2,606 1,861 2,176 1,371 8 Municipalities, counties, townships, school districts.... 10,660 12,845 18,623 rl,339 1,163 1,729 1,702 2,331 1,903 29,495 32,108 36,189 r2,914 2,003 3,068 2,595 3,118 3,766 By use of proceeds: 10 Education.................................................................................. 4,689 4,900 5,076 561 415 348 332 673 396 11 Transportation.......................................................................... 2,208 2,586 2,951 227 57 in 158 129 339 12 Utilities and conservation....................................................... 7,209 9,594 8,119 r485 369 959 720 557 604 13 Social welfare............................................................................ 4,392 6,566 8,274 855 516 684 845 951 664 14 445 483 4,676 246 315 328 273 348 405 15 10,552 7,979 7,093 540 331 476 267 460 1,358 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 Nov. Dec. Jan. Feb. Mar. April 1 All issues 1...................................................................................... 53,619 53,488 54,205 5,331 6,531 3,013 2,657 r4,442 3,285 2 Bonds............................................................................................... 42,756 42,380 42,193 3,411 5,362 2,380 2,131 3,620 2,811 By type of offering: 3 Public.......................................................................................... 32,583 26,453 24,186 2,211 1,542 1,382 1,464 1,902 1,958 4 Private placement..................................................................... 10,172 15,927 18,007 1,200 3,820 998 667 1,718 853 By industry group: 16,980 13,264 12,510 726 2,375 268 716 1,155 534 6 Commercial and miscellaneous............................................ 2,750 4,372 5,887 546 753 280 87 428 421 7 Transportation.......................................................................... 3,439 4,387 2,033 178 345 123 101 217 291 8 Public utility.............................................................................. 9,658 8,297 8,261 851 476 284 205 631 505 3,464 2,787 3,059 288 189 519 9 291 35 6,469 9,274 10,438 821 1,223 907 1,012 898 1,027 11 Stocks............................................................................................. 10,863 11,108 12,013 1,920 1,169 633 526 822 474 By type: 12 Preferred.................................................................................... 3,458 2,803 3,878 364 473 171 138 148 235 13 Common.................................................................................... 7,405 8,305 8,135 1,556 696 462 388 674 239 By industry group: 14 Manufacturing.......................................................................... 1,670 2,237 1,265 56 166 5 74 15 15 Commercial and miscellaneous............................................ 1,470 1,183 1,838 122 124 138 91 84 183 16 Transportation.......................................................................... 1 24 418 50 28 17 Public utility ............................................................................. 6,235 6,121 6,058 878 604 360 . 260 627 238 18 Communication....................................................................... 1,002 776 1,379 725 110 25 19 Real estate and financial......................................................... 488 771 1,054 88 165 130 150 28 10 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 Dec. Jan. Feb. Mar. Apr. May June INVESTMENT COMPANIES excluding money market funds 1 Sales of own shares1............................................ 4,226 6,401 557 638 451 613 625 558 487 2 Redemptions of own shares2............................ 6,802 6,027 562 465 348 459 580 831 757 3 -2,496 357 5 173 103 154 45 -273 -270 4 Assets3.................................................................... 47,537 45,049 45,049 43,000 42,747 44,052 46,594 46,969 46,106 5 Cash position4.................................................. 2,747 3,274 3,274 3,608 4,258 4,331 4,592 r4,642 4,493 6 Other................................................................... 44,790 41,775 41,775 39,392 38,489 39,721 42,002 *■42,327 41,613 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 1978 Account 1975 1976 1977 Q3 Q4 Ql Q2 Q3 Q4 Ql 1 Profits before tax.......................................................... 120.4 155.9 173.9 157.8 154.6 164.8 175.1 177.5 178.3 172.1 2 Profits tax liability........................................................ 49.8 64.3 71.8 64.7 62.4 68.3 72.3 72.8 73.9 70.0 3 Profits after tax............................................................ 70.6 91.6 102.1 93.1 92.2 96.5 102.8 104.7 104.4 102.1 4 Dividends........................................................................ 31.9 37.9 43.7 38.4 41.4 41.5 42.7 44.1 46.3 47.0 5 Undistributed profits.................................................... 38.7 53.7 58.4 54.7 50.8 55.0 60.1 60.6 58.1 55.1 6 Capital consumption allowances................................ 89.3 97.1 106.0 98.1 100.4 102.0 105.0 107.6 109.3 111.3 7 Net cash flow................................................................. 128.0 150.8 164.4 152.8 151.2 157.0 165.1 168.2 167.4 166.4 Source.—Survey of Current Business (U.S. Dept, of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 38 Domestic Financial Statistics □ August 1978 1.51 NONFINANCIAL CORPORATIONS Current Assets and Liabilities Billions of dollars, except for ratio 1976 1977 Account 1974 1975 Ql Ql Q3 Q4 Ql Q2 Q3 Q4 1 Current assets.............................................................. 734.6 756.3 779.4 801.7 817.4 823.1 843.2 857.3 881.7 901.2 2 Cash.......................................................................... 73.0 80.0 78.4 80.7 79.5 86.8 80.9 83.2 83.6 94.4 3 U.S. Government securities................................. 11.3 19.6 22.2 23.4 24.1 26.0 26.9 22.3 21.7 20.8 4 Notes and accounts receivable............................ 265.5 272.1 281.6 290.2 297.9 292.4 304.5 313.2 327.1 326.2 5 Inventories............................................................... 318.9 314.7 324.0 333.7 342.2 341.4 352.4 359.3 367.9 375.4 6 Other......................................................................... 65.9 69.9 73.2 73.6 73.6 76.4 78.3 79.2 81.2 84.3 7 Current liabilities......................................................... 451.8 446.9 459.7 470.3 484.0 487.5 503.4 510.5 530.2 543.9 8 Notes and accounts payable................................ 272.3 261.2 260.0 269.5 271.2 273.2 280.6 287.4 298.2 307.1 9 Other......................................................................... 179.5 185.7 199.7 200.8 212.8 214.2 222.9 223.1 231.7 236.8 282.8 309.5 319.7 331.4 333.4 335.6 339.8 346.9 351.6 357.3 1.626 1.693 1.696 1.705 1.689 1.688 1.675 1.679 1.663 1.657 1 (Total current assets)/(Total current liabilities). Source.—Federal Trade Commission. Note.—For a description of this series see “Working Capital of Non­ financial Corporations” in the July 1978 Bulletin, p. 533-37. 1.52 BUSINESS EXPENDITURES on New Plant and Equipment Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1976 1977 1978 Industry 1976 1977 Q4 Ql Q2 Q3 Q4 Ql Q2 Q32 120.15 135.72 125.22 130.16 134.24 140.38 138.11 144.25 148.88 153.83 Manufacturing 2 Durable goods industries...................................... 23.57 27.75 25.50 26.30 27.26 29.23 28.19 28.72 30.42 31.99 3 Nondurable goods industries............................... 28.70 32.33 28.93 30.13 32.19 33.79 33.22 32.86 35.25 37.45 Nonmanufacturing 4 Mining...................................................................... 4.00 4.49 4.13 4.24 4.49 4.74 4.50 4.45 4.95 4.84 Transportation: 5 Railroad............................................................... 2.51 2.82 2.63 2.71 2.57 3.20 2.80 3.35 3.28 3.27 6 Air.......................................................................... 1.29 1.63 1.41 1.62 1.43 1.69 1.76 2.67 2.30 2.02 7 Other..................................................................... 3.60 2.55 3.49 2.96 2.96 1.96 2.32 2.44 2.55 2.36 Public utilities: 8 Electric.................................................................. 18.77 21.57 19.49 21.19 21.14 21.90 22.05 23.15 23.70 25.04 9 Gas and other..................................................... 3.45 4.21 3.96 4.16 4.16 4.32 4.18 4.78 4.58 4.22 1 11 0 C C o om 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 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 2 1 4 7 . . 7 0 6 7 I> 4A1i .oQO/C 4A*Z% . Ori'XJ 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 1977 1978 Account 1972 1973 1974 1975 1976 Ql Q2 Q3 Q4 Ql ASSETS Accounts receivable, gross 1 Consumer............................................................. 31.9 35.4 36.1 36.0 38.6 39.2 40.7 42.3 44.0 44.5 2 Business................................................................ 27.4 32.3 37.2 39.3 44.7 47.5 50.4 50.6 55.2 57.6 3 Total................................................................. 59.3 67.7 73.3 75.3 83.4 86.7 91.2 92.9 99.2 102.1 4 Less: Reserves for unearned income and losses 7.4 8.4 9.0 9.4 10.5 10.6 11.1 11.7 12.7 12.8 5 Accounts receivable, net....................................... 51.9 59.3 64.2 65.9 72.9 76.1 80.1 81.2 86.5 89.3 6 Cash and bank deposits........................................ 2.8 2.6 3.0 2.9 2.6 2.7 2.5 2.5 2.6 2.2 7 Securities.................................................................. .9 .8 .4 1.0 1.1 1.0 1.2 1.8 .9 1.2 8 All other.................................................................. 10.0 10.6 12.0 11.8 12.6 13.0 13.7 14.2 14.3 15.0 9 Total assets........................................... 65.6 73.2 79.6 81.6 89.2 92.8 97.5 99.6 104.3 107.7 LIABILITIES 10 Bank loans............................................................... 5.6 7.2 9.7 8.0 6.3 6.1 5.7 5.4 5.9 5.8 11 Commercial paper.................................................. 17.3 19.7 20.7 22.2 23.7 24.8 27.5 25.7 29.6 29.9 Debt: 12 Short-term, n.e.c................................................. 4.3 4.6 4.9 4.5 5.4 4.5 5.5 5.4 6.2 5.3 13 Long-term, n.e.c.................................................. 22.7 24.6 26.5 27.6 32.3 34.0 35.0 34.8 36.0 38.0 14 Other..................................................................... 4.8 5.6 5.5 6.8 8.1 9.5 9.4 13.7 11.5 12.9 15 Capital, surplus, and undivided profits............. 10.9 11.5 12.4 12.5 13.4 13.9 14.4 14.6 15.1 15.7 16 Total liabilities and capital........................ 65.6 73.2 79.6 81.6 89.2 92.8 97.5 99.6 104.3 107.7 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 May 31. 1978 1978 1978 19781 Mar. Apr. May Mar. Apr. May Mar. Apr. May 1 Total..................................................................... 59,057 810 827 545 14,318 15,125 14,786 13,508 14,298 14,241 2 Retail automotive (commercial vehicles)........ 12,988 159 136 223 1,076 1,059 1,155 917 923 932 3 Wholesale automotive......................................... 12,906 273 357 1 5,951 6,600 6,195 5,678 6,243 6,194 4 Retail paper on business, industrial, and farm equipment............................................ 14,801 -112 148 182 981 1,024 1,153 1,093 876 971 5 Loans on commercial accounts receivable... 4,067 73 2 59 2,915 2,938 2,943 2,842 2,936 2,884 6 Factored commercial accounts receivable.... 2,301 34 125 51 1,666 1,811 1,663 1,632 1,686 1,612 7 All other business credit..................................... 11,994 383 59 29 1,729 1,693 1,677 1,346 1,634 1,648 1 Not seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Financial Statistics □ August 1978 1.53 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1978 Item 1975 1976 1977 Jan. Feb. Mar. Apr. May June 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 58.0 59.9 58.8 61.6 >-59.8 62.9 2 Amount of loan (thous. dollars)................... 33.3 35.9 40.5 43.3 44.0 43.5 45.7 '44.2 46.1 3 Loan/price ratio (per cent).............................. 74.7 74.2 76.3 76.4 75.3 75.5 76.1 >•75.5 75.7 4 Maturity (years)................................................ 26.8 27.2 27.9 28.3 27.3 27.4 28.4 >•27.7 28.3 5 Fees and charges (per cent of loan amount)2. 1.54 1.44 1.33 1.41 1.32 1.37 1.44 >•1.34 1.40 6 Contract rate (per cent per annum)............. 8.75 8.76 8.80 8.93 8.96 9.03 9.07 9.14 9.23 Yield (per cent per annum): 7 FHLBB series 3................................................... 9.01 8.99 9.01 9.15 9.18 9.26 9.30 9.37 9.46 8 HUD series4....................................................... 9.10 8.99 8.95 9.15 9.25 9.30 9.40 9.60 9.75 SECONDARY MARKETS Yields (per cent per annum) on— 9.19 8.82 7.96 9.11 9.29 9.37 9.67 8.52 8.17 8.04 8.56 8.64 8.60 8.71 r8.71 9.05 FNMA auctions:7 9.26 8.99 8.73 9.17 9.31 9.35 9.44 9.66 9.91 9.37 9.11 8.98 9.32 9.49 9.61 9.72 9.90 10.10 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 13 Total......................................................................... 31,824 32,904 34,370 34,756 35,408 36,030 r36,702 37,937 38,753 19,732 18,916 18,457 18,500 18,664 18,759 >•18,950 19,382 19,608 9,573 9,212 9,315 9,398 9,599 9,727 9,905 10,255 10,398 2,519 4,776 6,597 6,858 7,146 7,543 >•7,847 8,300 8,747 Mortgage transactions (during period) 17 Purchases................................................................. 4,263 3,606 497 636 879 891 937 1,551 1,148 18 Sales........................................................................ 2 86 5 4 Mortgage commitments:8 6,106 6,247 1,333 1,818 1,942 1,563 2,119 3,439 1,517 4,126 3,398 4,698 5,781 6,851 7,445 8,486 1,027 1,040 Auction of 4-month commitments to buy— Government-underwritten loans: 21 Offered 9............................................................... 7,042.6 4,929.8 1,184.5 1,779.8 1,199.1 523.7 909.3 2,117.7 1,095.0 3,848.3 2,787.2 794.0 970.9 623.1 334.9 529.2 1,093.7 636.6 Conventional loans: 23 Offered 9............................................................... 1,401.3 2,595.7 591.6 949.9 1,214.1 823.5 974.2 1,935.8 574.5 765.0 1,879.2 359.4 449.6 566.0 512.5 578.1 968.3 342.0 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)1 o 25 Total......................................................................... 4,987 4,269 3,276 3,163 3,044 r3,372 3,092 2,878 2,255 26 FHA/VA............................................................. 1,824 1,618 1,395 1,382 1,381 M,387 1,373 1,356 1,338 3,163 2,651 1,881 1,782 1,663 1,985 1,719 1,522 917 Mortgage transactions (during period) 1,716 1,175 489 401 363 344 356 479 500 1,020 1,396 477 503 470 120 466 651 1,093 Mortgage commitments:11 30 Contracted (during period)................................ 982 1,477 361 367 363 593 512 811 762 31 Outstanding (end of period)............................... 111 333 1,063 961 1,021 1,233 1,346 1,640 1,040 1 Weighted averages based on sample surveys of mortgages originated securities, assuming prepayment in 12 years on pools of 30-year FHA/VA by major institutional lender groups. Compiled by the Federal Home Loan mortgages carrying the prevailing ceiling rate. Monthly figures are Bank Board in cooperation with the Federal Deposit Insurance Cor­ unweighted averages of Monday quotations for the month. poration. 7 Average gross yields (before deduction of 38 basis points for mortgage 2 Includes all fees, commissions, discounts, and “points” paid (by servicing) on accepted bids in Federal National Mortgage Association’s the borrower or the seller) in order to obtain a loan. auctions of 4-month commitments to purchase home mortgages, assuming 3 Average effective interest rates on loans closed, assuming prepayment prepayment in 12 years for 30-year mortgages. No adjustments are made at the end of 10 years. for 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 197 4 1975 1976 Q3 Q4 Ql Q2* 1All holders....................................................... 682,321 742,512 801,537 889,327 r986,395 '1,023,470 1,052,358 1,089,740 2 1- to 4-family............................................ 416,211 449,371 490 ,-761 556,557 r630,498 '656,159 675,556 701,238 3 Multifamily................................................ 93,132 99,976 100,601 104,516 r109,389 '111,809 114,206 116,940 4 Commercial............................................... 131,725 146,877 159,298 171,223 r182,510 '189,834 194,550 200,668 5 Farm........................................................... 41,253 46,288 50,877 57,031 '63,998 '65,668 68,046 70,894 6 Major financial institutions......................... 505,400 542,560 581,193 647,650 '718,153 '745,064 764,665 792,152 7 Commercial banks1.................................. 119,068 132,105 136,186 151,326 r 171,166 '178,979 184,423 193,223 8 1- to 4-family........................................ 67,998 74,758 77,018 86,234 '100,474 '105,115 108,699 113,886 9 Multifamily............................................ 6,932 7,619 5,915 8,082 '8,815 '9,215 9,387 9,816 10 Commercial........................................... 38,696 43,679 46,882 50,289 '54,260 '56,898 58,407 61,194 11 Farm....................................................... 5,442 6,049 6,371 6,721 '7,617 '7,751 7,930 8,327 12 Mutual savings banks.............................. 73,230 74,920 77,249 81,639 86,079 88,104 89,800 91,382 13 1- to 4-family........................................ 48,811 49,213 50,025 53,089 56,313 57,637 58,747 59,782 14 Multifamily............................................ 12,343 12,923 13,792 14,177 14,952 15,304 15,398 15,873 15 Commercial........................................... 12,012 12,722 13,373 14,313 14,762 15,110 15,401 15,672 16 Farm....................................................... 64 62 59 60 52 53 54 55 17 Savings and loan associations................. 231,733 249,301 278,590 323,130 366,838 381,216 392,479 407,943 18 1- to 4-family........................................ 187,078 200,987 223,903 260,895 298,459 310,728 319,910 332,514 19 Multifamily............................................ 22,779 23,808 25,547 28,436 31,585 32,518 33,478 34,798 20 Commercial........................................... 21,876 24,506 29,140 33,799 36,794 37,969 39,091 40,631 21 Life insurance companies......................... 81,369 86,234 89,168 91,555 94,070 96,765 97,963 99,604 22 1- to 4-family........................................ 20,426 19,026 17,590 16,088 15,022 14,727 14,476 14,226 23 Multifamily............................................ 18,451 19,625 19,629 19,178 18,831 18,807 18,851 19,165 24 Commercial........................................... 36,496 41,256 45,196 48,864 51,742 54,388 55,426 56,631 25 Farm....................................................... 5,996 6,327 6,753 7,425 8,475 8,843 9,210 9,582 26 Federal and related agencies...................... 46,721 58,320 66,891 66,753 69,068 70,006 72,014 74,783 27 Government National Mortgage Assn... 4,029 4,846 7,438 4,241 3,599 3,660 3,291 3,200 28 1- to 4-family........................................ 1,455 2,248 4,728 1,970 1,522 1,548 948 922 29 Multifamily............................................ 2,574 2,598 2,710 2,271 2,on 2,112 2,343 2,278 30 1,366 1,432 1,109 1,064 1,292 1,353 1,179 1,429 31 1- to 4-family........................................ 743 759 208 454 548 626 202 245 32 Multifamily............................................ 29 167 215 218 192 275 408 495 33 Commercial........................................... 218 156 190 72 142 149 218 264 34 Farm....................................................... 376 350 496 320 410 303 351 425 35 Federal Housing and Veterans Admin... 3,476 4,015 4,970 5,150 5,130 5,212 5,219 5,289 36 1- to'4-family........................................ 2,013 2,009 1,990 1,676 1,566 1,627 1,585 1,607 37 Multifamily............................................ 1,463 2,006 2,980 3,474 3,564 3,585 3,634 3,682 38 Federal National Mortgage Assn........... 24,175 29,578 31,824 32,904 34,148 34,369 36,029 38,753 39 1- to 4-family........................................ 20,370 23,778 25,813 26,934 28,178 28,504 30,208 32,974 40 Multifamily............................................ 3,805 5,800 6,011 5,970 5,970 5,865 5,821 5,779 41 Federal land banks.................................... 11,071 13,863 16,563 19,125 21,523 22,136 22,925 23,857 42 1- to 4-family........................................ 123 406 549 601 649 670 691 727 43 Farm....................................................... 10,948 13,457 16,014 18,524 20,874 21,466 22,234 23,130 44 Federal Home Loan Mortgage Corp.... 2,604 4,586 4,987 4,269 3,376 3,276 3,371 2,255 45 1- to 4-family........................................ 2,446 4,217 4,588 3,889 2,818 2,738 2,785 1,856 46 Multifamily............................................ 158 369 399 380 558 538 586 399 47 Mortgage pools or trusts2........................... 18,040 23,799 34,138 49,801 64,667 70,289 74,080 77,917 48 Government National Mortgage Assn... 7,890 11,769 18,257 30,572 41,089 44,896 46,357 48,032 49 1- to 4-family........................................ 7,561 11,249 17,538 29,583 39,865 43,555 44,906 46,515 50 Multifamily............................................ 329 520 719 989 1,224 1,341 1,451 1,517 51 Federal Home Loan Mortgage Corp... 766 757 1,598 2,671 5,332 6,610 7,471 9,134 52 1- to 4-family........................................ 617 608 1,349 2,282 4,642 5,621 6,286 7,685 53 Multifamily............................................ 149 149 249 389 690 989 1,185 1,449 54 Farmers Home Admin.............................. 9,384 11,273 14,283 16,558 18,426 18,783 20,252 20,751 55 1- to 4-family........................................ 5,458 6,782 9,194 10,219 11,127 11,379 12,235 12,536 56 Multifamily........................................... 