Federal Reserve Bulletin, 1979-06

JUNE 1979 FED ERAL RESERVE BULLETIN R e c e n t L ab o r M a rk e t D e v e lo p m e n ts F o re ig n E x c h a n g e O p eratio n s: In te rim R e p o rt Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE BULLETIN (USPS 351-150). Controlled Circulation Postage Paid at Washington, D.C. POSTMASTER: Send address changes to Publications Services, Division of Support Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. 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 Support 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

VOLUME 65 □ NUMBER 6 □ JUNE 1979 FED ERAL RESERVE BULLETIN B o ard o f G o v ern o rs o f th e F ed eral R e serv e S y stem W ash in g to n , D .C . PUBLICATIONS COMMITTEE Joseph R. Coyne, Chairman □ Stephen H. Axilrod □ John M. Denkler Janet O. Hart □ James L. Kichline □ Neal L. Petersen □ Edwin M. Truman Michael J. Prell, Staff Director The Federal Reserve B ulletin is issued monthly under the direction of the stafl 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 447 Recent Labor M arket D evelopments 463 Governor Partee offers the view that the banking system is in good condition to W ith sustained economic expansion over deal with adversity despite certain problem the past year and a half have come sub­ areas, before the Senate Committee on stantial gains in employment and increas­ Banking, Housing and Urban Affairs, May ing tautness in labor markets. 23, 1979. 456 Treasury and Federal Reserve 467 Governor Nancy H. Teeters, in testimony Operations: Interim Report on the Credit Control Act of 1969, offers the Board’s view that, under most circum­ During the February-April period, the stances, policies other than credit controls dollar came into increasingly heavy de­ would have superior results with fewer mand against most major foreign curren­ undesirable side effects, before the Senate cies, due in large part to the effect of Committee on Banking, Housing and measures taken by U.S. and foreign au­ Urban Affairs, May 24, 1979. thorities in late 1978. All outstanding swap debt to foreign central banks was repaid. 470 Chairman G. W illiam Miller identifies an agenda of issues facing the world economy 459 Industrial Production in the 1980s including the expansion of Output increased about 1.3 percent in world trade, the need to expand production May. capacities for certain commodities, the growth of international bank lending, the 460 Statements to Congress worldwide effects of inflation and reces­ sion, and the changes in the international Governor J. Charles Partee urges a some­ monetary system, before the Subcommit­ what different approach than that con­ tee on International Economic Policy of tained in the Consumer Checking Account the Senate Foreign Relations Committee, Equity Act of 1979— namely, nationwide May 24, 1979. negotiable order of withdrawal (NOW) accounts with the provision for a ceiling 475 Governor Teeters addresses certain issues rate on such accounts that would be phased raised by the Equal Credit Opportunity out gradually— and underscores the Act, a bill that would prohibit a credit-card Board’s belief that the provision for pay­ issuer from discriminating on the basis of ment of interest on transactions balances a person’s place of residence, and con­ should be coupled with a solution to the cludes that the Board would not oppose member bank attrition problem, before the such a prohibition within certain limita­ Subcommittee on Financial Institutions tions, before the Subcommittee on Con­ Supervision, Regulation and Insurance of sumer Affairs of the Senate Committee on the House Committee on Banking, Fi­ Banking, Housing and Urban Affairs, June nance and Urban Affairs, May 15, 1979. 5, 1979. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

477 Announcements should be 4 to 8 percent and 4 to 8 V2 percent respectively. The Manager was Adoption of regulatory changes to help instructed to direct open market operations small savers obtain a higher return on their initially toward maintaining the federal deposits. funds rate at about the current level, re­ Test of electronic settlement of checks of presented by a rate of about 10 percent $100,000 or more issued by corporate or slightly higher. Subsequently, if the customers of a small number of banks. two-month growth rates of M -l and M-2 appeared to be close to or beyond the Improvement of the Federal Reserve’s au­ upper or lower limits of the indicated tomated clearinghouse services. ranges, the objective for the funds rate was Proposed amendment to Regulation E that to be raised or lowered in an orderly would make written notice of loss or theft fashion within a range of 93A to IOV2 of an electronic fund transfer card effec­ percent. It was also agreed that in assess­ tive when the consumer sends the notice; ing the behavior of the aggregates, the and proposals on interest rate ceilings on Manager should give approximately equal repurchase agreements and on liberaliza­ weight to M -l and M-2. tion pf penalty for early withdrawal of deposits in the event of death. 493 Law D epartment Amendment to Regulation E that requires Amendments to Regulation Q, various in­ financial institutions to make certain dis­ terpretations and bank holding company closures before imposing any liability for and bank merger orders, and pending unauthorized use of stolen or lost credit cases. cards in electronic fund transfers. Inclusion of new statistical table on claims Al Financial and B usiness Statistics on foreign countries held by U.S. offices A3 Domestic Financial Statistics and foreign branches of U.S.-chartered A46 Domestic Nonfinancial Statistics banks. A54 International Statistics Admission of three state banks to mem­ bership in the Federal Reserve System. A69 G uide to Tabular Presentation M eeting of Consumer Advisory Council. and Statistical Releases Availability of new data series on security A70 Board of Governors and Staff repurchase agreements of all commercial banks with the nonbank public. A ll Federal Open M arket Committee and Staff; A dvisory Councils Initiation of tours of Federal Reserve Building. A73 Federal Reserve Banks, Branches, and Offices 483 Record of Policy A ctions of the Federal Open M arket Committee A74 Federal Reserve Board Publications At the meeting on April 17, 1979, the Committee decided that ranges of toler­ A79 Index to Statistical Tables ance for the annual rates of growth in M -l and M-2 over the April-M ay period A81 Map of Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Labor Market Developments Robert S. Gay of the W ages, Prices, and Pro- average gain in the five previous postwar ex­ ductivity Section, Division of Research and pansions. From the end of 1977 until early Statistics, prepared this article with the assist­ 1979, hiring in the private sector was particu­ ance of A. M ichael Berman. larly vigorous, at a 4% percent annual rate of increase, with gains widespread among industry Sustained economic expansion in the past year groups. The belated resurgence in business out­ and a half brought with it substantial gains in lays for plant and equipment in this cycle stim­ employment and increasing tautness in labor ulated especially large employment increases in markets. But with the pace of economic activity the durable goods and construction industries slowing this year, there have been signs recently during this later period. However, labor demand of easing in labor demand. The overall rate of has moderated substantially in recent months. unemployment fell during the first half of 1978 Payroll employment showed no increase in and has remained about unchanged since then, April, in part due to a collective bargaining with jobless rates at fairly low levels among dispute in the trucking industry. Hiring picked skilled and experienced workers. In this envi­ up again in May but at a much slower pace ronment, and with inflation accelerating, in­ than earlier in the year. creases in wage rates also have picked up The strength of labor demand through early somewhat. The stepup in the rise of total com­ 1979 contributed to favorable labor market con­ pensation and unit labor costs has been still ditions for those in skilled occupations and with more marked, reflecting the government-man­ previous work experience. Hiring of less expe­ dated cost increases and the sluggish growth in rienced workers also was robust, and new job­ productivity. seekers continued to be drawn into the labor Employment has grown briskly throughout market by the improved prospects for employ­ the current expansion (chart 1). During the first ment. In addition, employers in goods-producthree years following the cyclical trough in early ing industries lengthened work shifts and main­ 1975, private nonfarm payroll employment rose tained overtime hours at a high level to meet at a 4 percent annual rate, well above the production schedules. Nevertheless, the degree 1. Real GNP, employment, and unemployment Percent UNEMPLOYMENT RATE GNP data are in constant 1972 dollars, from the Department of Labor; employment changes for 1979 are calculated at of Commerce; percentage change for 1979 is calculated from annual rates from December 1978 to March 1979 for Ql, and 1978 Q4 to 1979 Ql at an annual rate. Data on payroll from March to May for Q2. employment and unemployment rate are from the Department Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

448 Federal Reserve Bulletin □ June 1979 of labor utilization has not been so intensive for labor last year reflected increased spend­ as in previous periods of particularly tight labor ing for nonresidential construction activity sup­ markets. plemented by strong demands for housing, con­ The increase in payroll employment since late sumer goods, and capital equipment. M oreover, 1977 has been much larger than would be ex­ hiring gains remained sizable in the first quarter pected on the basis of historical relationships of 1979, despite the sharply reduced pace of between output changes and labor demand. economic activity. Since M arch, however, em­ From 1947 to 1967, growth in real output ex­ ployment growth has moderated appreciably. ceeded employment gains by a substantial mar­ Additions to private payrolls averaged 60,000 gin and output per hour of work in the nonfarm per month during April and M ay, about onebusiness sector rose 2 V2 percent annually. The fifth of the average monthly gain in the preced­ rise in output per hour began to slow in the ing half year. late 1960s, and since 1967 annual increases All major industry groups shared in the hiring have averaged only 1 XA percent. Over the four gains posted over the five quarters ending in quarters of 1978, real output and employment March. In the manufacturing sector, employ­ grew at about the same rate and hence output ment rose at an annual rate of 820,000, with per hour rose only fractionally. This poor per­ more than four-fifths of the increase in the formance was surprising in light of the rapid durable goods sector (chart 2). Early in the growth in output last year and the rather moder­ expansion, employment in hard goods industries ate gain in productivity the preceding year. The grew slowly compared with previous postwar lackluster advances in productivity during the cycles, in line with the sluggish performance past few years have contributed to persistent, of business fixed investment. In more recent rapid rates of increase in unit labor costs, which years, however, increased spending for plant are a major factor influencing changes in the and equipment has stimulated substantial job price level. In the nonfarm business sector, the gains. Employers in the durable goods sector increase in these costs was 9 percent over the expanded their work force at an annual rate of four quarters of 1978, up from 6lA percent 700,000 jobs from late 1977 to the first quarter during the preceding year. of 1979, substantially faster than the pace earlier Higher unit labor costs also have resulted from a sharp acceleration in compensation growth since late 1977. Legislated increases in payroll taxes that became effective at the begin­ ning of both 1978 and 1979 contributed heavily to the acceleration, and wage rates for a signifi­ cant portion of the work force were boosted by changes in the federal minimum wage law. M oreover, upward pressure on wages has in­ tensified in the past year and a half as sharp increases in consumer prices have eroded the purchasing power of workers’ earnings. E m p l o y m e n t The growth of nonfarm payroll employment from the end of 1977 to early 1979 was quite vigorous, continuing the pattern of unusually strong gains seen during the first three years of the current economic expansion. Over the four Output is based on Federal Reserve industrial production in­ dexes for manufacturing, seasonally adjusted. Employment is quarters of 1978, private payroll employment based on seasonally adjusted data from the Department of advanced by 3^2 million. This robust demand Labor. Data for May 1979 are used for 1979 Q2. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Labor Market Developments 449 in the cyclical recovery. Employment increases growth in sales by hiring more workers, many were widespread among metal-producing and of whom work part-time, rather than by length­ metal-using industries; exceptionally large gains ening work schedules. were registered in transportation equipment and Employment in the private service-oriented in nonelectrical machinery (especially con­ sector (trade, service, and finance industries) has struction equipment and computers). During moved steadily upward since the end of 1977, April and May of this year, employment in advancing 2.2 million at an annual rate. This durable goods industries fell about 25,000 each hiring pace exceeded the postwar trend rate of month; declines were reported in most cate­ growth. W ith consumer activity brisk, trade gories except nonelectrical machinery. establishments registered a gain of 840,000 at Unlike the generally strong growth at durable an annual rate. The service industries, which goods establishments over the last year and a have experienced persistently strong growth half, employment gains in the nondurable goods during both recession and recovery, showed a sector have been small, totaling only 120,000 similar increase. The trade-service-finance per year compared with average annual in­ complex now accounts for almost 60 percent creases of 230,000 earlier in the expansion. The of the jobs in nonfarm businesses compared with printing and publishing industry registered no­ 40 percent 30 years ago. table job increases, but employment in such In contrast with the private economy, the industries as apparel, textiles, and tobacco de­ government sector has not added significant clined. As a result, employment in the non­ numbers of workers to payrolls during most of durable goods sector still has not regained the the past year and a half. At the state and local peak cyclical level reached in late 1973. government level, growth in jobs has been The rate of job increase has been excep­ damped by reduced needs for educational per­ tionally rapid among construction workers as sonnel and by heightened fiscal austerity. A employment in the building trades has risen at buildup in federally funded public service jobs an annual rate of 440,000, or 11 percent, since did provide a boost to state and local payrolls late 1977. The surge in construction hiring re­ until m id-1978 as an additional 415,000 of such flected a sharp rise in spending for nonresiden­ jobs were funded early in 1977 under Titles II tial structures, particularly commercial and in­ and VI of the Comprehensive Employment and dustrial buildings, while housing demand con­ Training Act (CETA). Allowing for a tendency tinued strong. M oreover, increased hiring for to substitute subsidized workers for normal hir­ road repairs further buoyed growth in con­ ing, this program probably accounted for twostruction employment in recent months. fifths of the increase of 540,000 in state and W ith output expanding briskly, employers in local jobs between May 1977 when the buildup goods-producing industries continued to began and May 1978 when it was completed. lengthen the workweek during 1978 and early But later in 1978, enrollment levels actually 1979 to meet higher production schedules and declined because of uncertainties about future to limit the overhead costs associated with hiring funding for the program. Consequently, in May and training new workers. Average weekly of this year state and local employment was hours for factory workers rose from an already essentially unchanged from the level of a year high level of 40^ in late 1977 to 40% in the earlier. The slow growth in this sector recently first quarter of this year, about the same as the is in sharp contrast with the trend in the late previous peak level of 1973. The use of over­ 1960s and early 1970s, when state and local time was sharply curtailed in April partially governments were a major source of job oppor­ because of the effects of labor disputes and tunities. At the federal level, civilian employ­ holidays, but the rebound in May left overtime ment has remained virtually unchanged at 23A hours— an important indicator of factory labor million for more than a decade. demands— almost V2 hour below the first-quar- Following the demographic pattern of em­ ter average. M eanwhile, employers in the serv­ ployment evident for many years, adult women ice-producing sector have responded to the accounted for the bulk of the growth in job­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

450 Federal Reserve Bulletin □ June 1979 holders. An increase of 2l/i million in the num­ 3. Labor force participation rates for women ber of employed women aged 20 years and older Percent since the end of 1977 represents nearly 60 percent of the total growth in employment, although adult women account for only twofifths of the labor force. Job opportunities for women continue to be concentrated in serviceoriented industries, which absorbed more than half of the increase in employment among women in 1978, about the same proportion as in other recent years. Another one-fifth went to work in factory jobs, however, especially in durable goods industries in which women pre­ Based on annual averages of civilian labor force and population viously had not been employed in substantial data from the Department of Labor. numbers. Reflecting the widening of job oppor­ tunities for women in the industrial sector, the occupational distribution of women’s employ­ ment also changed somewhat as a greater num­ large number of whom had preschool children ber of women became employed in less tradi­ at home. By 1978 the proportion of 25- to tional, blue-collar jobs. 34-year-old women in the labor force had moved sharply upward, from less than 40 per­ cent to more than 60 percent. The participation L ab o r S u p p l y a n d U n e m p l o y m e n t rate for this age group now exceeds that of all Substantial growth in the labor force accom­ other age groups with the exception of women panied the strong demand for labor. The civilian between the ages of 20 and 24 years, a substan­ labor force climbed at an annual rate of 2 V2 tial proportion of whom are unmarried or have percent over the past five quarters, well above no children. the long-run trend of 13A percent. Until mid- A major influence on the growth in labor force 1978, employment grew even faster than the participation by women is their changing social labor supply, and the unemployment rate status. Job opportunities for women outside the dropped from 6.6 percent in late 1977 to 5.8 home have broadened, and women have gradu­ percent in June 1978. Since then, the unem­ ally moved into more varied jobs than in the ployment rate has shown little change. 1950s. In addition, the tendency for women in Paralleling the employment change, more their late twenties and early thirties to remain than half of the net increase in the labor force in the labor force after marriage has been ac­ since late 1977 has been concentrated among companied by a sharp drop in fertility rates to women 20 years of age and older. This growth about half the rate of two decades ago, while reflects both the strong gains in employment and participation among mothers of small children a continued trend toward higher labor force also has risen sharply. Finally, married women participation among women of nearly all ages. may have elected to seek employment to main­ The average participation rate for adult women tain family living standards in the face of the has risen from 35 percent in the late 1950s to erosion of real income associated with the in­ more than 50 percent in 1979. The pattern of flation of the 1970s. participation rates across age groups also has Teenagers also continued to play a role in changed significantly over the past two decades the expansion of the labor force during 1978 (chart 3). In the late 1950s, women aged 20 despite the fact that the proportion of young to 24 and those aged 45 to 54 were most active persons in the population, which had grown in the work force; participation rates tended to rapidly from the 1950s through 1975, had begun be lower among women 25 to 34 years old, a to fall. Declines in the teenage population have Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Labor Market Developments 451 been offset by a sharp rise in participation rates, by m id-1978 the overall unemployment rate fell particularly among female teenagers. Conse­ below 6 percent for the first time since late 1974. quently, the teenage labor supply expanded at The improvement in joblessness was widespread a 3 percent rate over the five quarters ending among worker groups. Since last summer, the in M arch, about in line with the long-run trend overall jobless rate has fluctuated between 5.7 rate (chart 4). New entrants to the labor force and 6.0 percent. tend to be sensitive to the state of labor demand, Labor market conditions have been especially and a larger number of job opportunities may favorable for skilled and experienced workers have encouraged many teenagers to seek em­ (chart 5). For example, unemployment rates for ployment. Teenage employment leveled off skilled blue-collar workers and adult men 25 years and older declined 1/2 to 1 percentage point during the first half of 1978. Since then, 4. Growth in labor force jobless rates for both white-collar and bluecollar workers as well as for adults 25 to 54 years old have been close to the levels of 1972 when the overall unemployment rate was 5.6 percent. Nonetheless, unemployment rates for most experienced worker groups— among which labor shortages generally appear first— are about 1/2 to IV2 percentage points above those that prevailed in previous periods of tight labor markets such as 1965, 1969, and 1973. Labor turnover rates for the manufacturing Data refer to the civilian labor force, from the Department of Labor. Change for 1979 is from 1978 Q4 to May 1979 sector also indicate the extent of labor market expressed at an annual rate. tightness. During the early phases of an eco­ nom ic upturn, em ployers rehire laid-off early in 1979, however, and subsequently labor workers, and jobseekers are attracted to the force participation among teenagers began to labor force by improved job prospects. As the drop. By May the number of 16- to 19-year expansion continues, however, the supply of olds in the labor force had declined nearly experienced workers is drawn down; conse­ 200,000 from the level in December 1978. quently, employers often step up recruiting ef­ In the first 3V2 years of the current expansion, forts in an attempt to bid workers away from the growth of labor demand exceeded the sub­ other jobs, resulting in an acceleration of wage stantial rate of increase in the labor force, and increases. The new-hire rate rises as firms take 5. Unemployment rates, selected years Percent Skilled blue-collar is craft and kindred workers; professional through May, seasonally adjusted, from the Department of is professional and technical workers. Data for 1972 and 1975 Labor, are annual averages; the 1979 bars are average rates for January Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

452 Federal Reserve Bulletin □ June 1979 on more workers or replace those who have Selected unemployment rates gone elsewhere. At the same time, quit rates Percent except for ratios also tend to rise, reflecting to a certain extent White Teen­ Nonwhite Relative the increased willingness of workers to seek new males, agers, adults, unemployment ratio Year 25 years 16 to 19 20 years Teen­ Nonwhite jobs as labor demand strengthens and job op­ and over years and over agers adults portunities widen. During the five quarters end­ (1) (2) (3) (4) (5) ing in M arch, both the new-hire rate and the 1965 ... 2.5 14.8 6.6 5.9 2.6 1972 ... 2.9 16.2 7:7 5.6 2.7 quit rate in manufacturing moved up a little 1978 ... 3.0 16.3 9.6 5.4 3.2 more than 1/4 of a percentage point, with the Column 4 equals column 2 divided by column 1; column new-hire rate reaching 3Vt> percent in the first 5 equals column 3 divided by column 1. Rates are based on part of 1979 and the quit rate climbing to 2x/3 Department of Labor data. percent. In contrast, over the four quarters of 1972 turnover rates rose more quickly and in the table. In 1978 the teenage unemployment reached levels at year-end that were appreciably rate was five times that of white males 25 years above those observed in early 1979. Thus, while and over; for adult non whites the ratio was more labor markets for experienced workers are rela­ than three to one. These ratios are not markedly tively tight, recent measures of labor turnover different from those in previous periods of rela­ do not suggest the pervasive scarcity that existed tively tight labor markets such as 1965 and in 1973. 1972. This similarity suggests that the structural Despite the favorable labor market conditions component of unemployment— the mismatching for experienced workers, the overall jobless rate of workers’ skills and experience with job re­ continued to be high by historical standards, with quirements— has not been reduced significantly unemployment especially adverse among teen­ over the past decade and a half. age, non white, and unskilled workers. Even though teenage employment rose substantially from late 1977 to early 1979, the jobless rate P r o d u c t iv it y a n d L a b o r C o sts for teenage workers did not show much varia­ tion and in May 1979 stood at 16.8 percent. One of the most striking economic develop­ For non white teenagers, the May unemployment ments of the past dozen years has been the weak rate was an extremely high 37 percent; in fact, performance of productivity compared with the unemployment for this group has shown little 1950s and 1960s. Since 1967, output per hour improvement since the beginning of the cyclical in the nonfarm sector advanced at an annual rate upturn. As experienced workers have been of 1.2 percent, less than half the pace recorded drawn into the work force from the ranks of in the preceding two decades. Following the the unemployed, young workers have accounted extraordinarily large drop in productivity during for a greater share of total unemployment; more the last recession, output per hour rebounded than 25 percent of all unemployed workers now in the first two years of the recovery to a 3.6 are teenagers, even though they account for less percent annual rate, about the same as in pre­ than 10 percent of the labor force. vious cyclical recoveries. Hopes of a sustained Among non white workers, little progress was improvement in productivity have been dashed, made in reducing joblessness during the first however, by the lackluster gains posted since three years after the cyclical trough. Employ­ early 1977. ment gains in the past year and a half did The reasons for the long-run slowdown in contribute to a decline of 1 xh percentage points productivity growth are not entirely clear. A in the unemployment rate for this group, but large part of the sluggishness in productivity at 11.6 percent in May it still was more than apparently has occurred outside the manufac­ twice the rate for white workers. turing sector and may reflect, in part, difficulties Throughout the postwar era, sustained peri­ in measuring real output. In service-producing ods of employment growth have not been suffi­ industries particularly, price indexes may not cient to improve the relative labor market situa­ adequately reflect improvements in quality. As tion of young workers and non whites, as shown a result, output in those industries may be over­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Labor Market Developments 453 deflated in the national income accounts, 7. Output per hour, nonfarm business sector thereby reducing measured real output and pro­ ductivity. Nevertheless, other developments clearly have contributed to the lower produc­ tivity trend. One important factor appears to have been the change in the composition of the work force toward a greater proportion of young and inex­ perienced workers. Relatively weak investment in new plant and equipment also may have played a role. Growth of the nation’s stock of private capital relative to the size of the labor force has slowed markedly from the 2 V2 percent Based on seasonally adjusted data from the Department of rate in the 1950s and 1960s (chart 6). The Labor. slowdown in capital formation may reflect the effects of persistent inflation. Profitability of Even with these adverse long-term develop­ investment has not improved substantially be­ ments, the performance of productivity in 1978 cause of swollen replacement costs for capital was dismal for a period of strong output gains. assets. Perhaps more important, increased vari­ Although growth of real output in the private ability of price changes associated with high nonfarm sector decelerated from 6 percent dur­ rates of inflation may have heightened uncer­ ing 1977 to 5lA percent over 1978, employment tainty about the long-term profitability of in­ continued to grow at almost the same rate. vestment commitments. In addition, an increas­ Consequently, growth in output per hour slowed ing proportion of capital spending has been to 0.7 percent. The weakening of productivity allocated to government-required investments growth apparently was not the result of the for pollution abatement and improved health and shortages of skilled labor and widespread pro­ safety conditions in the workplace, the benefits duction bottlenecks that often curb productivity of which are not included in measured output. gains in the later stage of an expansion. Labor markets for skilled workers did tighten in 1978, but as we have seen, there was no evidence of 6. Capital-labor ratio and output per hour widespread worker shortages. M oreover, ca­ pacity utilization rates moved up rapidly during 1978 but at year-end were still below their 1973 peak levels. In contrast with the poor overall performance of productivity last year, the manufacturing sec­ tor experienced a rather impressive gain (chart 7). Indeed, factory output per hour accelerated to a 33A percent rate of increase, as a sharp Ratio scale, index, 1967=100 advance in manufacturing production substan­ tially exceeded the growth in the number of factory jobs and the lengthening of the work­ week. A speedup in productivity growth during the mature phase of an expansion is unusual and suggests that manufacturers have been making an effort to keep employment levels in careful balance with production needs. Among sectors Capital-labor ratio is calculated as the private nonresidential other than the manufacturing sector, output per capital stock (annual data) from the Department of Commerce, divided by civilian labor force (for the fourth quarter of the hour, which has been on a considerably slower year indicated) seasonally adjusted, from the Department of growth trend than factory productivity through­ Labor. Output per hour is seasonally adjusted, from the Department of Labor. out the decade, apparently fell on average. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

454 Federal Reserve Bulletin □ June 1979 The meager overall productivity gains in re­ consequently, productivity. Thus, higher infla­ cent years, combined with large increases in tion rates result in larger wage adjustments— compensation, have resulted in substantial up­ although with a substantial delay— often ward pressures on costs and prices. Unit labor through formal or informal cost-of-living ar­ costs— an important determinant of price pres­ rangements as well as catchup increases when sures— rose 5.8 percent in the nonfarm business contracts are renegotiated. sector over the four quarters of 1976 and 6.3 The effects of larger price increases can be percent during 1977. The cost picture deterio­ seen most clearly in the manufacturing sector, rated significantly last year when productivity in which strong unions and long-term attach­ growth slowed and compensation increases ac­ ments between workers and firms are most celerated. The rise in unit labor costs in the prevalent. The acceleration in prices early in nonfarm business sector during 1978 was 9 1978 did not find its way immediately into wage percent, the largest increase since 1974. In adjustments. In the first three quarters of the manufacturing, however, cost pressures were year, the hourly earnings index for manufac­ more moderate as improvement in productivity turing increased at an annual rate of 8lA percent, offset larger compensation increases. Thus fac­ about the same as in 1977. Late in 1978, how­ tory unit labor costs rose 5.8 percent over the ever, wage increases began to pick up; since four quarters of last year— about the same as the third quarter of last year, the index for in 1977, but well below the pace for the private factory workers has been rising at an 8% percent economy as a whole. annual rate, with higher cost-of-living payments contributing to the upward momentum. Outside the manufacturing sector, wages also W a g e s a n d C o m pe n sa tio n rose faster in 1978 than in 1977. A substantial In the past year and a half, wage increases have part of the acceleration, however, was the result continued to be influenced by high inflation of a legislated increase in the minimum wage rates, as well as by a relatively taut labor market from $2.30 to $2.65 per hour on January 1. The and boosts in minimum wage rates. The index effects of the minimum-wage hike were most of average hourly earnings for production and evident in the less unionized trade and service nonsupervisory workers in the private nonfarm sectors, which also have the largest concentra­ economy, which adjusts for interindustry shifts tions of low-wage workers. After increasing 7.3 in employment and changes in manufacturing percent in 1977, the average hourly earnings overtime, has increased at an 8.4 percent rate index for trade and services surged upward at since late 1977, up from the 7.5 percent rise an annual rate of 11.1 percent in the first quarter recorded over the preceding four quarters. of 1978. During the remainder of the year, wage To a large degree this rapid rate of wage increases in the trade and service sectors re­ increase illustrates the considerable inertia that sumed their more moderate 1977 pace. In Jan­ exists in the wage-determination process. For uary 1979, average wage rates in low-wage a large portion of the job market, wages are industries again rose sharply as the minimum set under lengthy collective bargaining agree­ wage was boosted to $2.90 per hour, but the ments or reflect long-term attachments between impact on overall wage changes was not so great firms and workers. In such situations, wage as in 1978. Increases in the trade sector, for adjustments are likely to be influenced strongly example, were at a 10.5 percent annual rate in by bargaining power and equity consid­ the first quarter of this year compared with 12.3 erations— which typically involve maintaining percent early in 1978. wages relative to inflation— rather than by shift­ Fringe benefits have continued to rise faster ing conditions in the labor market. Supporting than wages over the past year and a half, and workers’ desires to sustain real incomes are legislated increases in payroll taxes for social employers’ concerns for declining morale and, insurance have added further to the rise in total Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Recent Labor Market Developments 455 8. Labor costs, nonfarm business sector living escalator clause. Other key contracts ex­ Percentage change, Q4 to Q4 pire this year in the electrical equipment, auto­ mobile, and farm machinery industries. To brake the momentum of wage and price 15 ------------Unit labor costs increases, the President initiated an anti-infla­ [—Compensation per hour hi l.nn,. _ 10 tion program on October 24, 1978, encompass­ ing voluntary wage and price standards, regula­ 5 tory reform, and federal budgetary restraint. Under the voluntary pay standard, annual in­ creases in private compensation (wages plus 1976___________1977___________1978 79 private fringe benefits) should not exceed 7 Data for 1979 are annual rates of change from 1978 Q4 to 1979 Ql, seasonally adjusted, from the Department of Labor. percent. In multiyear contracts the standard for first-year increases in wages and fringe benefits is a maximum of 8 percent, but an average compensation. Increases in hourly compensa­ annual increase of 7 percent over the contract tion accelerated sharply, from 7.6 percent in life is needed for compliance. W orkers who earn 1977 to 9.8 percent at an annual rate over the less than $4.00 per hour or who had signed past five quarters (chart 8). As much as half contracts before October 24 are exempt. The of the acceleration may be attributable to general price standard directs firms to hold in­ changes in social security taxes and the mini- creases to 1/2 percentage point below their mum-wage hikes. Further government-man­ average annual rise during 1976-77. Firms un­ dated increases in payroll taxes and minimum able to meet the general price standard because wage rates are scheduled for 1980 and 1981. of unavoidable cost increases must demonstrate, Due to the relatively light collective bargain­ as an alternative, that their before-tax profit ing calendar in 1978, the overall impact of margins do not exceed those in the best two negotiated agreements on wage changes was of the last three years and that their total profit smaller than in the previous year. Only about does not exceed the previous year’s level by 2.6 million workers negotiated major settle­ more than percent plus the increase in sales ments, whereas in 1977 more than 3.8 million volume. workers reached agreements. The majority of Compliance with the voluntary wage and those bargaining in 1978 were in the con­ price standards is likely to come under increas­ struction, railroad, and bituminuous coal-min- ing pressure in the coming months. Consumer ing industries. Deferred wage increases under prices so far this year have accelerated to a 13 prior settlements and cost-of-living adjustments percent rate of rise, up from 9 percent in 1978. accounted for a large portion of the changes in Much of the acceleration has come from higher union wage rates in 1978. Escalator clauses costs for food, energy, and homeowner ship, continued to cover nearly 60 percent of workers which generally are not covered by the program. in major bargaining units. This proportion has Nevertheless, the surge in prices— even if it remained roughly the same since the runup in proves to be temporary— has sharply depressed prices during 1973-74 led to a sharp increase real earnings. The decline in workers’ purchas­ in the use of escalator clauses. ing power is likely to result in wage demands W ith prices continuing to rise rapidly thus far beyond the guidelines, and the subsequent rise in 1979, demands for substantial catchup in­ in unit labor costs could spur another round of creases to recoup losses in purchasing power price hikes. W ith economic activity beginning appear likely in the upcoming collective bar­ to slow, however, demand pressures on prices gaining negotiations. The national master should ease. In such an environment, the freight agreement negotiated in April provided guidelines program might prevent food and fuel for a base-wage increase in the first year of 8 V2 prices from generating another acceleration in percent plus an additional rise under a cost-of- wage and price increases. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

456 Treasury and Federal Reserve Foreign Exchange Operations: Interim Report This interim report, covering the period Febru­ early 1979, such pressure failed to materialize. ary through April 1979, is the thirteenth of a On occasions when the dollar came on offer in series providing information on Treasury and January and February, the authorities quickly System foreign exchange operations to supple­ met the pressures, helping to restore a sense of ment the regular series of semiannual' reports two-way risk to the market. Moreover, as part that are usually issued each March and Sep­ of the broad effort of U.S. authorities to deal tember. It was prepared by Alan R. Holmes, with the inflation and dollar problems, the Fed- Manager, System Open Market Account, and Executive Vice President in charge of the Foreign Function of the Federal Reserve Bank 1. Foreign exchange operations: of New York, and Scott E. Pardee, Deputy Summary, January 31-April 30, 1979 Manager for Foreign Operations of the System Millions of dollars equivalent Open Market Account and Vice President in Type of transaction Transactions with the Foreign Function of the Federal Reserve German Federal Bank Bank of New York. Reciprocal currency arrangements 1 Commitments outstanding, January 31, 1979.............................. 4,168.2 During the February-April period under review, Drawings or repayments (-), Feb. 1-Apr. 30, 1979 ..................... 145.5 the dollar came into increasingly heavy demand Commitments outstanding, 1 —4,355.22 against most major foreign currencies. This de­ April 30, 1979 .................................. 0 mand largely took the form of the unwinding U.S. Treasury swap arrangement1 Commitments outstanding, of previously adverse leads and lags, the cover­ January 31, 1979.............................. 613.0 Drawings or repayments (-), ing of speculative positions, and the reversal of Feb. 1-Apr. 30, 1979..................... -613.33 portfolio shifts out of the dollar, which had built Commitments outstanding, April 30, 1979 .................................. 0 up last year. Transactions with At first, the reflux of funds mainly reflected Swiss National Bank growing confidence in the measures taken by Reciprocal currency arrangements 1 U.S. and foreign authorities in late 1978 to Commitments outstanding, January 31, 1979.............................. 446.7 correct what had become an excessive decline Drawings or repayments (-), Feb. 1-Apr. 30, 1979..................... 40.4 in the dollar. The measures had included a sharp Commitments outstanding, { -487.1 tightening of Federal Reserve monetary policy, April 30, 1979 .................................. 0 coordinated intervention in the exchange market Special swap arrangement4 Commitments outstanding, by U.S., German, Swiss, and Japanese authori­ January 31, 1979.............................. 139.3 ties, and provision for up to $30 billion of Repayments, Feb. 1-Apr. 30, 1979 .. -139.3 Commitments outstanding, foreign currency resources to finance U.S. par­ April 30, 1979 .................................. 0 ticipation in that intervention. The authorities 1. Data are on a transaction-date basis. had intervened in substantial amounts to blunt 2. Repayments include revaluation adjustments from swap selling pressure on the dollar through the year- renewals, which amounted to $41.5 million for drawings on the German Federal Bank renewed during the period. end. 3. Repayments include revaluation adjustments from swap Although many market participants expected renewals, which amounted to $0.3 million for drawings on the German Federal Bank during the period. renewed downward pressure on the dollar in 4. Data are on a value-date basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

457 eral Reserve kept interest rates firm, even as acceleration in U.S. exports and a slowing in the growth of the monetary aggregates remained import growth led to a further narrowing of the sluggish in February and March. U.S. trade and current-account deficits and bol­ Once market participants no longer expected stered expectations that further progress toward dollar rates to decline, traders began to respond reducing those deficits was likely over the rest to the relatively high interest rates in the United of the year. States compared with rates in many other in­ In view of concerns over the price outlook dustrial countries. Substantial amounts of funds for the United States, indications that the: U.S. began to move out of Germany, Switzerland, economy was cooling down somewhat were and Japan. The central banks of those countries taken positively by the market, as was the took the opportunity to mop up liquidity by further firming of U.S. interest rates by the purchasing their own currencies against dollars Federal Reserve when the monetary aggregates sold out of reserves, in effect unwinding part began to grow more sharply in April. By the of their intervention of last year. The U.S. end of the month, the dollar was very strongly authorities also purchased German marks, Swiss bid in the exchange market and the authorities francs, and Japanese yen to repay borrowings, of the United States, Germany, Switzerland, which had arisen out of previous operations, and and Japan intervened vigorously to contain the to restore depleted balances. demand pressures. On balance, for the three- The flow into dollars slowed as market parti­ month period, the dollar advanced about 1 per­ cipants reacted to the political upheavals in Iran, cent against the German mark and Swiss franc, the associated shortfall in world oil production, and 10 percent against the Japanese yen. the sharp rise in the international prices of oil During the period, U.S. authorities inter­ and other key commodities, and evidence of vened as a seller of foreign currencies only in generally more rapid inflation in the United February. That intervention amounted to some States. Adverse news for the United States oc­ $656 million equivalent of German marks, casionally sparked some selling of dollars, but Swiss francs, and Japanese yen. The bulk of the pressures did not cumulate. Moreover, many this intervention—$535 million equiva­ of these developments were seen as serious for lent—was in marks, of which $323.5 million other countries as well, particularly as inflation equivalent was by the Treasury out of balances rates began to rise sharply abroad. Indeed, as and $211.5 million equivalent was by the Fed­ oil supplies became short, leading to a scramble eral Reserve. Operations by the System in marks for spot crude around the world and prompting were financed partly out of balances and partly members of the Organization of Petroleum Ex­ by drawings of $145.5 million equivalent under porting Countries to jack up their prices, ex­ the swap arrangement with the German Federal change market sentiment turned bearish for cur­ Bank. rencies of countries that were most heavily The Federal Reserve sold $45.8 million dependent on oil imports for their energy needs. equivalent of Swiss francs financed by drawings These included Japan, in particular, and several on the swap line with the Swiss National Bank European countries. The United States was and from balances. For its part the Treasury sold viewed as better able to cope with oil-supply $24.8 million equivalent of francs from bal­ and price problems, and the dollar was one of ances. In addition, the Federal Reserve and the the currencies, along with the pound sterling and Treasury, respectively, sold $33.8 million the Canadian dollar, that came into demand as equivalent and $16.6 million equivalent of Jap­ concerns heightened in March and April over anese yen out of balances. In early March the the world energy outlook in general. Treasury placed another $1,351.5 million By that time, also, the market was responding equivalent of mark-denominated notes, bringing to clear evidence of an improvement in current- the total amount of marks raised in the German account positions. In particular, Japan’s cur- capital market to $2,946.7 million equivalent rent-account surplus virtually disappeared in the since December 1978. As with earlier such early months of the year. For our part, a rapid issues, the Treasury then warehoused the pro- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

458 Federal Reserve Bulletin □ June 1979 2. U.S. Treasury securities, foreign currency Bank, $487.1 million equivalent of Swiss franc denominated, January 31-April 30, 19791 debt to the Swiss National Bank, and $139.3 Millions of dollars equivalent; issues or redemptions (-) million equivalent of pre-1971 swap debt to the Commit­ Feb. 1 Commit­ Swiss central bank. For its part, the Exchange Issues ments, through ments, Jan. 31 Apr. 30 Apr. 30 Stabilization Fund (ESF) repaid $613.3 million equivalent of marks to the German Federal Bank Government series Swiss National Bank 531.2 -531.2 0 and liquidated $531.2 million equivalent of Public series pre-1971 Swiss franc-denominated obligations. Switzerland .............. 1,203.0 0 1,203.0 The remaining foreign currency acquisitions Germany ................... 1,595.2 1,351.5 2,946.7 were added to System and ESF balances, which Total ..................... 3,329.3 ( -531.2 ( 4,149.7 i 1,351.5 ! rose by $1,088 million equivalent to $6,286 million equivalent as of April 30. 1. Because of rounding, figures may not add to totals. Data During the period under review, the Federal are on a value-date basis. Reserve and the U.S. Treasury realized net profits from current operations. Table 3 presents ceeds of this new borrowing with the Federal these profit figures as well as figures on unrea­ Reserve. lized profits and losses. The table presents the With the dollar strengthening in the ex­ results of ESF operations separately from those changes, the U.S. authorities bought $2,218.7 of the Treasury general account, which issued million equivalent of foreign currencies in the the foreign currency-denominated securities. New York market. In addition, the U.S. au­ The realized profits on current operations reflect thorities purchased $4,972.8 million equivalent liquidation of current swap debts and sales of of currencies from correspondents, mainly from currencies out of the balances held by the Sys­ the German Federal Bank and the Swiss Na­ tem, the ESF, and the Treasury general account. tional Bank in connection with their own sales Unrealized profits and losses reflect revaluation of dollars. These acquisitions were used by the of System and Treasury foreign currency assets Federal Reserve and the Treasury to repay all and liabilities as of April 30. Losses on the final outstanding swap debt to foreign central banks. liquidation of pre-August 1971 Swiss franc The Federal Reserve repaid $4,355.2 million debts, undertaken to protect the U.S. gold stock, equivalent of mark debt to the German Federal are shown in table 3. □ 3. Net profits and losses (-) on U.S. Treasury and Federal Reserve foreign exchange operations1 Millions of dollars On liquidations of foreign currency Related to current operations debts outstanding as of Aug. 15, 1971 Period U.S. Treasury Federal Exchange Reserve Exchange General Federal Stabilization Stabilization account Reserve Fund Fund Feb. 1 through Apr. 30, 1979 ........... 21.6 4.6 8.5 -123.5 -471.2 Valuation profits and losses on out­ standing assets and liabilities as of Apr. 30, 1979 .................................... -14.4 -285.3 -.3 1. Data are on a value-date basis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

459 Industrial Production Released for publication June 15 May, to a level 0.3 percent higher than that in March. Output of durable goods materials rose Industrial production increased an estimated 1.3 sharply, reflecting increases in basic metals, percent in May, after a largely strike-related consumer durable goods parts, and equipment decline of 1.4 percent now indicated for April. parts. Output of nondurable goods materials Increases in production during the month were advanced again in May, reflecting continued widespread among major products and materi­ strength in chemical and paper materials and als. However, output of both consumer goods some recovery from strike-related declines in and construction supplies remained below their other components. Production of energy mate­ March levels. Overall, the May index, at 152.1 rials edged down slightly further in May. percent of the 1967 average, was 5.7 percent higher than that of a year earlier. Output of consumer goods rose 1.8 percent Seasonally adjusted, ratio scale, 1967=100 in May, after a 2.5 percent decline in April. Auto assemblies increased 19 percent to an annual rate of 9.4 million units—the same an­ nual rate as in March. But, with auto sales down from earlier rates, assemblies are scheduled to be lower in June. The production of home goods, such as appliances, carpeting, and furni­ ture, increased sharply in May but remained below the March level. Output of consumer nondurable goods was about unchanged, after a small decline in April. Business equipment was one of the few areas that has continued to show strength. Production in this sector ad­ Annual rate, millions of units vanced 1.3 percent in May, after a strike-related 0.9 percent drop in April; the May increase reflected large gains in transit equipment, par­ ticularly business vehicles, and sustained strength in commercial equipment. Federal Reserve indexes, seasonally adjusted. Latest figures: Production of materials also rebounded in May. Auto sales and stocks include imports. 1967 = 100 Percentage change from preceding month to— Percentage change Industrial production 1979 1978 1979 5/78 to Apr.p Maye Dec. Jan. Feb. Mar. Apr. May 5/79 Total .................................... 150.2 152.1 .9 .0 .2 .7 -1.4 1.3 5.7 Products, total ....................... 148.5 150.5 .9 .2 .5 .5 -1.7 1.3 5.2 Final products .................... 145.1 147.4 .8 .2 .4 .8 -1.8 1.6 4.9 Consumer goods ........... 148.6 151.3 .6 .0 .3 .9 -2.5 1.8 2.9 Durable ..................... 151.7 161.0 .1 -.6 .2 1.4 -7.2 6.1 .5 Nondurable ................ 147.4 147.5 1.0 .2 .2 .7 -.3 .1 4.1 Business equipment ... 170.5 172.7 .9 .6 .5 .9 -.9 1.3 7.8 Intermediate products __ 161.8 162.7 1.6 .5 .7 -.6 -.6 .6 6.6 Construction supplies 158.3 159.2 1.1 .2 .1 -.7 -1.2 .6 5.9 Materials .................................. 152.9 154.6 .7 -.5 -.1 .9 -.8 1.1 6.5 Preliminary. eEstimated. Note. Indexes are seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

460 Statements to Congress Statement by J. Charles Partee, Member, Board nities. In addition, since the prohibition against of Governors of the Federal Reserve System, explicit interest payments on transactions bal­ before the Subcommittee on Financial Institu­ ances has led banks to compete on the basis tions Supervision, Regulation and Insurance of of checking and other services at low or no cost, the Committee on Banking, Finance and Urban deposit customers are encouraged to make a Affairs, U.S. House of Representatives, May greater use of such services than would be the 15, 1979. case if they were explicitly priced. The payment of interest on transactions ac­ I am pleased to appear today on behalf of the counts would encourage financial institutions to Federal Reserve Board to discuss H.R. 3864, compete for deposits directly and to charge for the Consumer Checking Account Equity Act of their services on the basis of costs incurred. 1979. I understand that the bill was introduced Most members of the public would likely be in response to the recent ruling by the U.S. better off in an environment in which all depos­ Court of Appeals for the District of Columbia itary institutions offered explicit interest on that automatic transfers from savings accounts, transactions balances—consumers would have a credit union share drafts, and savings and loan more rational basis for choosing among finan­ association remote service units will not be cial services; they would probably receive authorized by law after January 1, 1980. While higher effective interest returns on their funds the legal demise of these accounts is not yet due both to increased competition for transac­ certain, since the affected regulatory agencies tions balances among financial institutions and are planning to appeal the decision, the Board to increased efficiency in the financial sector; believes that now is an opportune time for the and deposit customers would have less need to Congress to reconsider the issue to see whether spend time and money attempting to minimize agreement can be reached on a more rational their holdings of nonearning transactions bal­ system that would permit consumers to obtain ances. interest on their transactions balances. The Board, however, would urge a more The Federal Reserve Board for some time has gradual and, we believe, less disruptive ap­ supported the principle of interest payments on proach than that contained in H.R. 3864. Given transactions balances at all depositary institu­ our lack of knowledge about the transitional tions. Our support of this principle is based on problems, it seems important that the removal considerations of both economic equity and ef­ of the prohibition should be accomplished grad­ ficiency. Corporate depositors as well as some ually, by extending an activity with which ex­ informed smaller depositors already earn some­ perience has already been gained. I am referring thing approaching market rates of return on their to nationwide negotiable order of withdrawal transactions balances through the implicit re­ (NOW) accounts, which could be implemented ceipt of interest in the form of banking services by legislation similar to the NOW proposal provided at little or no charge. Alternatively, passed by the Senate Banking Committee in sophisticated depositors are able to minimize 1977 as part of S. 2055. Specifically, the Board their holdings of non-interest-bearing deposits favors nationwide NOW accounts, authorized by placing their funds in overnight investments for all depositary institutions but limited initially that can be readily mobilized for transactions to individuals and nonprofit institutions. Such purposes. It is only fair that smaller, less so­ accounts should be subject to rate ceilings on phisticated depositors have similar opportu­ deposits, equal among the institutions, during Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 461 a transitional period. And the Board strongly usual concentrations of consumer accounts or believes that all nationwide NOW accounts must that may already be experiencing an earnings be subject to reserve requirements, both because squeeze. Thrift institutions could be expected of the importance of the reserve requirement to compete vigorously with the banks for inter­ mechanism for the efficient conduct of monetary est-bearing transactions accounts and such policy and in the interests of institutional equity. competition could be quite costly to them, since A major virtue of this alternative approach for most this would constitute a new service is that it would moderate the transitional impact line. The earnings of thrift institutions already on commercial bank and thrift institution earn­ are being squeezed by the currently high cost ings that is likely to result froni competition for of their liabilities, especially money market market shares when a new interest-bearing certificates, and by the limited flexibility of the transactions account is first introduced. That the yields they can earn on their long-term portfo­ transitional effect on earnings can be significant lios of fixed-rate mortgages. is evidenced by our experience with NOW ac­ Thus, the Board is quite concerned about the counts. In the early years of NOWs in New transitional impact of interest on transactions England, the combination of ceiling interest accounts, and we believe there are several rea­ rates on deposit balances and no or low service sons why our proposal would have a much charges for NOW drafts was much more costly smaller short-run impact on the earnings of to depositary institutions than could be justified financial intermediaries than would the program in the long run. Over time, the New England contained in H.R. 3864. First, the approach we institutions increasingly came to link explicit suggest would contain specific and clear author­ interest on transactions accounts with explicit ity for the coordinated imposition of a ceiling charges for checking and other services ren­ rate on transactions balances, to be followed by dered. Minimum-balance requirements were an orderly phasing out of that ceiling over a developed, and service charges began to ap­ period of time. Second, nationwide NOW ac­ proximate true costs. Experience gained in the counts for individuals and nonprofit organi­ two original NOW states was used to advantage zations would be a logical extension of existing in those states that later received NOW account programs in New England and New York. De­ authority. Thus, we would expect that institu­ positary institutions in other states could use the tions in the other 43 states, when given NOW experience of existing NOW institutions to authority, would also be able to build upon this avoid pitfalls in designing and implementing experience in designing their service packages. their own NOW packages. Third, limiting in­ As a result, an effective implementation date terest payments to individuals and nonprofit of January 1, 1980, probably would provide organizations would reduce the exposure of fi­ institutions with a sufficient planning horizon if nancial institutions to earnings drains while still the enabling legislation proceeds promptly. providing interest relief to those groups least Nevertheless, Board staff analysis suggests able to obtain direct returns on their transactions that, without a deposit rate ceiling coordinated balances by other means. Finally, the basic by the agencies, the actual cost of NOW account characteristics of a NOW account are consistent funds to the institutions might rise temporarily with the powers of all depositary institutions, by several percentage points above the rate since they can be regarded as a form of savings sustainable in the long run in those states gain­ account. They thus may be less costly to de­ ing NOW powers for the first time. Our staff velop for thrift institutions, which are familiar estimates that, in the absence of such regulation, with the structure and administration of savings pre-tax earnings of all commercial banks during accounts. Also, state authorities may find that the worst year of the transition period could be permitting thrift depositors to write drafts expected to be between 5 and 7 percent lower against savings deposits would be less difficult than otherwise. While such earnings reductions to implement than obtaining demand deposit would not pose problems for the vast majority powers for state-chartered thrift institutions. of commercial banks, they would be trouble­ Once the short-run impact of interest on some for individual institutions that have un­ transactions accounts has been absorbed by the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

462 Federal Reserve Bulletin □ June 1979 financial system, the categories of depositors Apart from the monetary policy implications eligible for NOWs could be broadened and the of the treatment of reserve requirements under ceiling rate phased out. However, the longer-run H.R. 3864, the bill could lead to a worsening effects of major institutional changes are always of the competitive imbalances that already exist uncertain, and the Board believes that such among our various financial institutions and liberalization should be considered only after could lead to operational difficulties as well. For experience is gained with a more cautious pro­ example, if the agencies were to set reserve gram—a program that has substantial benefits ratios for savings and loan associations and for consumers, encourages efficiency and com­ credit unions lower than those imposed on petition in the financial sector, maintains the transactions accounts at member commercial safety and soundness of the financial system, banks, member banks would be placed at a allows for revision over time, and protects the disadvantage to thrift institutions—as they are Federal Reserve’s ability to regulate the money now to nonmember banks—in competing for supply. checking-type funds. Also, unless reserve bal­ With the Board’s general preference for ances of thrift institutions are credited to their NOWs as background, I would like to discuss accounts at the Federal Reserve Banks, such briefly some specific concerns the Board has funds could not be used as clearing balances with H.R. 3864. for purposes of settling checks passed through First, the legislation proposes that the level the Federal Reserve payments system. The of reserve ratios for transactions accounts at clearing mechanism is a vital part of our mone­ covered savings and loan associations be set by tary system and should be accessible to all kinds the Federal Home Loan Bank Board and that of transactions accounts on equal terms and reserve ratios for covered credit unions be set conditions. by the National Credit Union Board. Although In addition, the reserve requirement provi­ these agencies would be required to consult with sions contained in H.R. 3864 seem inequitable the Federal Reserve Board in setting reserve and deficient with respect to the classes of requirements, it is clear that the decision would depositary institutions that would be subject to rest solely with those agencies. However, the required reserves and the types of deposit ac­ setting of reserve ratios on transactions bal­ counts that would be subject to reserves. Ac­ ances—that is, the setting of reserve ratios on cording to our reading of the bill, four classes money—is an integral tool of monetary policy. of institutions—insured nonmember commercial Such power ought properly to be the province banks, insured mutual savings banks, stateof the nation’s central bank. chartered credit unions, and state-chartered sav­ Second, the proposed legislation would re­ ings and loan associations that are not members quire savings and loan members of the Federal of the Federal Home Loan Bank System— Home Loan Bank System to hold reserves in would not be subject to any reserve require­ the form of currency and coin, or in deposits ments under the bill. Further, it would appear at their respective Home Loan Bank; the form that financial institutions (except for Federal and place of reserves held by federally chartered Reserve members) would be required to main­ credit unions would be specified by the National tain reserves only against demand deposits but Credit Union Board. Again, to exercise control not against NOWs. Obviously, if reserves were over transactions balances, the central bank not required to be maintained against NOW must have control over the total amount of accounts, thrift institutions would avoid offering reserves supporting these balances. The reserve interest-bearing demand deposit accounts but accounting could conceivably be handled by— instead would gain a competitive advantage over and the necessary reserve deposits passed member banks by offering reserve-free NOWs. through from—the primary regulatory agencies. The ambiguities and exclusions in the treat­ But unless required reserves are held only in ment of reserves under H.R. 3864 not only vault cash or in balances at Federal Reserve would complicate the conduct of monetary pol­ Banks, the Federal Reserve’s ability to control icy and lead to competitive inequities but also reserve availability is compromised. might encourage unnecessary and disruptive Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 463 switching of charters by savings and loan asso­ If nonmembers were given access to System ciations and credit unions in order to avoid services, they would be subject to a substantially reserve requirements. Indeed, as you know, the lower reserve requirement burden than mem­ nonuniversality of reserve requirements for bers—because nontransactions accounts would banks has created substantial competitive prob­ not be reserved—but would have access to lems within the commercial banking industry; valuable rights and privileges of membership. H.R. 3864 would likely extend these difficulties As a result, withdrawals of member banks to to thrift institutions. “nonmember service” status would be vastly I would like to turn now to a final point that encouraged. I hope will demonstrate the complexity of this Thus, while the Board continues to endorse area as well as underscore the Board’s strong the general principle of interest on transactions belief that interest on transactions balances balances, we could not support such a program should be coupled with a solution to the mem­ unless steps are taken to halt member bank bership problem. As I noted earlier, the payment attrition and reverse the declining proportion of of interest on transactions accounts would exert deposits subject to reserve requirements admin­ downward pressure on bank earnings. This istered by the Federal Reserve. The provisions would make member banks even more aware of H.R. 3864, or even our preferred alternative of the costs of membership and, in all likeli­ of extending NOWs nationwide, would acceler­ hood, serve to accelerate the rate of membership ate withdrawals by Federal Reserve members attrition. Here, again, our experience with and would, therefore, undermine the ability of NOW accounts in New England is instruc­ the central bank to conduct monetary policy tive—the introduction of NOW accounts there effectively and to continue to backstop the li­ placed particular pressure on bank earnings, and quidity of our banking system. The concerns membership withdrawals in that region in­ of the Board now are even more pressing than creased sharply. in June of 1977 when former Chairman Burns But even if all institutions were required to stated before the Senate Banking Committee: hold equal reserves with the System against “We could not support nationwide extension of interest-bearing transactions balances, the NOW account authority if that extension were membership problem might still be exacerbated. not coupled with action to lighten the burden The question would arise as to whether, and of Federal Reserve membership. The risk to the to what extent, nonmembers holding reserves safety and soundness of our banking system of with the System should be allowed access to enacting the first part of the package without Federal Reserve services such as check clearing, the second would, in the Board’s judgment, be wire transfer, and use of the discount window. intolerably large.” □ Statement by J. Charles Partee, Member, Board perceived banking problems as they begin to of Governors of the Federal Reserve System, develop. before the Committee on Banking, Housing and At the outset, I believe it important to recog­ Urban Affairs, U.S. Senate, May 23, 1979. nize that commercial banks in our country function as the department stores of finance. I appreciate the opportunity to appear before this They serve both business and consumers, pro­ committee today to discuss the condition of the vide both short- and longer-term credit accom­ U.S. banking system. Before presenting the modation, and are involved as important fi­ Board’s testimony, I want to emphasize our nancing sources in virtually all areas and lines belief that this regular exchange of views is of economic activity. Because of this pervasive helpful to the federal regulators as well as to and continuous involvement, banks tend to re­ the Congress. The oversight hearings process flect the condition of the economy. When times should aid in focusing on—and dealing with— are good, the banking system appears to be in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

464 Federal Reserve Bulletin □ June 1979 good shape; when economic problems occur, there obviously is a heightened risk of more they are likely to show up in the condition of difficult times in some industries and regions. banks as well. And if a downturn of size should occur, the This linkage has been dramatically demon­ question is how well the banking system would strated over the past few years. During the weather it. Our view is that the system generally unusually severe recession of 1974-75, the is again in good shape to face adversity, al­ banking system experienced its greatest prob­ though financial problems could be exacerbated lems since the 1930s. Primarily as a result of in those relatively few banks that have not yet the downturn, classified assets of banks more recovered from their difficulties during the pre­ than tripled from year-end 1973 to year-end vious recession. We will be monitoring these 1975. Moreover, bank earnings, hurt by large institutions with special care in the period loan losses and loss reserve provisions, leveled ahead. off or declined after their sharp rise during the Meanwhile, the current rapid inflation is hav­ early 1970s. A significant number of banks ing a major impact, and one that is largely required remedial attention, and some—includ­ negative, on the condition of the banking sys­ ing a few large ones—had to be merged. Per­ tem. First, inflation creates conditions that may haps most serious, that earlier period witnessed adversely affect the quality of bank loan portfo­ the first significant erosion of public confidence lios. Inflation tends to generate ballooning credit in the banking system in almost four decades. demands, even while interest rates are rising. Since 1975, the economy has experienced a High interest rates and rising indebtedness, in long expansion, albeit at an uneven rate. Pre­ turn, expose borrowers to the risk of heavy dictably, the condition of the banking system debt-servicing burdens—especially if things has steadily improved. By year-end 1978, the don’t turn out as well as expected. The poten­ dollar volume of classified assets was down by tially harmful effect that spiraling interest rates more than 20 percent from the peak, and non­ can have on certain borrowers was vividly performing loans at large banks had been re­ demonstrated in the case of the real estate in­ duced by more than one-third, even though total vestment trusts (REITs) just a few years ago, bank assets had expanded sharply in the interim. when borrowing costs first rose sharply with Much of this improvement in asset quality re­ tight money conditions and then sales and rent­ flected a gradual workout of problems in the als failed to come through with the onset of real estate sector, the area in which banks expe­ recession. True, there were many other prob­ rienced by far their greatest difficulties during lems in the REIT industry—and in building the recession, although other types of lending generally—during that period. But an economic showed substantial improvement as well. Since slowdown necessarily brings with it slower sales 1975 also, bank earnings have experienced and reduced cash flows for many firms. strong growth. Over the last three years, profits A second way that inflation may adversely after taxes have risen more than 50 percent in affect the condition of the banking system is nominal terms, and the increase in 1978 alone by putting downward pressure on bank capital was the largest for any single year in the past ratios. Indeed, the moderate decline in the ratio several decades. One major factor contributing of equity capital to total assets for insured banks to this outstanding earnings performance has from 6.1 percent at year-end 1976 to 5.8 percent been the rapid growth in bank loans, which at year-end 1978 can be attributed mainly to reflected strong demands for credit both at home the effects of the rapid inflation experienced over and abroad. the last two years. This is because the inflation The economy has now reached the point at has been reflected in rapid growth of nominal which growth has slowed—necessarily, in view gross national product and hence in the needed of the accelerated inflation and limited potential financing associated with growth in real output for further gains in output—and many analysts and sales, even at a moderate pace. Bank credit, are predicting a recession in the period ahead. therefore, has been expanding rapidly, as banks Although the Board does not necessarily sub­ have performed their traditional role in accom­ scribe to this view of an inevitable recession, modating customer needs, and this expansion Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 465 has tended to outrun the internal growth of have an impact on the banking system, primarily capital from retention of earnings. by affecting the financial condition of bor­ At the same time, inflation has limited exter­ rowers. By far the most severe exogenous shock nal additions to bank capital by making equity to the economy in recent years was the quadru­ financing more expensive. By pushing up inter­ pling in oil prices by the cartel of the Organi­ est rates, inflation encourages holders of bank zation of Petroleum Exporting Countries in late stock to switch out of these stocks and into 1973. This action radically altered the cost higher-yielding debt instruments. The lack of structures of many businesses as well as the demand drives the price of bank stocks down, pattern of spending by consumers and others. thereby making equity financing more costly. The consequent downward pressure on profits In addition, inflation tends to make bank stocks in the affected industries increased the risk ex­ less attractive relative to many other stocks. The posure of banks lending to these companies. reason is that banks, unlike most other busi­ Today’s energy situation, though apparently not nesses, hold few real assets whose market or representing such a marked change as in 1973, replacement value can be expected to rise be­ will likely bring significant adjustments in some cause of the inflation. industries and markets also. Bank supervisors, The adverse effects of inflation on bank stock accordingly, will have to be alert to possible prices is clearly evident in the market. During consequences on the portfolios of affected the last several years, the stocks of most of the banks. nation’s major banking organizations consist­ Not all exogenous forces affecting the econ­ ently have sold at only five to eight times annual omy are this dramatic. Some evolve very slowly earnings. Moreover, most of these stocks are but still have an important cumulative impact trading at significant discounts from book value. on various parts of the economy and on the The current economic recovery and the attend­ banks serving it. One major example that comes ant inflation have also featured an unusually to mind is the migration in recent years of strong and sustained expansion in consumer business firms and population to the sunbelt. spending. As a result, and perhaps reflecting This migration is having major impacts on the also vigorous institutional promotion, consumer economies of the sunbelt states and has pro­ debt has risen very rapidly—15 percent per vided banks located in these areas with strong year, on average, over the past three years. growth trends and numerous business opportu­ Consumer debt-servicing burdens have risen nities. On the other hand, the migration has had apace, with monthly payments in relation to adverse effects in other areas of the country and disposable income reaching a postwar record has required banks in these areas to adjust their high late last year. This situation has raised operations to a slower pace of expansion. questions about the capacity of consumers to Sharply different rates of bank growth—a nec­ service this debt, particularly if there should be essary feature of our decentralized banking sys­ any marked slowing in income gains or sub­ tem—require close attention by supervisors stantially higher unemployment. The implica­ since they imply different strategies for such tions for the banking systems are of great im­ elements of banking condition as capital, liqui­ portance because consumer loans make up more dity, and lending policies. than 20 percent of bank loan portfolios. Another relatively new element in banking To date, the rise in consumer debt has not has been the strong trend toward international resulted in any appreciable rise in delinquency business. While the expansion in office facilities rates. However, we believe that the buildup of and in business abroad has brought many bene­ consumer debt could become a problem and fits to American banks, it has also exposed them should be closely monitored. Accordingly, we to certain risks—both economic and political. are in the process of reinforcing bank examina­ Probably the major risk relates to lending. In tion procedures to assure a careful review of addition to normal credit risks, lending abroad the quality of consumer lending and the controls involves so-called country risks. These include over this lending that banks are employing. the possibility that a foreign country may not Economic shocks and dislocations also can be able to generate enough foreign exchange to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

466 Federal Reserve Bulletin □ June 1979 service its debts, as well as the more remote the principles of diversification in all major chance that a change in government could result aspects of their operations, both at home and in the repudiation by the new regime of some abroad. In particular, they should strive to di­ or all of its foreign indebtedness. Historically, versify their loan and security portfolios, to American banks have had excellent results in avoid undue reliance on volatile sources of their foreign lending, with the ratios of losses funds, and to maintain adequate liquidity to to loans significantly below those sustained do­ meet all foreseeable contingencies. Diversifica­ mestically. However, this good record should tion will not prevent banks from taking losses, not obscure the relatively unpredictable eco­ but it should reduce the possibility of a bank nomic and political risks associated with some encountering such major difficulties that its via­ of this lending, particularly in the uncertain bility is threatened. environment that prevails. Since the hearings last year, the Federal Re­ I hope that these examples have helped to serve, in cooperation with the other federal demonstrate the close link that exists between banking agencies, has taken several actions de­ banks and the economy and to show that the signed to encourage diversification of risk and condition of the banking system is inevitably to assure prompt and effective supervisory re­ exposed to various unpredictable economic sponse to emerging banking problems. A new shocks and surprises. When the economy expe­ uniform examination system for assessing riences problems such as a recession, rapid country risk in international lending by U.S. inflation, or major dislocation, we can be quite banks was developed. This system is designed sure that many banks—the department stores of to identify and discourage undue concentration finance—will encounter some degree of adver­ of credit by banks in individual foreign coun­ sity also. tries. The agencies also introduced a new uni­ Given our inability to know in advance what form bank rating system that expands the num­ economic problems will emerge, how can bank ber of financial factors the agencies will consider supervisors help to ensure that banks will be in rating banks. This rating system should help able to overcome these difficulties and continue us identify more precisely those banks in need to serve effectively the banking needs of our of particularly close supervisory attention. country? One thing that we can do is to make Turning to the bank holding company area, sure that banks employ prudent lending stand­ there is substantial evidence that the condition ards and hold their commitments within rea­ of holding companies is continuing to improve. sonable bounds. We recognize that banks must This improvement in large part reflects the take risks in order to meet the legitimate bor­ healthier condition of bank subsidiaries, which rowing needs of their communities. But these constitute a very large part of most holding risks must not be excessive, they must not company organizations. But parent companies unduly tax the resources of the institution, and and their nonbank subsidiaries also are generally they must promise adequate compensation after in better condition than during the mid-1970s. allowance for risk. Holding company management appears to be Second, banks must keep their capital ratios exercising greater prudence in parent company sufficiently high to cushion losses and to main­ financing, and fewer parent companies are ex­ tain public confidence during adversity. It is periencing difficulties in meeting their debt evident that banks are now having difficulties service commitments. In the nonbank sector, maintaining their capital ratios due to inflation most holding companies appear to have turned and poor equity capital markets. However, the around the major problem areas, such as mort­ supervisors will expect banks to resist any slip­ gage banking, that emerged during the midpage through the current period of difficulty and 1970s. Here again, the economic expansion has to make every effort to improve these ratios played an important role. whenever possible, particularly when the envi­ Several actions have been taken during the ronment for equity financing turns more favor­ past year that should help improve bank holding able. company supervision. One major step was the Third, banks should be encouraged to employ introduction of a bank holding company rating Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 467 system. This system has standardized the eval­ other titles of the act. This implementation uation of the financial condition of holding process, which is now largely behind us, has companies and has helped to identify those required the issuance of regulations and policy companies with significant financial problems. statements on interlocking directorates, changes The Federal Reserve also is continuing to im­ in bank control, correspondent accounts, finan­ plement its recently expanded program for cial privacy, and electronic fund transfers. Dur­ inspecting bank holding companies. This pro­ ing the large-scale implementation effort, the gram involves the inspection on an annual basis supervisory agencies have worked closely to­ of all holding companies with consolidated total gether to assure uniformity in the resulting reg­ assets exceeding $300 million and incorporates ulations and supervisory procedures. It is too a standardized report form focusing attention on early to say, of course, what experience will the assets of nonbank subsidiaries, holding be in monitoring and enforcing these new re­ company debt, and the financial condition of the quirements. consolidated organization. One section of the act also created the Federal The passage last year by the Congress of the Financial Institutions Examination Council. The omnibus Financial Institutions Regulatory Act council, which is composed of principals from should prove helpful in our supervisory respon­ the five federal financial regulatory agencies, sibilities. As requested by the supervisory should help to increase even further the coopera­ agencies, this act provided for expanded cease- tion and coordination among the agencies that and-desist powers and civil penalties for viola­ have been achieved in recent years. The council tions of banking laws and regulations. The act is now a going business, and I can assure you also gave the Federal Reserve the authority to that the Federal Reserve will make every effort require the divestiture of a nonbank subsidiary to help the council carry out its mandate to of a holding company if such subsidiary consti­ accomplish greater uniformity and coordination tutes a serious risk to the safety of a holding in supervisory standards and procedures. This company bank. is certainly no time to permit potentially dam­ In recent months the supervisory agencies aging banking practices to slip between any have been actively implementing numerous cracks in the supervisory process. □ Statement by Nancy H. Teeters, Member, for actions to limit what the President deems Board of Governors of the Federal Reserve to be an inflationary expansion of credit. System, before the Committee on Banking, To implement controls under the President’s Housing and Urban Affairs, U.S. Senate, May authorization, the Board is given a broad range 24, 1979. of powers over credit transactions, which it may exercise at its discretion. Those powers en­ I am pleased to have the opportunity today to compass not only the regulation of the terms testify on behalf of the Federal Reserve Board of credit contracts, such as downpayments, ma­ on proposals to repeal or modify the Credit turities, and interest rates, but also the licensing Control Act of 1969. As you know, under the of borrowers or lenders and requirements for act the Board could be authorized to control and recordkeeping. In addition, the Board may set regulate extensions of credit if the President maximum loan-to-deposit or loan-to-asset ratios “determines that such action is necessary or for creditors or debtors. Assistance in imple­ appropriate for the purpose of controlling infla­ menting these sweeping regulations may be ob­ tion generated by the extension of credit in an tained from any appropriate state or federal excessive volume.” The President’s authori­ agency. zation may specify particular classes of credit Credit controls as an instrument of anti-infla­ that should be the target of Board regulations, tion policy have most appeal at times when or it may be a more general request to the Board fiscal and monetary policies cannot, for one Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