138 116 295 532 768 759 732 750 57 Commercial...................................... 1,124 1,473 1,948 2,440 2,824 2,945 3,528 3,615 58 Farm....................................................... 2,664 2,902 2,846 3,367 3,527 3,682 3,757 3,850 59 Individuals and others3 r.............................. 112,160 117,833 119,315 125,123 134,507 138,111 141,599 144,888 60 1- to 4-family........................................ 51 ,112 53,331 56,268 62,643 69,315 71,665 73,878 75,763 61 Multifamily............................................ 23,982 24,276 22,140 20,420 20,163 20,501 20,732 20,939 62 Commercial........................................... 21,303 23,085 22,569 21,446 21,986 22,375 22,479 22,661 63 Farm....................................................... 15,763 17,141 18,338 20,614 23,043 23,570 24,510 25,525 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 □ August 1978 1.55 CONSUMER INSTALMENT CREDIT Total Outstanding, and Net Change Millions of dollars 1977 1978 Holder, and type of credit 1975 1976 1977 Dec. Jan. Feb. Mar. Apr. May June Amounts outstanding (end of period) 1 164,955 185,489 216,572 216,572 215,925 216,297 219,203 112,mi 227,561 233,416 By holder: 2 78,667 89,511 105,291 105,291 105,466 105,663 107,166 109,336 111,673 114,756 3 35,994 38,639 44,015 44,015 43,970 44,107 44,486 45,182 46,136 47,147 4 25,666 30,546 37,036 37,036 36,851 37,217 38,185 38,750 39,951 41,388 5 18,002 19,052 21,082 21,082 20,525 20,060 19,920 19,941 20,141 20,310 6 6,626 7,741 9,149 9,149 9,114 9,250 9,446 9,528 9,660 9,815 By type of credit: 7 55,879 66,116 79,352 79,352 79,376 79,984 81,666 83,490 85,954 88,767 8 31,553 37,984 46,119 46,119 46,247 46,547 47,534 48,731 50,119 51,714 9 18,353 21,176 25,370 25,370 25,476 25,696 26,327 27,049 27,854 28,773 10 13,200 16,808 20,749 20,749 20,771 20,851 21,207 21,682 22,265 22,941 11 11,155 12,489 14,263 14,263 14,260 14,374 14,577 14,921 15,382 15,863 12 12,741 15,163 18,385 18,385 18,293 18,475 18,955 19,239 19,835 20,549 13 430 480 585 585 576 588 600 599 618 641 14 14,423 14,572 15,014 15,014 14,978 14,973 15,062 15,156 15,220 15,309 15 Commercial banks........................ 8,649 8,734 8,862 8,862 8,819 8,807 8,845 8,876 8,912 8,967 16 Finance companies........................ 3,451 3,273 3,109 3,109 3,115 3,098 3,085 3,095 3,098 3,103 17 Home improvement............................ 9,405 10,990 12,952 12,952 12,904 12,968 13,162 13,375 13,691 14,037 18 Commercial banks............... 4,965 5,554 6,473 6,473 6,445 6,436 6,479 6,598 6,782 6,971 Revolving credit: 19 Bank credit cards.......................... 9,501 11,351 14,262 14,262 14,369 14,174 14,142 14,345 14,456 14,929 20 Bank check credit......................... 2,810 3,041 3,724 3,724 3,776 3,822 3,844 3,856 3,919 3,996 21 72,937 79,418 91,269 91,269 90,522 90,376 91,327 92,515 94,321 96,378 22 Commercial banks, total............. 21,188 22,847 25,850 25,850 25,809 25,877 26,322 26,930 27,485 28,179 23 Personal loans............................ 14,629 15,669 17,740 17,740 17,708 17,769 18,002 18,383 18,640 19,049 24 Finance companies, total............. 21,238 22,749 26,498 26,498 26,452 26,489 26,675 27,012 27,496 28,012 25 Personal loans............................ 17,263 18,554 21,302 21,302 21,248 21,283 21,416 21,700 22,110 22.547 26 Credit unions.................................. 10,754 12,799 15,518 15,518 15,440 15,594 15,999 16,232 16,735 17,337 27 Retailers.......................................... 18,002 19,052 21,082 21,082 20,525 20,060 19,920 19,941 20,141 20,310 28 Others............................................... 1,755 1,971 2,321 2,321 2,296 2,356 2,411 2,400 2,464 2,540 Net change (during period) 3 29 Total......................................................... 7,504 20,533 31,090 2,736 2,424 2,661 4,068 3,719 3,857 3,792 By holder: 30 Commercial banks............................ 2,821 10,845 15,779 1,611 1,115 1,280 2,021 2,001 1,881 1,960 31 Finance companies............................ -90 2,644 5,376 500 460 418 662 781 763 553 32 Credit unions..................................... 3,771 4,880 6,490 641 495 603 836 699 911 836 33 Retailers i............................................ 69 1,050 2,032 -12 309 202 367 129 170 282 34 Others 2................................................ 933 1,115 1,413 -3 44 158 182 109 132 161 By type of credit: 35 Automobile......................................... 3,007 10,238 13,235 1,297 1,185 1,104 1,522 1,728 1,789 1,543 36 Commercial banks........................ 559 6,431 8,135 835 637 599 882 989 944 946 37 Indirect........................................ -334 2,823 4,194 486 407 389 564 603 575 554 38 Direct.......................................... 894 3,608 3,941 349 230 210 318 386 369 392 39 Finance companies....................... 532 1,334 1,774 127 247 201 238 375 367 199 40 Credit unions.................................. 1,872 2,422 3,222 328 244 300 406 343 465 383 41 Other................................................ 44 50 105 7 56 4 -4 21 13 15 42 Mobile homes...................................... -195 150 441 76 52 23 108 95 58 15 43 Commercial banks........................ -323 85 128 60 2 2 46 28 33 -1 44 Finance companies....................... -73 -177 -164 -8 36 -9 2 11 -3 -7 45 Home improvement........................... 881 1,585 1,967 173 105 171 217 212 222 209 46 Commercial banks........................ 271 588 920 no 70 69 74 111 109 95 Revolving credit: 47 Bank credit cards.......................... 1,220 1,850 2,911 250 160 285 448 311 263 362 48 Bank check credit......................... 14 231 683 46 65 87 120 56 129 90 49 All other............................................... 2,577 6,479 11,853 895 857 991 1,653 1,317 1,396 1,573 50 Commercial banks, total............. 1,080 1,659 3,003 310 180 238 451 506 403 468 51 Personal loans........................... 858 1,040 2,070 235 81 167 263 333 207 303 52 Finance companies, total............. -348 1,509 3,749 378 177 223 419 387 395 358 53 Personal loans............................ 279 1,290 2,748 254 162 183 309 307 327 301 54 Credit unions.................................. 1,580 2,045 2,719 252 205 252 358 301 371 383 55 Retailers.......................................... 69 1,050 2,032 -12 309 202 367 129 170 282 56 Others.............................................. 196 217 350 -33 -15 76 58 -6 57 82 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 Dec. Jan. Feb. Mar. Apr. May June Extensions 3 1Total......................................................... 164,169 193,328 225,645 20,138 19,586 20,179 21,595 22,117 22,336 22,680 By holder: 2 77,312 94,220 110,777 10,226 9,625 9,905 10,608 11,120 11,004 11,329 3 31,173 36,028 41,770 3,743 3,575 3,691 3,914 4,226 4,241 4,113 4 24,096 28,587 33,592 3,093 2,820 3,028 3,309 3,267 3,508 3,433 5 27,049 29,188 33,202 2,647 3,102 2,976 3,148 2,955 2,995 3,185 6 4,539 5,305 6,303 428 464 579 616 549 588 620 By type of credit: 7 51,413 62,988 72,888 6,721 6,263 6,400 6,822 7,248 7,387 7,241 8 Commercial banks........................ 28,573 36,585 42,570 3,941 3,650 3,700 3,924 4,212 4,189 4,178 9 Indirect........................................ 15,766 19,882 22,904 2,153 2,026 2,065 2,173 2,347 2,327 2,305 10 12,807 16,704 19,666 1,788 1,624 1,635 1,751 1,865 1,862 1,873 11 Finance companies....................... 9,674 11,209 12,635 1,143 1,088 1,080 1,173 1,314 1,337 1,278 12 Credit unions.................................. 12,683 14,675 17,041 1,581 1,421 1,565 1,679 1,654 1,798 1,721 13 483 518 642 55 105 55 46 68 63 64 14 Mobile homes...................................... 4,323 4,841 5,244 460 449 406 502 508 490 460 15 Commercial banks........................ 2,622 3,071 3,153 300 250 236 284 279 294 271 16 764 690 r651 60 101 62 74 85 74 69 17 Home improvement............................ 5,556 6,736 8,066 722 618 710 770 753 798 801 18 Commercial banks........................ 2,722 3,245 3,968 384 327 338 352 382 395 390 Revolving credit: 19 20,428 25,862 31,761 2,973 2,948 3,143 3,231 3,255 3,245 3,482 20 4,024 4,783 5,886 531 556 535 608 646 677 694 21 78,425 88,117 '101,801 8,731 8,751 8,985 9,662 9,707 9,739 10,002 22 18,944 20,673 23,439 2,096 1,893 1,953 2,209 2,346 2,204 2,314 23 Personal loans............................ 13,386 14,480 16,828 1,518 1,338 1,405 1,537 1,669 1,511 1,614 24 Finance companies, total............. 20,657 24,087 r28,396 2,530 2,380 2,541 2,659 2,814 2,819 2,755 25 Personal loans............................ 16,944 19,579 '22,348 1,975 1,851 1,989 2,105 2,226 2,273 2,231 26 10,134 12,340 14,604 1,326 1,236 1,288 1,429 1,431 1,500 1,501 27 Retailers.......................................... 27,049 29,188 33,202 2,647 3,102 2,976 3,148 2,955 2,995 3,185 28 Others............................................... 1,642 1,830 2,160 131 138 227 217 161 221 247 Liquidations3 29 156,665 172,795 '194,555 17,402 17,162 17,518 17,527 18,398 18,479 18,888 By holder: 30 74,491 83,376 94,998 8,615 8,509 8,625 8,587 9,119 9,123 9,369 31 Finance companies........................... 31,263 33,384 '36,394 3,244 3,114 3,273 3,252 3,445 3,478 3,560 32 20,325 23,707 27,103 2,452 2,325 2,425 2,473 2,568 2,597 2,597 33 26,980 28,138 31,170 2,659 2,793 2,774 2,781 2,826 2,825 2,903 34 3,606 4,191 4,890 432 420 421 434 440 456 459 By type of credit: 35 48,406 52,750 '59,652 5,424 5,078 5,296 5,300 5,520 5,598 5,698 36 28,014 30,154 34,435 3,106 3,013 3,101 3,042 3,223 3,245 3,232 37 Indirect........................................ 16,101 17,059 18,710 1,667 1,619 1,676 1,609 1,744 1,752 1,751 38 11,913 13,095 15,726 1,439 1,394 1,425 1,433 1,479 1,493 1,481 39 Finance companies....................... 9,142 9,875 10,819 1,017 841 879 935 939 970 1,079 40 10,811 12,253 13,819 1,253 1,177 1,265 1,273 1,311 1,333 1,338 41 439 468 536 48 48 51 50 47 50 49 42 4,517 4,691 r4,802 384 398 383 394 413 432 445 43 Commercial banks........................ 2,944 2,986 3,025 240 248 234 238 251 261 272 44 837 867 806 68 65 71 72 74 77 76 45 4,675 5,151 6,098 549 514 539 553 541 576 592 46 2,451 2,657 3,048 274 257 269 278 271 286 295 Revolving credit: 47 19,208 24,012 28,851 2,723 2,788 2,858 2,783 2,944 2,982 3,120 48 Bank check credit......................... 4,010 4,552 5,202 485 491 448 488 590 548 604 49 All other............................................... 75,849 81,638 89,948 7,836 7,894 7,994 8,009 8,390 8,343 8,429 50 Commercial banks, total............. 17,864 19,014 20,436 1,786 1,713 1,715 1,758 1,840 1,801 1,846 51 Personal loans............................ 12,528 13,439 14,757 1,284 1,258 1,238 1,274 1,336 1,304 1,311 52 Finance companies, total............. 21,005 22,578 '24,647 2,152 2,203 2,318 2,240 2,427 2,424 2,397 53 16,665 18,289 '19,600 1,722 1,688 1,806 1,796 1,919 1,946 1,930 54 8,554 10,295 11,884 1,075 1,031 1,036 1,071 1,130 1,129 1,118 55 26,980 28,138 31,170 2,659 2,793 2,774 2,781 2,826 2,825 2,903 56 1,446 1,613 1,811 165 153 151 159 167 164 165 i 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 □ August 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................................................... 189.6 205.6 268.3 340.5 180.8 230.4 254.5 282.1 300.8 380.2 1 2 Excluding equities............................................... 185.8 195.5 257.8 336.4 170.3 220.8 241.1 274.4 297.6 375.1 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 Public debt securities.................................... 12.0 85.8 69.1 57.6 80.4 91.3 73.0 65.3 40.9 74.4 4 5 Agency issues and mortgages...................... -.2 -.4 -.1 -.9 -.8 -.1 .1 -.3 -.6 -1.2 5 6 All other nonfinancial sectors............................ 177.8 120.2 199.2 283.7 101.1 139.2 181.4 217.1 260.5 307.0 6 7 Corporate equities......................................... 3.8 10.0 10.5 4.1 10.5 9.6 13.3 7.6 3.2 5.1 7 8 Debt instruments........................................... 174.0 110.1 188.8 279.6 90.7 129.6 168.0 209.5 257.3 301.9 8 9 Private domestic nonfinancial sectors......... 162.4 107.0 179.0 272.5 93.1 120.9 166.2 191.7 256.6 288.4 9 10 Corporate equities..................................... 4.1 9.9 10.5 3.7 10.3 9.5 13.3 7.7 2.5 4.9 10 11 Debt instruments........................................ 158.3 97.1 168.4 268.8 82.8 111.4 152.9 184.0 254.0 283.5 11 12 Debt capital instruments....................... 98.7 95.8 122.7 179.6 93.8 97.8 111.7 133.7 159.4 199.8 12 13 State and local obligations.............. 17.1 13.6 15.1 27.7 12.3 14.9 14.7 15.5 27.7 27.7 13 14 Corporate bonds................................ 19.7 27.2 22.8 21.0 33.4 21.1 20.4 25.3 13.8 28.1 14 Mortgages: 15 Home............................................... 34.8 39.5 63.6 94.9 33.4 45.6 57.1 70.2 85.6 104.3 15 16 Multifamily residential................. 6.9 * 1.6 6.9 .4 -.4 .6 2.6 5.3 8.4 16 17 Commercial.................................... 15.1 11.0 13.4 20.3 9.4 12.6 13.9 12.9 17.9 22.6 17 18 Farm................................................ 5.0 4.6 6.1 8.8 5.1 4.0 5.0 7.3 9.0 8.7 18 19 Other debt instruments.......................... 59.6 1.3 45.7 89.2 -11.0 13.6 41.2 50.3 94.7 83.7 19 20 Consumer credit................................ 10.2 9.4 23.6 35.0 2.2 16.6 22.9 24.2 35.6 34.5 20 21 Bank loans n.e.c................................. 29.1 -14.5 3.7 31.0 -20.9 - 8.2 -.3 7.8 37.4 24.7 21 22 Open market paper........................... 6.6 - 2.6 4.0 3.6 -1.4 -3.8 6.4 1.6 5.7 1.5 22 23 Other................................................... 13.7 9.0 14.4 19.5 9.0 9.0 12.2 16.7 15.9 23.1 23 24 By borrowing sector................................... 162.4 107.0 179.0 272.5 93.1 120.9 166.2 191.7 256.6 288.4 24 25 State and local governments............... 16.2 11.2 14.6 24.4 10.0 12.3 13.0 16.3 21.2 27.7 25 26 Households............................................. 49.2 48.6 89.8 138.1 37.3 59.9 83.9 95.6 129.7 146.5 26 27 Farm......................................................... 7.9 8.7 11.0 14.7 8.7 8.8 10.6 11.6 16.6 12.8 27 28 Nonfarm noncorporate........................ 7.4 2.0 5.2 11.9 - 1.1 5.1 2.7 7.6 11.8 12.0 28 29 Corporate................................................ 81.8 36.6 58.3 83.4 38.3 34.8 56.1 60.5 77.3 89.5 29 30 Foreign............................................................. 15.4 13.2 20.3 11.2 8.0 18.3 15.2 25.4 3.9 18.6 30 31 Corporate equities..................................... -.2 .1 * .4 .1 .1 * -.1 .6 .2 31 32 Debt instruments........................................ 15.7 13.0 20.3 10.8 7.9 18.2 15.1 25.5 3.3 18.4 32 33 Bonds....................................................... 2.1 6.2 8.4 5.0 5.1 6.8 7.3 9.5 4.3 5.6 33 34 Bank loans n.e.c..................................... 4.7 3.7 6.7 1.1 -.4 7.8 3.4 10.0 -5.8 7.9 34 35 Open market paper............................... 7.3 .3 1.9 1.9 -.8 1.4 1.5 2.4 1.6 2.1 35 36 U.S. Govt, loans.................................... 1.6 2.8 3.3 3.0 3.4 2.2 2.9 3.6 3.1 2.8 36 Financial sectors 37 Total funds raised................................................... 39.4 14.0 28.6 64.5 15.1 12.8 27.8 29.4 66.8 62.1 37 By instrument: 38 U.S. Govt, related............................................... 23.1 13.5 18.6 26.3 14.5 12.6 18.6 18.6 25.7 26.9 38 39 Sponsored credit agency securities............. 16.6 2.3 3.3 7.0 1.9 2.8 4.5 2.1 10.1 3.8 39 40 Mortgage pool securities.............................. 5.8 10.3 15.7 20.5 11.5 9.2 14.2 17.2 17.9 23.1 40 41 Loans from U.S. Govt.................................. .7 .9 -.4 - 1.2 1.1 .6 * -.7 -2.3 ...............41 42 Private financial sectors..................................... 16.3 .4 10.0 38.2 .6 .2 9.1 10.8 41.2 35.2 42 43 Corporate equities......................................... .3 * .1 .1 .1 -.1 -.7 ' 2.2 -.3 .5 43 44 Debt instruments............................................. 16.0 .4 9.2 38.1 .6 .3 9.8 8.6 41.5 34.7 44 45 Corporate bonds........................................ 2.1 2.9 5.8 9.0 2.3 3.5 7.0 4.5 9.1 8.2 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 2.4 47 48 Open market paper and Rp’s................. 3.9 2.8 7.1 21.9 8.2 - 2.6 6.1 8.1 27.9 15.8 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 5.8 3.0 3.4 4.5 1.4 7.8 3.8 50 51 Mortgage pools................................................... 5.8 10.3 15.7 20.5 11.5 9.2 14.2 17.2 17.9 23.1 51 52 Private financial sectors..................................... 16.3 .4 10.0 38.2 .6 .2 9.1 10.8 41.2 35.2 52 53 Commercial banks........................................ - 1.1 1.7 1A 11.8 5.7 -2.3 9.0 5.9 15.9 1.1 53 54 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 12.7 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 16.2 -1.4 2.4 5.7 7.1 16.7 15.6 57 58 REIT’s............................................................. .6 - 2.0 - 2.8 -2.7 - 2.0 -1.9 -2.5 -3.0 - 2.8 -2.6 58 59 Open-end investment companies................ -.7 -.1 - 1.0 -1.3 .7 -.9 -2.5 .5 -1.4 -1.1 59 60 2.4 1.3 -.3 .1 2.6 * -.7 .2 -.5 .8 60 All sectors 61 Total funds raised, by instrument........................ 229.0 219.5 296.8 405.0 195.9 243.2 282.2 311.4 367.6 442.4 61 62 Investment company shares............................ -.7 -.1 - 1.0 -1.3 .7 -.9 -2.5 .5 -1.4 - 1.1 62 63 Other corporate equities.................................. 4.8 10.2 12.2 5.5 9.8 10.5 15.1 9.3 4.3 6.7 63 64 Debt instruments.......................................... 224.9 209.5 285.6 400.7 185.4 233.6 269.6 301.6 364.8 436.7 64 65 U.S. Govt, securities..................................... 34.3 98.2 88.1 84.3 93.1 103.2 91.9 84.3 68.4 100.2 65 66 State and local obligations.......................... 17.1 13.6 15.1 27.7 12.3 14.9 14.7 15.5 27.7 27.7 66 67 Corporate and foreign bonds...................... 23.9 36.3 37.0 34.9 41.3 31.3 34.7 39.3 27.8 42.0 67 68 Mortgages....................................................... 60.5 57.2 86.8 133.9 49.5 65.0 77.9 95.7 120.8 147.0 68 69 Consumer credit............................................. 10.2 9.4 23.6 35.0 2.2 16.6 22.9 24.2 35.6 34.5 69 70 Bank loans n.e.c.............................................. 38.4 -14.4 6.7 32.0 -25.9 -2.9 .1 13.4 28.9 35.0 70 71 Open market paper and Rp’s..................... 17.8 .5 13.0 27.3 6.1 -5.0 14.0 12.0 35.2 19.4 71 72 Other loans...................................................... 22.7 8.7 15.3 25.6 6.9 10.5 13.4 17.2 20.2 31.0 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........................................ 185.8 195.5 257.8 336.4 170.3 220.8 241.1 274.4 297.6 375.1 1 By public agencies and foreign: 2 Total net advances................................................... 52.7 44.3 54.6 85.7 55.0 33.6 53.2 56.0 73.6 97.9 2 11.9 22.5 26.8 40.2 33.4 11.6 27.1 26.5 30.6 49.8 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 5 FHLB advances to S&L’s................................ 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 20.8 11.3 7.8 15.6 18.3 19.5 22.1 6 Totals advanced, by sector 7 U.S. Govt............................................................. 9.8 15.1 8.9 12.1 15.9 14.3 6.4 11.4 6.1 18.2 7 25.6 14.5 20.6 26.9 16.5 12.6 20.7 20.6 27.5 26.4 8 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 39.5 15.0 -2.7 11.6 18.8 28.5 50.6 10 11 Agency borrowing not included in line 1..... 23.1 13.5 18.6 26.3 14.5 12.6 18.6 18.6 25.7 26.9 11 Private domestic funds advanced 156.1 164.8 221.8 276.9 129.8 199.7 206.6 237.0 249.7 304.2 12 22.4 75.7 61.3 44.1 59.7 91.6 64.8 57.8 37.9 50.4 13 14 State and local obligations.............................. 17.1 13.6 15.1 27.7 12.3 14.9 14.7 15.5 27.7 27.7 14 20.9 32.8 30.3 22.3 38.8 26.8 26.8 33.9 15.1 29.5 15 16 Residential mortgages....................................... 26.9 23.2 52.4 81.3 16.7 29.6 45.5 59.2 70.7 91.8 16 17 Other mortgages and loans.............................. 75.4 15.6 60.8 105.9 -4.3 35.5 53.2 68.3 101.7 110.0 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 126.3 119.9 187.2 249.0 99.8 140.0 167.6 206.8 235.5 262.5 19 20 Commercial banking......................................... 64.6 27.6 58.0 85.5 14.4 40.7 44.5 71.5 80.6 90.5 20 21 Savings institutions............................................ 26.9 52.0 71.7 85.8 48.5 55.4 71.8 71.7 83.9 87.7 21 22 Insurance and pension funds.......................... 30.0 41.5 47.6 60.8 38.3 44.7 47.8 47.3 57.7 63.9 22 23 Other finance....................................................... 4.7 - 1.1 9.9 16.8 -1.4 -.7 3.4 16.3 13.3 20.3 23 24 Sources of funds...................................................... 126.3 119.9 187.2 249.0 99.8 140.0 167.6 206.8 235.5 262.5 24 25 Private domestic deposits................................. 69.4 90.9 122.8 134.8 90.3 91.5 106.1 139.5 120.9 148.7 25 16.0 .4 9.2 38.1 .6 .3 9.8 8.6 41.5 34.7 26 40.9 28.6 55.1 76.1 9.0 48.2 51.7 58.7 73.1 79.1 27 28 Foreign funds................................................. 14.5 -.4 3.1 3.4 -5.6 4.8 - 2.6 8.8 -3.1 9.8 28 29 Treasury balances.......................................... -5.1 -1.7 -.1 4.3 -3.5 .1 2.9 -3.1 - 1.1 9.7 29 26.0 29.0 35.8 50.1 26.4 31.5 35.1 36.5 47.2 53.0 30 5.4 1.7 16.4 18.4 -8.3 11.7 16.2 16.6 30.2 6.6 31 Private domestic nonfinancial investors 32 Direct lending in-credit markets........................... 45.9 45.3 43.8 66.0 30.6 60.0 48.8 38.8 55.7 76.4 32 33 U.S. Govt, securities......................................... 18.2 22.2 19.4 22.0 6.0 38.4 22.6 16.1 10.9 33.0 33 34 State and local obligations.............................. 10.0 6.3 4.7 8.2 7.2 5.5 3.9 5.5 6.5 9.9 34 35 Corporate and foreign bonds.......................... 