468 Federal Reserve Bulletin □ June 1979 reason or another, be employed flexibly. During that one set of controls will only give rise to World War II and for a while thereafter, mone­ another. tary policy was constrained by a pledge to One of the principal problems with attempting maintain a low interest rate on U.S. Treasury to control inflation by controlling credit is that securities. As a result, the Federal Reserve the increases in credit often observed during could not effectively control growth in the inflations may be a result, as well as a cause, monetary and credit aggregates since it had to of increases in prices. In many inflationary situ­ supply as much bank reserves as needed to ations credit will be growing simply to keep up maintain an unchanged level of interest rates. with the rising costs of items usually purchased Regulating nonrate terms of credit extensions with borrowed funds. In addition, rapid inflation seemed to be one of the few ways to discourage can occur, at least for a short period, without borrowing in such an environment. Thus, regu­ a marked pickup in credit usage. Since last lations limiting consumer credit were used on summer, for example, aggregate credit use by three occasions in this period—World War II, private, domestic nonfinancial borrowers is es­ 1948-49, and the Korean War—and regulations timated to have changed little on balance, affecting mortgage credit were used during the despite an acceleration of inflation. Korean War. Nor can credit-financed purchases by certain However, with monetary and fiscal policies sectors or in certain markets be easily pinpointed able to adapt to changing circumstances—as as significant stimulants to inflation. Credit ex­ they are at present—there is little need to risk pansion has been reasonably well balanced dur­ the market distortions, the administrative bur­ ing the current cyclical upswing, and there has dens and complexities, and the problems of been no evidence of developing speculative ex­ equity that are inherent in credit controls. If cesses. Much attention has been focused on credit controls are to be used, it would require borrowing by households, with concern ex­ circumstances in which the need is clear and pressed that consumers were assuming exces­ obvious—a national emergency, such as a war, sive amounts of debt in order to make purchases or a clearly perceived imbalance in the distri­ in anticipation of future price increases. The rise bution of available credit. in household indebtedness has slowed recently, The nature of financial markets in this country however, as growth in net extensions of both makes credit controls both unneeded—save for mortgages and consumer installment loans has very exceptional circumstances—and extremely fallen off, and debt repayments also have begun difficult to administer. Our credit markets reflect to decline slightly when compared to the level the borrowing and lending decisions of vast of disposable income. Moreover, objective in­ numbers of consumers and businesses and are dicators of debt-servicing trouble, such as de­ an important means through which our eco­ linquency and default rates, do not indicate nomic resources are efficiently allocated among widespread problems in handling the debt load. competing uses. The market is so large and fluid Business borrowing has picked up, in part to that credit is generally available to all qualified finance the rebuilding of inventories depleted at borrowers, though the price—that is, interest the end of last year, but thus far inventory stocks rate—will vary so as to ration the supplies of appear to have been kept in close alignment with funds. sales. Nonetheless, this situation will bear care­ Imposition of controls in such a free, well- ful watching for signs of an excessive buildup. functioning market inevitably invokes a re­ Selective credit controls might be effective sponse by market participants, who attempt to in holding down a narrow category of spending circumvent the controls. Lenders seek the most and might be appropriate if there were shortages profitable outlets for their funds, whether at of particular goods, such as automobiles and home or abroad. And borrowers, who may be other consumer durable goods during World blocked out of one market, may seek funds in War II. However, even if such shortages oc­ another. The fungibility of money and credit curred, rationing or excise taxes might be a makes it most difficult to administer credit con­ more effective and equitable means of treating trols selectively, and enhances the likelihood the problem. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 469 Moreover, even if the expansion of certain But the costs of controls probably would types of credit could be identified as adding to substantially excieed those that could be directly inflationary pressures, control of such credit measured by the labor and materials devoted to might well be ineffective in reducing demands. compliance. Perhaps the most important costs If controls were imposed on one type of credit, would be the hardest to measure—distortions to other credit could be substituted by lenders or markets and resource allocation. With many borrowers, or liquid assets could be drawn down normal avenues for competition among lenders to support spending. This problem would be no longer allowed, energies and resources heightened by the large volume of existing probably would be directed into the socially credit commitments, the use of which would be wasteful activity of devising methods to cir­ difficult to regulate. Consumers, for example, cumvent the regulations. Moreover, to the ex­ have access to sizable pools of credit through tent that controls retained any effectiveness, credit cards issued by banks, stores, and oil credit allocation and the underlying resource companies. Businesses have loan commitments allocation it supports would be responding to from banks and insurance companies among the signals given by the controls, rather than others. Even if new commitments were con­ by relative interest rates reflecting competitive trolled, the outstanding volume would take opportunities in private markets. Although, to some time to draw down, delaying and reducing some extent, this reallocation may conform to the potential impact of credit controls. Over the the wishes of the regulators, our experience with longer run, as controls began to impinge on controls in other markets teaches us that unin­ borrowing ability, both borrowers and lenders tended side effects from interference with pri­ would be likely to discover and utilize alterna­ vate decisions are not infrequent. Furthermore, tive credit instruments to finance spending. the burden of the regulations is likely to fall The flexibility of credit markets, and the most heavily on small businesses and house­ inherent fungibility of money, would tend to holds with moderate or low incomes. These vitiate any form of credit control. In periods borrowers or lenders probably would have the of demand pressures, credit controls would have most limited access to alternative means of to be pervasive to have any chance of being financing or to liquid assets with which to blunt effective. Controls on business borrowing prob­ the effect of the controls, and small businesses ably would be even more difficult than for would be especially inconvenienced by the consumers, given the wide array of funds avail­ paperwork load. able from different sources, especially to large All these factors suggest that under most corporations. For example, regulations would circumstances policies other than credit controls have to cover accounts receivable financing and would have superior results with fewer unde­ international capital flows to constrain effec­ sirable side effects. Measured application of tively all sources of funds for business spending. fiscal and monetary restraint over the coming For this reason, a large bureaucracy would years would seem to be the best method for probably have to be created to administer con­ achieving our goal of reducing inflation, and trols. In the absence of a national consensus as thereby lowering interest rates, without unduly to their necessity, detection of violations would disrupting the expansion of income and em­ depend almost entirely on the regulators, since ployment. The reduction of inflation will not both borrowers and lenders may have an incen­ take place quickly—it probably will require an tive to circumvent the controls. Regulatory staff extended period of moderate growth in output also would be needed to decide on exemptions and demand. Credit controls seem particularly to the controls, as obvious inequities arose. inappropriate for such an extended time horizon, Their cost also would include the paperwork and since the longer they are in force, the lower compliance burden borne by lenders and bor­ is their effectiveness and the higher is their cost. rowers. These direct costs would likely escalate There may be situations in the future, how­ with the duration of the controls as they were ever, in which mandatory credit controls could extended to counter the ingenuity of the private be a useful component of national economic sector. policy. One such circumstance could occur if Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

470 Federal Reserve Bulletin □ June 1979 it were necessary to undertake a major and rapid in S. 35. In view of the widespread recognition redirection of resource allocation in response to of the drawbacks associated with mandatory a national emergency, like an outbreak of war. controls, there would appear to be little chance At the beginning of the Korean War, for ex­ they would be used unnecessarily. Certainly, the ample, there was a considerable amount of panic history of the past 10 years is consistent with buying of consumer durable goods in antici­ this view. pation of future shortages. The quick imposition If it ever became necessary to impose credit of strict credit controls could temporarily controls in a national emergency, like the dampen this type of reaction and would initiate Korean War, they would need to be applied with the process of freeing resources to meet the minimum delay to avoid anticipatory and coun­ emergency. The greater public support for con­ terproductive actions by borrowers and lenders trols likely to exist in such a situation would that would dilute their effect. Thus, if the act enhance the feasibility of administering them. is to be retained, the changes suggested by The Credit Control Act of 1969 is useful to S. 389 would seem unwise. In the time that the the extent that it provides a means for dealing Congress was acting on a concurrent resolution, with such contingencies promptly. It does not businesses and consumers would be making appear that voluntary credit controls could be purchases, negotiating credit and credit lines, employed under such circumstances without and drawing on existing loan agreements to additional statutory authority. However, if the accumulate liquid assets. All these actions Congress feels that the availability of credit would tend to aggravate the condition that oc­ control measures may lead to unwise use of casioned the need for credit regulations in the them, it may want to repeal the act, as proposed first place. □ Statement by G. William Miller, Chairman, of economic problems and concerns common Board of Governors of the Federal Reserve to, and affecting, nearly all countries—rampant System, before the Subcommittee on Interna­ rates of inflation, the reduced availability and tional Economic Policy of the Foreign Relations increasing relative cost of raw materials, partic­ Committee, U.S. Senate, May 24, 1979. ularly energy, and sluggish investment. More­ over, gaps in standards of living between the Mr. Chairman, members of this subcommittee, citizens of industrial and developing countries I am pleased to participate in your important persist and even may be widening. In meeting hearings on the vital international economic the challenge of dealing with these problems issues that confront the United States today. My that affect the welfare of most individuals, all statement this morning identifies an agenda of countries have a stake in maintaining a wellissues facing the world economy as we enter functioning international economic system in the 1980s—issues that deserve our attention so which goods, services, and capital move freely that we may begin to develop specific solutions to satisfy economic needs and wants. In finding to them. solutions to these problem areas, it is essential that the United States—the world’s most im­ portant economy—provide creative leadership. We cannot delay our exploration of ways to W e Face Common Problems, strengthen the performance of the world econ­ Have Common Interests omy. Given the medium-term nature of many In an increasingly interdependent world econ­ of today’s underlying economic problems and omy, all countries are affected by favorable and the planning and implementation lags associated unfavorable developments originating in other with major policy initiatives, efforts must be countries. The world economy faces a number taken soon to affect the outcome in the 1980s. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 471 Economies Becoming of the United States, our energy consumption M ore Open and is outdistancing our domestic energy produc­ tion. As a result, whereas net U.S. oil imports M ore D ependent on Each O ther in the early 1950s accounted for less than a tenth In recent decades, international trade has been of U.S. consumption, these imports now ap­ expanding more rapidly than the growth of gross proach nearly one-half of consumption. More­ national product, and exports and imports con­ over, the United States has relied increasingly stitute an increasing share of most countries’ on oil produced by Middle Eastern and North output and expenditures (chart l).1 On the African oil producers, so that more than 50 whole, we all have benefited from greater inter­ percent of U.S. oil imports last year were national specialization, with the availability of derived from these sources compared with less lower-priced imports helping to contain infla­ than 30 percent in the 1963-73 decade. The tionary pressures by strengthening the forces of adverse consequences for the non-OPEC coun­ competition and spurring productivity. tries resulting from such an event as the disrup­ As economies have become more open, tion of Iranian oil production reinforce the ur­ however, they also have become more suscep­ gency for the United States and other oil-im­ tible to external developments affecting the porting countries to reduce their dependence on supply and prices of the goods that they import. imported oil and the need for these countries Over time, the major economies have become to conserve energy, to expand alternative energy increasingly dependent on imported raw materi­ supplies now available, and to develop new als. Even the United States, which once was sources of energy. more self-sufficient in many raw materials than other countries, has increased its reliance on N ew Challenges, imports of these commodities. By 1978, net imports accounted for more than half the U.S. N ew Opportunities use of 20 important metals and other minerals. The expansion of production capacities for If the United States and other economies are commodities that periodically are in short sup­ not to suffer from a secular, steep rise of raw ply could be aided by improving the process materials prices, the pace of the absorption of of transferring technology from industrial coun­ the world’s resources needs to be balanced by tries to less-industrialized economies. Broaden­ the development of new sources of supply. ing the opportunities for the transfer of technol­ Developments in recent years affecting the ogy in manufacturing also would help promote price and supply of energy have been especially the economic development of the developing troublesome for the United States and for other countries. The role of technology transfers economies. Industrial and developing countries would be enhanced by the maintenance in less still are coping with the problems resulting from industrialized countries of an economic climate the 1973-74 oil shock. The latest price increases that attracts foreign investment and by reaching by the Organization of Petroleum Exporting agreement on a code of conduct relating to the Countries are setting back the limited progress transfer of proprietary technology and industrial oil-importing countries have made in recent property rights. The United Nations Conference years in containing inflation and in resuming on Science and Technology for Development economic expansion. The latest OPEC price that is scheduled to convene in August in Vienna increases, moreover, weaken the stability of the provides an opportunity to bring the resources international payments system and, in particu­ and skills of science and technology better to lar, aggravate the financing problems facing the bear in advancing the growth of developing non-oil developing economies. countries, with mutual benefit to the world Despite the vast internal sources of energy economy. It is important that the United States play an active role at this conference and that 1. The charts to this statement are available on re­ the conference succeed in reducing those bar­ quest from Publications Services, Division of Support riers that impede the smooth transfer of tech­ Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. nology across borders. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

472 Federal Reserve Bulletin □ June 1979 A new challenge to the world trading system recycling massive surpluses of the oil-exporting is being posed by the emergence of newly countries. Industrial, developing, and Commu­ industrializing countries as competitive export­ nist economies all have been active participants ers of manufactured products. This development in these markets. is a logical consequence of a greater transfer Despite the generally smooth functioning and of technology and the successful efforts by de­ rapid growth of the Eurocurrency market in veloping countries to develop their economies. recent years, the less-regulated nature of this To allow their citizens to benefit from the low market periodically has been a source of concern cost of these goods, the more industrialized among policymaking authorities. The operations nations must be prepared to permit imports from of this market have raised questions about the these emerging countries. Firms and workers market’s impact on the efficacy of domestic displaced by these imports should not be re­ monetary policy, about the competitiveness of quired to assume the full adjustment burdens Eurocurrency banks vis-a-vis national banking resulting from this development. Appropriate systems, about the role of this market in facili­ measures by governments in industrial countries tating exchange-market speculation, and about will be necessary in order to facilitate the shift the soundness of the banking practices followed of their productive resources into export indus­ by banks involved in the Eurocurrency market. tries in which these countries enjoy a compara­ In recent years, central bank and treasury offi­ tive advantage. The emerging economies, in cials, both here and abroad, have focused atten­ turn, must be encouraged to open their markets tion on these and related aspects of the Euro­ to the high-technology goods produced in in­ currency market. The objective of these delib­ dustrial countries. erations has been to ensure that this market The worldwide economic downturn during performs its important financial intermediary 1974-75 precipitated protectionist demands functions without at the same time weakening throughout the industrial world. The Tokyo the structure of national banking systems or Round of Multilateral Trade Negotiations is market confidence in the international financial important not only because the world economy system. will benefit from the trade liberalization it pro­ Several aspects of the rapid expansion of vides, but, perhaps more crucially, because multinational banking deserve close examina­ these negotiations countered the emerging ten­ tion. There is a need to improve the ability of dencies toward protectionist actions. We must bank supervisory authorities to evaluate bank continue to be alert, however, to the need to lending on a consolidated basis. For some place the interests of the general consuming countries, more comprehensive statistical re­ public ahead of those few special interests that ports and more thorough supervisory procedures perennially seek protection from the rigors of are needed to ensure that the consolidated international competiton. operations of banks meet standards of prudence. Supervisory authorities in a number of countries are making progress in this area—a development that will benefit all. In addition, there is a need Impressive Expansion of for improved evaluation of country risk. It is International Capital M arkets important to both borrowers and lenders that The expansion of international capital transac­ international bank credit be extended on a scale tions, and particularly the growth of interna­ and be used in a manner that ensures that funds tional bank lending, has been one of the im­ are employed effectively and that borrowers are pressive developments in international finance able to service their debts. Finally, there is a in the past decade. International capital markets need to evaluate whether the growth of Eurohave channeled sizable accumulations of sav­ banking should be controlled. In this regard, a ings in some countries to other countries that range of techniques, including the possibility of could utilize these funds effectively. In recent imposing reserve requirements on the liabilities years, the Eurocurrency and Eurobond markets of banks in the Euromarket, deserves to be have played an especially important role in explored. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 473 A chieving S ustainable, mies and societies of trying to do so would be N oninflationary Grow th enormous. This makes it even more important for economic policymakers in the period ahead In a world economy that has become more open, to persist in maintaining sound fiscal and mone­ inflation and recession in major countries have tary policies that will prevent the development serious effects on other countries. The attain­ of further inflationary momentum and to seek ment of sustained, noninflationary growth by to lower the inflation rates somewhat each industrial countries not only would yield direct year. In addition, governments must avoid, benefits to these countries, but also would when possible, adopting other policies and reg­ strengthen the world economy in various ways. ulations that have price-raising effects. First, it would reduce the pressures in these Capital formation has an essential role to play countries to adopt protectionist trade policies. in achieving and maintaining steady, noninfla­ In addition, the expansion of import demand by tionary growth in industrial economies. Invest­ industrial countries in an environment of nonin­ ment spending performs two functions in the flationary growth would be one of the best ways process of promoting noninflationary growth. to contribute effectively and lastingly to the First, it is an important component of aggregate growth of their trading partners in the develop­ demand. Second, investment spending creates ing world. productive capacity, providing the means to High rates of inflation have plagued most employ a growing labor force and to increase industrial countries during the past decade. the output of the economy. By increasing the Many developing countries have experienced ratio of capital to employed labor, the produc­ even higher rates of inflation than those recorded tivity of labor can be raised. Also, higher in­ in industrial countries. Rates of inflation in some vestment spending typically is associated with developing countries in excess of 30 percent per an increase in the flow of innovation and brings year are not uncommon, and several of the the average industrial plant closer to the state larger developing countries in Latin America of “best practice” technology, further raising even have experienced triple-digit inflation. the average level of productivity. Higher pro­ While external influences, such as high prices ductivity is an important variable curbing or for OPEC oil, no doubt have contributed to offsetting inflationary pressures. It is through worldwide inflation, in most instances these productivity growth, of course, that real in­ external influences only have intensified an in­ comes can rise in the long run. flation that basically is homegrown and fed by A marked feature of the current economic high wage demands, business pricing practices, recovery in industrial economies has been the government regulation and spending policies, lower rate of productivity increases in this ex­ and excessively expansionary monetary poli­ pansion compared with earlier recoveries. This, cies. in part, reflects the weakness of fixed investment The costs of high rates of inflation are well expenditures. For a number of industrial coun­ known. They have resulted in arbitrary shifts tries—for example, the United States, Japan, in the distribution of income and wealth. High Germany, and Canada—investment as a per­ inflation rates also have weakened the invest­ centage of GNP has been lower on average in ment climate, which, in turn, has intensified cost the past five years, at a time of relatively slow pressures and has contributed to sluggish eco­ economic growth, than in the earlier period of nomic growth. Finally, high and divergent in­ higher GNP growth. A variety of factors have flation rates among countries have been a contributed to the weakness of investment principal factor in generating instability in spending in recent years—low levels of capital foreign exchange markets. utilization, the effects of the oil shock, weak The inflation problem has developed over a profits, and uncertainty generated by high infla­ long period and has become imbedded in the tion rates. structure of most economies. It, therefore, Governments can best foster increased private would be unrealistic to expect to eradicate it investment spending by providing an economic in a short time, and the disruption to the econo­ climate that is conducive to business enterprise. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

474 Federal Reserve Bulletin □ June 1979 Government officials in many industrial coun­ role of the dollar in the international monetary tries are giving increasing recognition to the system, therefore, could have important impli­ need to provide more scope for market forces cations for the operation of the system. The to operate and to encourage private initiative. United States did not elect that the dollar assume Appropriate government policies can stimu­ a key role in the international monetary system. late private investment spending. Cost-effective That role developed as a result of an evolution­ incentives—such as liberalization of deprecia­ ary process that now may be changing. Propos­ tion allowances—and the elimination of various als to reduce the international role of the dollar disincentives—such as unnecessary and bur­ and to expand that of the special drawing densome regulations—would go far to encour­ right—such as establishing a substitution ac­ age private investment. In addition, mainte­ count in the IMF—should be evaluated in the nance of sound monetary and fiscal policies that context of the longer-term development of the succeed in curbing inflation, stimulating per­ international monetary system. We must ensure sonal savings, and reducing the pace of govern­ that any plan to reduce the dollar’s role will ment spending, will provide an environment that not restrict the freedom of the United States to is conducive to an expansion of private invest­ pursue appropriate domestic economic objec­ ment spending. Finally, appropriate government tives, that it will facilitate the maintenance of support to intensify the efforts by the private an open system of world trade and capital sector in enlarging the role of research and in movements, and that it will contribute to more, developing improved technology is likely to rather than less, international monetary stability. have substantial payoffs in additional investment It is in our mutual interest to achieve an and higher productivity. economic environment that avoids excessively large swings in exchange rates. World trade and finance respond more effectively to signals that The E volving M onetary S ystem are not erratic. When exchange-rate adjustment The changes in the international monetary sys­ on the basis of fundamentals is necessary, such tem in recent years have been substantial— adjustment should take place in an orderly fash­ managed floating has replaced the adjustable peg ion. Article IV of the amended Articles of system, the status of the dollar as an interna­ Agreement of the IMF provides new procedures tional asset has undergone changes, and the role for international surveillance over countries’ of the International Monetary Fund (IMF) in exchange-rate policies and the adjustment of guiding the international monetary system has external imbalances. We need to explore how been enlarged. to make more effective use of these procedures. The amended Articles of Agreement of the The recent strengthening of the value of the IMF that were put into place last year provide U.S. dollar on foreign exchange markets reflects a framework for the evolution of the interna­ the market’s favorable reassessment of underly­ tional monetary system in the period ahead. We ing trends of U.S. and foreign economic per­ must be prepared to examine objectively our formance and policy, as well as the effects of attitude toward various proposals designed to the November 1 measures to support the dollar. strengthen the functioning of the international Market participants now recognize the will­ monetary system. ingness of the United States and its major Despite expressions of doubt in recent years trading partners to engage, if required, in sub­ about the future role of the dollar as an interna­ stantial intervention. The November 1 measures tional currency, the dollar continues to play a have provided the United States a necessary prominent role in private and official transac­ breathing spell during which its monetary, fis­ tions. About 80 percent of all official foreign cal, and wage-price policies can take hold in exchange reserves are held in dollars, a compa­ dealing with the fundamental economic and rable fraction of private financial assets and financial factors that most influence a country’s liabilities is denominated in dollars, and about exchange rate—international current-account half of world trade is estimated to be denomi­ developments, relative inflation rates, and rela­ nated in dollars. Proposals to reduce the official tive rates of real economic growth. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 475 In the final analysis, one cannot decree greater and solving its urgent internal economic prob­ stability of exchange rates. Such stability will lems, especially those related to inflation and require a narrowing of inflation-rate differentials energy, and by demonstrating its support for the at a lower level of inflation, as well as the international financial institutions. achievement of rates of economic growth and The economic summits held each year since structural adjustments in national economies 1975 have provided a forum for strengthening that are consistent with a sustainable pattern of the process of international consultation and international payments. cooperation. Continued cooperative efforts— such as next month’s summit meeting in Tokyo—will be required to deal with worldwide Need for U.S. Leadership and economic problems. In an increasingly in­ terdependent world economy, policymakers Continued International need to consider the effects of their actions on Cooperation others when formulating national policies. A The United States should play an active and frank exchange of views and policy intentions constructive role in international deliberations could contribute to better-informed policy for­ on the issues that I have raised this morning. mulation in each country and could set the stage If the United States is to maintain its leadership for sharing of possible solutions to common role, it must set a good example—by addressing problems. □ Statement by Nancy H. Teeters, Member, and would not oppose a congressional prohibi­ Board of Governors of the Federal Reserve tion. However, S. 15 raises several general System, before the Subcommittee on Consumer issues that transcend the specific proposal and Affairs of the Committee on Banking, Housing it represents a significant departure from the and Urban Affairs, U.S. Senate, June 5, 1979. existing prohibitions in the act. Rather than identifying a specific group that needs protec­ I am happy to appear before this subcommittee tion, the proposed bill forbids the use or con­ to address the issues raised by S. 15. This bill sideration of a particular characteristic, “place would amend the Equal Credit Opportunity Act of residence.” When use of the place-of-resito prohibit a credit-card issuer from discrim­ dence characteristic does discriminate illegally, inating in any aspect of the issuance or use of then the “effects test” already prohibits its use. a credit card on the basis of a person’s place Detection and rectification of violations of ef­ of residence. In part, this prohibition is directed fects tests, however, are complicated by the toward those numerical credit-scoring systems need for case-by-case judicial proceedings. employed by card issuers that weight ZIP code, However, legislative remedies for effects-test census tract, or a similar representation for the problems also raise competing considerations. applicant’s residence. The Equal Credit Oppor­ First, it is not always clear when use of a tunity Act prohibits discrimination on the basis particular characteristic has the effect of dis­ of race, color, religion, national origin, sex, criminating. Correlation with a prohibited basis marital status, age, receipt of public assistance, is usually less than perfect. Moreover, the de­ or exercise of federally protected consumer gree of association may vary from creditor to rights. A creditor can violate the act either by creditor. For example, scoring ZIP codes in discriminating intentionally on a prohibited New York City is more likely to have an ille­ basis or by engaging in credit practices that have gally discriminatory impact than it would in a the “effect” of discriminating. rural area. Obviously, certain uses of “place of resi­ Second, there is the problem of defining the dence” in granting credit, especially when small prohibition so as not to preclude legitimate, areas are considered, can discriminate illegally. nondiscriminatory uses. For example, identify­ The Board agrees that such uses are offensive ing place of residence by city block probably Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

476 Federal Reserve Bulletin □ June 1979 would discriminate, whereas identifying it by sonal. Furthermore, the latter systems often state probably would not. The state in which include factors that do not obviously relate to an applicant lives might be important to a na­ creditworthiness and do not appear to consider tional credit-card issuer since higher rate ceil­ each applicant individually. Interestingly, some ings, lower-cost creditor remedies, or the exist­ of the information on these applications is ence of expedited collection procedures could viewed as offensive when considered explicitly require different credit standards. Similarly, for in a numerical model but is the very same the local credit-card issuer, a prohibition on information customarily used in the judgmental considering place of residence would preclude systems. In truth, both judgmental and numeri­ limiting its cards to customers that reside within cal credit systems function in almost identical its trade or market area. Like many factors used fashions. in credit decisions, the fact that the size of the Arguably, properly developed scoring sys­ area considered forms a continuum makes it tems offer significant advantages over judgmen­ even more difficult to draw the line between tal systems to creditors and applicants. First, legitimate and nonlegitimate uses of particular these systems have the capability of assessing characteristics. creditworthiness more accurately than judg­ Third, limiting the legitimate, nondiscrimina- mental systems. Credit officers may recall past tory uses of characteristics will adversely affect experience imperfectly or use the information the overall accuracy of credit decisions. This inaccurately. More accurate credit analysis ben­ is likely to result in higher costs, less favorable efits the applicants with fewer arbitrary deci­ terms, and fewer loans. sions and the creditors with lower costs. As a It may be that the use of ZIP codes should result, one might expect more credit or more be prohibited, but the Congress should take note favorable terms to be available in the long run. of the fact that other characteristics can be called Second, scoring systems ensure that an appli­ into question. For example, homeownership cant will be treated more evenly, both from may correlate highly with marital status, age, credit officer to credit officer and from day to and race. Bills have been introduced prohibiting day, than judgmental systems. Third, scoring the use of occupation and title. Almost anything systems offer less opportunity for personal prej­ related to financial status is likely to show some udices to influence credit decisions. Finally, degree of correlation with one or more prohib­ from an enforcement perspective, numerical ited bases. systems permit evaluation of the characteristics Although the effects-tests considerations I’ve scored and how the analysis considered them. discussed appear most clearly in numerical In contrast, each credit officer balances the credit-scoring models, they also apply equally available information mentally, so that a regu­ to judgmental systems. All credit analysis, latory agency or a person denied credit cannot whether performed by loan officers or credit- replicate the judgmental process. This makes the scoring systems, uses the principle that past evaluation of judgmental systems much more credit experience predicts future credit perform­ difficult. ance. Thus, future creditworthy applicants will In conclusion, recognizing the problems out­ resemble recent creditworthy borrowers. A lined above and the precedent-setting nature of judgmental system uses the experience of its the proposed legislation, the Board would not credit officers to estimate the profile of past oppose a prohibition such as contained in S. credit-worthy customers. A credit-scoring sys­ 15, if limited to a census tract identification tem uses statistics to measure the characteristics number, the last two digits of a ZIP code, or associated with repayment. similar identifiers, and if the Congress deter­ A common argument is that judgmental credit mines that explicit consideration of place of evaluation systems are preferable because credit residence should be barred because its use is officers personally review each application and likely to have an illegally discriminatory effect. give an applicant individual treatment. This is Thank you for the opportunity to appear here contrasted with numerical credit-scoring sys­ today. I will be pleased to answer any questions tems that appear to be mechanistic and imper­ you may have. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

477 Announcements Regulatory Changes in one year or less, the minimum penalty will To Help Sm all Savers be three months’ loss of interest. The present penalty of a loss of three months’ interest and A series of regulatory changes that will help payment of interest on the funds withdrawn at small savers obtain a higher return on their the passbook rate will continue to apply to all deposits has been announced jointly by the time deposits issued before July 1. Federal Home Loan Bank Board, the Federal In announcing the improved opportunities for Deposit Insurance Corporation, and the Federal small savers, the agencies said they would plan Reserve Board. to consult toward the end of this year to deter­ The measures, which are effective July 1 for mine whether further adjustments in interest rate all federally insured commercial banks, savings ceilings were appropriate. and loan associations, and mutual savings The small saver proposals, which were issued banks, are as follows: on April 3 by the regulators, drew more than 1. An increase of one-quarter of a percent 3,000 responses. The actions were announced in the maximum rate of interest that commercial after consultation among the agencies and after banks and thrift institutions may pay on pass­ consideration of the comments that were re­ book savings accounts. This will raise the ceil­ ceived. ing for commercial banks to 5 xk percent and The rate ceiling for the new certificate will for savings and loan associations and mutual change on the first calendar day of each month, savings banks to 5Vi percent. The ceiling rate based on the average four-year yield on Treas­ on negotiable order of withdrawal accounts in ury securities as determined and announced by New England and New York will remain at 5 the Treasury Department. percent for all depositary institutions. This yield will be announced three business 2. A new savings certificate with a maturity days prior to the first day of the month and will of four years or more that will have a rate ceiling be based on the average daily yields for the based on the yield for four-year government preceding five business days. Thus, the ceiling securities as determined each month by the rate that will be in effect beginning July 1 will Treasury Department. The ceiling for commer­ be announced by the Treasury on June 27, based cial banks will be llA percentage points below on the average daily yields on four-year Treas­ the yield on four-year securities and the ceiling ury securities for June 20 through June 26. for thrift institutions will be 1 percentage point If the certificate had been in effect on June below the Treasury yield. 1, the nominal ceiling for June (based on the 3. Elimination of all requirements for mini­ average four-year Treasury yield for May mum denominations on consumer-type time de­ 21-25) would have been 7.85 percent for com­ posits except for the $10,000 minimum required mercial banks and 8.10 percent for thrift insti­ for money market certificates. Institutions may tutions. The corresponding effective yields, in­ set their own minimums if they desire. cluding continuous compounding, would be 4. A new early-withdrawal penalty in all 8.28 percent for banks and 8.56 percent for deposit categories for new certificates issued or thrift institutions. The new variable-rate ceiling renewed after July 1. If deposits mature in more certificate does not replace the existing four-, than one year, the minimum penalty will be six six-, and eight-year fixed note time deposits, months’ loss of interest. If the deposit matures whose ceilings will remain in effect. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

478 Federal Reserve Bulletin □ June 1979 In a related development, the agencies ruled check (the amount of the check, the identifica­ that banks and savings and loan associations tion of the bank on which the check is drawn, may accept deposits that have been pooled by and the account number of the business issuing depositors to reach a minimum-denomination the check) to magnetic tape. It does the same requirement, but the institutions may not solicit for all other checks of $100,000 or more re­ or promote pooled deposits in any way. ceived that day. With regard to federal credit unions, the Na­ 3. The magnetic tape is deposited at the tional Credit Union Administration (NCUA) is Atlanta Federal Reserve Bank. The Atlanta not mandating specific maturities—which may Federal Reserve, using computers to sort the range from 90 days on—for its share certificate payment instructions by destination, transmits accounts (similar to certificates of deposit). these instructions to the appropriate Federal However, in order to maintain consistency Reserve office. In the case being described, among financial institutions, the maximum rates Atlanta transmits the information to the Min­ payable on such certificates will be set at a rate neapolis Federal Reserve Bank. comparable to that of savings and loan associa­ 4. The Minneapolis Reserve Bank delivers tions. by the most expeditious means the payment In addition, NCUA is making certificates of instructions to the bank on which the check was indebtedness subject to the same term and in­ drawn. Finally, that bank debits its customer’s terest rate limitations as share certificates. The account. agency is also barring the issuance of certificates Checks for more than $100,000 cleared by of indebtedness to natural persons who are not the Federal Reserve are estimated to account for members of the issuing federal credit union. about one-tenth of 1 percent of total Federal Reserve check volume and in some districts for about 50 percent of the total dollar value of Electronic Settlem ent checks. The Federal Reserve Board announced on May The Board’s action was prompted by two 14, 1979, its intention to participate in a test concerns. One, transportation delays caused by of a new financial service aimed at speeding and weather, aircraft malfunctions, and other factors improving the clearing of checks with large have generated an increased level of checkdollar value. clearing float within the Federal Reserve check- The concept, called electronic settlement, is clearing system. Two, the Federal Reserve and to be tested in the second half of 1979. The private sector check-clearing systems rely heav­ program initially will affect only checks of ily on special air and surface transportation $100,000 or more issued by corporate customers systems that consume fuel and could be subject of a small number of large banks. No checks to reduced reliability as fuel becomes scarce. of consumers will be involved. Electronic settlement will ameliorate the In electronic settlement, the usual process of problem of transportation delays and thus the clearing and settling paper checks is discon­ risk of Federal Reserve float for checks of large tinued after checks are deposited in the first dollar value. In addition, the removal of the bank, and the process shifts to electronic means large items from the check collection system of clearance and settlement. This process, to be will mean less need for special priority trans­ used in the test to permit speedier clearance of portation systems. Electronic settlement of large large-value checks, is as follows: checks can also provide certainty of time of 1. A business in Minneapolis sends a check settlement to business customers, enabling them for $100,000 or more to a company in Atlanta. to achieve better cash management. The company deposits the check in its Atlanta Results of testing electronic settlement should bank. provide valuable insight and operating experi­ 2. The bank in Atlanta—instead of sending ence in support of efforts by the financial in­ the check to the Federal Reserve for collec­ dustry to develop new and more convenient tion—transfers the payment instructions on the financial services. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 479 The test is expected to begin in the second of the new time schedules. The remaining ACHs half of the year. It will involve from six to ten will be phased into the new procedures accord­ banks in three Federal Reserve Districts. If the ing to schedules to be determined by the local test proves successful, the electronic settlement Federal Reserve Bank and the local ACH asso­ system will be enlarged and the dollar limit may ciation. be lowered, perhaps eventually to $1,000. Dur­ The Board believes that the electronic transfer ing the pilot test, the paper checks will be of funds made possible by ACHs is superior forwarded on a delayed basis to the banks on to payment by cash or check in many instances, which they are drawn. The Federal Reserve has due to enhanced security, convenience, and no present plans for electronic settlement of reliability of payment. As volume develops, consumer’s checks. electronic transfer can become substantially The Board may reassess for high-value cheaper than other forms of payment. checks its policy of making credit available to The improvements in time schedule are of depositing banks based on fixed time schedules, two kinds. The first will provide financial insti­ and is studying the possibility of making credit tutions with five additional hours for initiating schedules reflect accurately the actual collection debit and credit payments, such as direct deposit times. of payroll and preauthorized bill payment, and cash concentration. For example, if payday is Friday and the employee is to have access to Improved A C H Services his wages on that day, the financial institution The Federal Reserve Board on May 14, 1979, that is initiating the payments on behalf of the announced actions to improve its automated employer must deposit the payments instruc­ clearinghouse services, by means of which tions at the ACH by 5 a.m. Thursday. This electronic fund transfers are cleared and settled. interval covers transmission between ACHs and The improvements are intended to provide better time for the receiving bank to credit the em­ service to the consumers, financial institutions, ployee’s account. and corporations that use Federal Reserve auto­ The second improvement allows some types mated clearinghouse (ACH) facilities. of payments, such as cash concentration The changes approved by the Board will give transfers made in the interests of improving cash users of ACH services more time to get certain management, to be handled even more expedi­ types of payment instructions to Federal Reserve tiously. For example, a financial institution col­ ACHs and will result in earlier availability to lecting funds on behalf of a corporate customer financial institutions of the funds being paid. from another financial institution can initiate Financial institutions can thus credit the ac­ debits to those accounts as late as 9 p.m. counts of their customers at an earlier time. Thursday for Friday settlement. At present, cash These improvements in ACH services follow concentration transfers must be initiated at the the linkage, approved by the Federal Reserve same time as other ACH payments. This change in April 1978, of 36 ACHs into a national in schedule will allow corporations to collect network. ACHs move money by electronically funds from any financial institution in the nation transmitted payment instructions rather than by on an overnight basis. paper checks. For example, an employer may At present, some 6,000 corporations, gov­ transfer instructions through an ACH for payroll ernments, and other entities are using ACH payments from the employer’s account in a services. The Federal Reserve, with the assist­ financial institution to the financial institutions ance of the National Automated Clearing House in which the employees have accounts. Association, has consulted with corporate offi­ The improvements in ACH services adopted cials and others to identify the ways to make by the Board will be subjected to a pilot test best use of the more economical and more and phased in later over a period of several secure movement of funds made possible by months. In the pilot program, three to five ACHs ACH services. will exchange payments to test the feasibility Large corporations interviewed in the course Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

480 Federal Reserve Bulletin □ June 1979 of formulating the changes have indicated they quested comment through July 2, 1979, on a are making use of ACH services for the elec­ proposal to subject repurchase agreements of tronic transfer of one or more of the following less than $100,000 to the same interest rate types of payment: direct deposit of managerial ceilings as deposits of similar maturities and on salaries and retirement benefits, the collection a proposal to liberalize the penalty for early of preauthorized insurance premiums and withdrawal of deposits for all accounts in the credit-card bills, and payments or collections event of the death of a depositor. made to improve cash management. Such cor­ porations include: Allied Chemical Corporation, Regulation E: R uling Aluminum Company of America, American Express Company, American Motors Corpora­ The Federal Reserve Board has adopted as part tion, The Dow Chemical Company, Equitable of its Regulation E (Electronic Fund Transfers) Life Assurance Society, General Motors Cor­ a rule requiring that issuers of EFT cards make poration, International Business Machines Cor­ certain disclosures to cardholders regarding the poration, Metropolitan Life Insurance Com­ consumer’s liability for the use of lost or stolen pany, NCR Corporation, TRW Inc., U.S. Postal cards as a precondition to imposing any liability Service, U.S. Steel Corporation, Westinghouse on EFT cardholders. Electric Corporation, and Xerox Corporation. The Electronic Fund Transfer Act of 1978 Allied Chemical, American Motors, and (Title XX of the Financial Institutions Regula­ General Motors are now using the ACH services tory and Interest Rate Control Act of 1978), for direct deposit of management payroll and which protects consumers in their use of EFT, are planning to use it for direct deposit of directs the Board to issue implementing regula­ retirement benefits. Alcoa, Dow Chemical, and tions. EFT services permit customers to transfer IBM are also using ACH services for their funds without the use of checks, such as by the management payroll and are exploring its appli­ use of an EFT card. EFT cards may be used cation to hourly payroll. NCR and U.S. Steel by consumers to withdraw cash from their ac­ also have their direct deposit payroll payments counts at automated teller machines or to debit sent through ACH. NCR is considering ACH the consumer’s account at the point of sale for services for direct deposit of dividend payments purchases of goods or services. while U.S. Steel is considering electronic The Board earlier this year issued a set of transfer payments through ACHs for cash man­ final rules implementing sections of the act that agement purposes. became effective February 8, 1979. Other sec­ Among other major firms, American Tele­ tions of the act do not become effective until phone & Telegraph Company, Southern Pacific May 1980. In March, together with its final Company, and Standard Oil Company of Cali­ rules, the Board proposed further rules regard­ fornia are actively studying the use of electronic ing disclosure of consumer liability for unauth­ payments. orized use of EFT cards, and the Board has adopted a modified version of one of the pro­ posed alternatives. Proposed A ctions Under the further final rule as adopted, effec­ The Federal Reserve Board on May 21, 1979, tive August 1, 1979, consumers will have no proposed an amendment to Regulation E (Elec­ financial responsibility for unauthorized use of tronic Fund Transfers) that would make written EFT cards if the card issuer has not made the notice of loss or theft of an EFT card effective following disclosures: when the consumer mails or otherwise transmits 1. The consumer’s liability for unauthorized the notice. The Board asked for comment by use of the card. June 25, 1979. 2. The telephone number and address for The regulatory agencies (Federal Home Loan reporting a lost or stolen card. Bank Board, Federal Deposit Insurance Cor­ 3. The days when an institution can be noti­ poration, and Federal Reserve Board) have re­ fied of loss or theft of a card. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 481 Financial institutions may make these disclo­ the figures have been adjusted to eliminate in­ sures at a time of their own choosing. However, trabank claims; that is, claims on foreign until the disclosures are made, a consumer can­ branches held by a U.S. office, or by another not be held liable for unauthorized use of the foreign branch, of the same parent bank. EFT access device. The foreign claims held by the U.S. offices Until August 1, the consumer’s liability will included in the data in table 3.20 are the same be determined by the provisions of the EFT Act as those that are, or have been, published in that went into effect February 8; namely, con­ the Bulletin as “claims on foreigners reported sumers are liable for unauthorized use of their by banks in the United States,” except that (as cards as provided in the act whether or not they noted above) table 3.20 excludes the claims held were advised of their potential liability. by agencies and branches of foreign banks as In May 1980, financial institutions will be well as the claims of U.S. offices on their own required, by provisions of the act, to make the foreign branches. The foreign branch claims above disclosures and others to all consumers correspond to those shown in lines 7 through who use EFT services. 10 of Table 3.13 of the Bulletin. Data for The EFT Act provides that consumers who the country breakdown of the foreign branch report loss or theft of a card within two business claims are collected quarterly and are published days of learning of such loss or theft are liable in statistical release E.ll (121) available from for up to $50 of unauthorized use. Liability rises Publications Services, Division of Support to a limit of $500 if this time limit is passed Services, Board of Governors of the Federal and the financial institution shows that losses Reserve System, Washington, D.C. 20551. would not have occurred but for the consumer’s The claims in table 3.20 differ in several failure to report. If the consumer fails to report respects from those included in the semiannual unauthorized use of a card within 60 days after Country Exposure Lending Survey (CELS) issuance of a periodic statement showing un­ prepared jointly by the Comptroller of the Cur­ authorized use, the act provides that the con­ rency, the Federal Deposit Insurance Corpora­ sumer’s loss may be unlimited with respect to tion, and the Federal Reserve and filed by the transfers made after the 60 days. reporting banks on a consolidated basis. The claims reported in the CELS include those held by majority-owned foreign subsidiaries of New Statistical Table U.S.-chartered banks, whereas those in table A new statistical table (table 3.20, page A63) 3.20 do not. On the other hand, the CELS appears in this issue of the Bulletin. It pro­ excludes claims on local borrowers denominated vides more comprehensive data than previously in local currency, whereas such claims are in­ published on the country breakdown of U.S. cluded in table 3.20. Furthermore, the reporting banks’ claims on foreigners. The new table, panel is not identical in the two cases. Informa­ containing quarterly data, combines claims held tion in the CELS (released by the Board as soon by banking offices in the United States with as available) provides considerable detail, in­ those held by foreign branches. The institutions cluding a maturity breakdown, rather than covered are U.S.-chartered banks; that is, merely total claims on each country. However, U.S.-owned banks with headquarters in the table 3.20 is updated quarterly rather than United States and U.S. subsidiaries of foreign- semiannually and provides more timely infor­ owned banks. Data are not provided for foreign mation on total claims per country. subsidiaries of U.S. banks or the U.S. agencies and branches of foreign-owned banks; however, System M embership: bank-reported claims and liabilities vis-a-vis A dmission of State Banks foreigners in tables 3.15 through 3.19 do in­ clude those data for U.S. agencies and branches The following banks were admitted to member­ of foreign banks. ship in the Federal Reserve System during the To reduce duplication as much as possible, period May 11 through June 10, 1979: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

482 Federal Reserve Bulletin □ June 1979 Virginia addition, a not seasonally adjusted series, esti­ Fairfax ..........................George Mason Bank mated with somewhat less complete informa­ Wyoming tion, has been constructed for the period No­ Cody ........................Western Bank of Cody vember 1969 to May 1974. These series are Mills .............................State Bank of Mills available on request from the Banking Section, Division of Research and Statistics, Board of Governors of the Federal Reserve System, Consumer A dvisory Council Washington, D.C. 20551. M eeting The Consumer Advisory Council met on June 6 and 7, 1979, at the Federal Reserve in Wash­ Tours of ington, D.C. Federal Reserve B oard B uilding The meeting dealt with Regulation Q, the regulation that governs the payment of interest The Federal Reserve Board has announced the on deposits; proposed regulations to cover the inauguration of public tours of its main building use of electronic fund transfers; Equal Credit on Wednesdays and Thursdays. Opportunity and credit-scoring systems; and the The Board building, located in Washington, costs and benefits of consumer credit regula­ D.C., was dedicated by President Franklin D. tions. Roosevelt on October 20, 1937. The architect was Dr. Paul Philippe Cret, who also designed the Folger Shakespeare Library and the Pan New Data Series American Union building. Monthly estimates of security repurchase agree­ The interior of the Board building has been ments of all commercial banks with the nonbank renovated, but the principal and distinctive ar­ public have been prepared. These data are chitectural features of the building have been available on a seasonally adjusted and not sea­ maintained and are a part of the tour program, sonally adjusted basis beginning June 1974. In as are rotating coin and art exhibits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

483 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON APRIL 17, 1979 1. Domestic Policy Directive The information reviewed at this meeting suggested that growth in real output of goods and services had slowed substantially in the first quarter of 1979 from the rapid annual rate of 6.9 percent in the fourth quarter of 1978. Average prices, as measured by the fixed-weight price index for gross domestic business product, appeared to have increased considerably faster in the first quarter than in the prior two quarters, when they rose at an annual rate of 8.0 percent. The staff projection of growth in output over the four quarters of 1979 had been reduced slightly from the one prepared a month earlier. The reduction reflected a revised estimate of much slower expansion for the first quarter, when economic activity was adversely affected by unusually severe weather; this slower growth was expected to be offset only in part by some rebound in the second quarter. The projection continued to suggest sluggish growth in the third and fourth quarters. The rise in average prices was projected to remain rapid, and the rate of unemployment was expected to move up moderately as the year progressed. The dollar value of total retail sales expanded considerably in March after having changed little earlier in the year when the weather was an adverse influence. For the first quarter as a whole, retail sales declined in real terms, following a sharp advance in the fourth quarter of 1978. Unit sales of new automobiles rose substantially in March, reflecting large increases in sales of small domestic and foreign models; the first-quarter pace of sales was somewhat above that in the previous quarter. The index of industrial production rose 0.8 percent in March following two months of virtually no change; the rate of advance for the first quarter was only about half that for the second half of 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

484 Federal Reserve Bulletin □ June 1979 In March total nonfarm payroll employment registered another large gain, which included a further sizable increase in manufacturing. The rate of unemployment remained at 5.7 percent, about the level pre­ vailing since midsummer 1978. Total private housing starts were expected to rebound in March, after a sharp decline earlier in the year in part because of the weather; but scattered market reports suggested that the rebound would be limited. It appeared likely that the annual rate for the quarter as a whole would be well below the totals for 1977 and 1978. In February total sales of new and existing single-family houses fell for the fourth consecutive month. The index of average hourly earnings of private nonfarm production workers, which had increased 8V2 percent during 1978, rose at an annual rate of about 83A percent during the first quarter. The recent rise was affected by the January advance in the minimum wage. Producer prices of finished goods and of materials increased sharply further in March. Over the first quarter, prices of finished goods rose at an annual rate of almost 14 percent, compared with a rate of about 9 percent over the preceding six months. Consumer prices advanced at an annual rate of about 12 percent over the first two months of the year, compared with a rate of 8V2 percent during the second half of 1978. Particularly large increases in retail prices of food and energy and in homeownership costs contributed to the acceleration. In foreign exchange markets the trade-weighted value of the dollar against major foreign currencies had risen about 1 XA percent since the March 20 meeting of the Committee. The strength of the dollar was especially pronounced against the yen and, to a lesser extent, against the Swiss franc and the mark. The U.S. merchandise trade deficit declined in February to about half the large deficit in January; the average for the two months was somewhat above the monthly average in the fourth quarter of 1978. Total credit at U.S. commercial banks expanded at a much slower pace in March than in January and February, as growth in real estate and business loans moderated considerably and banks reduced their holdings of securities. However, commercial paper issued by nonfi­ nancial firms increased sharply, and the overall rate of short-term business borrowing was maintained. For the first quarter as a whole, nonfinancial businesses substantially increased their borrowing in short- and intermediate-term markets. At the same time, they reduced Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 485 their public offerings of bonds to the smallest quarterly total since 1973. The narrowly defined money supply, M-l, grew somewhat in March after having declined in both January and February. The broader monetary aggregates, M-2 and M-3, expanded at relatively slow rates during the month, although growth in both measures picked up somewhat from the pace earlier in the year. The performance of M-l reflected in part the continuing impact of movements of funds from demand deposits to savings deposits associated with the growth of the automatic transfer service (ATS) and of negotiable order of withdrawal (NOW) accounts in New York State. With market interest rates remaining at high levels, expansion in M-2 and M-3 was restrained by relatively limited inflows of interest-bearing deposits, despite further large flows into money market certificates at both commercial banks and nonbank thrift institutions. The behavior of all three monetary aggregates was still being influenced by shifts of funds from deposits to money market mutual funds and other highyielding market instruments. From the fourth quarter of 1978 to the first quarter of 1979, M-l declined at an annual rate of 2V2 percent, while M-2 and M-3 expanded at annual rates of about IV2 percent and 4V2 percent respectively. In March, banks increased sharply further their reliance on nondeposit sources to supplement their loanable funds, including Eurodollars and repurchase agreements. However, a substantial decline in large-denomination time deposits outstanding during the month partially offset the increase in nondeposit sources of funds. At its meeting on March 20 the Committee had decided on ranges of tolerance for the annual rates of growth in M-l and M-2 during the March-April period of 4 to 8 percent and 3V2 to IV2 percent respectively. The Committee had agreed that early in the coming intermeeting period operations should continue to be directed toward maintaining the weekly average federal funds rate at around 10 percent or slightly higher. Subsequently, if the two-month growth rates of M-l and M-2, given approximately equal weight, 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 93A to IOV2 percent. In late March and early April staff projections suggested that over the March-April period M-l would grow at a rate close to the lower Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

486 Federal Reserve Bulletin □ June 1979 limit of the range established by the Committee and M-2 at a rate just below the midpoint of its range. These projections were not viewed as sufficiently weak in relation to the Committee’s ranges to call for a change in the federal funds rate objective of 10 percent or slightly higher. Short-term interest rates fluctuated over a fairly wide range during the intermeeting period and generally rose a little on balance. Rates on short-term Treasury bills were under particular pressure in late March and early April from sales of bills by foreign official institutions. Long-term interest rates and mortgage yields also edged up on balance during the period. In the Committee’s discussion of the current economic situation and outlook, attention was drawn to the indications of considerably slower growth in real output of goods and services in the first quarter of 1979 than had appeared likely earlier. It was noted that residential construction and consumer spending for goods had weakened more than had been anticipated, and that such expansion as had occurred in the first quarter apparently reflected a substantial acceleration in the growth of business inventories. With respect to inventories, the observation was made that the overall rate of accumulation in the first two months of the year was not as high as had been feared earlier and that it seemed to be attributable largely to transitory influences. The members in general anticipated relatively slow growth in economic activity for the near term, and some believed that growth could remain at a sluggish pace for an extended period. In view of business-cycle history, however, a number of members expressed doubt that growth could be sustained at a slow pace for many quarters. Many continued to believe that the probabilities of a downturn in activity before the end of 1979 were fairly high, especially in view of the unusually long duration of the current business expansion. It was also suggested by some that a pickup in activity, based in part on a surge in business demands for equipment and for inventories, might occur and persist for a time before an eventual downturn. Various reasons were cited for thinking that economic activity might be near a cyclical turning point. Foremost among them was the dampening effect on expenditures for consumption and housing arising from the recent slowing of growth in personal income, from the impact of inflation on the purchasing power of personal income and on consumer wealth, and from the high level of consumer debt. Continued Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 487 weakness in consumer spending might result in an unwanted increase in inventories. It was suggested that the relatively high rates of resource utilization and the recent strong preference in the business community to incur short-term rather than long-term debt were characteristic features of the late stages of a business expansion. And it was observed that over recent quarters the total of funds raised by nonfinancial sectors of the economy was estimated to have fallen considerably in relation to nominal gross national product, indicating a weakening in the overall demand for credit. As at other recent meetings, great concern was expressed about inflation. It was observed that the rate of increase in prices had tended to accelerate from year to year recently and that there were few if any indications of a near-term reversal in that momentum. Forecasters in general had failed to anticipate the degree of the rise in prices, and some differences of opinion were expressed about the prospects for abatement in the rate of inflation in the latter part of 1979. At its meeting on February 6, 1979, the Committee had agreed that from the fourth quarter of 1978 to the fourth quarter of 1979 average rates of growth in the monetary aggregates within the follow­ ing ranges appeared to be consistent with broad economic aims: M-l, IV2 to 4V2 percent; M-2, 5 to 8 percent; and M-3, 6 to 9 percent. The associated range for the rate of growth in commercial bank credit was IV2 to IOV2 percent. It had also been agreed that the longer-run ranges, as well as the particular aggregates for which such ranges were specified, would be reconsidered in July or at any time that conditions might warrant. In contemplating policy for the period immediately ahead, the Committee continued to face uncertainties concerning the forces af­ fecting monetary growth. A staff analysis had suggested that M-l, after having registered a decline in the first quarter, would expand over the April-May period, reflecting in part rapid growth in nominal GNP. It was anticipated that shifts of funds from demand deposits to savings accounts with automatic transfer services and to NOW accounts in New York State, which were estimated to have depressed growth of M-l by about 3 percentage points from the fourth quarter of 1978 to the first quarter of 1979, would have a somewhat less dampening effect on growth of M-l in the period immediately ahead than in the first quarter. Moreover, it was assumed that the public’s demand for money in relation to income would continue to shift Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

488 Federal Reserve Bulletin □ June 1979 downward, but at a sharply slower pace than in recent months. Thus, the rise in the income velocity of M-l was expected to be relatively rapid, but less than the unusually rapid rate of the two most recent calendar quarters. In the Committee’s discussion at this meeting, as at the meeting on March 20, 1979, several members stressed their concern about the degree of the shortfall in monetary growth relative to the longer-run ranges that the Committee had adopted at its meeting on February 6. It was observed that restrictive policy actions taken in late 1978 had contributed to the recent slowing of monetary growth (after allowance for the impact of special factors) and apparently also to a moderation of the expansion in economic activity. Now, some easing in money market conditions might be appropriate, with the objective of raising growth of the monetary aggregates over a number of months into the longer-run ranges and of helping to support economic activity later in the year. However, an easing in money market conditions was generally regarded as premature in the current environment of rapidly rising prices, although it was felt that monetary policy could have little if any immediate effect on prices of food, energy, and housing items, which had been largely responsible for the recent acceleration of the overall rise. Given the staff expectation of a near-term strengthening of monetary growth, most members advocated or found acceptable a policy of directing operations early in the period immediately ahead toward maintaining the money market conditions currently prevailing, as represented by a federal funds rate of 10 percent or slightly higher, and of having the objective for operations later in the period before the next regular meeting determined on the basis of incoming evidence on rates of growth of the monetary aggregates over the April-May period in relation to the growth rates currently anticipated. A few members advocated an immediate increase in the objective for the federal funds rate to IOV4 percent or IOV2 percent and a range for subsequent operations providing for a further increase in the funds rate if incoming evidence suggested relative strength in growth of the monetary aggregates. They stressed the recent acceleration in the rise in prices and high rates of resource use, and they continued to believe that action should be taken to demonstrate that inflation represented the greatest risk to economic stability over a period of time. In their view, inflationary expectations had increased over recent months while Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 489 interest rates on balance had changed little. In the current circum­ stances, moreover, they attached little significance to the behavior of the monetary aggregates. At the conclusion of the discussion the Committee decided that ranges of tolerance for the annual rates of growth in M-l and M-2 over the April-May period should be 4 to 8 percent and 4 to 8V2 percent respectively. The Manager was instructed to direct open market operations initially toward maintaining the federal funds rate at about the current level, represented by a rate of about 10 percent or slightly higher. Subsequently, if the two-month growth rates of M-l and M-2 appeared to be close to or beyond the upper or lower limits of the indicated ranges, the objective for the funds rate was to be raised or lowered in an orderly fashion within a range of 9% to 10V2 percent. It was also agreed that in assessing the behavior of the aggregates, the Manager should give approximately equal weight to M-l and M-2. As is customary, it was understood that the Chairman might call upon the Committee to consider the need for supplementary instruc­ tions before the next scheduled meeting if significant inconsistencies appeared to be developing among the Committee’s various objectives. The following domestic policy directive was issued to the Federal Reserve Bank of New York: The information reviewed at this meeting suggests that in the first quarter of 1979 growth in real output of goods and services slowed substantially from the rapid rate in the last quarter of 1978, while the rise in prices accelerated. In March the dollar value of total retail sales, industrial production, and nonfarm payroll employment expanded consid­ erably, but part of the strength was attributable to recovery from the effects of severe weather in the preceding two months. For the first quarter as a whole, retail sales in real terms declined somewhat, following a sharp increase in the fourth quarter of 1978, and the advance in industrial output slowed appreciably. Growth in employment remained strong in the quarter, however, and the unemployment rate in March, at 5.7 percent, was virtually unchanged from its level in late 1978 and the first two months of 1979. Over recent months, broad measures of prices have increased at a faster pace than during 1978, and the index of average hourly earnings has continued to rise rapidly. The trade-weighted value of the dollar against major foreign currencies has risen over the past four weeks, with the dollar showing particular strength against the yen, the Swiss franc, and the mark. The U.S. trade deficit in February was about half the size of the large deficit in January, but the average for the two months was above the monthly average in the fourth quarter of 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

490 Federal Reserve Bulletin □ June 1979 M-l increased slightly in March after having declined in both January and February. With market interest rates continuing high, inflows of the interest-bearing deposits included in M-2 and M-3 remained at reduced levels, despite substantial flows into money market certificates at both commercial banks and nonbank thrift institutions, and the broader mone­ tary aggregates continued to grow at relatively slow rates. From the fourth quarter of 1978 to the first quarter of 1979, M-l declined at an annual rate of about 2xh percent, in part because of the effects of the growth of the automatic transfer service, and M-2 and M-3 grew at rates of about I Vi percent and AVi percent respectively. The behavior of all three monetary aggregates was affected by shifts of funds from deposits to money market mutual funds and other liquid assets. Since mid-March, market interest rates generally have risen somewhat, on balance. Taking account of past and prospective developments in employment, unemployment, production, investment, real income, productivity, inter­ national trade and payments, and prices, it is the policy of the Federal Open Market Committee to foster monetary and financial conditions that will resist inflationary pressures while encouraging moderate economic expansion and contributing to a sustainable pattern of international trans­ actions. The Committee agreed that these objectives would be furthered by growth of M-l, M-2, and M-3 from the fourth quarter of 1978 to the fourth quarter of 1979 within ranges of IVz to 4Vi percent, 5 to 8 percent, and 6 to 9 percent respectively. The associated range for bank credit is IV2 to IOV2 percent. These ranges will be reconsidered in July or 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 the program for supporting the foreign exchange value of the dollar and to developing conditions in domestic financial markets. Early in the period before the next regular meeting, System open market operations are to be directed at maintaining the weekly average federal funds rate at about the current level. Subsequently, operations shall be directed at maintaining the weekly average federal funds rate within the range of 93A to IOV2 percent. In deciding on the specific objective for the federal funds rate the Manager shall be guided mainly by the relationship between the latest estimates of annual rates of growth in the April-May period of M-l and M-2 and the following ranges of tolerance: 4 to 8 percent for M-l and 4 to 8V2 percent for M-2. If, with approximately equal weight given to M-l and M-2, their rates of growth appear to be close to or beyond the upper or lower limits of the indicated ranges, the objective for the funds rate is to 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 corre­ sponding limit of its range, the Manager will promptly notify the Chair­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 491 man, who will then decide whether the situation calls for supplementary instructions from the Committee. Votes for this action: Messrs. Miller, Balles, Black, Kim­ brel, Mayo, Partee, and Mrs. Teeters. Votes against this action: Messrs. Volcker, Coldwell, and Wallich. Messrs. Volcker, Coldwell, and Wallich dissented from this action because they continued to favor a somewhat more restrictive policy posture, in view of strong inflationary forces reinforced by pressure on capacity in some industries. They believed that, despite uncertainty about prospects for economic activity later this year, some additional firming in money market conditions at this time would help in limiting inflationary pressures by curbing inflationary expectations quickly. On April 27 the Committee held a telephone conference to review the situation and to consider whether supplementary instructions were needed. However, no change was made in the domestic policy directive adopted at the meeting on April 17. 2. Authorization for Foreign Currency Operations On May 9 the Committee voted to amend paragraph 5 of the authori­ zation for foreign currency operations, effective immediately, to au­ thorize purchases of U.S. government securities from foreign central banks under agreements for repurchase of such securities within 30 calendar days, when appropriate in connection with arrangements to provide investment facilities for foreign currency holdings. Paragraph 5 as amended reads as follows: 5. Foreign currency holdings shall be invested insofar as practicable, considering needs for minimum working balances. When appropriate in connection with arrangements to provide investment facilities for foreign currency holdings, U.S. Government securities may be purchased from foreign central banks under agreements for repurchase of such securities within 30 calendar days. Votes for this action: Messrs. Miller, Volcker, Balles, Black, Coldwell, Kimbrel, Mayo, Partee, Mrs. Teeters, and Mr. Wallich. Votes against this action: None. This action was taken on the recommendation of the Manager of the System Open Market Account to provide an additional investment mechanism for System balances of foreign currencies. The mechanism Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

492 Federal Reserve Bulletin □ June 1979 involved (1) a transaction with a foreign central bank in which the System would sell a foreign currency spot and buy it forward; and (2) a repurchase agreement in which the System would acquire U.S. Treasury securities from the foreign central bank for the same period of time involved in the foreign currency transaction. 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 made available a few days after the next regularly scheduled meeting and are subsequently published in the Bulletin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

493 Law Department Statutes, regulations, interpretations, and decisions Amendments to Regulation Q the maturity of the deposit constitutes a payment of the time deposit before maturity. A time deposit The Board of Governors has amended Regulation may be paid before maturity without a forfeiture Q, Interest on Deposits, to provide additional of interest as prescribed by this paragraph in the returns to savers. following circumstances:*** Effective July 1, 1979, sections 217.4, 217.6, (e) Disclosure of early withdrawal penalty. At and 217.7 are amended to read as follows: the time a depositor enters into a time deposit Section 217.4 — contract with a member bank, the bank shall Payment of the Time Deposits Before Maturity provide a written statement of the effect of the penalty prescribed in paragraph (d) of this section, which shall (1) state clearly that the customer has contracted to keep his funds on deposit for the (d) Penalty for early withdrawals. Where a stated maturity, and (2) describe fully and clearly time deposit with an original maturity of one year how such penalty provisions apply to time deposits or less, or any portion thereof, is paid before in such bank, in the event the bank, notwith­ maturity, a depositor shall forfeit at least three standing the contract provisions, permits payment months of interest on the amount withdrawn at before maturity. Such statements shall be ex­ the rate being paid on the deposit. If the amount pressly called to the attention of the customer. withdrawn has remained on deposit for less than three months, all interest shall be forfeited. Where * * * a time deposit with an original maturity of more Section 217.6— than one year, or any portion thereof, is paid Advertising of Interest On Deposits before maturity, a depositor shall forfeit at least six months interest on the amount withdrawn at the rate being paid on the deposit. If the amount (e) Penalty for early withdrawals. Any adver­ has remained on deposit for less than six months, tisement, announcement, or solicitation relating to all interest shall be forfeited.11 Where necessary interest paid by a member bank on time deposits to comply with the requirements of this paragraph, shall include clear and conspicuous notice that the any interest already paid to or for the account of bank is prohibited from allowing payment of a the depositor shall be deducted from the amount time deposit before maturity unless substantial requested to be withdrawn. Any amendment of a interest is forfeited. Such notice may state that, time deposit contract that results in an increase “Substantial interest penalty is required for early in the rate of interest paid or in a reduction in withdrawal.” 11. The provisions of this paragraph apply to all time deposit contracts entered into on or after July 1, 1979, and Section 217.7—Maximum Rates to all existing time deposit contracts that are extended or of Interest Payable by Member Banks renewed (whether by automatic renewal or otherwise) on or after such date. All contracts not subject to the provisions of on Time and Savings Deposits this paragraph shall be subject to the restrictions of § 217.4(d) in effect prior to July 1, 1979, which provided that where * * * * * a time deposit, or any portion thereof, is paid before maturity, (b) Fixed ceiling time deposits of less than a member bank may pay interest on the amount withdrawn at a rate not to exceed that prescribed in § 217.7 for a savings $100,000. Except as provided in paragraphs (a), deposit and the depositor shall forfeit three months of interest (d), (e), (f), and (g), no member bank shall pay payable at such rate. If, however, the amount withdrawn has remained on deposit for three months or less, all interest shall interest on any time deposit at a rate in excess be forfeited. of the applicable rate under the following schedule: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

494 Federal Reserve Bulletin □ June 1979 Maturity Maximum per cent with a maturity of 26 weeks, at a rate not to exceed the rate established (auction average on a discount basis) for United States Treasury bills with ma­ 30 days or more but less turities of 26 weeks issued on or immediately prior than 90 days 5 to the date of deposit. Rounding such rate to the 90 days or more but less next higher rate is not permitted. A member bank than 1 year 5'h 1 year or more but less may not compound interest during the term of this than 30 months 6 deposit. A member bank may offer this category 30 months or more but of time deposit to all depositors. less than 4 years 61/2 (g) Time deposits of less than $100,000 with 4 years or more but less maturities of four years or more. Except as pro­ than 6 years 7lA vided in paragraphs (a) and (b), a member bank 6 years or more but less may pay interest on any nonnegotiable time de­ than 8 years IVi posit with a maturity of four years or more that 8 years or more 13A is issued on or after the first day of every month at a rate not to exceed one and one-quarter per cent below the average 4-year yield for United (c) Savings deposits. No member bank shall States Treasury securities as determined and an­ pay interest at a rate in excess of 5lA per cent nounced by the United States Department of the on any savings deposit. Provided, however, that Treasury three business days prior to the first day no member bank shall pay interest at a rate in of such month. The average 4-year yield will be excess of 5 per cent on any savings deposit that rounded by the United States Department of the is subject to negotiable orders of withdrawal, the Treasury to the nearest 5 basis points. A member issuance of which is authorized by Federal law. bank may offer this category of time deposit to (d) Governmental unit time deposits of less than all depositors. $100,000. Except as provided in paragraphs (a), (f), and (g), no member bank shall pay interest on any time deposit which consists of funds depos­ ited to the credit of, or in which the entire Interpretation of Regulation Q beneficial interest is held by, the United States, any State of the United States, or any county, The Board of Governors has issued an interpreta­ municipality or political subdivision thereof, the tion of Regulation Q, Interest on Deposits, which District of Columbia, the Commonwealth of provides that under Regulation Q member banks Puerto Rico, the Virgin Islands, American Samoa, may accept funds pooled by depositors but may Guam, or political subdivision thereof, at a rate not solicit pooled funds through advertisement, in excess of 8 per cent.2 announcement or other notice where the purpose (e) Individual Retirement Account and Keogh of such pooling is to pay higher rates of interest (H.R. 10) Plan deposits of less than $100,000. on deposits. Except as provided in paragraphs (a) and (g), a Effective May 30, 1979, a new section 217.155 member bank may pay interest on any time deposit is added to read as follows: with a maturity of three years or more that consists of funds deposited to the credit of, or in which Section 217.155— the entire beneficial interest is held by, an individ­ Pooling of funds to obtain higher interest rates ual pursuant to an Individual Retirement Account agreement or Keogh (H.R. 10) Plan established (a) The Board of Governors has reviewed its pursuant to 26 U.S.C. (I.R.C. 1954) §§ 408, 401, previous rulings concerning acceptance of pooled at a rate not in excess of 8 per cent.2 funds by member banks. Under these rulings, the (f) 26-week money market time deposits of less Board had expressed the view that a member bank than $100,000. Except as provided in paragraph that paid a higher rate on a deposit that it knew (a), a member bank may pay interest on any or had reason to know resulted from funds aggre­ nonnegotiable time deposit of $10,000 or more, gates (pooled) principally for the purpose of ob­ taining a higher rate of interest would be acting contrary to the spirit of Regulation Q. This inter­ 2. The ceiling rate on this category is the highest fixed pretation replaces these prior Board rulings that ceiling rate that may be paid on time deposits under $100,000 had been issued in the form of letter opinions in by any Federally insured commercial bank, mutual savings bank, or savings and loan association. 1968 and 1970. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 495 (b) The Board has determined that member Revenue Service. banks accepting and paying higher rates of interest He * * * * on pooled deposits from depositors who them­ selves have pooled their funds whether or not the The Board has issued this interpretation based bank knows or has reason to know that such funds upon its statutory authority under section 19 of have been pooled would not be violating Regula­ the Federal Reserve Act, 12 U.S.C. 461, 371a tion Q. However, member banks are not permitted and 371b. to solicit, advise or encourage depositors to pool funds for the purpose of paying higher interest rates. In addition, member banks are not permitted Bank Holding Company to solicit deposits from customers on the basis that and Bank Merger Orders the funds will be pooled by the bank for the purpose of paying higher interest rates. The Board Issued by the Board of Governors believes that participation by member banks in Orders Under Section 3 encouraging or establishing pooling arrangements of Bank Holding Company Act constitutes a device to avoid interest rate limita­ Hawkeye Bancorporation, tions. The Board further believes that adopting this Des Moines, Iowa new policy will facilitate the administration of Regulation Q interest rate ceilings. Order Denying Acquisition of Bank (c) The Board would regard any advertisement, announcement or solicitation by a member bank Hawkeye Bancorporation, Des Moines, Iowa, indicating that it will accept pooled funds or that a bank holding company within the meaning of funds can be pooled to obtain higher rates as a the Bank Holding Company Act, has applied for violation of Regulation Q. For example, printed the Board’s approval under section 3(a)(3) of the and broadcast advertisements stating that deposi­ Act (12 U.S.C. § 1842(a)(3)) to acquire all of the tors can achieve higher interest rates by pooling voting shares (less directors’ qualifying shares) of their funds with others and depositing them in the Mount Pleasant Bank and Trust Company, Mount bank would be inappropriate. In addition, in re­ Pleasant, Iowa (“Bank”). sponding to inquiries from depositors concerning Notice of the application, affording opportunity available deposit instruments and rates, member for interested persons to submit comments and banks are not permitted to suggest the practice of views, has been given in accordance with section pooling as a means of meeting minimum denomi­ 3(b) of the Act. The time for filing comments and nation requirements. Similarly, any advertisement, views has expired, and the Board has considered announcement or solicitation, written or oral, by the application and all comments received, in­ a member bank discussing a policy, practice, pro­ cluding those submitted by the Iowa Department gram, or procedure for accepting pooled deposits of Banking, in light of the factors set forth in would not be permitted. If, for example, two section 3(c) of the Act (12 U.S.C. § 1842(c)). depositors come into a member bank on their own Applicant, the third largest banking organization with checks of $5,000 each seeking to purchase in Iowa, controls 20 banks with aggregate deposits jointly one $10,000 minimum denomination of approximately $662.0 million, representing 4.5 money market time deposit, the bank is permitted percent of total deposits in commercial banks in to accept such funds in the form of a money market Iowa.1 Acquisition of Bank, with deposits of $27.1 time deposit and to pay the ceiling rate on such million, would increase Applicant’s share of com­ deposits. However, a member bank could not mercial bank deposits in Iowa by 0.2 percent and arrange to introduce, directly or indirectly, sepa­ would not result in a significant increase in the rate depositors that are seeking to pool their funds. concentration of banking resources in Iowa. (d) This interpretation is not intended to affect Bank is the second largest of seven banks lo­ other well-established practices which involve cated in the relevant banking market2 and controls pooling of funds such as money market mutual 27.5 percent of deposits in commercial banks in funds, trust department aggregation of temporarily the market. Applicant’s subsidiary, Hawkeye idle balances of bona fide fiduciary accounts, or Bank and Trust Company, Burlington, Iowa, combination of funds held in escrow by a person operates three banking offices in the relevant acting in a fiduciary or custodial capacity. In addition, member banks are expected to report 1. All banking data are as of June 30, 1978. 2. The relevant banking market is approximated by all of interest earned by depositors on pooled funds in Henry County and the northwestern portion of Lee County, accordance with the regulations of the Internal Iowa. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