4.7 8.2 4.0 1.5 10.8 5.6 4.9 3.1 2.0 1.0 35 36 Commercial paper............................................. 4.8 3.1 4.0 18.1 1.5 4.7 6.7 1.3 20.0 16.1 36 37 Other.................................................................... 8.2 5.5 11.8 16.3 5.1 6.0 10.8 12.8 16.2 16.4 37 38 Deposits and currency............................................ 75.7 97.1 130.1 143.1 96.0 98.2 111.0 149.3 125.1 161.0 38 39 Time and savings accounts................................ 66.7 84.8 113.0 121.4 73.0 96.5 98.3 127.6 105.2 137.5 39 40 Large negotiable CD’s.................................. 18.8 -14.0 -14.2 9.5 -27.8 -.2 -18.0 -10.4 -4.4 23.4 40 41 Other at commercial banks......................... 26.1 39.4 58.1 42.2 39.3 39.4 50.2 66.0 42.2 42.3 41 42 At savings institutions.................................. 21.8 59.4 69.1 69.6 61.5 57.4 66.1 72.1 67.4 71.9 42 43 Money................................................................... 8.9 12.3 17.2 21.7 23.0 1.7 12.7 21.6 19.9 23.5 43 2.6 6.1 9.9 13.4 17.3 -5.0 7.8 11.9 15.7 11.2 44 45 Currency.......................................................... 6.3 6.2 7.3 8.3 5.7 6.7 4.9 9.8 4.3 12.3 45 46 Total of credit market instruments, deposits and currency.................................................... 121.5 142.4 174.0 209.1 126.6 158.2 159.8 188.1 180.8 237.4 46 47 Public support rate (in per cent)..................... 28.4 22.7 21.2 25.5 32.3 15.2 22.1 20.4 24.7 26.1 47 48 Private financial intermediation (in per cent) 80.9 72.8 84.4 89.9 76.9 70.1 81.1 87.3 94.3 86.3 48 25.7 5.8 18.3 42.9 9.4 2.1 9.0 27.6 25.4 60.4 49 Memo: Corporate equities not included above 4.1 10.0 11.2 4.2 10.5 9.5 12.6 9.8 2.8 5.6 50 -.7 -.1 - 1.0 -1.3 .7 -.9 -2.5 .5 -1.4 -1.1 51 4.8 10.2 12.2 5.5 9.8 10.5 15.1 9.3 4.3 6.7 52 53 Acquisitions by financial institutions................. 5.8 9.4 12.3 5.9 10.7 8.1 12.6 12.0 4.6 7.3 53 - 1.6 .6 - 1.1 -1.7 -.2 1.4 * - 2.2 -1.7 -1.7 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 □ August 1978 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures 1967 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1977 1978 Measure 1975 1976 1977 Dec. Jan. Feb. Mar. Apr.' May June? July* 1 Industrial production....................................................... 117.8 129.8 137.0 139.7 138.8 139.2 140.9 143.2 143.9 144.6 145.3 Market groupings: 2 Products, total......................................................... 119.3 129.3 137.1 140.3 138.5 139.6 141.6 143.0 143.1 143.7 144.3 3 Final, total........................................................... 118.2 127.2 134.9 137.6 134.9 136.4 138.9 140.5 140.5 140.9 141.6 4 Consumer goods............................................. 124.0 136.2 143.4 145.8 141.8 143.8 145.9 147.5 147.1 146.9 147.3 b Equipment....................................................... 110.2 114.6 123.2 126.2 125.4 126.2 129.1 130.8 131.6 132.5 133.8 6 Intermediate......................................................... 123.1 137.2 145.1 150.4 151.6 151.4 151.4 152.1 152.9 154.3 154.8 7 Materials................................................................... 115.5 130.6 136.9 138.8 139.2 138.6 139.9 143.7 145.2 146.2 146.9 Industry groupings: 8 Manufacturing......................................................... 116.3 129.5 137.1 140.5 138.7 139.4 141.4 143.5 144.2 144.9 145.6 Capacity utilization (per cent)1 in— 9 Manufacturing............................................................. 73.6 80.2 82.4 83.0 81.7 81.9 82.7 83.7 83.8 84.0 84.1 10 Industrial materials industries.................................. 73.6 80.4 81.9 81.9 81.9 81.3 81.9 84.0 84.6 84.9 85.2 11 Construction contracts2................................................. 162.3 190.2 253.0 299.0 270.0 266.0 254.0 279.0 332.0 249.0 12 Nonagricultural employment, total3............................. 117.0 120.6 124.7 126.7 127.1 127.6 128.4 129.4 129.8 130.2 130.6 13 Goods-producing, total.............................................. 97.1 100.3 104.1 105.4 105.7 106.3 107.2 109.0 109.3 109.7 110.2 14 Manufacturing, total.............................................. 94.3 97.5 100.6 102.2 102.7 103.2 103.7 104.0 104.2 104.1 104.4 15 Manufacturing, production-worker.................... 91.3 95.2 98.3 100.0 100.7 101.3 101.7 102.0 102.2 101.9 102.1 16 Service-producing....................................................... 127.8 131.7 136.0 138.3 138.8 139.3 140.0 140.6 140.9 141.4 141.8 17 Personal inrnin» tntn 14 ............................................... r200.4 r220.4 '244.0 '256.8 '258.1 '259.3 '262.7 266.5 '268.3 270.6 18 Wages and salary disbursements................... r188.5 r208.2 '230.1 '240.3 '242.9 '245.0 '249.5 253.5 '254.4 256.1 IQ TVTarmfflr.tnrincr............................... ................... . 157.3 '177.1 '198.6 '209.2 '210.2 '213.6 '218.0 219.5 '220.5 221.6 10 Disnosahle nersonal income......................................... r199.6 '217.5 '239.3 '243.8 '261.6 '265.6 21 Retail sales5...................................................................... 184.6 203.5 224.4 237.1 228.8 235.6 239.5 244.8 245.4 245.6 246.2 Prices:6 22 Consumer7................................................................... 161.2 170.5 181.6 186.1 187.2 188.4 189.8 191.5 193.3 195.3 23 Wholesale..................................................................... 174.9 183.0 194.2 198.2 199.9 202.0 203.8 206.4 207.9 209.4 210.6 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 Q3 Q4 Ql Q2' Q3 Q4 Ql Q2 Q3 Q4 Ql Q2r Output (1967 = 100) Capacity (per cent of 1967 output) Utilization rate (per cent) 1 Manufacturing................................................... 138.7 139.9 139.8 144.2 167.1 168.7 170.3 172.0 83.0 82.9 82.1 83.8 2 Primary processing...................................... 147.3 148.2 148.2 153.8 173.5 175.1 176.8 178.5 84.9 84.6 83.8 86.1 3 Advanced processing.................................. 129.3 135.6 135.4 139.2 163.8 165.3 166.9 168.5 81.9 82.0 81.1 82.6 4 Materials........................................................... 138.1 138.9 139.2 145.0 167.8 168.9 170.4 171.7 82.3 82.2 81.7 84.5 5 Durable goods.............................................. 136.0 137.7 137.9 143.9 171.6 172.8 174.0 175.2 79.2 79.6 79.3 82.1 6 Basic metal............................................... 109.4 109.4 110.5 117.4 145.3 145.5 145.8 146.1 75.3 75.2 75.8 80.3 7 Nondurable goods...................................... 154.4 155.0 158.0 163.1 178.8 180.4 182.3 184.4 86.3 85.9 86.7 88.5 8 Textile, paper, and chemical................ 159.2 159.5 163.1 167.8 187.1 188.9 190.8 193.1 85.1 84.5 85.5 86.9 9 Textile.................................................... 112.3 117.9 115.3 116.9 142.5 143.0 143.5 144.1 78.8 82.4 80.3 81.1 10 Paper..................................................... 135.1 132.3 136.5 140.1 151.3 152.5 153.6 154.8 89.3 86.7 88.9 90.5 11 Chemical............................................... 189.5 188.9 194.9 201.3 221.2 223.6 226.6 230.1 85.7 84.5 86.0 87.5 12 Energy........................................................... 123.4 121.9 119.1 125.5 145.2 145.7 147.2 147.8 85.0 83.7 80.9 84.9 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. 1978 Category 1975 1976 1977 Jan. Feb. Mar. Apr. May June July Household survey data 1 Noninstitutional population1................ 153,449 156,048 158,559 159,937 160,128 160,313 160,504 160,713 160,928 161,148 2 Labor force (including Armed Forces)1....................................... 94,793 96,917 99,534 101,228 101,217 101,536 101,902 102,374 102,671 102,734 3 Civilian labor force............................... 92,613 94,773 97,401 99,107 99,093 99,414 99,784 100,261 100,573 100,618 Employment: 4 Nonagricultural industries2........ 81,403 84,188 87,302 89,527 89,761 89,956 90,526 90,877 91,346 91,038 5 Agriculture...................................... 3,380 3,297 3,244 3,354 3,242 3,310 3,275 3,235 3,473 3,387 Unemployment: 6 Number........................................... 7,830 7,288 6,855 6,226 6,090 6,148 5,983 6,149 5,754 6,193 7 Rate {per cent of civilian labor force)........................................ 8.5 7.7 7.0 6.3 6.1 6.2 6.0 6.1 5.7 6.2 8 Not in labor force.................................. 58,655 59,130 59,025 58,709 58,911 58,776 58,602 58,340 58,257 58,414 Establishment survey data 9 Nonagricultural payroll employment3 17,051 79,443 82,142 83,719 84,046 84,555 85,223 '85,466 '85,767 *86,031 10 Manufacturing.................................... 18,347 18,956 19,555 19,972 20,075 20,164 20,216 '20,258 '20,283 *20,308 11 Mining................................................. 745 783 831 705 r711 '728 898 903 912 *921 12 Contract construction....................... 3,512 3,594 3,845 3,916 '3,947 '4,053 4,237 '4,268 '4,357 *4,408 13 Transportation and public utilities. 4,498 4,509 4,589 4,628 4,651 4,672 4,709 '4,714 '4,724 *4,697 14 Trade.................................................... 17,000 17,694 18,291 18,744 18,744 18,849 18,891 '18,967 '19,047 *19,109 15 Finance................................................ 4,223 4,316 4,508 4,630 4,647 4,670 4,683 '4,712 '4,738 *4,758 16 Service.................................................. 14,006 14,644 15,333 15,693 15,791 15,875 15,962 '15,970 '16,014 *16,124 17 Government........................................ 14,720 14,948 15,190 15,431 15,480 15,544 15,627 '15,674 '15,692 *15,706 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 □ August 1978 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value Monthly data are seasonally adjusted. 1967 1977 1978 Grouping pro­ 1977 por­ aver­ tion age May June July Dec. Jan. Feb. Mar. Apr.r May June? July* Index(1967 = 100) MAJOR MARKET 1Total index.................................................................... 100.00 137.1 137.0 137.8 138.7 139.7 138.8 139.2 140.9 143.2 143.9 144.6 145.3 2 Products........................................................................ 60.71 137.1 136.5 137.3 138.7 140.3 138.5 139.6 141.6 143.0 143.1 143.7 144.3 3 47.82 134.9 134.7 135.4 136.8 137.6 134.9 136.4 138.9 140.5 140.5 140.9 141.6 4 27.68 143.4 143.1 143.8 145.4 145.8 141.8 143.8 145.9 147.5 147.1 146.9 147.3 5 Equipment............................................................ 20.14 123.2 123.2 124.1 124.8 126.2 125.4 126.2 129.1 130.8 131.6 132.5 133.8 6 12.89 145.1 143.5 144.7 146.3 150.4 151.6 151.4 151.4 152.1 152.9 154.3 154.8 39.29 136.9 137.8 138.7 138.9 138.8 139.2 138.6 139.9 143.7 145.2 146.2 146.9 Consumer goods 8 Durable consumer goods........................................ 7.89 153.1 152.2 155.8 158.0 155.8 146.5 151.2 157.5 161.8 160.3 161.2 161.6 9 Automotive products......................................... 2.83 174.2 172.8 179.8 184.8 172.4 157.5 162.8 175.8 184.3 180.0 180.3 180.8 10 Autos and utility vehicles............................. 2.03 169.2 167.4 177.4 184.1 165.5 145.5 153.9 171.0 182.7 175.6 175.3 175.7 11 1.90 148.4 148.5 156.8 161.4 143.6 127.4 131.5 149.7 159.1 151.6 150.1 152.7 12 Auto parts and allied goods........................ .80 186.8 186.6 185.8 186.6 190.4 187.8 185.3 188.5 188.2 191.2 192.9 193.5 13 5.06 141.3 140.6 142.3 142.9 146.6 140.3 144.6 147.2 149.2 149.3 150.4 150.9 14 1.40 127.3 131.0 133.1 130.1 132.8 116.1 133.3 135.4 142.2 139.6 141.1 140.9 15 1.33 130.5 134.8 136.8 134.4 134.6 117.4 135.7 137.9 144.7 142.0 143.3 16 1.07 152.2 147 3 151 2 154.1 161.5 159.1 160.2 159.3 158.9 163.4 165.2 17 2.59 144.3 143 .'l 143! 6 145! 1 147.7 145.9 144.3 148.7 149.0 148.8 149.3 149.9 18 Nondurable consumer goods.................................. 19.79 139.6 139.5 139.1 140.3 141.8 139.9 140.8 141.3 141.8 141.7 141.1 141.6 19 Clothing................................................................ 4.29 125.2 125.5 125.7 124.1 126.9 118.3 121.1 122.4 124.9 125.4 20 15.50 143.6 143.4 142.9 144.8 145.9 145.9 146.3 146.4 146.6 146.2 i45! 6 "\46.2 91 8.33 135.5 135.0 135.4 137.1 137.9 136.5 138.3 138.7 140.8 139.9 139.0 22 Nonfood staples. ........................................... 7.17 152.9 153.2 151.7 153.8 155.2 156.6 155.8 155.3 153.3 153.4 153.4 154.6 23 Consumer chemical products................... 2.63 180.5 180.8 179.3 179.4 186.5 187.4 184.3 182.1 182.5 182.0 183.5 24 Consumer paper products........................ 1.92 117.1 118.4 116.3 117.4 119.8 121.4 118.8 118.9 117.7 117.9 116.9 25 Consumer energy products....................... 2.62 151.4 150.8 149.8 154.9 149.7 151*5 154 5 155.0 149.9 150.4 150.1 26 Residential utilities................................ 1.45 159.0 157.1 159.9 167.5 158.5 161 > 167! 6 166.9 159.0 157.2 Equipment 27 12.63 149.2 148.9 150.1 151.2 154.0 152.6 154.2 157.4 159.3 160.2 161.3 162.8 28 Industrial equipment.......................................... 6.77 138.5 138.4 140.0 140.7 143.0 144.3 144.6 146.9 147.8 149.6 150.4 151.8 29 Building and mining equipment.................. 1.44 202.5 205.3 208.1 210.6 208.3 211.1 214.9 221.7 225.1 225.1 226.5 228.2 30 Manufacturing equipment............................ 3.85 113.9 112.8 115.0 114.3 118.2 118.8 117.7 118.3 119.0 121.4 122.1 123.3 31 Power equipment............................................ 1.47 140.2 139.9 139.0 141.2 143.7 146.1 145.8 148.8 147.3 149.2 150.1 151.4 32 Commercial transit, farm equipment............. 5.86 161.6 161.2 161.9 163.3 166.9 162.2 165.5 169.4 172.6 172.3 173.9 175.5 33 Commerical equipment................................. 3.26 191.6 191.1 191.4 191.7 198.8 198.5 200.9 202.0 203.8 204.2 206.6 208.1 34 1.93 117.8 116.5 118.5 121.5 121.1 111.1 115.9 126.1 133.7 132.2 131.8 132.7 35 .67 142.3 144.4 143.2 144.6 144.5 131.4 134.8 137.0 132.9 131.9 136.4 36 Defense and space equipment................................ 7.51 79.6 80.0 80.3 80.4 79.5 79.7 79.2 81.9 82.9 83.2 84.1 85.5 Intermediate products 37 6.42 140.8 138.7 139.9 141.2 148.3 149.2 148.6 147.9 148.5 150.4 151.3 152.4 38 Business supplies • 6.47 149.5 148.4 149.6 151.3 152.6 153.8 154.2 155.0 155.6 155.3 157.1 39 Commercial energy products ........... 1.14 164.6 165.8 164.2 168.2 165.6 165.5 165.6 164.3 163.5 163.7 163.7 Materials 4 41 0 Du D ra u b r l a e b g le o o c d o s n s m u a m te e r r i a p l a s r .. t .. s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 4 0 . . 5 3 8 5 1 1 3 3 4 2 . . 5 0 1 1 3 3 5 2 . . 2 0 1 1 3 34 6 . . 5 4 1 1 3 37 6 . . 2 8 1 1 3 35 8 . . 7 7 1 1 3 3 8 3 . . 2 0 1 13 3 1 7 . . 1 0 1 1 3 33 8 . . 1 6 1 1 4 36 2 . . 8 7 1 1 4 3 4 8. . 3 0 1 1 4 3 5 9 . . 0 0 1 1 4 4 6 0. . 5 4 42 Equipment parts.................................................. 5.44 143.1 141.7 143.0 145.0 149.2 148.7 146.6 151.3 154.8 155.8 157.7 159.2 43 Durable materials n.e.c..................................... 10.34 131.1 133.2 133.8 132.4 134.3 134.9 134.6 134.5 138.9 140.3 141.1 142.4 44 5.57 110.9 117.8 116.3 112.6 110.3 110.2 111.0 110.4 116.7 117.4 118.0 45 10.47 153.5 155.4 154.7 154.1 155.3 155.0 158.5 160.5 162.0 163:4 164.0 164.0 46 7.62 158.3 160.7 160.1 158.9 159.3 160.7 162.8 165.7 166.4 168.0 168.9 168.7 47 Textile materials . ............. 1.85 113.0 111.8 109.0 110.1 117.3 114.9 115.8 115.1 116.5 116.8 117.5 48 Paper materials ................. 1.62 133.5 136.2 134.4 134.3 130.2 135.0 136.8 137.8 139.2 140.1 141.1 49 Chemical materials ..... 4.15 188.2 192.2 192.7 190.3 189.5 191.4 194.2 199.2 199.5 201.7 202.7 50 Containers nondurable ............. 1.70 150.9 152.3 152.4 152.4 154.4 150.4 158.7 158.1 160.5 161.4 161.6 51 Nondurable materials nec.. ............... 1.14 125.3 123.1 122.9 124.9 129.9 123.6 128.9 129.3 134.6 135.2 134.8 52 8.48 122.4 122.3 124.3 125.2 118.7 122.2 117.7 117.5 123.9 125.9 126.7 127.5 53 Primary energy. ........................................... 4.65 107.3 106.6 109.7 108.9 103.0 105.2 101.0 104.5 115.5 116.2 116.3 54 Converted fuel materials . ... 3.82 140.7 141.4 142.0 145.1 137.7 142.8 138.0 133.3 134.1 137.8 139.5 Supplementary groups 55 Home goods and clothing.................................... 9.35 133.9 133.6 134.7 134.3 137.5 130.2 133.8 135.9 138.0 138.3 138.7 139.1 56 Energy, total............................................................. 12.23 132.5 132.5 133.5 135.6 129.7 132.5 130.0 129.8 133.1 134.7 135.1 136.1 57 Products................................................................ 3.76 155.4 155.3 154.1 158.9 154.5 155.8 157.9 157.9 154.1 154.5 154.2 58 8.48 122.4 122.3 124.3 125.2 118.7 122.2 117.7 117.5 123.9 125.9 126.7 * i27!5 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 May June July Dec. Jan. Feb. Mar. Apr. May JuneP July* Index (1967 = 100) MAJOR INDUSTRY 1 Mining and utilities. 12.05 136.2 137.1 138.8 139.4 133.9 137.4 137.7 138.2 140.9 141.6 142.1 142.8 2 Mining................... 6.36 117.8 119.5 122.8 119.8 113.4 115.0 114.4 119.3 127.2 128.1 128.9 129.3 3 Utilities................... 5.69 156.5 156.7 156.8 161.4 156.7 162.3 163.5 159.5 156.0 156.7 156.9 157.9 4 Electric............... 3. 175.5 175.4 176. 183.9 175.9 183.6 184.3 178.8 175.0 176.9 5 Manufacturing., 87.95 137.1 137.1 137.8 138.5 140.5 138.7 139.4 141.4 143.5 144.2 144.9 145.6 6 Nondurable.. 35.97 148.1 148.5 148.4 148.6 150.9 149.8 150.6 151.4 153.2 153.8 154.3 154.3 7 Durable........ 51.98 129.5 129.3 130.5 131.6 133.4 131.1 131.5 134.4 136.9 137.6 138.5 139.6 Mining 8 Metal mining...................... 10 .51 105.4 120.5 121.3 101.9 104.3 121.4 119.9 127.6 122.3 120.1 121.1 9 Coal...................................... 11,12 .69 118.0 122.4 133.4 120.7 74.6 54.8 56.5 78.4 129.5 132.7 136.8 n i’A 10 Oil and gas extraction----- 13 4.40 118.0 118.3 121.3 120.6 118.4 121.1 120.4 123.3 127.3 128.0 128.5 128.7 11 Stone and earth minerals. 14 .75 124.9 123.0 122.5 126.7 126.5 130.0 129.1 128.2 128.9 129.6 130.0 Nondurable manufactures 12 Foods.................................... 8.75 137.9 138.3 136.9 138.3 140.4 139.3 140.8 141.1 143.1 142.5 141.9 13 Tobacco products.............. .67 114.3 105.2 119.2 114.5 120.6 113.4 117.7 115.6 121.0 120.2 14 Textile mill products......... 2.68 137.1 136.0 135.4 137.2 143.7 137.1 136.4 135.1 138.1 138.5 139.1 15 Apparel products............... 3.31 124.2 123.5 122.1 121.1 125.8 118.6 121.1 122.8 126.1 125.9 16 Paper and products........... 3.21 137.4 139.5 139.3 139.2 138.6 139.9 143.9 144.9 145.7 146.6 147.8 144.4 17 Printing and publishing........ 4.72 124.9 124.4 124.1 124.9 127.5 129.9 128.3 129.1 128.6 128.2 128.0 128.6 18 Chemicals and products 7.74 180.7 182. 183.5 182.6 183.0 184.4 183.7 185.2 185.5 188.1 190.2 19 Petroleum products............... 1.79 141.0 142.4 140.0 140.4 139.3 139.7 139.0 140.1 141.7 142.3 141.6 'U2A 20 Rubber & plastic products . 2.24 232.2 232.4 235.2 235.2 240.1 238.7 240.0 243.1 249.1 253.0 253.4 21 Leather and products........... .86 75.3 76.2 74.1 74.1 77.3 74.5 73.0 72.1 76.0 75.7 74.4 Durable manufactures 22 Ordnance, private & government . 19,91 3.64 73.9 74.4 74.1 75.0 73.8 72.3 71.2 72.7 73.0 73.3 73.6 74.2 23 Lumber and products...................... 24 1.64 133.4 133.0 132.4 132.9 138.1 138.5 135.5 136.5 136.9 136.5 136.7 24 Furniture and fixtures..................... 25 1.37 140.9 137.5 139.9 143.0 146.6 146.4 150.1 149.5 148.9 152.8 154.2 25 Clay, glass, stone products............. 32 2.74 146.1 145.0 147.7 148.0 152.1 152.2 152.6 154.2 156.7 157.1 158.5 26 Primary metals..................... 33 6.57 110.2 117.1 114.7 114.4 111.0 107.4 106.2 106.1 114.3 115.3 117.3 118.4 27 Iron and steel................... 331,2 4.21 103.4 111.0 109.2 110.9 103.8 99.5 96.3 96.4 109.0 110.5 113.9 28 Fabricated metal products. 34 5.93 130.9 128.2 130.8 132.0 136.4 136.9 136.9 138.1 139.5 140.4 141.5 * i 42 i 5 29 Nonelectrical machinery... 35 9.15 144.8 142.6 144.0 145.7 151.7 150.1 150.1 151.5 152.2 152.9 154.2 156.0 30 Electrical machinery............ 36 8.05 141.9 141.8 142.6 143.6 147.3 144.0 146.4 149.5 152.3 153.1 154.0 155.0 31 Transportation equipment.... 37 9.27 121.1 120.3 123.7 125.6 122.2 116.2 118.4 126.5 130.5 130.1 130.5 131.4 32 Motor vehicles & parts......... 371 4.50 159.7 157.7 163.2 166.2 161.8 146.6 153.1 165.1 171.7 168.3 168.1 169.1 33 Aerospace & misc. trans. eq. 372-9 4.77 84.7 85.2 86.5 87.3 84.9 87.6 85.8 90.1 91.8 93.9 95.1 95.9 34 Instruments.................................. 38 2.11 159.1 157.4 158.2 159.0 164.7 163.4 163.5 168.7 170.5 169.8 171.6 171.5 35 Miscellaneous mfrs.................... 39 1.51 149.1 148.0 148.4 150.4 152.5 153.0 151.8 153.7 152.9 152.7 153.2 153.0 Gross value (billions of 1972 dollars, annual rates) MAJOR MARKET 36 Products, total............ 1507.4 583.9 582.2 585.9 590.5 594.7 582.0 591.2 601.1 608.8 606.3 607.0 609.6 37 Final products.......... 1390.9 452.1 451.0 453.7 457.8 458.7 445.1 454.4 463.5 470.7 467.9 468.0 469.4 38 Consumer goods. 1277.5 317.5 316.3 318.9 321.5 320.4 311.2 318.6 321.6 326.3 324.0 323.2 324.1 39 Equipment.......... U13.4 134.6 134.6 134.9 136.2 138.2 133.9 135.8 142.0 144.4 144.0 145.0 145.5 40 Intermediate products. 1116- 6 131.9 131.4 131.8 132.8 135.9 136.7 137.0 137.5 138.3 138.7 139.3 140.2 l 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 o August 1978 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates. Exceptions noted. 1977 1978 Item 1975 1976 1977 Dec. Jan. Feb. Mar.r Apr. May r June Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized................................. 927 1,296 18,133 1,778 1,526 1,534 1,647 1,740 1,597 1,800 2 1-family................................................ 669 894 12,265 1,188 1,032 957 1,037 1,157 1,058 1,109 3 2-or-more-family................................ 27 8 402 5,861 590 494 577 610 583 539 691 1,160 1,538 1,986 2,203 1,548 1,569 2,047 r2,165 2,081 2,099 5 1-family............................................... 892 1,163 1,451 1,574 1,156 1,103 1,429 1,492 1,493 1,431 6 2-or-more-family................................ 268 377 535 629 392 466 618 *•673 588 668 7 Under construction, end of period 1 1,003 1,147 1,442 1,249 1,262 1,260 1,260 1,277 1,291 8 1-family............................................... 531 655 829 770 785 787 778 111 775 9 2-or-more-family................................ 472 492 613 479 478 474 483 512 515 10 Completed................................................ 1,297 1,362 1,652 1,641 1,759 1,696 7,821 1,947 1,848 11 1-family............................................... 866 1,026 1,254 1,299 1,300 1,233 1,363 1,516 1,412 12 2-or-more-family............................... 430 336 398 342 459 463 458 431 436 13 Mobile homes shipped......................... 213 246 in 324 322 2.69 284 252 247 246 Merchant builder activity in 1-family units: 14 Number sold.......................................... 544 639 819 857 813 774 793 *"828 845 812 15 Number for sale, end of period i......... 383 433 407 403 405 404 404 411 417 421 Price (thous. of dollars)2 Median: 39.3 44.2 48.9 52.9 52.3 53.2 53.5 53.1 55.7 57.3 17 Units for sale.................................. 38.9 41.6 48.2 47.7 48.2 Average: 18 Units sold........................................ 42.5 48.1 54.4 57.6 58.5 59.1 60.0 r59.3 62.2 63.8 EXISTING UNITS (1-family) 19 Number sold.......................................... 2,452 3,002 3,572 4,030 3,780 3,460 3,770 3,880 3,770 3,780 Price of units sold (thous. of dollars):2 20 Median................................................ 35.3 38.1 42.9 44.2 45.5 46.3 46.5 48.2 47.8 48.4 39.0 42.2 47.9 48.3 50.3 51.3 51.1 53.6 54.8 55.1 Value of new construction 4 (millions of dollars) CONSTRUCTION 22 Total put in place............................ 147,481 170,685 179,026 r171,705 r177,936 184,817 192,871 198,310 200,544 23 Private............................................... 93,624 109,499 133,652 142,284 r135,280 *142,207 147,145 r151,338 153,207 156,603 24 Residential.................................... 46,472 60,519 81,067 87,361 *•79,716 85,577 87,578 *•90,036 91,267 92,443 25 Nonresidential, total.................. 47,152 48,980 52,585 54,923 r55,564 *■56,630 59,567 *'61,302 61,940 64,160 Buildings: 26 Industrial.............................. 8,017 7,182 7,182 7,874 r7,425 *•7,674 9,199 9,244 8,735 10,577 27 Commercial.......................... 12,804 12,757 14,604 14,890 r14,969 *■15,154 16,227 17,177 18,546 19,345 28 Other..................................... 5,585 6,155 6,226 6,252 *•6,012 5,867 6,358 6,806 6,935 6,705 29 Public utilities and other.... 20,746 22,886 24,573 25,907 r27,158 27,935 27,783 *•28,075 27,724 27,533 30 Public................................................. 40,669 37,982 37,033 36,762 36,425 35,729 37,672 41,532 45,103 43,941 31 Military........................................ 1,392 1,508 1,478 1,381 1,430 1,478 1,405 1,500 1,450 1,359 32 Highway........................................ 10,861 9,756 9,170 8,455 *•7,472 *•6,418 7,399 7,977 10,313 33 Conservation and development... 3,256 3,722 3,765 3,854 *”4,236 *•3,891 4,237 4,586 4,359 34 Other 3............................................ 25,160 22,996 22,620 23,072 *■23,287 *•23,942 24,631 27,469 28,981 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 PRODUCER 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 1978 1978 June 1977 1978 1978 June June (1967 Sept. Dec. Mar. June Feb. Mar. Apr. May June = 100)2 Consumer prices 3 1All items............................................................. 6.9 7.4 4.5 4.9 9.3 11.4 .6 .8 .9 .9 .9 195.3 2 Commodities...................................................... 6.2 6.9 2.5 4.9 9.3 11.2 .5 .8 .9 .9 .9 187.5 3 Food............................................................... 7.0 10.4 1.9 4.2 16.4 20.4 1.2 1.3 1.9 1.5 1.3 213.8 4 Commodities less food............................... 5.7 5.4 2.7 5.4 6.1 7.2 .2 .6 .5 .6 .6 174.4 5 Durable..................................................... 5.9 6.1 1.5 5.2 8.7 9.0 .7 .5 .5 .8 .8 173.9 6 Nondurable.............................................. 5.5 4.3 3.4 5.1 3.1 5.5 -.3 .6 .5 .4 .4 173.7 7 Services............................................................... 7.9 8.4 7.6 4.9 9.1 11.8 .7 .8 .9 1.0 .9 209.9 8 Rent................................................................ 5.9 7.0 6.7 6.3 6.2 8.5 .4 .6 .7 .7 .6 163.6 9 Services less rent.......................................... 8.2 8.6 8.0 4.8 9.6 12.2 .8 .9 .9 1.0 .9 218.3 Other groupings: 10 All items less food....................................... 6.8 6.8 5.3 5.0 8.1 9.3 .5 .7 .7 .8 .1 190.6 11 All items less food and energy................. 6.5 7.0 5.1 5.3 8.0 9.9 .4 .7 .7 .8 .9 188.0 12 6.9 10.5 8.5 7.1 12.2 14.5 .7 1.2 1.1 1.1 1.2 225.3 Producer prices, formerly Wholesale prices 13 Finished goods................................................. 6.2 7.7 2.9 7.2 9.4 11.4 rl.l r.5 1.3 .7 .7 194.4 14 Consumer....................................................... 6.2 7.5 1.8 5.4 10.5 12.5 '1.2 .5 1.6 .6 .7 192.8 15 Foods......................................................... 4.7 9.8 -2.3 7.4 21.0 14.8 r3.0 r.6 1.9 .5 1.1 209.4 16 Excluding foods....................................... 7.0 6.2 4.0 4.7 5.1 10.7 r.3 rA 1.3 .8 .4 182.6 17 Capital Equiptment..................................... 6.4 8.2 6.0 10.9 6.9 9.4 r .6 r.5 .6 .9 .8 198.2 18 Materials............................................................ 6.0 7.7 .4 8.3 14.2 8.4 1.3 .9 .9 .5 .6 220.2 19 Intermediate1................................................ 7.1 6.6 7.1 4.2 9.0 6.2 .8 .5 .5 .5 .5 215.6 Crude: 20 11.0 10.3 -5.3 20.1 15.7 12.4 1.0 1.5 .9 .4 1.7 286.3 21 Food........................................................... -2.9 16.5 -19.6 27.6 43.6 25.2 4.7 1.8 3.7 .0 1.9 223.7 1 Excludes intermediate materials for food manufacturing and manu- 3 Beginning Jan. 1978 figures for consumer prices are those for all urban factured animal feeds. consumers. 2 Not seasonally adjusted. Source.—Bureau of Labor Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 Domestic Nonfinancial Statistics □ August 1978 2.16 GROSS NATIONAL PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates. 1911r 1978 1975 r 1976 r 1977 r Account Ql Q2 Q3 Q4 Ql Q2p Gross national product 1 1,528.8 1,700.1 1,887.2 1,806.8 1,867.0 1,916.8 1,958.1 1,992.0 2,076.9 By source: 2 Personal consumption expenditures..................... 979.1 1,090.2 1,206.5 1,167.7 1,188.6 1,214.5 1,255.2 1,276.7 1,324.0 3 132.6 156.6 178.4 173.2 175.6 111 A 187.2 183.5 197.3 4 Nondurable goods............................................ 408.9 442.6 479.0 465.9 473.6 479.7 496.9 501.4 518.6 5 437.5 491.0 549.2 528.6 539.4 557.5 571.1 591.8 608.1 6 Gross private domestic investment...................... 190.9 243.0 297.8 272.5 295.6 309.7 313.5 322.7 342.2 7 201.6 232.8 282.3 262.2 278.6 287.8 300.5 306.0 321.5 8 150.2 164.6 190.4 180.6 187.2 193.5 200.3 205.6 216.7 9 53.8 57.3 63.9 59.3 63 A 65.4 61A 68.5 74.2 10 Producers’ durable equipment............... 96.4 107.3 126.5 121.4 123.8 128.1 132.8 137.1 142.5 11 51.5 68.2 91.9 81.6 91.4 94.3 100.2 100.3 104.8 12 49.5 65.8 88.9 78.6 88.4 91.2 97.5 97.3 101.7 13 Change in business inventories...................... -10.7 10.2 15.6 10.3 17.0 21.9 13.1 16.7 20.7 14 -14.3 12.2 15.0 11.1 16.5 22.0 10.4 16.9 22.7 15 Net exports of goods and services....................... 20.4 7.4 -11.1 -8.5 -5.9 -7.0 -23.2 -24.1 -13.9 16 147.3 163.2 175.5 170.9 178.1 180.8 172.1 181.7 199.4 17 126.9 155.7 186.6 179.4 184.0 187.8 195.2 205.8 213.3 18 Govt, purchases of goods and services................ 338.4 359.5 394.0 375.0 388.8 399.5 412.5 416.7 424.6 19 123.1 129.9 145.1 138.3 142.9 146.8 152.2 151.5 147.4 20 215.4 229.6 248.9 236.7 245.9 252.7 260.3 265.2 277.2 By major type of product: 21 1,539.6 1,689.9 1,871.6 1,796.5 1,850.0 1,894.9 1,945.0 1,975.3 2,056.2 22 686.6 760.3 832.6 800.2 825.8 844.7 859.6 861.8 907.1 23 Durable goods............................................... 259.0 304.6 341.3 332.2 339.1 346.5 347.4 351.2 372.1 24 427.5 455.7 491.3 468.0 486.7 498.2 512.2 510.6 534.9 25 697.6 778.0 862.8 832.3 850.0 875.3 893.6 926.4 949.2 26 144.7 161.9 191.8 174.3 191.3 196.8 204.9 203.8 220.6 27 Change in business inventories.......................... -10.7 10.2 15.6 10.3 17.0 21.9 13.1 16.7 20.7 28 -8.9 5.3 8.4 6.1 9.1 11.9 6.3 14.8 11.2 29 Nondurable goods............................................ - 1.8 4.9 7.2 4.2 7.9 10.0 6.8 1.9 9.5 30 Memo: Total GNP in 1972 dollars..................... 1,202.3 1,271.0 1,332.7 1,306.7 1,325.5 1,343.9 1,354.5 1,354.2 1,378.6 National income 31 Total......................................................................... 1,215.0 1,359,2 1.515.3 1,447.5 1,499.3 1,537.6 1,576.9 1,603.1 32 Compensation of employees............................... 931.1 1,036.8 1.153.4 1,107.9 1,140.5 1,165.8 1,199.7 1,241.0 1,286.1 33 Wages and salaries............................................ 805.9 890.1 983.6 946.4 973.4 993.6 1,021.2 1,050.8 1,088.7 34 Government and Government enterprises 175.4 187.6 200.8 195.2 198.1 201.7 208.1 211.4 213.9 35 Other................................................................ 630.4 702.5 782.9 751.2 775.3 791.9 813.1 839.3 874.7 36 Supplement to wages and salaries................... 125.2 146.7 169.8 161.5 167.1 172.2 178.4 190.2 197.5 37 Employer contributions for social insurance................................................ 60.1 69.7 19 A 76.6 78.6 79.9 82.4 90.2 93.4 38 Other labor income...................................... 65.1 77.0 90.4 84.9 88.5 92.2 96.1 100.0 104.0 39 Proprietors’ income1.............................................. 87.0 88.6 99.8 95.6 98.9 97.2 107.3 105.0 110.6 40 Business and professional1.............................. 63.5 70.2 79.5 76.1 78.9 80.8 82.3 83.1 86.1 41 Farm1.................................................................. 23.5 18.4 20.3 19.4 20.0 16.5 25.1 21.9 24.5 42 Rental income of persons2.................................. 22.4 22.5 22.5 22.5 22.4 22.4 22.7 22.8 23.0 43 Corporate profits1................................................. 95.9 127.0 144.2 129.9 143.7 154.8 148.2 132.6 44 Profits before tax3............................................ 120.4 155.9 173.9 164.8 175.1 177.5 178.3 172.1 45 Inventory valuation adjustment..................... -12.4 -14.5 -14.8 -20.3 -16.6 -7.7 -14.8 -23.5 -24.8 46 Capital consumption adjustment................... -12.0 -14.4 -14.9 -14.6 -14.8 -15.0 -15.3 -16.1 -16.7 47 Net interest............................................................. 78.6 84.3 95.4 91.7 93.7 97.3 99.0 101.7 104.2 1 With inventory valuation and capital consumption adjustments. 3 For after-tax profits, dividends, etc., see Table 1.50. 2 With capital consumption adjustments. Source.—Survey of Current Business (U.S. Dept, of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

National Income Accounts A53 2.17 PERSONAL INCOME AND SAVING Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted. 1977r 1978 1975 r 1976 r 1977 *■ Account Ql Q2 Q3 Q4 Ql Q2* Personal income and saving 1 Total personal income............................................... 1,255.5 1,380.9 1,529.0 1,470.7 1,508.6 1,543.7 1,593.0 1,628.9 1,682.5 2 Wage and salary disbursements............................... 805.9 890.1 983.6 946.4 973.4 993.6 1,021.2 1,050.8 1,088.6 3 Commodity-producing industries...................... 275.0 307.5 343.7 327.3 342.0 348.3 357.1 365.9 386.7 4 Manufacturing................................................... 211.0 237.5 266.3 254.6 264.1 269.3 277.3 286.9 295.7 5 Distributive industries.......................................... 195.3 216.4 239.1 231.2 236.5 241.2 247.5 257.0 265.6 6 Service industries................................................... 160.1 178.6 200.1 192.7 196.8 202.3 208.5 216.5 222.5 7 Government and government enterprises........ 175.4 187.6 200.8 195.2 198.1 201.7 208.1 211.4 213.9 8 Other labor income................................................... 65.1 77.0 90.4 84.9 88.5 92.2 96.1 100.0 104.0 87.0 88.6 99.8 95.6 98.9 97.2 107.3 105.0 110.6 10 Business and professional1.................................. 63.5 70.2 79.5 76.1 78.9 80.8 82.3 83.1 86.1 11 Farm1...................................................................... 23.5 18.4 20.3 19.4 20.0 16.5 25.1 21.9 24.5 12 Rental income of persons2...................................... 22.4 22.5 22.5 22.5 22.4 22.4 22.7 22.8 23.0 13 Dividends.................................................................... 31.9 37.9 43.7 41.5 42.7 44.1 46.3 47.0 48.1 14 Personal interest income.......................................... 115.5 126.3 141.2 135.9 139.1 143.6 146.0 151.4 156.3 15 Transfer payments..................................................... 178.2 193.9 208.8 203.4 204.0 211.9 215.9 219.2 220.9 16 Old-age survivors, disability, and health insurance benefits.......................................... 81.4 92.9 105.0 99.7 101.8 108.5 110.1 112.1 114.0 17 Less: Personal contributions for social insurance......................................................... 50.5 55.5 61.0 59.4 60.5 61.4 62.6 67.2 69.1 18 Equals: Personal income....................................... 1,255.5 1,380.9 1,529.0 1,470.7 1,508.6 1,543.7 1,593.0 1,628.9 1,682.5 19 Less: Personal tax and nontax payments.... 168.8 196.5 226.0 222.7 223.3 224.6 233.3 237.3 248.8 20 Equals : Disposable personal income.................. 1,086.7 1,184.4 1,303.0 1,248.0 1,285.3 1,319.1 1,359.6 1,391.6 1,433.7 21 Less: Personal outlays........................................ 1,003.0 1,116.3 1,236.1 1,195.8 1,217.8 1,244.8 1,285.9 1,309.2 1,357.9 22 Equals: Personal saving......................................... 83.6 68.0 66.9 52.2 67.5 74.3 73.7 82.4 75.8 Memo items : Per capita (1972 dollars): 5,629 5,906 6,144 6,044 6,120 6,191 6,226 6,215 6,318 3,626 3,808 3,954 3,916 3,922 3,953 4,030 4,009 4,063 4,025 4,136 4,271 4,185 4,241 4,293 4,365 4,370 4,400 26 Saving rate (per cent)............................................... 7.7 5.7 5.1 4.2 5.3 5.6 5.4 5.9 5.3 Gross saving 27 Gross private saving.................................................. 259.8 270.7 290.8 259.6 288.6 310.7 304.3 305.4 28 Personal saving...................................................... 83.6 68.0 66.9 52.2 67.5 74.3 73.7 82.4 75.8 29 Undistributed corporate profits1....................... 14.2 24.8 28 7 20 1 28.7 38 0 28.0 15 6 30 Corporate inventory valuation adjustment.... -12.4 -14.5 -14.8 -20! 3 —16^6 -1.1 -14i8 —23^5 -24.8 Capital consumption allowances: 31 Corporate........................................................... 101.3 111.5 120.9 116.6 119.8 122.6 124.6 127.4 130.0 32 Noncorporate..................................................... 60.7 66.3 74.3 70.7 72.6 75.9 77.9 79.9 82.0 33 Wage accruals less disbursements..................... 34 Government surplus, or deficit ( —), national —64.4 —33.2 — 18.6 — 7.8 — 11.8 —25.2 —29.6 —21.1 35 Federal.................................................................... —70 6 —53 8 — 48.1 — 37! 3 — 40* 3 _56 4 _53 6 — 52*6 36 State and local....................................................... 6!2 20! 7 9.6 29 .*5 28! 5 31.’2 29 !o 31 ]5 37 Capital grants received by the United States, net......................................................................... 38 Investment................................................................... 202.8 241.7 276.9 255.2 280.4 292.6 279.5 286.4 314.6 39 Gross private domestic........................................ 190.9 243.0 297.8 272.5 295.6 309.7 313.5 322.7 342.2 11.9 - 1.2 -20.9 -17.3 -15.2 -17.1 -34.1 -36.3 -27.5 41 Statistical discrepancy.............................................. 7.4 4.2 4.7 3.4 3.7 7.1 4.8 2.2 1 With inventory valuation and capital consumption adjustments. Source.—Survey of Current Business (U.S. Dept, of Commerce). 2 With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics □ August 1978 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data are seasonally adjusted except as noted.1 1977 1978 Item credits or debits 1975 1976 1977 Ql Q2 Q3 Q4 Ql 1 Merchandise exports................................................................... 107,088 114,694 120,585 29,477 30,638 31,013 29,457 30,664 2 Merchandise imports................................................................... 98,041 124,047 151,644 36,495 37,259 38,263 39,627 41,865 3 Merchandise trade balance 2............................................... 9,047 -9,353 -31,059 -7,018 -6,621 -7,250 -10,170 - 11,201 4 Military transactions, net........................................................... -876 312 1,334 568 295 467 5 307 5 Investment income, net3............................................................. 12,795 15,933 17,507 4,599 4,487 4,610 3,812 4,767 6 Other service transactions, net.................................................. 2,095 2,469 1,705 229 412 583 482 428 7 Balance on goods and services3,4................................................. 23,060 9,361 -10,514 -1,623 -1,427 -1,591 -5,870 -5,700 8 Remittances, pensions, and other transfers........................... -1,721 -1,878 -1,932 -490 -480 -490 -473 -502 9 U.S. Govt, grants (excluding military).................................... -2,894 -3,145 -2,776 -636 -763 -787 -591 -752 10 Balance on current account3....................................................... 18,445 4,339 -15,221 -2,749 -2,670 -2,868 -6,934 -6,954 11 -2,339 -2,492 —5,179 -5,212 -6,466 12 Change in U.S. Govt, assets, other than official reserve assets, net (increase, — )..................................................... -3,470 -4,213 -3,679 -949 -795 -1,098 -838 -900 13 Change in U.S. official reserve assets (increase. —............... -607 -2,530 -231 -388 6 151 246 14 Gold............................................................................................ -118 —58 —60 15 —66 —78 — 121 —83 —9 —29 — 16 16 Reserve position in International Monetary Fund (IMF). -466 - 2,212 -294 -389 -80 133 42 324 17 Foreign currencies................................................................... -75 -240 302 59 169 27 47 -62 18 Change in U.S. private assets abroad (increase, —)3........... -35,368 -43,865 -30,740 3 -11,214 -5,668 -13,862 -13,632 19 -13,532 -21,368 -11,427 3,684 -4,582 -1,779 -8,750 -6,270 20 Long-term.............................................................................. -2,357 -2,362 -751 -306 18 -447 -16 -311 21 Short-term.............................................................................. -11,175 -19,006 -10,676 3,990 -4,600 -1,332 -8,734 -5,959 22 -1,357 -2,030 -1,700 -768 -1,137 1,389 -1,184 -2,015 23 Long-term.............................................................................. -366 5 25 33 66 205 -279 -60 24 Short-term.............................................................................. -991 -2,035 -1,725 -801 -1,203 1,184 -905 -1,955 25 U.S. purchase of foreign securities, net.............................. -6,235 -8,852 -5,398 -736 -1,766 -2,165 -731 -934 26 U.S. direct investments abroad, net3.................................. -14,244 -11,614 -12,215 -2,177 -3,729 -3,113 -3,197 -4,413 27 Change in foreign official assets in the United States (increase, -f).............................................................................. 6,907 18,073 37,124 5,451 7,884 8,246 15,543 15,691 28 U.S. Treasury securities........................................................ 4,408 9,333 30,294 5,323 5,123 6,948 12,900 12,965 29 905 573 2,308 98 610 627 973 117 30 Other U.S. Govt, liabilities 5................................................ 1,647 4,993 1,644 505 417 332 390 785 31 -2,158 969 773 -725 752 -163 909 1,456 32 Other foreign official assets 6................................................ 2,104 2,205 2,105 250 982 502 371 368 33 Change in foreign private assets in the United States (increase, +)3............................................................................ 8,643 18,897 13,746 -2,962 6,180 6,005 4,522 2,125 34 U.S. bank-reported liabilities.................................................. 628 10,990 6,719 -5,304 6,240 2,640 3,143 -314 35 Long-term.............................................................................. -280 231 373 42 104 194 33 250 36 908 10,759 6,346 -5,346 6,136 2,446 3,110 -564 37 319 -507 257 -346 -412 590 425 418 38 Long-term.............................................................................. 406 -958 -620 -220 -176 18 -242 45 39 Short-term.............................................................................. -87 451 877 -126 -236 572 667 373 40 Foreign private purchases of U.S. Treasury securities, net....................................................................................... 2,590 2,783 563 981 -1,370 1,251 -299 881 41 Foreign purchases of other U.S. securities, net................. 2,503 1,284 2,869 828 725 513 803 462 42 Foreign direct investments in the United States, net3... 2,603 4,347 3,338 880 996 1,012 450 679 43 Allocation of SDR’s.................................................................... 44 Discrepancy.................................................................................... 5,449 9,300 -998 1,593 609 -4,769 1,569 3,423 45 Owing to seasonal adjustments............................................. 