496 Federal Reserve Bulletin □ June 1979 banking market.3 Through its subsidiary, Appli­ services, such as investment management, credit cant controls deposits of $12.9 million, repre­ card and agricultural services. However, there is senting 13.0 percent of market deposits, and ranks no indication that these proposed new services can as the third largest banking organization in the not be obtained elsewhere in the relevant banking relevant banking market.4 From the record it ap­ market, or that Applicant could not offer such pears that consummation of the proposal would services through its present subsidiary bank in the eliminate a significant amount of direct competi­ market. Accordingly, the Board finds that consid­ tion between Bank and Applicant’s subsidiary erations relating to the convenience and needs of bank, inasmuch as both organizations compete in the community to be served do not outweigh the the relevant banking market. The Board regards substantially adverse competitive effects that this elimination of existing competition as an ad­ would result from Applicant’s acquisition of verse factor in its consideration of this application. Bank.5 In addition to the elimination of existing com­ On the basis of the foregoing and other facts petition, the acquisition of Bank by Applicant in the record, and in light of the factors set forth would have adverse effects upon the concentration in section 3(c) of the Act, it is the Board’s judg­ of banking resources in the relevant banking mar­ ment that approval of the proposal would not be ket. Upon consummation of the proposal, Appli­ in the public interest. Accordingly, the application cant would become the largest banking organi­ should be, and hereby is, denied for the reasons zation in the market, and would increase its share summarized above. of market deposits from 13.0 to 40.5 percent. By order of the Board of Governors, effective Thus, the Board views the effects of the proposal May 25, 1979. on concentration of banking resources in the rele­ Voting for this action: Chairman Miller and Gover­ vant banking market as an adverse factor in its nors Wallich, Partee, and Teeters. Absent and not consideration of this application. Moreover, those voting: Governor Coldwell. effects are regarded as more serious in light of the fact that the market is already highly concen­ (Signed) Edward T. Mulrenin, trated with the four largest banking organizations [seal] Assistant Secretary of the Board. in the market holding 81.7 percent of market deposits. Accordingly, the Board finds on the basis of Longview Financial Corporation, the foregoing and other facts of record that ap­ Longview, Texas proval of the application would have substantially adverse effects on competition, and that such ad­ Order Approving verse competitive effects weigh sufficiently against Formation of Bank Holding Company approval so that the application should not be approved unless the anticompetitive effects are Longview Financial Corporation, Longview, outweighed by considerations relating to the con­ Texas, has applied for the Board’s approval under section 3(a)(1) of the Bank Holding Company Act venience and needs of the community to be served. The financial and managerial resources of Ap­ (12 U.S.C. § 1842(a)(1)) of formation of a bank plicant, its subsidiaries and Bank are regarded as holding company through acquisition of 80 percent generally satisfactory, and their future prospects or more (less directors’ qualifying shares) of the appear favorable, particularly in light of Appli­ voting shares of Longview Bank and Trust Com­ cant’s proposal to increase Bank’s capital. Thus, pany, Longview, Texas (“Bank”). considerations relating to banking factors lend Notice of the application, affording opportunity some weight toward approval of the application. for interested persons to submit comments and In addition, through its nonbank subsidiaries, Ap­ views, has been given in accordance with section plicant proposes to offer Bank’s customers new 3(b) of the Act. The time for filing comments and views has expired, and the application and all comments received have been considered in light 3. Applicant entered the relevant banking market in July 1976 by acquiring certain assets and assuming liabilities of two banks located in the market, each of which was subse­ 5. Comments have been submitted on behalf of certain quently dissolved. banks competing in the relevant banking market indicating that 4. The Board notes that a director and shareholder of Ap­ they do not object to the proposed acquisition. In the Board’s plicant is also a principal shareholder of two other banks in view, the fact that competitors do not object to a particular the relevant banking market (including the market’s largest proposal does not alter the competitive effects of the proposal bank), which hold an aggregate of $38.3 million, representing and is not determinative of whether the proposal is in the public 38.9 percent of market deposits. interest. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 497 of the factors set forth in section 3(c) of the Act The financial and managerial resources and fu­ (12 U.S.C. § 1842(c)). ture prospects of Applicant are dependent upon Applicant is a recently organized non-operating those of Bank, which are considered to be gener­ corporation formed for the purpose of becoming ally satisfactory. Applicant proposes to service the a bank holding company through the acquisition debt it will incur as a result of the proposed of Bank. Bank is the 111th largest banking orga­ transaction over a 12-year period. Based on Bank’s nization in the state of Texas with total deposits past earnings and Applicant’s commitments, it of approximately $57.8 million.1 Bank is located appears that Applicant will be able to meet its in Longview, Texas, and is the fourth largest of annual debt-servicing requirements and maintain 17 banking organizations in the relevant banking Bank’s capital position. Additionally, the financial market which is approximated by the Longview conditions of the related banking organizations SMSA, consisting of Gregg and Harrison Coun­ appear to be satisfactory.3 Accordingly, consid­ ties. Bank controls approximately 10.2 percent of erations relating to the banking factors are con­ the market’s total deposits. The transaction has as sistent with approval of the application. Consid­ its purpose the transfer of the ownership of shares erations relating to the convenience and needs of of Bank from individuals to a corporation owned the community to be served are also consistent by the same individuals. Three principals of Ap­ with approval of the application. plicant are affiliated with banking organizations in On the basis of the record, the application is separate markets from Bank; these organizations approved for the reasons summarized above. The are of such size and distant location as to preclude transaction shall not be consummated before the any adverse competitive effects that might result thirtieth calendar day following the effective date from consummation of the proposal. In addition, of this Order or later than three months after the two principals of Applicant are also principals of effective date of this Order, unless such period White Oak Bancshares, Inc., the proposed holding is extended for good cause by the Board or by company for White Oak State Bank, White Oak, the Federal Reserve Bank of Dallas, pursuant to Texas, which holds deposits of approximately delegated authority. $16.2 million.2 White Oak State Bank is located By order of the Secretary of the Board, acting in the same banking market as Bank and controls pursuant to authority delegated from the Board of 2.9 percent of market deposits. The two banks Governors, effective May 31, 1979. together control 13.1 percent of total market de­ posits and would rank second in the market as (Signed) Griffith L. Garwood, a single organization. However, approval of the [seal] Deputy Secretary of the Board. application will not affect market entry conditions or result in any unfair competitive advantage. Denial of the application is unlikely to result in Michigan National Corporation, severance of existing relationships beyond those Bloomfield Hills, Michigan steps to which Applicant has made commitment as a matter of record, including steps to attain Order Approving Acquisition of Bank compliance with Title II of the Financial Institu­ tions Regulatory and Interest Rate Control Act of Michigan National Corporation, Bloomfield 1978. Given the relative market shares of the Hills, Michigan (“MNC”), a bank holding com­ organizations involved and the number of banking pany within the meaning of the Bank Holding alternatives available in the market, it does not Company Act, has applied for the Board’s ap­ appear that consummation of this transaction proval under section 3(a)(3) of the Act (12 U.S.C. would have any significant adverse effect upon § 1842(a)(3)) to acquire all of the voting shares existing or potential competition or increase the (less directors’ qualifying shares) of Michigan concentration of banking resources in any relevant National Bank-Ann Arbor, Ann Arbor, Michigan area. Therefore, competitive considerations are (“Bank”), a proposed new bank. consistent with approval of the application. Notice of the application, affording opportunity for interested persons to submit comments and 1. All banking data are as of December 31, 1977, and reflect bank holding company formations and acquisitions approved 3. Where principals of an Applicant are engaged in operat­ as of November 30, 1978. ing a chain of one-bank holding companies, the Board has 2. By separate action of this date, the Board approved the indicated it is appropriate to analyze such organizations by application of White Oak Bancshares, Inc., WTiite Oak, Texas, the standards normally applied to multibank holding compa­ to become a bank holding company with respect to White Oak nies. Nebraska Banco, Inc., Ord., Nebraska, (62 Federal State Bank. Reserve Bulletin 638 (1976)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

498 Federal Reserve Bulletin □ June 1979 views, has been given in accordance with section The Board finds that the capitalization of MNC 3(b) of the Act. The time for filing comments and and its subsidiary banks is generally satisfactory. views has expired, and the Board has considered Moreover, Protestants’ arguments regarding the application and all comments received, in­ MNC’s capitalization were not found to be per­ cluding those of National Bank and Trust Com­ suasive at Bank’s charter hearing before the pany of Ann Arbor, Ann Arbor Bank and Trust Comptroller of the Currency. MNC’s loan loss Company, and Huron Valley National Bank, all reserves, although smaller than those of its peer of Ann Arbor, Michigan, in light of the factors group, appear to be sufficient in view of its low set forth in section 3(c) of the Act (12 U.S.C. loan loss experience and conservative lending pol­ § 1842(c)). icies. The insider transactions at issue appear to MNC, the second largest commercial banking relate primarily to sale and leaseback arrangements organization in Michigan, controls 18 banks with regarding the premises of various of MNC’s sub­ aggregate deposits of approximately $4.1 billion, sidiary banks. Although certain of these transac­ representing 10.9 percent of the deposits in com­ tions appear to have been made on a less than mercial banks in the state.1 Since this application arms-length basis, MNC has taken corrective ac­ involves the acquisition of a proposed de novo tions regarding such transactions and on balance bank, consummation of the proposal would not the Board believes that MNC’s managerial re­ immediately increase Applicant’s share of deposits sources are generally satisfactory. in commercial banks in Michigan, nor would it MNC’s future prospects appear favorable. Bank increase the concentration of banking resources in has no operating history; however, based upon its that state. planned management, capitalization, and projected Bank is to be located in the Ann Arbor banking earnings, Bank’s future prospects as a subsidiary market, and will represent MNC’s initial entry into of MNC appear favorable. Thus, considerations that market.2 The nearest office of any of Appli­ relating to banking factors are consistent with cant’s subsidiary banks to Bank’s proposed loca­ approval of the application. tion is 22 road miles east of Bank, although one The establishment of Bank would provide a new of MNC’s subsidiary banks does have an applica­ and convenient banking alternative for the area’s tion pending to open a branch in the Ann Arbor residents. As a subsidiary of MNC, Bank would market. It is the Board’s view that consummation have access to MNC’s resources and would be able of this proposal would add an additional full-serv­ to institute and develop a full line of banking ice banking competitor to the market. Moreover, services. Thus, considerations relating to the con­ Applicant’s de novo entry would have no adverse venience and needs of the community to be served effects on potential competition. Accordingly, it lend some weight toward approval of the applica­ appears from the facts of record that consumma­ tion. Accordingly, it is the Board’s judgment that tion of the proposal would not result in any adverse approval of the application to acquire Bank would effects upon competition in any relevant area. be in the public interest and that the application Thus, competitive considerations are consistent should be approved. with approval of the application. On the basis of the record, the application is With regard to MNC’s financial and managerial approved for the reasons summarized above. The resources, Protestants contend that MNC is un­ transaction shall not be made (a) before the thir­ dercapitalized, that its loan loss reserves are inad­ tieth calendar day following the effective date of equate, and that certain transactions between MNC this Order or (b) later than three months after that and its officers, directors, and shareholders reflect date, and (c) Bank shall be opened for business adversely on management.3 Protestants further not later than six months after the effective date contend their criticisms are confirmed by the pen­ of this Order. Each of the periods described in dency of an investigation by the Securities and (b) and (c) may be extended for good cause by Exchange Commission into these matters. the Board, or by the Federal Reserve Bank of Chicago pursuant to delegated authority. By order of the Board of Governors, effective 1. All banking data are as of June 30, 1978, and reflect May 25, 1979. bank holding company formations and acquisitions approved as of March 31, 1979. 2. The Ann Arbor banking market is approximated by Voting for this action: Chairman Miller and Gover­ Washtenaw County, Michigan (minus Salem township), plus nors Wallich, Partee, and Teeters. Absent and not the southwestern most townships of Livingston County. voting: Governor Coldwell. 3. Protestants also question MNC’s use of preferred stock to satisfy its commitment to inject $10 million of equity capital (Signed) Edward T. Mulrenin, into its subsidiary banks. The Board has previously determined [seal] Assistant Secretary of the Board. that such preferred stock is adequate to satisfy the commitment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 499 Old Kent Financial Corporation, de novo entry since the per capita income, deposits Grand Rapids, Michigan per bank office and population density of Mecosta County are below the state average. In addition, Order Approving Acquisition of Bank a number of large- and medium-sized banking Old Kent Financial Corporation, Grand Rapids, organizations remain available as potential entrants Michigan, a bank holding company within the into the Big Rapids market. Accordingly, con­ meaning of the Bank Holding Company Act, has summation of the proposal would have only a applied for the Board’s approval under § 3(a)(3) slightly adverse effect on potential competition and of the Act (12 U.S.C. § 1842(a)(3)) to acquire would have no adverse effect on existing competi­ all of the voting shares of the successor by con­ tion or concentration of banking resources in the solidation to Central Michigan Bank and Trust, relevant market. Thus, the Board concludes that Big Rapids, Michigan (“Bank”). The bank with competitive considerations weigh only slightly which Bank is to be consolidated has no signifi­ against approval of the application. cance except as a means to facilitate the acquisition The financial and managerial resources of Ap­ of shares of Bank. Accordingly, the proposed plicant and its subsidiaries are regarded as satis­ acquisition of shares of the successor organization factory and their future prospects appear favorable, is treated herein as the proposed acquisition of the particularly in light of certain commitments made shares of Bank. by Applicant in connection with this application. Notice of the application, affording opportunity The financial and managerial resources of Bank for interested persons to submit comments and are regarded as generally satisfactory. Accord­ views, has been given in accordance with § 3(b) ingly, banking factors are consistent with approval of the Act. The time for filing comments and views of the application. has expired, and the Board has considered the Applicant has indicated that it will increase the application and all comments received in light of range of savings programs offered by Bank, elim­ the factors set forth in § 3(c) of the Act (12 U.S.C. inate the add-on method of calculating interest on § 1842(c)). Bank’s new loans, and make available to Bank Applicant, a multi-bank holding company, is the the corporate services offered by Applicant and sixth largest banking organization in the state of its subsidiary, Old Kent Leasing Corporation. Michigan, with eight subsidiary banks in that state Considerations relating to the convenience and with a total of $1.3 billion in deposits, representing needs of the community to be served are consistent 3.5 percent of the total deposits in commercial with and lend weight toward approval sufficient banks in the state.1 Acquisition of Bank, with to outweigh the slightly adverse competitive ef­ deposits of $52.8 million, would increase Appli­ fects associated with the proposal. Accordingly, cant’s share of commercial bank deposits in it is the Board’s judgment that the proposed trans­ Michigan by one-tenth of one percent, and would action would be consistent with the public interest not have an appreciable effect upon concentration and that the application should be approved. of banking resources in the state. On the basis of the record, the application is Bank is the largest of five commercial banks approved for the reasons summarized above. The transaction shall not be made before the thirtieth in the Big Rapids banking market2 with approxi­ calendar day following the effective date of this mately 44.2 percent of total commercial bank deposits in the market. None of Applicant’s sub­ Order or later than three months after the effective date of this Order, unless such period is extended sidiary banks competes in the Big Rapids market, for good cause by the Board, or by the Federal and Applicant’s nearest subsidiary bank is located Reserve Bank of Chicago pursuant to delegated about 35 miles from Bank’s nearest branch office. authority. From the record it appears that no significant competition presently exists between Applicant’s By order of the Board of Governors, effective banking subsidiaries and Bank, and it appears May 18, 1979. unlikely that any significant competition would develop between them in the future. Furthermore, it does not appear that the market is attractive for Voting for this action: Chairman Miller and Gover­ nors Wallich, Coldwell, Partee, and Teeters. 1. Banking data are as of June 30, 1978. 2. The Big Rapids banking market is approximated by (Signed) Griffith L. Garwood, Mecosta County, Michigan, and the southern eight townships in Osceola County, Michigan. [seal] Deputy Secretary of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

500 Federal Reserve Bulletin □ June 1979 Texas American Bancshares, Inc., are held through Bank, and approval of the subject Forth Worth, Texas application would result in consolidation of Ap­ plicant’s control over Bank’s market share. While Order Approving it appears that approval of the application would Acquisition of Bank Shares result in the elimination of some existing competi­ Texas American Bancshares, Inc., Fort Worth, tion between Applicant and Bank, the amount of Texas, a bank holding company within the mean­ competition eliminated would be slight in view of ing of the Bank Holding Company Act, has ap­ the long-standing relationship between Bank and plied for the Board’s approval under section Applicant’s lead bank, FWNB. Bank was organ­ 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to ized in 1946 by a group of officers, directors, and acquire 75 percent of the voting shares of River­ shareholders of FWNB; a majority of Bank’s side State Bank, Fort Worth, Texas (“Bank”). shares was controlled by FWNB for eight years, and the two institutions have remained closely Notice of the application, affording opportunity associated. Moreover, 39 additional banking or­ for interested persons to submit comments and ganizations will remain as competitors in the Fort views, has been given in accordance with section 3(b) of the Act. The time for filing comments and Worth banking market, and the market will remain attractive for de novo entry. Accordingly, the views has expired, and the Board has considered Board concludes that the proposed acquisition the application and all comments received, in­ cluding those filed on behalf of Ella Jackson, would have only slightly adverse effects upon Willie Wingfield, and Brenda Evans and those existing competition. filed by Mr. Ronald C. Fernandes, in light of the The financial and managerial resources of Ap­ factors set forth in section 3(c) of the Act (12 plicant and Bank are regarded as generally satis­ U.S.C. § 1842(c)). factory and the future prospects of each appear Applicant is the seventh largest banking organi­ favorable. Accordingly, banking factors are con­ sistent with approval of the application. zation in Texas, with ten subsidiary banks holding As part of its analysis of this application, the total deposits of $1.76 billion, representing 2.9 percent of total deposits in commercial banks in Board has considered the comments submitted by the state.1 Bank, which is not among the larger Ronald C. Fernandes, Executive Director of the Minority Procurement Program of the Mexican banking organizations in Texas, holds total depos­ its of $68.9 million, representing 0.1 percent of American Chamber of Commerce, Fort Worth, Texas, and comments submitted by counsel on total deposits in commercial banks in Texas. Bank behalf of Ella Jackson, Willie Wingfield, and is presently considered to be a subsidiary of Ap­ plicant due to Applicant’s direct ownership of Brenda Evans (“Protestants”). Mr. Fernandes has 24.99 percent of Bank’s outstanding voting shares requested that the Board “review” this application and control of an additional 13.11 percent of “with consideration for the minority community and the policies that adversely affect our commu­ Bank’s outstanding voting shares held by Appli­ nity.” However, Mr. Fernandes has not provided cant in a fiduciary capacity through the trust the Board with any facts that would tend to sub­ department of Applicant’s lead bank, Fort Worth stantiate his generalized statements.3 In the ab­ National Bank, Fort Worth, Texas (“FWNB”). Because Bank is already a subsidiary of Applicant, sence of any such facts, and in light of other facts of record indicating that Applicant and its subsidi­ the effect of the acquisition of the remainder of ary banks are serving the convenience and needs Bank’s outstanding voting shares will be to con­ solidate Applicant’s control of Bank, and approval of the application would not result in any increase in the percentage of bank deposits in Texas of Tarrant County and portions of Denton, Johnson, Parker, and Wise Counties in Texas. deemed to be controlled by Applicant. 3. Mr. Fernandes has provided the Board with his own Applicant is the largest banking organization in affidavit stating that his request for a Community Reinvestment the Fort Worth banking market with approximately Act Statement from FWNB was initially met with confusion on the part of employees of FWNB, although a Statement was 28.4 percent of total deposits in commercial banks soon provided to him. In addition, he notes that FWNB did in the market.2 Of this market share 1.9 percent not choose to become an underwriter of the Fort Worth Minor­ ity Enterprise Small Business Investment Corporation, of which he is an organizer. However, he has neither alleged nor produced any evidence tending to show, that FWNB’s 1. All banking data are as of December 31, 1977, and reflect decision not to participate as an underwriter was anything other bank holding company formations and acquisitions approved than a legitimate business decision. Accordingly, the Board as of June 30, 1978. does not consider either of the above specific comments as 2. The Fort Worth banking market is approximated by the adversely reflecting upon Applicant’s or FWNB’s performance Fort Worth Ranally Metropolitan Area (“RMA”), consisting in serving the convenience and needs of the community. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 501 of their communities, including the credit needs ing company may be relevant to the Board’s con­ of low- and moderate-income segments of such sideration of applications under the Act and may communities, the Board concludes that Mr. Fer­ clearly bear on the managerial integrity of an nandes’ comments are not sufficient to warrant the applicant.” 6 After taking all of the facts of record denial of this application. into consideration, the Board concludes that the Protestants contend that approval of the pro­ evidence submitted by Protestants does not support posed acquisition would not serve the convenience any adverse finding regarding Applicant or the and needs of the Fort Worth community because likely effect of its acquisition of Bank. FWNB engages in illegal discriminatory employ­ This conclusion is further supported by the ment practices. The protest arises out of com­ actions of those federal agencies that are directly plaints filed by Ella Jackson and Willie Wingfield responsible for the enforcement and implementa­ with the Equal Employment Opportunity Com­ tion of equal employment opportunity laws and mission (“EEOC”) and subsequent suits filed by regulations as they affect Applicant. The EEOC all of the Protestants against FWNB, now pending has formally considered the complaints of two of before the United States District Court for the the Protestants regarding FWNB’s employment Northern District of Texas. As in the earlier pro­ practices and in both cases dismissed the com­ test,4 Protestants claim that the percentage of black plaints as being without merit.7 Moreover, the and other minority employees of FWNB is less Treasury Department has reviewed FWNB’s equal than that existing in the work force in the Fort employment opportunity program and has certified Worth SMSA, and that black and other minority that FWNB is in compliance with relevant stand­ employees at FWNB are disproportionately found ards pertaining to employment non-discrimination, at lower salary levels and are underrepresented at and all employment data submitted by Protestants higher salary levels. Protestants believe that Ap­ predate this certification. Upon consideration of plicant may extend discriminatory employment these facts and all of the additional data submitted practices to Bank should this application be ap­ to the Board in connection with this application, proved. the Board believes that Protestants’ claims do not Protestants suggest that their protest to the sub­ support an adverse finding. Neither does it appear ject application may be distinguished from their that Board action on this application would impair earlier protest to the acquisition of Bank of Fort any remedy available to Protestants by law. Worth because they have submitted some addi­ In connection with this proposal Applicant pro­ tional data, and the fact that regulations have been poses to expand Bank’s services, including lock issued implementing the Community Reinvest­ box and trust services and payroll processing. ment Act of 1977 (12 U.S.C. § 2901 et seq. Bank will benefit from Applicant’s lending exper­ (Supp. 1978)) (“CRA”) since the date of the tise and provision of data processing facilities. In Board’s Order pertaining to Bank of Fort Worth.5 addition, Bank will be able to offer rates on CRA requires federal regulators of financial credit-related insurance through Applicant’s insur­ institutions to consider an applicant’s record of ance subsidiary lower than the rates currently meeting the credit needs of its entire community; charged by Bank. Accordingly, the Board finds however, nothing in the CRA relates to employ­ that considerations relating to the convenience and ment practices. Protestants do not claim and allege needs of the community to be served lend weight no basis for claiming, that Applicant or its subsid­ toward approval of the application sufficient to iary banks have failed to meet the credit needs outweigh the slightly adverse competitive effects of their communities. Therefore, it is the Board’s associated with the proposal. It is the Board’s opinion that the considerations in the CRA are not judgment that the proposed transaction is consist­ relevant to their protest. However, as the Board ent with the public interest and that the application has previously stated “[discrimination in em­ should be approved. ployment on the basis of race or sex is unlawful, On the basis of the record, the application is and evidence of unlawful conduct by a bank hold- approved for the reasons summarized above. The transaction shall not be made before the thirtieth 4. Ella Jackson and Willie Wingfield protested an earlier application by Applicant to acquire voting shares of Bank of 6. 64 Federal Reserve Bulletin 982, 983 (December Forth Worth, also located in Fort Worth, Texas. The applica­ 1978). See, Application by American Security Corporation, tion was approved by the Board on November 1, 1978 (64 Washington, D.C., to acquire the successor by merger to Federal Reserve Bulletin 982 (December 1978)). American Security and Trust Company, Washington, D.C. (62 5. The Board’s Order approving Applicant’s acquisition of Federal Reserve Bulletin 255 (March 1976)). Bank of Fort Worth was issued five days before the regulations 7. A third protestant, Brenda Evans, has not filed a com­ required by the statute to implement CRA took effect. plaint with the EEOC. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

502 Federal Reserve Bulletin □ June 1979 calendar day following the effective date of this by the same individuals. Three principals of Ap­ Order, or later than three months after the effective plicant are affiliated with banking organizations in date of this Order unless such period is extended separate markets from Bank; these organizations for good cause by the Board, or by the Federal are of such size and distant location as to preclude Reserve Bank of Dallas, pursuant to delegated any competitive effect as a result of consummation authority. of the proposal. In addition, certain principals of By order of the Board of Governors, effective Applicant are principals of Longview Bank and May 2, 1979. Trust Company (“Longview Bank”), Longview, Texas,3 which holds deposits of approximately $57.8 million. Longview Bank is located in the Voting for this action: Chairman Miller and Gover­ nors Wallich, Coldwell, Partee, and Teeters. same banking market as Bank and controls 10.2 percent of the market deposits. The two banks (Signed) Griffith L. Garwood, together control 13.1 percent of total market de­ [seal] Deputy Secretary of the Board. posits and would rank second in the market as a single organization. Approval of the application will not affect market entry conditions or result in any unfair competitive advantage, and denial White Oak Bancshares, Inc., of the application is unlikely to result in severance White Oak, Texas of existing relationship beyond those steps to Order Approving which Applicant has made commitment as a matter Formation of Bank Holding Company of record, including steps to attain compliance with Title II of the Financial Institutions Regula­ White Oak Bancshares, Inc., White Oak, tory and Interest Rate Control Act of 1978. Given Texas, has applied for the Board’s approval under the relative size and market share of the bank and section 3(a)(1) of the Bank Holding Company Act the presence of numerous banking alternatives in (12 U.S.C. § 1842(a)(1)) of formation of a bank the market, it does not appear that consummation holding company through acquisition of 80 percent of this proposal will have any significant adverse or more of the voting shares (less directors’ quali­ effect upon existing or potential competition or fying shares) of White Oak State Bank, White increase the concentration of banking resources in Oak, Texas (“Bank”). any relevant area. Therefore, competitive consid­ Notice of the application, affording opportunity erations are consistent with approval of the appli­ for interested persons to submit comments and cation. views, has been given in accordance with section The financial and managerial resources and fu­ 3(b) of the Act. Time for filing comments and ture prospects of Applicant are dependent upon views has expired, and the application and com­ those of Bank, which are considered to be gener­ ments received have been considered in light of ally satisfactory. Applicant proposes to service the the factors set forth in section 3(c) of the Act (12 debt it will incur as a result of the proposed U.S.C. § 1842(c)). transaction over a 12-year period. Based on Bank’s Applicant is a recently organized non-operating past earnings and Applicant’s commitments of corporation formed for the purpose of becoming record, it appears that Applicant will be able to a bank holding company through the acquisition meet its annual debt-servicing requirements and of Bank. Bank is the 562nd largest banking orga­ maintain Bank’s capital position. Additionally, the nization in the state of Texas with total deposits financial conditions of the related banking organi­ of approximately $16.2 million.1 Bank is located zations appear to be satisfactory.4 Accordingly, in White Oak, Texas, and is the eleventh largest considerations relating to the banking factors are of 17 banking organizations in the Longview consistent with approval of the application. Con­ banking market.2 Bank controls approximately 2.9 siderations relating to the convenience and needs percent of the market’s total deposits. This pro­ posal is essentially a reorganization of existing ownership from individuals to a corporation owned 3. By separate action of this date, the Board approved the application of Longview Financial Corporation, Longview, Texas, to become a bank holding company with respect to Longivew Bank. 1. All banking data are as of December 31, 1977, and reflect 4. Where principals of an Applicant are engaged in operat­ bank holding company formations and acquisitions approved ing a chain of one-bank holding companies, the Board has as of November 30, 1978. indicated it is appropriate to analyze such organizations by 2. The Longview banking market is approximated by the the standards normally applied to multi-bank holding compa­ Longview SMSA, which is defined as Gregg and Harrison nies. Nebraska Banco, Inc., Ord., Nebraska, (62 Federal Counties, Texas. Reserve Bulletin 638 (1976)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 503 of the community to be served also are consistent Marshall Bank is the largest of six commercial with approval of the application. banks located in the Saline County, Missouri, On the basis of the record, the application is banking market and holds approximately 43.3 approved for the reasons summarized above. The percent of total commercial bank deposits in the transaction shall not be made before the thirtieth market. This proposal involves a restructuring of calendar day following the effective date of this Bank’s ownership from individuals to a corpora­ Order or later than three months following the tion owned by the same individuals and, therefore, effective date of this Order, unless such period would not result in any adverse effects on compe­ is extended for good cause by the Board or by tition or concentration of resources in any relevant the Federal Reserve Bank of Dallas, pursuant to market. Southern Bank is a proposed de novo bank delegated authority. to be located in the Howell County, Missouri, By order of the Secretary of the Board, acting banking market. Inasmuch as Southern Bank is pursuant to authority delegated from the Board of a proposed new bank and located in a banking Governors, effective May 31, 1979. market different than that of Marshall Bank, con­ summation of the proposal will neither eliminate (Signed) Griffith L. Garwood, existing competition nor increase the concentration [seal] Deputy Secretary of the Board. of banking resources in any relevant area. Ac­ cordingly, it appears from the facts of record that competitive considerations are consistent with ap­ Wood & Huston Bancorporation, Inc., proval of the application. Marshall, Missouri The financial and managerial resources of Ap­ plicant, Marshall Bank and Southern Bank, are Order Approving considered satisfactory and the future prospects for Formation of a Multi-Bank Holding Company each appear favorable. While Applicant will incur Wood & Huston Bancorporation, Inc., Mar­ some debt in connection with this proposal, it shall, Missouri, has applied for the Board’s ap­ appears, in light of Marshall Bank’s past earnings proval under section 3(a)(1) of the Bank Holding and sound condition, that Applicant will have the Company Act (12U.S.C. § 1842(a)( 1)) to become necessary financial flexibility to meet its debt a bank holding company through acquisition of servicing requirements while maintaining adequate 100 percent, less directors’ qualifying shares, of capital positions for both banks. Thus, consid­ the voting shares of Wood and Huston Bank erations relating to banking factors are consistent (“Marshall Bank”), Marshall, Missouri, and of with approval of the application. Southern Bank Missouri Southern Bank (“Southern Bank”), will be located in an area that has experienced West Plains, Missouri, a proposed de novo bank. substantial economic and population growth and Notice of the application, affording opportunity will provide the public with an additional source for interested persons to submit comments and of banking services. Although consummation of views, has been given in accordance with section the proposal would effect no changes in the bank­ 3(b) of the Act. The time for filing comments and ing services offered by Marshall Bank, consid­ views has expired, and the Board has considered erations relating to the convenience and needs of the application and all comments received, in­ the communities to be served are also consistent cluding those of West Plains Bank (“Protestant”), with approval. West Plains, Missouri, in light of the factors set In its review of this application, the Board has forth in section 3(c) of the Act (12 U.S.C. given careful consideration to the comments sub­ § 1842(c)). mitted by Protestant concerning the acquisition by Applicant is a non-operating corporation organ­ Applicant of Southern Bank. Protestant contends ized for the purpose of becoming a bank holding that Southern Bank will lack adequate capital and company. Marshall Bank ($43.9 million in depos­ management and, consequently, Southern Bank its),1 is the 93rd largest of 714 commercial banks will not be able to compete in the relevant market in Missouri and Southern Bank is a proposed de in a prudent manner. novo bank. Upon consummation of the proposed Protestant submitted evidence in opposition to transaction, Applicant would control approxi­ the chartering of Southern Bank in hearings before mately 0.2 percent of total commercial bank de­ the State Banking Board and the Commissioner posits in the state. of Finance of the State of Missouri. The State Board and the Commissioner have found that Southern Bank was adequately capitalized and that adequate demand for banking services exists in 1. All banking data are as of June 30, 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

504 Federal Reserve Bulletin □ June 1979 Howell County to support an additional bank. In meaning of the Bank Holding Company Act (12 this latter regard, the record shows that county U.S.C. § 1841 et seq.), have applied for the population increased by 17.3 percent between Board’s approval under section 4(c)(8) of the Act 1970 and 1976 and employment increased by 8 (12 U.S.C. § 1843(c)(8)) and section 225.4(b)(2) percent between 1973 and 1977. In addition, the of the Board’s Regulation Y (12 U.S.C. population of Howell County exceeds that of other § 225.4(b)(2)) to acquire all of the outstanding Missouri counties where new banks have recently shares of American Credit Corporation (“ACC”), been chartered and where the number of banking Charlotte, North Carolina, and its subsidiaries.1 alternatives were greater. Thus, it appears that ACC engages in direct consumer lending; sales Southern Bank has adequate capital and that the financing; factoring; commercial lending; leasing; market can reasonably be expected to support an and selling, as agent, credit-related insurance and additional banking facility. In addition, the record underwriting credit life and credit accident and indicates that an experienced banker has been health insurance.2 These activities have been de­ appointed as managing officer of Southern Bank. termined by the Board to be closely related to Thus, the Board finds that the proposed manage­ banking (12 C.F.R. §§ 225.4(a)(1), (6), 9(ii), and ment of Southern Bank is satisfactory. Accord­ (10)). ACC also engages through subsidiaries in ingly, it is the Board’s judgment that the proposed underwriting property and casualty insurance; un­ acquisition would be in the public interest and that derwriting and selling ordinary life insurance; un­ the application should be approved. derwriting and selling level term credit life insur­ On the basis of the record, the application is ance; underwriting credit life insurance for unaffi­ approved for the reasons summarized above. The liated organizations; non-full payout leasing; and transactions shall not be made (a) before the thir­ rug manufacturing. While these activities have not tieth calendar day following the effective date of been determined by the Board to be closely related this Order or (b) later than three months after that to banking and Applicants have committed to date, and (c) Missouri Southern Bank, West divest certain of these subsidiaries, BBIL has also Plains, Missouri, shall be opened for business not proposed to acquire certain of ACC’s impermissi­ later than six months after the effective date of ble subsidiaries on the basis of section 2(h)(2) of this Order. Each of the periods described in (b) the Act (12 U.S.C. § 1841(h)(2)). and (c) may be extended for good cause by the Notice of the applications, affording opportunity Board, or by the Federal Reserve Bank of Kansas for interested persons to submit comments and City pursuant to delegated authority. views on the public interest factors, has been duly By order of the Board of Governors, effective published (44 Federal Register 2426 (1979)). The May 21, 1979. time for filing comments and views has expired, and the Board has considered the applications and Voting for this action: Chairman Miller and Gover­ all comments received in light of the factors set nors Wallich, Coldwell, Partee, and Teeters. forth in section 4(c)(8) of the Act. (Signed) Griffith L. Garwood, Applicants comprise the largest banking organi­ [seal] Deputy Secretary of the Board. zation in the United Kingdom and the eleventh largest in the world, with consolidated assets of approximately $42 billion and consolidated de­ Orders Under Section 4 posits of about $37 billion.3 Barclays engages in of Bank Holding Company Act retail and wholesale banking, merchant banking, development finance and related financial services Barclays Bank Limited, London, England 1. Applicant proposes to acquire the shares of ACC and Barclays Bank International Limited, its subsidiaries by merging them into non-operating whollyowned subsidiaries of BBIL. The subsidiaries into which ACC London, England is to be merged have no significance except as a means to facilitate the acquisition of ACC. Order Approving 2. Applicant also proposes to acquire indirectly a wholly- Acquisition of American Credit Corporation owned subsidiary of ACC engaged solely in owning, leasing, and managing property exclusively for use in ACC’s consumer finance business. ACC could itself provide such activities Barclays Bank Limited (“Barclays”) and its directly through a division or department and the Board be­ wholly-owned subsidiary, Barclays Bank Interna­ lieves that section 4(c)(8) of the Act permits, with the Board’s tional Limited (“BBIL”), both of London, Eng­ approval, the acquisition of shares of a wholly-owned subsidi­ ary of § 4(c)(8) company that engages in activities that such land, together referred to as Applicants, each of a company could engage in directly. which is a bank holding company within the 3. Financial data are as of December 31, 1977. 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Law Department 505 through more than 3,000 offices in the United not appear to be any significant competition be­ Kingdom and 1,700 offices in more than 75 coun­ tween the two organizations in the regional leasing tries worldwide. Its subsidiary, BBIL, is the hold­ markets in which ACC competes, inasmuch as ing company for Barclays’ foreign operations and Applicants engage in personal property leasing in holds two domestic subsidiary banks located in the New York and California and ACC derives less United States, Barclays Bank of California, and than 1 percent of its lease receivables from those Barclays Bank of New York.4 In addition, BBIL states. Thus, it appears that consummation of the holds two branches in New York, one branch each proposed transaction would have no significant in Boston, Chicago, and the Virgin Islands, agen­ adverse effects on existing competition. cies in San Francisco and Atlanta, and a repre­ While both Applicants and ACC are of such sentative office in Houston. Applicants do not size that either might expand de novo into markets presently have any nonbanking subsidiaries in the in which the other competes, it is unlikely that United States. substantial competition would develop between In connection with its consideration of these them in the future. As foreign institutions, Appli­ applications, the Board has required Applicants to cants are generally unfamiliar with the relevant provide sufficient information to permit the Board markets in which ACC competes and has not to assess the financial strength and operating per­ heretofore evidenced an interest in those areas of formance of Applicants. In particular, the Board the country, and it does not appear probable that has analyzed the financial and managerial re­ they would expand into these markets on a de novo sources of Barclays, BBIL and their subsidiaries, basis. Given the competitive structure of the con­ and has found them to be satisfactory. Further­ sumer finance industry and the large number of more, Applicants have committed that they will potential entrants into all product lines in which provide sufficient information to enable the Board ACC competes, the Board finds that the effect of to monitor and assess their operations on a contin­ consummation of the proposed acquisition on uing basis. probable future competition would not be signifi­ ACC is the thirteenth largest noncaptive finance cant. company and the 23rd largest of all finance com­ Affiliation with Applicants will provide ACC panies in the United States5 with total receivables with greater access to an assured and less costly of approximately $688 million. ACC operates 346 source of funds and under Applicants’ direction offices in 244 local consumer finance markets ACC would be able to expand its operations na­ located in 22 states. While its operations are tionally.6 Applicants will cause ACC to offer new widespread, ACC derives more than 40 percent and expanded services to its customers at each of of its business from North Carolina and South its offices, including loans with longer maturities, Carolina and almost 90 percent from the south­ larger second mortgage loans, family financial eastern United States. ACC does not operate of­ counseling, consumer leases, and consumer re­ fices in California or New York, in which states volving credit loans. Applicants also propose to Applicants also engage in lending through their reduce the rates on consumer loans for borrowers subsidiary banks, and they derive only an insub­ scoring in the highest tenth percentile on credit stantial amount of loan business from these two scoring tests, and states that following consum­ states through mail solicitation. Because the geo­ mation, ACC will offer at reduced premiums in graphic markets for direct consumer lending and each state the several types of credit insurance that sales finance are generally local and regional, it will write. In addition, ACC will offer its com­ respectively, acquisition of ACC by Applicants mercial customers expanded services such as would have no adverse effects on existing compe­ larger commercial loans and leases, international tition in the relevant areas. Similarly, there does factoring, expanded fixed asset commercial loans, corporate insurance premiums and diversification of items leased. 4. As a result of the 1966 amendments to the Bank Holding On the basis of these and other facts of record, Company Act, Barclays became a multi-bank holding company by virtue of its ownership of a subsidiary bank in California the Board concludes that the benefits to the public and three branches in New York. Barclays’ multi-state opera­ that would result from Applicants’ acquisition of tions were grandfathered as of that time. In 1971, Barclays ACC, including the reduction in insurance pre­ converted one of its New York branches into a state-chartered subsidiary bank, a transaction that essentially reorganized Bar­ miums that Applicants propose to establish, are clays’ operations in that state. See the Board’s Order and Statement of December 29, 1970, in Barclays Bank Lim­ ited/Barclays Bank of New York, (57 Federal Reserve Bulletin 44 (1971)). 6. In this regard, Applicants commit to waive ACC’s divi­ 5. American Banker, June 19, 1978. dends during the first year following ACC’s expansion. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

506 Federal Reserve Bulletin □ June 1979 sufficient to outweigh the slightly adverse effects to be reasonably expected to result from this pro­ on competition that would result from the proposed posal with regard to insurance underwriting activ­ acquisition. ities. In making this determination, the Board has Under the terms of the application, BBIL also given due consideration to all public comments proposes to acquire and retain, under section received on the applications, including those of 2(h)(2) of the Act, as added by section 8(e) of Mr. Anthony R. Martin-Trigona (“Protestant”). the International Banking Act of 1978, shares of Protestant states that it would be “unwise” to certain subsidiaries of ACC engaged in activities allow foreign banking institutions to engage in the that are not permissible for bank holding compa­ consumer finance business in this country because nies, and that Applicants would ordinarily be re­ such institutions have different “formulae for al­ quired to divest as a condition of approval under locating resources, and often act contrary, or ca­ section 4(c)(8) of the Act.7 In this connection, priciously, to local or domestic interests of the Applicants have committed to divest themselves consuming public.” Protestant has requested that of such subsidiaries if the Board so conditions the Board hold a formal hearing to investigate this approval and relying on that commitment, the charge. Board conditions its approval of this application Protestant has not demonstrated that the Board’s on Applicants’ divestiture of ACC’s impermissible approval of the application or denial of his request insurance underwriting and leasing activities for a formal hearing would injure him in any within one year of consummation of the transac­ manner. In the absence of a showing of injury tion. that would be caused by the Board’s action, Prot­ The approval of this application is subject to estant lacks the primary requisite for standing to the conditions set forth In section 225.4(c) of intervene in this matter. The bare statement that Regulation Y and to the Board’s authority to he is a former customer of Applicant, unaccom­ require such modification or termination of the panied by even an allegation of harm to be suffered activities of a holding company or any of its due to Board action in this matter, is not sufficient subsidiaries as the Board finds necessary to assure to confer standing on Protestant. Protestant has compliance with the provisions and purposes of also failed to demonstrate that a hearing is neces­ the Act and the Board’s regulations and orders sary for, or useful to, a full consideration of the issued thereunder, or to prevent evasion thereof. application. Therefore, the Board has denied the The transaction shall not be made later than three request for a hearing. months after the effective date of this Order, unless With respect to the allegation that the acquisi­ such period is extended for good cause by the tion of ACC by Applicants would not be in the Board or by the Federal Reserve Bank of New public interest, Protestant has not provided any York, acting pursuant to authority hereby dele­ evidence that approval of the acquisition would gated. be detrimental in any way to the interest of the By order of the Board of Governors, effective American public. There is no evidence in the May 17, 1979. record that consummation of the proposal would, Voting for this action: Chairman Miller and Gover­ with respect to these applications, result in any nors Coldwell, Partee, and Teeters. Absent and not undue concentration of resources, decreased or voting: Governor Wallich. unfair competition, conflicts of interest, unsound banking practices, or other adverse effects on the (Signed) Griffith L. Garwood, public interest. [seal] Deputy Secretary of the Board. Based on the foregoing and other facts of rec­ ord, the Board has determined that the balance of public interest factors it must consider under 7. Section 2(h) provides an exemption from the prohibitions section 4(c)(8) of the Act is favorable. Accord­ of section 4 of the Act for a foreign bank holding company, principally engaged in the banking business outside the United ingly, the applications are hereby approved subject States, to own shares of a foreign company that does some to the conditions that (1) ACC will cease to un­ direct or indirect business in the United States. The exempt foreign company (the “investor company”) must be principally derwrite and sell level term credit life insurance engaged in business outside the United States and may acquire within 30 days of consummation of the transac­ shares of a nonbanking company in the United States only tion; (2) ACC will continue to negotiate the sale if the U.S. company is engaged in the same general line of business as, or in a business related to, that of the investor of Virginia Rugs, Inc., Keysville, Virginia, and company. BBIL, which is the proposed “investor company”, complete the divestiture of this subsidiary promp­ is not itself engaged in the same general line of business as tly; and (3) Applicants maintain on a continuing the ACC subsidiaries that it proposes to acquire and, therefore, BBIL would not qualify for the exemption provided in section basis the public benefits that the Board has found 2(h)(2) to acquire and retain such subsidiaries. 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Law Department 507 Citicorp, the activities of making consumer loans, selling New York, New York credit-related insurance, financing mobile homes, and other sales-finance products through offices in Order Approving Second Mortgage Lending 26 states. and Acting as Agent or Broker in the Sale of Person-to-Person proposes to engage in the ac­ Credit-Related Insurance tivities of making second-mortgage loans to indi­ viduals and businesses and acting as agent or Citicorp, New York, New York, a bank holding broker in the sale of credit-related insurance in company within the meaning of the Bank Holding connection with such loans. The activities would Company Act (“Act”), has applied pursuant to be conducted from an office in Westport, Connec­ section 4(c)(8) of the Act (12 U.S.C. ticut, and would serve primarily an area within § 1843(c)(8)) and section 225.4(b)(1) of the the state of Connecticut.4 Board’s Regulation Y (12 C.F.R. § 225.4(b)(1)), Twelve protestants have submitted comments in for permission to establish de novo, through its opposition to the subject application. Two of the subsidiary, Nationwide Financial Services Cor­ protestants, the Connecticut Bankers Association poration, St. Louis, Missouri (“Nationwide”), an (“CBA”) and the Connecticut Bank and Trust office of Citicorp Person-to-Person Financial Cen­ Company (“CBTC”) both of Hartford, Connecti­ ter of Connecticut, Inc., in Westport, Connecticut cut, also request that the Board hold a formal (“Person-to-Person”). Person-to-Person would hearing on the application in order to submit or engage in the activities of second-mortgage lend­ elicit evidence in support of their allegations con­ ing and selling credit-related insurance in connec­ cerning the subject proposal. tion with such loans. Such nonbank activities have On March 16, 1979, the Board considered the been determined by the Board to be closely related subject proposal and protests thereto, including the to banking and therefore permissible for bank requests of CBA and CBTC that the Board order holding companies (12 C.F.R. §§ 225.4(a)(1) and a formal evidentiary hearing. The Board deter­ (9)). mined not to order a formal hearing at that time, Notice of the application, affording opportunity but to grant CBA and CBTC an opportunity for for interested persons to submit comments and an informal presentation before members of the views on the public interest factors has been duly Board’s staff. The presentation was held in Wash­ published.1 The time for filing comments and ington, D.C., on March 29, 1979, at which CBA views has expired, and the Board has considered and CBTC presented their reasons why a formal the application and all comments received, in­ hearing was required; Applicant was represented cluding those received from twelve protestants2, and set forth its reasons why a formal hearing was in the light of the considerations specified in sec­ not required. CBA and CBTC requested a further tion 4(c)(8) of the Act. opportunity to provide the Board with additional Applicant controls two banks with aggregate written submissions in support of their requests domestic deposits of approximately $19.3 billion; for a hearing and on the merits of the proposal, it is the second largest banking organization in the and materials were subsequently received by the United States and the largest in the state of New Board. Applicant submitted a response thereto. In York.3 Applicant also controls a number of do­ reaching the conclusions set forth below, the mestic nonbank subsidiaries engaged in a variety Board has considered Applicant’s amended pro­ of nonbanking activities, including consumer and posal, Applicant’s supplementary comments and commercial finance; factoring; mortgage banking; submissions, as well as all of the comments and the sale and underwriting of credit-related insur­ submissions by protestants. ance; and leasing. Applicant’s subsidiary, Nation­ Section 4(c)(8) of the Act provides that the wide (the parent of Person-to-Person), engages in Board may approve a bank holding company’s application to engage in a nonbanking activity only after the Board has determined that the proposed 1. This application was originally being processed under the procedures set forth in section 225.4(b)(1) of the Board’s activity is closely related to banking so as to be Regulation Y (12 C.F.R. § 225.4(b)(1)) as a proposal to a proper incident thereto. The Act further provides engage de novo in activities determined by the Board to be closely related to banking. Accordingly, notice of the applica­ that this determination by the Board may be made tion was published in local newspapers of general circulation in several cities in Connecticut. Because of the protests filed and the hearing requested, it was determined that the applica­ tion should be processed at the Board. 4. This proposal involves de novo entry into Connecticut 2. The protestants to the application are listed in the Ap­ by Person-to-Person. It is expected that Person-to-Person pendix to this Order. would serve customers located in the Connecticut counties of 3. Banking data are as of December 31, 1978. Litchfield, New Haven, Fairfield, Hartford, and Middlesex. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

508 Federal Reserve Bulletin □ June 1979 by rule or order. The Board has determined by 1. Branch Banking regulation that second-mortgage lending of the Under federal as well as Connecticut law a type proposed by Person-to-Person, and the sale national bank situated in a state other than Con­ as agent of credit-related insurance in connection necticut may not maintain a branch office in the with such loans, are permissible nonbank activi­ state of Connecticut.5 Citibank is a national bank ties. None of the comments received have raised that maintains offices in New York state; therefore, the issue that the proposed activities are not closely it is precluded from having a branch office in the related to banking. state of Connecticut. Moreover, the Board may To approve an application under section 4(c)(8) not grant approval for a proposal that would result of the Act the Board must also determine that the in a violation of federal or state law.6 performance of the proposed activities by a non­ CBA and CBTC allege that Person-to-Person bank subsidiary of a bank holding company can would constitute a branch bank of Citibank based reasonably be expected to produce benefits to the upon the unitary operation of Citicorp, Citibank, public such as greater convenience, increased Nationwide, and Person-to-Person. CBA and competition, or gains in efficiency, that outweigh CBTC further allege that “close evidentiary ex­ possible adverse effects, such as undue concentra­ amination of the nature of the lending and advisory tion of resources, decreased or unfair competition, activities engaged in by Person-to-Person is nec­ conflicts of interests, or unsound banking prac­ essary in light of Independent Bankers Association tices. Section 4(c)(8) of the Act provides that the of America v. Heimann, Civil Action No. 78- Board may approve a bank holding company’s 0811, (D.C. Dist. Ct., March 30, 1979) (“Inde­ application to engage in, or to acquire, voting pendent Bankers of America”); i.e., “(t)o the shares of a company engaged in nonbanking ac­ extent that Citicorp Person-to-Person may be en­ tivities only after notice of the proposal and an gaged in interviewing and advising customers of opportunity for a hearing on the matter. Citibank N.A. with respect to services available Protestants have set forth four principal issues through Citibank N.A., in referring customers to in opposition to the subject proposal. These issues Citibank N.A., or otherwise soliciting indirectly may be summarized as follows: or directly, business for Citibank N.A., this deci­ (1) Branch Banking: The inter-relationships sion suggests that those activities may constitute among Applicant, Citibank, N.A. (a wholly- branch banking.” CBA and CBTC have requested owned subsidiary of Applicant)(“Citibank”), Na­ the Board to hold a hearing on this question in tionwide, and Person-to-Person would constitute order to elicit evidence concerning the structure, a unitary operation and, therefore, branch banking management, and operations of Citicorp, Citibank, in violation of Connecticut and federal law. Nationwide, and Person-to-Person. (2) Banking Business: The proposed activities Applicant has provided the Board with specific of Person-to-Person would constitute “banking responses to each of the evidentiary inquiries business” under Connecticut law and thereby vio­ raised by CBA and CBTC in connection with this late state law. issue. Applicant has assured the Board that all of (3) Adverse Effects versus Public Benefits: Person-to-Person’s activities would be engaged in Protestants present three basic arguments on the on behalf of Person-to-Person. Applicant has public benefits aspects of the proposal: A) The stated that there will be no interlocking officers, proposed operation of Person-to-Person would directors or management personnel between Citi­ produce anti-competitive effects that would not be bank and Person-to-Person; that Person-to-Person outweighed by the public benefits to be derived would not be funded by Citibank; that Person-totherefrom; B) Applicant and its subsidiary bank, Person would not serve as a loan production office Citibank, have failed to meet the credit needs of for Citibank; and that Person-to-Person would not New York City and surrounding communities, as required by the Community Reinvestment Act; and C) the Connecticut statutes regulating insurance utes prohibits a foreign banking corporation except a national activities must be considered by the Board in bank having its main office in Connecticut, from maintaining making a determination on the public benefits any office within Connecticut to solicit deposits or conduct a general bank or banking and trust business. Under 12 U.S.C. question. § 36(c), a national bank is authorized to establish and operate (4) Hearing: There exist disputed material facts a branch office at a location within a state if state-chartered banks are so authorized by the law of the state in question. for which a formal proceeding is required before A branch is defined to “include . . . any branch place of the Board may consider the proposal on its merits. business ... at which deposits are received, or checks paid, or money lent”. (12 U.S.C. § 36(f)). 6. Whitney National Bank in Jefferson Parish v. Bank of 5. In general, § 36-59(4) of the Connecticut General Stat- New Orleans and Trust Co., 379 U.S. 411 (1965). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 509 perform any services for customers of Citibank, that mere affiliation in a bank holding company nor solicit or make any loans or take any deposits system will cause the bank holding company’s on behalf of Citibank. Applicant has also assured subsidiary banks, and a fortiori holding company the Board that Citibank would not participate in, nonbank subsidiaries, to be engaged in “branch” or purchase any loans from, Person-to-Person. banking. CBA and CBTC have not submitted any evidence The Board, acting pursuant to congressional that Person-to-Person, directly or indirectly, or mandate, has authorized the activities of secondthrough any device, will act for, on behalf of, or mortgage lending and the sale of credit-related be controlled by, Citibank. Neither CBA nor insurance as proper activities for a nonbanking CBTC has provided the Board with any evidence subsidiary of a bank holding company. CBA and indicating that Applicant’s undertakings in con­ CBTC do not assert that, as a matter of law, bank nection with this proposal are otherwise than as holding company proposals to engage in the activ­ Applicant has stated. The record shows that Na­ ities of second-mortgage lending and the sale of tionwide, including its subsidiary, Person-to-Per- credit-related insurance are nonpermissible activi­ son, is an independent company that has been ties within the meaning of section 4(c)(8) of the lawfully engaged in nonbank activities for a num­ Act and the Board’s Regulation Y. CBA and ber of years as a Board-approved subsidiary of CBTC only allege that the subject proposal would Applicant, a bank holding company. Furthermore, be a branch of Citibank without submitting any there is no evidence in the record indicating that supporting evidence. the operations of the other offices of Citicorp On the question of whether this proposal would Person-to-Person Financial Center, Inc., constitute constitute de facto branch banking, CBA and de facto branch banking by Citibank. CBTC have made allegations unsupported by any Reliance by CBA and CBTC on Independent evidence of record. CBA and CBTC have failed Bankers of America is misplaced. That case is to show that there is any factual dispute between clearly distinguishable from the subject proposal the parties that would be relevant to the Board’s which involves activity of a nonbanking subsidiary determination as to whether this proposal would of a bank holding company. In Independent violate branch banking restrictions. On the basis Bankers of America, the Comptroller of the Cur­ of the record in this matter, the Board concludes rency had promulgated an interpretive ruling pro­ that the subject proposal would not violate federal viding that a loan production office of a national or Connecticut branching restrictions. The Board bank would not be a branch of a national bank, also finds there are not material issues of fact on within the meaning of 12 U.S.C. § 36(f), if em­ this question that would warrant the Board order­ ployees or agents of a national bank or of a ing a formal hearing. subsidiary corporation of such bank originated loans at locations other than at the main office 2. Banking Business or a branch office of the bank provided such loans Person-to-Person would engage in the activities were approved at the main office or branch office of second-mortgage lending and the sale of creditof such national bank, or its subsidiary. The Dis­ related accident, life and health insurance. Pur­ trict Court found, as a matter of law, that such suant to its authority under section 4(c)(8) of the a loan production office would be engaged in Act, the Board has determined these activities to activities on behalf of the national bank and, be “closely related to banking”. While the term therefore, would be a branch within the meaning “banking business” is nowhere defined in the Act, of 12 U.S.C. § 36(f). the Act defines “bank” to mean “any institution The establishment and operation by a bank organized under the laws of the United States [or] holding company of nonbanking subsidiaries is any state . . . which (1) accepts deposits that the authorized, contemplated and lawful under the depositor has a legal right to withdraw on demand, Bank Holding Company Act. (Grandview Bank and (2) engages in the business of making com­ & Trust Co. v. Board of Governors, 550 F.2d mercial loans.” (12 U.S.C. § 1841(c)). More­ 415 (8th cir. 1977), cert, denied, 98 S.Ct. 64 over, section 36-5a(b) of the Connecticut General (1977)). The legislative history of the 1970 Statutes prohibits a subsidiary of an out-of-state Amendments to the Act makes it clear that Con­ bank holding company from establishing or main­ gress intended to allow bank holding companies taining an office in Connecticut that would engage to expand the range of their business activities into in the “banking business”. areas such as those at issue here. In enacting the Person-to-Person would not be a “bank” nor Bank Holding Company Act, Congress con­ would it be engaged in the “banking business” sciously and intentionally excluded the possibility in violation of federal or Connecticut law. In Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

510 Federal Reserve Bulletin □ June 1979 interpreting a particular state law, the Board con­ no purpose would be served in holding a hearing siders the statute itself, any judicial interpretations on this issue. of that law, and, in the absence of any such interpretations, opinions of the state’s Attorney 3. Public Benefits versus Adverse Effects General or relevant administrative agency.7 The Under section 4(c)(8) of the Act, the Board must courts of the state of Connecticut have not issued find that the performance of the proposed activity an interpretation of section 36-5a. However, the by an applicant can reasonably be expected to Connecticut Bank Commissioner has interpreted produce benefits to the public, such as greater the statute, and has done so with regard to the convenience, increased competition, or gains in proposed activities of Person-to-Person.8 The efficiency, that outweigh possible adverse effects, Connecticut Bank Commissioner determined that such as undue concentration of resources, de­ Person-to-Person’s proposed activities are not creased or unfair competition, conflicts of inter­ “banking business” and proceeded to grant Per­ ests, or unsound banking practices. son-to-Person the relevant operating license re­ This proposal contemplates the opening of a quired under state law. The Commissioner deter­ new office that would offer the communities it mined that: would serve an additional source of second-mort­ gage lending, thereby increasing overall competi­ Section 2 of this Act [Connecticut Public Act 77-228] authorizes any “person” to engage in tion in Westport and the surrounding area. In the the secondary mortgage loan business. Banks, absence of evidence to the contrary, the Board national banks, savings and loan associations, views de novo entry as a positive public benefit federal savings and loan associations, credit since it would provide an additional competitive unions, and federal credit unions are among those source in a market. The Board’s regulation per­ entities which are exempt from the licensing requirements of Public Act 77-228. mitting de novo activity by a bank holding com­ The Connecticut Legislature has therefore speci­ pany was promulgated based on this consideration fically provided that corporations which are not and was derived in part from the Board’s experi­ banks, may be licensed as second-mortgage ence in administering the Bank Holding Company lenders. Since this licensing statute exempts banks, the statute exists solely for the purpose Act. By the language in section 4(c)(8), and in of licensing nonbanks. It is clear, therefore, that the legislative history of the Act, Congress made the business which is authorized by these licens­ it clear that the Board could differentiate between ing statutes is not “banking business”.9 bank holding company proposals to engage in The Board is of the view that the Commis­ nonbanking activities through the acquisition of a sioner’s opinion is reasonable and consistent with going concern and proposals to engage in these the language of the statute he is charged to enforce. activities on a de novo basis.10 The Board is of The Board finds that the proposed second-mort? the view that the opening of a new office of a gage lending activities of Person-to-Person would nonbanking subsidiary of a bank holding company not constitute “banking business” under federal favors the public interest by introducing an addi­ or Connecticut law. Determination of this issue tional source of credit and insurance into Westport is a matter of law, which is conceded by CBA and the surrounding area. and CBTC, and they have not raised any factual issues relevant to the Board’s determination on this A. Anti-Competitive Effects of the Proposal question. Therefore, the Board is of the view that CBA and CBTC assert that the subject proposal 7. See, e.g., the Board’s Order dated February 16, 1979, bility that Citicorp Person-to-Person may serve, in dismissing the applications of Credit and Commerce American effect, as a branch bank of Citibank and thereby violate Holdings, N.V., Netherlands Antilles, and Credit and Com­ state and federal law; therefore, your suggesting that merce American Investment, N.V., The Netherlands, to be­ I deny the application because of this possibility is come bank holding companies by acquiring Financial General inappropriate. Bankshares, Inc., Washington, D.C. (65 Federal Reserve The Commissioner also noted that the cases cited by CBA Bulletin 254 (1979)). in support of its allegation that Person-to-Person would operate 8. By action of December 8, 1978, the Connecticut Banking as a branch of Citibank, were inapposite, i.e., First National Commissioner (“Commissioner”) granted Citicorp the license Bank v. First Bank Stock Corporation. 306 F.2d 937 (1962), required by Connecticut Public Act 77-228, thereby authorizing Independent Bankers Association of Georgia v. Board of Person-to-Person to engage in the second mortgage loan busi­ Governors of the Federal Reserve System 516 F.2d 1206 ness. The Commissioner determined that CBA (one of the (1975). In conclusion, he states, “For either of the above cases protestants requesting a hearing in this matter, and a protestant to be relevant, CBA would have to prove that Citibank controls before the Commissioner) did not have standing to challenge Citicorp Person-to-Person.” his approval of the license application under Connecticut law. 9. Letter dated December 8, 1978, to Harold E. Read, Jr., However, by letter dated December 8, 1978, addressed to Mr. Esq., Connecticut counsel for Citicorp, approving the licensing William DeLana, counsel for CBA, the Commissioner ex­ application for the subject proposal. pressly found: 10. H.R. Rep. No. 91-1747, 91st Cong., 2d Sess. 17-18 There has been no factual basis for suggesting a possi- (1970)(Conference Report). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 511 would have adverse competitive effects. In partic­ the number of banks in Connecticut.12 Applicant ular, CBA and CBTC allege that the proposal has not disputed the data submitted by CBA and would (1) create an undue concentration of re­ CBTC. Based upon the foregoing, there would not sources, (2) cause a decrease in competition in appear to be any disputed issue of material fact the market, and (3) result in unfair competition. that would warrant a hearing and the Board so In support of their allegations, CBA and CBTC concludes. Furthermore, the Board is unable to cite the overall size of Applicant and the structure conclude that the addition of another source of of the Connecticut banking market; however, these second-mortgage lending in Westport would lead facts have not been disputed by Applicant. Fur­ to an overall decrease in competition in the Con­ thermore, the Board finds, for the reasons stated necticut banking market. The relevant product below, that there is no merit to the allegations market is second-mortgage lending in which both made by CBA and CBTC concerning the compet­ banking and nonbanking institutions compete and itive factors that would warrant denial of this the Board is of the view that the addition of a application. de novo office through an indirect subsidiary of Protestants allege that “(t)he proliferation of Citicorp would not have significant adverse com­ Citicorp lending subsidiaries, [moreover] through petitive effects. On the contrary, such de novo the United States could well lead to an undue entry should have a salutary effect on competition. concentration of resources and economic lever­ In addition to their allegation that the proposed age.” In effect, protestants would have the Board office of Person-to-Person would lead to a decrease determine at this time, that, at some time in the in competition in the Connecticut banking market, future Citicorp’s lending subsidiaries will exist CBA and CBTC further allege that Person-to-Perthroughout the United States and that the existence son would engage in unfair competitive prac­ of these subsidiaries will create an undue concen­ tices.13 CBA and CBTC also request the Board tration of resources. The Board is unable to con­ to address the question of voluntary tie-ins. The clude at this time that the mere existence of Citi­ fact that an organization the size of Applicant is corp’s lending subsidiaries throughout the United involved is insufficient to establish that such an States would lead to an undue concentration of organization would engage in unfair competition. resources. Even if the Board were to find that the Furthermore, there is no evidence that Applicant future proliferation of Citicorp’s lending subsidi­ has engaged in unfair competitive practices in aries throughout the United States would lead to operating its other nonbanking subsidiaries that an undue concentration of resources, it is not clear engage in the same or similar activities as would how such a finding would be relevant to a deter­ Person-to-Person.14 mination that the instant proposal, which is to open one de novo office, would result in an undue B. Applicability of the Community Reinvestment concentration of resources. Act (“CRA”) CBA and CBTC also assert that the Person-to- Person office would lead to a decrease in competi­ 12. The Board notes that Person-to-Person would primarily compete with Connecticut institutions. tion. The reasoning behind this argument appears 13. First Stamford Bank & Trust Company, Stamford, to be the following: The Connecticut banking Connecticut (“First Stamford”), alleges that the proposal would result in an unfair tax burden on Connecticut banks. market is highly competitive and Connecticut This contention appears to be based upon First Stamford’s banks have low profit ratios compared to banks belief that Person-to-Person would operate as an out-of-state located in other markets in the United States. bank and, consequently, would not be subject to the same taxation as banks located in Connecticut. As discussed in the Citibank is significantly larger than all of the text, there is nothing in the record to indicate that the operation banking organizations in Connecticut and has of Person-to-Person would constitute branch banking or bank­ much higher profit ratios than banks in Connecti­ ing business. Accordingly, the fact that Connecticut law taxes banks differently from nonbank institutions located within its cut.11 Accordingly, in view of the disparity be­ borders does not constitute unfair competition. tween the profit ratios of Connecticut banks and In addition, City trust, Bridgeport, Connecticut, alleges that the similarity in the names of Person-to-Person’s parent, Citi­ the profit ratios of Citibank, the Westport office corp, and City trust would result in confusion on the part of of Person-to-Person would have a competitive City trust’s customers, resulting in unfair competition on the advantage over banks in Connecticut, and this part of Applicant. The Board notes that the name of Applicant’s subsidiary involved here is Citicorp Person-to-Person Financial disparity would eventually lead to a decrease in Center of Connecticut, Inc. The Board finds no reasonable basis for concluding that there is such similarity between that name 11. In this regard, it should be noted that the Board has and City trust as to result in unfair competition. determined that Person-to-Person would not be either a 14. Section 106 of the Act and section 225.4(c) of the “branch” of Citibank or “engaged in the banking business”. Board’s Regulation Y (12C.F.R. § 225.4(c)) prohibit coercive In addition to protestants, Person-to-Person would be in com­ tie-in arrangements. The record reveals no violations of the petition with organizations other than banks engaged in sec­ tie-in prohibitions by Applicant in connection with its nonbank ond-mortgage lending and the sale of credit-related insurance. subsidiaries. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

512 Federal Reserve Bulletin □ June 1979 CBA and CBTC request the Board to consider sider the impact of these provisions as part of its the factors set forth in the Community Reinvest­ public benefits analysis of this proposal. ment Act (“CRA”), e.g., the extent to which The Board notes that section 38-72 of the Applicant and its banking subsidiary, Citibank, Connecticut General Statutes merely requires that have met the credit needs of New York City and one seeking to engage in the sale of credit-related its surrounding communities.15 The provisions of insurance as agent, under certain circumstances, CRA make it clear that CRA does not apply to must make application to the Insurance Commis­ applications filed pursuant to section 4(c)(8) of the sioner. The statute further provides, in section Act.16 Thus, the Board finds that CRA is not 38-72(8)(B), for an exemption from state exami­ applicable to an application by a bank holding nation where the premium for the credit related company to engage in second-mortgage lending accident, life, and health insurance is included in and the sale of credit-related insurance. CBA and the financing or mortgaging agreement. It appears CBTC alternatively argue that if it is determined that this would be the nature and extent of the that the activities of Person-to-Person would con­ proposed insurance activities of Person-to-Person. stitute “banking business”, CRA should be con­ In view of the nature of the proposed insurance sidered by the Board in acting on this proposal. activities of Person-to-Person, the statutory prohi­ Based upon the facts of record, and the discussion bition in section 38-72a of Connecticut General hereinabove, the Board has determined that the Statutes is inapplicable to the subject proposal. subject proposal would not constitute branch CBA and CBTC further assert that the Board banking or “banking business” under Connecticut must consider the impact of these state statutes law. Therefore, the Board concludes that the CRA as part of its public benefits analysis.17 The Board is not applicable to this proposal. notes that the first two issues raised by CBA and CBTC are solely questions of law and do not C. Insurance Activities require a hearing for their resolution. In view of Person-to-Person’s insurance agency activities the Board’s determination that the Connecticut will assure that credit-related insurance would be statutes at issue here do not apply to this proposal, available to its customers. Applicant has commit­ the third point raised by CBA and CBTC is moot. ted that Person-to-Person will offer such credit- The Board, therefore, concludes that a formal related insurance to its customers below the state’s hearing is not required in connection with the prima facie rates. Furthermore, the proposal will Board’s consideration of Person-to-Person’s pro­ provide an additional and alternative source of posed insurance activities. credit and credit-related insurance in the market. Based upon the foregoing and other facts of The Board has determined that increased competi­ record, the Board finds that the balance of the tion, added convenience and lower credit-related public interest factors is favorable and lends insurance rates are benefits to the public. Based weight toward approval of this application. upon the foregoing and other facts of record, the Board finds that the balance of the public interest 4. Hearing factors is favorable and lends weight toward ap­ In order to be entitled to a hearing on a proposal proval of this application. under section 4(c)(8) of the Act, a petitioner must CBA and CBTC allege that Person-to-Person present issues of fact that are material to the has not obtained the license required by section Board’s decision and disputed by the relevant 38-72 of the Connecticut General Statutes to en­ parties.18 Unsupported allegations do not entitle gage in its proposed insurance activities; further­ protestants to a hearing in this matter because there more, that section 38-72a of the Connecticut Gen­ are no facts in dispute that bear upon the determi­ eral Statutes would preclude Person-to-Person from selling fire or casualty insurance. In addition, 17. In Florida Association of Insurance Agents, Inc., v. CBA and CBTC assert that the Board must con- Board of Governors of the Federal Reserve System Nos. 75-3151 to 75-3153, 75-3342, 75-3343, 75-3358, (CA 5th Cir. March 19, 1979), the state statutes severely limited the poten­ tial extent of the applicants’ insurance activities. The statutes 15. The Community Reinvestment Act (12 U.S.C. § 2903) at issue here do not apply to Person-to-Person’s proposed requires that in connection with the examination of a regulated insurance activities. financial institution within the Board’s jurisdiction, the Board 18. In Independent Bankers Association of Georgia v. shall “assess the institution’s record of meeting the credit needs Board of Governors of the Federal Reserve System, 516 F.2d of its entire community, including low- and moderate-income 1206 (D.C. Cir. 1975) (“Independent Bankers of Georgia”), neighborhoods.” The statute further requires the Board to take the Court stated: that record into account in acting on applications subject to ... an agency is not required to conduct an evidentiary CRA. hearing when it can serve absolutely no purpose. In 16. Section 803(3)(F) of the Community Reinvestment Act such a circumstance, denial of a hearing may be proper (12 U.S.C. § 2902(3)(F)). even though adjudicatory proceedings are provided for Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 513 nation the Board must make. Such a finding is there are no facts in dispute on the question of consistent with the legislative history of section whether public benefits outweigh adverse effects, 4(c)(8) of the Act. but only a dispute on the conclusion to be drawn The record in this case is devoid of any facts therefrom, CBA and CBTC are not entitled to a that support, or tend to support, the allegations hearing. made by CBA and CBTC. Reliance by CBA and Even though the Board is not required to hold CBTC on Independent Bankers of Georgia is a hearing, it could do so if the Board deemed such misplaced. In Independent Bankers of Georgia the a proceeding appropriate under the circumstances. petitioner had a factual basis upon which to base However, as discussed above, the allegations of its allegation that the proposal would constitute CBA and CBTC, as well as those of the other branch banking. The Court there ordered a hearing protestants, are unsupported by any evidence in to be held on the branch banking allegation based the record. The facts of record support the conclu­ upon information in the record showing the appli­ sions that the subject proposal would not constitute cant’s proclivity “in the past for using puppet branch banking or otherwise violate state law, and corporations to avoid branching laws,” and the that the balance of public interest considerations holding company system’s “allegedly ques­ is favorable. Based upon the foregoing, the Board tionable record of expansion in the past” (at concludes that it would be inappropriate to hold 1224). In that case the applicant proposed to a hearing on the subject application and the request transfer to the newly formed nonbank subsidiary for a hearing is hereby denied. the “bulk” of the real estate lending activity of In making the foregoing determinations, the the holding company’s banking subsidiary. There Board has considered all the facts of record and is no such history with respect to Applicant’s the allegations of the various protestants. The operation of its subsidiaries. As discussed above, Board notes that Person-to-Person would engage Citibank is not funding, or otherwise sponsoring, de novo in its proposed activities and has relied the proposed activities of Nationwide or Person- upon Applicant’s assurances regarding such pro­ to-Person. In these circumstances, and lacking any posed activities. Moreover, it appears that con­ reasonable basis to believe that the proposal at summation of this proposed transaction would not issue involves anything other than the expansion result in any undue concentration of resources, by a bank holding company of its recognized and conflicts of interests, unsound banking practices, lawful nonbanking activities, the Board finds prot­ or other adverse effects on the public interest. The estants’ reliance on the Independent Bankers of findings contained herein do not preclude contrary Georgia decision as misplaced and concludes that findings with respect to any or all of the Board’s a hearing on the branch banking question raised determinations should the facts regarding Appli­ by CBA and CBTC would serve no purpose. cant’s actual operation of Person-to-Person prove In the absence of evidence to the contrary, as to be other than as Applicant has represented. in this case, de novo entry by a bank holding Upon consideration of the request by CBA and company is generally viewed by the Board as CBTC for a stay of the Board’s order pending having positive effects on competition and the judicial review thereof, the Board finds that the public’s convenience and needs, since it would requested stay should not be granted for the fol­ introduce a new competitor into the area. The fact lowing reasons.19 The Board finds it unlikely, for that an organization the size of Applicant is in­ the reasons discussed above, that CBA or CBTC volved is insufficient to establish that such an will succeed on the merits of a court appeal of organization would engage in unfair competition. the Board’s action.20 The Board further finds by Furthermore, there is no evidence that Applicant this order that they have failed to raise any issues has engaged in unfair competitive practices in operating its nonbanking subsidiaries that engage in the same or similar activities as proposed for 19. The Board has taken into consideration the four factors that courts apply in deciding whether to stay agency orders: this new office of Person-to-Person. Thus, since (1) Likelihood of success on the merits; (2) irreparable injury to movant; (3) substantial harm to interested parties; and (4) public interest, Virginia Petroleum Jobbers Association v. FPC, 259 F. 2d 921 (D.C. 1958). by statute. The agency, however, carries a heavy bur­ 20. If a “strong” showing is made on the remaining three den of justification. Where Congress has plainly given factors, a stay may be granted if a “substantial” case on interested parties the right to a full hearing, the agency the merits is made. Washington Metropolitan Area Transit must show that the parties could gain nothing thereby Commission v. Holiday Tours, Inc., 559 F. 2d 841 (D.C. Cir. because they disputed none of the material facts upon 1977). In this case, there does not appear to be a “strong” which the agency decision could rest. showing on the remaining three factors, and the Board need Also, America Bancorporation v. Board of Governors, 509 not determine whether a “substantial” case on the merits has F.2d 29 (8th Cir. 1974). been made. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