130 -177 -2,230 2,276 176 46 Statistical discrepancy in recorded data before seasonal 5,449 9,300 -998 1,463 786 -2,539 -707 3,247 Memo items:................................................................................. Changes in official assets: 47 U.S. official reserve assets (increase, —)............................ —607 —2,530 —231 —388 6 151 246 48 Foreign official assets in the United States (increase, +). 5,259 13,080 35,480 4,946 7,467 7,914 15,153 14,906 49 Changes in Organization of Petroleum Exporting Countries (OPEC) official assets in the United States (part of line 27 above)................................................................. 7,092 9,581 6,733 2,927 1,344 1,438 1,024 1,810 50 Transfers under military grant programs (excluded from 2,207 373 194 39 53 31 71 77 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 5 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. 6 Consists of investments in U.S. corporate stocks and in debt securi­ 3 Includes reinvested earnings of incorporated affiliates. ties of private corporations and state and local governments. 4 Differs from the definition of “net exports of goods and services” in 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 r Dec. Jan. Feb. Mar. Apr. May June 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments............................................ 107,130 114,802 121,150 11,007 10,014 9,922 10,912 11,635 11,754 12,126 2 GENERAL IMPORTS including merchandise for immediate con­ sumption plus entries into bonded warehouses.......................................... 96,115 120,678 147,685 13,474 12,381 14,440 13,699 14,496 13,992 13,723 11,014 -5,876 -26,535 -2,467 -2,367 -4,518 -2,787 -2,861 -2,238 -1,597 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 intemational-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 i 1978 Type 1975 1976 1977 Jan. Feb. Mar. Apr. May June July 1 Total......................................................... 16,226 18,747 19,312 19,454 19,373 19,192 18,842 3 18,966 18,864 3 18,832 2 Gold stock, including Exchange Stabilization Fund i.......................... 11,599 11,598 11,719 11,718 11,718 11,718 11,718 11,718 11,706 11,693 3 Special Drawing Rights2..................... 2,335 2,395 2,629 2,629 2,671 2,693 2,669 3 2,760 2,804 3 2,860 4 Reserve position in International Monetary Fund.................................. 2,212 4,434 4,946 4,934 4,966 4,701 4,388 3 4,347 4,270 3 4,177 5 Convertible foreign currencies........... 80 320 18 173 18 80 67 141 84 102 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 July amounted to $18,401; SDR holdings, $2,739; and reserve 1971; and $710 million on Jan. 1, 1972; plus net transactions in SDR’s. position in IMF $3,867. 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 □ August 1978 3.13 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data Millions of dollars, end of period 1977 1978 Asset account 1974 1975 1976 Nov. Dec. Jan. Feb. Mar. Apr. May2* All foreign countries 1 151,905 176,493 219,420 250,454 259,094 258,703 256,959 263,468 260,523 259,270 2 Claims on United States................... 6,900 6,743 7,889 8,964 11,623 9,874 9,361 11,013 13,768 8,728 3 Parent bank.................................... 4,464 3,665 4,323 5,238 7,806 5,932 5,410 6,698 9,348 4,866 4 Other................................................ 2,435 3,078 3,566 3,726 3,818 3,942 3,951 4,315 4,419 3,862 5 138,712 163,391 204,486 232,972 238,850 239,624 238,660 243,316 237,382 241,788 6 Other branches of parent bank.. 27,559 34,508 45,955 54,631 55,772 55,052 54,201 55,554 51,819 52,722 7 Banks............................................... 60,283 69,206 83,765 89,410 91,883 92,229 92,341 95,348 92,334 91,960 8 Public Borrowers1......................... 4,077 5,792 10,613 14,854 14,634 15,274 15,093 15,284 15,204 21,120 9 Nonbank foreigners............... 46,793 53,886 64,153 74,077 76,561 77,069 77,025 77,130 78,025 75,986 10 Other assets........................................ 6,294 6,359 7,045 8,518 8,620 9,206 8,938 9,139 9,373 8,754 11 Total payable in U.S. dollars.............. 105,969 132,901 167,695 188,593 193,933 192,968 189,523 194,855 194,139 192,509 12 Claims on United States................... 6,603 6,408 7,595 8,393 11,049 9,252 8,630 10,320 12,966 8,036 13 Parent bank.................................... 4,428 3,628 4,264 5,145 7,692 5,781 5,162 6,616 9,158 4,715 14 Other................................................ 2,175 2,780 3,332 3,248 3,357 3,471 3,467 3,704 3,808 3,321 15 Claims on foreigners.......................... 96,209 123,496 156,896 176,080 178,896 179,237 176,737 180,341 176,818 180,332 16 Other branches of parent bank.. 19,688 28,478 37,909 44,087 44,256 43,618 42,664 43,502 40,630 41,210 17 Banks............................................... 45,067 55,319 66,331 69,122 70,786 70,535 69,721 71,934 70,471 70,144 18 Public borrowers1......................... 3,289 4,864 9,022 12,887 12,632 13,097 13,087 13,276 13,230 18,253 19 Nonbank foreigners..................... 28,164 34,835 43,634 49,984 51,222 51,987 51,267 51,628 52,487 50,725 20 Other assets........................................ 3,157 2,997 3,204 4,120 3,988 4,479 4,156 4,195 4,354 4,141 United Kingdom 21 Total, all currencies............................... 69,804 74,883 81,466 88,748 90,933 90,789 89,626 90,162 87,100 89,645 22 3,248 2,392 3,354 2,955 4,341 3,701 2,547 3,075 2,506 2,333 23 Parent bank.................................... 2, All 1,449 2,376 2,123 3,518 2,928 1,775 2,274 1,548 1,476 24 Other................................................ 776 943 978 833 823 773 771 802 958 857 25 Claims on foreigners........................ 64,111 70,331 75,859 83,331 84,016 84,346 84,423 84,648 81,871 84,700 26 Other branches of parent bank.. 12,724 17,557 19,753 21,476 22,017 21,427 21,114 21,092 19,514 19,550 27 Banks............................................... 32,701 35,904 38,089 40,530 39,899 40,605 40,996 41,612 40,436 40,807 28 Public borrowers1......................... 788 881 1,274 2,145 2,206 2,303 2,100 2,192 2,020 4,150 29 Nonbank foreigners..................... 17,898 15,990 16,743 19,180 19,895 20,010 20,213 19,753 19,901 20,193 30 Other assets........................................ 2,445 2,159 2,253 2,462 2,576 2,742 2,656 2,439 2,724 2,612 49,211 57,361 61,587 65,369 66,635 65,744 63,870 64,565 62,330 63,565 32 Claims on United States................... 3,146 2,273 3,275 2,744 4,100 3,443 2,186 2,850 2,312 2,163 33 Parent bank.................................... 2,468 1,445 2,374 2,062 3,431 2,815 1,558 2,236 1,520 1,452 34 Other................................................ 678 828 902 682 669 628 628 614 793 711 35 Claims on foreigners.......................... 44,694 54,121 57,488 61,587 61,408 61,094 60,521 60,610 58,845 60,277 36 Other branches of parent bank,. 10,265 15,645 17,249 18,539 18,947 18,102 17,782 17,603 16,531 16,406 37 Banks............................................... 23,716 28,224 28,983 29,560 28,530 28,661 28,641 28,947 28,177 28,324 38 610 648 846 1,639 1,669 1,770 1,640 1,710 1,631 3,254 39 Nonbank foreigners...................... 10,102 9,604 10,410 11,849 12,263 12,560 12,457 12,349 12,507 12,293 40 Other assets........................................ 1,372 967 824 1,038 1,126 1,208 1,163 1,104 1,173 1,125 Bahamas and Caymans 41 31,733 45,203 66,774 76,769 79,052 80,081 79,711 82,947 84,409 81,805 42 Claims on United States................... 2,464 3,229 3,508 5,259 5,782 4,994 5,837 6,761 9,921 5,235 43 Parent bank.................................... 1,081 1,477 1,141 2,552 3,051 2,097 2,918 3,570 6,710 2,502 44 Other................................................ 1,383 1,752 2,367 2,707 2,731 2,897 2,919 3,191 3,211 2,733 45 Claims on foreigners.......................... 28,453 41,040 62,048 69,839 71,671 73,470 72,272 74,397 72,689 74,839 46 Other branches of parent bank.. 3,478 5,411 8,144 10,611 11,120 11,272 11,025 11,367 9,565 10,580 47 Banks............................................... 11,354 16,298 25,354 26,109 27,939 28,810 28,179 29,602 28,695 29,065 48 Public borrowers1......................... 2,022 3,576 7,105 9,198 9,109 9,322 9,486 9,438 9,362 11,397 49 Nonbank foreigners..................... 11,599 15,756 21,445 23,922 23,503 24,067 23,583 23,990 25,067 23,797 50 Other assets........................................ 815 933 1,217 1,670 1,599 1,617 1,602 1,789 1,799 1,731 51 Total payable in U.S. dollars.............. 28,726 41,887 62,705 71,728 73,987 74,831 74,283 77,521 79,324 76,653 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Overseas Branches A57 3.13 Continued 1977 1978 Liability account 1974 1975 1976 Nov. Dec. Jan. Feb. Mar. Apr. May2p All foreign countries 52 Total, all currencies.......................... 151,905 176,493 219,420 250,454 259,094 258,703 256,959 263,468 260,523 259,270 53 To United States........................... 11,982 20,221 32,719 42,315 44,155 45,811 45,811 50,860 49,088 49,659 54 Parent bank................................ 5,809 12,165 19,773 24,780 24,542 28,311 26,999 27,650 26,732 28,265 5 5 5 6 N O o th n e b r a b n a k n s k .. s .. . i . n .. .. U ... n ... i . t . e .. d ... . S ... t . a .. t .. e .. s .. . } 6,173 8,057 12,946 17,535 19,613 17,500 18,811 23,209 22,355 1 f 1 9 2 , , 1 2 0 8 7 7 57 To foreigners.................................. 132,909 149,815 179,954 200,158 206,579 204,471 203,041 204,629 202,912 202,273 58 Other branches of parent bank 26,941 34,111 44,370 52,289 53,244 51,901 50,896 52,090 48,907 50,414 59 Banks........................................... 65,675 72,259 83,880 90,141 94,140 90,744 90,904 90,557 91,678 87,177 60 Official institutions................... 20,185 22,773 25,829 28,667 28,110 28,677 28,850 28,018 28,498 29,780 61 Nonbank foreigners................. 20,189 20,672 25,877 29,061 31,085 33,149 32,390 33,963 33,830 34,902 62 Other liabilities.............................. 6,933 6,456 6,747 7,981 8,360 8,421 8,108 7,980 8,523 7,338 63 Total payable in U.S. dollars.......... 107,890 135,907 173,071 193,421 198,741 197,934 194,688 199,879 197,546 196,533 64 To United States........................... 11,437 19,503 31,932 41,219 42,882 44,602 44,473 49,248 47,811 48,030 65 Parent bank................................ 5,641 11,939 19,559 24,488 24,213 28,017 26,688 27,321 26,437 27,630 6 6 6 7 N O o th n e b r a b n a k n s k .. s .. . i . n ... . U ... n ... i . t . e .. d ... . S ... t . a ... t . e .. s .. . } 5,795 7,564 12,373 16,731 18,669 16,584 17,784 21,927 21,374 1 f 1 8 1 , , 7 6 9 0 7 3 68 To foreigners.................................. 92,503 112,879 137,612 147,995 151,363 148,878 145,958 146,406 145,322 144,783 69 Other branches of parent bank 19,330 28,217 37,098 43,105 43,268 41,812 40,720 41,636 39,256 40,138 70 Banks........................................... 43,656 51,583 60,619 62,094 64,872 61,571 60,815 60,353 61,650 57,487 71 Official institutions................... 17,444 19,982 22,878 25,113 23,972 24,546 24,453 23,593 23,810 25,124 72 Nonbank foreigners................. 12,072 13,097 17,017 17,684 19,251 20,949 19,970 20,824 20,606 22,034 73 Other liabilities.............................. 3,951 3,526 3,527 4,207 4,496 4,454 4,258 4,224 4,413 3,720 United Kingdom 74 Total, all currencies........................... 69,804 74,883 81,466 88,748 90,933 90,789 89,626 90,162 87,100 89,645 75 To United States............................ 3,978 5,646 5,997 7,237 7,753 6,008 6,785 7,609 7,266 6,758 76 Parent bank................................ 510 2,122 1,198 1,375 1,451 1,253 1,550 1,646 1,983 1,636 7 7 7 8 N O o th n e b r a b n a k n s k .. s .. . i . n ... . U ... n ... i . t . e .. d ... . S ... t . a ... t . e .. s .. . } 3,468 3,523 4,798 5,862 6,302 4,755 5,236 5,962 5,283 { ( 2 2 , , 7 3 7 4 6 6 79 To foreigners.................................. 63,409 67,240 73,228 79,087 80,736 82,160 80,331 80,036 77,169 80,108 80 Other branches of parent bank 4,762 6,494 7,092 9,491 9,376 9,999 9,037 8,674 8,014 9,009 81 Banks........................................... 32,040 32,964 36,259 36,974 37,893 36,915 36,764 36,250 34,940 35,980 82 Official institutions................... 15,258 16,553 17,273 19,555 18,318 19,309 19,580 19,262 18,817 19,087 83 Nonbank foreigners................. 11,349 11,229 12,605 13,066 15,149 15,937 14,950 15,850 15,399 16,032 84 Other liabilities.............................. 2,418 1,997 2,241 2,424 2,445 2,621 2,509 2,518 2,665 2,779 85 Total payable in U.S. dollars.......... 49,666 57,820 63,174 66,289 67,573 66,619 65,021 65,477 62,662 64,025 86 To United States............................ 3,744 5,415 5,849 7,012 7,480 5,737 6,479 7,250 6,938 6,446 87 Parent bank................................ 484 2,083 1,182 1,339 1,416 1,222 1,524 1,598 1,953 1,609 8 8 8 9 O N t o h n e b r a b n a k n s k .. s .. . i . n .. .. U ... n ... i . t . e .. d ... . S ... t . a .. t .. e .. s .. . } 3,261 3,332 4,666 5,673 6,063 4,515 4,955 5,652 4,985 \ ( 2 2 , , 2 5 8 5 1 6 90 To foreigners.................................. 44,594 51,447 56,372 58,285 58,977 59,671 57,386 57,045 54,498 56,274 91 Other branches of parent bank 3,256 5,442 5,874 7,871 7,505 8,164 7,211 6,747 6,202 6,696 92 Banks........................................... 34,056 39,156 45,721 45,869 48,350 44,494 44,481 44,775 46,221 42,240 93 Official institutions................... 15,580 17,771 18,959 20,205 18,465 19,601 19,729 19,230 19,066 20,258 94 Nonbank foreigners................. 9,466 10,076 13,152 13,223 14,875 16,517 15,581 15,445 16,044 17,332 95 Other liabilities.............................. 2,077 2,040 2,073 2,495 2,634 2,530 2,480 2,570 2,751 2,611 Bahamas and Caymans 96 Total, all currencies......................... 31,733 45,203 66,774 76,769 79,052 80,081 79,711 82,947 84,409 81,805 97 To United States......................... 4,815 11,147 22,721 30,641 32,176 35,795 35,082 38,380 37,256 37,100 98 Parent bank.............................. 2,636 7,628 16,161 20,572 20,956 24,713 23,374 23,854 22,379 23,098 99 Other banks in United States ( 5,727 100 Nonbanks................................. } 2,180 3,520 6,560 10,069 11,220 11,082 11,708 14,526 14,878 X 8,275 101 To foreigners................................ 26,140 32,949 42,899 44,571 45,292 42,929 43,272 43,153 45,610 43,380 102 Other branches of parent bank. 7,702 10,569 13,801 13,308 12,816 11,642 11,598 10,839 10,288 11,250 103 Banks......................................... 14,050 16,825 21,760 23,374 24,717 22,264 22,840 23,374 25,847 21,066 104 Official institutions................. 2,377 3,308 3,573 3,053 3,000 3,183 3,207 3,060 3,489 4,419 105 Nonbank foreigners............... 2,011 2,248 3,765 4,836 4,759 5,840 5,628 5,880 5,986 6,645 106 Other liabilities............................ 778 1,106 1,154 1,557 1,584 1,357 1,358 1,414 1,543 1,325 107 Total payable in U.S. dollars........ 28,840 42,197 63,417 72,286 74,463 75,479 75,253 78,467 80,243 77,976 1 In May 1978 a broader category of claims on foreign public borrowers, 2 In May 1978 the exemption level for branches required to report including corporations that are majority owned by foreign governments, was increased, which reduced the number of reporting branches. replaced the previous, more narrowly defined claims on foreign official institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics □ August 1978 3.14 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1977 1978 Item 1974 1975 1976 Dec. Jan. Feb. Mar. Apr. Mayp June** ▲ A. By type 1 Total1....................................................................... 77,040 82,572 95,634 131,049 134,905 137,859 145,948 142,380 140,478 139,701 2 Liabilities reported by banks in the United States2.................................................................. 18,547 16,262 17,231 18,003 17,988 19,020 19,459 19,255 18,849 18,253 3 U.S. Treasury bills and certificates3....................... 34,656 34,199 37,725 47,820 49,752 52,689 59,302 57,613 56,449 55,606 U.S. Treasury bonds and notes: 4 Marketable............................................................... 5,059 6,671 11,788 32,116 33,830 33,554 34,528 32,838 32,089 32,559 5 Nonmarketable4..................................................... 16,339 19,976 20,648 20,443 20,473 19,602 19,513 19,444 19,355 19,284 6 U.S. securities other than U.S. Treasury securities5............................................................. 2,439 5,464 8,242 12,667 12,862 12,994 13,146 13,230 13,736 13,999 B. By area 7 Total.............................................................................. 77,040 82,572 95,634 131,049 134,905 137,859 145,948 142,380 140,478 139,701 8 Western Europe1........................................................ 44,328 45,701 45,882 70,707 72,557 74,401 76,238 73,666 72,552 73,833 9 Canada.......................................................................... 3,662 3,132 3,406 2,334 2,078 1,389 1,633 2,493 2,702 2,610 10 Latin America and Caribbean................................ 4,449 4,461 4,926 4,649 4,591 5,179 5,773 5,554 5,413 4,660 11 Asia................................................................................ 18,844 24,411 37,767 50,693 53,207 54,335 59,537 57,700 56,958 55,946 12 Africa............................................................................ 3,160 2,983 1,893 1,742 1,706 1,899 1,756 1,872 1,945 1,689 13 Other countries6........................................................ 2,597 1,884 1,760 924 766 656 1,011 1,095 908 963 1 Includes the Bank for International Settlements. 5 Debt securities of U.S. Govt, corporations and Federally sponsored 2 Principally demand deposits, time deposits, bankers acceptances, agencies, and U.S. corporate stocks and bonds. commercial paper, negotiable time certificates of deposit, and borrowings 6 Includes countries in Oceania and Eastern Europe. under repurchase agreements. 3 Includes nonmarketable certificates of indebtedness (including those Note.—Based on Treasury Dept, data and on data reported to the payable in foreign currencies through 1974) and Treasury bills issued to Treasury Dept, by banks (including Federal Reserve Banks) and securities official institutions of foreign countries. dealers in the United States. 4 Excludes notes issued to foreign official nonreserve agencies. Includes A For a description of the changes in the International Statistics bonds and notes payable in foreign currencies. tables, see July 1978 Bulletin, p. 612. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-reported Data A59 3.15 LIABILITIES TO FOREIGNERS Reported by Banks in the United States Payable in U.S. dollars Millions of dollars, end of period 1977 1978 Item 1974 1975 1976 Dec. Jan. Feb. Mar. Apr. A May** June** A. By holder and type of liability 95,290 95,590 110,657 126,168 126,377 130,105 139,414 141,457 137,118 135,103 65,364 61,690 60,583 14,051 13,564 16,803 18,996 17,377 17,675 17,163 17,863 17,820 17,183 9,932 10,267 11,347 11,521 11,518 12,038 11,274 11,665 11,866 11,630 5 Other2....................................................................... 7,343 7,247 6,516 28.493 24.757 25.255 76,093 75,428 74,520 35,662 37,414 40,744 48,906 51,094 54,233 61,071 59,104 58,262 57,138 9 Other negotiable and readily transferable 13,981 14,518 14,691 10 Other......................................................................... 3,008 2,648 2,691 11 Nonmonetary international and regional 3,992 5,699 5,714 3,274 3,625 3,102 3,618 2.998 3,168 2,929 831 565 485 139 139 290 231 186 180 245 272 298 267 111 148 205 139 129 120 109 143 112 117 15 Other2....................................................................... 416 154 102 2,166 2,604 2,443 17 U.S. Treasury bills and certificates................... 497 2,554 2,701 706 959 1,111 1,317 892 1,153 922 18 Other negotiable and readily transferable instruments6................................................. 1,274 1,449 1,518 19 Other......................................................................... 1 1 3 20 Official institutions8................................................. 53,076 50,461 54,956 65,822 67,740 71,709 78,761 76,868 75,298 73,860 9,586 9,026 8,450 22 Demand deposits................................................ 2,951 2,644 3,394 3,528 2,673 2,782 2,804 3,703 3,092 2,610 1..............................................2..3.. .. T4i,m16e7 depo3s,i4ts23 2,321 1,797 1,788 2,570 1,777 1,884 1,981 1,981 24 Other2 ................................................................. 3.999 3,953 3,859 67.282 66,272 65,409 26 U.S. Treasury bills and certificates5.............. 34,656 34,i99 37,725 47,820 49,752 52,689 59,302 57,613 56,449 55,606 27 Other negotiable and readily transferable 9,180 9,240 9,305 489 583 498 29 Banks9........................................................................... 29,729 29,330 37,174 42,335 40,228 40,549 42,115 47.283 43,524 43,125 42,841 39,280 38,745 14,348 14,523 13,490 32 Demand deposits............................................ 8,23 i 7,534 9,104 10,933 10,274 i6,570 10,113 10,195 10,343 10,160 33 Time deposits1............................................... 1,910 1,873 2,297 2,040 1,995 1,823 1,734 1,643 1,596 1,259 34 Other2 ............................................................. 2,511 2,584 2,071 28.493 24.757 25.255 36 Banks’ custody liabilities4.................................... 4,442 4,244 4,381 37 U.S. Treasury bills and certificates............... 232 335 119 141 152 165 161 314 363 300 38 Other negotiable and readily transferable instruments 6................................................ 1,991 2,137 2,219 39 Other..................................................................... 2,137 1,745 1,861 40 Other foreigners........................................................... 8,493 10,100 12,814 14,736 14,785 14,745 14,919 14,309 15,128 15,189 41 Banks’ own liabilities........................................... 12,106 12,819 12,903 42 Demand deposits................................................ 2,729 3,248 4,015 4,304 4,245 4,143 4,000 3,693 4,086 4,146 43 Time deposits1.................................................... 3,744 4,823 6,524 7,546 7,606 7,526 7,654 7,995 8,177 8,272 44 Other2................................................................... 418 557 484 45 Banks’ custody liabilities4.................................... 2,203 2,308 2,286 46 U.S. Treasury bills and certificates................ 277 325 198 240 231 268 291 286 297 310 47 Other negotiable and readily transferable 1,536 1,692 1,649 48 Other..................................................................... 381 320 327 49 Memo: Negotiable time certificates of deposit 8,471 8,913 9,014 1 Excludes negotiable time certificates of deposit, which are included 6 Principally bankers acceptances, commercial paper, and negotiable in “Other negotiable and readily transferable instruments.” time certificates of deposit. 2 Includes borrowings under repurchase agreements. 7 Principally the International Bank for Reconstruction and Develop­ 3 U.S. banks: includes amounts due to own foreign branches and ment, and the Inter-American and Asian Development Banks. foreign subsidiaries consolidated in “Consolidated Report of Condition” 8 Foreign central banks and foreign central governments and the filed with bank regulatory agencies. Agencies, branches, and majority- Bank for International Settlements. owned subsidiaries of foreign banks: principally amounts due to head 9 Excludes central banks, which are included in “Official institutions.” office or parent foreign bank, and foreign branches, agencies or whollyowned subsidiaries of head office or parent foreign bank. Note.—Data for time deposits prior to April 1978 represent short­ 4 Financial claims on residents of the United States, other than long­ term only. term securities, held by or through reporting banks. A For a description of the changes in the International Statistics 5 Includes nonmarketable certificates of indebtedness (including those Tables, see July 1978 Bulletin, p. 612. payable in foreign currencies through 1974) and Treasury bills issued to official institutions of foreign countries. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 International Statistics □ August 1978 3.15 Continued 1977 1978 Item 1974 1975 1976 Dec. Jan. Feb. Mar. Apr. A May* June* B. By area and country 1 95,290 95,590 110,657 126,168 126,377 130,105 139,414 141,457 137,118 135,103 2 Foreign countries......................................................... 91,297 89,891 104,943 122,893 122,752 127,002 135,795 138,459 133,950 132,174 3 Europe........................................................................... 48,619 44,072 47,076 60,295 59,702 60,970 63,994 63,067 62,943 63,950 4 Austria...................................................................... 605 759 346 318 294 302 419 322 350 349 5 Belgium-Luxembourg............................................ 2,500 2,893 2,187 2,531 2,629 2,765 2,992 3,109 2,893 2,631 6 Denmark.................................................................. 367 329 356 770 1,044 1,050 1,044 1,063 1,110 1,335 7 Finland...................................................................... 266 391 416 323 295 307 357 430 393 337 8 France....................................................................... 4,257 7,726 4,876 5,269 5,153 4,668 5,033 5,499 6,275 6,531 9 Germany................................................................... 9,560 4,543 6,241 7,239 8,832 10,585 11,530 11,013 9,537 10,066 10 Greece....................................................................... 248 284 403 603 538 548 571 588 563 562 11 Italy........................................................................... 2,568 1,059 3,182 6,857 6,199 5,943 5,626 5,987 6,365 6,865 12 Netherlands............................................................. 3,190 3,407 3,003 2,869 2,959 3,029 3,132 3,011 2,993 3,113 13 Norway..................................................................... 1,038 994 782 944 987 888 1,211 1,465 1,644 1,869 14 Portugal.................................................................... 309 193 239 273 205 188 174 164 288 191 15 Spain......................................................................... 378 423 559 619 707 648 111 659 717 684 16 Sweden...................................................................... 1,135 2,277 1,692 2,712 2,711 2,826 2,816 3,177 3,302 3,341 17 Switzerland............................................................... 9,940 8,476 9,460 12,343 12,134 12,689 13,549 13,090 12,514 12,289 18 Turkey...................................................................... 125 118 166 130 187 171 115 249 200 124 19 United Kingdom.................................................... 7,580 6,867 10,018 14,125 12,576 11,929 12,274 11,021 11,606 11,455 20 Yugoslavia............................................................... 183 126 189 232 219 196 138 192 168 229 21 Other Western Europe1........................................ 4,080 2,970 2,673 1,804 1,787 1,966 2,030 1,757 1,716 1,657 22 U.S.S.R..................................................................... 82 40 51 98 63 98 72 62 96 66 23 Other Eastern Europe2........................................ 206 197 236 236 186 175 193 206 211 255 24 Canada.......................................................................... 3,264 2,919 4,659 4,607 5,279 4,758 4,564 5,923 6,600 5,833 25 Latin America and Caribbean.................................. 11,850 15,028 19,132 23,670 23,263 24,286 25,338 28,764 24,982 25,284 26 Argentina................................................................. 887 1,146 1,534 1,416 1,746 1,928 1,801 1,861 2,260 1,692 27 Bahamas................................................................... 1,106 1,874 2,770 3,596 3,150 3,755 4,199 7,259 3,327 3,983 28 Bermuda................................................................... 116 184 218 321 269 286 322 364 340 398 29 Brazil......................................................................... 1,039 1,219 1,438 1,396 1,113 977 1,327 1,414 1,298 1,220 30 British West Indies................................................ 449 1,311 1,877 3,998 4,081 3,993 4,097 4,814 3,949 4,741 31 Chile......................................................................... 277 319 337 360 387 412 415 394 361 376 32 Colombia................................................................. 305 417 1,021 1,221 1,226 1,207 1,290 1,350 1,298 1,424 33 Cuba......................................................................... 7 6 6 6 6 7 8 6 7 7 34 Ecuador.................................................................... 122 120 320 330 358 376 438 360 318 325 35 Guatemala3............................................................. 447 541 447 36 Jamaica3................................................................... 41 46 66 37 Mexico..................................................................... 1,773 2,070 2,870 2,876 2,985 3,084 2,793 2,677 2,965 2,745 38 Netherlands Antilles4............................................ 158 129 158 196 205 203 212 212 289 320 39 Panama..................................................................... 526 1,115 1,167 2,331 2,189 2,121 2,132 2,176 2,559 2,293 40 Peru........................................................................... 272 243 257 287 265 267 262 309 274 282 41 Uruguay................................................................... 164 172 245 243 230 280 226 221 208 220 42 Venezuela................................................................. 3,434 3,309 3,118 2,929 3,016 3,246 3,438 3,225 3,298 3,138 43 Other Latin America and Caribbean................. 1,215 1,393 1,797 2,167 2,037 2,147 2,380 1,636 1,643 1,605 44 21,192 22,384 29,766 30,488 30,881 33,330 37,995 36,430 35,518 33,462 45 China, People’s Republic of (Mainland)........... 50 123 48 53 54 48 56 50 41 53 46 China, Republic of (Taiwan)............................... 818 1,025 990 1,013 1,041 995 1,014 1,208 1,043 1,053 47 Hong Kong............................................................. 529 605 894 1,094 1,037 1,121 1,174 1,118 1,490 1,085 48 India......................................................................... 252 115 638 961 1,012 1,001 947 937 962 899 49 Indonesia................................................................. 1,221 369 340 410 896 506 492 649 451 330 50 Israel.......................................................................... 389 387 392 559 461 454 485 486 568 476 51 Japan......................................................................... 10,904 10,207 14,363 14,616 14,488 17,024 21,725 20,392 19,999 19,020 52 Korea........................................................................ 384 390 438 602 606 737 682 753 817 748 53 Philippines............................................................... 748 700 628 687 658 615 647 601 688 592 54 Thailand................................................................... 333 252 277 264 258 309 317 258 304 297 55 Middle East oil-exporting countries5................. 4,717 7,355 9,360 8,979 9,193 9,329 9,165 8,671 7,863 7,699 56 Other Asia............................................................... 847 856 1,398 1,250 1,178 1,190 1,291 1,307 1,285 1,209 57 Africa............................................................................ 3,546 3,369 2,298 2,535 2,507 2,645 2,469 2,699 2,641 2,360 58 Egypt......................................................................... 103 342 333 404 346 357 341 455 461 402 59 Morocco................................................................... 38 68 87 66 100 79 51 31 29 28 60 South Africa............................................................ 124 166 141 174 191 251 183 167 185 226 61 Zaire......................................................................... 84 62 36 39 41 50 45 46 49 44 62 Oil-exporting countries6....................................... 2,815 2,250 1,133 1,155 1,179 1,263 1,226 1,393 1,244 981 63 Other Africa............................................................ 382 481 568 698 649 645 623 607 673 679 64 Other countries............................................................ 2,827 2,119 2,012 1,297 1,121 1,014 1,434 1,575 1,267 1,285 65 Australia................................................................... 2,740 2,006 1,905 1,140 933 870 1,229 1,275 1,129 1,082 66 All other................................................................... 87 113 107 158 188 144 205 300 138 203 67 Nonmonetary international and regional organizations........................................................ 3,992 5,699 5,714 3,274 3,625 3,102 3,618 2,998 3,168 2,929 68 International........................................................... 3,552 5,415 5,157 2,752 3,116 2,558 3,094 2,591 2,441 2,311 69 Latin American regional...................................... 265 188 267 278 258 266 261 117 467 401 70 Other regional7....................................................... 175 96 290 245 250 279 262 290 260 216 1 Includes the Bank for International Settlements. Beginning April 6 Comprises Algeria, Gabon, Libya, and Nigeria. 1978, also includes Eastern European countries not listed in line 23. 7 Asian, African, Middle Eastern, and European regional organizations, 2 Beginning April 1978 comprises Bulgaria, Czechoslovakia, German except the Bank for International Settlements, which is included in Democratic Republic, Hungary, Poland, and Romania. “Other Western Europe.” 3 Included in “Other Latin America and Caribbean” through March 1978. A For a description of the changes in the International Statistics 4 Includes Surinam through December 1975. tables, see July 1978 Bulletin, p. 612. 5 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 3.16 BANKS’ OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States Payable in U.S. Dollars Millions of dollars, end of period 1977 1978 Area and country 1974 1975 1976 Dec. Jan. Feb. Mar. Apr. A May*’ Junep 1 44,958 58,308 79,301 90,206 91,874 91,040 96,449 88,387 88,016 87,367 2 Foreign countries......................................................... 44,950 58,275 79,261 90,163 91,830 91,005 96,406 88,339 87,968 87,334 3 Europe............................................................................ 7,728 11,109 14,776 18,114 17,034 17,197 18,690 15,318 15,885 16,435 4 Austria...................................................................... 40 35 63 65 101 112 83 16 95 105 5 Belgium-Luxembourg............................................ 373 286 482 561 660 552 596 586 794 732 6 Denmark................................................................... 93 104 133 173 172 171 166 146 186 146 7 Finland...................................................................... 146 180 199 172 179 184 189 180 185 182 8 France....................................................................... 836 1,565 1,549 2,082 1,776 1,988 2,265 1,646 1,688 1,898 9 Germany................................................................... 526 380 509 644 640 615 783 698 756 793 10 Greece....................................................................... 261 290 279 206 188 209 211 200 280 204 11 Italy........................................................................... 424 443 993 1,334 1,170 1,147 1,155 907 1,199 967 12 Netherlands............................................................. 350 305 315 338 374 382 470 419 472 387 13 Norway..................................................................... 173 131 136 162 176 191 184 192 211 219 14 Portugal.................................................................... 27 30 88 175 137 155 155 131 132 126 15 Spain.......................................................................... 307 424 745 722 732 735 741 597 703 709 16 Sweden...................................................................... 198 198 206 218 230 200 171 206 192 220 17 Switzerland............................................................... 300 199 379 564 597 704 696 699 394 689 18 Turkey...................................................................... 98 164 249 360 337 311 315 308 307 309 19 United Kingdom..................................................... 2,800 5,170 7,033 8,964 8,133 8,200 9,204 6,823 6,954 7,399 20 Yugoslavia............................................................... 133 210 234 311 306 308 307 280 285 320 21 Other Western Europe i........................................ 44 76 85 86 142 74 49 268 138 154 22 U.S.S.R..................................................................... 224 406 485 413 424 383 370 337 380 338 23 Other Eastern Europe2......................................... 375 513 613 566 554 576 580 621 536 535 24 Canada.......................................................................... 2,609 2,834 3,319 3,355 3,758 4,009 4,084 2,779 2,439 2,558 25 Latin America and Caribbean.................................. 14,911 23,863 38,879 45,850 48,616 47,249 49,866 48,991 46,956 45,922 26 Argentina................................................................. 879 1,377 1,192 1,478 1,622 1,574 1,642 1,533 1,596 1,551 27 Bahamas................................................................... 3,418 7,583 15,464 19,858 22,348 21,517 22,801 22,015 21,038 18,703 28 Bermuda................................................................... 91 104 150 232 111 233 195 176 345 143 29 Brazil......................................................................... 2,256 3,385 4,901 4,629 4,510 4,559 4,832 4,412 4,447 4,673 30 British West Indies................................................. 947 1,464 5,082 6,481 6,173 5,589 6,851 7,823 6,259 7,412 31 Chile.......................................................................... 446 494 597 675 690 700 710 722 111 745 32 Colombia................................................................. 111 751 675 671 651 640 592 551 579 613 33 Cuba.......................................................................... 14 14 13 10 14 4 3 1 1 2 34 Ecuador.................................................................... 170 252 375 517 518 530 544 525 531 562 35 Guatemala 3............................................................. 55 79 86 36 Jamaica3................................................................... 19 42 48 37 Mexico...................................................................... 2,646 3,745 4,822 4,909 4,898 4,719 4,836 A,319 4,510 4,788 38 Netherlands Antilles4............................................ 75 72 140 224 220 208 215 202 207 213 39 Panama....'............................................................. 582 1,138 1,372 1,410 1,953 1,880 1,699 2,196 2,149 1,903 40 Peru........................................................................... 628 805 933 962 965 931 920 885 920 933 41 Uruguay................................................................... 65 57 42 80 67 65 65 51 58 52 42 Venezuela................................................................. 931 1,319 1,828 2,318 2,205 2,421 2,367 2,146 2,237 2,246 43 Other Latin America and Caribbean................. 987 1,302 1,293 1,394 1,671 1,678 1,593 1,302 1,242 1,244 44 Asia................................................................................ 17,801 17,706 19,204 19,236 18,830 18,985 20,039 18,064 19,490 19,280 45 China, People’s Republic of (Mainland)........... 38 22 3 10 15 13 11 15 22 53 46 China, Republic of (Taiwan)............................... 693 1,053 1,344 1,719 1,619 1,663 1,656 1,422 1,459 1,339 47 Hong Kong.............................................................. 266 289 316 543 516 495 609 826 754 776 48 India.......................................................................... 56 57 69 53 65 72 97 53 71 81 49 Indonesia.................................................................. 228 246 218 232 210 222 202 165 138 147 50 Israel.......................................................................... 500 721 755 584 501 498 491 434 505 467 51 Japan......................................................................... 12,749 10,944 11,040 9,839 9,626 9,767 10,266 9,532 9,749 10,032 52 Korea........................................................................ 1,058 1,791 1,978 2,336 2,458 2,315 2,090 1,850 1,802 2,305 53 507 534 719 594 602 642 660 615 751 678 54 Thailand.................................................................... 476 520 442 633 634 647 656 686 731 712 55 Middle East oil-exporting countries5................. 714 744 1,459 1,746 1,681 1,753 2,219 1,488 2,527 1,536 56 Other Asia............................................................... 516 785 862 947 903 898 1,082 978 981 1,154 1,183 1,933 2,311 2,518 2,556 2,548 2,632 2,235 2,229 2,148 58 Egypt......................................................................... 126 123 126 119 126 121 101 19 13 70 59 18 8 27 43 61 44 39 35 38 38 60 South Africa............................................................ 367 657 957 1,066 1,095 1,106 1,169 1,052 1,059 1,059 61 Zaire.......................................................................... 136 181 112 98 98 98 101 77 80 79 62 176 382 524 510 499 531 493 416 442 378 63 360 581 565 682 677 648 723 575 537 523 717 830 772 1,090 1,037 1,017 1,095 953 970 991 65 580 100 597 905 839 813 879 785 803 829 66 137 130 175 186 198 204 216 168 168 161 67 Nonmonetary International and Regional 8 33 40 43 44 35 43 48 48 33 1 Includes the Bank for International Settlements. Beginning April 6 Comprises Algeria, Gabon, Libya, and Nigeria. 1978, also includes Eastern European countries not listed in line 23. 7 Excludes the Bank for International Settlements, which is included 2 Beginning April 1978 comprises Bulgaria, Czechoslovakia, German in “Other Western Europe.” Democratic Republic, Hungary, Poland, and Romania. 3 Included in “Other Latin America and Caribbean” through March ▲ Data for period prior to April 1978 include claims of banks’ domestic 1978. customers on foreigners. For a description of the changes in the Inter­ 4 Includes Surinam through December 1975. national Statistics tables, see July 1978 Bulletin, p. 612. 5 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