514 Federal Reserve Bulletin □ June 1979 that would warrant denial of the subject applica­ First Stamford Bank & Trust Company tion. Indeed, the record relied upon by the Board Stamford, Connecticut in this order contradicts the claims of CBA or The Fidelity Trust Company CBTC. Furthermore, based upon a review of the Stamford, Connecticut facts, it does not appear that CBA or CBTC will Merchants Bank and Trust Company suffer irreparable harm if the stay is denied. Fi­ Norwalk, Connecticut nally, the public interest would not be served by Union Trust Company a stay for, if the stay were granted, the community Stamford, Connecticut would lose an immediate additional source of Westport National Bank second-mortgage lending. Westport, Connecticut Based upon the foregoing and other consid­ erations reflected in the record, the Board has determined that the balance of the public interest factors that the Board is required to consider under F.N.B. Corporation, section 4(c)(8) is favorable. Accordingly, the ap­ Sharon, Pennsylvania plication is hereby approved. This determination is subject to the conditions set forth in section Order Approving Acquisition 225.4(c) of Regulation Y and to the Board’s au­ of a Consumer Finance Company thority to require such modification or termination F.N.B. Corporation, Sharon, Pennsylvania, a of the activities of a holding company or any of bank holding company within the meaning of the its subsidiaries as the Board finds necessary to Bank Holding Company Act, has applied for the assure compliance with the provisions and pur­ Board’s approval under section 4(c)(8) of the Act poses of the Act and the Board’s regulations and (12 U.S.C. § 1843(c)(8)) and section 225.4(b)(2) orders issued thereunder or to prevent evasion of the Board’s Regulation Y (12 C.F.R. thereof. § 225.4(b)(2)) to acquire, through a proposed de The transaction shall be made not later than novo subsidiary, F.N.B. Consumer Discount three months after the effective date of this Order, Company, substantially all of the assets of TRY-M unless such period is extended for good cause by Consumer Discount Company (“TRY-M”), War­ the Board or by the Federal Reserve Bank of New ren, Pennsylvania. TRY-M makes consumer cash York, pursuant to delegated authority. loans and acts as agent for the sale of credit life By order of the Board of Governors, effective and credit accident and health insurance related May 25, 1979. to its extensions of credit. These activities have Voting for this action: Chairman Miller and Gover­ been determined by the Board to be closely related nors Wallich, Partee, and Teeters. Absent and not to banking (12 C.F.R. § 225.4(a)(1) and (9)(ii)). voting: Governor Coldwell. Notice of the application, affording opportunity for interested persons to submit comments and (Signed) Edward T. Mulrenin, views on the public interest factors, has been duly [seal] Assistant Secretary of the Board. published (44 Federal Register 15,538 (1979)). Appendix The time for filing comments and views has ex­ pired, and the Board has considered the application List of Protestants: and all comments received, including those of the Honorable William B. Washabaugh, Jr., Bank­ Connecticut Bankers Association ruptcy Judge, U.S. District Court for the Western Hartford, Connecticut District of Pennsylvania, in light of the factors set Connecticut Bank and Trust Company forth in section 4(c)(8) of the Act. Hartford, Connecticut Applicant controls one bank with deposits of Putnam Trust Company/The Bank of Greenwich approximately $160 million, representing about Greenwich, Connecticut 0.3 percent of total deposits in commercial banks Citytrust in the state.1 Applicant also controls Citizens Bridgeport, Connecticut Budget Company (“Citizens”), Youngstown, State National Bank of Connecticut Ohio, a consumer finance subsidiary that makes Bridgeport, Connecticut consumer installment loans, purchases installment Connecticut National Bank Bridgeport, Connecticut Colonial Bancorp Waterbury, Connecticut 1. Financial and market data are as of December 31, 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 515 sales finance contracts, and sells life and accident entrants into TRY-M’s local markets and the small and health insurance directly related to its exten­ shares of those markets currently held by TRY-M. sions of credit. Citizens operates seven offices in Consummation of the proposal will ensure the Ohio and one in Pennsylvania. TRY-M currently continued availability of personal loans and related operates seven offices in western Pennsylvania. insurance services to TRY-M’s customers at its Applicant’s subsidiary bank and the Brookfield, present locations. Upon consummation of the pro­ Ohio office of Citizens both compete in the Sharon, posal Applicant intends to make available to the Pennsylvania banking market.2 The Greenville, public larger loans with longer maturities than Pennsylvania office of TRY-M is also located in TRY-M has been able to offer and to institute sales this market. Applicant holds, through its bank financing from each office location. Affiliation with subsidiary and Citizens’ Brookfield office, $10.1 Applicant would provide the company with an million in consumer finance receivables, repre­ assured source of funds at more favorable terms senting 16.4 percent of such receivables originated than has been previously available. On the basis by financial institutions in the Sharon market. of these and other facts of record, the Board TRY-M controls, through its Greenville office, concludes that the benefits to the public that would approximately $1.1 million in consumer finance result from the acquisition of TRY-M are sufficient receivables originated in the Sharon market, rep­ to outweigh any slightly adverse effects on com­ resenting about 1.7 percent of consumer finance petition that might result from the proposed acqui­ receivables originated in the market. Thus, upon sition. Furthermore, there is no evidence in the consummation of the proposed acquisition, Appli­ record that consummation of this proposed trans­ cant’s share of the relevant consumer finance mar­ action would result in any undue concentration of ket would increase slightly to 18.1 percent. How­ resources, unfair competition, conflicts of inter­ ever, forty financial organizations, engaged in ests, unsound banking practices, or other adverse making direct personal cash loans to consumers, effects upon the public interest. currently operate 75 offices in the Sharon market. Based upon the foregoing and other consid­ The four largest organizations control only 41.3 erations reflected in the record, the Board has percent of personal cash loans originated in the determined that the balance of the public interest market. In view of the small increase in Appli­ factors the Board is required to consider under cant’s market share, the large number of alterna­ section 4(c)(8) of the Act is favorable. Accord­ tive organizations that offer consumer finance ingly, the application is approved. This determi­ lending in the Sharon market, and the weakness nation is subject to the conditions set forth in of TRY-M as an effective competitor in that mar­ section 225.4(c) of Regulation Y and to the ket, it appears that consummation of the proposal Board’s authority to require such modification or would not have significant adverse effects on ex­ termination of the activities of a holding company isting competition in the relevant area. or any of its subsidiaries as the Board finds neces­ The Board notes that TRY-M has experienced sary to assure compliance with the provisions and operational difficulties and in 1974 it filed to reor­ purposes of the Act and the Board’s regulations ganize under Chapter XI of the Federal Bankruptcy and orders issued thereunder, or to prevent evasion Act. Since that time, TRY-M closed two offices thereof. and reduced total receivables outstanding from The transaction shall not be made later than approximately $11 million to less than $8 million. three months after the effective date of this Order, In view of these problems and TRY-M’s future unless such period is extended for good cause by prospects, it does not appear that TRY-M is a the Board or by the Federal Reserve Bank of likely entrant into the local consumer finance mar­ Cleveland pursuant to authority hereby delegated. kets where Citizens currently has offices. While By order of the Board of Governors, effective Applicant, through Citizens, could be considered May 11, 1979. a potential entrant into the other consumer finance markets in which TRY-M competes, the loss of Applicant as a potential entrant would not appear to have any significant adverse effects on potential Voting for this action: Governors Wallich, Coldwell, competition given the large number of possible Partee, and Teeters. Absent and not voting: Chairman Miller. 2. The Sharon banking market consists of Mercer County, (Signed) Griffith L. Garwood, Pennsylvania, and Brookfield and Hartford Townships in Trumbull County, Ohio. [SEAL] Deputy Secretary of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

516 Federal Reserve Bulletin □ June 1979 Orders Approved Under cial bank deposits in the state. United National Bank Merger A ct Bank is the 25th largest bank in the Dallas banking market and holds 0.5 percent of market deposits. First City Bank of Dallas, Upon consummation of the proposed transaction, Dallas, Texas First City Bank would hold total deposits of $433.2 million, or 3.7 percent of market deposits. United National Bank, While Applicant’s rank in the market would not Dallas, Texas change, it will become the 16th largest in the state. Order Approving Approval of the subject proposal would result Application for Merger of Banks in a slight increase in the concentration of banking resources within the Dallas banking market and First City Bank of Dallas, Dallas, Texas (“Ap­ would remove one independent competitor from plicant”), has applied for the Board’s approval, the market. Bank’s physical plant limits its ability pursuant to the Bank Merger Act (12 U.S.C. to provide the services expected of a full-service § 1828(c)), of the merger of Applicant with United bank and consequently limits its potential to be­ National Bank, Dallas, Texas (“Bank”), under come a full-service competitor within the Dallas the charter and title of Applicant. Applicant is a banking market. It appears from the above that wholly-owned subsidiary of First City Bancor­ approval of the subject application would have a poration of Texas, Inc., Houston, Texas (“First slightly negative effect upon competition within City Bancorp”). the relevant market. Therefore, the Board con­ As required by the Bank Merger Act, notice cludes that competitive considerations associated of the proposed transaction in a form approved with the application are slightly adverse. by the Board was published, and reports on com­ The Board has examined information of record petitive factors were requested from the U.S. At­ concerning the financial and managerial resources torney General, the Office of the Comptroller of of Applicant, Bank, and First City Bancorp and the Currency, the Commissioner of Banking of the concludes that the financial and managerial re­ State of Texas, and the Federal Deposit Insurance sources and future prospects of the institutions Corporation. The Board has considered the appli­ involved are satisfactory. cation and all comments and reports received in In its submissions on the convenience and needs light of the factors set fofth in the Bank Merger of the community to be served, Applicant has Act. stated that Bank must cease operation after con­ Applicant is a wholly-owned subsidiary of First summation as required by state law but that Ap­ City Bancorp, the second largest banking organi­ plicant intends to maintain a trust office at Bank’s zation in Texas. First City Bancorp controls 31 location. Applicant therefore warrants that it will banking subsidiaries in Texas with $4.8 billion in offer existing customers of Bank the benefit of the deposits representing 8.0 percent of total statewide following services in addition to continuing to commercial bank deposits.1 First City Bancorp provide those currently offered by Applicant: in­ controls six subsidiary banks located in the Dallas creased lending capacity, specialized lending banking market holding total deposits of $597.9 services, trust services, electronic data processing, million, representing 5.2 percent of market depos­ investment services, and improved facilities. Ap­ its.2 Upon consummation First City Bancorp will plicant will provide these services directly or will hold 5.7 percent of market deposits and its rank provide them indirectly through First City Bancorp in the market as the fourth largest banking organi­ and its other subsidiaries. In view of Applicant’s zation would remain unchanged. commitment to offer a wider range of services as Applicant is the 21st largest bank in Texas with a result of the proposed merger, Applicant would total deposits of $370.2 million, representing 0.6 thereby provide more banking service alternatives percent of total commercial bank deposits in the to the community. state. It is the fourth largest bank in the Dallas After considering the competitive effects asso­ banking market. United National Bank is the 155th ciated with the application, the financial and man­ largest bank in Texas with total deposits of $63.0 agerial resources and future prospects of the exist­ million, representing 0.1 percent of total commer­ ing and proposed institutions, and the convenience and needs of the community to be served, the 1. Unless otherwise noted, all banking data are as of De­ Board finds that consummation of the proposal cember 31, 1977, and reflect bank holding company formations would be consistent with the public interest. On and acquisitions approved as of February 28, 1979. the basis of the record and for the reasons sum­ 2. The Dallas baking market is the relevant market and is approximated by the Dallas RMA. marized above, the application to merge is hereby Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 517 approved. deposits of approximately $392 million and is the The transaction shall not be consummated (a) 17th largest commercial bank in the state of Ohio, before the thirtieth calendar day following the representing 1.0 percent of total deposits in com­ effective date of this Order or (b) later than three mercial banks in the state.2 The proposed merger months after the effective date of this Order, unless would not appreciably increase Applicant’s share such period is extended for good cause by the of state deposits nor would it significantly increase Board or by the Federal Reserve Bank of Dallas the concentration of banking resources in the state. pursuant to delegated authority. Bank, with deposits of $29.0 million, is the By order of the Board of Governors, effective 131st largest bank in the state of Ohio, and May 2, 1979. operates two offices and has received approval to establish an additional office in the village of Voting for this action: Chairman Miller and Gover­ Wauseon, a community in the Fulton County nors Coldwell, Partee, and Teeters. Voting against this banking market, the relevant banking market.3 action: Governor Wallich. Bank is the second largest banking organization (Signed) Griffith L. Garwood, in the market controlling 16.2 percent of market [seal] Deputy Secretary of the Board. deposits. Applicant and Bank are located in sepa­ rate banking markets, and no significant existing competition would be eliminated between Appli­ cant and Bank by consummation of this proposal. The Ohio Citizens Trust Company, Although Applicant could enter the Fulton Toledo, Ohio County market by establishing a de novo branch, The Peoples State Bank, the market does not appear attractive for such entry Wauseon, Ohio due to the low per capita income and deposits per banking office in the area. Bank could also enter Order Approving the market area served by Applicant; however, in Application for Merger of Banks light of all the facts of record, it does not appear The Ohio Citizens Trust Company, Toledo, that Bank could be a viable competitor in that market. In view of the facts discussed above and Ohio (“Applicant”), a state member bank of the Federal Reserve System, has applied for the based upon the record, the Board concludes that Board’s approval, pursuant to the Bank Merger consummation of the proposed transaction would Act (12 U.S.C. § 1828(c)), to merge with The have no significant adverse effects on competition Peoples State Bank, Wauseon, Ohio (“Bank”), in the relevant market. under the charter and title of Applicant. Incident The financial and managerial resources and fu­ to the proposed merger, the existing offices of ture prospects of Applicant are regarded as satis­ Bank would become branch offices of the resulting factory and those of Bank are regarded as generally bank. satisfactory. The financial and managerial re­ As required by the Bank Merger Act, notice sources of the resulting institution would also be of the proposed merger was published in a form satisfactory. approved by the Board, and reports on competitive The Board has considered the application in effects were requested from the United States light of the Community Reinvestment Act (12 Attorney General, the Comptroller of the Cur­ U.S.C. § 2901) (“CRA”) which requires that the rency, and the Federal Deposit Insurance Cor­ Board assess an institution’s record of meeting the poration. A report was submitted by the United credit needs of its entire community, including States Attorney General and the Comptroller of low- and moderate-income neighborhoods, con­ the Currency.1 The Board received comment from sistent with the safe and sound operation of the the Greater Toledo Housing Coalition, Toledo, institution; and take that record into account in Ohio (“Protestant”). The Board has considered its evaluation of an application (12 U.S.C. the application and all comments and reports re­ § 2903). Applicant has high community-wide4 ceived in light of the factors set forth in the Bank levels of conventional lending, and in addition it Merger Act. Applicant operates 20 offices with aggregate 2. All banking data are as of June 30, 1978. 3. The Fulton County banking market includes all of Fulton County except portions of two townships in the southeastern 1. The United States Attorney General expressed the view corner of the county. The market also includes the southern that the merger would not have a significantly adverse effect half of Seneca, Fairfield, and Ogden Townships in Lenawee on competition. The Comptroller of the Currency, in its report, County, Michigan. stated that the merger would not have a substantially adverse 4. Pursuant to the Board’s Regulation BB (12 CFR 228.3) effect on competition. Applicant delineates its community as all of Lucas County, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

518 Federal Reserve Bulletin □ June 1979 participates in a variety of community develop­ considerations, Bank’s customers would have ment programs. However, the Board views certain access to Applicant’s higher lending limit, thereby aspects of Applicant’s record of lending to low- enabling Bank to meet the credit needs of its large and moderate-income neighborhoods with some commercial and agricultural customers. In addi­ concern. Protestant, a citizen’s organization, con­ tion, Applicant would offer a number of new and tends that Applicant’s mortgage and home-im- expanded services, including trust services, leas­ provement lending policies have had the effect of ing, cash management and payroll and account discriminating against minorities and older neigh­ reconciliation services. Applicant would also in­ borhoods, and thus believes that Applicant has had troduce mobile home financing and indirect in­ a poor record under the CRA. Protestant’s conten­ stallment lending at Bank. tions are based on its analysis of the data which Accordingly, the Board regards considerations Applicant provided to it pursuant to the Home relating to the convenience and needs of the com­ Mortgage Disclosure Act of 1975 (12 U.S.C. munity to be served, including Applicant’s com­ § 2803), which requires, inter alia, disclosure by mitment with respect to low- and moderate-income certain banks of the number and dollar amount areas', as lending weight towards approval of the of loans originated or purchased during each fiscal application. Based upon the foregoing and other year, to be itemized by census tract. Protestant considerations reflected in the record, it is the has analyzed the data supplied for the fiscal year Board’s judgment that the proposed acquisition is 1977 and has concluded that Applicant has not in the public interest and that the application met certain credit needs of the entire community. should be approved. An inquiry was conducted by staff of the Board On the basis of the record and for the reasons and the Federal Reserve Bank of Cleveland into summarized above, the application to merge and, the allegations made by the Protestant. This in­ incident thereto, to establish branches, is ap­ vestigation disclosed that the lending activity in proved. The transaction shall not be made before the low- to moderate-income census tracts was low the thirtieth calendar day following the effective in certain respects. Several factors, including the date of this Order or later than three months after percentage of owner-occupied residences in these the date of this Order, unless such period is ex­ tracts, a low amount of housing stock in some tended for good cause by the Board, or by the neighborhoods as a result of urban renewal pro­ Federal Reserve Bank of Cleveland pursuant to grams for the older Toledo area and low average delegated authority. income, may have contributed to this result. A By order of the Board of Governors, effective review of Applicant’s marketing program did not May 31, 1979. reveal any intent or effort to discourage loan de­ mand from low- to moderate-income neighbor­ Voting for this action: Chairman Miller and Gover­ nors Coldwell, Partee, and Teeters. Absent and not hoods. Nonetheless, based on the present record, voting: Governor Wallich. it does not appear to the Board that Applicant has made a sufficient effort to lend in low- and moder­ (Signed) Griffith L. Garwood, ate-income areas. [seal] Deputy Secretary of the Board. In view of the Board’s concern in this area, the Board has obtained from Applicant a commitment that it will make increased efforts to communicate C ertification s P u rsu an t to th e with members of its community to enable it to serve better the credit needs of low- and moder­ B ank H olding Com pany Tax A ct o f 1976 ate-income neighborhoods. Based on this commit­ Hansen-Lawrence Agency, Inc., ment, and other aspects of Applicant’s overall Worden, Montana record in serving its community, the Board be­ lieves that approval of the application is consistent Final Certification Pursuant to the with the purposes of the CRA. Bank Holding Company Tax Act of 1976 With respect to other convenience and needs [Docket No. TCR 76-166] Hansen-Lawrence Agency, Inc., Worden, Montana (“Agency”), has requested a final cer­ tification pursuant to section 1101(c) of the Internal Revenue Code (the “Code”), as amended by Perrysburg and Northwood townships in northern Wood section 2(a) of the Bank Holding Company Tax County, all in Ohio, and the southeastern corner of Monroe County, Michigan. Act of 1976, that it has (before the expiration of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 519 the period prohibited property is permitted to be by Agency, or that Agency has failed to disclose held by a bank holding company under the Bank to the Board other material facts, it may revoke Holding Company Act (12 U.S.C. § 1841, et seq.) this certification. (“BHC Act”)) disposed of all the property the By order of the Board of Governors, acting disposition of which is necessary or appropriate through its General Counsel, pursuant to delegated to effectuate section 4 of the BHC Act. authority (12 C.F.R. § 265.2(b)(3)), effective May In connection with this request, the following 15, 1979. information is deemed relevant for purposes of issuing the requested certification:1 (Signed) Theodore E. Allison, 1. Effective December 28, 1978, the Board [seal] Secretary of the Board. issued to Agency a prior certification with respect to its proposed divestiture of all its right, title, and interest to certain real property2 through the pro rata distribution of such property to the com­ Lindoe, Inc., Pueblo, Colorado mon shareholders of Agency. The Board’s order certified that: Final Certification Pursuant to the (A) Agency is a qualified bank holding cor­ Bank Holding Company Act of 1976 poration, within the meaning of subsection (b) of [Docket No. TCR 76-160] section 1103 of the Code, and satisfies the re­ quirements of that subsection; Lindoe, Inc., Pueblo, Colorado (“Lindoe”), (B) the real property that Agency proposes to has requested a final certification pursuant to sec­ distribute to its shareholders is “prohibited prop­ tion 1101(e) of the Internal Revenue Code (the erty” within the meaning of section 1103(c) of “Code”), as amended by section 2(a) of the Bank the Code; and Holding Company Tax Act of 1976 (the “Tax (C) the distribution by Agency of all its right, Act”), that it has (before the expiration of the title, and interest in the real property is necessary period prohibited property is permitted under the or appropriate to effectuate the policies of section Bank Holding Company Act (“BHC Act”) to be 4 of the BHC Act. held by a bank holding company) disposed of all 2. On December 28, 1978, Agency distributed, property the disposition of which is necessary or on a pro rata basis, all its right, title, and interest appropriate to effectuate section 4 of the Act. in the real property to its common shareholders. In connection with this request, the following 3. Following the distribution, Agency retained information is deemed relevant for purposes of no interest in the real Property. issuing the requested certification:1 4. Agency has represented that it holds no other 1. Effective June 13, 1978, the Board issued property the disposition of which is necessary or a prior certification pursuant to section 1101(a) of appropriate to effectuate section 4 of the BHC Act. the Code with respect to Lindoe’s proposed dives­ On the basis of the foregoing information, it titure of all its right, title and interest in the is hereby certified that Agency has (before the Colonial Motel, Estes Park, Colorado, through the expiration of the period prohibited property is pro rata distribution of such property to the share­ permitted to be retained under the BHC Act to holders of Lindoe. The Board’s order certified that: be held by a bank holding company) disposed of (A) Lindoe is a qualified bank holding corpora­ all the property the disposition of which is neces­ tion, within the meaning of subsection (b) of sary or appropriate to effectuate section 4 of the section 1103 of the Code, and satisfies the re­ BHC Act. quirements of that subsection; This certification is based upon the repre­ (B) the Colonial Motel is “prohibited prop­ sentations made to the Board by Agency and upon erty” within the meaning of section 1103(c) of the facts set forth above. In the event the Board the Code; and should hereafter determine that facts material to (C) the distribution by Lindoe of all of its right, this certification are otherwise than as represented title and interest in the Colonial is necessary or appropriate to effectuate section 4 of the BHC Act. 2. On July 1, 1978, Lindoe distributed to its 1. This information derives from Agency’s correspondence with the Board concerning its request for this certification, Agency's Registration Statement filed with the Board pursuant to the BHC Act, and other records of the Board. 1. This information derives from Lindoe’s correspondent 2. The Real Property at issue is described at page 2 of the with the Board concerning its request for this certification, Board’s Order of December 28, 1978, granting Agency’s Lindoe’s Registration Statement filed with the Board pursuant request for a prior certification. to the BHC Act and other records of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

520 Federal Reserve Bulletin □ June 1979 shareholders, on a pro rata basis, all of its interest Order Granting Determination Under in Colonial Motel. Lindoe does not presently hold the Bank Holding Company Act any interest in Colonial Motel. First International Bancshares, Inc., Dallas, 3. The prior certification issued June 13, 1978, Texas (“FIB”), a bank holding company within was granted upon the representation of Lindoe that the meaning of the Bank Holding Company Act it will elect, for purposes of Part VIII of Sub­ of 1956, as amended, has requested a determi­ chapter O of Chapter 1 of the Code, to have the nation under section 2(g)(3) of the Act (12 U.S.C. determination of whether property is “prohibited § 1841(g)(3)), that FIB and its subsidiary, First property” or is property eligible to be distributed National Bank in Dallas, Dallas, Texas (“Bank”), without recognition of gain under section are not in fact capable of controlling Mrs. Eleanor 1101(b)(1) of the Code, made under the BHC Act Lindsey Love (“Love”) an individual residing in as if such act did not contain, respectively, the Athens, Texas, in connection with a sale to Love proviso of section 4(a)(2) thereof as provided in by Bank, as successor trustee of the Ellen Lindsey section 1103(g) of the Code. Lindoe has made Key Trust (“Trust”), of 70 shares of seven percent such an election by resolution of its board of of the outstanding voting shares of First State Bank directors and has filed a written statement with the of Kerens, Kerens, Texas (“Kerens Bank”), not­ Board to that effect. Section 1103(g) of the Code withstanding the fact that Love is indebted to provides that a company making such election Bank. must dispose of either all banking property or all Under section 2(g)(3) of the Act shares trans­ nonbanking property. ferred after January 1, 1966, by any bank holding 4. Lindoe has represented to the Board that it company to a transferee that is indebted to the has disposed of all of its nonbanking property and transferor are deemed to be indirectly owned or that it does not presently own or control any controlled by the transferor unless the Board, after nonbanking shares or property or engage in any opportunity for hearing, determines that the trans­ nonbanking activities. feror is not in fact capable of controlling the On the basis of the foregoing information, it transferee. Although the shares of Kerens Bank is hereby certified that Lindoe has (before the sold to Love were owned and transferred by Bank, expiration of the period prohibited property is as successor trustee of the Trust, a determination permitted under the BHC Act to be held by a bank respecting FIB is necessary because under section holding company) disposed of all of the property 2(g)(1) of the Act, FIB is deemed to own directly the disposition of which is necessary or appropriate shares owned by its subsidiary bank. No request to effectuate section 4 of the BHC Act. for a hearing was made by FIB. FIB has submitted This certification is based upon the repre­ to the Board evidence to support its contention sentations made to the Board by Lindoe and upon that it, directly or through its subsidiary, Bank, the facts set forth above. In the event the Board is not in fact capable of controlling Love, and the should hereafter determine that facts material to Board has received no contradictory evidence. this certification are otherwise than as represented Based upon the evidence of record in this matter, by Lindoe, or that Lindoe has failed to disclose it is hereby determined that FIB is not in fact to the Board other material facts, it may revoke capable of controlling Love. this certification. This determination is based upon the evidence By order of the Board of Governors, acting of record in this matter, including the following through its General Counsel, pursuant to delegated facts: FIB acquired ownership of the above-deauthority (12 C.F.R. § 265.2(b)(3)), effective May scribed voting shares of Kerens Bank through the 11, 1979. qualification of Bank, its subsidiary, as successor (Signed) Griffith L. Garwood, trustee to Trust. The only indebtedness of Love [seal] Deputy Secretary of the Board. to FIB or its subsidiaries is the debt relating to the financing of the sale by Bank to Love of said 70 shares of stock of Kerens Bank; no other agreements exist between Love and FIB, Bank or their affiliates; and FIB and Bank have committed that, in the event they or their affiliate become Order Under Section 2 the owner of the 70 shares of Kerens Bank, they of the Bank Holding Company A ct will report that occurrence to the Federal Reserve First International Bancshares, Inc., Bank of Dallas, will place the shares in a trust Dallas, Texas administered by a trustee acceptable to the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 521 of Governors, and will apply to retain the shares is granted. This determination is based on repre­ or dispose of them within one year. Furthermore, sentations made to the Board by FIB, Bank and Love holds no director, officer or employee posi­ Love. In the event that the Board should hereafter tion with FIB or any of its subsidiaries. Also, Love determine that facts material to this determination personally and independently owns 725 shares of are otherwise than as represented, or that FIB, Kerens Bank, free and clear of any indebtedness Bank or Love have failed to disclose to the Board in favor of FIB, Bank or any other company or other material facts, this determination may be person. Finally, resolutions were submitted by the revoked, and any change in the facts and circum­ Board’s of Directors of FIB, and Bank and an stances relied upon by the Board in making this affidavit was submitted by Love, stating that FIB determination could result in the Board recon­ and Bank do not control and in fact are not capable sidering the determination made herein. of controlling Love. FIB and Bank also commit By order of the Board of Governors, acting to refrain from entering into any future agreements through its General Counsel, pursuant to delegated pursuant to which FIB, Bank or any of their authority (12 C.F.R. § 265.2(b)(1)), effective May affiliates would be capable of controlling Love. 31, 1979. Accordingly, it is ordered, that the request of FIB for a determination pursuant to section 2(g)(3) (Signed) Griffith L. Garwood, [seal] Deputy Secretary of the Board. Orders A pproved Under Bank Holding Company A ct By the Board of Governors During May 1979 the Board of Governors approved the applications listed below. Copies are available upon request to Publications Services, Division of Support Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Board Action (Effective date) Applicant Bank(s) The Avoca Company, Farmers Stale Bank, May 14, 1979 Avoca, Nebraska Avoca, Nebraska Citizens Bancgroup & Co., Citizens National Bank of May 9, 1979 St. Ann, Missouri Greater St. Louis, Maplewood, Missouri Cushing Bancshares, Inc., The First National Bank of Cushing May 25, 1979 Cushing, Texas Cushing, Texas Falsbuilding, Inc., United National Bank, May 31, 1979 Columbia Falls, Montana Libby, Montana Jacomo Bancshares, Inc., Bank of Jacomo, May 3, 1979 Blue Springs, Missouri Blue Springs, Missouri Kent Bancshares, Inc., State Bank of Kent, May 29, 1979 Kent, Illinois Kent, Illinois Lindale Bancshares, Inc., Lindale State Bank May 23, 1979 Lindale, Texas Lindale, Texas Mainland Bancshares, Inc., First Bank of La Marque, May 1, 1979 La Marque, Texas La Marque, Texas National Detroit Corporation, Peoples Bank and Trust of Alpena, May 22, 1979 Detroit, Michigan Alpena, Michigan United Bancshares, Inc., United Bank, May 11, 1979 Tulsa, Oklahoma Tulsa, Oklahoma Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

522 Federal Reserve Bulletin □ June 1979 Sections 3 and 4 Nonbanking Board Action company (Effective Applicant Bank(s) (or activity) date) Peoples of Indianola, Peoples Bank of Indianola, to engage de novo May 16, 1979 Inc., Indianola, Indianola, Mississippi in credit-related Mississippi insurance agency activities. By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies of the orders are available upon request to the Reserve Banks. Section 3 Reserve Effective Applicant Bank(s) Bank date Colonial American Metropolitan Bank of Richmond May 14, 1979 Bankshares Corporation, Central Virginia, Lynchburg, Virginia Lynchburg, Virginia NB Corporation, State Bank of Keysville, Richmond May 24, 1979 Charlottesville, Virginia Keysville, Virginia The Summit Bancorporation, The Chatham Trust Company, New York May 11, 1979 Summit, New Jersey Chatham Township, New Jersey Sections 3 and 4 Nonbanking Company Reserve Effective Applicant (or activity) Bank date Pittsburgh National to engage de novo Cleveland May 29, 1979 Corporation, Pittsburgh, in the activity Pennsylvania of underwriting, as reinsurer, credit life and credit accident and health insurance Order A pproved Under Bank M erger A ct Reserve Effective Applicant Bank(s) Bank date Fidelity American Bank, The First National BAnk of Richmond May 30, 1979 Norfolk, Virginia Yorktown, Yorktown, Virginia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 523 Pending Cases Involving the B oard of Governors* This list of pending cases does not include suits against the Federal Reserve Banks in which the Board of Governors is not named a party. Independent Insurance Agents of America, et al. Board of Governors, filed May 1978, U.S.D.C. v. Board of Governors, filed May 1979, for the District of Columbia. U.S.C.A. for the District of Columbia. Citicorp v. Board of Governors, filed March 1979, Independent Insurance Agents of America, et al. U.S.C.A. for the Second Circuit. v. Board of Governors, filed April 1979, Security Bancorp and Security National Bank v. U.S.C.A. for the District of Columbia. Board of Governors, filed March 1978, Independent Insurance Agents of America, et al. U.S.C.A. for the Ninth Circuit. v. Board of Governors, filed March 1979, Michigan National Corporation v. Board of Gov­ U.S.C.A. for the District of Columbia. ernors, filed January 1978, U.S.C.A. for the Gibraltar Financial Corp. of California v. Board Sixth Circuit. of Governors, filed March 1979, U.S.C.A. for Wisconsin Bankers Association v. Board of Gov­ the District of Columbia. ernors, filed January 1978, U.S.C.A. for the Credit and Commerce American Investment, et al. District of Columbia. v. Board of Governors, filed March 1979, Vickars-Henry Corp. v. Board of Governors, filed U.S.C.A. for the District of Columbia. December 1977, U.S.C.A. for the Ninth Cir­ California Life Corporation v. Board of Gover­ cuit. nors, filed January 1979, U.S.C.A. for the Emch v. The United States of America, et al., District of Columbia. filed November 1977 for the Eastern District of Consumers Union of the United States v. G. Wisconsin. William Miller, et al., filed December 1978, Investment Company Institute v. Board of Gover­ U.S.D.C. for the District of Columbia. nors, filed September 1977, U.S.D.C. for the Ella lackson et al., v. Board of Governors, filed District of Columbia. November 1978, U.S.C. A. for the Fifth Circuit. BankAmerica Corporation v. Board of Gover­ Manchester-Tower Grove Community Organi­ nors, filed May 1977, U.S.D.C. for the North­ zation/ACORN v. Board of Governors, filed ern District of California. September 1978, U.S.C.A. for the District of BankAmerica Corporation v. Board of Gover­ Columbia. nors, filed May 1977, U.S.C.A. for the Ninth Beckley v. Board of Governors, filed July 1978, Circuit. U.S.D.C. for the Northern District of Illinois. Roberts Farms, Inc. v. Comptroller of the Cur­ Independent Bankers Association of Texas v. First rency, et al., filed November 1975, U.S.D.C. National Bank in Dallas, et al., filed July 1978, for the Southern District of California. U.S.C.A. for the Northern District of Texas. David R. Merrill, et al., v. Federal Open Market Mid-Nebraska Bancshares, Inc. v. Board of Gov­ Committee of the Federal Reserve System, filed ernors, filed July 1978, U.S.C.A. for the Dis­ May 1975, U.S.D.C. for the District of Colum­ trict of Columbia. bia. NCNB Corporation v. Board of Governors, filed Bankers Trust New York Corporation v. Board June 1978, U.S.C.A. for the Fourth Circuit. of Governors, filed May 1973, U.S.C.A. for United States League of Savings Associations v. the Second Circuit. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A l Financial and Business Statistics Contents Domestic Financial Statistics Weekly Reporting Commercial Banks A3 Monetary aggregates and interest rates Assets and liabilities A4 Factors affecting member bank reserves A20 All reporting banks A5 Reserves and borrowings of member A21 Banks in New York City banks A22 Banks outside New York City A6 Federal funds transactions of money A23 Balance sheet memoranda market banks A24 Commercial and industrial loans A25 Gross demand deposits of individuals, Policy Instruments partnerships, and corporations A8 Federal Reserve Bank interest rates A9 Member bank reserve requirements Financial M arkets 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 All Federal Reserve open market short-term business loans transactions A26 Terms of lending at commercial banks A27 Interest rates in money and capital Federal Reserve Banks markets A12 Condition and Federal Reserve note A28 Stock market—Selected statistics statements A13 Maturity distribution of loan and A29 Savings institutions—Selected assets and liabilities security holdings M onetary and Credit A ggregates Federal Finance A13 Bank debits and deposit turnover A30 Federal fiscal and financing operations A14 Money stock measures and components A31 U.S. budget receipts and outlays A15 Aggregate reserves and deposits of A32 Federal debt subject to statutory member banks limitation A15 Loans and investments of all A32 Gross public debt of U.S. Treasury— commercial banks Types and ownership A33 U.S. government marketable securities—Ownership, by maturity Commercial Bank A ssets 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, September 30, 1978 agencies—Debt outstanding Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A2 Federal Reserve Bulletin □ June 1979 Securities M arkets 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 A38 Nonfinancial corporations—Assets and A58 Selected U.S. liabilities to foreign liabilities official institutions A38 Business expenditures on new plant and equipment Reported by Banks in the United States A39 Domestic finance companies—Assets and liabilities; business credit A58 Liabilities to and claims on foreigners A59 Liabilities to foreigners A61 Banks’ own claims on foreigners Real Estate A62 Banks’ own and domestic customers A40 Mortgage markets claims on foreigners A41 Mortgage debt outstanding A62 Banks’ own claims on unaffiliated foreigners A63 Claims on foreign countries— Consumer Installment Credit Combined domestic offices and foreign branches A42 Total outstanding and net change A43 Extensions and liquidations Securities Holdings and Transactions Flow of Funds A64 Marketable U.S. Treasury bonds and notes—Foreign holdings and A44 Funds raised in U.S. credit markets transactions A45 Direct and indirect sources of funds to A64 Foreign official assets held at Federal credit markets Reserve Banks A65 Foreign transactions in securities Domestic Nonfinancial Statistics A46 Nonfinancial business activity— Reported by N onbanking Concerns in Selected measures the United States A46 Output, capacity, and capacity A66 Short-term liabilities to and claims on utilization foreigners A47 Labor force, employment, and A67 Long-term liabilities to and claims on unemployment foreigners A48 Industrial production—Indexes and gross value A50 Housing and construction Interest and Exchange Rates A51 Consumer and wholesale prices A68 Discount rates of foreign central banks A52 Gross national product and income A68 Foreign short-term interest rates 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 1978 r 1979 ' 1978 r 1979 Item Q2 Q3 Q4 Ql Dec. Jan.r Feb.r Mar.r Apr. Monetary and credit aggregates (annual rates of change, seasonally adjusted in percent)13 Member bank reserves 1 Total........................................................................................ 6.2 8.6 2.3 -2.9 -0.1 6.0 -21.0 1.8 -4.9 2 Required................................................................................. 6.7 8.6 2.1 -2.8 -0.4 6.6 -20.9 3.3 -5.5 3 Nonborrowed......................................................................... .6 6.6 4.6 -3.3 -4.9 2.2 -20.6 1.3 -2.8 4 Monetary base1..................................................................... 7.6 9.3 8.4 5.7 7.9 8.6 -.5 4.6 5.0 Concepts of money2 5 M-l.......................................................................................... 9.2 7.9 4.1 -2.1 2.0 -5.0 -3.7 1.3 17.7 6 M-1 +...................................................................................... 7.2 6.1 2.6 -5.0 -1.2 -8.0 -6.6 -1.2 11.2 7 M-2.......................................................................................... 8.4 9.8 7.6 1.8 2.9 -1.1 2.3 3.8 14.1 8 M-3.......................................................................................... 8.4 10.3 9.3 4.7 5.6 2.9 4.8 6.2 11.0 Time and savings deposits Commercial banks 9 Total........................................................................................ 11.5 11.3 12.3 8.4 5.3 9.0 8.6 -1.4 2.1 10 Savings.................................................................................... 3.8 2.9 0.2 -9.6 -7.0 -11.8 -12.0 -4.9 0.0 11 Other time............................................................................... 11.4 17.9 18.2 15.6 11.2 12.8 20.0 13.2 20.2 12 Thrift institutions3................................................................. 8.5 11.1 11.6 8.8 9.5 8.3 8.2 9.5 6.8 13 Total loans and investments at commercial banks4............... 14.9 11.8 10.7 11.0 .4 25.3 10.9 5.8 13.6 1978 1979 1979 Q2 Q3 Q4 Ql Jan. Feb. Mar. Apr. May Interest rates (levels, percent per annum) Short-term rates 14 Federal funds 5....................................................................... 7.28 8.09 9.58 10.07 10.07 10.06 10.09 10.01 10.24 15 Federal Reserve discount6.................................................... 6.78 7.50 9.09 9.50 9.50 9.50 9.50 9.50 9.50 16 Treasury bills (3-month market yield)?............................... 6.48 7.31 8.57 9.38 9.35 9.32 9.48 9.46 9.61 17 Commercial paper (90- to 119-day)7.8................................. 7.16 8.03 9.83 10.04 10.25 9.95 9.90 9.85 9.95 Long-term rates Bonds 18 U.S. government®................................................................... 8.43 8.53 8.78 9.03 8.98 9.03 9.08 9.12 9.21 19 State and local government10.............................................. 6.02 6.16 6.28 6.37 6.47 6.31 6.33 6.29 6.25 20 Aaa utility (new issue)11....................................................... 8.98 8.94 9.23 9.58 9.54 9.53 9.62 9.70 9.83 21 Conventional mortgages12.................................................... 9.58 9.80 10.12 10.33 10.30 10.35 10.35 10.35 n.a. 1 Includes total reserves (member bank reserve balances in the current 6 Rate for the Federal Reserve Bank of New York. week plus vault cash held two weeks earlier); currency outside the U.S. 7 Quoted on a bank-discount basis. Treasury, Federal Reserve Banks and the vaults of commercial banks; 8 Beginning Nov. 1977, unweighted average of offering rates quoted and vault cash of nonmember banks. by at least five dealers. Previously, most representative rate quoted by 2 M-l equals currency plus private demand deposits adjusted. these dealers. M-1+ equals M-l plus savings deposits at commercial banks, NOW 9 Market yields adjusted to a 20-year maturity by the U.S. Treasury. accounts at banks and thrift institutions, credit union share draft ac­ 10 Bond Buyer series for 20 issues of mixed quality. counts, and demand deposits at mutual savings banks. 11 Weighted averages of new publicly offered bonds rated Aaa, Aa, M-2 equals M-l plus bank time and savings deposits other than large and A by Moody’s Investors Service and adjusted to an Aaa basis. negotiable certificates of deposit (CDs). Federal Reserve compilations. M-3 equals M-2 plus deposits at mutual savings banks, savings and 12 Average rates on new commitments for conventional first mortgages loan associations, and credit union shares. on new homes in primary markets, unweighted and rounded to nearest 3 Savings and loan associations, mutual savings banks, and credit 5 basis points, from Dept, of Housing and Urban Development. unions. 13 Unless otherwise noted, rates of change are calculated from average 4 Quarterly changes calculated from figures shown in table 1.23. amounts outstanding in preceding month or quarter. 5 Seven-day averages of daily effective rates (average of the rates on a given date weighted by the volume of transactions at those rates). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A4 Domestic Financial Statistics □ June 1979 1.11 FACTORS AFFECTING MEMBER BANK RESERVES Millions of dollars Monthly averages of daily figures Weekly averages of daily figures for weeks ending- Factors 1979 1979 Mar. Apr. MayP Apr. 18 Apr. 25 May 2 May 9 May 16 May 23? May 30p Supplying Reserve Funds 1 Reserve Bank credit outstanding........ 126,356 127,462 128,599 128,366 129,404 129,474 128,381 128,308 127,949 128,654 2 U.S. government securities1.............. 105,359 105,618 106,100 105,648 107,267 106,853 105,663 106,384 106,136 106,000 3 Bought outright.............................. 104,707 105,369 106,003 105,648 106.632 106,473 105,663 106,384 106,136 105,763 4 Held under repurchase agree­ ments ....................................... 652 249 97 0 635 380 0 0 0 237 5 Federal agency securities................... 7,633 7,515 7,475 7,464 7,610 7,628 7,434 7,434 7,434 7,468 6 Bought outright.............................. 7,468 7,464 7,433 7,464 7,464 7,464 7,434 7,434 7,434 7,425 7 Held under repurchase agree­ ments ....................................... 165 51 42 0 146 164 0 0 0 43 8 Acceptances........................................ 152 61 40 0 195 122 0 0 0 91 9 Loans.................................................. 999 897 1,769 949 991 1,217 1,488 1,759 1,703 2,290 10 Float.................................................... 5,933 6,518 6,662 7,394 6,468 6,934 7,013 6,090 6,706 6,040 11 Other Federal Reserve assets............ 6,280 6,853 6,553 6,911 6,874 6,720 6,784 6,641 5,970 6,764 12 Gold stock........................................... 11,514 11,435 11,370 11,418 11,418 11,417 11,408 11,354 11,354 11,354 13 Special Drawing Rights certificate account......................................... 1,300 1,300 1,413 1,300 1,300 1,300 1,300 1,300 1,300 1,729 14 Treasury currency outstanding.......... 12,050 12,162 12,231 12,167 12,180 12,207 12,209 12,221 12,240 12,256 Absorbing Reserve Funds 15 Currency in circulation...................... 111,764 113,369 114,274 113,976 113,492 113,248 113,885 114,363 114,210 114,690 16 Treasury cash holdings....................... 358 392 373 394 401 385 377 357 361 365 Deposits, other than member bank reserves, with Federal Reserve Banks 17 Treasury.............................................. 3,204 2,623 3,350 2,072 3,617 3,398 4,134 3,208 2,960 2,916 18 Foreign................................................ 276 286 281 323 250 296 302 241 252 312 19 Other.................................................... 785 673 821 678 649 759 654 617 568 1,431 20 Other Federal Reserve liabilities and capital........................................... 4,434 4,340 4,305 4,302 4,506 4,598 4,028 4,234 4,340 4,540 21 Member bank reserves with Federal Reserve Banks............................. 30,399 30,675 30,210 31,504 31,386 31,714 29,918 30,165 30,151 29,739 End-of-month figures Wednesday figures 1979 1979 Mar. Apr. May** Apr. 18 Apr. 25 May 2 May 9 May 16 May 23^ May 30p Supplying Reserve Funds 22 Reserve bank credit outstanding........ 130,681 132,175 127,634 130,164 132,633 130,471 128,150 127,711 126,237 129,644 23 U.S. government securities1.............. 110,940 108,588 106,185 104,465 108,016 105,231 103,991 104,681 104,009 107,701 24 Bought outright.............................. 109,260 107,287 106,185 104,465 105,821 105,231 103,991 104,681 104,009 106,871 25 Held under repurchase agree­ ments ....................................... 1,680 1,301 0 0 2,195 0 0 0 0 830 26 Federal agency securities................... 7,832 7,613 7,423 7,464 8,095 7,464 7,434 7,434 7,434 7,574 27 Bought outright.............................. 7,464 7,464 7,423 7,464 7,464 7,464 7,434 7,434 7,434 7,423 28 Held under repurchase agree­ ments ....................................... 368 149 0 0 631 0 0 0 0 151 29 Acceptances........................................ 204 252 0 0 575 0 0 0 0 319 30 Loans.................................................. 963 1,256 1,333 3,171 1,527 1,673 2,372 1,908 2,076 3,468 31 Float.................................................... 4,337 7,361 6,416 8,046 7,381 9,496 7,550 7,598 6,765 4,239 32 Other Federal Reserve assets............ 6,405 7,105 6,277 7,018 7,039 6,607 6,803 6,090 5,953 6,343 33 Gold stock.......................................... 11,479 11,416 11,354 11,418 11,418 11,416 11,382 11,354 11,354 11,354 34 Special Drawing Rights certificate account........................................ 1,300 1,300 1,800 1,300 1,300 1,300 1,300 1,300 1,300 1,800 35 Treasury currency outstanding.......... 12,114 12,242 12,289 12,177 12,183 12,205 12,218 12,225 12,251 12,268 Absorbing Reserve Funds 36 Currency in circulation...................... 111,988 113,234 115,270 114,177 113,671 113,772 114,504 114,635 114,497 115,346 37 Treasury cash holdings...................... 385 370 357 394 387 388 367 351 384 361 Deposits, other than member bank reserves, with Federal Reserve Banks 38 Treasury.............................................. 5,726 3,100 1,974 4,868 4,067 4,569 2,944 3,398 3,259 2,443 39 Foreign................................................ 303 388 407 252 275 304 282 245 218 334 40 Other.................................................... 708 813 852 682 692 687 727 569 642 735 41 Other Federal Reserve liabilities and capital........................................... 4,750 4,641 4,715 4,364 4,632 3,967 4,087 4,290 4,364 4,670 42 Member bank reserves with Federal Reserve Banks............................. 31,714 34,587 29,503 30,321 33,809 31,706 30,139 29,102 27,778 31,177 1 Includes securities loaned—fully guaranteed by U.S. government Note. For amounts of currency and coin held as reserves, see table securities pledged with Federal Reserve Banks—and excludes (if any) 1.12. securities sold and scheduled to be bought back under matched salepurchase transactions. 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 1977 1978 1979 Dec. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May* All member banks Reserves 1 At Federal Reserve Banks.... 27,057 28,010 28,701 29,853 31,158 31,935 30,485 30,399 30,675 30,210 2 Currency and coin.................. 9,351 9,605 9,654 9,794 10,330 11,093 10,074 9,776 9,737 10,045 3 Total held1............................... 36,471 37,689 38,434 39,728 41,572 43,167 40,703 40,316 40,546 40,382 4 Required............................... 36,297 37,614 38,222 39,423 41,447 42,865 40,494 40,059 40,548 40,098 5 Excess1................................. 174 75 212 305 125 302 209 257 -2 284 Borrowings at Federal Reserve Banks2 6 Total......................................... 558 1,068 1,261 722 874 994 973 999 897 1,769 7 Seasonal................................... 54 191 221 185 134 112 114 121 134 175 Large banks in New York City 8 Reserves held........................... 6,244 6,182 6,428 6,682 7,120 7,808 6,995 6,892 6,804 6,553 9 Required............................... 6,279 6,251 6,349 6,658 7,243 7,690 6,976 6,845 6,837 6,545 10 Excess................................... -35 -69 79 24 -123 118 19 47 -33 8 11 Borrowings2............................. 48 78 157 48 99 117 45 61 150 Large banks in Chicago 12 Reserves held........................... 1,593 1,655 1,672 1,791 1,907 2,011 1,824 1,822 1,801 1,649 13 Required............................... 1,613 1,650 1,649 1,765 1,900 2,010 1,823 1,809 1,824 1,712 14 Excess................................... -20 5 23 26 7 1 1 13 -23 -63 15 Borrowings2..................................... 26 35 14 4 10 23 10 26 18 59 Other large banks 16 Reserves held........................... 13,993 14,564 14,862 15,547 16,446 16,942 16,055 15,844 15,948 15,812 17 Required............................... 13,931 14,541 14,867 15,447 16,342 16,923 16,018 15,802 16,014 15,891 18 Excess................................... 62 23 -5 100 104 19 37 42 -66 -79 19 Borrowings2............................. 243 363 408 194 276 269 275 215 271 712 All other banks 20 Reserves held........................... 14,641 15,288 15,472 15,708 16,099 16,406 15,829 15,758 15,993 15,978 21 Required............................... 14,474 15,172 15,357 15,553 15,962 16,242 15,677 15,603 15,873 15,950 22 Excess................................... 167 116 115 155 137 164 152 155 120 28 23 Borrowings2............................. 241 592 682 476 489 585 688 713 547 848 Weekly averages of daily figures for weeks ending 1979 Mar. 28 Apr. 4 Apr. 11 Apr. 18 Apr. 25 May 2 May 9 May 16 May 23» May 30p All member banks Reserves 24 At Federal Reserve Banks................. 30,040 30,519 29,243 31,504 31,386 31,714 29,918 30,165 30,151 29,739 9,760 9,776 10,071 9,650 9,309 9,963 10,537 10,315 9,378 •9,962 26 Total held1.......................................... 39,941 40,430 39,448 41,288 40,829 41,811 40,588 40,607 39,652 39,823 39,858 40,042 39,292 41,130 40,716 41,661 40,514 40,350 39,611 39,585 28 Excess1............................................ 83 388 156 158 113 150 74 257 41 238 Borrowings at Federal Reserve Banks2 29 Total.................................................... 1,082 867 628 949 991 1,217 1,488 1,759 1,703 2,290 134 130 119 128 141 163 161 162 172 199 Large banks in New York City 6,617 7,035 6,597 7,137 6,664 6,885 6,605 6,712 6,303 6,350 6,648 6,959 6,601 7,130 6,710 6,836 6,634 6,686 6,447 6,354 -31 76 -4 7 -46 49 -29 26 -144 -4 55 0 0 175 11 99 89 154 54 344 Large banks in Chicago 1,779 1,819 1,768 1,983 1,727 1,825 1,701 1,762 1,562 1,629 1,783 1,804 1,778 1,977 1,732 1,819 1,707 1,757 1,667 1,693 37 Excess.............................................. -4 15 -10 6 -5 6 -6 5 -105 -64 0 0 0 69 0 9 132 0 36 93 Other large banks 15,740 15,795 15,459 16,235 16,189 16,564 16,092 16,092 15,611 15,332 15,730 15,660 15,474 16,239 16,122 16,584 16,092 16,029 15,629 15,666 10 135 -15 -4 67 -20 0 63 -18 -334 213 164 199 244 390 390 564 763 800 806 All other banks 15,805 15,781 15,624 15,933 16,249 16,537 16,190 16,041 15,874 15,874 15,697 15,619 15,439 15,784 16,152 16,422 16,081 15,878 15,868 15,872 108 162 185 149 97 115 109 163 6 2 814 703 429 461 590 719 703 842 813 1,047 i Adjusted to include waivers of penalties for reserve deficiencies in nonmember bank joins the Federal Reserve System. For weeks for which accordance with board policy, effective Nov. 19, 1975, of permitting figures are preliminary, figures by class of bank do not add to total transitional relief on a graduated basis over a 24-month period when a because adjusted data by class are not available. nonmember bank merges into an existing member bank, or when a 2 Based on closing figures. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Financial Statistics □ June 1979 1.13 FEDERAL FUNDS TRANSACTIONS Money Market Banks Millions of dollars, except as noted 1979, week ending Wednesday Type Apr. 4 Apr. 11 Apr. 18 Apr. 25 May 2 May 9 May 16 May 23 May 30 Total, 46 banks Basic reserve position 1 Excess reserves1................................... 136 80 60 48 39 -10 35 37 31 Less: 2 Borrowings at Federal Reserve Banks......................................... 26 25 307 169 194 309 338 411 696 3 Net interbank federal funds transactions............................... 16,732 22,233 21,461 18,974 16,045 17,799 16,958 17,047 15,474 Equals: Net surplus, or deficit (—) 4 Amount............................................ -16,622 -22,179 -21,707 -19,095 -16,201 -18,117 -17,261 -17,421 -16,138 5 Percent of average required reserves..................................... 96.6 132.7 121.3 111.6 92.1 107.1 101.1 105.8 98.0 Interbank federal funds transactions Gross transactions 6 Purchases.......................................... 24,440 28,231 27,904 25,501 23,662 24,622 23,598 23,212 23,585 7 Sales.................................................. 7,707 5,997 6,443 6,527 7,616 6,824 6,640 6,166 8,111 8 Two-way transactions2....................... 6,147 5,643 5,976 4,993 5,854 5,645 5,285 5,224 5,824 Net transactions 9 Purchases of net buying banks....... 18,293 22,588 21,929 20,509 17,808 18,977 18,312 17,988 17,761 10 Sales of net selling banks................ 1,561 354 467 1,534 1,762 1,178 1,354 942 2,287 Related transactions with U.S. government securities dealers 11 Loans to dealers 3................................. 4,182 5,657 4,186 3,578 3,832 4,216 3,827 4,001 3,591 12 Borrowing from dealers4.................... 1,700 1,402 1,498 1,978 1,808 2,179 2,428 1,776 1,870 13 Net loans.............................................. 2,482 4,257 2,688 1,600 2,023 2,037 1,399 2,226 1,722 8 banks in New York City Basic reserve position 14 Excess reserves1................................... 65 40 52 -5 35 -14 18 -28 51 Less: 15 Borrowings at Federal Reserve Banks......................................... 172 11 14 79 54 344 16 Net interbank federal funds transactions............................... 3,987 6,274 5,344 5,090 3,130 3,284 3,340 3,102 2,874 Equals: Net surplus, or deficit ( —) 17 Amount............................................ -3,923 -6,234 -5,463 -5,105 -3,095 -3,312 -3,401 -3,183 -3,167 18 Percent of average required reserves..................................... 62.0 104.2 84.9 84.4 50.1 55.3 56.3 54.9 55.3 Interbank federal funds transactions Gross transactions 5,057 7,086 6,653 6,071 4,527 4,668 4,688 4,174 4,521 20 Sales.................................................. 1,070 812 1,309 981 1,398 1,384 1,348 1,072 1,647 21 Two-way transactions2....................... 1,070 812 1,310 981 1,398 1,328 1,348 1,065 1,361 Net transactions 22 Purchases of net buying banks....... 3,987 6,274 5,344 5,090 3,129 3,340 3,341 3,109 3,160 23 Sales of net selling banks................ 56 8 286 Related transactions with U.S. government securities dealers 24 Loans to dealers3................................. 2,159 3,179 1,872 1,753 1,990 2,180 1,827 2,027 1,387 606 589 539 678 611 916 895 610 541 1,553 2,590 1,333 1,076 1,380 1,264 932 1,418 846 38 banks outside New York City Basic reserve position 27 Excess reserves1................................... 71 40 8 53 4 5 17 65 -19 Less: 28 Borrowings at Federal Reserve Banks......................................... 26 25 135 159 194 295 259 357 352 29 Net interbank federal funds transactions............................... 12,745 15,960 16,117 13,884 12,916 14,515 13,618 13,945 12,600 Equals: Net surplus, or deficit ( —) 30 Amount............................................ -12,700 -15,945 -16,245 -13,990 -13,106 -14,805 -13,859 -14,238 -12,971 31 Percent of average required 116.8 148.6 141.8 126.4 114.8 135.6 125.6 133.4 120.8 Interbank federal funds transactions Gross transactions 32 Purchases.......................................... 19,383 21,145 21,251 19,431 19,134 19,955 18,909 19,039 19,064 6,638 5,185 5,134 5,546 6,219 5,440 5,292 5,093 6,464 5,077 4,831 4,667 4,012 4,456 4,317 3,938 4,159 4,463 Net transactions 35 Purchases of net buying banks....... 14,306 16,314 16,584 15,419 14,678 15,637 14,972 14,879 14,601 36 Sales of net selling banks................ 1,561 354 467 1,534 1,762 1,122 1,354 934 2,001 Related transactions with U.S. government securities dealers 37 Loans to dealers3................................. 2,023 2,480 2,314 1,825 1,841 2,036 2,001 1,974 2,205 38 Borrowing from dealers4.................... 1,094 813 959 1,301 1,197 1,263 1,533 1,166 1,329 929 1,667 1,355 524 644 773 467 808 876 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Funds A7 1.13 Continued 1979, week ending Wednesday Type Apr. 4 Apr. 11 Apr. 18 Apr. 25 May 2 May 9 May 16 May 23 May 30 5 banks in City of Chicago Basic reserve position 10 1 7 5 -1 3 26 5 Less: 41 Borrowings at Federal Reserve 64 126 36 91 42 Net interbank federal funds transactions............................... 5,501 6,210 7,073 5,926 5,720 5,741 5,732 5,223 6,112 Equals: Net surplus, or deficit ( —).. 43 Amount............................................ -5,491 -6,210 -7,130 -5,926 -5,715 -5,867 -5,729 -5,232 -6,198 44 Percent of average required reserves..................................... 325.4 373.6 383.9 366.8 336.1 368.9 349.4 336.5 392.3 Interbank federal funds transactions Gross transactions 45 Purchases.......................................... 6,711 7,407 6,711 7,124 6,992 6,951 6,988 6,544 7,378 46 Sales.................................................. 1,211 1,197 1,211 1,198 1,272 1,211 1,256 1,321 1,266 47 Two-way transactions2....................... 1,188 1,170 1,188 1,167 1,272 1,211 1,256 1,321 1,266 Net transactions 48 Purchases of net buying banks....... 5,524 6,237 5,524 5,957 5,720 5,741 5,732 5,222 6,112 49 Sales of net selling banks................ 23 27 23 31 Related transactions with U.S. government securities dealers 50 Loans to dealers 3................................. 608 647 608 387 337 408 431 446 621 51 Borrowing from dealers4.................... 26 2 26 15 12 15 52 Net loans.............................................. 583 645 583 327 326 408 416 446 621 33 other banks Basic reserve position 53 Excess reserves1................................... 62 39 1 53 -1 5 14 38 -24 Less: 54 Borrowings at Federal Reserve Banks........................................ 26 25 71 159 194 169 259 321 260 55 Net interbank federal funds transactions............................... 7,245 9,749 9,044 7,959 7,196 8,774 7,886 8,723 6,488 Equals: Net surplus, or deficit (—) 56 Amount............................................ -7,209 -9,735 -9,114 -8,064 -7,391 -8,938 -8,130 -9,006 -6,773 57 Percent of average required 78.5 107.4 95.0 85.4 76.1 95.8 86.6 98.8 73.9 Interbank federal funds transactions Gross transactions 58 Purchases.......................................... 12,672 13,737 12,672 12,307 12,143 13,003 11,922 12,495 11,686 59 Sales.................................................. 5,427 3,988 5,427 4,348 4,947 4,229 4,036 3,772 5,198 60 Two-way transactions2....................... 3,889 3,661 3,889 2,846 3,184 3,107 2,682 2,838 3,197 Net transactions 61 Purchases of net buying banks....... 8,782 10,077 8,782 9,461 8,959 9,897 9,240 9,657 8,489 62 Sales of net selling banks................ 1,538 327 1,538 1,502 1,762 1,122 1,354 934 2,001 Related transactions with U.S. government securities dealers 63 Loans to dealers3................................. 1,415 1,833 1,415 1,438 1,504 1,628 1,570 1,528 1,584 64 Borrowing from dealers4.................... 1,068 811 1,068 1,286 1,186 1,263 1,518 1,166 1,329 65 Net loans.............................................. 347 1,022 347 152 318 365 51 362 255 1 Based on reserve balances, including adjustments to include waivers 4 Federal funds borrowed, net funds acquired from each dealer by of penalities 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. government 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, see 3 Federal funds loaned, net funds supplied to each dealer by clearing August 1964 Bulletin, pp. 944-53. Back data for 46 banks appear in banks, repurchase agreements (purchases from dealers subject to resale), 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 □ June 1979 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent 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 5/31/79 date rate 5/31/79 date rate 5/31/79 date rate 5/31/79 date rate Boston.................. 9V4 11/2/78 8i/4 10 11/2/78 9 10% 11/2/78 9% 12% 11/2/78 11% New York............ 9V4 11/1/78 8 V4 10 11/1/78 9 10% 11/1/78 9% 12% 11/1/78 11% Philadelphia......... 91/4 11/2/78 8 Vi 10 11/2/78 9 101/4, 11/2/78 9% 12% 11/2/78 11% Cleveland............. 91/4 11/2/78 81/4 10 11/2/78 9 lOVi 11/2/78 9% 12% 11/2/78 11% Richmond............ 91/4 11/2/78 81/4 10 11/2/78 9 10V4 11/2/78 9% 12% 11/2/78 11% Atlanta................. 91/4 11/3/78 81/4 10 11/3/78 9 10% 11/3/78 9% 12% 11/3/78 11% Chicago................ 9 V4 11/2/78 81/4 10 11/2/78 9 id/4 11/2/78 9% 12% 11/2/78 11% St. Louis............... 9% 11/2/78 8 Vi 10 11/2/78 9 10%, 11/2/78 9% 12% 11/2/78 11% Minneapolis.......... 91/4 11/1/78 8i/4 10 11/1/78 9 10% 11/1/78 9% 12% 11/1/78 11% Kansas City.......... 91/4 11/2/78 8i/4 10 11/2/78 9 10%, 11/2/78 9% 12% 11/2/78 11% Dallas................... 91/4 11/2/78 8i/4 10 11/2/78 9 10% 11/2/78 9% 12% 11/2/78 11% San Francisco.... 91/4 11/2/78 8i/4 10 11/2/78 9 10% 11/2/78 9% 12% 11/2/78 11% 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 5% 51/4 1973—May 4. 5 34 sy4 1976—Jan. 19.................. 5%-6 5% 11. 5 34-6 6 23................. 5% 5% 1971—Jan. 8............ 5*4-5% 5% 18. 6 Nov. 22................. 514-5% 514 15............ 514 5% June 11. 6-6% 61/4 26................. 514 514 19............ 5-514 51/4 15. 6i/4 61/4 22............ 5-514 5 July 2. 7 7 1977—Aug. 30.................. 514-534 514 29............ 5 5 Aug. 14. 7-71,4 31.................. 514-534 5% Feb. 13............ 4*4-5 5 23. 71/4 Sept. 2................. 534 sy4 19............ 4 y4 4y4 Oct. 26................. 6 6 July 16............ 4V4-5 5 1974—Apr. 25. 7V4-8 2 3 5 30. 8 8 1978—Jan. 9................. 6-6% 6% Nov 11............ 4V4-5 5 Dec. 9. 7%-8 m 20................. 6% 6% 19............ 4 y4 4 y4 16. m m May 11................. 6%- 7 7 Dec. 13............ 41/4-4 y4 4 y4 12................. 7 7 17............ 4%-4 y4 41/4 1975—Jan. 6. 714-734 m July 3................. 7-7V4 714 2 4 4% 4% 10. iV4-m 714 10................. 714 714 24. 7V4 714 Aug. 21................. 734 734 1973—Jan. 15.......... 5 5 Feb. 5. 6y4-m 6 *4 Sept. 22................. 8 8 Feb. 26.......... 5-5 Vi 5 % 7. 6 y4 6 y4 Oct. 16................. 8-8% 8% Mar. 2.......... 5% 51/4 Mar. 10, 6V4-6 y4 614 20................. 8% 8% Apr. 23.......... 5*4-5% 5% 14, 6i/4 614 Nov. 1................. 8%-9% 9% May 16, 6-614 6 3................. 9% 9% 23, 6 6 In effect May 31, 1979.... 9% 9% 1 Discounts of eligible paper and advances secured by such paper or by 4 Advances to individuals, partnerships, or corporations other than U.S. government obligations or any other obligations eligible for Federal member banks secured by direct obligations of, or obligations fully Reserve Bank purchase. guaranteed as to principal and interest by, the U.S. government or any 2 Advances secured to the satisfaction of the Federal Reserve Bank. agency thereof. Advances secured by mortgages on 1- to 4-family residential property 5 Rates under secs. 13 and 13a (as described above). For description are made at 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, 1972-76, and 1973-77. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 1.15 MEMBER BANK RESERVE REQUIREMENTS1 Percent of deposits Requirements in effect Previous requirements May 31, 1979 Type of deposit, and deposit interval in millions of dollars Percent Effective date Percent Effective date Net demand2 0-2...................................................................................................... 7 12/30/76 m 2/13/75 2-10..................................................................................................... 9% 12/30/76 10 2/13/75 10-100................................................................................................. uy4 12/30/76 12 2/13/75 100-400............................................................................................... 12% 12/30/76 13 2/13/75 Over 400............................................................................................. 161/4 12/30/76 16^ 2/13/75 Time and savings2-3.4 Savings................................................................................................ 3 3/16/67 m 3/2/67 Time 5 0-5, by maturity 30-179 days........................................................................................ 3 3/16/67 m 3/2/67 180 days to 4 years............................................................................ 1/8/76 3 3/16/67 4 years or more.................................................................................. 1 10/30/75 3 3/16/67 Over 5, by maturity 30-179 days........................................................................................ 6 12/12/74 5 10/1/70 180 days to 4 years............................................................................ VA 1/8/76 3 12/12/74 1 10/30/75 3 12/12/74 Legal limits Minimum Maximum Net demand Reserve city banks............................................................................. 10 22 Other banks....................................................................................... 7 14 3 10 Borrowings from foreign banks........................................................ 0 22 1 For changes in reserve requirements beginning 1963, see board’s on net balances due from domestic banks to their foreign branches and Annual Statistical Digest, 1971-1975 and for prior changes, see board’s on deposits that foreign branches lend to U.S. residents were reduced to Annual Report for 1976, table 13. zero from 4 percent and 1 percent, respectively. The Regulation D reserve 2 (a) Requirement schedules are graduated, and each deposit interval requirement on borrowings from unrelated banks abroad was also reduced applies to that part of the deposits of each bank. Demand deposits to zero from 4 percent. subject to reserve requirements are gross demand deposits minus cash (d) Effective with the reserve computation period beginning Nov. 16, items in process of collection and demand balances due from domestic 1978, domestic deposits of Edge Corporations are subject to the same banks. reserve requirements as deposits of member banks. (b) The Federal Reserve Act specifies different ranges of requirements 3 Negotiable order of withdrawal (NOW) accounts and time deposits for reserve city banks and for other banks. Reserve cities are designated such as Christmas and vacation club accounts are subject to the same under a criterion adopted effective Nov. 9, 1972, by which a bank having requirements as savings deposits. net demand deposits of more than $400 million is considered to have the 4 The average reserve requirement on savings and other time deposits character of business of a reserve city bank. The presence of the head must be at least 3 percent, the minimum specified by law. office of such a bank constitutes designation of that place as a reserve 5 Effective November 2, 1978, a supplementary reserve requirement of city. Cities in which there are Federal Reserve Banks or branches are also 2 percent was imposed on time deposits of $100,000 or more, obligations reserve cities. Any banks having net demand deposits of $400 million or of affiliates, and ineligible acceptances. less are considered to have the character of business of banks outside of reserve cities and are permitted to maintain reserves at ratios set for banks Note. Required reserves must be held in the form of deposits with not in reserve cities. For details, see the board’s Regulation D. Federal Reserve Banks or vault cash. (c) Effective August 24, 1978, the Regulation M reserve requirements Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Financial Statistics □ June 1979 1.16 MAXIMUM INTEREST RATES PAYABLE on Time and Savings Deposits at Federally Insured Institutions Percent per annum Commercial banks Savings and loan associations and mutual savings banks Type and maturity of deposit In effect May 31, 1979 Previous maximum In effect May 31, 1979 Previous maximum Percent Effective Percent Effective Percent Effective Percent Effective date date date date 1 Savings..................................................... 5 7/1/73 4 Vi 1/21/70 5% (7) 5 (8) 2 Negotiable order of withdrawal accounts1......................................... 5 1/1/74 (10) 5 1/1/74 (10) 3 Money market time deposits of less than $100,0002.......................................... (9) (9) (9) (9) (9) (9) (9) (9) Time (multiple- and single-maturity unless otherwise indicated)3 30-89 days 4 5 S M in u g ti l p e l - e m -m atu at r u it r y it .. y .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . } * 7/1/73 J I 4 5 % 9 1 / / 2 2 6 1 / / 6 7 6 0 } (10) (i°) 90 days to 1 year 7 6 S M in u g ti l p e l - e m -m atu at r u it r y it . y ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . } 5 V4 7/1/73 ’ { 7 9 / / 2 2 0 6 / / 6 66 6 } 45V4 (7) 5Va 1/21/70 9 8 2 1 t t o o 2 iy y 2 e y ar e s a 4 r . s . 4 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . } 6 7/1/73 J 1 5 5 1 V / 4 2 1 1 / / 2 2 1 1 / / 7 7 0 0 } 6% (7) J 534 1 1 / / 2 21 1 / / 7 7 0 0 10 2Vi to 4 years4........................................ 61/2 7/1/73 5Va 1/21/70 6V4 (7) ' I 1/21/70 11 4 to 6 years 5............................................ 12 6 to 8 years 5............................................ 13 8 years or more 5..................................... 14 Issued to governmental units (all maturities)........................................ 15 Individual retirement accounts and Keogh (H.R. 10) plans*................. t-~ oo 11/1/73 (“) 7 Vi 11/1/73 12 6 /2 /1 3 / / 7 7 8 4 ( I 1 V 0a) ll/i/73 m 8 12 6 /2 /1 3 / / 7 7 8 4 (iO) 11/1/73 6/1/78 m 12/23/74 8 6/1/78 m 12/23/74 8 6/1/78 m 7/6/77 8 6/1/78 IVa 7/6/77 1 For authorized states only. Federally insured commercial banks, Beginning March 15, 1979, the Va percentage point interest differential savings and loan associations, cooperative banks, and mutual savings is removed when the 6-month Treasury bill rate is 9 percent or more. banks in Massachusetts and New Hampshire were first permitted to offer The full differential is in effect when the 6-month bill rate is 8Va percent negotiable order of withdrawal (NOW) accounts on Jan. 1, 1974. or less. Thrift institutions may pay a maximum 9 percent when the 6-month Authorization to issue NOW accounts was extended to similar institutions bill rate is between 8% and 9 percent. Also effective March 15, 1979, throughout New England on Feb. 27, 1976, and in New York State on interest compounding was prohibited on money market time deposits Nov. 10, 1978. at all offering institutions. For both commercial banks and thrift institu­ 2 Must have a maturity of exactly 26 weeks and a minimum denomina­ tions, the maximum allowable rates in May were as follows: May 3, tion of $10,000, and must be nonnegotiable. 9.570; May 10, 9.617; May 17, 9.459; May 24, 9.602; May 31, 9.409. 3 For exceptions with respect to certain foreign time deposits see the I o No separate account category. Federal Reserve Bulletin for October 1962 (p. 1279), August 1965 (p. II Between July 1, 1973, and Oct. 31, 1973, there was no ceiling for 1094), and February 1968 (p. 167). certificates maturing in 4 years or more with minimum denominations 4 A minimum of $1,000 is required for savings and loan associations, of $1,000; however, the amount of such certificates that an institution except in areas where mutual savings banks permit lower minimum de­ could issue was limited to 5 percent of its total time and savings deposits. nominations. This restriction was removed for deposits maturing in less Sales in excess of that amount, as well as certificates of less than $1,000, than 1 year, effective Nov. 1, 1973. were limited to the 6Vi percent ceiling on time deposits maturing in 2Vi 5 $1,000 minimum except for deposits representing funds contributed years or more. to an Individual Retirement Account (IRA) or a Keogh (H.R. 10) Plan es­ Effective Nov. 1, 1973, ceilings were reimposed on certificates maturing tablished pursuant to the Internal Revenue Code. The $1,000 minimum in 4 years or more with minimum denominations of $1,000. There is no requirement was removed for such accounts in December 1975 and No­ limitation on the amount of these certificates that banks can issue. vember 1976, respectively. Note. Maximum rates that can be paid by federally insured commer­ 6 3-year minimum maturity. cial banks, mutual savings banks, and savings and loan associations are 7 July 1, 1973, for mutual savings banks; July 6, 1973, for savings and established by the Board of Governors of the Federal Reserve System, loan associations. the Board of Directors of the Federal Deposit Insurance Corporation, 8 Oct. 1, 1966, for mutual savings banks; Jan. 21, 1970, for savings and and the Federal Home Loan Bank Board under the provisions of 12 loan associations. CFR 217, 329, and 526, respectively. The maximum rates on time de­ 9 Commercial banks, savings and loan associations, and mutual savings posits in denominations of $100,000 or more were suspended in midbanks were authorized to offer money market time deposits effective 1973. For information regarding previous interest rate ceilings on all June 1, 1978. The ceiling rate for commercial banks is the discount rate types of accounts, see earlier issues of the Federal Reserve Bulletin, on most recently issued 6-month U.S. Treasury bills. Until March 15, the Federal Home Loan Bank Board Journal, and the Annual Report 1979, the ceiling rate for savings and loan associations and mutual savings of the Federal Deposit Insurance Corporation. banks was Va percentage point higher than the rate for commercial banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A l 1 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS Millions of dollars 1978 1979 1976 1977 1978 Type of transaction Oct. Nov. Dec. Jan. Feb. Mar. Apr. U.S. Government Securities Outright transactions (excluding matched salepurchase transactions) Treasury bills 1 Gross purchases................................................... 14,343 13,738 16,628 1,978 2,039 0 0 0 2,012 22,361 2 Gross sales............................................................ 8,462 7,241 13,725 2,148 3,587 2,751 3,758 228 475 100 3 Redemptions........................................................ 2 5,017 2,136 2,033 0 603 0 500 400 400 21,240 Others within 1 year1 4 Gross purchases................................................... 472 3,017 1,184 73 139 0 0 48 2,600 0 5 Gross sales............................................................ 0 0 0 0 0 0 0 0 0 0 6 Exchange, or maturity shift................................. 792 4,499 -5,170 -385 -778 705 -673 -30 724 439 7 Redemptions........................................................ 0 2,500 0 0 0 0 0 0 0 2 3,240 1 to 5 years 8 Gross purchases................................................... 2 3,202 2,833 4,188 507 628 0 0 426 0 2 640 9 Gross sales............................................................ 177 0 0 0 0 0 0 0 0 0 10 Exchange, or maturity shift................................. -2,588 -6,649 -178 385 -657 -705 673 2,205 -724 -439 5 to 10 years 11 Gross purchases................................................... 1,048 758 1,526 87 163 0 0 134 0 0 12 Gross sales............................................................ 0 0 0 0 0 0 0 0 0 0 13 Exchange, or maturity shift................................. 1,572 584 2,803 0 835 0 0 -2,975 0 0 Over 10 years 14 Gross purchases................................................... 642 553 1,063 139 108 0 0 93 0 0 15 Gross sales............................................................ 0 0 0 0 0 0 0 0 0 0 16 Exchange, or maturity shift................................. 225 1,565 2,545 0 600 0 0 800 0 0 All maturities1 17 Gross purchases................................................... 219,707 20,898 24,591 2,785 3,075 0 0 700 4,612 2 3,000 18 Gross sales............................................................ 8,639 7,241 13,725 2,148 3,587 2,751 3,758 228 475 100 19 Redemptions........................................................ 2 5,017 4,636 2,033 0 603 0 500 400 400 2 4,480 Matched sale-purchase transactions 20 Gross sales............................................................ 196,078 425,214 511,126 35,112 40,785 52,661 64,691 56,291 61,669 62,362 21 Gross purchases................................................... 196,579 423,841 510,854 36,106 40,546 51,586 60,750 58,426 63,707 61,968 Repurchase agreements 22 Gross purchases................................................... 232,891 178,683 151,618 18,976 7,719 8,133 3,117 6,931 11,817 5,784 23 Gross sales............................................................ 230,355 180,535 152,436 20,565 8,383 7,049 4,201 6,931 10,137 6,163 24 Net change in U.S. government securities........ 9,087 5,798 7,743 43 -2,017 -2,743 -9,283 2,207 7,454 -2,352 Federal Agency Obligations Outright transactions 25 Gross purchases................................................... 891 1,433 301 0 0 0 0 0 0 0 26 Gross sales............................................................ 0 0 173 0 0 0 379 20 0 0 27 Redemptions........................................................ 169 223 235 12 39 3 10 * 23 * Repurchase agreements 28 Gross purchases................................................... 10,520 13,811 40,567 6,675 2,544 4,307 713 1,152 2,851 1,173 29 Gross sales............................................................ 10,360 13,638 40,885 7,196 2,670 4,174 846 1,152 2,482 1,392 30 Net change in federal agency obligations......... 882 1,383 -426 -533 -165 130 -522 -20 345 -219 Bankers Acceptances 31 Outright transactions, net................................... -545 -196 0 0 0 0 0 0 0 0 32 Repurchase agreements, net............................... 410 159 -366 -479 -236 587 -587 0 204 48 -135 -37 -366 -479 -236 587 -587 0 204 48 34 Total net change in System Open Market Account.......................................................... 9,833 7,143 6,951 -969 -2,419 -2,026 -10,392 2,187 8,003 -2,524 1 Both gross purchases and redemptions include special certificates bills. Each of these transactions is treated in the table as both a purchase created when the Treasury borrows directly from the Federal Reserve, and a redemption. as follows (millions of dollars): Sept. 1977, 2,500; Mar. 1979, 2,600. 2 In 1976, the System acquired $189 million of 2-year Treasury notes Note. Sales, redemptions, and negative figures reduce holdings of in exchange for maturing bills. In April 1979, the System acquired $640 the System Open Market Account; all other figures increase such holdings. million of 2-day cash management bills in exchange for maturing 2-year Details may not add to totals because of rounding. notes. New 2-year notes were later obtained in exchange for the maturing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Financial Statistics □ June 1979 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements Millions of dollars Wednesday End of month Account 1979 1979 May 2 May 9 May 16 May 23p May 30p Mar. Apr. May? Consolidated condition statement Assets 1 Gold certificate account....................................... 11,416 11,382 11,354 11,354 11,354 11,479 11,416 11,354 2 Special drawing rights certificate account........... 1,300 1,300 1,300 1,300 1,800 1,300 1,300 1,800 3 392 400 409 417 412 395 405 411 Loans 4 Member bank borrowings.................................... 1,673 2,372 1,908 2,076 3,468 963 1,256 1,333 5 0 0 0 0 0 0 0 0 Acceptances 6 Bought outright...................................................... 0 0 0 0 0 0 0 0 7 Held under repurchase agreements....................... 0 0 0 0 319 204 252 0 Federal agency obligations 8 7,464 7,434 7,434 7,434 7,423 7,464 7,464 7,423 9 Held under repurchase agreements....................... 0 0 0 0 151 368 149 0 U.S. government securities Bought outright 10 Bills...................................................................... 37,212 35,972 36,662 35,990 38,852 38,641 39,268 38,166 11 Certificates—Special........................................... 0 0 0 0 0 2,600 0 0 12 Other............................................. 0 0 0 0 0 0 0 0 13 54,662 54,662 54,462 54,462 54,462 54,662 54,662 54,462 14 13,357 13,357 13,557 13,557 13,557 13,357 13,357 13,557 15 Total i................................................................... 105,231 103,991 104,681 104,009 106,871 109,260 107,287 106,185 16 Held under repurchase agreements....................... 0 0 0 0 830 1,680 1,301 0 17 Total U.S. government securities......................... 105,231 103,991 104,681 104,009 107,701 110,940 108,588 106,185 18 Total loans and securities....................................... 114,368 113,797 114,023 113,519 119,062 119,939 117,709 114,941 19 Cash items in process of collection....................... 17,358 13,563 15,028 12,855 13,919 10,271 13,266 12,808 20 397 397 397 397 395 396 397 395 Other assets 21 Denominated in foreign currencies2..................... 3,745 3,745 3.680 3,680 3,680 3,754 3,745 3,664 22 2,465 2,661 2,013 1,876 2,268 2,255 2,963 2,218 23 151,441 147,245 148,204 145,398 152,890 149,789 151,201 147,591 Liabilities 24 Federal Reserve notes.............................................. 102,346 103,053 103,170 103,047 103,851 100,654 101,767 103,748 Deposits 25 Member bank reserves........................................... 31,706 30,139 29,102 27,778 31,177 31,714 34,587 29,503 26 4,569 2,944 3,398 3,259 2,443 5,726 3,100 1,974 27 Foreign.................................................................... 304 282 245 218 334 303 388 407 28 687 727 569 642 735 708 813 852 29 37,266 34,092 33,314 31,897 34,689 38,451 38,888 32,736 30 7,862 6,013 7,430 6,090 9,680 5,934 5,905 6,392 31 1,682 1,632 1,661 1,561 1,719 1,795 1,663 1,673 32 149,156 144,790 145,575 142,595 149,939 146,834 148,223 144,549 Capital Accounts 33 1,116 1,117 1,115 1,117 1,123 1,113 1,117 1,124 34 1,078 1,078 1,078 1,078 1,078 1,078 1,078 1,078 35 Other capital accounts.......................................... 91 260 436 608 750 764 783 840 36 Total liabilities and capital accounts..................... 151,441 147,245 148,204 145,398 152,890 149,789 151,201 147,591 37 Memo: Marketable U.S. government securities held in custody for foreign and international account............................................................ 83,902 81,774 80,003 78,151 75,972 89,184 84,423 76,123 Federal Reserve note statement 38 Federal Reserve notes outstanding (issued to 115,868 115,759 115,982 116,400 116,521 114,135 115,604 116,615 Collateral held against notes outstanding 39 Gold certificate account......................................... 11,416 11,382 11,354 11,354 11,354 11,479 11,416 11,354 40 Special Drawing Rights certificate account.......... 1,300 1,300 1,300 1,300 1,800 1,300 1,300 1,800 41 1,284 1,969 1,742 1,823 2,585 845 986 1,182 42 101,868 101,108 101,586 101,923 100,782 100,511 101,902 102,279 43 115,868 115,759 115,982 116,400 116,521 114,135 115,604 116,615 1 Includes securities loaned—fully guaranteed by U.S. government 2 Beginning December 29, 1978, such assets are revalued monthly securities pledged with Federal Reserve Banks—and excludes (if any) at market exchange rates. securities sold and scheduled to be bought back under matched sale- 3 Includes exchange-translation account reflecting, beginning December purchase transactions. 29, 1978, the monthly revaluation at market exchange rates of foreignexchange commitments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Reserve Banks A13 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holdings Millions of dollars Wednesday End of month Type and maturity 1979 1979 May 2 May 9 May 16 May 23 May 30 Mar. 31 Apr. 30 May 31 1,672 2,371 1,910 2,076 3,468 964 1,255 1,333 2 Within 15 days......................................................... 1,582 2,278 1,840 2,032 3,439 905 1,211 1,261 90 93 70 44 29 59 44 72 4 91 days to 1 year...................................................... 0 0 0 0 0 0 0 0 5 Acceptances............................................................... 0 0 0 0 319 204 252 0 0 0 0 0 319 204 252 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 9 U.S. government securities...................................... 105,231 103,991 104,681 104,009 107,701 110,940 108,588 106,185 10 Within 15 days1....................................................... 3,711 3,322 2,734 4,042 3,601 7,663 5,284 597 16,230 15,149 15,784 16,069 19,267 20,031 18,905 19,267 28,004 28,234 33,599 31,333 32,268 25,595 27,113 33,694 33,843 33,843 28,571 28,572 28,572 34,208 33,843 28,634 14 Over 5 years to 10 years.......................................... 11,875 11,875 12,225 12,225 12,225 11,875 11,875 12,225 15 Over 10 years............................................................ 11,568 11,568 11,768 11,768 11,768 11,568 11,568 11,768 16 Federal agency obligations....................................... 7,464 7,434 7,434 7,434 7,574 7,832 7,613 7,423 17 Within 15 days1....................................................... 30 0 202 253 385 393 211 234 18 16 days to 90 days................................................... 604 644 442 391 357 553 604 357 977 937 937 937 793 994 945 793 3,507 3,507 3,507 3,507 3,776 3,509 3,507 3,776 21 Over 5 years to 10 years.......................................... 1,571 1,571 1,571 1,571 1,488 1,573 1,571 1,488 775 775 775 775 775 810 775 775 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, turnover as ratio of debits to deposit. Monthly data are at annual rates. 1978 1979 Bank group, or type 1975 1976 1977 of customer Dec.r Jan.r Feb. r Mar. Apr. Debits to demand deposits 2 (seasonally adjusted) 1 All commercial banks............... 25,028.5 29,180.4 34,322.8 41,783.3 44,598.7 43,878.3 44,920.4 46,612.2 2 Major New York City banks.. 9,670.7 11,467.2 13,860.6 14,661.7 16,345.5 15,432.8 15,644.9 16,898.7 3 Other banks............................... 15,357.8 17,713.2 20,462.2 27,121.6 28,253.1 28,445.5 29,275.5 29,713.5 Debits to savings deposits 3 (not seasonally adjusted) 4 All customers............................. 174.0 445.1 583.5 448.4 598.3 698.0 5 Business 1................................... 21.7 68.4 73.7 54.1 76.1 71.7 6 Others......................................... 152.3 376.8 509.8 394.3 522.2 626.4 Demand deposit turnover 2 (seasonally adjusted) 7 All commercial banks............... 105.3 116.8 129.2 139.3 151.2 150.4 154.4 156.8 8 Major New York City banks.. 356.9 411.6 503.0 520.4 584.2 565.1 571.8 618.4 9 Other banks............................... 72.9 79.8 85.9 99.8 105.8 107.6 111.1 110.1 Savings deposit turnover 3 (not seasonally adjusted) 10 All customers............................. 1.6 2.0 2.7 2.1 2.8 3.2 11 Business 1................................... 4.1 6.0 6.8 5.3 7.4 7.0 12 Others...:................................. 1.5 1.8 2.5 1.9 2.5 3.0 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 SMSAs, 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 and of states and political subdivisions. for savings deposits are not available prior to July 1977. 3 Excludes negotiable order 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 □ June 1979 1.21 MONEY STOCK MEASURES AND COMPONENTS Billions of dollars, averages of daily figures 1978 1979 1975 1976 1977 1978 Dec. Dec. Dec. Dec. Item Nov. Dec. Jan. Feb. Mar. Apr. Seasonally adjusted Measures1 1 M-l...................................................................... 295.4 313.8 338.7 361.2 360.6 361.2 359.7 358.6 359.0 364.3 2 M-l + ................................................................. 456.8 517.2 560.6 587.1 587.7 587.1 583.2 580.0 579.4 584.8 3 M-2...................................................................... 664.8 740.6 809.4 875.8 873.7 875.8 875.0 876.7 879.5 889.8 4 M-3...................................................................... 1,092.4 1,235.6 1,374.3 1,500.1 1,493.1 1,500.1 1,503.7 1,509.7 1,517.5 1,531.4 5 M-4...................................................................... 745.8 803.0 883.1 972.4 969.1 972.4 975.5 978.8 978.5 984.8 6 M-5...................................................................... 1,173.5 1,298.0 1,448.0 1,596.7 1,588.6 1,596.7 1,604.2 1,611.8 1,616.5 1,626.4 Components 7 Currency.............................................. 73.8 80.8 88.6 97.5 96.6 97.5 98.2 98.9 99.4 100.2 Commercial bank deposits 8 Demand.............................................. 221.7 233.0 250.1 263.7 264.0 263.7 261.5 259.7 259.5 264.1 9 Time and savings............................... 450.3 489.2 544.4 611.2 608.5 611.2 615.8 620.2 619.5 620.6 10 Savings............................................ 160.7 202.1 219.7 223.0 224.3 223.0 220. 8 218.6 217.7 217.7 11 Negotiable CDs2............................. 81.0 62.4 73.7 96.6 95.4 96.6 100.5 102.1 99.0 95.0 12 Other time....................................... 208.6 224.7 251.0 291.5 288.8 291.5 294.6 299.5 302.8 307.9 13 Nonbank thrift institutions3.............. 427.7 495.0 564.9 624.4 619.5 624.4 628.7 633.0 638.0 641.6 Not seasonally adjusted Measures1 14 M -l...................................................................... 303.9 322.6 348.2 371.3 362.6 371.3 365.4 351.9 353.7 367.4 15 M-l + ................................................................. 463.6 524.2 568.0 595.1 587.8 595.1 588.2 572.6 575.5 590.3 16 M-2...................................................................... 670.0 745.8 814.9 881.5 871.0 881.5 879.6 871.0 878.2 896.9 17 M-3...................................................................... 1,095.0 1,238.3 1,377.2 1,502.8 1,487.2 1,502.8 1,506.8 1,502.1 1,517.4 1,541.4 18 M-4...................................................................... 753.5 810.0 890.8 981.0 967.4 981.0 980.7 970.6 975.7 989.5 19 M-5...................................................................... 1,178.4 1,302.6 1,453.2 1,602.4 1,583.5 1,602.4 1,607.9 1,601.7 1,614.9 1,634.0 Components 20 Currency.............................................. 75.1 82.1 90.1 99.1 97.3 99.1 97.4 97.6 98.6 99.9 Commercial bank deposits 21 Demand.............................................. 228.8 240.5 258.1 272.2 265.3 272.2 268.0 254.2 255.1 267.5 22 Member........................................... 162.8 169.4 177.5 183.0 178.4 183.0 179.3 169.6 170.4 178.5 23 Domestic nonmember.................... 62.6 67.5 76.2 85.2 83.2 85.2 84.6 80.7 80.6 85.1 24 Time and savings............................... 449.6 487.4 542.6 609.7 604.8 609.7 615.3 618.7 622.0 622.1 25 Savings............................................ 159.1 200.2 217.7 220.9 222.4 220.9 219.9 218.0 218.9 220.1 26 Negotiable CDs2............................. 83.5 64.3 75.9 99.5 96.4 99.5 101.1 99.6 97.5 92.6 27 Other time....................................... 207.1 222.9 249.0 289.2 286.0 289.2 294.3 301.1 305.5 309.4 28 Other checkable deposits4.................. 0.7 1.4 2.1 2.9 2.9 2.9 2.8 2.8 2.8 2.9 29 Nonbank thrift institutions3.............. 424.9 492.5 562.3 621.4 616.2 621.4 627.1 631.1 639.2 644.6 30 U.S. government deposits (all commercial banks)..................... 4.1 4.4 5.1 10.2 8.0 10.2 11.9 8.3 6.5 5.3 1 Composition of the money stock measures is as follows: of mutual savings banks, savings and loan shares, and credit union shares (nonbank thrift). M-l: Averages of daily figures for (1) demand deposits at commercial M-4: M-2 plus large negotiable CDs. banks other than domestic interbank and U.S. government, less cash items M-5: M-3 plus large negotiable CDs. in process of collection and Federal Reserve float; (2) foreign demand 2 Negotiable time CDs issued in denominations of $100,000 or more balances at Federal Reserve Banks; and (3) currency outside the Treasury, by large weekly reporting commercial banks. Federal Reserve Banks, and vaults of commercial banks. 3 Average of the beginning- and end-of-month figures for deposits of M-1 + : M-l plus savings deposits at commercial banks, NOW accounts mutual savings banks, for savings capital at savings and loan associations, at banks and thrift institutions, credit union share draft accounts, and and for credit union shares. demand deposits at mutual savings banks. 4 Includes NOW accounts at thrift institutions, credit union share M-2: M-l plus savings deposits, time deposits open account, and time draft accounts, and demand deposits at mutual savings banks. certificates of deposit (CDs) other than negotiable CDs of $100,000 or more at large weekly reporting banks. Note. Latest monthly and weekly figures are available from the Board’s M-3: M-2 plus the average of the beginning- and end-of-month deposits H.6 (508) release. Back data are available from the Banking Section, Division of Research and Statistics. NOTES TO TABLE 1.23: 1 Adjusted to exclude domestic commercial interbank loans and ments” were increased by $1.5 billion largely as the result of reclassifica­ Federal funds sold to domestic commercial banks. tions of certain tax-exempt obligations. 2 Loans sold are those sold outright to a bank’s own foreign branches, 6 As of Dec. 31, 1978, commercial and industrial loans were reduced by nonconsolidated nonbank affiliates of the bank, the bank’s holding $0.1 billion as a result of reclassifications. company (if not a bank), and nonconsolidated nonbank subsidiaries of 7 As of Dec. 31, 1978, commercial and industrial loans sold outright the holding company. were increased by $0.7 billion as the result of reclassifications, but $0.1 3 As of Mar. 31, 1976, reclassification of loans reduced these loans by billion of this amount was offset by a balance sheet reduction of $0.1 about $1.2 billion. billion as noted above. 4 As of Dec. 31, 1977, reclassification of loans at one large bank reduced these loans by about $200 million. Note. Data are for last Wednesday of month except for June 30 and 5 As of Dec. 31, 1978, total loans and investments were reduced by December 31 call report data. Data revised beginning July 1978 to reflect $0.1 billion. Total loans were reduced by $1.6 billion, and “Other invest­ adjustments to preliminary December 31, 1978, call report data. 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 1978 1979 Item 1975 1976 1977 Dec. Dec. Dec. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. Seasonally adjusted 34.67 34.89 36.10 38.21 38.38 39.75 41.27 41.48 40.75 40.81 40.65 34.54 34.84 35.53 37.15 37.10 39.05 40.40 40.48 39.78 39.82 39.73 3 Required..................................................................... 34.40 34.61 35.91 38.02 38.22 39.53 41.04 41.26 40.54 40.66 40.47 4 Monetary base 2.......................................................... 106.7 118.4 127.8 136.8 137.8 140.0 142.3 143.4 143.3 143.9 144.5 5 Deposits subject to reserve requirements3................. 504.2 528.6 568.6 607.0 608.9 616.9 616.7 621.1 619.7 616.4 618.6 6 Time and savings....................................................... 336.8 354.1 386.7 416.8 418.3 427.5 429.4 433.5 436.1 434.1 432.0 Demand 7 Private......................................................................... 164.5 171.5 178.5 186.2 187.2 187.0 185.1 185.6 181.9 180.5 184.7 8 U.S. government........................................................ 2.9 3.0 3.5 4.0 3.5 2.3 2.3 1.9 1.8 1.8 1.8 Not seasonally adjusted 9 Monetary base2.......................................................... 108.3 120.3 129.8 136.2 137.5 140.5 144.6 144.4 141.9 142.3 144.2 10 Deposits subject to reserve requirements 3................. 510.9 534.8 575.3 605.9 608.4 615.1 624.0 627.1 614.3 614.3 621.1 11 Time and savings........................................................ 337.2 353.6 386.4 416.6 418.5 425.2 429.6 433.8 434.2 434.9 432.3 Demand 12 Private......................................................................... 170.7 177.9 185.1 184.7 186.9 188.0 191.9 191.5 178.2 177.5 186.8 13 U.S. government........................................................ 3.1 3.3 3.8 4.6 3.0 2.0 2.5 1.9 1.8 1.9 2.0 1 Series reflects actual reserve requirement percentages with no adjust­ 3 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 Reguation 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. government, less cash items in Dec. 12, 1974; Feb. 13, May 22, and Oct. 30, 1975; Jan. 8 and Dec. 30, process of collection and demand balances due from domestic commercial 1976. In addition, effective Jan. 1, 1976, statewide branching in New York banks. was instituted. The subsequent merger of a number of banks raised required reserves because of higher reserve requirements on aggregate Note. Back data and estimates of the impact on required reserves deposits at these banks. and changes in reserve requirements are shown in table 14 of the Board’s 2 Includes total reserves (member bank reserve balances in the current Annual Statistical Digest, 1971-1975. week plus vault cash held two weeks earlier); currency outside the U.S. Treasury, Federal Reserve Banks and the vaults of commercial banks; and vault cash of nonmember banks. 1.23 LOANS AND INVESTMENTS All Commercial Banks Billions of dollars; last Wednesday of month except for June 30 and Dec. 31 1978 1979 1975 1976 1977 Category Dec. 31 Dec. 31 Dec. 31 Nov. 29? Dec. 31? Jan. 31? Feb. 28? Mar. 28? Apr. 25? May 30? Seasonally adjusted 1 Loans and investments1...................... 721.8 785.1 870.6 977.6 5977.7 998.6 1,007.7 1,012.6 1,023.4 1,033.3 2 Including loans sold outright2 .... 726.2 788.9 875.5 981.3 5981.5 1,002.2 1,011.3 1,016.2 1,027.0 1,037.0 Loans 3 Total i.................................................. 496.9 538.9 617.0 715.1 5715.4 732.4 738.3 743.4 752.0 758.4 4 Including loans sold outright2 .... 501.3 542.7 621.9 718.8 5719.2 736.0 741.9 747.0 755.6 762.1 5 Commercial and industrial................ 176.2 3179.7 4201.4 230.7 6230.9 237.8 240.6 243.5 247.3 251.9 6 Including loans sold outright2 .... 178.7 3182.1 4204.2 232.6 7233.4 240.3 243.1 246.1 249.9 254.6 Investments 7 U.S. Treasury..................................... 80.1 98.0 95.6 91.4 88.8 89.4 92.1 90.5 92.0 94.5 8 Other.................................................... 144.8 148.2 158.0 171.1 5173.5 176.8 177.3 178.7 179.4 180.4 Not seasonally adjusted 9 Loans and investments1...................... 737.0 801.6 888.9 980.4 5998.2 994.6 1,000.0 1,009.5 1,022.0 1,032.0 10 Including loans sold outright2 .... 741.4 805.4 893.8 984.1 51,002.0 998.2 1,003.6 1,013.1 1,025.7 1,035.7 Loans 11 Total i.................................................. 507.4 550.2 629.9 715.5 5730.4 726.0 730.3 737.5 747.1 757.4 12 Including loans sold outright2.... 511.8 554.0 634.8 719.2 5734.2 729.6 733.9 741.1 750.8 761.1 13 Commercial and industrial................ 179.3 3182.9 4205.0 230.7 6235.1 235.3 238.6 243.0 248.0 251.9 14 Including loans sold outright2.... 181.8 3185.3 4207.8 232.6 7237.6 237.8 241.1 245.6 250.7 254.6 Investments 15 U.S. Treasury..................................... 84.1 102.5 100.2 93.7 93.6 92.2 93.3 93.9 94.4 93.4 16 Other................................................... 145.5 148.9 158.8 171.2 5174.3 176.4 176.5 178.2 180.4 181.2 For notes see bottom of opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics □ June 1979 1.24 COMMERCIAL BANK ASSETS AND LIABILITIES Last-Wednesday-of-Month Series Billions of dollars except for number of banks 1978 1979 Account June Julyp Aug.? Sept.*> Oct.*5 Nov.p Dec.*5 Jan.p Feb.*> Mar.*> Apr.® All commercial1 1 Loans and investments........... 985.0 979.4 986.2 1,002.2 ,010.8 1,029.2 1,051.3 1,041.6 1,048.1 1,059.8 1,073.9 2 Loans, gross........................... 722.1 718.0 724.3 738.0 746.7 764.3 782.6 773.0 778.3 787.7 799.0 3 Interbank............................ 46.3 43.5 42.9 45.1 46.0 48.8 56.0 47.0 48.1 50.2 51.9 4 Commercial and industrial. 221.6 221.0 222.0 224.5 227.1 230.7 232.8 235.3 238.6 243.0 248.0 5 Other................................... 454.2 453.5 459.4 468.4 473.6 484.8 493.8 490.7 491.6 494.5 499.1 6 U.S. Treasury securities........ 97.9 96.3 95.2 95.6 94.4 93.7 94.0 92 2 93.3 93.9 94.4 7 Other securities...................... 165.1 165.2 166.7 168.5 169.7 171.2 174.7 176.4 176.5 178.2 180.4 8 Cash assets, total................................... 166.8 131.8 140.3 146.8 148.5 150.7 174.7 150.5 158.8 148.1 149.7 9 Currency and coin................................. 12.0 14.9 15.2 15.2 15.1 16.7 17.2 15.3 15.1 15.3 15.7 10 Reserves with Federal Reserve Banks. 29.6 23.6 29.7 32.6 34.6 32.6 37.7 29.6 29.4 29.9 33.7 11 Balances with depositary institutions.. 56.0 46.0 45.9 49.4 47.1 48.0 56.3 50.8 54.1 48.8 48.7 12 Cash items in process of collection---- 69.3 47.3 49.6 49.7 51.7 53.5 63.5 54.7 60.2 54.1 51.6 13 Other assets........................................... 63.2 67.3 68.6 70.5 69.9 74.0 77.9 77.3 76.1 72.9 69.9 14 Total assets/total liabilities and capital. 1,215.0 1,178.6 1,195.1 1,219.5 1,229.2 1,254.0 1,303.9 1,269.5 1,283.0 1,280.8 1,293.5 15 Deposits.............. 965.7 931.5 939.8 956.0 957.2 968.1 1,005.8 979.9 988.2 979.4 983.9 16 Demand............... 374.8 339.0 340.5 351.9 348.7 349.0 382.1 350.8 355.7 343.1 350.8 17 Time and savings. 591.0 592.5 599.3 604.1 608.5 619.1 623.7 629.1 632.5 635.2 633.2 18 Savings............ n.a. n.a. n.a. n.a. n.a. n.a. n.a. 216.5 216.6 218.6 217.5 19 Time................. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 412.7 415.9 417.7 415.7 20 Borrowings............................................ 106.8 102.6 108.5 112.1 117.8 126.9 136.8 122.3 122.1 125.1 134.2 Memo items 21 U.S. Treasury note balances included in borrowing.................................. 7.5 12.4 11.6 3.7 4.7 5.8 22 Number of banks.................................. 14,698 14,709 14,718 14,723 14,712 14,724 14,712 14,701 14,711 14,716 14,720 Member 23 Loans and investments........................... 699.7 695.8 698.9 706.9 713.4 724.3 739.5 732.5 736.9 741.2 753.1 24 Loans, gross.......................................... 519.6 517.6 520.3 527.0 533.9 544.6 558.3 549.6 553.2 555.5 565.1 25 Interbank............................................ n.a. n.a. n.a. n.a. n.a. n.a. n.a. 30.3 30.6 30.7 31.1 26 Other.................................................. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 519.3 522.6 524.8 534.0 27 U.S. Treasury securities....................... 67.4 65.7 65.3 65.4 64.1 63.5 63.6 62.3 63.4 64.1 64.7 28 Other securities..................................... 112.7 112.5 113.3 114.5 115.3 116.2 117.6 120.4 120.2 121.5 123.2 29 Cash assets, total................................... 133.8 104.2 111.2 115.4 118.6 121.3 140.2 119.1 125.4 115.5 119.0 30 Currency and coin................................. 8.7 10.8 11.1 11.1 11.1 12.3 12.7 11.2 11.1 11.2 11.5 31 Reserves with Federal Reserve Banks.. 29.6 23.6 29.7 32.6 34.6 32.6 37.7 29.6 29.4 29.9 33.7 32 Balances with depositary institutions.. 29.1 24.3 22.9 24.0 23.2 25.1 28.6 25.8 27.0 22.3 24.1 33 Cash items in process of collection---- 66.5 45.4 47.6 47.7 49.7 51.4 61.2 52.5 57.9 52.1 49.7 34 Other assets........................................................ 55.2 57.3 58.4 60.0 59.3 62.9 65.5 65.5 64.2 61.3 58.1 35 Total assets/total liabilities and capital. 888.7 857.3 868.5 882.2 891.2 908.5 945.2 917.1 926.5 918.0 930.1 36 Deposits.................................................. 694.3 666.1 670.6 679.6 682.5 688.6 716.3 696.6 701.7 687.9 691.8 37 Demand................................................. 282.7 255.0 256.1 262.3 262.6 262.3 286.8 263.5 267.6 253.2 262.0 38 Time and savings.................................. 411.5 411.1 414.5 417.2 420.0 426.4 429.5 433.1 434.1 434.5 429.8 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 146.5 146.4 147.7 147.1 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 286.6 287.7 286.8 282.7 41 Borrowings............................................ 92.1 88.0 93.9 97.2 101.4 108.1 115.9 102.3 104.0 107.1 115.3 Memo items 42 U.S. Treasury note balances included 6.3 11.1 9.3 3.0 3.7 4.5 43 Number of banks.................................. 5,622 5,613 5,610 5,593 5,585 5,586 5,565 5,544 5,532 5,531 5,532 1 Figures partly estimated except on call dates. Member banks: The following numbers of noninsured trust companies Note. Figures include all bank-premises subsidiaries and other signi­ that are members of the Federal Reserve System are excluded from mem­ ficant majority-owned domestic subsidiaries. ber banks in tables 1.24 and 1.25 and are included with noninsured banks Commercial banks: All such banks in the United States, including in table 1.25: 1977—December, 12; 1979—March, 13. member and nonmember banks, stock savings banks, nondeposit trust companies, and U.S. branches of foreign banks. 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 1978 1976 1977 1978 Account Dec. 31 June 30 Dec. 31 June 30 Dec. 31 June 30 Dec. 31 June 30 Total insured National (all insured) 1 827,696 854,733 914,779 956,431 476,610 488,240 523,000 542,218 Loans 2 Gross....................................................................... 578,734 601,122 657,509 695,443 340,691 351,311 384,722 403,812 3 560,077 581,143 636,318 672,207 329,971 339,955 372,702 390,630 Investments 4 U.S. Treasury securities......................................... 101,461 100,568 99,333 97,001 55,727 53,345 52,244 50,519 5 Other........................................................................ 147,500 153,042 157,936 163,986 80,191 83,583 86,033 87,886 6 Cash assets.............................................................. 129,562 130,726 159,264 157,393 76,072 74,641 92,050 90,728 7 Total assets/total liabilities1................................... 1,003,970 1,040,945 1,129,712 1,172,772 583,304 599,743 651,360 671,166 8 Deposits................................................................... 825,003 847,372 922,657 945,874 469,377 476,381 520,167 526,932 Demand 9 U.S. government.................................................... 3,022 2,817 7,310 7,956 1,676 1,632 4,172 4,483 10 Interbank................................................................ 44,064 44,965 49,843 47,203 23,149 22,876 25,646 22,416 11 Other........................................................................ 285,200 284,544 319,873 312,707 163,346 161,358 181,821 176,025 Time and savings 12 Interbank................................................................ 8,248 7,721 8,731 8,987 4,907 4,599 5,730 5,791 13 Other........................................................................ 484,467 507,324 536,899 569,020 276,296 285,915 302,795 318,215 14 Borrowings.............................................................. 75,291 81,137 89,339 98,351 54,421 57,283 63,218 68,948 15 72,061 75,502 79,082 83,074 41,319 43,142 44,994 47,019 16 Memo: Number of banks..................................... 14,397 14,425 14,397 14,381 4,735 4,701 4,654 4,616 State member (all insured) Insured nonmember 17 Loans and investments, gross................................. 144,000 144,597 152,514 157,464 207,085 221,896 239,265 256,749 Loans 18 Gross....................................................................... 102,277 102,117 110,243 115,736 135,766 147,694 162,543 175,894 19 Net........................................................................... 99,474 99,173 107,205 112,470 130,630 142,015 156,411 169,106 Investments 20 U.S. Treasury securities......................................... 18,849 19,296 18,179 16,886 26,884 27,926 28,909 29,595 21 Other........................................................................ 22,874 23,183 24,091 24,841 44,434 46,275 47,812 51,259 22 Cash assets.............................................................. 32,859 35,918 42,305 43,057 20,631 20,166 24,908 23,606 23 189,579 195,452 210,442 217,384 231,086 245,748 267,910 284,221 24 Deposits................................................................... 149,491 152,472 163,436 167,403 206,134 218,519 239,053 251,539 Demand 25 U.S. government.................................................... 429 371 1,241 1,158 917 813 1,896 2,315 26 Interbank................................................................. 19,295 20,568 22,346 23,117 1,619 1,520 1,849 1,669 27 Other........................................................................ 52,204 52,570 57,605 55,550 69,648 70,615 80,445 81,131 Time and savings 28 Interbank................................................................ 