A62 International Statistics □ August 1978 3.17 BANKS’ OWN AND DOMESTIC CUSTOMERS’ CLAIMS ON FOREIGNERS Reported by Banks in the United States Payable in U.S. Dollars Millions of dollars, end of period 1977 1978 Type of claim 1974 1975 1976 Dec. Jan. Feb. Mar. Apr. ▲ MayP June? 1 Total.............................................................................. 44,958 58,308 79,301 90,206 91,874 91,040 96,449 2 Banks’ own claims on foreigners............................ 88,387 88,016 87,367 3 Foreign public borrowers.................................... 4,584 5,085 5,144 4 Own foreign offices1.............................................. 35,513 35,911 30,803 5 Unaffiliated foreign banks.................................... 28,660 27,805 29,916 6 Deposits............................................................... 4,869 4,577 5,078 7 Other..................................................................... 23,791 23,228 24,834 8 All other foreigners.................................................... 19,629 19,215 21,504 9 Claims of banks’ domestic customers2................ 10 Deposits.................................................................... 11 Negotiable and readily transferable in­ struments 3....................................................... 12 Outstanding collections and other claims4.... 5,637 5,467 5,756 6,176 6,342 6,446 6,765 13 Memo: Customer liability on acceptances . . 1 U.S. banks: includes amounts due from own foreign branches and 3 Principally negotiable time certificates of deposit and bankers ac­ foreign subsidiaries consolidated in “Consolidated Report of Condition” ceptances. filed with bank regulatory agencies. Agencies, branches, and majority- 4 Data for March 1978 and for period prior to that are outstanding owned subsidiaries of foreign banks: principally amounts due from head collections only. office or parent foreign bank, and foreign branches, agencies, or whollyowned subsidiaries of head office or parent foreign bank. Note.—Beginning April 1978, data for banks’ own claims are given 2 Assets owned by customers of the reporting bank located in the on a monthly basis, but the data for claims of banks’ domestic customers United States that represent claims on foreigners held by reporting banks are available on a quarterly basis only. for the account of their domestic customers. ▲ For a description of the changes in the International Statistics tables, see July 1978 Bulletin, p. 612. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-reported Data A63 3.18 BANKS’ OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States Payable in U.S. Dollars Millions of dollars, end of period Maturity; by borrower and area 1 Total............... By borrower: 2 Maturity of 1 year or less1............. 3 Foreign public borrowers.............. 4 All other foreigners....................... 5 Maturity of over 1 year*.................. 6 Foreign public borrowers............ 7 All other foreigners....................... NO FIGURES UNTIL JUNE 1978 DATA ARE AVAILABLE A By area: Maturity of 1 year or less1.......... 8 Europe.......................................... 9 Canada........................................ 10 Latin America and Caribbean, 11 Asia.............................................. 12 Africa........................................... 13 All other2.................................... Maturity of over 1 year i............. 14 Europe.......................................... 15 Canada........................................ 16 Latin America and Caribbean. 17 Asia.............................................. 18 Africa........................................... 19 Allother2.................................... 1 Remaining time to maturity. A For a description of the changes in the International Statistics 2 Includes nonmonetary international and regional organizations. tables, see July 1978 Bulletin, p. 612. 3.19 LIABILITIES TO AND CLAIMS ON FOREIGNERS Reported by Banks in the United States Payable in Foreign CurrenciesA Millions of dollars, end of period 1977 1978 Item 1974 1975 1976 Nov. Dec. Jan. Feb. Mar. 1 Banks’ own liabilities..................................................... 766 560 781 944 925 831 885 986 2 Banks’ own claims1........................................................ 1,276 1,459 1,834 2,086 2,356 2,371 2,317 2,383 3 Deposits........................................................................ 669 656 1,103 841 941 940 895 948 4 Other claims................................................................. 607 802 731 1,245 1,415 1,432 1,422 1,435 5 Claims of banks’ domestic customers2..................... 1 Includes claims of banks’ domestic customers through March 1978. Note.—Data on claims exclude foreign currencies held by U.S. mone- 2 Assets owned by customers of the reporting bank located in the tary authorities. United States that represent claims on foreigners held by reporting banks A For a description of the changes in the International Statistics for the accounts of their domestic customers. Tables, see July 1978 Bulletin, p. 612. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 International Statistics □ August 1978 3.20 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Holdings and Transactions Millions of dollars 1978 1977 1978 Country or area 1976 1977 Jan.- JuneP Dec. Jan. Feb. Mar. Apr. MayP June? Holdings (end of period) 4 1 Estimated total....................... 15,799 38,620 38,620 40,101 40,380 41,230 39,661 39,183 40,414 2 Foreign countries................... 12,765 33,874 33,874 35,648 35,479 36,475 34,812 34,161 34,720 3 Europe................................. 2,330 13,916 13,916 15,044 14,895 15,206 13,607 12,763 12,862 4 Belgium-Luxembourg.. 14 19 19 19 19 19 19 19 19 5 Germany......................... 764 3,168 3,168 3,373 3,494 3,816 3,820 4,031 4,361 6 Netherlands................... 288 911 911 930 954 1,029 1,079 1,070 1,113 7 Sweden........................... 191 100 100 125 125 155 175 175 185 8 Switzerland..................... 261 477 477 391 401 400 443 264 204 9 United Kingdom........... 485 8,888 8,888 9,839 9,513 9,418 7,737 6,856 6,597 10 Other Western Europe. 323 349 349 362 384 363 330 344 379 11 Eastern Europe............. 4 4 4 4 4 4 4 4 4 12 Canada................................ 256 288 288 285 250 251 253 261 264 13 Latin America and Caribbean.................. 313 551 551 543 587 551 535 499 491 14 Venezuela.................................................. 149 199 199 201 241 200 189 174 174 15 Other Latin American and Caribbean. 47 183 183 181 184 189 184 164 155 16 Netherlands Antilles 1............................ 118 170 170 162 162 162 162 162 162 17 Asia................................................................. 9,323 18,745 18,745 19,413 19,378 20,120 20,070 20,137 20,605 18 Japan.......................................................... 2,687 6,860 6,860 7,463 7,617 8,313 8,332 8,964 9,616 19 Africa............................................................. 543 362 362 362 362 341 341 491 491 20 All other.................................................... * 11 11 2 7 6 6 8 5 21 Nonmonetary international and regional organizations........................................ 3,034 4,746 4,746 4,453 4,901 4,755 4,849 5,021 5,693 22 International..................... 2,906 4,646 4,646 4,358 4,781 4,640 4,740 4,931 5,643 23 Latin American regional. 128 100 100 95 120 115 110 90 50 Transactions (net purchases, or sales ( during period) 24 Total....................... 8,096 22,823 1,793 959 1,481 278 851 -1,569 -479 1,231 25 Foreign countries. 5,393 21,110 845 589 1,774 -169 996 -1,664 -651 559 26 Official institutions. 4,958 20,328 436 598 1,714 -277 975 -1,690 -757 470 27 Other foreign........... 435 782 409 -9 59 108 22 26 107 89 28 Nonmonetary international and regional organizations........................................ 2,704 1,713 948 370 -292 447 -145 94 172 672 Memo: Oil-exporting countries 29 Middle East 2.......................................... 3,887 4,451 -876 324 56 -184 72 -72 -563 -185 30 Africa 3.................................................... 221 -181 130 13 —20 150 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 1 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. 3.21 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS Millions of dollars, end of period 1978 Assets 1975 1976 1977 Jan. Feb. Mar. Apr. May June July 1 Deposits....................................................................... 353 352 424 422 445 352 481 453 288 347 Assets held in custody: 2 U.S. Treasury securities1...................................... 60,019 66,532 91,962 95,945 98,465 105,362 102,044 100,146 99,465 101,696 3 Earmarked gold2.................................................... 16,745 16,414 15,988 15,726 15,735 15,727 15,686 15,667 15,620 15,594 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 3.22 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1978 1977 1978 Transactions, and area or country 1976 1977 J J u a n n e . * - Dec. Jan. Feb. Mar. Apr. May* June* U.S. corporate securities Stocks 1 Foreign purchases.................................................. 18,227 14,155 9,546 1,235 1,024 825 1,413 1,864 2,391 2,029 2 Foreign sales............................................................ 15,475 11,479 7,627 945 909 762 921 1,151 1,963 1,921 3 Net purchases, or sales (—).................................. 2,753 2,676 1,919 290 115 63 492 713 428 108 4 Foreign countries..................................................... 2,740 2,661 1,965 286 116 63 510 720 427 129 5 Europe.................................................................. 336 1,006 1,250 156 30 41 319 508 323 29 6 France............................................................... 256 40 92 -3 -12 -2 68 79 -2 -39 7 Germany.......................................................... 68 291 386 58 45 33 52 125 52 79 8 Netherlands..................................................... -199 22 -19 9 -4 -13 -9 16 9 -18 9 Switzerland...................................................... -100 152 -7 -3 -54 -16 7 103 31 -78 10 United Kingdom............................................ 340 613 807 109 60 57 r187 173 229 101 11 Canada................................................................. 324 65 -74 14 -19 -26 -3 44 -58 -12 12 Latin America and Caribbean........................ 155 127 110 15 -9 -4 17 37 36 33 13 Middle East1....................................................... 1,803 1,390 571 100 107 48 170 97 90 59 14 Other Asia............................................................ 119 59 109 1 6 1 5 35 39 23 15 Africa.................................................................... 7 5 -5 * * 2 1 -1 -4 -3 16 Other countries................................................... -4 8 2 * 1 1 * * * * 17 Nonmonetary international and regional organizations................................................... 13 15 -46 4 -1 1 -19 -7 1 -21 Bonds2 18 Foreign purchases.................................................. 5,529 7,739 3,353 354 459 524 600 312 780 678 19 Foreign sales............................................................ 4,322 3,404 2,323 267 377 348 621 343 333 301 20 Net purchases, or sales ( —)................................. 1,207 4,335 1,031 87 83 176 -21 -31 447 377 21 Foreign countries..................................................... 1,248 4,239 958 41 101 131 * -29 449 306 22 Europe.................................................................. 91 2,006 109 19 133 32 -163 -93 41 159 23 France............................................................... 39 -34 3 -11 -4 1 5 -4 8 -3 24 Germany.......................................................... -49 59 72 9 1 7 19 10 21 14 25 Netherlands..................................................... -29 72 -19 * 7 1 -20 3 -3 -7 26 Switzerland...................................................... 158 157 -105 -6 -7 3 -37 -33 -36 5 27 United Kingdom............................................ 23 1,705 200 28 125 22 -122 -54 75 154 28 Canada................................................................. 96 141 47 -1 7 7 5 13 9 6 29 Latin America and Caribbean........................ 94 64 43 3 11 6 11 1 12 2 30 Middle East1....................................................... 1,179 1,695 647 4 -59 75 137 33 370 91 31 Other Asia............................................................ -165 338 108 16 9 11 9 16 15 48 32 Africa.................................................................... -25 -6 -1 * * -1 * * * * 33 Other countries................................................... -21 * 2 * * * * 1 1 * 34 Nonmonetary international and regional organizations................................................... -41 96 76 46 -18 45 -20 -2 -1 72 Foreign securities 35 Stocks, net purchases, or sales ( —)........................ -323 -410 401 59 103 113 114 143 -13 -59 36 Foreign purchases.................................................. 1,937 2,255 1,791 291 255 280 337 404 271 244 37 Foreign sales............................................................ 2,259 2,665 1,390 232 152 167 223 261 284 303 38 Bonds, net purchases, or sales (—)......................... -8,740 -5,034 -2,405 -330 -569 -176 -519 -495 -39 -607 39 Foreign purchases................................................... 4,932 8,052 5,198 885 691 522 797 1,169 1.017 1,002 40 Foreign sales........................................................... 13,672 13,086 7,602 1,215 1,260 698 1,315 1,664 1,056 1,609 41 Net purchases, or sales ( —) of stocks and bonds.. -9,063 -5,444 -2,004 -271 -466 -64 -405 -352 -51 -666 42 Foreign countries......................................................... -7,165 -3,886 -1,912 -293 -473 17 -256 -422 -67 -711 43 Europe...................................................................... -850 -1,125 -15 108 98 95 116 106 -194 -236 44 Canada...................................................................... -5,245 -2,403 -1,943 -175 -446 -4 -177 -807 -80 -429 45 Latin America and Caribbean............................ -3 -80 273 -68 -6 37 69 120 72 -20 46 Asia........................................................................... -699 -14 -38 51 -114 -113 -270 150 131 178 47 Africa........................................................................ 48 2 -17 1 -2 * ♦ 7 * -22 48 Other countries....................................................... -416 -267 -171 -210 -3 2 6 2 4 -182 49 Nonmonetary international and regional organizations....................................................... -1,898 -1,557 -90 22 7 -80 -148 70 16 45 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 □ August 1978 3.23 SHORT-TERM LIABILITIES TO AND CLAIMS ON FOREIGNERS Reported by Nonbanking Concerns in the United States Millions of dollars, end of period 1977 1978 1977 1978 Type, and area or country Mar. June Sept. Dec. Mar.*7 Mar. June Sept. Dec. Mar.p Liabilities to foreigners Claims on foreigners 1 '6,595 '6,480 '7,190 '7,873 8,311 '14,941 '16,125 '14,971 '16,050 18,215 By type: 2 Payable in dollars................................................... '5,828 '5,763 r6,340 r7,070 '7,426 '13,925 '15,012 '13,925 '14,704 16,587 3 Payable in foreign currencies................................ 767 '717 r850 r803 885 1,016 1,113 1,047 '1,346 1,628 4 Deposits with banks abroad in reporter’s 431 448 414 620 670 5 585 665 632 '726 958 By area or country: 6 Foreign countries......................................................... '6,403 '6,310 '7,036 '7,658 8,164 '14,938 '16,124 '14,970 '16,049 18,214 7 *2,135 r2,183 r2,283 '2,495 2,754 '5,170 '5,751 '4,991 '5,660 5,457 8 9 10 12 21 23 23 26 24 24 21 9 111 138 119 '106 161 170 '221 '226 '211 187 10 15 14 16 14 23 48 40 44 56 47 11 2 10 11 9 12 40 90 59 13 13 12 France................................................................... 163 157 171 '239 274 436 413 430 513 545 13 175 163 226 284 335 367 377 393 453 410 14 80 73 78 85 108 90 86 52 41 42 15 Italy....................................................................... 135 '138 '107 '128 104 473 440 352 387 384 16 168 205 176 230 252 172 182 161 166 184 17 37 33 35 '7 9 42 42 38 42 42 18 Portugal............................................................... 23 20 12 11 7 35 30 34 69 27 19 Spain..................................................................... 52 68 74 77 94 325 322 307 387 407 20 36 36 41 28 37 93 92 91 117 115 21 214 236 '257 '263 229 154 179 146 220 238 22 Turkey.................................................................. 12 21 97 108 99 32 37 32 39 48 23 United Kingdom................................................ r689 '721 '725 '750 861 '2,413 '2,963 '2,409 '2,687 2,526 24 Yugoslavia........................................................... 113 110 92 90 82 30 28 20 20 24 25 Other Western Europe...................................... 6 6 9 10 8 18 15 15 25 33 26 U.S.S.R................................................................. 15 16 11 24 15 105 76 62 55 44 27 Other Eastern Europe....................................... 13 10 14 12 23 103 102 96 135 121 28 Canada...................................................................... 427 448 r451 '504 530 2,426 '2,574 '2,509 '2,600 3,347 29 Latin America......................................................... 1,121 1,020 1,027 ' 1,178 1,359 '4,448 '4,965 '4,567 r4,476 5,885 30 Argentina............................................................. 42 50 50 '40 53 46 51 53 53 53 31 Bahamas.............................................................. 256 216 222 300 306 '1,920 '2,271 '1,906 '2,007 3,088 32 Brazil.................................................................... 49 37 76 49 62 535 457 414 517 496 33 Chile..................................................................... 16 24 13 17 14 35 28 40 45 40 34 Colombia............................................................. 18 22 24 42 26 75 72 85 84 83 35 Cuba..................................................................... * * * * * 1 1 * * * 36 Mexico................................................................. 121 120 103 114 111 317 301 '302 '314 312 37 Panama................................................................. 12 11 12 22 12 105 121 '222 '91 178 38 Peru....................................................................... 24 21 13 15 22 32 28 30 '32 30 39 Uruguay............................................................... 4 3 4 3 5 6 5 5 5 7 40 260 208 225 222 283 210 240 256 '277 317 41 Other Latin American republics..................... 148 141 122 '118 107 237 237 257 '281 270 42 Netherlands Antilles......................................... 11 17 9 25 41 14 8 8 12 24 43 160 151 154 '209 250 914 1,146 '989 '757 987 44 Asia............................................................................ 2,057 ' 1,971 *2,594 *2,825 2,809 2,316 2,315 '2,403 '2,774 2,966 45 China, People’s Republic of (Mainland).... 3 2 1 8 4 1 1 12 9 22 46 China, Republic of (Taiwan).......................... 113 138 152 156 164 130 131 139 157 145 47 Hong Kong......................................................... 42 27 25 40 32 107 93 73 98 84 48 India..................................................................... 39 41 44 37 26 35 51 42 '38 85 49 Indonesia............................................................. 94 80 60 '56 57 206 184 185 '375 189 50 37 45 58 63 68 51 70 46 38 47 51 Japan.................................................................... 172 183 604 695 767 969 927 '1,026 '1,068 1,372 52 Korea................................................................... 96 95 81 '108 104 130 158 153 '174 135 53 Philippines........................................................... 59 73 78 74 99 86 90 111 99 94 54 Thailand............................................................... 19 11 17 17 11 27 22 24 23 31 55 Other Asia........................................................... 1,383 '1,277 '1,474 '1,572 1,477 569 582 '590 '697 761 56 Africa........................................................................ 591 589 568 563 609 429 370 346 '393 408 57 Egypt.................................................................... 29 33 45 13 19 70 24 22 38 33 58 Morocco............................................................... 30 72 105 112 130 12 11 10 21 20 59 South Africa....................................................... 33 27 29 20 30 80 69 75 75 71 60 Zaire..................................................................... 39 39 48 46 55 19 17 19 15 11 61 Other Africa........................................................ 460 418 341 372 375 248 248 221 '245 272 62 Other countries........................................................ 72 98 111 93 104 150 149 153 '146 150 63 Australia............................................................... 53 78 93 75 89 114 110 113 '111 116 64 All other............................................................. 19 20 18 18 14 36 40 41 35 34 65 Nonmonetary international and regional organizations....................................................... 192 170 154 '215 147 2 1 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 3.24 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' Dec.r Jan.r Feb.' Mar.' Apr. May*7 1 Total.............................................................................. 3,185 3,357 3,799 5,506 6,936 7,694 8,312 8,929 9,049 9,439 By type: 2 Payable in dollars................................................... 2,641 2,660 3,042 4,823 5,999 6,680 7,321 7,791 7,953 8,420 2,604 2,591 2,710 4,450 5,597 6,226 6,836 7,213 7,310 7,814 4 Short-term investments 1.................................. 37 69 332 373 402 454 485 578 643 606 5 Payable in foreign currencies................................ 544 697 757 683 955 1,015 991 1,137 1,096 1,018 6 Deposits............................................................... 431 429 511 397 553 553 533 607 597 492 7 Short-term investments 1.................................. 113 268 246 286 402 462 458 530 499 526 By country: 8 United Kingdom..................................................... 1,128 1,350 1,306 1,817 2,006 1,757 1,908 1,810 1,746 1,595 9 Canada..................................................................... 