2,384 2,134 2,026 2,275 956 988 973 920 29 Other....................................................................... 75,178 76,827 80,216 85,301 132,993 144,581 153,887 165,502 30 Borrowings.............................................................. 17,310 19,697 21,736 23,167 3,559 4,155 4,384 6,235 31 13,199 13,441 14,182 14,670 17,542 18,919 19,905 21,384 32 1,023 1,019 1,014 1,005 8,639 8,705 8,729 8,760 Noninsured nonmember Total nonmember 33 18,819 22,940 24,415 28,699 225,904 244,837 263,681 285,448 Loans 34 Gross...................................................................... 16,336 20,865 22,686 26,747 152,103 168,559 185,230 202,641 35 16,209 20,679 22,484 26,548 146,840 162,694 178,896 195,655 Investments 36 U.S. Treasury securities......................................... 1,054 993 87? 869 27,938 28,919 29,788 30,465 37 Other........................................................................ 1,428 1,081 849 1,082 45,863 47,357 48,662 52,341 38 Cash assets.............................................................. 6,496 8,330 9,458 9,360 27,127 28,497 34,367 32,967 39 Total assets/total liabilities1................................... 26,790 33,390 36,433 42,279 257,877 279,139 304,343 326,501 40 Deposits................................................................... 13,325 14,658 16,844 19,924 219,460 233,177 255,898 271,463 Demand 41 4 8 10 8 921 822 1,907 2,323 42 Interbank................................................................ 1,277 1,504 1,868 2,067 2,896 3,025 3,718 3,736 43 Other........................................................................ 3,236 3,588 4,073 4,814 72,884 74,203 84,518 85,946 Time and savings 44 1,041 1,164 1,089 1,203 1,997 2,152 2,063 2,123 45 7,766 8,392 9,802 11,831 140,760 152,974 163,690 177,334 46 Borrowings.............................................................. 4,842 7,056 6,908 8,413 8,401 11,212 11,293 14,649 47 Total capital accounts............................................. 818 893 917 962 18,360 19,812 20,823 22,346 48 275 293 310 317 8,914 8,998 9,039 9,077 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 □ June 1979 1.26 COMMERCIAL BANK ASSETS AND LIABILITIES Detailed Balance Sheet, September 30, 1978 Millions of dollars, except for number of banks. Member banks1 Insured Non­ Asset account commercial Large banks member banks banks1 Total All other New York City of Other City Chicago large 1 Cash bank balances, items in process.......................................... 158,380 134,955 43,758 5,298 47,914 37,986 23,482 2 Currency and coin........................................................................ 12,135 8,866 867 180 2,918 4,901 3,268 28,043 28,041 3,621 1,152 12,200 11,067 3 4 Demand balances with banks in United States......................... 41,104 25,982 12,821 543 3,672 8,945 15,177 5 Other balances with banks in United States.............................. 4,648 2,582 601 15 648 1,319 2,066 6 Balances with banks in foreign countries................................... 3,295 2,832 331 288 1,507 705 463 7 Cash items in process of collection............................................ 69,156 66,652 25,516 3,119 26,969 11,049 2,504 8 Total securities held—Book value................................................ 262,199 179,877 20,808 7,918 58,271 92,881 82,336 9 U.S. Treasury............................................................................... 95,068 65,764 9,524 2,690 22,051 31,499 29,315 10 Other U.S. government agencies................................................ 40,078 25,457 1,828 1,284 7,730 14,616 14,622 11 States and political subdivisions................................................. 121,260 85,125 9,166 3,705 27,423 44,831 36,136 12 All other securities....................................................................... 5,698 3,465 291 240 1,048 1,887 2,234 13 Unclassified total.......................................................................... 94 66 19 47 28 14 Trading-account securities........................................................... 6,833 6,681 3,238 708 2,446 290 151 15 U.S. Treasury........................................................................... 4,125 4,103 2,407 408 1,210 78 23 16 Other U.S. government agencies............................................ 825 816 401 82 278 55 9 17 States and political subdivisions.............................................. 1,395 1,381 363 117 794 107 14 18 All other trading account securities....................................... 394 316 67 101 145 3 78 94 66 19 47 28 20 Bank investment portfolios......................................................... 255,366 173,196 17,570 7,210 55,825 92,591 82,185 21 U.S. Treasury........................................................................... 90,943 61,661 7,117 2,282 20,840 31,422 29,293 22 Other U.S. government agencies............................................ 39,253 24,641 1,426 1,201 7,452 14,561 14,613 23 States and political subdivisions.............................................. 119,865 83,745 8,803 3,588 26,629 44,724 36,123 24 All other portfolio securities.................................................... 5,305 3,149 224 138 903 1,884 2,156 25 Federal Reserve stock and corporate stock............................... 1,656 1,403 311 111 507 475 253 26 Federal funds sold and securities resale agreement..................... 41,258 31,999 3,290 1,784 16,498 10,427 9,365 27 Commercial banks....................................................................... 34,256 25,272 1,987 1,294 12,274 9,717 9,090 28 Brokers and dealers..................................................................... 4,259 4,119 821 396 2,361 541 140 29 Others............................................................................................ 2,743 2,608 482 94 1,863 169 135 30 Other loans, gross......................................................................... 675,915 500,802 79,996 26,172 190,565 204,069 175,113 31 Less: Unearned income on loans................................................ 17,019 11,355 675 107 3,765 6,809 5,664 32 Reserves for loan loss........................................................ 7,431 5,894 1,347 341 2,256 1,949 1,537 33 Other loans, net............................................................................ 651,465 483,553 77,974 25,724 184,544 195,311 167,912 Other loans, gross, by category 34 Real estate loans........................................................................... 203,386 138,730 10,241 2,938 52,687 72,863 64,656 35 Construction and land development....................................... 25,621 19,100 2,598 685 9,236 6,581 6,521 36 Secured by farmland................................................................ 8,418 3,655 23 34 453 3,146 4,763 37 Secured by residential properties............................................ 117,176 81,370 5,362 1,559 31,212 43,236 35,806 38 1- to 4-family residences...................................................... 111,674 77,422 4,617 1,460 29.774 41,570 34,252 39 FHA-insured or VA-guaranteed..................................... 7,503 6,500 508 44 3,446 2,502 1,003 40 Conventional.......................................................................................... 104,171 70,922 4,109 1,417 26,328 39,068 33,249 41 Multifamily residences.......................................................... 5,502 3,948 746 99 1,438 1,665 1,554 42 FHA-insured...................................................................... 399 340 132 27 88 92 59 43 Conventional..................................................................... 5,103 3,609 613 72 1,350 1,573 1,495 44 Secured by other properties..................................................... 52,171 34,605 2,258 660 11,786 19,901 17,566 45 Loans to financial institutions.................................................... 37,072 34,843 12,434 4,342 15,137 2,930 2,228 46 REITs and mortgage companies............................................ 8,574 8,162 2,066 801 4,616 680 412 47 Domestic commercial banks.................................................... 3,362 2,618 966 165 1,206 281 744 48 Banks in foreign countries....................................................... 7,359 7,187 3,464 268 2,820 635 171 49 Other depositary institutions................................................... 1,579 1,411 290 76 785 261 167 50 Other financial institutions...................................................... 16,198 15,465 5,649 3,033 5,710 1,073 733 51 Loans to security brokers and dealers........................................ 11,042 10,834 6,465 1,324 2,846 199 207 52 Other loans to purchase or carry securities............................... 4,280 3,532 410 276 1,860 985 747 53 Loans to farmers—except real estate........................................ 28,054 15,296 168 150 3,781 11,196 12,758 54 Commercial and industrial loans................................................ 213,123 171,815 39,633 13,290 67,833 51,059 41,309 55 Loans to individuals..................................................................... 161,599 110,974 7,100 2,562 40,320 60,993 50,624 56 Installment loans...................................................................... 131,571 90,568 5,405 1,711 33,640 49,811 41,003 57 Passenger automobiles.......................................................... 58,908 37,494 1,077 209 11,626 24,582 21,414 58 Residential repair and modernization................................. 8,526 5,543 331 60 2,088 3,064 2,983 59 Credit cards and related plans............................................ 21,938 19,333 2,268 1,267 9,736 6,062 2,605 60 Charge-account credit cards............................................ 17,900 16,037 1,573 1,219 8,192 5,053 1,863 61 Check and revolving credit plans.................................... 4,038 3,296 695 47 1,545 1,009 742 62 Other retail consumer goods................................................ 19,689 13,296 427 57 5,242 7,570 6,393 63 Mobile homes................................................................... 9,642 6,667 179 19 2,563 3,905 2,976 64 Other.................................................................................. 10,047 6,629 249 38 2,678 3,664 3,417 65 Other installment loans........................................................ 22,510 14,902 1,302 119 4,948 8,533 7,608 66 Single-payment loans to individuals....................................... 30,027 20,406 1,694 851 6,680 11,182 9,621 67 All other loans............................................................................. 17,360 14,778 3,545 1,290 6,100 3,844 2,582 956,579 696,833 102,383 35,536 259,820 299,094 259,867 69 Direct lease financing................................................................... 6,717 6,212 1,145 96 3,931 1,041 505 70 Fixed assets—Buildings, furniture, real estate........................... 22,448 16,529 2,332 795 6,268 7,133 5,926 71 Investment in unconsolidated subsidiaries................................. 3,255 3,209 1,642 188 1,282 96 46 72 Customer acceptances outstanding............................................. 16,557 16,036 8,315 1,258 6,054 409 521 73 Other assets................................................................................... 34,559 30,408 11,323 1,000 12,810 5,275 4,249 74 Total assets................................................................................... 1,198,495 904,182 170,899 44,170 338,079 351,034 294,595 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A19 1.26 Continued Member banks1 Insured Non- Liability or capital account commercial Large banks member banks banks1 Total All other New York City of Other City Chicago large 75 Demand deposits......................................................................... 369,030 282,450 66,035 10,690 100,737 104,988 86,591 76 Mutual savings banks................................................................ 1,282 1,089 527 1 256 305 194 77 Other individuals, partnerships, and corporations................. 279,651 205,591 31,422 7,864 79,429 86,876 74,061 78 U.S. government........................................................................ 7,942 5,720 569 188 1,987 .2,977 2,222 79 States and political subdivisions................................................ 17,122 11,577 764 252 3,446 7,116 5,545 80 Foreign governments, central banks, etc................................. 1,805 1,728 1,436 19 211 62 77 81 Commercial banks in United States......................................... 39,596 38,213 21,414 1,807 10,803 4,189 1,393 82 Banks in foreign countries........................................................ 7,379 7,217 5,461 207 1,251 298 162 83 Certified and officers’ checks, etc.............................................. 14,253 11,315 4,443 352 3,354 3,166 2,937 84 Time deposits.............................................................................. 368,562 266,496 38,086 15,954 98,525 113,931 102,066 79 66 1 65 13 86 Mutual savings banks................................................................ 399 392 177 40 148 27 7 87 Other individuals, partnerships, and corporations.................. 292,120 210,439 29,209 12,074 76,333 92,824 81,680 88 U.S. government....................................................................... 864 689 61 40 356 232 175 89 States and political subdivisions............................................... 59,087 40,010 1,952 1,554 16,483 20,020 19,077 90 Foreign governments, central banks, etc.................................. 6,672 6,450 3,780 1,145 1,401 124 222 91 Commercial banks in United States......................................... 7,961 7,289 2,077 999 3,585 629 672 92 Banks in foreign countries........................................................ 1,381 1,161 829 103 219 9 220 93 Savings deposits.......................................................................... 223,326 152,249 10,632 2,604 54,825 84,188 71,077 94 Individuals and nonprofit organizations.................................. 207,701 141,803 9,878 2,448 51,161 78,316 65,897 95 Corporations and other profit organizations........................... 11,216 7,672 519 148 3,195 3,809 3,544 82 65 2 3 24 35 17 97 States and political subdivisions................................................ 4,298 2,682 215 4 437 2,025 1,616 30 27 18 * 8 2 3 99 Total deposits............................................................................. 960,918 701,195 114,753 29,248 254,087 303,107 259,733 100 Federal funds purchased and securities sold under agreements to repurchase....................................................................... 91,981 85,582 21,149 8,777 41,799 13,857 6,398 101 Commercial banks..................................................................... 42,174 39,607 6,991 5,235 21,609 5,773 2,566 102 Brokers and dealers................................................................... 12,787 11,849 2,130 1,616 6,381 1,722 939 103 Others.......................................................................................... 37,020 34,126 12,028 1,926 13,809 6,362 2,894 104 Other liabilities for borrowed money....................................... 8,738 8,352 3,631 306 3,191 1,225 386 105 Mortgage indebtedness.............................................................. 1,767 1,455 234 27 701 491 316 106 Bank acceptances outstanding.................................................. 16,661 16,140 8,398 1,260 6,070 412 521 107 Other liabilities........................................................................... 27,124 23,883 8,860 1,525 9,020 4,477 3,494 1,107,188 836,607 157,026 41,144 314,868 323,569 270,849 109 Subordinated notes and debentures.......................................... 5,767 4,401 1,001 79 2,033 1,287 1,366 85,540 63,174 12,871 2,947 21,177 26,178 22,380 Ill Preferred stock........................................................................... 88 36 5 31 52 112 Common stock........................................................................... 17,875 12,816 2,645 570 4,007 5,594 5,064 113 Surplus......................................................................................... 32,341 23,127 4,541 1,404 8,148 9,034 9,217 114 Undivided profits....................................................................... 33,517 26,013 5,554 921 8,680 10,858 7,509 115 Other capital reserves................................................................. 1,719 1,182 132 52 337 661 538 1,198,495 904,182 170,899 44,170 338,079 351,034 294,595 117 D M e e m m a o n i d t e d m e s posits adjusted2....................................................................... 252,337 171,864 18,537 5,576 60,978 86,774 80,472 Average for last 15 or 30 days 146,283 124,916 36,862 6,030 45,731 36,293 21,379 119 Federal funds sold and securities purchased under agree­ ments to resell..................................................................... 43,873 33,682 4,272 1,887 16,007 11,517 10,307 120 Total loans.................................................................................. 651,874 483,316 76,750 25,722 184,790 196,054 168,558 121 Time deposits of $100,000 or more.......................................... 183,614 150,160 32,196 13,216 65,776 38,972 33,454 122 Total deposits............................................................................. 944,593 687,543 107,028 28,922 250,804 300,789 257,062 123 Federal funds purchased and securities sold under agree- 92,685 86,635 22,896 9,473 40,541 13,725 6,053 124 Other liabilities for borrowed money....................................... 8,716 8,326 3,679 370 3,211 1,067 390 125 Standby letters of credit outstanding........................................ 18,820 17,658 10,063 1,477 4,820 1,297 1,162 126 Time deposits of $100,000 or more........................................... 186,837 152,553 32,654 13,486 66,684 39,728 34,284 127 Certificates of deposit............................................................ 160,227 129,667 27,950 11,590 56,383 33,743 30,560 128 Other time deposits................................................................ 26,610 22,886 4,704 1,896 10,301 5,985 3,724 129 Number of banks....................................................................... 14,390 5,593 12 9 153 5,419 8,810 1 Member banks exclude and nonmember banks include 13 noninsured Note. Data include consolidated reports, including figures for all trust companies that are members of the Federal Reserve System. bank-premises subsidiaries and other significant majority-owned do­ 2 Demand deposits adjusted are demand deposits other than domestic mestic subsidiaries. Securities are reported on a gross basis before deduc­ commercial interbank and U.S. government, less cash items reported tions of valuation reserves. Back data in lesser detail were shown in as in process of collection. previous issues of the Bulletin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Financial Statistics □ June 1979 1.27 ALL LARGE WEEKLY REPORTING COMMERCIAL BANKS with Domestic Assets of 5750 Million or More on December 31, 1977, Assets and Liabilities Millions of dollars, Wednesday figures 1979 Account Apr. 4 Apr. 11 Apr. 18 Apr. 25 May 2? May 9? May 16? May 23? May 30? 1 Cash items in process of collection..................... 47,147 46,235 47,102 41,974 49,126 40,928 46,915 42,341 53,543 2 Demand deposits due from banks in the United States............................................................ 13,746 13,628 13,126 13,602 13,713 13,883 14,424 12,656 17,408 3 All other cash and due from depositary 24,422 29,204 30,363 32,553 30,204 29,286 28,789 26,825 31,241 470,209 465,749 471,335 465,682 469,315 467,211 468,554 467,188 471,720 Securities 5 U.S. Treasury securities....................................... 40,378 40,148 39,958 37,472 36,048 36,455 37,112 37,281 37,012 6 7,333 6,446 6,339 5,458 4,404 4,822 5,564 5,457 5,352 7 Investment account, by maturity..................... 33,045 33,702 33,619 32,014 31,644 31,632 31,547 31,824 31,661 8 One year or less............................................ 10,760 11,261 11,097 9,788 9,190 9,287 9,157 9,198 9,206 9 Over one through five years......................... 18,015 18,202 18,248 17,926 18,127 18,036 17,940 18,039 17,908 10 Over five years.............................................. 4,270 4,239 4,274 4,300 4,327 4,308 4,450 4,587 4,546 11 64,699 65,371 67,280 66,988 66,711 67,108 66,814 67,019 67,186 12 2,891 3,263 3,770 3,194 3,138 3,455 3,161 3,356 3,091 13 61,808 62,108 63,510 63,794 63,573 63,654 63,652 63,662 64,095 14 U.S. government agencies............................. 11.956 12,029 12,150 12,349 12,172 12,183 12,173 12,171 12,374 15 States and political subdivision, by maturity. 47,066 47,319 48,616 48,699 48,663 48,756 48,767 48,755 48,855 16 One year or less........................................ 7,235 7,214 8,371 8,365 8,340 8,241 8,195 8,082 8,258 17 39,831 40,105 40,246 40,333 40,323 40,515 40,572 40,674 40,597 18 Other bonds, corporate stocks and 2,786 2,760 2,744 2,746 2,738 2,715 2,712 2,735 2,866 Loans 19 Federal funds sold1.............................................. 30,690 25,820 27,935 25,621 27,324 25,814 25,090 24,391 26,589 20 To commercial banks....................................... 19,159 17,016 18,104 17,286 18,303 16,319 15,946 15,753 18,948 21 To nonbank brokers and dealers in securities. 8,393 6,304 6,816 5,693 6,836 7,042 7,342 6,704 5,904 22 3,138 2,500 3,015 2,642 2,184 2,453 1,802 1,933 1,737 23 344,819 344,878 346,688 346,191 349,853 348,541 350,318 349,350 351,893 24 137,191 137,583 138,726 138,690 140,142 140,469 140,603 140,250 141,326 25 Bankers’ acceptances and commercial 3,368 3,135 3,376 2,997 3,029 2,907 3,221 2,978 3,577 26 133,823 134,448 135,350 135,693 137,113 137,562 137,382 137,273 137,750 27 127,575 128,205 129,189 129,521 130,930 131,377 131,226 131,116 131,630 28 6,248 6,243 6,161 6,172 6,183 6,185 6,156 6,157 6,119 29 83,739 84,173 84,479 84,675 84,856 85,114 85,502 85,829 86,212 30 To individuals for personal expenditures........ 61,734 61,906 62,357 62,807 63,145 63,273 63,612 63,850 64,237 To financial institutions 31 Commercial banks in the U.S...................... 2,937 2,913 2,908 2,718 2,902 2,704 2,615 2,640 2,834 32 Banks in foreign countries.................... 7,383 7,601 6,826 6,778 6,436 6,300 6,078 6,108 6,214 33 Sales finance, personal finance companies, etc............................................................ 8,372 8,712 8,381 8,322 8,696 8,825 8,759 8,656 8,823 34 Other financial institutions.................... 14,479 14,400 14,424 14,364 14,788 14,770 14,719 14,630 14,717 35 To nonbank brokers and dealers in securities. 8,935 8,039 8,600 8,443 8,972 7,429 8,754 7,844 7,776 36 To others for purchasing and carrying 2,306 2,313 2,308 2,326 2,335 2,419 2,424 2,449 2,455 37 To finance agricultural production................. 4,600 4,620 4,665 4,667 4,726 4,754 4,768 4,804 4,830 38 All other............................................................ 13,144 12,619 13,015 12,401 12,853 12,482 12,483 12,291 12,468 39 5,808 5,889 5,941 5,983 5,945 6,013 6,079 6,136 6,243 40 4,569 4,579 4,586 4,607 4,676 4,694 4,700 4,717 4,717 41 334,442 334,410 336,162 335,600 339,232 337,834 339,538 338,497 340,933 42 Lease financing receivables.................................. 5,722 5,720 5,741 5,761 5,794 5,837 5,871 5,910 6,561 43 59,815 60,176 58,351 58,204 57,843 57,042 54,624 54,505 54,315 621,062 620,713 626,020 617,776 625,995 614,188 619,178 609,426 634,787 Deposits 182,137 181,070 181,120 173,982 181,176 168,999 176,310 167,706 181,019 46 Mutual savings banks....................................... 892 837 770 715 853 746 754 693 622 47 Individuals, partnerships, and corporations.. 126,614 127,662 129,965 124,460 128,367 120,335 126,244 120,270 129,446 48 States and political subdivisions..................... 4,330 4,686 4,628 4,764 5,679 4,260 4,558 4,330 4,545 49 3,227 1,657 2,631 1,965 1,450 831 877 598 726 50 Commercial banks in United States............... 30,633 30,159 27,633 26,800 28,839 27,596 28,739 26,806 29,870 51 Banks in foreign countries.............................. 6,600 6,452 6,509 6,734 6,344 6,824 6,859 7,023 7,203 52 Foreign governments and official institutions. 1,413 1,236 1,245 1,250 1,506 1,485 1,159 1,226 2,212 53 Certified and officers’ checks........................... 8,428 8,380 7,739 7,294 8,140 6,922 7,121 6,760 6,394 256,028 254,417 251.872 251,497 250,690 251,068 250,064 250,330 248,857 55 Savings............................................................... 77,839 77,742 77,183 76.742 76,615 76,556 76,594 76,667 76,594 56 Individuals and nonprofit organizations.... 72,738 72,679 72,152 71^716 71,634 71,494 71,528 71,589 71,520 57 Partnerships and corporations operated for profit....................................................... 4,215 4,202 4,118 4,142 4,116 4,164 4,148 4,197 4,184 58 Domestic governmental units....................... 865 834 891 868 840 866 892 857 869 59 22 27 22 17 26 31 26 23 20 60 178,188 176,675 174,689 174,754 174,076 174,512 173,470 173,663 172,263 61 Individuals, partnerships, and corporations.. 140,413 139,556 138,186 138,344 138,075 138,623 138,085 138,504 137,427 62 States and political subdivisions..................... 23,474 23,245 23,066 23,178 23,004 23,102 22,996 23,201 22,927 63 474 480 478 496 474 477 490 493 484 64 Commercial banks in United States............... 7,006 6,736 6,534 6,408 6,205 6,066 5,825 5,619 5,442 65 Foreign governments, official institutions, and banks.................................................. 6,822 6,658 6,424 6,328 6,317 6,244 6,074 5,846 5,983 66 Federal funds purchased3.................................... 82,423 86,344 87,770 87,648 85,265 84,693 85,177 83,159 93,404 Other liabilities for borrowed money 67 Borrowings from Federal Reserve Banks---- 220 87 2,597 940 924 1,569 1,081 1,195 2,352 68 Treasury tax-and-loan notes............................. 492 214 4,214 3,210 3,708 4,216 3,797 2,895 2,481 69 All other liabilities for borrowed money........ 10,051 10,165 9,793 10,188 12,004 11,281 10,585 10,887 11,355 70 Other liabilities and subordinated note and debentures...................................................... 47,509 46,105 46,438 48,091 49,756 49,750 49,354 50,467 52,486 71 Total liabilities.................................................. 578,859 578,402 583,804 575,556 583,524 571,575 576,368 566,639 591,954 72 Residual (total assets minus total liabilities)4. 42,203 42,311 42,215 42,220 42,471 42,613 42,809 42,787 42,834 1 Includes securities purchased under agreements to resell. 4 This is not a measure of equity capital for use in capital adequacy analysis or 2 Other than financial institutions and brokers and dealers. for other analytic uses. 3 Includes securities sold under agreements to repurchase. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Banks A21 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS with Domestic Assets of $1 Billion or More on December 31, 1977 Assets and Liabilities Millions of dollars, Wednesday figures 1979 Account Apr. 4 Apr. 11 Apr. 18 Apr. 25 May 2p May 9 p May 16^ May 23p May 30p 1 Cash items in process of collection..................... 44,831 44,110 44,699 39,607 46,237 38,942 44,634 40,336 50,967 2 Demand deposits due from banks in the United States............................................................. 12,926 12,899 12,526 12,929 12,974 13,232 13,690 11,947 16,565 3 All other cash and due from depositary institutions..................................................... 22,999 27,513 28,797 30,671 28,377 27,473 27,136 25,214 29,546 4 Total loans and securities..................................... 440,180 435,694 440,864 435,784 439,395 437,339 438,594 437,336 441,753 Securities 5 U.S. Treasury securities....................................... 37,901 37,615 37,389 34,995 33,594 34,013 34,678 34,844 34,594 6 Trading account................................................ 7,271 6,376 6,249 5,425 4,342 4,780 5,531 5,404 5,313 7 Investment account, by maturity..................... 30,629 31,239 31,140 29,570 29,252 29,234 29,146 29,439 29,281 8 One year or less............................................ 10,106 10,603 10,440 9,154 8,594 8,698 8,557 8,615 8,616 9 Over one through five years......................... 16,564 16,708 16,740 16,434 16,649 16,547 16,459 16,555 16,440 10 Over five years.............................................. 3,959 3,928 3,960 3,983 4,009 3,989 4,130 4,269 4,226 11 59,837 60,510 62,314 61,962 61,682 62,075 61,784 61,978 62,118 12 2,807 3,193 3,703 3,130 3,084 3,394 3,099 3,295 3,028 13 Investment account........................................... 57,030 57,317 58,611 58,832 58,598 58,681 58,685 58,683 59,089 14 U.S. government agencies............................ 11,127 11,190 11,300 11,487 11,299 11,313 11,305 11,302 11,495 15 States and political subdivision, by maturity. 43,335 43,587 44,784 44,820 44,788 44,877 44,895 44,875 44,973 16 6,650 6,629 7,702 7,674 7,647 7,559 7,518 7,398 7,575 17 Over one year............................................ 36,685 36,958 37,083 37,146 37,141 37,319 37,376 37,476 37,398 18 Other bonds, corporate stocks and securities................................................ 2,568 2,540 2,527 2,524 2,510 2,491 2,484 2,506 2,621 Loans 19 28,346 23,541 25,544 23,773 25,527 24,080 23,302 22,908 25,001 20 17,103 15,072 15,954 15,703 16,757 14,833 14,437 14,545 17,700 21 To nonbank brokers and dealers in securities. 8,126 5,989 6,602 5,449 6,606 6,815 7,081 6,449 5,581 22 To others............................................................ 3,118 2,479 2,988 2,622 2,164 2,432 1,784 1,913 1,719 23 Other loans, gross................................................. 323,703 323,721 325,360 324,858 328,426 327,086 328,812 327,657 330,204 24 Commercial and industrial............................... 130,171 130,495 131,542 131,510 132,937 133,255 133,346 132,989 134,095 25 Bankers’ acceptances and commercial paper...................................................... 3,312 3,080 3,317 2,941 2,973 2,853 3,165 2,926 3,522 26 All other........................................................ 126,859 127,414 128,225 128,569 129,964 130,402 130,181 130,062 130,573 27 U.S. addresses............................................ 120,665 121,226 122,118 122,450 123,835 124,272 124,076 123,955 124,504 28 Non-U.S. addressees.................................. 6,194 6,189 6,107 6,119 6,129 6,130 6,105 6,108 6,069 29 Real estate......................................................... 78,508 78,937 79,215 79,416 79,595 79,827 80,224 80,525 80,894 30 To individuals for personal expenditures........ 54,953 55,105 55,510 55,937 56,221 56,346 56,662 56,742 57,092 To financial institutions 31 Commercial banks in the U.S...................... 2,854 2,833 2,824 2,640 2,822 2,619 2,537 2,560 2,753 32 Banks in foreign countries........................... 7,323 7,530 6,766 6,728 6,372 6,240 6,019 6,059 6,164 33 Sales finance, personal finance companies, etc............................................................ 8,197 8,520 8,187 8,127 8,506 8,637 8,580 8,486 8,652 34 Other financial institutions........................... 14,025 13,959 13,986 13,918 14,344 14,323 14,277 14,194 14,275 35 To nonbank brokers and dealers in securities. 8,842 7,959 8,514 8,358 8,884 7,338 8,663 7,754 7,688 36 To others for purchasing and carrying securities2................................................... 2,064 2,076 2,075 2,093 2,102 2,183 2,196 2,217 2,224 37 To finance agricultural production................. 4,449 4,470 4,516 4,514 4,571 4,599 4,614 4,647 4,674 38 All other............................................................ 12,316 11,837 12,225 11,616 12,070 11,717 11,694 11,484 11,692 5,309 5,384 5,430 5,469 5,433 5,495 5,556 5,608 5,716 40 4,298 4,307 4,314 4,336 4,402 4,420 4,426 4,443 4,449 41 314,096 314,029 315,617 315,054 318,591 317,171 318,831 317,606 320,039 5,559 5,557 5,578 5,597 5,617 5,659 5,689 5,729 6,379 43 58,331 58,664 56,862 56,701 56,321 55,555 53,178 53,059 52,796 44 Total assets............................................................ 584,826 584,439 589,326 581,288 588,921 578,201 582,921 573,621 598,006 Deposits 171,155 170,228 169,828 163,006 169,618 158,629 165,527 157,615 170,174 46 854 811 748 692 818 718 725 671 600 47 Individuals, partnerships, and corporations.. 118,260 119,192 121,147 115,996 119,554 112,254 117,811 112,377 120,929 48 States and political subdivisions..................... 3,782 4,146 4,076 4,126 5,089 3,689 4,003 3,736 4,024 49 2,983 1,514 2,324 1,655 1,068 755 775 542 667 50 Commercial banks in United States............... 29,190 28,826 26,383 25,584 27,450 26,286 27,389 25,580 28,459 51 Banks in foreign countries............................... 6,543 6,386 6,444 6,678 6,279 6,762 6,791 6,965 7,140 52 Foreign governments and official institutions. 1,411 1,233 1,243 1,232 1,504 1,482 1,157 1,222 2,205 53 Certified and officers’ checks........................... 8,130 8,120 7,462 7,043 7,855 6,682 6,874 6,522 6,150 54 Time and savings deposits................................... 239,008 237,367 234,925 234,552 233,713 234,020 233,018 233,157 231,555 55 Savings............................................................... 72,189 72,094 71,576 71,168 71,089 71,012 71,080 71,134 71,055 56 Individuals and nonprofit organizations---- 67,478 67,437 66,932 66,528 66,473 66,338 66,384 66,435 66,370 57 Partnerships and corporations operated for 3,904 3,891 3,816 3,835 3,811 3,853 3,836 3,883 3,869 58 Domestic governmental units....................... 786 740 806 789 780 789 836 793 796 59 All other........................................................ 20 26 21 16 24 30 25 22 19 60 166,819 165,273 163,349 163,384 162,625 163,008 161,938 162,024 160,500 61 Individuals, partnerships, and corporations.. 131,516 130,625 129,287 129,410 129,044 129,574 129,000 129,321 128,094 62 States and political subdivisions..................... 21,306 21,071 20,921 21,037 20,880 20,937 20,843 21,030 20,776 63 U.S. government............................................... 468 475 472 491 469 475 484 488 479 64 Commercial banks in United States............. 6,736 6,474 6,272 6,147 5,942 5,804 5,563 5,364 5,194 65 Foreign governments, official institutions, 6,793 6,629 6,396 6,299 6,290 6,218 6,048 5,820 5,958 78,300 82,103 83,703 83,428 81,243 80,562 81,218 79,191 89,269 Other liabilities for borrowed money 67 Borrowings from Federal Reserve Banks.... 195 87 2,589 934 877 1,532 1,065 1,161 2,324 68 Treasury tax-and-loan notes............................ 463 189 3,969 2,926 3,429 3,918 3,512 2,693 2,297 69 All other liabilities for borrowed money........ 9,712 9,826 9,340 9,827 11,596 10,951 10,198 10,343 10,950 70 Other liabilities and subordinated note and 46,405 44,963 45,385 47,023 48,602 48,618 48,225 49,342 51,276 71 Total liabilities.................................................. 545,237 544,764 549,738 541,696 549,079 538,232 542,764 533,502 557,845 72 Residual (total assets minus total liabilities)4. 39,589 39,675 39,587 39,592 39,842 39,969 40,157 40,119 40,160 1 Includes securities purchased under agreements to resell. 4 This is not a measure of equity capital for use in capital adequacy analysis or 2 Other than financial institutions and brokers and dealers. for other analytic uses. 3 Includes securities sold under agreements to repurchase. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Financial Statistics □ June 1979 1.29 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1979 Account Apr. 4 Apr. 11 Apr. 18 Apr. 25 May 2p May 9p May I6p May 23^ May 30^ 1 Cash items in process of collection..................... 17,040 17,205 15,841 14,443 16,659 14,531 15,740 15,030 17,513 2 Demand deposits due from banks in the United States.............................................................. 8,342 8,575 7,909 8,652 8,769 9,203 9,101 7,825 11,314 3 All other cash and due from depositary institutions..................................................... 4,716 7,046 6,450 5,405 6,818 7,156 7,437 5,517 7,733 4 Total loans and securities1................................... 100,950 98,916 100,291 99,152 100,834 99,282 99,118 98,994 98,738 Securities 5 6 7 Investment account, by maturity..................... 7,077 7,157 7,035 6,6ii 6,491 6,498 6,484 6,610 6,452 8 One year or less............................................ 1,584 1,563 1,401 1,189 860 908 898 930 934 9 Over one through five years......................... 4,556 4,660 4,682 4,463 4,665 4,639 4,629 4,618 4,550 10 Over five years.............................................. 937 934 952 958 966 952 958 1,062 968 11 n 13 Investment account.......................................... 10,895 10,891 11,335 11,272 11,219 11,136 11,128 11,085 11,264 14 U.S. government agencies............................. 1,343 1,353 1,388 1,372 1,352 1,352 1,359 1,362 1,416 15 States and political subdivision, by maturity. 9,001 8,995 9,421 9,373 9,334 9,249 9,232 9,185 9,196 16 One year or less......................................... 1,461 1,432 1,879 1,820 1,762 1,680 1,689 1,630 1,696 17 Over one year............................................ 7,540 7,562 7,542 7,552 7,572 7,570 7,542 7,555 7,500 18 Other bonds, corporate stocks and securities 551 543 526 527 533 536 538 538 652 Loans 19 Federal funds sold3................................................ 7,549 5,626 6,881 6,518 7,641 7,232 6,119 6,809 5,358 20 To commercial banks....................................... 3,783 2,965 4,169 3,252 4,036 3,160 2,615 3,372 2,926 21 To nonbank brokers and dealers in securities. 3,044 1,987 2,140 2,192 2,906 3,032 3,015 2,943 1,922 22 To others............................................................ 721 674 572 1,074 698 1,040 489 494 510 23 Other loans, gross................................................. 77,525 77,348 77,152 76,878 77,625 76,570 77,553 76,672 77,957 24 Commercial and industrial............................... 39,267 39,285 39,476 39,505 39,845 39,977 39,930 39,547 40,534 25 Bankers’ acceptances and commercial paper....................................................... 1,109 960 970 883 850 738 945 806 1,261 26 All other........................................................ 38,158 38,326 38,506 38,622 38,995 39,239 38,985 38,740 39,273 27 U.S. addressees.......................................... 35,909 36,070 36,279 36,396 36,730 36,925 36,685 36,429 36,980 28 Non-U.S. addressees................................. 2,249 2,256 2,227 2,225 2,264 2,314 2,300 2,311 2,293 29 Real estate......................................................... 10,508 10,545 10,576 10,591 10,579 10,585 10,630 10,676 10,858 30 To individuals for personal expenditures.... 7,372 7,394 7,433 7,481 7,538 7,526 7,578 7,505 7,589 To financial institutions 31 Commercial banks in the U.S...................... 974 1,002 956 885 987 971 809 815 831 32 Banks in foreign countries........................... 3,641 3,909 3,213 3,268 2,908 2,997 2,902 3,050 3,005 33 Sales finance, personal finance companies, etc............................................................ 3,238 3,416 3,232 3,067 3,252 3,268 3,195 3,169 3,316 34 Other financial institutions........................... 4,232 4,143 4,181 4,167 4,339 4,319 4,285 4,266 4,256 35 To nonbank brokers and dealers in securities. 4,983 4,505 4,838 4,844 5,054 3,868 5,054 4,431 4,472 36 To others for purchasing and carrying 353 354 357 356 359 414 420 412 419 37 To finance agricultural production................. 236 230 244 242 243 234 232 240 238 38 2,722 2,564 2,646 2,472 2,520 2,412 2,518 2,560 2,438 39 Less: Unearned income........................................ 684 691 696 705 697 703 715 719 831 40 Loan loss reserve........................................ 1,412 1,415 1,415 1,422 1,444 1,451 1,452 1,463 1,462 41 Other loans, net.................................................... 75,429 75,241 75,040 74,751 75,484 74,416 75,386 74,490 75,664 42 Lease financing receivables.................................. 530 536 537 533 534 552 550 550 1,185 43 All other assets5.................................................... 32,742 32,263 31,257 31,895 29,691 29,598 28,442 29,435 27,630 44 Total assets............................................................ 164,320 164,541 162,286 160,080 163,306 160,323 160,388 157,350 164,113 Deposits 45 Demand deposits.................................................... 56,728 57,037 53,396 52,646 56,021 53,265 53,721 52,306 55,610 46 Mutual savings banks....................................... 509 497 409 392 447 414 398 395 314 47 Individuals, partnerships, and corporations... 28,602 28,632 28,090 27,187 29,373 26,463 28,017 26,926 29,272 48 States and political subdivisions..................... 385 422 441 376 453 349 442 436 448 49 U.S. government............................................... 794 401 599 491 304 140 86 63 84 50 Commercial banks in United States............... 16,496 17,116 14,450 14,791 15,781 16,149 15,729 15,049 15,382 51 Banks in foreign countries............................... 4,866 4,677 4,906 5,037 4,648 5,262 5,075 5,282 5,459 52 Foreign governments and official institutions. 1,205 982 1,014 1,021 1,271 1,258 882 981 1,862 53 Certified and officers’ checks........................... 3,871 4,309 3,485 3,351 3,744 3,229 3,091 3,173 2,788 54 Time and savings deposits..................................... 47,830 47,054 46,200 45,563 45,353 44,932 43,716 43,163 42,910 55 Savings............................................................... 9,952 9,963 9,988 9,964 9,917 9,881 9,915 9,896 9,872 56 Individuals and nonprofit organizations.... 9,308 9,334 9,328 9,309 9,253 9,215 9,222 9,224 9,272 57 Partnerships and corporations operated for profit....................................................... 447 443 443 444 447 447 449 453 402 58 Domestic governmental units....................... 185 169 204 203 201 196 227 205 190 59 All other........................................................ 12 17 14 7 17 23 17 14 9 60 37,878 37,091 36,212 35,599 35,436 35,051 33,801 33,267 33,038 61 Individuals, partnerships, and corporations. 29,179 28,703 28,164 27,728 27,604 27,372 26,516 26,319 25,974 62 States and political subdivisions.................. 1,670 1,640 1,633 1,638 1,686 1,704 1,703 1,704 1,704 63 U.S. government........................................... 48 52 48 46 46 46 43 43 42 64 Commercial banks in U.S............................. 2,876 2,729 2,584 2,456 2,400 2,286 2,042 1,918 1,871 65 Foreign governments, official institutions, and banks.............................................. 4,105 3,967 3,783 3,731 3,699 3,643 3,497 3,283 3,446 66 Federal funds purchased 6.................................... 23,610 24,615 24,780 25,205 24,152 24,004 24,251 23,018 25,416 Other liabilities for borrowed money 67 Borrowings from Federal Reserve Banks....... 1,225 75 165 100 554 377 550 68 Treasury tax-and-loan notes........................... 2 991 486 44 821 752 583 628 69 All other liabilities for borrowed money........ 4,063 4,309 4,226 4,388 5,108 4,633 4,776 5,003 5,255 70 Other liabilities and subordinated note and debentures...................................................... 19,250 18,653 18,655 18,936 19,561 19,576 19,383 19,701 20,458 71 Total liabilities...................................................... 151,482 151,670 149,472 147,300 150,405 147,332 147,153 144,151 150,829 72 Residual (total assets minus total liabilities)7.. 12,839 12,871 12,814 12,780 12,901 12,991 13,235 13,199 13,284 1 Excludes trading account securities. 5 includes trading account securities. 2 Not available due to confidentiality. 6 Includes securities sold under agreements to repurchase. 3 Includes securities purchased under agreements to resell. 7 This is not a measure of equity capital for use in capital adequacy analysis or 4 Other than financial institutions and brokers and dealers. for other analytic uses. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Banks A23 1.30 LARGE WEEKLY REPORTING COMMERCIAL BANKS Balance Sheet Memoranda Millions of dollars, Wednesday figures 1979 Account Apr. 4 Apr. 11 Apr. 18 Apr. 25 May 2 p May 9p May 16^ May 23^ May 30^ Large weekly reporting banks with assets of $7501 million ormore 1 Total loans (gross) and investments adjusted1... 458,490 456,288 460,850 456,269 458,731 458,895 460,772 459,648 460,898 2 Total loans (gross) adjusted1............................... 353,413 350,769 353,612 351,808 355,972 355,332 356,846 355,348 356,699 3 Demand deposits adjusted2................................. 101,130 103,019 103,753 103,242 101,762 99,644 99,779 97,961 96,879 4 Time deposits in accounts of $100,000 or more. 126,306 124,555 122,206 121,806 121,095 120,992 119,634 119,847 118,030 5 Negotiable CDs................................................ 90,979 89,576 87,503 86,880 86,096 86,266 85,078 84,846 83,111 6 Other time deposits.......................................... 35,326 34,978 34,704 34,926 34,999 34,727 34,556 35,001 34,919 7 Loans sold outright to affiliates3........................ 3,604 3,632 3,594 3,648 3,662 3,625 3,563 3,718 3,737 2,565 2,618 2,586 2,638 2,597 2,626 2,572 2,715 2,722 9 Other.................................................................. 1,039 1,014 1,008 1,010 1,065 999 991 1,004 1,016 Large weekly reporting banks with assets of $1 billion or more 10 Total loans (gross) and investments adjusted1.. 429,830 427,480 431,829 427,245 429,650 429,802 431,602 430,281 431,464 11 Total loans (gross) adjusted1............................. 332,092 329,356 332,127 330,288 334,373 333,714 335,140 333,459 334,752 12 Demand deposits adjusted2............................... 94,150 95,778 96,421 96,160 94,863 92,646 92,729 91,157 90,081 13 Time deposits in accounts of $100,000 or more 118,790 117,021 114,765 114,436 113,667 113,528 112,150 112,266 110,350 14 Negotiable CDs.............................................. 86,294 84,735 82,712 82,109 81,200 81,328 80,117 79,802 77,950 15 Other time deposits........................................ 32,496 32,286 32,052 32,327 32,466 32,199 32,033 32,464 32,400 16 Loans sold outright to affiliates3....................... 3,564 3,583 3,544 3,599 3,615 3,578 3,517 3,672 3,691 17 Commercial and industrial............................. 2,550 2,595 2,565 2,617 2,577 2,606 2,553 2,697 2,704 18 Other................................................................ 1,014 988 980 982 1,038 972 964 975 987 Large weekly reporting banks in New York City 19 Total loans (gross) and investments adjusted1-4. 98,289 97,055 97,278 97,142 97,952 97,305 97,860 96,989 97,274 20 Total loans (gross) adjusted1............................... 80,317 79,007 78,908 79,259 80,242 79,671 80,248 79,294 79,558 21 Demand deposits adjusted2................................. 22,398 22,314 22,505 22,922 23,277 22,445 22,165 22,163 22,631 22 Time deposits in accounts of $100,000 or more. 32,512 31,674 30,731 30,100 29,795 29,374 28,099 27,546 27,283 23 Negotiable CDs................................................ 25,202 24,425 23,548 22,906 22,531 22,108 20,874 20,302 19,881 24 Other time deposits.......................................... 7,310 7,249 7,184 7,194 7,264 7,266 7,224 7,244 7,402 1 Exclusive of loans and federal funds transactions with domestic com­ 3 Loans sold are those sold outright to a bank’s own foreign branches, mercial banks. nonconsolidated nonbank affiliates of the bank, the bank’s holding com­ 2 All demand deposits except U.S. government and domestic banks pany (if not a bank) and nonconsolidated nonbank subsidiaries of the less cash items in process of collection. holding company. 4 Excludes trading account securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Financial Statistics □ June 1979 1.31 LARGE WEEKLY REPORTING COMMERCIAL BANKS Domestic Classified Commercial and Industrial Loans Millions of dollars Outstanding Net change during Industry classification 1979 1978 1979 1979 Jan. 31 r Feb. 28 *- Mar. 28r Apr. 25 r May 30p Q4 Ql- Mar.r Apr.r May** 1 Durable goods manufacturing.......... 17,659 18,745 19,478 20,596 20,521 365 1,474 733 1,118 -75 2 Nondurable goods manufacturing... 16,363 16,767 17,442 17,542 17,226 213 226 674 101 -316 3 Food, liquor, and tobacco............. 4,592 4,677 4,804 4,747 4,398 686 -132 127 -58 -349 4 Textiles, apparel, and leather........ 3,786 3,942 4,189 4,322 4,525 -624 464 246 134 202 5 Petroleum refining.......................... 2,337 2,328 2,276 2,112 2,030 153 -367 -52 -164 -83 6 Chemicals and rubber.................... 3,248 3,356 3,488 3,583 3,464 88 -52 131 96 -119 7 Other nondurable goods................ 2,399 2,463 2,685 2,778 2,811 -89 314 222 93 33 8 Mining (including crude petroleum and natural gas).......................... 9.999 9.971 10,140 10,373 10,858 200 -512 169 233 484 9 Trade................................................... 21,009 21,415 22,454 22,930 23,477 817 2,490 1,038 476 547 10 Commodity dealers......................... 1,951 1,946 1,892 1,815 1,954 227 -71 -54 -78 139 11 Other wholesale............................... 10,198 10,366 10,960 11,260 11,336 277 1,524 594 300 77 12 Retail............................................... 8,859 9,103 9,602 9,856 10,186 312 1,037 498 254 330 13 Transportation, communication, and other public utilities................... 13,419 13,760 13,980 14,391 14,515 1,086 569 220 411 124 14 Transportation................................ 5,770 6,009 6,198 6,251 6,329 74 557 190 53 78 15 Communication............................... 1,725 1,829 1,845 1,880 1,872 83 48 16 35 -8 16 Other public utilities....................'. 5,924 5,922 5,936 6,260 6,313 930 -37 15 323 53 17 Construction....................................... 5,062 5,034 5,355 5,461 5,651 -25 148 322 106 190 18 Services................................................ 15,283 15,451 15,844 16,264 16,473 982 887 394 419 210 19 All other i............................................ 16,132 16,075 14,592 14,892 15,783 -409 -2,316 -1,483 300 891 20 Total domestic loans.......................... 114,926 117,218 119,285 122,450 124,504 3,229 2,966 2,067 3,165 2,054 21 Memo: Term loans (original maturity more than 1 year) included in domestic loans............................. 57,562 58,488 59,357 61,389 62,126 1,718 4,084 869 2,032 738 1 Includes commercial and industrial loans at a few banks with assets with domestic assets of $1 billion or more as of December 31, 1977 are of $1 billion or more that do not classify their loans. included in this series. The revised series is on a last-Wednesday-of-themonth basis. Note. New series. The 134 large weekly reporting commercial banks 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 Corporations1 Billions of dollars, estimated daily-average balances At commercial banks Type of holder 1977 1978 1979 1974 1975 1976 Dec. Dec. Dec. Sept. Dec. Mar. June Sept. Dec. Mar.2 1 All holders, individuals, partnerships, and corporations.................................................... 225.0 236.9 250.1 252.7 274.4 262.5 271.2 278.8 294.6 270.4 2 Financial business.................................................. 19.0 20.1 22.3 23.7 25.0 24.5 25.7 25.9 27.8 24.4 3 Nonfinancial business............................................ 118.8 125.1 130.2 128.5 142.9 131.5 137.7 142.5 152.7 135.9 73.3 78.0 82.6 86.2 91.0 91.8 92.9 95.0 97.4 93.9 5 Foreign.................................................................... 2.3 2.4 2.7 2.5 2.5 2.4 2.4 2.5 2.7 2.7 11.7 11.3 12.4 11.8 12.9 12.3 12.4 13.1 14.1 13.5 At weekly reporting banks 1978 1979 1975 1976 1977 Dec. Dec. Dec. July Aug. Sept. Oct. Nov. Dec. Mar. 3 7 All holders, individuals, partnerships, and corporations.................................................... 124.4 128.5 139.1 139.9 137.7 139.7 141.3 142.7 147.0 121.9 8 Financial business.................................................. 15.6 17.5 18.5 19.4 19.4 18.9 19.1 19.3 19.8 16.9 9 Nonfinancial business............................................ 69.9 69.7 76.3 73.7 72.0 74.1 75.0 75.7 79.0 64.6 10 Consumer................................................................ 29.9 31.7 34.6 37.1 36.8 37.1 37.5 37.7 38.2 31.1 2.3 2.6 2.4 2.3 2.4 2.4 2.5 2.5 2.5 2.6 12 Other....................................................................... 6.6 7.1 7.4 7.3 7.1 7.3 7.2 7.5 7.5 6.7 1 Figures include cash items in process of collection. Estimates of gross 3 After the end of 1978 the large weekly reporting bank panel was deposits are based on reports supplied by a sample of commercial banks. changed to 170 large commercial banks, each of which had total assets in Types of depositors in each category are described in the June 1971 domestic offices exceeding $750 million as of December 31, 1977. See Bulletin, p. 466. “Announcements,” p. 408 in the May 1979 Bulletin. Beginning in 2 Beginning with the March 1979 survey, the demand deposit ownership March 1979, demand deposit ownership estimates for these large banks survey sample was reduced to 232 banks from 349 banks, and the estima­ are constructed quarterly on the basis of 97 sample banks and are not tion procedure was modified slightly. To aid in comparing estimates comparable with earlier data. The following estimates in billions of dollars based on the old and new reporting sample, the following estimates in for December 1978 have been constructed for the new large-bank panel: billions of dollars for December 1978 have been constructed using the new financial business, 18.2; nonfinancial business, 67.2; consumer, 32.8; smaller sample: financial business, 27.0; nonfinancial business, 146.9; foreign, 2.5; other, 6.8. consumer, 98.3; foreign, 2.8; and other, 15.1. 1.33 COMMERCIAL PAPER AND BANKERS ACCEPTANCES OUTSTANDING Millions of dollars, end of period 1978 1979 1975 1976 1977 Instrument Dec. Dec. Dec. Oct. Nov. Dec. Jan. Feb. Mar. Apr. Commercial paper (seasonally adjusted) 1 AH issuers................................................................ 48,471 52,971 65,101 77,734 80,679 83,665 85,226 87,358 90,796 92,725 Financial companies1 Dealer-placed paper2 2 Total.................................................................... 6,212 7,261 8,884 10,949 11,487 12,296 12,915 13,419 14,247 14,961 3 Bank-related........................................................ 1,762 1,900 2,132 2,868 3,231 3,521 4,413 3,969 3,793 4,251 Directly placed paper 3 4 Total................................................................... 31,404 32,511 40,484 48,460 50,093 51,630 52,880 54,586 55,653 55,313 5 Bank-related........................................................ 6,892 5,959 7,102 10,925 11,478 12,314 12,191 12,166 12,642 12,788 6 Nonfinancial companies4....................................... 10,855 13,199 15,733 18,325 19,099 19,739 19,431 19,353 20,896 22,451 Dollar acceptances (not seasonally adjusted) 7 Total........................................................................ 18,727 22,523 25,450 30,579 32,145 33,700 33,749 34,337 34,617 34,391 Holder 8 Accepting banks..................................................... 7,333 10,442 10,434 8,379 8,082 8,579 7,339 7,715 7,645 7,535 9 Own bills............................................................. 5,899 8,769 8,915 7,012 6,840 7,653 6,214 6,708 6,535 6,685 10 Bills bought........................................................ 1,435 1,673 1,519 1,366 1,243 927 1,125 1,007 1,110 849 Federal Reserve Banks 11 Own account...................................................... 1,126 991 954 1 204 252 12 Foreign correspondents..................................... 293 375 362 557 585 664 765 750 c793 861 13 Others...................................................................... 9,975 10,715 13,904 21,644 23,478 24,456 25,646 25,829 c25,975 25,744 Basis 14 Imports into United States.................................. 3,726 4,992 6,378 8,575 8,675 8,574 8,869 9,114 9,281 8,679 15 Exports from United States.................................. 4,001 4,818 5,863 6,665 7,224 7,586 7,762 7,858 8,104 8,087 16 All other.................................................................. 11,000 12,713 13,209 15,339 16,245 17,540 17,118 17,365 17,232 17,625 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. Digitized form FarRkAetS. ER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Financial Statistics □ June 1979 1.34 PRIME RATE CHARGED BY BANKS on Short-term Business Loans Percent per annum Month Average Month Average Effective date Rate Effective date Rate rate rate 1978_Jan 10 . . 8 1978—Sept. 15........... 9V4 1977—Aug...................... 6.83 19 78—July...................... 9.00 28........... 9 y4 Sept...................... 7.13 Aug...................... 9.01 May 5........... SVa 7.52 Sept...................... 9.41 26........... m Oct. 13........... 10 Nov...................... 7.75 Oct....................... 9.94 27........... IOVa Dec...................... 7.75 10.94 June 16........... 8 Va Dec....................... 11.55 30......... 9 Nov. 1........... 101/2 1978—jan........................ 7.93 6........... 1034 Feb....................... 8.00 I979—jan....................... 11.75 Aug. 31............ 9Va 17........... 11 Mar...................... 8.00 Feb....................... 11.75 24........... 111/2 Apr...................... 8.00 Mar...................... 11.75 May..................... 8.27 Apr....................... 11.75 Dec. 26.......... UVa June..................... 8.63 11.75 1.35 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, February 5-10, 1979 Size of loan (in thousands of dollars) All Item sizes 1,000 25-49 50-99 100-499 500-999 and over Short-term commercial and industrial loans 1 Amount of loans (thousands of dollars)........ 6,849,553 764,236 572,350 582,423 1,571,248 639,108 2,720,187 2 Number of loans.............................................. 144,174 106,536 17,073 9,420 8,982 1,025 1,137 3 Weighted-average maturity (months)............ 3.2 3.3 3.3 3.7 3.3 3.3 2.8 4 Weighted-average interest rate (percent per annum)...................................................... 12.27 12.14 12.01 12.83 12.55 12.63 11.99 5 Interquartile range1..................................... 11.51-13.10 10.47-13.52 10.75-13.25 11.75-14.20 11.89-13.37 12.00-13.28 11.50-12.45 Percentage of amount of loans 6 With floating rate............................................ 50.1 29.0 39.6 36.8 45.9 56.9 61.8 7 Made under commitment............................... 46.4 20.3 24.1 37.5 47.6 55.3 57.5 Long-term commercial and industrial loans 8 Amount of loans (thousands of dollars)........ 1,081,529 242,097 205,214 96,688 537,530 9 Number of loans.............................................. 16,416 14,943 1,111 154 207 10 Weighted-average maturity (months)............ 47.6 36.7 51.0 57.2 49.6 11 Weighted-average interest rate (percent per annum)...................................................... 12.01 11.83 12.25 11.93 12.02 12 Interquartile range1..................................... 11.50-13.15 10.47-13.16 11.57-13.15 11.75-12.50 11.50-13.25 Percentage of amount of loans 13 With floating rate............................................ 61.7 25.8 52.5 71.4 79.6 14 Made under commitment............................... 55.4 29.3 41.9 61.0 71.2 Construction and land development loans 15 Amount of loans (thousands of dollars)........ 591,415 94,199 63,486 93,408 122,193 218,129 16 Number of loans.............................................. 15,222 11,013 1,918 1,520 639 133 17 Weighted-average maturity (months)............. 7.8 8.4 5.4 2.8 7.8 10.4 18 Weighted-average interest rate (percent per annum)...................................................... 11.79 11.22 12.15 12.00 12.43 11.48 19 Interquartile range1..................................... 10.21-13.37 10.00-12.55 10.16-13.69 10.50-12.68 11.05-13.75 9.95-13.00 Percentage of amount of loans 20 With floating rate............................................ 44.2 22.6 24.8 20.2 53.8 64.1 21 Secured by real estate...................................... 92.4 84.1 92.9 97.4 93.8 92.9 22 Made under commitment............................... 59.3 49.1 48. I 71.7 56.3 63.2 Type of construction 23 1- to 4-family................................................... 40.9 62.0 80.1 82.3 38.4 4.1 24 Multifamily...................................................... 15.8 2.9 3.3 4.0 16.7 29.6 24 Nonresidential.................................................. 43.2 35.2 16.5 13.7 44.9 66.2 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).......... 968,124 154,312 159,679 154,817 166,626 137,522 195,168 27 Number of loans................................................ 62,545 43,081 11,189 4,553 2,411 996 315 28 Weighted-average maturity (months)............... 7.8 8.4 10.7 8.0 8.0 6.1 5.1 29 Weighted-average interest rate (percent per annum)........................................................ 11.01 10.34 10.40 10.37 10.69 11.69 12.33 30 Interquartile range1...................................... 10.00-11.83 9.50-11.00 9.73-11.00 9.61-11.00 10.00-11.00 11.00-12.49 11.00-13.50 By purpose of loan 31 Feeder livestock............................................. 11.10 10.35 10.18 10.54 10.60 11.33 12.86 32 Other livestock.............................................. 11.23 10.47 10.87 10.53 10.71 (2) (2) 33 Other current operating expenses................. 10.88 10.31 10.42 10.33 10.78 11.65 12.07 34 Farm machinery and equipment.................. 10.28 10.23 10.25 10.10 (2) (2) (2) 35 Other............................................................... 11.23 10.42 10.83 10.28 10.66 12.61 11.81 1 Interest rate range that covers the middle 50 percent of the total 2 Fewer than 10 sample loans, dollar amount of loans made. Note. For more detail, see the Board’s 416 (G.14) statistical release. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Markets All 1.36 INTEREST RATES Money and Capital Markets Averages, percent per annum 1979 1979, week ending Instrument 1976 1977 1978 Feb. Mar. Apr. | May May 5 May 12May 19May 26 June 2 Money market rates 1 Federal funds1.............................................. 5.05 5.54 7.94 10.06 10.09 10.01 10.24 10.22 10.25 10.25 10.17 10.28 Prime commercial paper2-3 2 90- to 119-day.............................................. 5.24 5.54 7.94 9.95 9.90 9.85 9.95 9.87 9.95 9.99 9.98 9.92 3 4- to 6-month............................................... 5.35 5.60 7.99 10.01 9.96 10.39 9.98 9.91 10.00 10.03 9.98 9.91 4 Finance company paper, directly placed, 3- to 6-month3-4................................... 5.22 5.49 7.78 9.85 9.73 10.15 9.75 9.67 9.77 9.76 9.81 9.70 5 Prime bankers acceptances, 90-day3-5....... 5.19 5.59 8.11 10.01 9.94 10.42 9.98 9.99 10.04 10.00 9.94 9.93 6 Large negotiable certificates of deposit, 3-month, secondary market6............... 5.26 5.58 8.20 10.18 10.13 10.05 10.15 10.21 10.19 10.19 10.08 10.09 7 Eurodollar deposits, 3-month7.................. 5.57 6.05 8.74 10.79 10.64 10.60 10.73 10.88 10.80 10.63 10.68 10.53 U.S. government securities Bills*’* Market yields 8 3-month.................................................... 4.98 5.27 7.19 9.32 9.48 9.46 9.61 9.58 9.63 9.60 9.64 9.55 9 6-month.................................................... 5.26 5.53 7.58 9.41 9.47 9.49 9.54 9.60 9.61 9.50 9.49 9.44 10 1-year........................................................ 5.52 5.71 7.74 9.39 9.38 9.28 9.27 9.40 9.39 9.26 9.14 9.05 Rates on new issue9 11 3-month.................................................... 4.989 5.265 7.221 9.265 9.457 9.493 9.592 9.498 9.621 9.506 9.744 9.526 12 6-month.................................................... 5.266 5.510 7.572 9.349 9.458 9.498 9.562 9.570 9.617 9.459 9.602 9.409 Capital market rates Government notes and bonds U.S. Treasury Constant maturities10 13 1-year........................................................ 5.88 6.09 8.34 10.24 10.25 10.12 10.12 10.30 10.27 10.09 9.95 9.88 14 2-year........................................................ 6.45 8.34 9.72 9.79 9.78 9.78 9.92 9.91 9.80 9.63 9.54 15 3-year........................................................ 6.77 6.69 8.29 9.29 9.38 9.43 9.42 9.54 9.54 9.45 9.27 9.19 7.18 6.99 8.32 9.13 9.20 9.25 9.24 9.36 9.35 9.27 9.08 9.01 17 7-year........................................................ 7.42 7.23 8.36 9.11 9.15 9.21 9.23 9.34 9.34 9.26 9.08 9.01 18 10-year...................................................... 7.61 7.42 8.41 9.10 9.12 9.18 9.25 9.36 9.37 9.28 9.11 9.04 19 20-year...................................................... 7.86 7.67 8.48 9.03 9.08 9.12 9.21 9.28 9.30 9.23 9.11 9.06 20 30-year...................................................... 8.49 9.00 9.03 9.08 9.19 9.24 9.27 9.21 9.11 9.06 Notes and bonds maturing in11 21 3 to 5 years......................................... 6.94 6.85 8.30 9.16 9.25 9.32 9.30 9.42 9.42 9.32 9.14 9.08 22 Over 10 years (long-term)....................... 6.78 7.06 7.89 8.43 8.45 8.44 8.55 8.55 8.59 8.61 8.51 8.44 State and local Moody’s series12 23 Aaa............................................................ 5.66 5.20 5.52 5.66 5.82 5.80 5.81 5.80 5.85 5.90 5.75 5.75 24 Baa............................................................ 7.49 6.12 6.27 6.75 6.41 6.25 6.38 6.30 6.35 6.45 6.40 6.40 25 Bond Buyer series13.................................... 6.64 5.68 6.03 6.31 6.33 6.29 6.25 6.27 6.30 6.30 6.21 6.16 Corporate bonds Seasoned issues14 26 All industries................................................ 9.01 8.43 9.07 9.63 9.76 9.81 9.96 9.92 9.96 9.98 9.98 9.94 By rating groups 27 Aaa............................................................ 8.43 8.02 8.73 9.26 9.37 9.38 9.50 9.51 9.52 9.51 9.49 9.48 28 Aa.............................................................. 8.75 8.24 8.92 9.50 9.61 9.65 9.86 9.81 9.89 9.89 9.86 9.80 29 A................................................................ 9.09 8.49 9.12 9.68 9.81 9.88 10.00 9.94 9.97 10.02 10.05 10.02 30 Baa............................................................ 9.75 8.97 9.45 10.08 10.26 10.33 10.47 10.40 10.47 10.50 10.51 10.45 Aaa utility bonds15 31 New issue...................................................... 8.48 8.19 8.96 9.53 9.62 9.70 9.83 9.85 9.80 32 Recently offered issues................................. 8.49 8.19 8.97 9.56 r9.62 9.74 9.84 9.93 9.93 9.85 9.74 9.71 Dividend/price ratio16 33 Preferred stocks............................................ 7.97 7.60 8.25 8.77 8.77 8.29 8.82 8.81 8.79 8.79 8.90 8.83 3.77 4.56 5.28 5.43 5.39 5.35 5.58 5.42 5.60 5.66 5.59 5.65 1 Weekly figures are 7-day averages of daily effective rates for the week 10 Yields on the more actively traded issues adjusted to constant ending Wednesday; the daily effective rate is an average of the rates on maturities by the U.S. Treasury, based on daily closing bid prices. a given day weighted by the volume of transactions at these rates. 11 Unweighted averages for all outstanding notes and bonds in maturity 2 Beginning Nov. 1977, unweighted average of offering rates quoted ranges shown, based on daily closing bid prices. “Long-term” includes by at least five dealers. Previously, most representative rate quoted by all bonds neither due nor callable in less than 10 years, including a num­ those dealers. ber of very low yielding “flower” bonds. 3 Yields are quoted on a bank-discount basis. 12 General obligations only, based on figures for Thursday, from 4 The most representative offering rate published by finance companies. Moody’s Investors Service. 5 Average of the midpoint of the range of daily dealer closing rates 13 Twenty issues of mixed quality. offered for domestic issues. 14 Averages of daily figures from Moody’s Investors Service. 6 Weekly figures (week ending Wednesday) are 7-day averages of the 15 Compilation of the Board of Governors of the Federal Reserve daily midpoints as determined from the range of offering rates; monthly System. figures are averages of total days in the month. Beginning Apr. 5, 1978, Issues included are long-term (20 years or more). New-issue yields weekly figures are simple averages of offering rates. are based on quotations on date of offering; those on recently offered 7 Averages of daily quotations for the week ending Wednesday. issues (included only for first 4 weeks after termination of underwriter 8 Except for new bill issues, yields are computed from daily closing price restrictions), on Friday close-of-business quotations. bid prices. 16 Provided by Standard and Poors’ Corporation. 9 Rates are recorded in the week in which bills are issued. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Financial Statistics □ June 1979 1.37 STOCK MARKET Selected Statistics 1978 1979 Indicator 1976 1977 1978 Nov. Dec. Jan. Feb. Mar. Apr. May Prices and trading (averages of (daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31,1965 = 50). 54.45 53.67 53.76 52.74 53.69 55.76 55.06 56.18 57.50 56.21 2 Industrial................................................................ 60.44 57.84 58.30 57.50 58.72 61.31 60.42 61.89 63.64 62.21 3 Transportation....................................................... 39.57 41.07 43.25 41.80 42.49 43.69 42.27 43.22 45.92 45.60 4 Utility..................................................................... 36.97 40.91 39.23 37.88 38.09 38.79 39.22 38.94 38.63 37.48 5 Finance................................................................... 52.94 55.23 56.74 54.95 55.73 57.59 56.09 57.65 59.50 58.80 6 Standard & Poor’s Corporation (1941-43 = 10)1.. 102.01 98.18 96.11 94.71 96.10 99.70 98.23 100.11 102.10 99.73 7 American Stock Exchange (Aug. 31,1973 = 100). 101.63 116.18 144.56 144.17 149.94 159.26 160.92 171.51 181.14 180.81 Volume of trading (thousands of shares) 8 New York Stock Exchange................................... 21,189 20,936 28,591 24,505 24,622 27,988 25,037 29,536 31,033 28,352 9 American Stock Exchange.................................... 2,565 2,514 3,922 3,304 3,430 3,150 2,944 4,105 4,262 3,888 Customer financing (end-of-period balances;, in millions of dollars) 10 Regulated margin credit at brokers/dealers2........ 8,166 9,993 11,035 11,209 11,035 10,955 10,989 11,056 11,416 1 11 Margin stock3........................................................ 7,960 9,740 10,830 11,000 10,830 10,750 10,790 10,870 11,220 12 Convertible bonds.................................................. 204 250 205 209 205 204 195 185 194 13 Subscription issues................................................ 2 3 1 1 1 4 1 2 n.a. Free credit balances at brokers4 585 640 835 790 835 810 775 830 835 15 Cash-account.......................................................... 1,855 2,060 2,510 2,305 2,510 2,565 2,430 2,490 2,550 Margin-account debt at brokers (percentage distribution, end of period) 16 Total....................................................................... 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 By equity class (in percent)5 17 Under 40................................................................. 12.0 18.0 33.0 32.0 33.0 21.0 29.0 r21.0 23.0 18 40-49....................................................................... 23.0 36.0 28.0 27.0 28.0 32.0 31.0 r29.0 29.0 n.a. 19 50-59....................................................................... 35.0 23.0 18.0 20.0 18.0 22.0 18.0 r25.0 23.0 20 60-69....................................................................... 15.0 11.0 10.0 10.0 10.0 12.0 11.0 '12.0 12.0 21 70-79....................................................................... 8.7 6.0 6.0 6.0 6.0 7.0 6.0 r7.0 7.0 22 80 or more.............................................................. 6.0 5.0 5.0 5.0 5.0 6.0 5.0 '6.0 6.0 Special miscellaneous-account balances at brokers (end of period) 23 Total balances (millions of dollars)6.. 8,776 9,910 Distribution by equity status (percent) 24 Net credit status................................. 41.3 43.4 Debit status, equity of 25 60 percent or more........................ 47.8 44.9 26 Less than 60 percent..................... 10.9 11.7 Margin requirements (percent of market value) 7 Effective date Mar. 11, 1968 June 8, 1968 May 6, 1970 Dec. 6, 1971 Nov. 24, 1972 Jan. 3, 1974 27 Margin stocks........................................................ 70 80 65 55 65 50 28 Convertible bonds................................................. 50 60 50 50 50 50 29 Short sales.............................................................. 70 80 65 55 65 50 1 Effective July 1976, includes a new financial group, banks and in­ 5 Each customer’s equity in his collateral (market value of collateral surance companies. With this change the index includes 400 industrial less net debit balance) is expressed as a percentage of current collateral stocks (formerly 425), 20 transportation (formerly 15 rail), 40 public values. utility (formerly 60), and 40 financial. 6 Balances that may be used by customers as the margin deposit re­ 2 Margin credit includes all credit extended to purchase or carry quired for additional purchases. Balances may arise as transfers based stocks or related equity instruments and secured at least in part by stock. on loan values of other collateral in the customer’s margin account or Credit extended is end-of-month data for member firms of the New York deposits of cash (usually sales proceeds) occur. Stock Exchange. 7 Regulations G, T, and U of the Federal Reserve Board of Governors, In addition to assigning a current loan value to margin stock generally, prescribed in accordance with the Securities Exchange Act or 1934, Regulations T and U permit special loan values for convertible bonds limit the amount of credit to purchase and carry margin stocks that may and stock acquired through exercise of subscription rights. be extended on securities as collateral by prescribing a maximum loan 3 A distribution of this total by equity class is shown on lines 17-22. value, which is a specified percentage of the market value of the collateral 4 Free credit balances are in accounts with no unfulfilled commitments at the time the credit is extended. Margin requirements are the difference to the brokers and are subject to withdrawal by customers on demand. between the market value (100 percent) and the maximum loan value. The term “margin stocks” is defined in the corresponding regulation. 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 1978 1979 1975 1976 1977 Account Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr.?5 Savings and loan associations9 1 Assets..................................... 338,233 391,907 459,241 504,298 508,977 515,352 520,677 523,649 529,820 534,168 539,715 543,342 2 Mortgages............................. 278,590 323,005 381,163 416,677 420,971 425,236 429,420 432,858 435,460 437,905 441,420 445,717 3 Cash and investment securities1........................... 30,853 35,724 39,150 44,188 43,987 45,577 45.869 44,855 47,653 49,018 50,130 48,644 4 Other...................................... 28,790 33,178 38,928 43,433 44,019 44,539 45,388 45,936 46,707 47,245 48,165 48,981 5 Liabilities and net worth........ 338,233 391,907 459,241 504,298 508,977 515,352 520,677 523,649 529,820 534,168 539,715 543,342 6 Savings capital....................... 285,743 335,912 386,800 413,972 420,405 423,050 425,207 431,009 435,752 438,633 446,981 445,797 7 Borrowed money................... 20,634 19,083 27,840 37,219 38,595 39,873 40,981 42,960 42,468 41,368 41,592 43,675 8 FHLBB.............................. 17,524 15,708 19,945 27,363 28,632 29,456 30,322 31,990 31,758 31,004 31,123 32,333 9 Other.................................. 3,110 3,375 7,895 9,856 9,963 10,417 10,659 10,970 10,610 10,364 10,469 11,342 10 Loans in process.................... 5,128 6,840 9,911 11,422 11,222 11,165 rl1,015 10,737 10,445 10,287 10,346 10,717 11 Other...................................... 6,949 8,074 9,506 13,906 10,676 12,832 14,666 9,918 11,971 14,250 10,919 12,966 12 Net worth2............................. 19,779 21,998 25,184 27,779 28,079 28,432 28,808 29,025 29,284 29,630 29,877 30,187 13 Memo : Mortgage loan com­ mitments outstanding 3.. 10,673 14,826 19,875 22,047 21,648 21,503 20,738 18,911 r18,053 19,038 21,085 22,793 Mutual savings banks10 14 Assets..................................... 121,056 134,812 147,287 155,210 156,110 156,843 157,436158,174 158,892 160,078 161,866 Loans 15 Mortgage............................... 77,221 81,630 88,195 92,866 93,403 93,903 94,497 95,157 95,552 95,821 96,136 16 Other...................................... 4,023 5,183 6,210 8,379 8,418 8,272 7,921 7,195 7,744 8,455 9,421 Securities 17 U.S. government.................. 4,740 5,840 5,895 5,210 5,172 5,105 5,035 4,959 4,838 4,801 4,814 18 State and local government... 1,545 2,417 2,828 3,098 3,180 3,190 3,307 3,333 3,328 3,167 3,126 19 Corporate and other4........... 27,992 33,793 37,918 39,592 39,639 39,651 39,679 39,732 40,007 40,307 40,658 20 Cash....................................... 2,330 2,355 2,401 2,080 2,293 2,735 3,033 3,665 3,274 3,306 3,410 21 Other assets........................... 3,205 3,593 3,839 3,985 4,006 3,988 3,962 4,131 4,149 4,222 4,300 22 Liabilities............................... 121,056 134,812 147,287 155,210 156,110 156,843 157,436158,174 158,892 160,078 161,866 n.,a. 23 Deposits................................. 109,873 122,877 134,017 139,308 140,816 141,026 141,155 142,701 142,879 143,539 145,650 24 Regular^........................... 109,291 121,961 132,744 137,690 139,068 139,422 c139,697 141,170 141,388 142,071 c144,042 25 Ordinary savings............ 69,653 74,535 78,005 75,578 75,423 74,124 72,398 71,816 69,244 68,817 68,829 26 Time and other.............. 39,639 47,426 54,739 62,112 63,645 65,298 67,299 69,354 72,145 73,254 75,213 27 Other.................................. 582 916 1,272 1,619 1,747 1,604 1,458 1,531 1,491 1,468 1,608 28 Other liabilities..................... 2,755 2,884 3,292 5,246 4,570 5,040 5,411 4,565 5,032 5,485 5,048 29 General reserve accounts___ 8,428 9,052 9,978 10,654 10,725 10,777 10,870 10,907 10,980 11,054 11,167 30 Memo : Mortgage loan com­ mitments outstanding®.. 1,803 2,439 4,066 4,789 4,561 4,843 4,843 4,400 4,366 4,453 4,482 Life insurance companies 31 Assets..................................... 289,304 321,552 351,722 378,124 381,050 382,446 385,562 389,021 393,402 395,553 399,530 Securities 32 Government........................... 13,758 17,942 19,553 19,536 19,638 19,757 19,711 19,579 19,829 19,922 20,119 4,736 5,368 5,315 5,155 5,156 5,183 4,934 4,795 5,049 5,209 5,324 4,508 5,594 6,051 5,884 6,001 6,035 6,235 6,250 6,236 6,132 6,106 35 Foreign®............................. 4,514 6,980 8,187 8,524 8,481 8,539 8,542 8,534 8,544 8,581 8,689 36 Business................................. 135,317 157,246 175,654 194,620 196,152 195,883 197,615 197,342 201,061 201,869 203,971 n.a. 107,256 122,984 141,891 157,888 159,972 161,347 162,347 161,923 165,552 166,693 167,625 38 Stocks................................. 28,061 34,262 33,763 36,732 36,180 34,536 34,780 35,419 35,509 35,176 36,346 39 Mortgages.............................. 89,167 91,552 96,848 101,602 102,365 103,161 104,106 105,932 106,397 107,137 108,189 40 Real estate............................. 9,621 10,476 11,060 11,538 11,583 11,693 11,707 11,776 11,841 11,919 11,959 24,467 25,834 27,556 29,067 29,290 29,521 29,818 30,202 30,506 30,835 31,224 16,971 18,502 21,051 21,734 22,022 22,431 22,605 24,190 23,768 23,871 24,068 Credit unions11 43 Total assets/liabilities and capital............................. 38,037 45,225 54,084 60,376 61,605 61,194 61,614 62,595 61,756 62,319 63,883 63,247 44 Federal................................... 20,209 24,396 29,574 33,437 34,187 33,823 34,215 34,681 34,165 34,419 35,289 34,653 45 State....................................... 17,828 20,829 24,510 26,939 27,418 27,371 27,399 27,914 27,591 27,900 28,594 28,594 46 Loans outstanding................ 28,169 34,384 42,055 49,058 49,984 50,393 51,103 51,807 51,526 51,716 52,480 52,542 47 Federal............................... 14,869 18,311 22,717 26,751 27,355 27,545 28,031 28,583 28,340 28,427 28,918 28,849 13,300 16,073 19,338 22,307 22,629 22,848 23,072 23,224 23,186 23,289 23,562 23,693 49 Savings................................... 33,013 39,173 46,832 51,456 52,394 52,240 52,418 53,048 51,916 52,484 54,243 53,745 50 Federal (shares)................. 17,530 21,130 25,849 28,283 28,923 28,865 28,992 29,326 28,427 28,743 29,741 29,339 51 State (shares and deposits). 15,483 18,043 20,983 23,173 23,471 23,375 23,426 23,722 23,489 23,741 24,502 24,406 For notes see bottom of page A30. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Financial Statistics □ June 1979 1.39 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year Transition quarter Fiscal Fiscal Type of account or operation (July- year year 1977 1978 1979 Sept. 1977 1978 1976) H2 HI H2 Feb. Mar. Apr. U.S. budget 1 Receipts1.............................................. 81,772 357,762 401,997 175,820 210,650 206,275 32,639 31,144 52,230 2 Outlays1................................................ 94,729 402,725 450.836 216,781 222,518 238,150 37,739 43,725 40,752 3 Surplus, or deficit ( — )......................... -12,956 -44,963 -48,839 -40,961 -11,870 -31,875 -5,100 -12,581 11,478 4 Trust funds...................................... -1,952 7,833 12,693 4,293 4,334 11,755 2,188 -1,155 705 5 Federal funds2................................. -11,004 -52,796 -61,532 -45,254 -16,204 -43,630 -7,288 -11,426 10,774 Off-budget entities surplus, or deficit ( —) 6 Federal Financing Bank outlays........ -2,564 -8,201 -10,614 -6,663 -5,105 -5,082 -995 -1,639 -1,102 7 Other3.................................................. 779 -483 287 428 -790 1,841 62 498 -542 U.S. budget plus off-budget, in­ cluding Federal Financing Bank 8 Surplus, or deficit ( —)......................... -14,741 -53,647 -59,166 -47,196 -17,765 -35,117 -6,033 -13,722 9,834 Financed by 9 Borrowing from the public................. 18,027 53,516 59,106 40,284 23,374 30,308 -668 8,012 -4,965 10 Cash and monetary assets (decrease, or increase ( —))........................... -2,899 -2,238 -3,023 4,317 -5,098 3,381 8,179 -779 -2,991 11 Other4.................................................. -387 2,369 3,083 2,597 -511 1,428 -1,478 6,489 -1,878 Memo items 12 Treasury operating balance (level, end of period)............................... 17,418 19,104 22,444 12,274 17,526 16,291 6,887 7,685 8,342 13 Federal Reserve Banks.................... 13,299 15,740 16,647 7,114 11,614 4,196 3.443 5,726 3,100 14 Tax and loan accounts.................... 4,119 3,364 5,797 5,160 5,912 12,095 3,444 1,959 5,242 1 Effective June 1978, earned income credit payments in excess of cellaneous liability (including checks outstanding) and asset accounts; an individual’s tax liability, formerly treated as income tax refunds, are seignorage; increment on gold; net gain/loss for U.S. currency valuation classified as outlays retroactive to January 1976. adjustment; net gain/loss for IMF valuation adjustment; and profit on 2 Half years calculated as a residual of total surplus/deficit and trust the sale of gold. fund surplus/deficit. 3 Includes Pension Benefit Guaranty Corp.; Postal Service Fund; Rural Source. “Monthly Treasury Statement of Receipts and Outlays of Electrification and Telephone Revolving Fund; and Rural Telephone the U.S. Government,” Treasury Bulletin, and the Budget of the United Bank. States Government, Fiscal Year 1980. 4 Includes accured interest payable to the public; deposit funds; mis­ NOTES TO TABLE 1.38 1 Holdings of stock of the Federal Home Loan Banks are included in Note. Savings and loan associations: Estimates by the FHLBB for “other assets.” all associations in the United States. Data are based on monthly reports 2 Includes net undistributed income, which is accrued by most, but not of federally insured associations and annual reports of other associations. all, associations. Even when revised, data for current and preceding year are subject to 3 Excludes figures for loans in process, which are shown as a liability. further revision. 4 Includes securities of foreign governments and international organiza­ Mutual savings banks: Estimates of National Association of Mutual tions and nonguaranteed issues of U.S. government agencies. Savings Banks for all savings banks in the United States. Data are re­ 5 Excludes checking, club, and school accounts. ported on a gross-of-valuation-reserves basis. 6 Commitments outstanding (including loans in process) of banks in Life insurance companies: Estimates of the American Council of Life New York State as reported to the Savings Banks Association of the Insurance for all life insurance companies in the United States. Annual State of New York. figures are annual-statement asset values, with bonds carried on an 7 Direct and guaranteed obligations. Excludes federal agency issues amortized basis and stocks at year-end market value. Adjustments for not guaranteed, which are shown in this table under “business” securities. interest due and accrued and for differences between market and book 8 Issues of foreign governments and their subdivisions and bonds of the values are not made on each item separately but are included, in total, in International Bank for Reconstruction and Development. “other assets.” 9 Data reflect benchmark revisions back to 1977. Credit unions: Estimates by the National Credit Union Administration 10 Data for December 1978 through February 1979 have been revised. for a group of federal and state-chartered credit unions that account for 11 Data for August through November 1978 have been revised. about 30 percent of credit union assets. Figures are preliminary and revised annually to incorporate recent benchmark data. 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 quarter Fiscal Fiscal Source or type (July- year year 1977 1978 1979 Sept. 1977 1978 1976) H2 HI H2 Feb. Mar. Apr. Receipts 1 All sources1.......................................... 81,772 357,762 401,997 175,820 210,650 206,275 32,639 31,144 52,230 2 Individual income taxes, net............... 38,800 157,626 180,988 82,911 90,336 98,854 14,509 8,255 25,029 3 Withheld........................................... 32,949 144,820 165,215 75,480 82,784 90,148 16,292 16,194 15,537 4 Presidential Election Campaign Fund......................................... 1 37 39 1 36 3 5 10 7 5 Nonwithheld..................................... 6,809 42,062 47,804 9,397 37,584 10,777 1,037 3,119 17,975 6 Refunds1.......................................... 958 29,293 32,070 1,967 30,068 2,075 2,825 11,068 8,489 7 Corporation income taxes 8 Gross receipts................................... 9,808 60,057 65,380 25,121 38,496 28,536 1,706 9,879 10,418 9 Refunds............................................ 1,348 5,164 5,428 2,819 2,782 2,757 424 578 651 10 Social insurance taxes and contribu­ tions, net....................................... 25,760 108,683 123,410 52,347 66,191 61,064 13,614 10,373 14,165 11 Payroll employment taxes and contributions 2......................... 21,534 88,196 99,626 44,384 51,668 51,052 11,528 9,315 9,051 12 Self-employment taxes and contributions 3......................... 269 4,014 4,267 316 3,892 369 322 321 2,993 13 Unemployment insurance............... 2,698 11,312 13,850 4,936 7,800 6,727 1,286 198 1,608 1,259 5,162 5,668 2,711 2,831 2,91 7 478 540 513 4,473 17,548 18,376 9,284 8,835 9,879 1,436 1,434 1,529 16 Customs deposits................................. 1,212 5,150 6,573 2,848 3,320 3,748 527 621 623 1,455 7,327 5,285 2,837 2,587 2,691 426 449 323 18 Miscellaneous receipts 5..................... 1,612 6,536 7,413 3,292 3,667 4,260 846 712 794 Outlays 8 19 All types1............................................. 94,729 402,725 450,836 216,781 222,518 238,150 37,739 43,725 40,752 20 National defense.................................. 22,307 97,501 105,186 50,873 52,979 55,129 8,803 10,159 9,439 21 International affairs............................. 2,197 4,813 5,922 2,896 2,904 2,221 460 896 407 22 General science, space, and 1,161 4,677 4,742 2,318 2,395 2,362 422 459 256 23 Energy .............................................. 794 4,172 5,861 2,487 4,461 904 700 665 24 Natural resources and environment.. 2,532 10,000 10,925 4,959 6,119 1,030 855 965 581 5,532 7,731 5,477 2,353 4,854 762 457 502 26 Commerce and housing credit............ 1 392 -44 3,325 -946 3,291 — 553 173 100 27 Transportation ................................... 3,304 14,636 15,444 7,723 8,758 1,095 1,257 1,251 28 Community and regional development................................. 1,340 6,286 11,000 4,924 5,928 6,108 625 773 602 29 Education, training, employment, and social services....................... 5,162 20,985 26,463 10,800 12,792 13,676 2,075 2,578 2,595 8,721 38,785 43,676 19,422 21,391 23,942 3,894 4,231 4,060 31 Income security1................................. 32,797 137,915 146,212 71,081 75,201 73,305 13,300 14,415 13,316 32 Veterans benefits and services............ 3,962 18,038 18,974 9,864 9,603 9,545 1,622 2,717 840 33 Administration of justice.................... 859 3,600 3,802 1,723 1,946 1,973 352 347 369 34 General government............................ 883 3,374 3,777 1,749 1,803 2,111 300 435 305 35 General-purpose fiscal assistance....... 2,092 9,499 9,601 4,926 4,665 4,385 81 67 1,752 36 Interest 6............................................................ 7,216 38,009 43,966 19,962 22,280 24,110 4,099 3,807 3,993 37 Undistributed offsetting receipts 6-7.. -2,567 -15,053 -15,772 -8,506 -7,945 -8,200 -1,530 -603 -664 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. government accounts from an accrual basis to a cash basis. classified as outlays retroactive to January 1976. 7 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. government contributions for accounts. employee retirement. 3 Old-age, disability, and hospital insurance. 8 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 1980; data are not available for half-years 5 Deposits of earnings by Federal Reserve Banks and other miscel­ prior to 1978. laneous receipts. In addition, for some categories the table includes revisions in figures 6 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 □ June 1979 1.41 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1976 1977 1978 1979 Item Dec. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 1 Federal debt outstanding..................... 665.5 685.2 709.1 729.2 747.8 758.8 780.4 797.7 804.6 2 Public debt securities........................... 653.5 674.4 698.8 718.9 738.0 749.0 771.5 789.2 796.8 3 Held by public................................. 506.4 523.2 543.4 564.1 585.2 587.9 603.6 619.2 630.5 4 Held by agencies.............................. 147.1 151.2 155.5 154.8 152.7 161.1 168.0 170.0 166.3 5 Agency securities................................. 12.0 10.8 10.3 10.2 9.9 9.8 8.9 8.5 7.8 6 Held by public................................. 10.0 9.0 8.5 8.4 8.1 8.0 7.4 7.0 6.3 7 Held by agencies.............................. 1.9 1.8 1.8 1.8 1.8 1.8 1.5 1.5 1.5 8 Debt subject to statutory limit............ 654.7 675.6 700.0 720.1 739.1 750.2 772.7 790.3 797.9 9 Public debt securities........................... 652.9 673.8 698.2 718.3 737.3 748.4 770.9 788.6 796.2 10 Other debt1.......................................... 1.7 1.7 1.7 1.7 1.8 1.8 1.8 1.7 1.7 11 Memo: Statutory debt limit............... 682.0 700.0 700.0 752.0 752.0 752.0 798.0 798.0 798.0 1 Includes guaranteed debt of government agencies, specified participa­ $0.5 billion due to a retroactive reclassification of the Export-Import Bank tion certificates, notes to international lending organizations, and District certificates of beneficial interest from loan asset sales to debt, effective of 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 Department). 1.42 GROSS PUBLIC DEBT OF U.S. TREASURY Types and Ownership Billions of dollars, end of period 1979 Type and holder 1975 1976 1977 1978 Jan. Feb. Mar. Apr. May 1 Total gross public debt.......................................... 576.6 653.5 718.9 789.2 790.5 792.2 796.8 796.4 804.8 By type 2 Interest-bearing debt.............................................. 575.7 652.5 715.2 782.4 789.5 791.2 792.3 795.4 803.8 3 Marketable............................................................ 363.2 421.3 459.9 487.5 496.5 498.0 500.4 504.6 506.9 4 Bills.................................................................... 157.5 164.0 161.1 161.7 162.3 162.4 165.5 163.7 163.1 5 Notes.................................................................. 167.1 216.7 251.8 265.8 272.8 271.4 270.8 275.3 276.1 6 Bonds................................................................. 38.6 40.6 47.0 60.0 61.4 64.2 64.1 65.5 67.7 7 Nonmarketable1.................................................... 212.5 231.2 255.3 294.8 293.0 293.3 8 291.9 290.8 296.9 8 Convertible bonds 2........................................... 2.3 2.3 2.2 2.2 2.2 2.2 2.2 2.2 2.2 9 State and local government series................... 1.2 4.5 13.9 24.3 24.2 24.2 24.2 24.0 24.0 10 Foreign issues 3.................................................. 21.6 22.3 22.2 29.6 30.3 28.2 28.2 25.4 25.2 11 Government................................................... 21.6 22.3 22.2 28.0 27.5 25.4 24.0 21.3 21.0 12 Public.............................................................. 0 0 0 1.6 2.8 2.8 4.2 4.2 4.2 13 Savings bonds and notes.................................. 67.9 72.3 77.0 80.9 80.8 80.8 80.8 130.8 80.8 14 Government account series4............................ 119.4 129.7 139.8 157.5 155.2 157.6 153.8 158.2 164.6 15 Non-interest-bearing debt..................................... 1.0 1.1 3.7 6.8 1.0 1.0 4.4 .9 1.0 By holder 5 16 U.S. government agencies and trust funds........ 139.1 147.1 154.8 170.0 167.7 170.1 166.3 17 Federal Reserve Banks......................................... 89.8 97.0 102.5 109.6 101.3 103.5 110.3 349.4 409.5 461.3 508.6 521.4 518.6 519.6 19 Commercial banks................................................ 85.1 103.8 101.4 93.4 95.0 94.0 96.3 20 Mutual savings banks.......................................... 4.5 5.9 5.9 5.2 5.2 5.2 5.2 9.5 12.7 15.1 15.0 15.1 15.1 15.1 22 Other corporations............................................... 20.2 27.7 22.7 20.6 22.5 23.5 23.8 n.a. n.a. 23 State and local governments................................ 34.2 41.6 55.2 68.6 67.9 68.6 68.8 Individuals 24 Savings bonds.................................................... 67.3 72.0 76.7 80.7 80.6 80.6 80.6 25 Other securities.................................................. 24.0 28.8 28.6 30.0 30.4 30.8 31.1 26 Foreign and international6................................... 66.5 78.1 109.6 137.8 142.2 '136.9 132.8 27 Other miscellaneous investors7........................... 38.0 38.9 46.1 57.4 62.5 7 63.7 66.0 1 Includes (not shown separately): Securities issued to the Rural 6 Consists of the investments of foreign balances and international Electrification Administration, depositary bonds, retirement plan bonds, accounts in the United States. Beginning with July 1974, the figures exclude 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 1 Vi porate pension trust funds, dealers and brokers, certain government percent, 5-year marketable Treasury notes. Convertible bonds that have deposit accounts, and government sponsored agencies. been so exchanged are removed from this category and recorded in the 8 Includes a nonmarketable Federal Reserve special certificate for $2.6 notes category above. billion. 3 Nonmarketable dollar-denominated and foreign currency denomin­ ated series held by foreigners. Note. Gross public debt excludes guaranteed agency securities and, 4 Held almost entirely by U.S. government agencies and trust funds. beginning in July 1974, includes Federal Financing Bank security issues. 5 Data for Federal Reserve Banks and U.S. government agencies and Data by type of security from Monthly Statement of the Public Debt of trust funds are actual holdings; data for other groups are Treasury the United States (U.S. Treasury Department); data by holder from estimates. Treasury Bulletin. 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 1979 1979 Type of holder 1977 1978 1977 1978 Feb. Mar. Feb. Mar. All maturities 1 to 5 years 1All holders................................................................................ 459,927 487,546 497,976 500,400 151,264 162,886 169,352 166,221 2 U.S. government agencies and trust funds........................... 14,420 12,695 12,693 12,685 4,788 3,310 2,710 2,710 3 Federal Reserve Banks........................................................... 101,191 109,616 103,486 107,655 27,012 31,283 34,208 34,057 4 Private investors...................................................................... 344,315 365,235 381,797 380,060 119,464 128,293 132,435 129,454 5 Commercial banks............................................................... 75,363 68,890 68,344 69,342 38,691 38,390 38,252 37,183 6 4,379 3,499 3,408 3,395 2,112 1,918 1,752 1,826 7 12,378 11,635 11,844 11,811 4,729 4,664 5,033 4,949 8 9,474 8,272 9,048 9,175 3,183 3,635 3,112 3,166 9 Savings and loan associations............................................ 4,817 3,835 3,923 3,627 2,368 2,255 2,149 1,941 10 State and local governments.............................................. 15,495 18,815 18,589 18,692 3,875 3,997 3,791 4,053 11 222,409 250,288 266,641 264,017 64,505 73,433 78,246 76,335 Total, within 1 year 5 to 10 years 12 All holders................................................................................ 230,691 228,516 233,525 239,125 45,328 50,400 45,163 45,163 13 U.S. government agencies and trust funds........................... 1,906 1,488 2,088 2,082 2,129 1,989 1,989 1,989 14 Federal Reserve Banks........................................................... 56,702 52,801 45,835 50,076 10,404 14,809 11,875 11,929 15 Private investors...................................................................... 172,084 174,227 185,602 186,967 32,795 33,601 31,299 31,245 16 Commercial banks............................................................... 29,477 20,608 20,220 22,611 6,162 7,490 7,299 7,104 17 Mutual savings banks.......................................................... 1,400 817 820 846 584 496 450 456 18 Insurance companies.......................................................... 2,398 1,838 1,962 1,930 3,204 2,899 2,571 2,646 19 Nonfinancial corporations.................................................. 5,770 4,048 5,249 5,351 307 369 320 342 20 Savings and loan associations............................................ 2,236 1,414 1,608 1,522 143 89 89 86 21 7,917 8,194 8,009 7,679 1,283 1,588 1,511 1,502 22 122,885 137,309 147,735 147,027 21,112 20,671 19,058 19,109 Bills, within 1 year 10 to 20 years 23 All holders................................................................................ 161,081 161,747 162,416 165,459 12,906 19,800 21,190 21,145 24 U.S. government agencies and trust funds........................... 32 2 1 * 3,102 3,876 3,876 3,875 25 Federal Reserve Banks............................................................ 42,004 42,397 35,467 39,266 1,510 2,088 2,119 2,130 26 Private investors...................................................................... 119,035 119,348 126,948 126,193 8,295 13,836 15,195 15,141 27 Commercial banks............................................................... 11,996 5,707 4,877 6,704 456 956 1,045 995 28 Mutual savings banks.......................................................... 484 150 100 102 137 143 153 142 29 Insurance companies........................................................... 1,187 753 695 648 1,245 1,460 1,478 1,455 30 Nonfinancial corporations.................................................. 4,329 1,792 2,522 2.494 133 86 160 173 31 Savings and loan associations............................................ 806 262 294 265 54 60 61 60 32 State and local governments.............................................. 6,092 5,524 5,133 4,793 890 1,420 1,587 1,616 33 All others............................................................................ 94,152 105,161 113,326 111,186 5,380 9,711 10,712 10,699 Other, within 1 year Over 20 years 34 All holders................................................................................ 69,610 66,769 71,109 73,666 19,738 25,944 28,746 28,746 35 U.S. government agencies and trust funds........................... 1,874 1,487 2,087 2,082 2,495 2,031 2,030 2,030 36 Federal Reserve Banks........................................................... 14,698 10,404 10,368 10,810 5,564 8,635 9,449 9,463 37 Private investors..................................................................... 53,039 54,879 58,654 60,774 11,679 15,278 17,267 17,254 38 Commercial banks.............................................................. 15,482 14,901 15,343 15,907 578 1,446 1,528 1,449 39 Mutual savings banks.......................................................... 916 667 720 744 146 126 133 125 40 Insurance companies........................................................... 1,211 1,084 1,267 1,282 802 774 800 831 41 Nonfinancial corporations.................................................. 1,441 2,256 2,727 2,857 81 135 208 143 42 Savings and loan associations............................................ 1,430 1,152 1,313 1,258 16 17 16 17 43 State and local governments.............................................. 1,825 2,670 2,876 2,885 1,530 3,616 3,692 3,841 44 All others............................................................................. 28,733 32,149 34,409 35,841 8,526 9,164 10,890 10,848 Note. Direct public issues only. Based on Treasury Survey of Owner­ (1) 5,454 commercial banks, 463 mutual savings banks, and 727 insurance ship from Treasury Bulletin (U.S. Treasury Department). companies, each about 80 percent; (2) 434 nonfinancial corporations and Data complete for U.S. government agencies and trust funds and 485 savings and loan associations, each about 50 percent; and (3) 491 Federal Reserve Banks, but data for other groups include only holdings state and local governments, about 40 percent. of those institutions that report. The following figures show, for each “All others,” a residual, includes holdings of all those not reporting category, the number and proportion reporting as of Mar. 31, 1979: 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 □ June 1979 1.44 U.S. GOVERNMENT SECURITIES DEALERS Transactions Par value; averages of daily figures, in millions of dollars 1979 1979, week ending Wednesday Item 1976 1977 1978 Feb. Mar. Apr. Feb. 28 Mar. 14 Mar. 21 Mar. 28 Apr. 4 1 U.S. government securities. 10,449 10,838 10,285 11,612 9,882 14,280 11,240 11,664 10,258 7,686 9,115 14,362 By maturity 2 Bills.................................... 6,676 6,746 6,173 6,261 6,204 9,906 5,925 7,116 6,018 5,017 5,993 10,787 3 Other within 1 year.......... 210 237 392 344 320 434 492 344 221 213 424 484 4 1-5 years........................... 2,317 2,320 1,889 2,595 1,744 2,184 2,982 2,191 2,142 1,234 1,393 1,640 5 5-10 years.......................... 1,019 1,148 965 1,185 825 674 849 985 1,074 589 640 726 6 Over 10 years..................... 229 388 866 1,227 789 1,083 992 1,028 803 632 664 725 By type of customer 7 U.S. government securities dealers........................ 1,360 1,267 1,135 1,235 1,170 1,617 1,360 1,505 1,042 1,185 1,530 8 U.S. government securities brokers....................... 3,407 3,709 3,838 4,750 3,651 5,043 4,323 4,322 4,324 2,728 3,038 4,332 9 Commercial banks............ 2,426 2,295 1,804 1,764 1,565 2,095 1,731 1,880 1,589 1,228 1,383 2,201 10 All others1......................... 3,257 3,568 3,508 3,863 3,496 5,525 3,826 3,957 3,303 2,781 3,509 6,300 11 Federal agency securities. . 1,548 1,729 1,894 2,351 2,099 2,218 2,544 2,466 2,398 1,431 1,731 2,260 1 Includes, among others, all other dealers and brokers in commodities Transactions are market purchases and sales of U.S. government and securities, foreign banking agencies, and the Federal Reserve System. securities dealers reporting to the Federal Reserve Bank of New York. The figures exclude allotments of, and exchanges for, new U.S. government Note. Averages for transactions are based on number of trading days securities, redemptions of called or matured securities, or purchases or in the period. sales of securities under 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 1979 1979, week ending Wednesday Item 1976 1977 1978 Feb. Mar. Apr. Feb. 7 Feb. 14 Feb. 21 Feb. 28 Mar. 7 Mar. 14 Positions2 1 U.S. government securities.. . 7,592 5,172 2,656 3,077 1,849 4,277 4,419 3,639 2,147 2,030 3,750 2,262 2 Bills........................................ 6,290 4,772 2,452 3,060 2,471 4,698 4,382 2,990 2,485 2,253 3.885 2,780 3 Other within 1 year.............. 188 99 260 -72 -262 -276 153 77 -227 -294 -323 -251 4 1-5 years............................... 515 60 -92 -355 -471 -264 -60 -426 -739 -284 -32 -434 5 5-10 years.............................. 402 92 40 152 -20 -83 71 410 173 12 24 -14 6 Over 10 years........................ 198 149 -4 293 131 202 -126 589 455 343 197 181 7 Federal agency securities.... 729 693 606 761 734 953 1,220 861 487 442 450 789 Sources of financing3 8 All sources............................. 8,715 9,877 10,204 13,370 12,378 14,680 14,174 13,407 13,481 12,418 14,093 14,287 Commercial banks 9 New York City..................... 1,896 1,313 599 2,189 874 1,266 2,376 2,161 2,556 1,663 2,366 1,718 10 Outside New York City....... 1,660 1,987 2,174 2,402 2,453 2,724 2,592 2,318 2,552 2,146 2,759 2,753 11 Corporations1....................... 1,479 2,423 2,370 2,602 2,748 3,000 2,695 2,535 2,592 2,588 2,555 3,091 12 All others............................... 3,681 4,155 5,052 6,176 6,304 7,690 6,511 6,392 5,780 6,021 6,413 6,727 1 All business corporations except commercial banks and insurance firms and dealer departments of commercial banks against U.S. govern­ companies. ment and federal agency securities (through both collateral loans and sales 2 New 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 securities held under agreement to resell are excluded where the borrowing been sold under agreements to repurchase. The maturities of some re­ contract and the agreement to resell are equal in amount and maturity, purchase agreements are sufficiently long, however, to suggest that the that is, a matched agreement. securities involved are not available for trading purposes. Securities owned, and hence dealer positions, do not include securities purchased Note. Averages for positions are based on number of trading days under agreements 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 1978 1979 Agency 1976 1977 1978 Oct. Nov. Dec. Jan. Feb. Mar. 1 Federal and federally sponsored agencies........... 103,325 109,924 131,982 127,468 129,139 131,982 129,849 129,865 129,278 2 Federal agencies.................................................... 21,896 22,760 23,488 23,279 23,073 23,488 23,431 23,485 23,507 3 Defense Department1....................................... 1,113 983 868 897 876 868 864 859 839 4 Export-Import Bank 2,3.................................... 7,801 8,671 8,711 8,704 8,392 8,711 8,515 8,499 8,326 5 Federal Housing Administration4................... 575 581 588 598 594 588 582 586 580 6 Government National Mortgage Association participation certificates 5......................... 4,120 3,743 3,141 3,166 3,166 3,141 3,141 3,141 3,141 7 Postal Service6.................................................. 2,998 2,431 2,364 2,364 2,364 2,364 2,364 2,364 2,364 8 Tennessee Valley Authority............................. 5,185 6,015 7,460 7,195 7,325 7,460 7,620 7,690 7,900 9 United States Railway Association6............... 104 336 356 355 356 356 345 346 357 10 Federally sponsored agencies............................... 81,429 87,164 108,494 104,189 106,066 108,494 106,418 106,380 105,771 11 Federal Home Loan Banks............................. 16,811 18,345 27,563 25,395 26,777 27,563 27,677 28,447 28,265 12 Federal Home Loan Mortgage Corporation.. 1,690 1,686 2,262 2,063 2,062 2,262 2,262 2,461 2,333 13 Federal National Mortgage Association........ 30,565 31,890 41,080 39,776 39,814 41,080 41,917 42,405 43,625 14 Federal Land Banks......................................... 17,127 19,118 20,360 20,360 20,360 20,360 19,275 19,275 19,275 15 Federal Intermediate Credit Banks................. 10,494 11,174 11,469 11,554 11,548 11,469 9,978 8,958 7,890 16 Banks for Cooperatives................................... 4,330 4,434 4,843 4,264 4,668 4,843 4,392 3,852 3,351 17 Student Loan Marketing Association7............ 410 515 915 775 835 915 915 980 1,030 18 Other.................................................................. 2 2 2 2 2 2 2 2 2 Memo items 19 Federal Financing Bank debt6,8........................... 28,711 38,580 51,298 49,212 49,645 51,298 52,154 53,221 55,310 Leading to federal and federally sponsored agencies 20 Export-Import Bank3........................................... 5,208 5,834 6,898 6,568 6,568 6,898 6,898 6,898 7,131 21 Postal Service6...................................................... 2,748 2,181 2,114 2,114 2,114 2,114 2,114 2,114 2,114 22 Student Loan Marketing Association7............... 410 515 915 775 835 915 915 980 1,030 23 Tennessee Valley Authority................................. 3,110 4,190 5,635 5,370 5,500 5,635 5,795 5,865 6,075 24 United States Railway Association6................... 104 336 356 355 356 356 345 346 357 Other lending9 25 Farmers Home Administration........................... 10,750 16,095 23,825 23,050 23,050 23,825 24,445 25,160 25,985 26 Rural Electrification Administration.................. 1,415 2,647 4,604 4,407 4,489 4,604 4,680 4,735 4,962 27 Other..................................................................... 4,966 6,782 6,951 6.573 6,733 6,951 6,962 7,123 7,656 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 8 The FFB, which began operations in 1974, is authorized to purchase thereafter. or sell obligations issued, sold, or guaranteed by other federal agencies. 4 Consists of debentures issued in payment of Federal Housing Ad­ Since FFB incurs debt solely for the purpose of lending to other agencies, ministration insurance claims. Once issued, these securities may be sold its debt is not included in the main portion of the table in order to avoid privately on the securities market. double counting. 5 Certificates of participation issued prior to fiscal 1969 by the Govern­ 9 Includes FFB purchases of agency assets and guaranteed loans; ment National Mortgage Association acting as trustee for the Farmers the latter contain loans guaranteed by numerous agencies with the Home Administration; Department of Health, Education, and Welfare; guarantees of any particular agency being generally small. The Farmers Department of Housing and Urban Development; Small Business Ad­ Home Administration item consists exclusively of agency assets, while the ministration; and the Veterans Administration. Rural Electrification Administration entry contains both agency assets 6 Off-budget. and guaranteed loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Financial Statistics □ June 1979 1.47 NEW SECURITY ISSUES of State and Local Governments Millions of dollars 1978 1979 Type of issue or issuer, 1976 1977 1978 or use Nov. Dec. Jan.r Feb.r Mar.r Apr. 1 All issues, new and refunding 1.............................................. 35,313 46,769 48,607 4,328 3,694 2,828 2,602 4,533 3,009 Type of issue 18,040 18,042 17,854 1,168 1,698 1,301 934 1,034 1,115 17,140 28,655 30,658 3,152 1,992 1,506 1,664 3,491 1,883 4 Housing Assistance Administration 2.................................. 5 U.S. government loans........................................................ 133 72 95 8 4 21 4 8 11 Type of issuer 7,054 6,354 6,632 343 497 467 580 436 297 7 Special district and statutory authority............................... 15,304 21,717 24,156 2,848 2,148 958 1,198 2,897 1,433 8 Municipalities, counties, townships, school districts.......... 12,845 18,623 17,718 1,129 1,043 1,382 821 1,192 1,268 32,108 36,189 37,629 4,216 3,379 2,799 2,575 4,519 2,985 Use of proceeds 10 Education............................................................................... 4,900 5,076 5,003 463 319 482 411 267 433 2,586 2,951 3,460 259 337 248 208 202 121 9,594 8,119 9,026 1,241 705 541 735 1,148 457 13 Social welfare......................................................................... 6,566 8,274 10,494 817 1,126 766 796 2,039 1,260 14 Industrial aid.......................................................................... 483 4,676 3,526 323 276 269 174 233 134 15 Other purposes....................................................................... 7,979 7,093 6,120 1,113 616 493 251 630 580 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 1978 1979 Type of issue or issuer, 1976 1977 r 1978 or use Aug. Sept. Oct. Nov. Dec. Jan. 1 All issues 1.............................................................................. 53,488 53,792 45,309 3,311 3,832 3,685 3,207 4,401 3,668 2 Bonds....................................................................................... 42,380 42,015 35,178 2,529 2,905 2,516 2,481 3,281 3,004 Type of offering 3 Public...................................................................................... 26,453 24,072 19,939 1,497 1,610 1,651 1,608 1,227 1,282 4 Private placement................................................................... 15,927 17,943 15,239 1,032 1,295 865 873 2,054 1,722 Industry group 5 Manufacturing....................................................................... 13,264 12,204 8,839 485 823 405 805 1,031 866 6 Commercial and miscellaneous............................................ 4,372 6,234 4,670 414 454 487 112 694 434 7 Transportation....................................................................... 4,387 1,996 1,972 115 135 67 96 123 111 8 Public utility........................................................................... 8,297 8,262 7,112 521 912 819 384 383 532 9 Communication...................................................................... 2,787 3,063 3,306 546 205 290 456 285 259 10 Real estate and financial........................................................ 9,274 10,258 9,276 448 375 446 627 765 802 11 Stocks...................................................................................... 11,108 11,777 10,131 782 927 1,169 726 1,120 664 Type 12 Preferred................................................................................. 2,803 3,916 2,629 157 127 47 149 424 171 13 Common................................................................................. 8,305 7,861 7,502 625 800 1,122 577 696 493 Industry group 14 Manufacturing....................................................................... 2,237 1,189 1,219 236 148 90 35 42 41 15 Commercial and miscellaneous............................................. 1,183 1,834 1,812 110 168 112 111 303 169 16 Transportation....................................................................... 24 456 263 0 12 0 12 113 17 Public utility........................................................................... 6,121 5,865 4,973 354 426 800 377 271 358 18 Communication.................................................................. 776 1,379 249 6 10 0 1 175 19 Real estate and financial........................................................ 771 1,049 1,614 75 164 167 190 216 96 1 Figures, which represent gross proceeds of issues maturing in more companies other than closed-end, intracorporate transactions, and sales to than one 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 1978 1979 Item 1977 1978 Oct. Nov. Dec. Jan. Feb. Mar. Apr. Investment Companies excluding money market funds 1 Sales of own shares1........................................ 6,401 6,645 463 587 602 648 451 523 594 2 Redemptions of own shares2.......................... 6,027 7,231 607 439 545 607 548 646 769 3 Net sales............................................................ 357 -586 -144 148 57 41 -97 -123 -175 4 Assets3.............................................................. 45,049 44,980 43,462 44,242 44,980 46,591 45,016 47,051 47,142 5 Cash position4.................................................. 3,274 4,507 3,793 4,299 4,507 4,624 4,851 4,746 4,862 6 41,775 40,473 39,669 39,943 40,473 41,967 40,165 42,305 42,280 1 Includes reinvestment of investment income dividends. Excludes 4 Also includes all U.S. government securities and other short-term reinvestment of capital gains distributions and share issue of conversions debt 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. 1977 1978 1979 Account 1976 1977 1978 Q3 Q4 Ql Q2 Q3 Q4r Ql? 1 Profits before tax..................................................... 155.9 173.9 r202.0 177.5 178.3 172.1 205.5 205.4 224.9 226.9 2 Profits tax liability................................................... 64.3 71.8 83.9 72.8 73.9 70.0 85.0 86.2 94.4 89.1 3 Profits after tax........................................................ 91.6 102.1 r118.1 104.7 104.4 102.1 120.5 119.2 130.5 137.8 4 Dividends.................................................................. 37.9 43.7 49.3 44.1 46.3 47.0 48.1 50.1 51.9 54.0 5 Undistributed profits............................................... 53.7 58.4 r68.8 60.6 58.1 55.1 72.4 69.1 78.6 83.8 6 Capital consumption allowances............................. 97.1 106.0 114.4 107.6 109.3 111.3 113.3 115.4 117.5 119.6 7 Net cash flow............................................................ 150.8 164.4 183.3 168.2 167.4 166.4 185.7 184.5 196.1 203.4 Source. Survey of Current Business (U.S. Department of Commerce.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Financial Statistics □ June 1979 1.51 NONFINANCIAL CORPORATIONS Current Assets and Liabilities Billions of dollars, except for ratio 1977 1978 Account 1975 1976 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 1Current assets......................................................... 756.3 823.1 841.6 855.7 879.1 898.3 922.7 952.2 991.2 1,026.1 2 Cash.................................................................... 80.3 87.5 81.6 83.5 83.7 94.6 89.3 91.8 92.4 103.8 3 U.S. government securities.............................. 19.0 25.5 26.3 21.8 21.3 20.8 21.0 19.8 18.8 21.0 4 Notes and accounts receivable......................... 271.7 291.5 302.6 311.4 325.3 323.5 335.7 354.6 375.4 381.2 5 Inventories.......................................................... 315.2 341.5 352.0 358.6 367.0 374.3 388.8 397.9 414.2 426.6 6 Other................................................................... 70.0 77.1 79.2 80.4 81.7 85.2 87.9 88.1 90.4 93.5 7 Current liabilities.................................................... 448.2 488.8 503.9 510.7 530.0 543.9 571.1 591.2 624.6 660.4 8 Notes and accounts payable............................. 258.3 269.9 277.2 283.3 293.7 301.0 311.7 324.3 342.1 359.9 9 Other................................................................... 189.9 218.9 226.8 227.4 236.3 242.9 259.3 266.9 282.5 300.4 10 Net working capital................................................ 308.1 334.3 337.7 345.0 349.1 354.5 351.6 361.0 366.6 365.8 11 Memo: Current ratio1........................................... 1.688 1.684 1.670 1.675 1.659 1.652 1.616 1.611 1.587 1.554 1 Ratio of total current assets to total current liabilities. All data in this table have been revised and final revisions will appear next month. Note. For a description of this series see “Working Capital of Non­ financial Corporations” in the July 1978 Bulletin, pp. 533-37. Source. Federal Trade Commission. 1.52 BUSINESS EXPENDITURES on New Plant and Equipment Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1977 1978 1979 Industry 1977 1978 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 1 All industries.......................................................... 135.72 153.60 140.38 138.11 144.25 150.76 155.41 163.96 164.23 167.52 Manufacturing 2 Durable goods industries....................................... 27.75 31.59 29.23 28.19 28.72 31.40 32.25 33.90 34.18 37.09 3 Nondurable goods industries............................... 32.33 35.86 33.79 33.22 32.86 35.80 35.50 39.26 37.78 38.81 Nonmanufacturing 4 Mining.................................................................... 4.49 4.81 4.74 4.50 4.45 4.81 4.99 4.98 5.35 4.89 Transportation 5 Railroad.............................................................. 2.82 3.33 3.20 2.80 3.35 3.09 3.38 3.49 3.77 3.11 6 Air....................................................................... 1.63 2.34 1.69 1.76 2.67 2.08 2.20 2.39 3.28 2.36 7 Other................................................................... 2.55 2.42 1.96 2.32 2.44 2.23 2.47 2.55 3.01 2.89 Public utilities 8 Electric................................................................ 21.57 24.71 21.90 22.05 23.15 23.83 24.92 26.95 27.06 26.92 9 Gas and other.................................................... 4.21 4.72 4.32 4.18 4.78 4.62 4.70 4.78 5.24 4.98 1 1 0 1 C Co o m m m m e u r n c i i c a a l t a io n n d . . o ... t . h .. e .. r .. 1 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 2 1 2 5 . . 9 4 5 3 2 1 5 8 . . 6 15 7 2 1 3 6 . . 1 4 4 0 2 1 3 5 . . 2 82 7 2 1 4 7 . . 7 0 6 7 2 1 4 8 . . 7 1 1 8 2 1 6 8 . . 0 9 9 0 2 1 7 8 . . 1 4 2 6 | 44.54 46.46 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 1978 1979 Account 1973 1974 1975 1976 1977 Ql Q2 Q3 Q4 Ql Assets Accounts receivable, gross 1 Consumer............................................................... 35.4 36.1 36.0 38.6 44.0 44.5 47.1 49.7 52.6 54.9 2 Business.................................................................. 32.3 37.2 39.3 44.7 55.2 57.6 59.5 58.3 63.3 66.7 3 Total................................................................... 67.7 73.3 75.3 83.4 99.2 102.1 106.6 108.0 116.0 121.6 4 Less : Reserves for unearned income and losses.. 8.4 9.0 9.4 10.5 12.7 12.8 14.1 14.3 15.6 16.5 5 Accounts receivable, net....................................... 59.3 64.2 65.9 72.9 86.5 89.3 92.6 93.7 100.4 105.1 6 Cash and bank deposits........................................ 2.6 3.0 2.9 2.6 2.6 2.2 2.9 2.7 3.5 1 7 Securities................................................................ .8 .4 1.0 1.1 .9 1.2 1.3 1.8 1.3 \ 23.8 8 All other................................................................. 10.6 - 12.0 11.8 12.6 14.3 15.0 16.2 17.1 17.3 J 9 Total assets............................................................. 73.2 79.6 81.6 89.2 104.3 107.7 112.9 115.3 122.4 128.9 Liabilities 10 Bank loans.............................................................. 7.2 9.7 8.0 6.3 5.9 5.8 5.4 5.4 6.5 6.5 11 Commercial paper.................................................. 19.7 20.7 22.2 23.7 29.6 29.9 31.3 29.3 34.5 38.1 Debt 12 Short-term, n.e.c.................................................... 4.6 4.9 4.5 5.4 6.2 5.3 6.6 6.8 8.1 6.7 13 Long-term, n.e.c..................................................... 24.6 26.5 27.6 32.3 36.0 38.0 40.1 41.3 43.6 44.5 14 Other....................................................................... 5.6 5.5 6.8 8.1 11.5 12.9 13.6 15.2 12.6 15.1 15 Capital, surplus, and undivided profits............... 11.5 12.4 12.5 13.4 15.1 15.7 16.0 17.3 17.2 18.0 16 Total liabilities and capital.................................... 73.2 79.6 81.6 89.2 104.3 107.7 112.9 115.3 122.4 128.9 1 Beginning Ql, 1979, asset items on lines 6, 7, and 8 are combined. 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 receivable Type outstanding Mar. 30, 1979 1979 1979 19791 Jan. Feb. Mar. Jan. Feb. Mar. Jan. Feb. Mar. 1 Total................................................................. 66,663 860 756 689 16,160 16,858 17,268 15,300 16,102 16,579 2 Retail automotive (commercial vehicles)....... 15,042 145 183 269 1,231 1,283 1,391 1,086 1,100 1,122 3 Wholesale automotive..................................... 15,189 1,156 655 310 6,723 7,080 6,745 5,567 6,425 6,435 4 Retail paper on business, industrial, and farm equipment........................................ 16,005 -425 -84 251 1,012 1,123 1,130 1,437 1,207 879 5 Loans on commercial accounts receivable... 6 Factored commercial accounts receivable.... } 6,578 27 -108 -225 5,261 5,375 5,920 5,234 5,483 6,145 7 All other business credit................................. 13,849 -43 110 84 1,933 1,997 2,082 1,976 1,887 1,998 1 Not seasonally adjusted. 2 Beginning January 1979 the categories “Loans on commercial ac­ counts receivable” and “Factored commercial accounts receivable” are combined. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Financial Statistics □ June 1979 1.53 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1978 1979 Item 1976 1977 1978 Nov. Dec. Jan. Feb. Mar. Apr. Terms and yields in primary and secondary markets Primary Markets Conventional mortgages on new homes Terms1 1 Purchase price (thous. dollars)..................................... 48.4 54.3 62.6 65.1 68.1 71.9 68.3 68.1 71.7 2 Amount of loan (thous. dollars)................................. 35.9 40.5 45.9 47.5 49.6 52.0 49.5 49.9 52.3 3 Loan/price ratio (percent)............................................. 74.2 76.3 75.3 74.4 75.1 74.7 74.5 75.4 75.2 4 Maturity (years).................................................................... 27.2 27.9 28.0 27.9 28.1 28.6 28.6 28.5 28.9 5 Fees and charges (percent of loan amount) 2.......... 1.44 1.33 1.39 1.40 1.49 1.56 1.56 '1.65 1.76 6 Contract rate (percent per annum).......................... 8.76 8.80 9.30 9.63 9.76 9.92 9.94 10.02 10.04 Yield (percent per annum) 7 FHLBB series3...................................................................... 8.99 9.01 9.54 9.87 10.02 10.18 10.20 10.30 10.34 8 HUD series4........................................................................... 8.99 8.95 9.68 10.10 10.30 10.30 10.35 10.35 10.55 Secondary Markets Yield (percent per annum) 9 FHA mortgages (HUD series)5................................... 8.82 8.68 9.70 9.99 10.16 10.17 10.17 10.19 n.a. 10 GNMA securities6............................................................... 8.17 8.04 8.98 9.39 9.54 9.67 9.67 9.70 9.79 FNMA auctions7 11 Government-underwritten loans............................ 8.99 8.73 9.77 10.30 10.50 10.70 10.54 '10.42 10.59 12 Conventional loans........................................................ 9.11 8.98 10.01 10.56 10.85 11.07 11.04 10.94 11.03 Activity in secondary markets Federal National Mortgage Association Mortgage holdings (end of period) 13 Total............................................................................................ 32,904 34,370 43,311 42,590 43,311 44,329 45,155 46,140 47,028 18,916 18,457 21,243 20,929 21,243 21,704 21,967 22,601 22,773 15 VA-guaranteed.................................................. 9,212 9,315 10,544 10,535 10,544 10,578 10,606 10,616 10,591 16 Conventional...................................................................... 4,776 6,597 11,524 11,126 11,524 12,046 12,582 13,193 13,664 Mortgage transactions (during period) 17 Purchases................................................................................... 3,606 4,780 12,303 920 974 1,280 1,173 1,291 883.2 86 67 5 0 0 0 0 0 0 Mortgage commitments8 6,247 9,729 18,960 1,275 1,051 479 388 565 n.a. 20 Outstanding (end of period)........................................... 3,398 4,698 9,201 9,525 9,201 8,161 7,381 6,573 n.a. Auction of 4-month commitments to buy Government-underwritten loans 21 Offered ^................................................................................ 4,929.8 7,974.1 12,978 788.0 627.0 304.9 210.6 '508.4 1,322.7 2,787.2 4,846.2 6,747.2 321.8 319.6 155.4 161.2 284.4 638.5 Conventional loans 23 Offered 9................................................................................ 2,595.7 5,675.2 9,933.0 861.4 417.4 113.5 63.0 144.9 661.9 1,879.2 3,917.8 5,110.9 386.8 220.9 58.1 45.4 113.5 363.6 Federal Home Loan Mortgage Corporation Mortgage holdings (end of period)10 25 Total............................................................................................ 4,269 3,276 3,064 3,022 3,064 3,263 3,207 3,510 3,377 26 FHA/VA.............................................................................. 1,618 1,395 1,243 1,257 1,243 1,231 1,220 1,260 1,198 2,651 1,881 1,822 1,766 1,822 2,033 1,989 2,250 2,180 Mortgage transactions (during period) 1,175 3,900 6,524 763 596 498 300 350 358 29 Sales............................................................................................. 1,396 4,131 6,211 581 540 317 r494 116 364 Mortgage commitments11 30 Contracted (during period)........................................... 1,477 5,546 7,451 706 455 374 357 547 540 333 1,063 1,410 1,617 1,410 1,248 1,177 1,342 1,487 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 mortgages carrying the prevailing ceiling rate. Monthly figures are Loan Bank Board in cooperation with the Federal Deposit Insurance unweighted averages of Monday quotations for the month. Corporation. 7 Average gross yields (before deduction of 38 basis points for mortgage 2 Includes all fees, commissions, discounts, and “points” paid (by the servicing) on accepted bids in Federal National Mortgage Association’s 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 prepay­ prepayment in 12 years for 30-year mortgages. No adjustments are made ment 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 1978 Type of holder, and type of property 1974 1975 1976 1977 Ql Q2 Q3 Q4p 1 742,512 801,537 889,327 1,023,505 1,051,908 1,092,451 1,133,122 1,169,522 2 449,371 490,761 556,557 656,566 676,573 706,230 734,097 759,617 3 Multifamily................................................ 99,976 100,601 104,516 111,841 113,915 116,419 119,207 121,928 4 Commercial............................................... 146,877 159,298 171,223 189,274 193,355 198,926 206,045 211,810 5 Farm.......................................................... 46,288 50,877 57,031 65,824 68,065 70,876 73,773 76,167 542,560 581,193 647,650 745,011 764,614 794,009 822,184 846,788 7 Commercial banks1.................................. 132,105 136,186 151,326 178,979 184,423 194,469 205,445 213,845 8 1- to 4-family......................................... 74,758 77,018 86,234 105,115 108,699 115,389 121,911 126,896 9 Multifamily............................................ 7,619 5,915 8,082 9,215 9,387 9,925 10,478 10,906 10 Commercial........................................... 43,679 46,882 50,289 56,898 58,407 60,950 64,386 67,019 11 Farm...................................................... 6,049 6,371 6,721 7,751 7,930 8,205 8,670 9,024 12 Mutual savings banks............................... 74,920 77,249 81,639 88,104 89,800 91,535 93,403 95,044 13 1- to 4-family......................................... 49,213 50,025 53,089 57,637 58,747 59,882 61,104 62,178 14 Multifamily............................................ 12,923 13,792 14,177 15,304 15,598 15,900 16,224 16,509 15 Commercial........................................... 12,722 13,373 14,313 15,110 15,401 15,698 16,019 16,300 16 Farm...................................................... 62 59 60 53 54 55 56 57 17 Savings and loan associations................. 249,301 278,590 323,130 381,163 392,428 407,965 420,971 432,922 18 1- to 4-family......................................... 200,987 223,903 260,895 310,686 320,064 334,164 345,232 355,291 19 Multifamily............................................ 23,808 25,547 28,436 32,513 33,592 34,351 35,446 36,452 20 Commercial........................................... 24,506 29,140 33,799 37,964 38,772 39,450 40,293 41,179 21 Life insurance companies......................... 86,234 89,168 91,555 96,765 97,963 100,040 102,365 104,971 22 1- to 4-family......................................... 19,026 17,590 16,088 14,727 14,476 14,129 14,189 14,550 23 Multifamily............................................ 19,625 19,629 19,178 18,807 18,851 18,745 18,803 19,284 24 Commercial........................................... 41,256 45,196 48,864 54,388 55,426 57,463 59,268 60,782 25 Farm...................................................... 6,327 6,753 7,425 8,843 9,210 9,703 10,105 10,361 26 Federal and related agencies.................... 58,320 66,891 66,753 70,006 72,014 73,991 78,672 82,086 27 Government National Mortgage Assn... 4,846 7,438 4,241 3,660 3,291 3,283 3,560 3,610 28 1- to 4-family......................................... 2,248 4,728 1,970 1,548 948 922 897 910 29 Multifamily............................................ 2,598 2,710 2,271 2,112 2,343 2,361 2,663 2,700 30 Farmers Home Administration............... 1,432 1,109 1,064 1,353 1,179 618 1,384 1,084 31 1- to 4-family......................................... 759 208 454 626 202 124 460 360 32 Multifamily............................................ 167 215 218 275 408 102 240 188 33 Commercial........................................... 156 190 72 149 218 104 251 197 34 Farm...................................................... 350 496 320 303 351 288 433 339 35 Federal Housing and Veterans Admin... 4,015 4,970 5,150 5,212 5,219 5,225 5,295 5,365 36 1- to 4-family......................................... 2,009 1,990 1,676 1,627 1,585 1,543 1,565 1,587 37 Multifamily............................................ 2,006 2,980 3,474 3,585 3,634 3,682 3,730 3,778 38 Federal National Mortgage Association. 29,578 31,824 32,904 34,369 36,029 38,753 41,189 43,311 39 1- to 4-family......................................... 23,778 25,813 26,934 28,504 30,208 32,974 35,437 37,579 40 Multifamily............................................ 5,800 6,011 5,970 5,865 5,821 5,779 5,752 5,732 41 Federal Land Banks................................. 13,863 16,563 19,125 22,136 22,925 23,857 24,758 25,658 42 1- to 4-family......................................... 406 549 601 670 691 727 819 849 43 Farm...................................................... 13,457 16,014 18,524 21,466 22,234 23,130 23,939 24,809 44 Federal Home Loan Mortgage Corp....... 4,586 4,987 4,269 3,276 3,371 2,255 2,486 3,058 45 1- to 4-family......................................... 4,217 4,588 3,889 2,738 2,785 1,856 1,994 2,453 46 Multifamily............................................ 369 399 380 538 586 399 492 605 47 Mortgage pools or trusts2................................. 23,799 34,138 49,801 70,289 74,080 78,602 82,153 86,747 48 Government National Mortgage Assn... 11,769 18,257 30,572 44,896 46,357 48,032 50,844 54,347 49 1- to 4-family......................................... 11,249 17,538 29,583 43,555 44,906 46,515 49,276 52,732 50 Multifamily............................................ 520 719 989 1,341 1,451 1,517 1,568 1,615 51 Federal Home Loan Mortgage Corp....... 757 1,598 2,671 6,610 7,471 9,423 9,934 10,125 52 1- to 4-family......................................... 608 1,349 2,282 5,621 6,286 7,797 8,358 8,519 53 Multifamily............................................ 149 249 389 989 1,185 1,626 1,576 1,606 54 Farmers Home Administration............... 11,273 14,283 16,558 18,783 20,252 21,147 1,084 22,275 55 1- to 4-family......................................... 6,782 9,194 10,219 11,379 12,235 12,742 360 13,392 56 Multifamily............................................ 116 295 532 759 732 1,128 188 1,163 57 Commercial........................................... 1,473 1,948 2,440 2,945 3,528 3,301 197 3,510 58 Farm...................................................... 2,902 2,846 3,367 3,682 3,757 3,976 339 4,210 59 Individuals and others3............................. 117,833 119,315 125,123 138,199 141,200 145,849 150,113 153,901 60 1- to 4-family............................................. 53,331 56,268 62,643 72,115 74,741 77,466 80,004 82,321 61 Multifamily................................................ 24,276 22,140 20,420 20,538 20,327 20,904 21,119 21,390 62 Commercial............................................... 23,085 22,569 21,446 21,820 21,603 21,960 22,459 22,823 63 Farm.......................................................... 17,141 18,338 20,614 23,726 24,529 25,519 26,531 27,367 1 Includes loans held by nondeposit trust companies but not bank trust Note. Based on data from various institutional and government departments. sources, with some quarters estimated in part by Federal Reserve in 2 Outstanding principal balances of mortgages backing securities in­ conjunction with the Federal Home Loan Bank Board and the Depart­ sured or guaranteed by the agency indicated. ment of Commerce. Separation of nonfarm mortgage debt by type of 3 Other holders include mortgage companies, real estate investment property, if not reported directly, and interpolations and extrapolations trusts, state and local credit agencies, state and local retirement funds, where required, are estimated mainly by Federal Reserve. Multifamily noninsured pension funds, credit unions, and U.S. agencies for which debt refers to loans on structures of five 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 □ June 1979 1.55 CONSUMER INSTALLMENT CREDIT1 Total Outstanding, and Net Change Millions of dollars 1978 1979 Holder, and type of credit 1976 1977 1978 Oct. Nov. Dec. Jan. Feb. Mar. Apr. Amounts outstanding (end of period) 1 Total. 193,977 230,829 275,640 265,821 269,445 275,640 275,346 275,818 278,347 282,439 By major holder 2 Commercial banks........ 93,728 112,373 136,189 132,702 133,908 136,189 136,452 136,671 137,445 139,816 3 Finance companies....... 38,919 44,868 54,309 51,984 53,099 54,309 55,004 55,728 56,885 58,225 4 Credit unions................. 31,169 37,605 45,939 44,635 45,305 45,939 45,526 45,661 46,301 46,322 5 Retailers2....................... 19,260 23,490 24,876 22,464 23,006 24,876 23,962 23,246 22,929 23,097 6 Savings and loans.......... 6,246 7,354 8,394 8,177 8,291 8,394 8,427 8,488 8,671 8,833 7 Gasoline companies 2,830 2,963 3,240 3.276 3,173 3.240 3,338 3,274 3,292 3,383 8 Mutual savings banks.. 1,825 2,176 2,693 2.583 2,663 2.693 2,637 2,750 2,824 2,763 By major type of credit 9 Automobile................... 67,707 82,911 102,468 100,159 101,565 102,468 102,890 103,780 105,426 107,159 10 Commercial banks. . , 39,621 49,577 60,564 59,778 60,347 60,564 60,682 61,053 61,742 62,839 11 Indirect paper........ 22,072 27,379 33,850 33,415 33,709 33,850 33,928 34,261 34,592 35,302 12 Direct loans........... 17,549 22,198 26,714 26,363 26,638 26,714 26,754 26,792 27,150 27,537 13 Credit unions............. 15,238 18,099 21,976 21,344 21,664 21,967 21,769 21,834 22,140 22,150 14 Finance companies.., 12,848 15,235 19,937 19,037 19,554 19,937 2,0,439 20,893 21,544 22,170 15 Revolving..................... 17,189 39,274 47,051 42,579 43,523 47,051 46,516 45,586 45,240 45,782 16 Commercial banks. . 14,359 18,374 24,434 22,165 22,724 24,434 24,677 24,502 24,442 24,768 17 Retailers................... 17,937 19,377 17,138 17,626 19,377 18,501 17,810 17,506 17,631 18 Gasoline companies. 2,830 2,963 3,240 3.276 3,173 3.240 3,338 3,274 3,292 3,383 19 Mobile home............. 14,573 15,141 16,042 15,925 16,017 16,042 16,004 16,008 16,092 16,197 20 Commercial banks. 8,737 9,124 9,553 9,548 9,572 9,553 9,511 9,495 9,509 9,548 21 Finance companies. 3,263 3,077 3,152 3,127 3,150 3,152 3,149 3,147 3,148 3,159 22 Savings and loans.. 2,241 2,538 2,848 2,775 2,813 2,848 2,859 2,880 2,942 2,997 23 Credit unions.......... 332 402 489 475 482 489 485 486 493 493 24 Other................................ 94,508 93,503 110,079 107,158 108,340 110,079 109,936 110,444 111,589 113,301 25 Commercial banks 31,011 35,298 41,638 41,211 41,265 41,638 41,582 41,621 41,752 42,661 26 Finance companies___ 22,808 26,556 31,220 29,820 30,395 3.1,220 31,416 31,688 32,193 32,896 27 Credit unions............... 15,599 19,104 23,483 22,816 23,159 23,483 23,272 23,341 23,668 23,679 28 Retailers....................... 19,260 5,553 5,499 5,326 5,380 5,499 5,461 5,436 5,423 5,466 29 Savings and loans........ 4,005 4,816 5,546 5,402 5,478 5,546 5,568 5,608 5,729 5,836 30 Mutual savings banks. 1,825 2,176 2,693 2.583 2,663 2.693 2,637 2,750 2,824 2,763 Net change (during period) 3 31 Total.................................................... 21,647 35,278 45,066 3,382 4,104 4,400 3,061 3,308 3,731 4,068 By major holder 32 Commercial banks............................. 10,792 18,645 24,058 1,617 1,925 2,080 1,330 1,630 1,465 2,080 33 Finance companies............................. 2,946 5,948 9,441 863 1,018 1,098 1,341 1,205 1,334 1,377 34 Credit unions...................................... 5,503 6,436 8,334 644 779 773 360 402 528 139 35 Retailers1............................................ 1,059 2,654 1,386 115 186 196 -90 -221 143 306 36 Savings and loans............................... 1,085 1,111 1,041 127 88 115 67 86 173 158 37 Gasoline companies........................... 124 132 276 16 -1 96 100 68 20 73 38 Mutual savings banks......................... 138 352 530 -8 104 42 -47 138 68 -65 By major type of credit 39 Automobile......................................... 10,465 15,204 19,557 1,375 1,755 1,780 1,680 1,565 1,486 1,387 40 Commercial banks.......................... 6,334 9,956 10,987 759 839 845 633 739 617 740 41 Indirect paper............................. 2,742 5,307 6,471 354 440 530 387 530 290 477 42 Direct loans................................. 3,592 4,649 4,516 405 399 315 246 209 327 263 43 Credit unions................................... 2,497 2,861 3,868 301 364 391 187 190 245 64 44 Finance companies......................... 1,634 2,387 4,702 315 552 544 860 636 624 583 45 Revolving............................................ 2,170 6,248 7,776 346 665 869 433 317 742 875 46 Commercial banks.......................... 2,046 4,015 6,060 337 556 610 375 492 588 562 47 Retailers.......................................... 2,101 1,440 -7 110 163 -42 -243 134 240 48 Gasoline companies....................... 124 132 276 16 -1 96 100 68 20 73 49 Mobile home...................................... 140 565 897 25 75 71 40 56 108 84 50 Commercial banks.......................... 70 387 426 -25 19 21 12 15 31 22 51 Finance companies......................... -182 -189 74 -2 15 11 7 9 11 7 52 Savings and loans........................... 192 297 310 46 34 30 19 28 59 56 53 Credit unions................................... 60 70 87 6 7 9 2 4 7 -1 54 Other.................................................... 8,872 13,261 16,836 1,636 1,609 1,680 908 1,370 1,395 1,722 55 Commercial banks.......................... 2,342 4,287 6,585 554 516 604 310 384 229 756 56 Finance companies......................... 1,494 3,750 4,665 550 451 543 474 560 699 787 57 Credit unions................................... 2,946 3,505 4,379 337 408 373 171 208 276 76 58 Retailers.......................................... 1,059 553 -54 122 76 33 -48 22 9 66 59 Savings and loans........................... 893 814 731 81 54 85 48 58 114 102 60 Mutual savings banks..................... 138 352 530 -8 104 42 -47 138 68 -65 1 The Board’s series cover most short- and intermediate-term credit Note. Total consumer noninstallment credit outstanding—credit extended to individuals through regular business channels, usually to scheduled to be repaid in a lump sum, including single-payment loans, finance the purchase of consumer goods and services or to refinance charge accounts, and service credit—amounted to $64.3 billion at the end debts incurred for such purposes, and scheduled to be repaid (or with of 1978, $58.6 billion at the end of 1977, $54.8 billion at the end of 1976, the option of repayment) in two or more installments. and $50.9 billion at the end of 1975. Comparable data for Dec. 31, 1979 2 Includes auto dealers and excludes 30-day charge credit held by will be published in the February 1980 Bulletin. travel and entertainment companies. 3 Net change equals extensions minus liquidations (repayments, chargeoffs, and other credits); figures for all months are seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Consumer Debt A43 1.56 CONSUMER INSTALLMENT CREDIT Extensions and Liquidations Millions of dollars 1978 1979 Holder, and type of credit 1976 1977 1978 Oct. Nov. Dec. Jan. Feb. Mar. Apr. Extensions2 1 Total.................................................... 211,028 254,071 298,574 25,766 26,219 26,500 25,544 26,202 26,698 25,801 By major holder 2 Commercial banks............................. 97,397 117,896 142,965 12,190 12,481 12,521 12,153 12,430 12,412 11,870 3 Finance companies............................. 36,129 41,989 50,483 4,605 4,512 4,679 4,547 4,822 5,123 5,271 4 Credit unions...................................... 29,259 34,028 40,023 3,401 3,530 3,526 3,241 3,238 3,250 2,753 5 Retailers1............................................ 29,447 39,133 41,619 3,518 3,571 3,612 3,565 3,460 3,611 3,742 6 Savings and loans............................... 3,898 4,485 5,050 566 489 516 481 468 583 559 7 Gasoline companies........................... 13,387 14,617 16,125 1,335 1,376 1,451 1,440 1,486 1,493 1,505 8 Mutual savings banks......................... 1,511 1,923 2,309 151 260 195 117 298 226 101 By major type of credit 9 Automobile......................................... 63,743 75,641 88,986 7,501 7,787 7,833 7,545 7,756 7,797 7,724 10 Commercial banks......................... 37,886 46,363 53,028 4,345 4,503 4,443 4,286 4,430 4,424 4,432 11 Indirect paper............................. 20,576 25,149 29,336 2,384 2,422 2,451 2,318 2,472 2,449 2,524 12 Direct loans................................. 17,310 21,214 23,692 1,961 2,081 1,992 1,968 1,958 1,975 1,908 13 Credit unions................................... 14,688 16,616 19,486 1,643 1,718 1,738 1,635 1,624 1,587 1,415 14 Finance companies......................... 11,169 12,662 16,472 1,513 1,566 1,652 1,624 1,702 1,786 1,877 15 Revolving............................................ 43,934 86,756 104,587 8,846 9,176 9,424 9,417 9,357 9,714 8,918 16 Commercial banks......................... 30,547 38,256 51,531 4,475 4,702 4,814 4,799 4,860 5,024 4,119 33,883 *6,931 3,036 3,098 3,159 3,178 3,011 3,197 3 294 18 Gasoline companies...................... 13,387 14,617 16,125 1,335 1,376 1,451 1,440 1,486 1,493 1^505 19 Mobile home...................................... 4,859 5,425 6,067 604 486 502 369 454 516 496 20 Commercial banks......................... 3,064 3,466 3,704 352 280 295 235 295 296 299 21 Finance companies......................... 702 643 886 73 77 74 33 60 61 50 22 Savings and loans........................... 929 1,120 1,239 154 108 111 88 81 139 134 23 Credit unions................................... 164 196 238 25 21 22 13 18 20 13 24 Other................................................... 98,492 86,249 98,934 8,815 8,870 8,741 8,213 8,635 8,671 8,663 25 Commercial banks......................... 25,900 29,811 34,702 3,018 2,996 2,969 2,833 2,845 2,668 3,020 26 Finance companies......................... 24,258 28,684 33,125 3,019 2,869 2,953 2,890 3,060 3,276 3,344 27 Credit unions.................................. 14,407 17,216 20,299 1,733 1,791 1,766 1,593 1,596 1,643 1,325 28 Retailers.......................................... 29,447 5.250 4,688 482 473 453 387 449 414 448 29 Savings and loans........................... 2,969 3,365 3,811 412 381 405 393 387 444 425 30 Mutual savings banks..................... 1,511 1,923 2,309 151 260 195 117 298 226 101 Liquidations2 31 Total.................................................... 189,381 218,793 253,508 22,384 22,115 22,100 22,483 22,894 22,967 21,733 By major holder 32 Commercial banks............................. 86,605 99,251 118,907 10,565 10,551 10,441 10,823 10,800 10,947 9,790 33 Finance companies............................. 33,183 36,041 41,042 3,742 3,494 3,581 3,206 3,617 3,789 3,894 34 Credit unions...................................... 23,756 27,592 31,689 2,757 2,751 2,753 2,881 2,836 2,722 2,614 35 Retailers1............................................ 28,388 36,479 40,233 3,403 3,385 3,416 3,655 3,681 3,468 3,436 36 Savings and loans............................... 2,813 3,374 4,009 439 401 401 414 382 410 401 37 Gasoline companies........................... 13,263 14,485 15,849 1,319 1,377 1,355 1,340 1,418 1,473 1,432 38 Mutual savings banks........................ 1,373 1,571 1,779 159 156 153 164 160 158 166 By major type of credit 39 Automobile......................................... 53,278 60,437 69,429 6,126 6,032 6,053 5,865 6,191 6,311 6,337 40 Commercial banks......................... 31,552 36,407 42,041 3,586 3,664 3,598 3,653 3,691 3,807 3,692 41 Indirect paper............................. 17,834 19,842 22,865 2,030 1,982 1,921 1,931 1,942 2,159 2,047 42 Direct loans................................. 13,718 16,565 19,176 1,556 1,682 1,677 1,722 1,749 1,648 1,645 43 Credit unions................................... 12,191 13,755 15,618 1,342 1,354 1,347 1,448 1,434 1,342 1,351 44 Finance companies......................... 9,535 10,275 11,770 1,198 1,014 1,108 764 1,066 1,162 1,294 45 Revolving............................................ 41,764 80,508 96,811 8,500 8,511 8,555 8,984 9,040 8,972 8,043 46 Commercial banks......................... 28,501 34,241 45,471 4,138 4,146 4,204 4,424 4,368 4,436 3,557 47 Retailers.......................................... 31,782 35,491 3,043 2,988 2,996 3,220 3,254 3,063 3,054 48 Gasoline companies....................... 13,263 14,485 15,849 1,319 1,377 1,355 1,340 1,418 1,473 1,432 49 Mobile home...................................... 4,719 4,860 5,170 579 411 431 329 398 408 412 50 Commercial banks......................... 2,994 3,079 3,278 377 261 274 223 280 265 277 51 Finance companies......................... 884 832 812 75 62 63 26 51 50 43 52 Savings and loans........................... 737 823 929 108 74 81 69 53 80 78 53 Credit unions.................................. 104 126 151 19 14 13 11 14 13 14 54 Other.................................................... 89,620 72,988 82,098 7,179 7,161 7,061 7,305 7,265 7,276 6,941 55 Commercial banks.......................... 23,558 25,524 28,117 2,464 2,480 2,365 2,523 2,461 2,439 2,264 56 Finance companies......................... 22,764 24,934 28,460 2,469 2,418 2,410 2,416 2,500 2,577 2,557 57 Credit unions.................................. 11,461 13,711 15,920 1,396 1,383 1,393 1,422 1,388 1,367 1,249 58 Retailers.......................................... 28,388 4,697 4,742 360 397 420 435 427 405 382 59 Savings and loans........................... 2,076 2,551 3,080 331 327 320 345 329 330 323 60 Mutual savings banks..................... 1,373 1,571 1,779 159 156 153 164 160 158 166 1 Includes auto dealers and excludes 30-day charge credit held by 2 Monthly figures are seasonally adjusted, travel and entertainment companies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic Financial Statistics □ June 1979 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1976 1977 1978' Transaction category, or sector 1973 1974 1975 1976 1977 1978' HI H2 HI H2 HI H2 Nonfinancial sectors 1Total funds raised........................................ 203.8 188.8 208.1 272.5 340.5 395.6 259.6 285.6 302.2 378.9 377.8 413.8 2 Excluding equities.................................... 196.1 184.9 198.0 261.7 337.4 393.6 245.9 277.5 301.0 373.8 376.4 411.0 By sector and instrument 8.3 11.8 85.4 69.0 56.8 53.7 73.5 64.5 42.6 71.0 58.8 48.6 4 7.9 12.0 85.8 69.1 57.6 55.1 73.4 64.9 43.1 72.2 59.7 50.5 5 .4 -.2 -.4 -.1 -.9 -1.4 .1 -.3 -.6 -1.2 -.9 -1.9 6 All other nonfinancial sectors....................... 195.5 177.0 122.7 203.5 283.8 342.0 186.0 221.0 259.6 307.9 319.0 365.2 7 Corporate equities................................... 7.7 3.8 10.1 10.8 3.1 2.1 13.6 8.1 1.2 5.1 1.4 2.8 8 Debt instruments..................................... 187.9 173.1 112.6 192.6 280.6 339.9 172.4 213.0 258.5 302.8 317.6 362.4 9 Private domestic nonfinancial sectors. ... 189.3 161.6 109.5 182.8 271.4 312.4 168.5 197.2 252.1 290.7 301.4 323.7 10 Corporate equities................................ 7.9 4.1 9.9 10.5 2.7 2.6 13.3 7.7 .5 4.9 2.2 3.0 11 Debt instruments................................. 181.4 157.5 99.6 172.3 268.7 309.8 155.2 189.5 251.6 285.8 299.2 320.7 12 Debt capital instruments................. 105.0 98.0 97.8 126.8 181.1 198.6 117.8 135.9 163.4 198.9 185.5 211.6 13 State and local obligations.......... 14.7 16.5 15.6 19.0 29.2 30.1 19.3 18.7 29.3 29.0 28.6 31.6 14 Corporate bonds........................... 9.2 19.7 27.2 22.8 21.0 20.1 22.2 23.5 16.0 26.0 18.9 21.3 15 Home......................................... 46.4 34.8 39.5 63.7 96.4 104.6 56.9 70.5 88.5 104.2 99.2 110.1 16 10.4 6.9 * 1.8 7.4 10.2 .6 3.1 6.4 8.4 9.2 11.2 17 Commercial............................... 18.9 15.1 11.0 13.4 18.4 23.3 13.8 12.9 14.2 22.6 20.4 26.1 18 Farm.......................................... 5.5 5.0 4.6 6.1 8.8 10.2 4.9 7.3 8.9 8.7 9.3 11.2 19 Other debt instruments.................... 76.4 59.6 1.8 45.5 87.6 111.3 37.4 53.6 88.2 86.9 113.7 109.1 20 Consumer credit........................... 23.8 10.2 9.4 23.6 35.0 49.9 22.9 24.3 35.7 34.4 49.4 50.7 21 Bank loans n.e.c............................ 39.8 29.0 -14.0 3.5 30.6 35.6 -2.7 9.6 34.0 27.2 41.1 30.2 22 Open market paper....................... 2.5 6.6 -2.6 4.0 2.9 5.2 5.6 2.4 3.5 2.4 5.2 5.2 23 Other.............................................. 10.3 13.7 9.0 14.4 19.0 20.6 11.6 17.3 15.0 23.0 18.0 23.1 24 By borrowing sector............................. 189.3 161.6 109.5 182.8 271.4 312.4 168.5 197.2 252.1 290.7 301.4 323.7 25 State and local governments............ 13.2 15.5 13.2 18.5 25.9 25.5 17.6 19.5 22.7 29.0 21.8 29.2 26 Households....................................... 80.9 49.2 48.6 89.9 139.6 161.2 82.7 97.1 131.2 148.0 154.6 168.0 27 Farm.................................................. 9.7 7.9 8.7 11.0 14.7 16.8 9.9 12.1 15.5 13.8 14.6 19.1 28 Nonfarm noncorporate.................... 12.8 7.4 2.0 5.2 12.6 17.7 4.0 6.4 12.8 12.3 20.4 15.3 29 Corporate.......................................... 72.7 81.8 37.0 58.2 78.7 91.2 54.3 62.2 69.8 87.6 90.1 92.2 30 Foreign...................................................... 6.2 15.3 13.2 20.7 12.3 29.5 17.5 23.8 7.5 17.2 17.6 41.5 31 Corporate equities............................... -.2 -.2 .2 .3 .4 -.5 .3 .3 .6 .2 -.8 -.2 32 Debt instruments................................. 6.4 15.6 13.0 20.4 11.9 30.1 17.2 23.5 6.9 17.0 18.4 41.7 33 Bonds................................................ 1.0 2.1 6.2 8.5 5.0 3.9 7.4 9.7 4.4 5.6 4.9 2.9 34 Bank loans n.e.c............................... 2.8 4.7 3.7 6.6 1.6 15.8 5.4 7.9 -3.2 6.4 6.3 25.2 35 Open market paper.......................... .9 7.3 .3 1.9 2.4 6.6 1.5 2.4 2.7 2.2 3.6 9.6 36 U.S. government loans.................... 1.7 1.5 2.8 3.3 3.0 3.8 2.9 3.6 3.1 2.9 3.6 4.0 Financial sectors 37 Total funds raised......................................... 57.6 36.4 11.7 29.2 58.8 95.2 27.9 30.5 61.5 56.2 103.0 87.3 By instrument 38 U.S. government related...................................... 19.9 23.1 13.5 18.6 26.3 41.4 18.2 19.0 25.0 27.5 41.5 41.3 39 Sponsored credit agency securities......... 16.3 16.6 2.3 3.3 7.0 23.1 4.1 2.6 9.5 4.4 24.9 21.2 40 Mortgage pool securities......................... 3.6 5.8 10.3 15.7 20.5 18.3 14.2 17.2 17.9 23.1 16.6 20.1 41 Loans from U.S. government.................... .7 .9 -.4 -1.2 * — .7 -2.3 0 42 Private financial sectors............................... 37.7 13.3 -1.9 10.6 32.6 53.7 9.7 11.5 36.5 28.7 61.5 46.0 43 Corporate equities................................... 1.5 .3 .6 1.0 .6 .5 -.2 2.3 .5 .7 1.0 -.1 44 Debt instruments..................................... 36.2 13.0 -2.5 9.6 32.0 53.3 10.0 9.2 36.0 28.0 60.5 46.0 45 Corporate bonds................................... 3.5 2.1 2.9 5.8 10.1 7.5 6.4 5.2 10.1 10.1 8.4 6.6 46 Mortgages............................................. -1.2 -1.3 2.3 2.1 3.1 .9 1.5 2.7 3.3 2.9 2.3 -.4 47 Bank loans n.e.c................................... 8.9 4.6 -3.6 -3.7 * 1.6 -2.6 -4.8 -2.3 2.3 .6 2.7 48 Open market paper and RPs.............. 17.8 .9 -.1 7.3 14.4 30.7 6.2 8.5 21.4 7.4 35.2 26.2 49 Loans from FHLBs............................. 7.2 6.7 -4.0 -2.0 4.3 12.5 -1.5 -2.5 3.4 5.2 14.1 10.9 By sector 50 Sponsored credit agencies........................... 16.3 17.3 3.2 2.9 5.8 23.1 4.0 1.8 7.1 4.4 24.9 21.2 51 Mortgage pools............................................ 3.6 5.8 10.3 15.7 20.5 18.3 14.2 17.2 17.9 23.1 16.6 20.1 52 Private financial sectors............................... 37.7 13.3 -1.9 10.6 32.6 53.7 9.7 11.5 36.5 28.7 61.5 46.0 53 Commercial banks................................... 14.1 -5.6 -1.4 7.5 4.8 7.4 9.0 6.0 10.0 -.4 12.5 2.4 54 Bank affiliates........................................... 2.2 3.5 .*3 -.8 1.3 4.3 -1.3 -.3 1.3 1.2 5.8 2.8 55 Savings and loan associations................. 6.0 6.3 -2.2 * 11.9 16.4 .1 -.1 10.6 13.1 19.7 13.2 56 Other insurance companies..................... .5 .9 1.0 .9 .9 1.1 .9 .9 .9 1.0 1.0 1.1 57 Finance companies................................... 9.4 6.0 .6 6.4 16.9 19.8 6.0 6.9 17.4 16.4 18.4 21.3 58 REITs....................................................... 6.5 .6 -1.4 -2.4 -2.4 - 1.2 -2.1 -2.7 -2.5 -2.2 -1.2 -1.2 59 Open-end investment companies............ -1.2 -.7 -.1 -1.0 -1.0 - 1.1 -2.4 .4 -.8 -1.2 -.6 -1.5 60 Money market funds............................... 2.4 1.3 * .2 6.9 -.5 .5 -.5 .9 5.9 8.0 All sectors 61 Total funds raised, by instrument............... 261.4 225.1 219.8 301.7 399.4 490.8 287.5 316.0 363.7 435.0 480.8 501.1 62 Investment company shares........................ -1.2 -.7 -.1 -1.0 -1.0 -1.1 -2.4 .4 -.8 -1.2 -.6 -1.5 63 Other corporate equities............................. 10.4 4.8 10.8 12.9 4.8 3.6 15.8 9.9 2.5 7.0 3.0 4.3 64 Debt instruments......................................... 252.3 221.0 209.1 289.8 395.6 488.2 274.1 305.7 362.0 429.2 478.4 498.4 65 U.S. government securities...................... 28.3 34.3 98.2 88.1 84.3 95.2 91.9 84.3 70.0 98.6 100.4 90.0 66 State and local obligations...................... 14.7 16.5 15.6 19.0 29.2 31.5 19.3 18.7 29.3 29.0 28.6 31.6 67 Corporate and foreign bonds................. 13.6 23.9 36.4 37.2 36.1 31.2 36.1 38.4 30.5 41.7 32.2 30.8 68 Mortgages................................................. 79.9 60.5 57.2 87.1 134.0 149.2 77.7 96.4 121.2 146.7 140.2 158.2 69 Consumer credit....................................... 23.8 10.2 9.4 23.6 35.0 49.9 22.9 24.3 35.7 34.4 49.4 50.7 70 Bank loans n.e.c....................................... 51.6 38.3 -13.9 6.4 32.2 53.0 .1 12.6 28.4 35.9 47.9 58.1 71 Open market paper and RPs.................. 21.2 14.8 -2.4 13.3 19.8 42.5 13.3 13.3 27.6 11.9 44.0 41.0 72 Other loans............................................... 19.1 22.6 8.7 15.3 25.1 36.9 12.9 17.7 19.2 31.0 35.7 38.0 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; quarterly data are at seasonally adjusted annual rates. 1976 1977 1978 r Transaction category, or sector 1973 1974 1975 1976 1977 1978 ^ HI H2 HI H2 HI H2 1 Total funds advanced in credit markets to nonfinancial sectors............................... 196.1 184.9 198.0 261.7 337.4 393.6 245.9 277.5 301.0 373.8 376.4 411.0 By public agencies and foreign 2 Tot&l net advances....................................... 34.1 52.6 44.3 54.5 85.4 109.4 49.7 59.3 69.3 101.6 103.7 115.1 3 U.S. government securities.................... 9.5 11.9 22.5 26.8 40.2 43.9 24.4 29.3 27.2 53.2 42.7 45.0 4 Residential mortgages............................. 8.2 14.7 16.2 12.8 20.4 26.5 11.8 13.7 20.0 20.9 23.5 29.5 5 FHLB advances to S&Ls....................... 7.2 6.7 -4.0 -2.0 4.3 12.5 -1.5 -2.5 3.4 5.2 14.1 10.9 6 Other loans and securities........................ 9.2 19.4 9.5 16.9 20.5 26.6 15.0 18.8 18.6 22.4 23.5 29.7 Totals advanced, by sector 7 U.S. government..................................... 2.8 9.7 15.1 8.9 11.8 18.6 6.3 11.5 6.1 17.6 19.5 17.7 8 Sponsored credit agencies....................... 21.4 25.6 14.5 20.6 26.9 46.0 20.0 21.2 26.7 27.2 44.9 47.1 9 Monetary authorities............................... 9.2 6.2 8.5 9.8 7.1 7.0 13.7 6.0 10.2 4.1 12.9 1.0 10 Foreign...................................................... .6 11.2 6.1 15.2 39.5 37.8 9.7 20.6 26.4 52.7 26.3 49.2 11 Agency borrowing not included in line 1.. 19.9 23.1 13.5 18.6 26.3 41.4 18.2 19.0 25.0 27.5 41.5 41.3 Private domestic funds advanced 12 Total net advances....................................... 182.0 155.3 167.3 225.7 278.2 325.6 214.4 237.1 256.8 299.7 314.3 337.2 13 U.S. government securities.................... 18.8 22.4 75.7 61.3 44.1 51.3 67.5 55.1 42.8 45.4 57.7 44.9 14 State and local obligations...................... 14.7 16.5 15.6 19.0 29.2 30.1 19.3 18.7 29.3 29.0 28.6 31.6 15 Corporate and foreign bonds................. 10.0 20.9 32.8 30.5 22.3 22.3 28.6 32.3 17.2 27.3 22.3 22.4 16 Residential mortgages............................. 48.4 26.9 23.2 52.7 83.2 88.3 45.6 59.7 74.9 91.6 84.9 91.7 17 Other mortgages and loans..................... 