775 967 1,156 1,541 1,696 2,152 2,284 2,463 2,702 2,771 10 Bahamas................................................................... 597 391 546 1,322 1,883 2,404 2,656 2,951 2,988 3,569 11 Japan......................................................................... 336 398 343 113 153 205 267 405 290 258 12 All other................................................................... 349 252 446 713 1,198 1,176 1,197 1,300 1,323 1,246 i Negotiable and other readily transferable foreign obligations payable Note.—Data represent the assets abroad of large nonbanking conon demand or having a contractural maturity of not more than 1 year cems 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. 3.25 LONG-TERM LIABILITIES TO AND CLAIMS ON FOREIGNERS Reported by Nonbanking Concerns in the United States Millions of dollars, end of period 1977 1978 1977 1978 Area and country Mar. June Sept. Dec. Mar.** Mar. June Sept. Dec. Mar.p Liabilities to foreigners Claims on foreigners 1Total............................................................................. '3,523 '3,364 '3,355 '3,222 3,205 '4,946 '4,898 '4,697 '5,054 5,114 2 Europe.......................................................................... '2,657 '2,507 '2,565 '2,458 2,540 ' 899 '898 '826 '857 930 3 Germany.................................................................. 391 370 407 255 295 84 76 76 70 73 4 Netherlands............................................................. 272 262 272 288 293 154 147 81 82 81 5 Switzerland.............................................................. 178 177 224 241 241 53 43 42 49 48 6 United Kingdom.................................................... '1,389 '1,277 '1,255 '1,232 1,247 '259 '283 '282 '310 332 7 Canada......................................................................... 80 79 76 71 67 1,475 1,486 1,462 '1,776 1,792 8 Latin America............................................................. '292 '301 '294 '289 253 1,489 1,457 1,371 '1,406 1,387 9 Bahamas................................................................... 163 167 159 156 146 34 34 36 40 42 10 Brazil........................................................................ 5 7 7 7 6 125 125 134 '144 154 11 Chile......................................................................... 1 1 1 1 1 210 208 201 203 194 12 23 26 30 30 30 180 178 187 '177 183 13 Asia............................................................................... 432 408 358 '342 284 817 833 809 797 789 14 Japan........................................................................ 413 386 319 305 250 96 111 94 66 83 15 Africa............................................................................ 2 3 3 2 2 199 158 165 '161 156 16 All other i..................................................................... 59 67 59 60 60 67 67 63 59 60 1 Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 International Statistics □ August 1978 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Per cent per annum Rate on July 31, 1978 Rate on July 31, 1978 Rate on July 31, 1978 Country Country Country Per Month Per Month Per Month cent effective cent effective cent effective Argentina.......................... 18.0 Feb. 1972 9.5 Aug. 1977 7.0 Feb. 1978 Austria................................ 4.5 June 1978 Germany, Fed. Rep. of. 3.0 Dec. 1977 6.5 July 1978 Belgium.............................. 6.0 July 1978 11.5 Aug. 1977 1.0 Feb. 1978 Brazil.................................. 30.0 Sept. 1977 3.5 Mar. 1978 United Kingdom........... 10.0 June 1978 Canada............................... 9.0 July 1978 4.5 June 1942 5.0 Oct. 1970 Denmark............................ 8.0 July 1977 Netherlands.................... 4.5 July 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. 3.27 FOREIGN SHORT-TERM INTEREST RATES Per cent per annum, averages of daily figures 1978 Country, or type 1975 1976 1977 Feb. Mar. Apr. May June July 1 Euro-dollars................................................................ 7.02 5.58 6.03 7.28 7.27 7.38 7.82 8.33 8.52 2 United Kingdom....................................................... 10.63 11.35 8.07 6.82 6.72 7.47 9.17 10.02 10.13 3 Canada......................................................................... 8.00 9.39 7.47 7.14 7.44 8.14 8.01 8.12 8.23 4 Germany..................................................................... 4.87 4.19 4.30 3.45 3.49 3.54 3.60 3.61 3.71 5 Switzerland................................................................. 3.01 1.45 2.56 .50 .46 .40 1.18 1.38 1.74 6 Netherlands................................................................. 5.17 7.02 4.73 5.28 5.35 4.62 4.48 4.60 5.61 7 France.......................................................................... 7.91 8.65 9.20 10.45 9.86 8.35 8.21 7.94 7.61 8 Italy.............................................................................. 10.37 16.32 14.26 C1) 0) 11.75 11.80 11.75 11.75 9 Belgium....................................................................... 6.63 10.25 6.95 6.75 6.41 5.55 5.71 5.61 5.84 10 Japan............................................................................ 11.64 7.70 6.22 5.25 4.86 4.50 4.50 4.75 4.75 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 3.28 FOREIGN EXCHANGE RATES Cents per unit of foreign currency 1978 Country/currency 1975 1976 1977 Feb. Mar. Apr. May June July 1 Australia/dollar................... 130.77 122.15 110.82 113.56 113.83 113.97 112.76 113.83 114.94 2 Austria/shilling..................... 5.7467 5.5744 6.0494 6.6893 6.8221 6.8081 6.6031 6.6718 6.7547 3 Belgium/franc....................... 2.7253 2.5921 2.7911 3.0930 3.1589 3.1419 3.0463 3.0590 3.0864 4 Canada/dollar....................... 98.30 101.41 94.112 89.850 88.823 87.592 89.397 89.143 88.921 5 Denmark/krone................... 17.437 16.546 16.658 17.610 17.839 17.807 17.535 17.723 17.846 6 Finland/markka................... 27.285 25.938 24.913 24.527 24.013 23.900 23.430 23.390 23.809 7 France/franc......................... 23.354 20.942 20.344 20.628 21.256 21.803 21.513 21.841 22.531 8 Germany/deutsche mark... 40.729 39.737 43.079 48.142 49.181 48.964 47.497 47.984 48.647 9 India/rupee........................... 11.926 11.148 11.406 12.331 12.185 11.815 11.653 11.900 12.245 10 Ireland/pound....................... 222.16 180.48 174.49 193.96 190.55 184.97 181.81 183.72 189.49 11 Italy/lira................................. .15328 .12044 .11328 .11619 .11692 .11644 .11488 .11634 .11804 12 Japan/yen.............................. .33705 .33741 .37342 .41603 .43148 .45084 .44215 .46744 .50101 13 Malaysia/ringgit................... 41.753 39.340 40.620 42.374 42.428 42.057 41.462 41.964 42.447 14 Mexico/peso......................... 8.0000 6.9161 4.4239 4.3972 4.3928 4.3945 4.3973 4.3840 4.3756 15 Netherlands/guilder............ 39.632 37.846 40.752 44.880 45.994 45.865 44.407 44.716 45.076 16 New Zealand/dollar............ 121.16 99.115 96.893 102.07 102.20 101.92 100.69 101.90 103.85 17 Norway/krone...................... 19.180 18.327 18.789 19.025 18.775 18.621 18.360 18.450 18.524 18 Portugal/escudo................... 3.9286 3.3159 2.6234 2.4806 2.4483 2.4075 2.2208 2.1857 2.1939 19 South Africa/rand............... 136.47 114.85 114.99 115.05 115.05 115.05 115.01 114.93 115.00 20 Spain/peseta......................... 1.7424 1.4958 1.3287 1.2394 1.2497 1.2475 1.2317 1.2587 1.2885 21 Sri Lanka/rupee................... 14.385 11.908 11.964 6.4028 6.5000 6.4950 6.2945 6.2859 6.3245 24.141 22.957 22.383 21.554 21.693 21.731 21.491 21.690 22.012 23 Switzerland/franc................. 38.743 40.013 41.714 52.422 52.693 52.511 50.892 53.046 55.443 24 United Kingdom/pound... 222.16 180.48 174.49 193.96 190.55 184.97 181.81 183.72 189.49 Memo: 25 United States/dollar i.......... '98.34 '105.57 '103.31 '96.19 '94.80 '94.56 '96.31 '94.74 92.44 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. March 1973 = 100. transfers. Weights are 1972-76 global trade of each of the 10 countries. Series revised as of August 1978. For description and back data, see “Index of the Weighted-Average*Exchange Value of the U.S. Dollar: Revision” in this Bulletin. 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 ......................................... June 1978 A-76 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Federal R eserve B oard o f G overnors G. William M iller, Chairman Henry C. Wallich Stephen S. Gardner, Vice Chairman Philip E. Coldwell 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 N eal L. Petersen, General Counsel Joseph S. Zeisel, Deputy Director Robert E. M annion, Associate General Counsel Edward C. Ettin, Associate Director A llen L. Raiken, Associate General Counsel John H. Kalchbrenner, Associate Director Charles R. M cN eill, Assistant to the General John J. Mingo, Senior Research Division Officer Counsel Eleanor J. Stock w ell, Senior Research Division Officer James R. W etzel, Senior Research Division Officer OFFICE OF THE SECRETARY Robert A. Eisenbeis, Associate Research Division Officer Theodore E. A llison, Secretary Jared J. Enzler, Associate Research Division G riffith L. Garwood, Deputy Secretary Officer *John M. W allace, Assistant Secretary J. Cortland G. Peret, Associate Research Richard H. Puckett, Manager, Regulatory Division Officer Improvement Project Helm ut F. W endel, Associate Research Division Officer James M. Brundy, Assistant Research Division DIVISION OF CONSUMER AFFAIRS Officer Robert M. Fisher, Assistant Research Division Janet O. Har^ , Director Officer N athaniel E. B utler, Associate Director Stephen P. Taylor, Assistant Research Division Jerauld C. Kluckman, Associate Director Officer Levon H. Garabedian, Assistant Director DIVISION OF BANKING SUPERVISION AND REGULATION DIVISION OF INTERNATIONAL FINANCE John E. Ryan, Director Edwin M. Truman, Director t Frederick C. Schadrack, Deputy Director John E. Reynolds, Counselor Frederick R. Dahl, Associate Director Robert F. Gemmill, Associate Director W illiam W. W iles, Associate Director George B. Henry, Associate Director Jack M. Egertson, Assistant Director Charles J. Siegman, Associate Director Don E. K line, Assistant Director Samuel Pizer, Senior International Division Robert S. Plotkin, Assistant Director Officer Thomas A. Sidman, Assistant Director Samuel H. T alley, Assistant Director W illiam Taylor, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A71 and O ffic ia l S ta ff 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 Clyde H. Farnsworth, Jr., Associate Director DIVISION OF DATA PROCESSING John F. Hoover, Assistant Director P. D. Ring, Assistant Director Charles L. Hampton, Director Bruce M. Beardsley, Associate Director DIVISION OF U yless D. Black, Assistant Director FEDERAL RESERVE BANK OPERATIONS Glenn L. Cummins, Assistant Director Robert J. Zemel, Assistant Director James R. Kudlinski, Director W alter A lthausen, Assistant Director DIVISION OF PERSONNEL Brian M. Carey, Assistant Director Harry A. Guinter, Assistant Director David L. Shannon, Director Lorin S. Meeder, Assistant Director John R. Weis, Assistant Director Charles W. Wood, Assistant Director OFFICE OF THE CONTROLLER John K akalec, 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 Atlanta. tOn loan from the Federal Reserve Bank of New York. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Federal Reserve Bulletin □ August 1978 F O M C and A d v iso ry C o u n cils FEDERAL OPEN MARKET COMMITTEE G. W illiam M iller, Chairman Paul A. Volcker, Vice Chairman Ernest T. Baughman Stephen S. Gardner Henry C. Wallich Philip E. Coldwell Philip C. Jackson, Jr. Mark H. Willes David P. Eastburn J. Charles Partee Willis J. Winn M urray Altm ann, Secretary Edward C. Ettin, Associate Economist Norm and 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. Axilrod, Economist John E. Reynolds, Associate Economist Joseph Burns, Associate Economist Edwin M. Truman, Associate Economist John M. Davis, Associate Economist Joseph S. Zeisel, Associate Economist Richard G. Davis, Associate Economist Alan R. Holmes, Manager, System Open Market Account Peter D. Sternlight, Deputy Manager for Domestic Operations Scott E. Pardee, Deputy Manager for Foreign Operations FEDERAL ADVISORY COUNCIL G ilbert F. Bradley, 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. Wriston, second district Edward Byron Smith, seventh district William B. Eagleson, Jr., third district Clarence C. Barksdale, eighth district M. Brock Weir, fourth district Richard H. Vaughan, ninth district John H. Lumpkin, fifth district James D. Berry, eleventh district Herbert 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 Roland E. Brandel, San Francisco, California Richard F. Kerr, Cincinnati, Ohio Agnes H. Bryant, Detroit, Michigan Robert J. K lein, New York, New York John G. B ull, Fort Lauderdale, Florida Percy W. Loy, Portland, Oregon Robert V. B ullock, Frankfort, Kentucky R. C. M organ, El Paso, Texas Linda M. Cohen, Washington, D.C. Reece A. Overcash, Jr., Dallas, Texas Robert R. Dockson, Los Angeles, California Raymond J. Saulnier, New York, New York Anne G. Draper, Washington, D.C. E. G. Schuhart, Dalhart, Texas Carl Felsenfeld, New York, New York Blair C. Shick, Cambridge, Massachusetts Jean A. Fox, Pittsburgh, Pennsylvania James E. Sutton, Dallas, Texas Marcia A. Hakala, Omaha, Nebraska Thomas R. Swan, Portland, Maine Joseph F. Holt III, Oxnard, California Anne Gary Taylor, Alexandria, Virginia Richard H. Holton, 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

A 73 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. Fishbume 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 no* 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 Report of the Joint Treasury-Federal Reserve each. Elsewhere, $24.00 per year or $2.50 each. Study of the U.S. Government Securities Banking and Monetary Statistics, 1914-1941. Market. 1969. 48 pp. $.25 each; 10 or more to (Reprint of Part 1 only) 1976. 682 pp. $5.00. 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. I. 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 REPRINTS (Except for Staff Papers, Staff Economic Studies, and (Short pamphlets suitable for classroom use. Multiple some leading articles, most of the articles reprinted do copies available without charge.) not exceed 12 pages.) The Equal Credit Opportunity Act and . . . Age The Equal Credit Opportunity Act and Measures of Security Credit. 12/70. Credit Rights in Housing Revision of Bank Credit Series. 12/71. the Equal Credit Opportunity Act and . . . Doc­ Assets and Liabilities of Foreign Branches of tors, Lawyers, Small Retailers, and Others U.S. Banks. 2/72. Who May Provide Incidental Credit Bank Debits, Deposits, and Deposit Turnover— the Equal Credit Opportunity Act and Revised Series. 7/72. Women Yields on Newly Issued Corporate Bonds. 9/72. Fair Credit Billing Recent Activities of Foreign Branches of U.S. A Guide to Federal Reserve Regulations Banks. 10/72. How to File A Consumer Credit Complaint Revision of Consumer Credit Statistics. 10/72. If You Borrow To Buy Stock One-Bank Holding Companies Before the 1970 Truth in Leasing Amendments . 12/72. U.S. Currency Yields on Recently Offered Corporate Bonds. What Truth in Lending Means to You 5/73. Rates on Consumer Instalment Loans. 9/73. New Series for Large Manufacturing Corpora­ STAFF ECONOMIC STUDIES tions. 10/73. U.S. Energy Supplies and Uses, Staff Economic Studies and papers on economic and financial subjects Study by Clayton Gehman. 12/73. that are of general interest in the field of economic Inflation and Stagnation in Major Foreign In­ research. dustrial Countries. 10/74. The Structure of Margin Credit. 4/75. Summaries Only Printed in the Bulletin New Statistical Series on Loan Commitments at (Limited supply of mimeographed copies of full text Selected Large Commercial Banks. 4/75. available upon request for single copies. Recent Trends in Federal Budget Policy. 7/75. The Performance of Bank Holding Company-Af­ Recent Developments in International Financial filiated Finance Companies, by Stephen A. Markets. 10/75. MINNIE: A Small Version of the MIT-PENN-SSRC Rhoades and Gregory E. Boczar. Aug. 1977. 19 Econometric M odel, Staff Economic Study by pp. Douglas Battenberg, Jared J. Enzler, and Arthur Greeley in Perspective, by Paul Schweitzer and M. Havenner. 1 1/75. Joshua Greene. Sept. 1977. 17 pp. An Assessment of Bank Holding Companies, Staff Structure and Performance Studies in Banking: Economic Study by Robert J. Lawrence and Sam­ A Summary and Evaluation, by Stephen A. uel H. Talley. 1/76. Rhoades. Dec. 1977. 45 pp. An Analysis of Federal Reserve Attrition Since Industrial Electric Power Use. 1/76. 1960, by John T. Rose. Jan. 1978. 44 pp. Revision of Money Stock Measures. 2/76. Problems in Applying Discriminant Analysis in Survey of Finance Companies, 1975. 3/76. Credit Scoring Models, by Robert A. Eisenbeis. Revised Series for Member Bank Deposits and Jan. 1978. 28 pp. Aggregate Reserves. 4/76. External Capital Financing Requirements of Industrial Production— 1976 Revision. 6/76. Commercial Banks: 1977-81, by Gerald A. Han- Federal Reserve Operations in Payment Mecha­ weck and John J. Mingo. Feb. 1978. 34 pp. nisms: A Summary. 6/76. Mortgage Borrowing Against Equity in Existing Recent Growth in Activities of U.S. Offices of Homes: Measurement, Generation, and Im­ Banks. 10/76. plications for Economic Activity, by David F. New Estimates of Capacity Utilization: Manu­ Seiders. May 1978. 42 pp. facturing and Materials. 11/76. Bank Holding Company Financial Developments The Behavior of Member Bank Required Reserve in 1976. 4/77. Ratios and the Effects of Board Action, Survey of Terms of Bank Lending—New Series. 1968-77, by Thomas D. Simpson. July 1978. 39 5/77. pp. The Commercial Paper Market. 6/77. Foothold Acquisitions and Bank Market Struc­ Consumption and Fixed Investment in the Eco­ ture, by Stephen A. Rhoades and Paul Schweit­ nomic Recovery Abroad. 10/77. zer, July 1978. 8 pp. Recent Developments in U.S. International Transactions. 4/78. Printed in Full in the Bulletin Survey of Time and Savings Deposits at Commer­ Staff Economic Studies shown under “Reprints.” cial Banks, April 1978. 8/78. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 76 Index to S tatistical 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 deposits): Consumer instalment credit, 42, 43 Banks, by classes, 3, 16, 17, 19, 20-23, 29 Production, 48, 49 Federal Reserve Banks, 4, 12 Subject to reserve requirements, 15 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. FARM mortgage loans, 41 banks, 56 Farmers Home Administration, 41 Liabilities of U.S. banks to their foreign Federal agency obligations, 4, 11, 12, 13, 34 branches, 23 Federal and Federally sponsored credit agencies, 35 Business activity, 46 Federal finance: Business expenditures on new plant and Debt subject to statutory limitation and equipment, 38 types and ownership of gross debt, 32 Business loans (See Commercial and industrial 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 GOLD: Customer credit, stock market, 28 Certificates, 12 Stock, 4, 55 DEBITS to deposit accounts, 13 Government National Mortgage Assn., 35, 40, 41 Debt (See specific types of debt or securities) Gross national product, 52, 53 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve Bulletin □ August 1978 A ll 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 (See 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 New security issues, 36 companies) Ownership of securities of, 18, 20, 21, 22, 29 Loans (See also specific types of loans): Yields of securities, 3 Banks, by classes, 16, 17, 18, 20-23, 29 State member banks, 17 Commercial banks, 3, 15-18, 20-23, 24, 26 Stock market, 28 Federal Reserve Banks, 3, 4, 5, 8, 12, 13 Stocks (See also Securities): Insurance companies, 29, 41 New issues, 36 Insured or guaranteed by U.S., 40, 41 Prices, 28 Savings and loan assns., 29 MANUFACTURING: TAX receipts, Federal, 31 Capacity utilization, 46 Time deposits, 3, 10, 13, 15, 16, 17, 19, 20, 21, Production, 46, 49 22, 23 Margin requirements, 10 Trade, foreign, 55 Member banks: Treasury currency, Treasury cash, 4 Assets and liabilities, by classes, 16, 17, 18 Treasury deposits, 4, 12, 30 Borrowings at Federal Reserve Banks, 5, 12 Treasury operating balance, 30 Number, by classes, 16, 17, 19 Reserve position, basic, 6 UNEMPLOYMENT, 47 Reserve requirements, 9 U.S. balance of payments, 54 Reserves and related items, 3, 4, 5, 15 U.S. Govt, balances: Mining production, 49 Commercial bank holdings, 19, 20, 21, 22 Mobile home shipments, 50 Member bank holdings, 15 Monetary aggregates, 3, 15 Treasury deposits at Reserve Banks, 4, 12, 30 Money and capital market rates (See Interest U.S. Govt, securities: 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 NATIONAL banks, 17, 19 transactions, 12, 32, 64 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, OPEN market transactions, 11 Yields, 3 Utilities, production, 49 PERSONAL income, 53 Prices: VETERANS Administration, 40, 41 Consumer and wholesale, 46, 51 Stock market, 28 WEEKLY reporting banks, 20-24 Prime rate, commercial banks, 26 Wholesale prices, 46 Production, 46, 48 Profits, corporate, 37 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 78 The Federal Reserve System B oundaries of Federal R eserve D istricts and T heir B ranch T erritories 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