97.2 75.4 16.1 60.4 103.7 146.0 51.9 68.9 96.0 111.5 134.9 157.4 18 Less: FHLB advances............................. 7.2 6.7 -4.0 -2.0 4.3 12.5 -1.5 -2.5 3.4 5.2 14.1 10.9 Private financial intermediation 19 Credit market funds advanced by private financial institutions............................. 165.4 126.2 119.9 191.2 249.6 288.5 174.4 207.9 241.1 258.0 282.7 294.4 20 Commercial banking............................... 86.5 64.5 27.6 58.0 85.8 121.9 46.6 69.4 81.1 90.5 119.5 124.3 21 Savings institutions.................................. 36.9 26.9 52.0 71.4 84.8 78.2 70.5 72.4 85.3 84.3 77.5 78.9 22 Insurance and pension funds.................. 23.9 30.0 41.5 51.7 62.0 70.1 53.2 50.2 60.3 63.7 68.8 71.3 23 Other finance............................................ 18.0 4.7 -1.1 10.1 16.9 18.4 4.2 15.9 14.5 19.4 16.9 19.9 24 Sources of funds........................................... 165.4 126.2 119.9 191.2 249.6 288.5 174.4 207.9 241.1 258.0 282.7 294.4 25 Private domestic deposits........................ 86.6 69.4 90.6 121.5 136.0 131.4 108.3 134.6 127.0 145.0 120.0 142.8 26 Credit market borrowing......................... 36.2 13.0 -2.5 9.6 32.0 53.3 10.0 9.2 36.0 28.0 60.5 46.0 27 Other sources............................................ 42.5 43.8 31.9 60.1 81.6 103.9 56.1 64.1 78.2 85.1 102.2 105.6 28 Foreign funds....................................... 5.8 16.8 .9 5.1 11.6 12.7 .7 9.5 .7 22.4 4.0 21.4 29 Treasury balances................................. -1.0 -5.1 -1.7 -.1 4.3 8.1 2.3 -2.5 -1.8 10.4 -.7 17.0 30 Insurance and pension reserves.......... 18.4 26.0 29.6 34.8 48.0 57.6 35.8 33.8 45.5 50.4 55.9 59.3 31 Other, net.............................................. 19.4 6.0 3.1 20.3 17.8 25.5 17.2 23.4 33.7 1.9 43.2 7.8 Private domestic nonfinancial investors 32 Direct lending in credit markets................. 52.8 42.2 44.9 44.1 60.6 90.3 50.0 38.4 51.6 69.6 92.1 88.8 33 U.S. government securities.................... 19.2 17.5 23.0 19.6 24.6 36.1 25.0 14.1 14.1 35.2 37.6 34.5 34 State and local obligations...................... 5.4 9.3 8.3 6.8 9.1 9.6 7.6 6.0 8.2 10.1 10.8 8.4 35 Corporate and foreign bonds................. 1.3 4.7 8.0 2.1 1.1 -1.8 2.9 1.3 .4 1.8 -3.0 -.5 36 Commercial paper................................... 18.3 2.4 -.8 4.1 9.5 28.3 4.8 3.4 13.0 6.0 28.8 27.8 37 Other......................................................... 8.6 8.2 6.4 11.5 16.2 18.1 9.7 13.5 15.9 16.5 17.8 18.7 38 Deposits and currency................................. 90.6 75.7 96.8 128.8 144.3 140.6 114.3 143.3 132.6 156.0 130.0 151.1 39 Time and savings accounts..................... 76.1 66.7 84.8 112.2 120.1 120.6 99.5 125.0 110.5 129.7 111.5 129.7 40 Large negotiable CDs......................... 18.1 18.8 -14.1 -14.4 9.3 13.2 -19.8 -9.1 -4.4 22.9 11.5 14.9 41 Other at commercial banks................. 29.6 26.1 39.4 58.1 41.7 46.4 52.0 64.3 45.3 38.2 45.2 47.7 42 At savings institutions......................... 28.5 21.8 59.4 68.5 69.1 61.0 67.3 69.8 69.6 68.7 54.8 67.1 43 Money....................................................... 14.4 8.9 12.0 16.6 24.2 20.0 14.8 18.3 22.1 26.3 18.6 21.4 44 Demand deposits.................................. 10.5 2.6 5.8 9.3 15.9 10.8 8.9 9.6 16.5 15.3 8.5 13.1 45 Currency................................................ 3.9 6.3 6.2 7.3 8.3 9.2 6.0 8.6 5.6 11.0 10.1 8.3 46 Total of credit market instruments, de­ posits and currency............................... 143.4 117.8 141.6 172.9 204.9 230.9 164.3 181.6 184.2 225.6 222.1 240.0 47 Public support rate (in percent)............ 17.4 28.5 22.4 20.8 25.3 27.8 20.2 21.4 23.0 27.2 27.5 28.0 48 Private financial intermediation (in per­ cent) ................................................... 90.9 81.3 71.7 84.7 89.7 88.6 81.3 87.7 93.9 86.1 89.9 87.3 49 Total foreign funds................................... 6.4 28.0 7.1 20.3 51.1 50.5 10.4 30.1 27.1 75.1 30.3 70.7 Memo: Corporate equities not included above 50 Total net issues............................................. 9.2 4.1 10.7 11.9 3.8 2.6 13.4 10.4 1.7 5.8 2.4 2.7 51 Mutual fund shares.................................. -1.2 -.7 -.1 -1.0 -1.0 -1.1 -2.4 .4 -.8 -1.2 -.6 -1.5 52 Other equities........................................... 10.4 4.8 10.8 12.9 4.8 3.6 15.8 9.9 2.5 7.0 3.0 4.3 53 Acquisitions by financial institutions......... 13.3 5.8 9.7 12.5 6.2 3.7 13.1 12.0 6.1 6.3 2.0 5.4 54 Other net purchases..................................... -4.1 -1.6 1.0 -.7 -2.4 -1.1 .3 -1.6 -4.4 -.5 .4 -2.6 Notes by line number. 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. Sum of lines 39 and 44. 49. Sum of lines 10 and 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 □ June 1979 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures 1967 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1978 1979 Measure 1976 1977 1978 Oct. Nov. Dec. Jan. Feb. Mar. Apr. May 129.8 137.1 145.2 148.7 149.6 150.9 150.9 151.2 152.3 150.2 152.1 Market groupings 2 Products, total............................................................ 129.3 137.1 144.3 147.0 147.7 149.1 149.4 150.2 151.0 148.5 150.5 3 Final, total.............................................................. 127.2 134.9 141.4 144.1 144.5 145.6 145.9 146.5 147.7 145.1 147.4 4 Consumer goods................................................. 136.2 143.4 147.4 149.2 149.7 150.6 150.6 151.0 152.4 148.6 151.3 5 Equipment.......................................................... 114.6 123.2 133.1 137.0 137.3 138.7 139.5 140.2 141.4 140.4 142.0 6 Intermediate............................................................ 137.2 145.1 155.3 158.0 159.3 161.8 162.6 163.7 162.8 161.8 162.7 7 Materials..................................................................... 130.6 136.9 146.5 151.4 152.7 153.8 153.1 152.9 154.2 152.9 154.6 Industry groupings 8 Manufacturing............................................................ 129.5 137.1 145.6 149.5 150.4 151.8 151.9 152.2 153.1 150.9 153.0 Capacity utilization (percent)1 9 Manufacturing............................................................ 80.2 82.4 84.2 85.5 85.8 86.3 86.0 85.9 86.2 84.7 85.6 10 Industrial materials industries................................... 80.4 81.9 84.9 87.1 87.6 86.1 87.4 87.1 87.6 86.7 87.4 11 Construction contracts2............................................ 190.2 160.5 174.3 193.0 173.0 184.0 181.0 231.0 186.0 187.0 n.a. 12 Nonagricultural employment, total3........................... 120.7 125.0 130.3 131.6 132.3 133.5 133.0 133.5 134.1 '134.1 134.4 13 Goods-producing, total............................................. 100.2 104.2 108.9 110.1 111.0 111.7 112.0 112.4 113.3 '113.1 113.3 14 Manufacturing, total.............................................. 97.7 101.0 104.5 105.1 105.9 106.6 107.1 107.4 107.8 '107.6 107.5 15 Manufacturing, production-worker...................... 95.3 98.6 102.1 102.4 103.5 104.3 104.8 105.2 '105.4 '105.1 105.0 16 Service-producing...................................................... 131.9 136.4 142.1 143.4 144.0 144.2 144.5 145.0 145.5 145.7 146.0 17 Personal income, total4.............................................. 220.4 244.0 272.5 282.2 285.0 288,5 290.3 292.6 296.2 297.1 n.a. 18 Wages and salary disbursements............................... 189.3 230.1 257.5 266.1 268.8 271.5 274.4 176.9 180.6 281.1 n.a. 19 Manufacturing............................................................ 177.1 198.6 223.6 230.3 234.8 238.0 238.0 244.1 246.7 245.6 n.a. 20 Disposable personal income...................................... 176.8 194.5 216.7 226.0 233.4 n.a. 21 Retail sales5.............................................................. 203.5 224.4 248.0 257.5 262.0 265.3 270.7 '271.7 '275.3 '272.1 271.7 Prices6 22 Consumer7.................................................................. 170.5 181.5 195.4 200.9 202.0 202.9 204.7 207.1 209.1 211.5 n.a. 23 Producer finished goods8.......................................... 170.3 180.6 194.6 '199.6 '200.3 202.4 205.2 207.4 208.8 211.2 212.4 1 Ratios of indexes of production to indexes of capacity. Based on data Review (U.S. Department of Labor). Seasonally adjusted data for changes from Federal Reserve, McGraw-Hill Economics Department, and De­ in the price indexes may be obtained from the Bureau of Labor Statistics, partment of Commerce. U.S. Department of Labor. 2 Index of dollar value of total construction contracts, including 7 Beginning Jan. 1978, based on new index for all urban consumers. residential, nonresidential, and heavy engineering, from McGraw-Hill 8 Beginning with the November 1978 Bulletin, producer price data Informations Systems Company, F. W. Dodge Division. in this table have been changed to the BLS series for producer finished 3 Based on data in Employment and Earnings (U.S. Department of goods. The previous data were producer prices for all commodities. Labor). Series covers employees only, excluding personnel in the Armed Forces. Note. Basic data (not index numbers) for series mentioned in notes 4 Based on data in Survey of Current Business (U.S. Department of Com­ 3, 4, and 5, and indexes for series mentioned in notes 2 and 6 may also be merce). Series for disposable income is quarterly. found in the Survey of Current Business (U.S. Department of Commerce). 5 Based on Bureau of Census data published in Survey of Current Figures for industrial production for the last two months are preliminary Business (U.S. Department of Commerce). and estimated, respectively. 6 Data without seasonal adjustment, as published in Monthly Labor 2.11 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION Seasonally adjusted 1978 1979 1978 1979 1978 1979 Series Q2 Q3 Q4 Ql' Q2 Q3 Q4 Ql Q2 Q3 Q4 Qlr Output (1967 = 100) Capacity (percent of 1967 output) Utilization rate (percent) 1 Manufacturing.............................................. 144.4 147.7 150.6 152.4 172.0 173.7 175.4 177.1 84.0 85.0 85.9 86.1 2 Primary processing................................... 154.1 158.2 161.9 162.1 178.5 180.2 181.9 183.8 86.3 87.8 89.0 88.2 3 Advanced processing............................... 139.3 142.1 144.5 147.2 168.5 170.2 171.8 173.4 82.7 83.5 84.1 84.9 4 Materials...................................................... 145.1 148.7 152.6 153.4 171.7 173.0 174.2 175.6 84.5 86.0 87.6 87.4 5 Durable goods.......................................... 144.0 150.4 155.2 155.2 175.2 176.3 177.4 178.4 82.2 85.3 87.5 87.0 6 Basic metal........................................... 117.5 124.6 129.4 124.2 146.1 146.5 146.8 147.1 80.4 85.1 88.1 84.4 7 Nondurable goods................................... 163.2 163.2 166.9 169.3 184.4 186.5 188.5 190.7 88.5 87.5 88.5 88.8 8 Textile, paper, and chemical............... 167.7 168.4 172.2 175.0 193.1 195.4 197.5 199.8 86.8 86.2 87.2 87.6 9 Textile............................................... 117.1 117.3 119.4 117.3 144.1 144.7 145.2 145.8 81.2 81.0 82.2 80.5 10 Paper................................................. 139.7 134.8 137.2 137.6 154.8 155.8 156.9 158.0 90.3 86.5 87.4 87.1 11 Chemical........................................... 201.4 204.4 209.5 215.6 230.1 233.5 236.8 240.2 87.5 87.5 88.5 89.7 12 Energy...................................................... 125.5 127.0 128.7 129.3 147.8 148.4 148.9 150.2 84.9 85.6 86.4 86.1 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 1979 Category 1976 1977 1978 Nov. Dec. Jan. Feb. Mar. Apr. May Household survey data 1 Noninstitutional population1.............. 156,048 158,559 161,058 162,033 162,250 162,448 162,633 162,909 163,008 163,260 2 Labor force (including Armed Forces)1....................................... 96,917 99,534 102,537 103,745 103,975 104,277 104,621 104,804 104,193 104,325 3 Civilian labor force............................. 94,773 97,401 100,420 101,628 101,867 102,183 102,527 102,714 102,111 102,247 Employment 4 Nonagricultural industries2........ 84,188 87,302 91,031 92,476 92,468 93,068 93,335 93,499 92,987 93,134 5 Agriculture................................... 3,297 3,244 3,342 3,275 3,387 3,232 3,311 3,343 3,186 3,184 Unemployment 6 Number....................................... 7,288 6,855 6,047 5,877 6,012 5,883 5,881 5,871 5,937 5,929 7 Rate (percent of civilian labor force).................................... 7.7 7.0 6.0 5.8 5.9 5.8 5.7 5.7 5.8 5.8 8 Not in labor force.............................. 59,130 59,025 58,521 58,288 58,275 58,170 58,012 58,105 58,815 58,935 Establishment survey data 9 Nonagricultural payroll employment 3 79,382 82,256 85,760 87,036 87,281 87,524 87,818 r88,263 r88,267 88,438 10 Manufacturing.................................... 18,997 19,647 20,331 20,601 20,729 20,825 20,895 r20,964 r20,928 20,897 779 809 837 903 904 905 c919 r922 r924 920 12 Contract construction......................... 3,576 3,833 4,213 4,368 4,397 4,381 4,385 '4,526 r4,517 4,584 13 Transportation and public utilities... 4,582 4,696 4,858 4,947 4,967 4,974 5,001 r5,025 r4,942 4,995 14 Trade.................................................... 17,755 18,492 19,392 19,701 19,697 19,817 19,883 r19,945 r19,966 20,010 15 Finance................................................ 4,271 4,452 4,676 4,774 4,789 4,809 4,829 r4,839 r4,854 4,863 14,551 15,249 15,976 16,270 16,327 16,352 16,438 >■16,535 r16,578 16,608 17 Government........................................ 14,871 15,079 15,478 15,472 15,471 15,461 15,468 r15,507 r 15,558 15,561 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 □ June 1979 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value Monthly data are seasonally adjusted. 1967 1978 1979 Grouping pro­ 1978 por­ avertion age? Mar. Apr. May Sept. Oct. Nov. Dec. Jan. Feb.r Mar. Apr.P May® Index (1967 = 100) MAJOR MARKET 1Total index................................................ 100.00 145.2 140.9 143.2 143.9 147.8 148.7 149.6 150.9 150.9 151.2 152.3 150.2 152.1 2 Products..................................................... 60.71 144.3 141.6 143.0 143.1 146.5 147.0 147.7 149.1 149.4 150.2 151.0 148.5 150.5 3 Final products........................................... 47.82 141.4 138.9 140.5 140.5 143.7 144.1 144.5 145.6 145.9 146.5 147.7 145.1 147.4 4 Consumer goods.................................... 27.68 147.4 145.9 147.5 147.0 149.0 149.2 149.7 150.6 150.6 151.0 152.4 148.6 151.3 5 Equipment.............................................. 20.14 133.1 129.1 130.8 131.6 136.4 137.0 137.3 138.7 139.5 140.2 141.4 140.4 142.0 6 Intermediate products............................... 12.89 155.3 151.4 152.1 152.6 157.0 158.0 159.3 161.8 162.6 163.7 162.8 161.8 162.7 7 Materials.................................................... 39.29 146.5 139.9 143.7 145.1 149.7 151.4 152.7 153.8 153.1 152.9 154.2 152.9 154.6 Consumer goods 8 Durable consumer goods......................... 7.89 158.9 157.5 161.8 160.2 160.3 161.6 161.8 161.9 160.9 161.3 163.5 151.7 161.0 9 Automotive products............................ 2.83 178.6 175.8 184.3 180.0 178.3 185.6 189.0 185.1 181.3 179.0 186.6 161.3 183.5 10 Autos and utility vehicles................. 2.03 172.5 171.0 182.7 175.6 170.0 180.5 185.0 179.3 173.4 170.7 180.1 147.4 177.6 11 Autos.............................................. 1.90 148.5 149.7 159.1 151.6 144.4 154.2 159.7 151.8 145.9 144.9 153.7 128.6 153.1 12 Auto parts and allied goods............. 80 194.0 188.5 188.2 191.5 199.8 199.1 199.0 200.1 201.8 200.2 202.8 197.0 198.0 13 Home goods.......................................... 5.06 147.8 147.2 149.2 148.9 150.2 148.2 146.5 148.9 149.5 151.3 150.5 146.2 148.4 14 Appliances, A/C, and TV................. 1.40 132.5 135.4 142.2 138.3 134.4 128.7 123.4 129.1 125.9 130.4 127.6 115.0 121.0 15 Appliances and TV........................ 1.33 134.5 137.9 144.7 140.7 136.9 129.9 124.4 129.8 126.8 131.5 128.9 115.9 16 Carpeting and furniture.................... 1.07 164.3 159.3 158.9 163.4 169.0 168.0 164.9 166.8 170.8 172.9 174.1 171 8 17 Miscellaneous home goods............... 2.59 149.3 148.7 149.0 148.8 150.8 150.6 151.3 152.0 153.6 153.7 153.3 152.8 153.3 18 Nondurable consumer goods................... 19.79 142.8 141.3 141.8 141.7 144.4 144.3 144.8 146.2 146.5 146.8 147.9 147.4 147.5 19 4.29 125.5 m . 4 124.9 125.4 128.9 128.3 130. 1 130.1 20 Consumer staples................................... 15.50 147.6 146.4 146.6 146.2 148.8 148.8 149.2 150.6 151.0 151.3 152.5 152.3 152.2 ?1 Consumer foods and tobacco........... 8.33 140.1 138.7 140.8 139.9 141.2 140.4 141.0 143.0 142.1 142.6 145.5 144.7 22 Nonfood staples................................. 7.17 156.2 155.3 153.3 153.4 157.4 158.5 158.8 159.6 161.3 161.6 160.4 161.2 161.5 23 Consumer chemical products........ 2,63 187.1 182.1 182.5 182.0 191.9 191.9 190.7 193.2 196.5 196.3 194.2 194.5 24 Consumer paper products............. 1.92 118.1 118.9 117.7 117.9 118.2 117.6 117.6 116.9 120.1 122.2 121.3 122 6 25 Consumer energy products............ 2.62 153.2 155.0 149.9 150.7 153.3 155.4 156.7 156.9 156.6 155.7 155. 3 156.2 26 Residential utilities..................... 1.45 161.5 166.9 159.0 157.2 160.9 162.8 162.1 161. 1 165.3 168.0 Equipment 27 Business...................................................... 12.63 162.0 157.4 159.3 160.2 165.8 166.9 167.2 168.7 169.7 170.6 172.1 170.5 172.7 28 Industrial................................................ 6.77 149.9 146.9 147.8 149.7 152.7 152.9 151.8 152.2 154.7 156.0 156.3 155.3 156.4 29 1.44 223.4 221.7 225.1 226.0 226.3 226.5 223.8 222.3 222.3 224.2 223.0 223.2 223.7 30 Manufacturing................................... 3.85 121.9 118.3 119.0 121.3 124.4 125.0 124.2 124.7 127.9 128.9 129.5 128.7 129.5 31 Power.................................................. 1.47 151.0 148.8 147.3 149.2 154.8 154.0 153.4 155.6 158.5 159.8 161.0 158.2 160.5 32 Commercial transit, farm..................... 5.86 176.0 169.4 172.6 172.3 180.8 182.9 184.9 187.8 187.1 187.4 190.4 188.1 191.6 33 Commercial........................................ 3.26 208.6 202.0 203.8 204.2 214.1 215.1 214.9 217.1 218.1 218.8 221.5 221.5 222.8 34 Transit................................................ 1.93 133.8 126.1 133.7 132.2 138.6 142.6 147.5 151.0 148.2 145.7 149.4 143.3 151.6 35 Farm................................................... 67 138.9 137.0 132.9 131.9 142.0 143.2 145.8 151.5 149.5 154.6 157.6 153.8 36 Defense and space..................................... 7.51 84.5 81.9 82.9 83.6 87.1 86.7 87.2 87.9 88.7 89.1 89.5 89.8 90.5 Intermediate products 37 Construction supplies............................... 6.42 153.3 147.9 148.5 150.4 155.6 157.0 159.0 160.8 161.2 161.3 160.2 158.3 159.2 38 Business sunnlies................................................... 6.47 157.3 155.0 155.6 155.0 158.4 159.2 159.9 162.7 163.8 166.1 165.4 165.4 39 Commercial energy products................ 1.14 166.5 164.3 163.5 162.7 169.9 168.8 168.8 170.0 172.2 173.6 173.1 172.0 Materials 40 Durable goods materials........................... 20.35 146.9 138.6 142.7 143.9 152.1 154.0 154.9 156.8 155.4 154.4 155.7 153.4 156.0 41 Durable consumer parts....................... 4.58 140.3 133.1 136.8 137.9 144.8 147.3 147.4 148.4 147.8 144.3 145.6 138.6 143.5 42 Equipment parts.................................... 5.44 159.1 151.3 154.8 155.8 164.6 166.0 167.6 170.5 170.5 171.6 173.4 174.3 175.5 43 Durable materials n.e.c......................... 10.34 143.4 134.5 138.9 140.3 148.7 150.5 151.6 153.6 150.8 149.8 151.0 149.2 151.2 44 Basic metal materials................................ 5.57 120.4 110.4 116.7 117.5 126.7 128.2 129.1 130.9 124.6 122.8 125.1 122.9 45 Nondurable goods materials.................... 10.47 162.9 160.5 162.0 163.5 164.4 165.7 167.8 167.1 168.3 169.2 170.5 170.9 172.5 46 Textile, paper, and chemical materials. 7.62 167.9 165.7 166.4 167.9 170.0 171.0 173.3 172.3 173.7 175.0 176.3 177.7 179.1 47 Textile materials.................................... 1.85 117.2 115.1 116.5 116.7 118.7 118.7 120.4 119.0 118.1 115.8 118.0 117.2 48 Paper materials...................................... 1.62 137.1 137.8 139.2 140.1 137.7 137.3 137.6 136.6 133.5 138.5 140.8 142.3 49 Chemical materials................................ 4.15 202.6 199.2 199.5 201.7 205.5 207.6 210.7 210.3 214.3 215.9 216.5 218.4 50 Containers, nondurable......................... 1.70 160.5 158.1 160.5 161.9 161.1 163.4 165.6 165.5 167.6 166.2 168.0 165.1 51 Nondurable materials n.e.c......................... 1.14 133.2 129.3 134.6 135.8 131.8 134.5 134.5 135.4 133.4 135.3 135.8 135.0 52 Energy materials........................................ 8.48 125.2 117.5 123.9 125.2 126.0 128.0 128.4 129.6 128.7 128.9 130.4 129.1 128.8 53 Primary energy....................................... 4.65 112.7 104.5 115.5 114.4 111.8 115.9 117.4 116.9 113.5 112.4 115.1 114.1 54 Converted fuel materials....................... 3.82 140.5 133.3 134.1 138.6 143.4 142.7 141.8 145.1 147.3 149.1 149.0 147.4 Supplementary groups 9.35 137.6 135.9 138.0 138.2 140.3 139.1 138.5 140.2 140.6 141.6 141.7 138.6 140.3 12.23 135.1 129.8 133.1 134.2 135.9 137.6 138.2 139.3 138.7 138.8 139.8 138.9 138.6 57 3.76 157.2 157.9 154.1 154.3 158.3 159.3 160.4 161.0 161.3 161.1 160.8 161.0 58 8.48 125.2 117.5 123.9 125.2 126.0 128.0 128.4 129.6 128.7 128.9 130.4 129.1 1128.8 For Note see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Output A49 2.13 Continued 1967 1978 1979 Grouping SIC pro­ 1978 code por­ avertion age? Mar. Apr. May Sept. Oct. Nov. Dec. Jan. Feb.r Mar. Apr.P May e Index (1967 = 100) MAJOR INDUSTRY 1 Mining and utilities. 12.05 141.6 138.2 140.9 140.9 142.1 144.1 144.5 145.0 144.2 144.0 144.8 144.6 144.9 2 Mining.................. 6.36 124.2 119.3 127.2 126.7 124.1 127.6 128.1 127.6 124.0 121.8 124.0 124.1 124.6 3 Utilities................. 5.69 161.0 159.5 156.0 157.0 162.3 162.4 162.9 164.3 166.8 169.0 168.2 167.5 167.8 4 Electric.............. 3. 182.2 ,178.8 175.0 177.1 184.4 184.1 185.0 186.6 189.4 192.2 5 Manufacturing. 87.95 145.7 141.4 143.5 144.3 148.7 149.5 150.4 151.8 151.9 152.2 153.1 150.9 153.0 6 Nondurable. . 35.97 154.8 151.4 153.2 154.0 157.1 157.4 158.5 159.6 160.4 160.7 161.5 160.9 161.6 7 Durable......... 51.98 139.3 134.4 136.9 137.6 142.8 144.0 144.8 146.4 146.0 146.2 147.3 144.0 147.1 Mining 8 Metal................................ 10 .51 121.0 127.6 122.3 120.0 115.6 122.1 125.3 123.9 123.5 124.3 126.3 128.2 9 Coal.................................. 11,12 .69 115.7 78.4 129.5 131.7 114.7 114.7 145.1 146.8 116.0 104.0 124.0 129.3 133.9 10 Oil and gas extraction. . . 13 4.40 124.7 123.3 127.3 126.3 124.9 124.5 124.9 123.8 123.2 121.7 121.5 120.6 120.4 11 Stone and earth minerals. .75 131.1 128.2 128.9 130.1 133.8 134.0 132.9 134.2 136.7 137.0 136.7 136.2 Nondurable manufactures 12 Foods........................................... 8.75 142.9 141.1 143.1 142.8 144.4 143.2 144.2 145.7 145.5 146.5 147.7 146.3 13 Tobacco products....................... .67 119.2 115.6 121.0 120.2 120.6 119.0 121.5 122.0 120.0 118.8 121.8 14 Textile mill products................... 2.68 140.0 135.1 138.1 138.5 142.2 142.1 143.9 144.9 143.5 140.5 142.6 141.3 15 Apparel products........................ 3.31 126.3 122.8 126.1 125.8 130.9 130.6 131.4 132.3 16 Paper and products..................... 3.21 144.5 144.9 145.7 146.6 142.3 145.8 145.3 147.8 144.9 148.0 149.9 i 49.6 151.9 17 Printing and publishing........ 4.72 129.9 129.1 128.6 128.2 131.0 130.5 132.1 133.0 135.8 137.6 137.0 136.9 137.0 18 Chemicals and products....... 7.74 190.7 185.2 185.5 188.1 194.2 195.9 197.6 197.9 200.8 201.4 200.9 202.1 19 Petroleum products............... 1.79 144.2 140.1 141.7 143.4 147.1 147.1 148.9 149.9 147.9 144.5 144.3 145.7 144.1 20 Rubber and plastic products. 2.24 254.8 243.1 249.1 252.7 263.1 264.1 264.2 267.0 268.1 270.1 272.1 269.0 21 Leather and products............ .86 74.1 72.1 76.0 75.7 74.1 73.8 74.1 74.0 75.1 73.3 73.6 71.0 Durable manufactures 22 Ordnance, private and govern­ ment ................................... 19,91 3.64 73.7 72.7 73.0 74.3 74.3 73.9 73.6 74.2 73.4 73.5 73.4 74.2 74.5 23 Lumber and products............... 24 1.64 138.9 136.5 136.9 136.5 139.2 141.2 142.5 146.0 142.0 140.6 140.7 138.1 24 Furniture and fixtures.............. 25 1.37 154.7 149.5 148.9 152.8 160.7 160.9 157.6 156.7 161.7 163.6 163.8 161.8 25 Clay, glass, stone products 32 2.74 159.2 154.2 156.7 157.9 160.9 162.1 166.3 167.7 168.6 166.9 166.1 163.9 26 Primary metals.................... 33 6.57 119.0 106.1 114.3 115.5 127.9 128.6 129.0 130.4 122.0 121.3 121.7 119.2 121.6 27 Iron and steel.................. 331,2 4.21 113.2 96.4 109.0 110.5 123.2 123.8 124.1 124.5 112.7 112.8 114.4 113.3 28 Fabricated metal products. 34 5.93 142.6 138.1 139.5 140.4 146.3 146.0 146.9 149.0 151.0 152.2 151.3 150.5 151.0 29 Nonelectrical machinery__ 35 9.15 155.6 151.5 152.2 152.9 158.7 160.3 160.3 161.8 163.6 164.6 166.7 165.2 166.6 30 Electrical machinery.......... 36 8.05 154.3 149.5 152.3 152.9 158.3 157.9 159.0 161.9 163.9 165.3 166.1 163.5 165.1 31 Transportation equipment............ 37 9.27 130.5 126.5 130.5 130.1 132.8 137.0 139.3 139.5 137.7 136.3 140.1 128.9 139.8 32 Motor vehicles and parts......... 371 4.50 168.3 165.1 171.7 168.3 168.9 176.8 180.8 179.7 174.5 171.4 178.1 155.5 175.7 33 Aerospace and miscellaneous transportation equip­ ment ................................... 372-9 4.77 94.9 90.1 91.8 93.9 98.9 99.6 100.2 101.7 103.0 103.2 104.3 103.7 106.3 34 Instruments................................... 38 2.11 171.6 168.7 170.5 169.8 174.6 175.3 172.2 179.5 180.4 181.0 182.7 182.1 182.8 35 Miscellaneous manufactures........ 39 1.51 153.3 153.7 152.9 152.7 154.1 153.9 152.1 153.7 154.8 156.9 157.1 155.4 156.0 Gross value (billions of 1972 dollars, annual rates) MAJOR MARKET 36 Products, total........ 1507.4 609.6 601.1 608.8 606.8 613.6 621.3 625.3 632.0 628.0 632.0 638.3 623.2 635.2 37 Final....................... 1390.9 469.3 463.5 470.7 468.2 471.8 478.8 481.6 486.6 481.8 484.4 491.1 476.3 487.7 38 Consumer goods. 1277.5 324.0 321.6 326.3 324.0 324.4 328.1 330.8 332.3 329.0 330.4 334.5 323.9 331.4 39 Equipment.......... 1113.4 145.3 142.0 144.4 144.2 147.7 150.6 150.9 154.3 152.9 154.1 156.3 152.6 156.4 40 Intermediate. . 1116.6 140.4 137.5 138.3 138.6 141.9 142.6 144.0 145.6 146.3 147.4 147.3 146.9 147.5 i 1972 dollars. shown separately. For description and historical data, see Industrial Production—1976 Revision (Board of Governors of the Federal Reserve Note. Published groupings include some series and subtotals not System: Washington, D.C.), December 1977. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics □ June 1979 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates except as noted. 1978 1979 1976 1977 1978 Item Oct. Nov. Dec. Jan. Feb. Mar. Apr. Private residential real estate activity (thousands of units) New Units 1 Permits authorized..................... 1,296 1,677 rl,801 rl,835 '1,789 rl,827 1,442 1,425 1,621 1,517 2 1-family............................................ 894 1,126 rl,182 r1,209 rl, 172 '1,268 920 881 1,056 1,040 3 2-or-more-family............................. 402 551 r619 '626 '617 r557 522 544 565 477 4 Started................................................. 1,538 1,986 2,019 2,054 2,107 2,074 1,679 1,381 1,786 1,749 5 1-family............................................ 1,163 1,451 1,433 1,436 1,502 1,539 *•1,139 r953 '1,266 1,279 6 2-or-more-family............................. 377 535 586 618 605 535 r540 r428 '520 470 7 Under construction, end of period1.. 1,147 1,442 1,355 1,320 1,337 1,345 rl,360 rl,344 1,316 n.a. 8 1-family............................................ 655 829 1,378 781 791 799 '812 r793 775 n.a. 9 2-or-more-family............................. 492 613 553 539 545 546 r549 r551 541 n.a. 10 Completed........................................... 1,362 1,652 1,866 1,883 1,885 1,888 rl,815 '1,894 1,954 n.a. 11 1-family............................................ 1,026 1,254 1,368 1,414 1,375 1,805 rl,331 rl,376 1,415 n.a. 12 2-or-more-family............................. 336 398 498 468 510 1,892 r484 '518 539 n.a. 13 Mobile homes shipped....................... 246 277 276 286 280 303 311 272 '270 304 Merchant builder activity in 1-family units 14 Number sold....................................... 639 819 817 900 803 802 774 697 '784 732 15 Number for sale, end of period1........ 433 407 423 407 412 413 412 410 '424 426 Price (thousands of dollars) 2 Median 16 Units sold........................................ 44.2 48.9 55.9 58.3 58.8 59.9 60.3 61.2 60.4 62.4 17 Units for sale................................... 41.6 48.2 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Average 18 Units sold........................................ 48.1 54.4 62.7 65.7 66.3 67.4 67.7 68.7 68.5 70.2 Existing Units (1-family) 19 Number sold....................................... 3,002 3,572 3,905 4,290 4,350 4,160 3,710 3,620 3,650 3,760 Price of units sold (thous. of dollars) 2 20 Median............................................ 38.1 42.9 48.7 50.1 50.7 50.9 52.0 51.9 53.8 54.7 21 Average............................................ 42.2 47.9 55.1 57.3 57.4 58.1 59.8 59.5 61.8 62.5 Value of new construction 4 (millions of dollars) Construction 22 Total put in place............................... 148,778 172,552 202,219 211,984 215,827 218,529 208,595 205,616 '211,909 214,443 23 Private.......................................................... 110,416 134,723 157,455 164,096 i 67,931 170,966 162,260 163,852 r168,739 170,353 24 Residential....................................... 60,519 80,957 93,088 95,162 97,594 98,793 92,188 94,092 '94,759 96,635 25 Nonresidential, total...................... 49,897 53,766 64,367 68,934 70,337 72,173 70,072 69,760 '73,980 73,718 Buildings: 26 Industrial................................. 7,182 7,713 10,762 12,627 12,529 13,273 12,512 13,022 '15,233 14,311 27 Commercial............................. 12,757 14,789 18,280 19,410 20,294 20,049 19,272 18,767 '20,658 21,166 28 Other........................................ 6,155 6,200 6,659 6,667 6,877 6,922 6,598 6,431 '6,977 7,153 29 Public utilities and other............ 23,803 25,064 28,666 30,230 30,637 31,929 31,688 '31,541 '31,112 31,088 30 Public.................................................. 38,312 37,828 44,762 47,888 47,897 47,563 46,335 41,763 '43,170 44,089 31 Military............................................ 1,521 1,517 1,462 1,409 1,415 1,442 1 ,621 1,438 '1,742 1,529 32 Highway.......................................... 9,439 9,280 8,627 11,428 10,956 11,176 10,015 9,037 9,332 n.a. 33 Conservation and development... 3,751 3,882 3,697 3,851 4,593 4,357 4,865 4,476 4,862 n.a. 34 Other3.............................................. 23,601 23,149 23,503 31,200 30,933 30,588 29,834 26,812 27,234 n.a. 1 Not at annual rates. Note. Census Bureau estimates for all series except (a) mobile homes 2 Not seasonally adjusted. which are private, domestic shipments as reported by the Manufactured 3 Beginning Jan. 1977 Highway imputations are included in Other. Housing Institute and seasonally adjusted by the Census Bureau, and 4 Value of new construction data in recent periods may not be strictly (b) sales and prices of existing units, which are published by the Na­ comparable with data in prior periods due to changes by the Bureau of tional 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 those reported see Construction Reports (C-30-76-5), issued by the Bureau in July 1976. to the Census Bureau from 14,000 jurisdictions through 1977, and 16,000 jurisdictions beginning with 1978. 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 1978 1979 1978 1979 Apr. 1978 1979 1979 Apr. Apr. (1967 June Sept. Dec. Mar. Dec. Jan. Feb. Mar. Apr. = 100)2 Consumer prices 3 1 All items........................................................ 6.6 10.4 10.7 8.5 8.5 13.0 .6 .9 1.2 1.0 1.1 211.5 2 Commodities............................................... 5.9 10.8 10.5 7.3 9.6 14.5 .8 1.1 1.2 1.1 1.2 203.3 8.7 12.0 18.3 4.8 10.2 17.7 1.0 1.4 1.6 1.1 1.0 232.3 4.7 10.3 7.2 8.3 9.6 12.9 .8 .9 1.0 1.1 1.3 188.9 4.7 10.2 9.0 9.1 11.3 10.0 .8 .9 1.0 .5 .9 187.2 4.3 10.4 5.5 6.9 6.7 16.5 .6 1.1 .8 1.9 1.9 189.6 7 Services......................................................... 8.0 9.9 11.0 10.3 7.2 10.6 .4 .5 1.1 .9 .9 227.0 6.5 6.5 8.2 7.3 7.7 3.6 .6 .3 .4 .2 .5 172.0 9 Services less rent....................................... 8.2 10.5 11.3 10.8 7.1 11.7 .4 .6 1.1 1.0 1.0 237.1 Other groupings 6.4 10.1 10 All items less food....................................... 6.4 9.4 8.9 9.3 8.5 12.0 .6 .8 1.0 1.0 1.2 206.3 11 All items less food and energy................... 9.7 14.2 10.4 9.7 7.7 9.3 .4 .5 .9 .8 .9 202.3 12 Homeownership........................................... 13.2 14.6 10.9 16.7 .4 .8 1.8 1.3 1.4 251.7 Producer prices 13 Finished goods............................................. 7.1 10.3 10.3 7.4 10.5 13.7 1.0 rl. 3 1.0 1.0 .9 211.2 14 Consumer.................................................. 6.9 10.7 10.6 7.5 11.1 15.6 1.2 '1.4 '1.1 1.1 .8 210.0 15 Foods.................................................... 8.5 11.3 11.4 4.9 15.3 20.1 1.2 1.8 '1.5 1.2 -.3 227.6 16 Excluding foods.................................... 5.9 10.4 10.5 8.8 8.8 12.9 1.2 '1.2 '.8 1.1 1.4 199.2 17 Capital equipment.................................... 7.7 9.2 9.1 7.0 8.8 9.8 .6 1.0 .8 .6 1.1 213.6 18 Materials.......................................-.............. 5.6 12.1 9.9 7.5 13.0 17.3 .7 '1.5 1.6 1.0 1.0 244.0 19 Intermediate1............................................ 6.3 10.7 7.2 6.9 11.2 13.2 .7 '1.2 .9 1.1 1.6 236.2 Crude 20 Nonfood................................................ 4.9 18.4 14.9 16.9 19.8 29.5 1.2 1.6 2.8 2.1 -.5 333.3 21 Food...................................................... 6.2 16.3 26.6 2.8 21.2 30.6 .3 2.8 '3.7 .2 -.3 251.6 1 Excludes intermediate materials for food manufacturing and manu- 3 Figures for consumer prices are those for all urban consumers, factured animal feeds. 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 □ June 1979 2.16 GROSS NATIONAL PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates. 1977 1978 1979 1976 1977 1978 Account Q4 Ql Q2 Q3 Q4 Ql Gross national product 1 1,700.1 1,887.2 2,107.6 1,958.1 1,992.0 2 ,,087.5 2,136.1 2,214.8 2,264.8 By source 2 Personal consumption expenditures.................... 1,090.2 1,206.5 1,340.1 1,255.2 1,276.7 1,322.9 1,356.9 1,403.9 1,440.4 3 Durable goods.................................................. 156.6 178.4 197.5 187.2 183.5 197.8 199.5 209.1 211.4 4 Nondurable goods............................................ 442.6 479.0 526.5 496.9 501.4 519.3 531.7 553.4 567.9 5 Services.............................................................. 491.0 549.2 616.2 571.1 591.8 605.8 625.8 641.4 661.0 6 Gross private domestic investment..................... 243.0 297.8 345.6 313.5 322.7 345.4 350.1 364.0 371.1 7 Fixed investment............................................... 232.8 282.3 329.6 300.5 306.0 325.3 336.5 350.5 354.5 8 Nonresidential............................................... 164.6 190.4 222.6 200.3 205.6 220.1 227.5 237.1 244.1 9 Structures................................................... 57.3 63.9 77.8 67.4 68.5 76.6 80.9 85.1 85.2 10 Producers’ durable equipment................. 107.3 126.5 144.8 132.8 137.1 143.5 146.6 152.0 158.9 11 Residential structures................................... 68.2 91.9 107.0 100.2 100.3 105.3 109.0 113.4 110.4 12 Nonfarm.................................................... 65.8 88.9 103.8 97.5 97.3 102.1 105.7 110.2 107.2 13 Change in business inventories........................ 10.2 15.6 16.0 13.1 16.7 20.1 13.6 13.5 16.6 14 Nonfarm........................................................ 12.2 15.0 16.7 10.4 16.9 22.1 14.6 13.4 17.8 15 Net exports of goods and services....................... 7.4 -11.1 -12.0 -23.2 -24.1 -5.5 -10.7 -7.6 -5.3 16 Exports.............................................................. 163.2 175.5 204.8 172.1 181.7 205.4 210.1 221.9 233.8 17 Imports.............................................................. 155.7 186.6 216.8 195.2 205.8 210.9 220.8 229.5 239.0 18 Government purchases of goods and services... 359.5 394.0 433.9 412.5 416.7 424.7 439.8 454.5 458.5 19 Federal............................................................... 129.9 145.1 153.8 152.2 151.5 147.2 154.0 162.5 164.5 20 State and 1 ocal.................................................. 229.6 248.9 280.2 260.3 265.2 277.6 285.8 292.0 294.0 By major type of product 21 Final sales, total.................................................... 1,689.9 1,871.6 2,091.6 1,945.0 1,975.3 2,067.4 2,122.5 2,201.3 2,248.1 22 Goods................................................................. 760.3 832.6 918.4 859.6 861.8 912.2 927.3 972.5 1,000.8 23 Durable.......................................................... 304.6 341.3 376.8 347.4 351.2 375.8 380.1 400.1 426.0 24 Nondurable.................................................... 455.7 491.3 541.7 512.2 510.6 536.4 547.2 572.4 574.8 25 Services.............................................................. 778.0 862.8 962.5 893.6 926.4 952.0 973.7 997.7 1,025.9 26 Structures.......................................................... 16.1.9 191.8 226.7 204.9 203.8 223.4 235.0 244.7 238.1 27 Change in business inventories............................ 10.2 15.6 16.0 13.1 16.7 20.1 13.6 13.5 16.6 28 Durable goods.................................................. 5.3 8.4 11.7 6.3 14.8 10.8 10.2 10.8 20.1 29 Nondurable goods............................................ 4.9 7.2 4.3 6.8 1.9 9.3 3.4 2.7 -3.4 30 Memo: Total GNP in 1972 dollars................... 1,271.0 1,332.7 1,385.7 1,354.5 1,354.2 1,382.6 1,391.4 1,414.7 1,416.3 National income 31 1,359.2 1,515.3 1,703.7 1,576.9 1,603.1 1,688.1 1,728.4 1,795.2 1,835.4 32 Compensation of employees................................ 1,036.8 1,153.4 1,301.4 1,199.7 1,241.0 1,287.8 1,317.1 1,359.8 1,406.8 33 Wages and salaries............................................ 890.1 983.6 1,101.0 1,021.2 1,050.8 1,090.2 1,113.4 1,149.4 1,185.2 34 Government and government enterprises.. 187.6 200.8 216.1 208.1 211.4 213.9 216.8 222.3 225.1 35 Other.............................................................. 702.5 782.9 884.8 813.1 839.3 876.3 896.6 927.1 960.1 36 Supplement to wages and salaries................... 146.7 169.8 200.5 178.4 190.2 197.6 203.6 210.4 221.5 37 Employer contributions for social insurance................................................ 69.7 79.4 94.5 82.4 90.2 93.6 95.7 98.6 105.6 38 Other labor income....................................... 77.0 90.4 105.9 96.1 100.0 104.0 107.9 111.8 115.9 39 Proprietors’ income1............................................ 88.6 99.8 113.2 107.3 105.0 110.1 114.5 123.0 123.6 40 Business and professional1............................... 70.2 79.5 87.8 82.3 83.1 86.1 89.6 92.6 93.0 41 Farm1................................................................ 18.4 20.3 25.3 25.1 21.9 24.0 25.0 30.4 30.6 42 Rental income of persons2................................... 22.5 22.5 23.4 22.7 22.8 22.2 24.3 24.4 24.7 43 Corporate profits1................................................ 127.0 144.2 159.5 148.2 132.6 163.4 165.2 176.6 166.0 44 Profits before tax3............................................ 155.9 173.9 202.0 178.3 172.1 205.5 205.4 224.9 226.9 45 Inventory valuation adjustment....................... -14.5 -14.8 -24.4 -14.8 -23.5 -24.9 -20.9 -28.4 -40.2 46 Capital consumption adjustment..................... -14.4 -14.9 -18.1 -15.3 -16.1 -17.2 -19.3 -19.9 -20.7 47 Net interest............................................................ 84.3 95.4 106.3 99.0 101.7 104.6 107.4 111.4 114.5 1 With inventory valuation and capital consumption adjustments. 3 For after-tax profits, dividends, and the like, 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. 1977 1978 1979 1976 1977 1978 Account Q4 Ql Q2 Q3 Q4 Ql Personal income and saving 1 Total personal income. 1.380.9 1.529.0 1.708.0 1.593.0 1,628.9 1.682.4 1.731.7 1.789.0 1.836.0 2 Wage and salary disbursements.................... 890.1 983.6 1,100.9 1,021.2 1.050.8 1.090.2 1,113.2 1,149.4 1,185.4 3 Commodity-producing industries.............. 307.5 343.7 390.2 357.1 365.9 387.0 396.4 411.3 426.8 4 Manufacturing......................................... 237.5 266.3 299.9 277.3 286.9 296.1 302.0 314.4 327.1 5 Distributive industries................................. 216.4 239.1 268.9 247.5 257.0 266.4 271.6 280.4 290.5 6 Service industries........................................ 178.6 200.1 225.8 208.5 216.5 222.8 228.5 235.4 242.8 7 Government and government enterprises. 187.6 200.8 216.1 208.1 211.4 213.9 216.7 222.3 225.3 8 Other labor income........................................ 77.0 90.4 105.9 96.1 100.0 104.0 107.9 111.8 115.9 9 Proprietors’ income1.............. 88.6 99.8 113.2 107.3 105.0 110.1 114.5 123.0 123.6 10 Business and professional1. 70.2 79.5 87.8 82.3 83.1 86.1 89.6 92.6 93.0 11 Farm1.................................. 18.4 20.3 25.3 25.1 21.9 24.0 25.0 30.4 30.6 12 Rental income of persons2. 22.5 22.5 23.4 22.7 22.8 22.2 24.3 24.4 24.7 13 Dividends............................ 37.9 43.7 49.3 46.3 47.0 48.1 50.1 51.9 54.0 14 Personal interest income... 126.3 141.2 159.0 146.0 151.4 156.3 161.7 166.6 172.4 15 Transfer payments......................................... 193.9 208.8 226.0 215.9 219.2 220.6 230.4 233.9 239.0 16 Old-age survivors, disability, and health insurance benefits............................... 92.9 105.0 117.4 110.1 112.1 113.7 121.1 122.7 124.8 17 Less: Personal contributions for social insurance........................................... 55.5 61.0 69.7 62.6 67.2 69.2 70.5 72.1 78.8 18 Equals: Personal income.............................. 1.380.9 1.529.0 1.708.0 1.593.0 1.628.9 1.682.4 1.731.7 1.789.0 1.836.0 19 Less: Personal tax and nontax payments.... 196.5 226.0 256.2 233.3 237.3 249.1 263.2 275.1 272.9 20 Equals: Disposable personal income.............. 1,184.4 1.303.0 1.451.8 1,359.6 1,391.6 1.433.3 1.468.4 1.513.9 1.563.2 21 Less: Personal outlays................................... 1,116.3 1.236.1 1.374.9 1,285.9 1,309.2 1,357.0 1.392.5 1.440.9 1.478.3 22 Equals: Personal saving................................... 68.0 66.9 76.9 73.7 82.4 76.3 76.0 73.0 84.9 Memo items Per capita (1972 dollars) 23 Gross national product..................... 5,906 6,144 6,340 6,226 6,215 6,334 6,360 6,452 6,449 24 Personal consumption expenditures. 3,808 3,954 4,080 4,030 4,009 4,060 4,092 4,159 4,155 25 Disposable personal income............. 4,136 4,271 4,421 4,365 4,370 4,399 4,428 4,485 4,508 26 Saving rate (percent)............................ 5.7 5.1 5.3 5.4 5.9 5.3 5.2 4.8 5.4 Gross saving 27 Gross private saving.............................................. 270.7 290.8 320.1 304.3 305.4 319.9 325.7 329.6 339.5 28 Personal saving...................................................... 68.0 66.9 76.9 73.7 82.4 76.3 76.0 73.0 84.9 29 Undistributed corporate profits1......................... 24.8 28.7 26.3 28.0 15.6 30.3 29.0 30.3 22.9 30 Corporate inventory valuation adjustment......... -14.5 -14.8 -24.4 -14.8 -23.5 -24.9 -20.9 -28.4 -40.2 Capital consumption allowances 31 Corporate.............................................................. 111.5 120.9 132.5 124.6 127.4 130.5 134.7 137.4 140.3 32 Noncorporate........................................................ 66.3 74.3 84.4 77.9 79.9 82.8 86.1 89.0 91.4 33 Wage accruals less disbursements...................... 34 Government surplus, or deficit (—), national income and product accounts...................... -33.2 -18.6 -1.6 -29.6 -21.1 6.2 .6 8.0 8.7 35 Federal............................................................... -53.8 -48.1 -29.9 -58.6 -52.6 -23.6 -22.8 -20.8 -18.4 36 State and local.................................................. 20.7 29.6 28.3 29.0 31.5 29.8 23.4 28.8 27.1 37 Capital grants received by the United States, net.................................................................. 1.1 38 Investment............................................................. 241.7 276.9 320.4 279.5 286.4 326.6 326.6 342.0 351.3 39 Gross private domestic..................................... 243.0 297.8 345.6 313.5 322.7 345.4 350.1 364.0 371.1 40 Net foreign........................................................ -1.2 -20.9 -25.2 -34.1 -36.3 -18.9 -23.5 -22.1 -19.8 41 Statistical discrepancy.......................................... 4.2 4.7 1.8 4.8 2.2 .5 .4 4.3 2.1 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 □ June 1979 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 1976 1977 1978 Q4 Ql Q2 Q3 Q4 1 Merchandise exports............................................................... 114,694 120,576 141,844 29,637 30,787 35,256 36,486 39,315 2 Merchandise imports.............................................................. 124,047 151,706 175,988 39,009 42,707 43,125 44,478 45,678 3 Merchandise trade balance2............................................... -9,353 -31,130 -34,144 -9,372 - 11,920 -7,869 -7,992 -6,363 4 Military transactions, net........................................................ 312 1,334 531 5 210 444 12 -136 5 Investment income, net3......................................................... 15,933 17,507 19,915 3,812 4,877 4,581 4,878 5,580 6 Other service transactions, net............................................... 2,469 1,705 2,814 482 532 835 666 781 9,361 -10,585 -10,885 -5,072 -6,302 -2,009 -2,436 -138 8 Remittances, pensions, and other transfers........................... -1,878 -1,932 -2,048 -473 -504 -536 -496 -513 9 U.S. government grants (excluding military)....................... -3,145 -2,776 -3,028 -591 -778 -781 -779 -691 10 Balance on current account3.................................................... 4,339 -15,292 -15,961 -6,136 -7,584 -3,326 -3,711 -1,342 11 Not seasonally adjusted3.................................................... -5,245 -6,382 -2,803 -6,326 -449 12 Change in U.S. government assets, other than official reserve assets, net (increase, —)..................................... -4,213 -3,679 -4,657 -838 -896 -1,176 -1,498 -1,086 13 Chanee in U.S. official reserve assets (increase. — 'I............. -2,530 -231 872 246 329 115 182 14 Gold..................................................................................... -118 -65 -60 -65 15 Special drawing rights (SDRs)........................................... -78 -121 1,249 -29 -16 -104 -43 1,412 16 Reserve position in International Monetary Fund........... -2,212 -294 4,231 42 324 437 195 3,275 17 Foreign currencies............................................................... -240 302 -4,543 47 -62 -4 -37 -4,440 18 Change in U.S. private assets abroad (increase, —)3............ -43,865 -30,740 -54,963 -13,862 -14,417 -5,320 -8,833 -26,394 19 Bank-reported claims.......................................................... -21,368 -11,427 -33,957 -8,750 -6,270 -503 -5,622 -21,562 20 Nonbank-reported claims................................................... -2,030 -1,700 -2,256 -1,184 -2,222 267 -36 -265 21 Long-term......................................................................... 5 25 33 -279 -57 80 62 -52 22 Short-term........................................................................ -2,035 -1,725 -2,289 -905 -2,165 187 -98 -213 23 U.S. purchase of foreign securities, net............................. -8,852 -5,398 -3,389 -731 -949 -1.103 -467 -870 24 U.S. direct investments abroad, net3................................. -11,614 -12,215 -15,361 -3,197 -4,976 -3,981 -2,708 -3,697 25 Change in foreign official assets in the United States (increase, +).................................................................... 18,073 37,124 33,967 15,543 15,760 -5,685 4,852 19,040 26 U.S. Treasury securities...................................................... 9,333 30,294 24,063 12,900 12,965 -5,728 3,029 13,797 27 Other U.S. government obligations.................................. 573 2,308 656 973 117 211 443 -115 28 Other U.S. government liabilities5................................... 4,993 1,644 2,810 390 804 -312 350 1,968 29 Other U.S. liabilities reported by U.S. banks................... 969 773 5,043 909 1,456 -493 946 3,134 30 Other foreign official assets6.............................................. 2,205 2,105 1,395 371 418 637 84 256 31 Change in foreign private assets in the United States 18,897 13,746 29,293 4,522 2,336 6,090 10,637 10,230 32 U.S. bank-reported liabilities............................................. 10,990 6,719 16,860 3,143 -314 1,836 7,965 7,373 33 U.S. nonbank-reported liabilities...................................... -507 257 1,676 425 495 248 986 -53 34 Long-term......................................................................... -958 -620 —49 -242 38 -68 106 -125 35 Short-term........................................................................ 451 877 1,725 667 457 316 880 72 36 Foreign private purchases of U.S. Treasury securities, net................................................................................. 2,783 563 2,248 -299 881 847 -1,053 1,573 37 Foreign purchases of other U.S. securities, net................ 1,284 2,869 2,899 803 462 1,308 533 596 38 Foreign direct investments in the United States, net3....... 4,347 3,338 5,611 450 812 1,852 2,206 741 39 Allocation of SDRs............................................................... 40 Discrepancy............................................................................. 9,300 -927 11,449 771 4,555 9,087 -1,562 -630 41 Owing to seasonal adjustments.......................................... 1,445 917 108 -2,455 1,431 42 Statistical discrepancy in recorded data before seasonal adjustment.................................................................... 9,300 -927 11,449 -674 3,638 8,979 893 -2,061 Memo items Changes in official assets 43 U.S. official reserve assets (increase, —)............................. -2,530 -231 872 246 329 115 182 44 Foreign official assets in the United States (increase, +).... 13,080 35,480 31,157 15,153 14,956 -5,373 4,502 17,072 45 Changes in Organization of Petroleum Exporting Countries (OPEC) official assets in the Unites States (part of line 25 above).............................................................. 9,581 6,733 -570 1,024 1,963 -2,838 -1,592 1,897 46 Transfers under military grant programs (excluded from lines 1, 4, and 9 above)................................................... 373 194 274 71 75 57 69 73 1 Seasonal factors are no longer calculated for lines 13 through 46. excludes certain military sales to Israel from exports and excludes U.S. 2 Data are on an international accounts (IA) basis. Differs from the government 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 Current Business (U.S. Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Trade and Reserve Assets A55 3.11 U.S. FOREIGN TRADE Millions of dollars; monthly data are seasonally adjusted. 1978 1979 Item 1976 1977 1978 Oct. Nov. Dec. Jan. Feb. Mar. Apr. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments......................................... 115,156 121,150 143,575 12,901 13,451 13,282 13,132 13,507 14,452 13,883 2 GENERAL IMPORTS including merchandise for immediate con­ sumption plus entries into bonded warehouses...................................... 121,009 147,685 172,026 14,852 14,825 15,032 16,231 14,806 15,273 16,036 3 Trade balance...................................... -5,853 -26,535 -28,451 -1,950 -1,374 -1,749 -3,099 -1,299 -821 -2,153 Note. Bureau of Census data reported on a free-alongside-ship and are reported separately in the “service account”). On the import (f.a.s.) value basis. Effective January 1978, major changes were made in side, the largest single adjustment is the addition of imports into the coverage, reporting, and compiling procedures. The international- Virgin Islands (largely oil for a refinery on St. Croix), which are not accounts-basis data adjust the Census basis data for reasons of coverage included in Census statistics. and timing. On the export side, the largest adjustments are: (a) the addition of exports to Canada not covered in Census statistics, and (b) the exclusion Source. FT 900 “Summary of U.S. Export and Import Merchandise of military exports (which are combined with other military transactions Trade” (U.S. Department of Commerce, Bureau of the Census). 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 1978 1979 Type 1976 1977 1978 Nov. Dec. Jan. Feb. Mar. Apr. May** 1 Total.................................................... 18,747 19,312 18,650 17,967 18,650 20,468 20,292 21,658 21,403 322,230 2 Gold stock, including Exchange Stabilization Fund1........................ 11,598 11,719 11,671 11,642 11,671 11,592 11,544 11,479 11,418 11,354 3 Special Drawing Rights2................... 2,395 2,629 4,374 1,522 1,558 2,661 2,672 2,667 2,602 32,624 4 Reserve position in International Monetary Fund............................... 4,434 4,946 1,047 1,099 1,047 1,017 1,120 1,121 1,097 31,193 5 Convertible foreign currencies4......... 320 18 1,558 3,704 4,374 5,198 4,956 6,391 6,286 7,059 1 Gold held under earmark at Federal Reserve Banks for foreign and 3 Beginning July 1974, the IMF adopted a technique for valuing the international accounts is not included in the gold stock of the United SDR based on a weighted average of exchange rates for the currencies States; see table 3.24. of 16 member countries. The U.S. SDR holdings and reserve position in 2 Includes allocations by the International Monetary Fund of SDRs as the IMF also are valued on this basis beginning July 1974. follows: $867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; $710 4 Beginning November 1978, valued at current market exchange rates. million on Jan. 1, 1972; and $1,139 million on Jan. 1, 1979; plus net transactions in SDRs. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A56 International Statistics □ June 1979 3.13 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data Millions of dollars, end of period 1978 1979 Asset account 1975 1976 1977 Sept. Oct. Nov. Dec. Jan. Feb. Mar.p All foreign countries 1Total, all currencies............................ 176,493 219,420 258,897 287,369 '292,594 '295,980 '306,145 '295,118 295,341 305,821 2 Claims on United States.................... 6,743 7,889 11,623 14,976 12,169 13,426 16,690 15,340 15,065 21,669 3 Parent bank..................................... 3,665 4,323 7,806 10,693 7,879 9,046 12,161 10,789 10,188 16,092 4 Other................................................ 3,078 3,566 3,817 4,283 4,290 4,380 4,529 4,551 4,877 5,577 5 Claims on foreigners.......................... 163,391 204,486 238,848 262,063 '269,410 '271,468 '278,135 '268,116 268,052 271,206 6 Other branches of parent bank---- 34,508 45,955 55,772 63,493 67,748 68,403 70,340 66,653 64,249 64,973 7 Banks............................................... 69,206 83,765 91,883 95,222 98,104 101,043 102,805 97,696 99,147 101,253 8 Public borrowers1.......................... 5,792 10,613 14,634 r23,890 '24,220 '23,324 '24,041 '24,060 24,874 25,095 9 Nonbank foreigners....................... 53,886 64,153 76,560 r79,458 '79,338 '78,698 '80,949 79,707 79,782 79,885 10 Other assets......................................... 6,359 7,045 8,425 10,330 11,015 11,086 11,320 11,662 12,224 12,946 11 Total payable in U.S. dollars............. 132,901 167,695 193,764 '211,799 '210,938 218,289 224,290 '214,312 213,100 222,533 12 Claims on United States.................... 6,408 7,595 11,049 14,168 11,328 12,530 15,732 14,506 14,130 20,636 13 Parent bank..................................... 3,628 4,264 7,692 10,535 7,688 8,877 11,975 10,596 9,958 15,901 14 Other................................................ 2,780 3,332 3,357 3,633 3,640 3,653 3,757 3,910 4,172 4,735 15 Claims on foreigners.......................... 123,496 156,896 178,896 r193,193 '194,881 200,777 203,498 '194,416 193,269 195,948 16 Other branches of parent bank.... 28,478 37,909 44,256 50,880 52,887 54,721 55,410 51,799 49,615 49,735 17 Banks............................................... 55,319 66,331 70,786 71,892 72,644 76,473 78,389 '73,458 74,393 76,765 18 Public borrowers1........................... 4,864 9,022 12,632 r20,235 '20,295 '19,612 '19,862 20,092 20,613 21,277 19 Nonbank foreigners....................... 34,835 43,634 51,222 r50,186 '49,055 '49,971 '49,837 49,067 48,648 48,171 20 Other assets........................................ 2,997 3,204 3,820 4,438 4,729 4,982 5,060 5,390 5,701 5,949 United Kingdom 21 Total, all currencies............................ 74,883 81,466 90,933 99,084 101,887 102,032 106,593 100,786 101,179 102,144 22 Claims on United States.................... 2,392 3,354 4,341 2,940 3,119 3.706 5,370 3,960 3,912 5,019 23 Parent bank..................................... 1,449 2,376 3,518 2,014 2,230 2,779 4,448 2,930 2,689 3,544 24 Other................................................ 943 978 823 926 889 927 922 1,030 1,223 1,475 25 Claims on foreigners.......................... 70,331 75,859 84,016 93,364 95,774 95,220 98,137 93,690 94,032 93,840 26 Other branches of parent bank.... 17,557 19,753 22,017 24,691 26,516 25,802 27,830 25,911 24,474 24,911 27 Banks............................................... 35,904 38,089 39,899 42,677 43,926 44,353 45,013 42,531 44,032 42,964 28 Public borrowers1........................... 881 1,274 2,206 4,549 4,692 4,526 4,522 4,549 4,548 4,608 29 Nonbank foreigners....................... 15,990 16,743 19,895 21,447 20,640 20,539 20,772 20,699 20,978 21,357 30 Other assets......................................... 2,159 2,253 2,576 2,780 2,994 3,106 3,086 3,136 3,235 3,285 31 Total payable in U.S. dollars............. 57,361 61,587 66,635 70,008 70,209 71,761 75,860 70,502 70,525 71,499 32 Claims on United States.................... 2,273 3,275 4,100 2,598 2,877 3,475 5,113 3,738 3,618 4.710 33 Parent bank..................................... 1,445 2,374 3,431 1,895 2,187 2,727 4,386 2,878 2,610 3,488 34 Other................................................ 828 902 669 703 690 748 727 860 1,008 1,222 35 Claims on foreigners........................... 54,121 57,488 61,408 66,242 66,132 67,031 69,416 65,364 65,416 65,214 36 Other branches of parent bank,... 15,645 17,249 18,947 20,934 21,377 21,197 22,838 21,171 19,884 20,370 37 Banks............................................... 28,224 28,983 28,530 29,859 29,680 30,565 31,482 29,113 30,185 29,393 38 Public borrowers1........................... 648 846 1,669 3,471 3,595 3,467 3,317 3,342 3,414 3,523 39 Nonbank foreigners....................... 9,604 10,410 12,263 11,978 11,480 11,802 11,779 11,738 11,933 11,928 40 Other assets......................................... 967 824 1,126 1,168 1,200 1,255 1,331 1,400 1,491 1,575 Bahamas and Caymans 41 45,203 66,774 79,052 88,755 '86,290 89,720 91,085 87,899 87,993 96,307 42 Claims on United States.................... 3,229 3,508 5,782 10,053 7,247 7,501 8,985 9,753 8,994 14,560 43 Parent bank..................................... 1,477 1,141 3,051 7,090 4,255 4,437 5,779 6,646 5,780 10,957 44 Other................................................ 1,752 2,367 2,731 2,963 2,992 3,064 3,206 3,107 3,214 3,603 45 Claims on foreigners.......................... 41,040 62,048 71,671 76,651 '76,867 80,006 79,774 75,792 76,507 79,070 46 Other branches of parent bank.... 5,411 8,144 11,120 12,348 12,618 13,526 12,906 11,477 11,841 12,086 47 Banks.............................................. 16,298 25,354 27,939 29,472 30,317 33,060 33,675 31,638 31,534 33,839 48 Public borrowers1........................... 3,576 7,105 9,109 '12,356 '12,088 '11,529 '11,514 11,392 12,125 12,541 49 Nonbank foreigners....................... 15,756 21,445 23,503 '22,475 '21,844 '21,891 '21,679 21,285 21,007 20,604 50 Other assets........................................ 933 1,217 1,599 2,051 2,176 2,213 2,326 2,354 2,492 2,677 51 Total payable in U.S. dollars............. 41,887 62,705 73,987 83,007 '80,222 83,710 84,767 81,669 81,736 89,861 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Overseas Branches A57 3.13 Continued 19782 1979 Liability account 1975 1976 1977 Sept.r Oct.r Nov.r Dec.r Jan.r Feb. Mar.P All foreign countries 52 Total, all currencies............................... 176,493 219,420 258,897 287,369 292,594 295,980 306,145 295,118 295,341 305,821 53 To United States................................... 20,221 32,719 44,154 48,016 49,974 55,651 57,005 52,212 53,841 55,139 54 Parent bank........................................ 12,165 19,773 24,542 22,115 24,412 28,997 27,682 23,951 23,696 20,109 55 Other banks in United States........ 10,064 8,362 9,084 12,304 8,188 9,143 12,812 56 Nonbanks............................................ 15,837 17,200 17,570 17,019 20,073 21,002 22,218 57 Foreigners............................................... 149,815 179,954 206,579 230,087 233,023 230,707 238,973 232,706 231,398 240,241 58 Other branches of parent bank.... 34,111 44,370 53,244 61,505 64,916 65,807 67,994 65,246 62,559 62,709 59 Banks................................................... 72,259 83,880 94,140 97,309 95,577 93,434 97,247 92,340 93,751 101,691 60 Official institutions............................ 22,773 25,829 28,110 33,978 33,612 32,212 31,936 31,137 31,704 34,050 61 Nonbank foreigners.......................... 20,672 25,877 31,085 37,295 38,918 39,254 41,796 43,983 43,384 41,791 62 Other liabilities...................................... 6,456 6,747 8,163 9,266 9,597 9,622 10,167 10,200 10,102 10,441 63 Total payable in U.S. dollars............... 135,907 173,071 198,572 215,230 215,517 222,873 230,160 220,210 219,734 228,180 64 To United States.................................... 19,503 31,932 42,881 45,862 47,741 53,697 54,869 50,182 51,651 53,061 65 Parent bank........................................ 11,939 19,559 24,213 21,165 23,432 28,124 26,611 22,967 22,635 19,077 66 Other banks in United States........ 9,724 8,008 8,813 12,050 7,927 8,837 12,577 67 Nonbanks............................................ 14,973 16,301 16,760 16,208 19,288 20,179 21,407 68 To foreigners.......................................... 112,879 137.612 151,363 164,662 163,061 164,194 169,987 164,437 162,438 169,259 69 Other branches of parent bank.... 28,217 37,098 43,268 49,897 51,973 53,323 53,894 51,305 48,650 48,493 70 Banks................................................... 51,583 60,619 64,872 62,948 58,530 58,333 62,536 58,025 58,809 65,119 71 Official institutions............................ 19,982 22,878 23,972 28,259 27,707 26,667 26,404 25,567 26,089 28,299 72 Nonbank foreigners.......................... 13,097 17,017 19,251 23,558 24,851 25,871 27,153 29,540 28,890 27,348 73 Other liabilities...................................... 3,526 3,527 4,328 4,706 4,715 4,982 5,304 5,591 5,645 5,860 United Kingdom 74 Total, all currencies............................. 74,883 81,466 90,933 99,084 101,887 102,032 106,593 100,786 101,179 102,144 75 To United States.................................. 5,646 5,997 7,753 7,507 7,560 8,295 9,730 8,118 9,538 10,086 76 Parent bank...................................... 2,122 1,198 1,451 1,346 1,389 1,609 1,887 1,585 2,055 1,461 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 .. . .. . . . .. . . y 3,523 4,798 O, o\)Z 3 3 , , 0 1 1 5 1 0 2 3 , , 9 2 4 2 9 2 3 3 , , 4 2 5 3 2 4 4 3 , , 2 61 3 1 2 2 3 , , 6 8 9 4 3 0 4 3 , , 2 2 6 1 7 6 4 3 , , 9 6 4 7 8 7 79 To foreigners........................................ 67,240 73,228 80,736 88,204 90,766 90,105 93,202 88,942 87,798 88,068 80 Other branches of parent bank... 6,494 7,092 9,376 11,852 12,030 13,015 12,786 12,712 11,303 10,910 81 Banks................................................. 32,964 36,259 37,893 37,333 38,854 37,795 39,917 36,142 36,655 38,318 82 Official institutions......................... 16,553 17,273 18,318 22,019 21,980 20,940 20,963 19,700 20,313 21,845 83 Nonbank foreigners....................... 11,229 12,605 15,149 17,000 17,902 18,355 19,536 20,388 19,527 16,995 84 Other liabilities.................................... 1,997 2,241 2,445 3,373 3,561 3,632 3,661 3,726 3,843 3,990 85 Total payable in U.S. dollars............ 57,820 63,174 67,573 70,227 71,158 72,812 77,030 72,048 72,293 72,639 86 To United States.................................. 5,415 5,849 7,480 7,124 7,198 7,908 9,328 7,736 9,179 9,756 87 Parent bank...................................... 2,083 1,182 1,416 1,279 1,329 1,563 1,836 1,539 2,018 1,418 88 Other banks in United States___ 3,092 2,902 3,178 4,144 2,601 3,122 3,626 89 Nonbanks.......................................... J 3,332 4,667 6,064 2,753 2,967 3,167 3,348 3,596 4,039 4,712 90 To foreigners......................................... 51,447 56,372 58,977 61,757 62,589 63,389 66,216 62,629 61,405 61,215 91 Other branches of parent bank... 5,442 5,874 7,505 9,175 9,169 10,174 9,635 9,890 8,393 7,985 92 Banks................................................. 23,330 25,527 25,608 22,592 22,837 22,672 25,287 21,642 21,911 23,017 93 Official institutions......................... 14,498 15,423 15,482 18,185 17,893 17,075 17,091 15,834 16,544 18,030 94 Nonbank foreigners........................ 8,176 9,547 10,382 11,805 12,690 13,468 14,203 15,263 14,557 12,183 95 Other liabilities.................................... 959 953 1,116 1,346 1,371 1,515 1,486 1,683 1,709 1,668 Bahamas and Caymans 96 Total, all currencies............................. 45,203 66,774 79,052 88,755 86,290 89,720 91,085 87,899 87,993 96,307 97 To United States................................. 11,147 22,721 32,176 34,379 35,677 40,631 38,781 36,927 36,546 37,623 98 Parent bank...................................... 7,628 16,161 20,956 16,750 18,045 22,252 19,806 17,054 15,726 13,681 1 9 0 9 0 N Ot 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 .. . .. . . . .. . . } 3,520 6,560 11,220 1 5 2 , , 5 1 1 1 1 8 1 4 3 , , 4 2 1 1 5 7 1 4 3 , , 8 5 5 2 2 7 1 6 2 , , 1 7 9 7 9 6 1 4 5 , , 2 5 7 9 5 8 1 4 5 , , 8 9 6 5 3 7 1 7 6 , , 3 5 7 72 0 101 To foreigners........................................ 32,949 42,899 45,292 52,574 48,953 47,400 50,447 49,153 49,534 56,585 102 Other branches of parent bank... 10,569 13,801 12,816 14,762 15,635 14,715 16,094 14,266 13,697 13,983 103 Banks................................................. 16,825 21,760 24,717 27,393 22,512 21,974 23,104 22,290 23,299 28,725 104 Official institutions......................... 3,308 3,573 3,000 4,451 4,402 4,306 4,208 4,602 4,429 4,956 105 Nonbank foreigners....................... 2,248 3,765 4,759 5,968 6,404 6,405 7,041 7,995 8,109 8,921 106 Other liabilities.................................... 1,106 1,154 1,584 1,802 1,660 1,689 1,857 1,819 1,913 2,099 107 Total payable in U.S. dollars............ 42,197 63,417 74,463 84,317 81,323 85,012 86,364 83,152 83,332 91,474 1 In May1978 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 □ June 1979 3.14 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1978 1979 Item 1976 1977 1978 Oct. Nov. Dec. Jan. Feb. Mar.p Apr.® A. By type 1 Total1............................................................................ 95,634 131,097 162,303 152,203 156,285 162,303 162,656 159,813 154,325 147,102 2 Liabilities reported by banks in the United States2.................................................................. 17,231 18,003 23,086 22,040 21,719 23,086 22,600 23,163 23,239 24,021 3 U.S. Treasury bills and certificates3....................... 37,725 47,820 67,650 57,967 62,635 67,650 68,415 65,558 59,652 51,329 U.S. Treasury bonds and notes 11,788 32,164 35,877 36,153 36,222 35,877 36,026 35,509 36,033 36,285 5 Nonmarketable4..................................................... 20,648 20,443 20,970 21,426 20,993 20,970 20,952 20,912 20,471 20,467 6 U.S. securities other than U.S. Treasury 8,242 12,667 14,720 14,617 14,716 14,720 14,663 14,671 14,930 15,000 B. By area 7 Total............................................ 95,634 131,097 162,303 152,203 156,285 162,303 162,656 159,813 154,325 147,102 8 Western Europe1....................... 45,882 70,748 92,946 85,118 88,412 92,946 94,397 92,587 90,166 84,643 9 Canada........................................ 3,406 2,334 2,486 2,619 2,446 2,486 2,150 1,911 3,088 3,044 10 Latin America and Caribbean 4,926 4,649 5,029 4,615 4,499 5,029 4,330 4,402 4,201 4,783 11 Asia.............................................. 37,767 50,693 58,656 56,928 57,834 58,656 58,962 57,753 54,063 51,270 12 Africa........................................... 1,893 1,742 2,443 2,184 2,301 2,443 2,299 2,371 2,135 2,529 13 Other countries6....................... 1,760 931 743 741 793 743 518 789 672 833 1 Includes the Bank for International Settlements. 5 Debt securities of U.S. government corporations and federally 2 Principally demand deposits, time deposits, bankers acceptances, sponsored 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 Department data and on data reported to payable in foreign currencies through 1974) and Treasury bills issued to the Treasury Department by banks (including Federal Reserve Banks) official institutions of foreign countries. and securities dealers in the United States. 4 Excludes notes issued to foreign official nonreserve agencies. Includes bonds and notes payable in foreign currencies. 3.15 LIABILITIES TO AND CLAIMS ON FOREIGNERS Reported by Banks in the United States Payable in Foreign Currencies Millions of dollars, end of period 1978 1979 Item 1975 1976 1977 June Sept. Dec. Mar.p 1 Banks’ own liabilities........................................................................... 560 781 925 1,464 1,768 2,233 1,989 2 Banks’ own claims1.............................................................................. 1,459 1,834 2,356 2,622 2,989 3,565 2,646 3 Deposits............................................................................................... 656 1,103 941 1,084 1,400 1,734 1,157 4 Other claims....................................................................................... 802 731 1,415 1,538 1,589 1,831 1,489 5 Claims of banks’ domestic customers2............................................ 809 446 367 476 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 for the accounts of their domestic customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-reported Data A59 3.16 LIABILITIES TO FOREIGNERS Reported by Banks in the United States Payable in U.S. dollars Millions of dollars, end of period 1978 1979 Item 1975 1976 1977 Oct. Nov. Dec. Jan. Feb. Mar.P Apr.** A. By holder and type of liability 1 All foreigners............................................................. 95,590 110,657 126,168 150,296 158,231 166,011 163,824 163,479 166,997 158,058 2 Banks’ own liabilities............................................... 71,087 75,265 77,711 74,210 76,287 85,232 84,558 4 3 D Ti e m m e a d n e d p d o e s p it o s1 si .. t . s .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 3 0 , , 5 2 6 6 4 7 1 1 6 1 , , 8 3 0 4 3 7 1 1 1 8 , , 5 9 2 9 1 6 1 1 2 7 , , 2 5 7 5 9 3 1 1 8 2 , , 2 5 6 1 4 4 1 1 9 2 , , 1 2 9 9 9 8 1 1 2 7 , , 1 78 2 5 0 1 11 7, , 2 9 0 6 1 7 1 12 6 , , 3 6 8 9 9 6 1 1 8 2 , , 3 5 6 1 8 6 5 Other2..................................................................... 9,652 8,641 9,527 8,889 9,235 8,302 10,045 6 Own foreign offices3............................................ 31,603 35,847 36,687 35,416 37,883 47,845 43,630 7 Banks’ custody liabilities4...................................... 79,209 82,966 88,300 89,614 87,192 81,765 73,500 8 U.S. Treasury bills and certificates 5................ 37,414 40,744 48,906 59,068 63,130 68,178 68,999 66,508 60,587 53,280 9 Other negotiable and readily transferable instruments6.................................................. 17,355 17,439 17,581 18,197 18,504 19,009 18,063 10 Other......................................................................... 2,786 2,397 2,541 2,418 2,180 2,169 2,157 11 Nonmonetary international and regional organizations7.................................................... 5,699 5,714 3,274 2,929 2,225 2,617 2,317 2,095 2,364 2,300 12 Banks’ own liabilities. 336 417 916 762 506 769 791 1 1 3 4 D Ti e m m e a d nd ep d o e s p it o s1 s . i . t .. s . . .. . . . 1 1 3 4 9 8 2 2 9 05 0 2 1 3 3 1 9 1 1 3 1 3 6 1 1 5 0 3 2 3 9 3 4 0 33 8 3 8 2 1 7 0 2 2 27 99 6 2 1 7 0 0 0 15 Other2....................... 87 161 492 340 131 394 422 1 1 6 7 Ba U nk .S s . ’ c T u r s e t a o s d u y ry l i b a i b ll i s li t a ie n s d 4 .. c .. e .. r . t .. i . f .. i . c .. a .. t . e .. s .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,554 2,701 706 2,5 4 9 0 3 3 1,8 1 0 8 9 3 1,7 2 0 0 1 1 1,5 1 5 8 5 3 1,5 1 8 9 9 3 1,529115 1,5 2 0 1 9 2 18 Other negotiable and readily transferable 19 Other i . n ... s . t .. r .. u .. m ... e .. n ... t . s .. 6 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,189 1 1,625 1 1,499 1 1,367 5 1,393 3 1,382 2 1,294 2 20 Official institutions8. 50,461 54,956 65,822 79,999 84,050 90,481 90,828 88,721 82,891 75,350 21 Banks’ own liabilities. 11,479 10,829 11,732 10,504 11,077 10,425 12,193 22 Demand deposits... 2,644 3,394 3,528 3,050 3,416 3,389 2,699 2,759 2,864 3,602 23 Time deposits1........ 3,423 2,321 1,797 2,399 2,345 2,334 2,288 2.169 2,524 2,491 24 Other2....................... 6,030 5,068 6,008 5,517 6,149 5,036 6,100 25 Banks’ custody liabilities4.................................... 68,520 73,221 78,749 80,324 77,645 72,467 63,157 26 U.S. Treasury bills and certificates 5.............. 34,199 37,725 47,820 57,958 62,331 67,394 68,228 65,558 59,652 51,329 27 Other negotiable and readily transferable 28 Othe i r n .. s . t .. r .. u .. m ... e .. n ... t . s .. 6 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,3 2 5 1 2 0 10,7 1 8 0 3 7 11,1 1 8 7 5 0 11,9 1 0 9 5 1 12,02 6 6 0 12,77 4 2 3 11,78 4 9 0 29 Banks9. 29,330 37,174 42,335 51,372 55,363 56,861 54,683 56,006 65,900 63,408 30 Banks’ own liabilities............. 46,417 50,529 52,035 49,932 51,218 60,995 58,309 31 Unaffiliated foreign banks. 14,814 14,682 15,349 14,517 13,335 13,150 14,679 32 Demand deposits.............. 7,534 9,104 10,933 10,148 10,066 11,239 10,425 9,426 9,349 10,207 33 Time deposits1.................. 1,873 2,297 2,040 1,564 1,735 1,489 1,479 1,322 1,262 1,309 34 Other2.................................. 3,102 2,881 2,621 2,612 2,587 2,539 3,164 35 Own foreign offices3. 31,603 35,847 36,687 35,416 37,883 47,845 43,630 36 Banks’ custody liabilities4.................................... 4,955 4,834 4,826 4,751 4,788 4,905 5,098 37 U.S. Treasury bills and certificates................ 335 119 141 381 371 300 302 399 425 587 38 Other negotiable and readily transferable instruments6................................................ 2,447 2,561 2,417 2,422 2,416 2,416 2,482 39 Other..................................................................... 2,126 1,902 2,109 2,027 1,973 2,064 2,029 40 Other foreigners. 10,100 12,814 14,736 15,996 16,593 16,052 15,995 16,657 15,842 17,000 41 Banks’ own liabilities. 12,855 13,490 13,028 13,012 13,487 13,044 13,265 4 43 2 T D i e m m e a d n e d p d o e si p t o s1 s . i . t .. s .. . . . . . 4 3 , , 8 2 2 4 3 8 4 6 , , 0 5 1 2 5 4 4 7 , , 3 5 0 4 4 6 4 8 , , 2 20 2 1 2 4 8 , , 6 33 2 1 8 4 8 , , 2 3 4 8 2 0 4 8 , , 3 2 2 6 8 4 4 8 , , 7 3 4 7 4 5 4 8 , , 2 5 0 0 7 4 4 8 , , 2 6 8 1 9 7 44 Other2....................... 432 531 406 420 368 333 359 45 Banks’ custody liabilities4.................................... 3,141 3,103 3,024 2,983 3.170 2,798 3,735 46 U.S. Treasury bills and certificates................ 325 198 326 . 245 282 285 358 299 1,152 47 Other negotiable and readily transferable instruments6................................................ 2,367 2,471 2,480 2,503 2,669 2,439 2,498 48 Other..................................................................... 448 387 262 195 143 60 85 49 Memo: Negotiable time certificates of deposit held in custody for foreigners......................... 10,992 10,821 10,926 11,080 11,021 11,231 11,077 1 Excludes negotiable time certificates of deposit, which are included payable in foreign currencies through 1974) and Treasury bills issued to in “Other negotiable and readily transferable instruments.” official institutions of foreign countries. 2 Includes borrowings under repurchase agreements. 6 Principally bankers acceptances, commercial paper, and negotiable 3 U.S. banks: includes amounts due to own foreign branches and time certificates of deposit. foreign subsidiaries consolidated in “Consolidated Report of Condition” 7 Principally the International Bank for Reconstruction and Develop­ filed with bank regulatory agencies. Agencies, branches, and majority- ment, and the Inter-American and Asian Development Banks. owned subsidiaries of foreign banks: principally amounts due to head 8 Foreign central banks and foreign central governments and the office or parent foreign bank, and foreign branches, agencies or wholly- Bank for International Settlements. owned subsidiaries of head office or parent foreign bank. 9 Excludes central banks, which are included in “Official institutions.” 4 Financial claims on residents of the United States, other than long­ term securities, held by or through reporting banks. Note. Data for time deposits prior to April 1978 represent short-term 5 Includes nonmarketable certificates of indebtedness (including those only. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 International Statistics □ June 1979 3.16 Continued 1978 1979 Item 1975 1976 1977 Oct. Nov. Dec. Jan. Feb. Mar.p Apr.P B. By area and country 1 95,590 110,657 126,168 150,296 158,231 166,011 163,824 163,479 166,997 158,058 2 Foreign countries......................................................... 89,891 104,943 122,893 147,367 156,006 163,394 161,507 161,385 164,633 155,758 3 Europe.......................................................................... 44,072 47,076 60,295 73,171 78,129 '84,605 83,774 81,670 81,891 77,027 4 Austria...................................................................... 759 346 318 473 514 506 555 505 524 484 5 Belgium-Luxembourg............................................ 2,893 2,187 2,531 2,449 2,471 2,546 2,481 2,179 2,443 2,358 6 Denmark.................................................................. 329 356 770 1,734 1,827 1,946 2,036 2,074 2,131 1,596 7 Finland...................................................................... 391 416 323 424 388 346 379 357 361 367 8 France....................................................................... 7,726 4,876 5,269 8,421 8,817 8,631 8,377 8,173 8,891 9,291 9 Germany................................................................... 4,543 6,241 7,239 13,345 15,652 17,286 15,770 13,868 12,995 9,363 10 Greece....................................................................... 284 403 603 887 907 826 683 761 671 656 11 1,059 3,182 6,857 7,346 7,761 7,674 8,723 8,056 8,142 8,939 12 Netherlands............................................................. 3,407 3,003 2,869 2,501 2,518 2,402 2,536 2,786 2,766 2,823 13 Norway..................................................................... 994 782 944 1,210 1,102 1,271 1,411 1,445 1,572 1,477 14 Portugal.................................................................... 193 239 273 386 379 330 254 246 279 231 15 Spain.......................................................................... 423 559 619 702 885 778 759 704 763 950 16 Sweden...................................................................... 2,277 1,692 2,712 3,187 3,216 3,131 2,955 2,656 2,520 2,596 17 Switzerland............................................................... 8,476 9,460 12,343 14,195 15,463 18,564 19,864 19,808 18,560 15,636 18 Turkey...................................................................... 118 166 130 164 163 157 141 141 132 110 19 United Kingdom..................................................... 6,867 10,018 14,125 12,232 12,826 14,214 13,080 13,788 15,368 15,824 20 Yugoslavia............................................................... 126 189 232 158 190 254 174 184 176 207 21 Other Western Europe1........................................ 2,970 2,673 1,804 3,012 2,777 3,334 3,296 3,706 3,284 3,775 22 U.S.S.R..................................................................... 40 51 98 82 73 82 150 62 59 84 23 Other Eastern Europe2......................................... 197 236 236 262 198 325 150 171 257 258 24 Canada.......................................................................... 2,919 4,659 4,607 7,465 8,073 6,963 6,622 7,037 8,044 8,819 25 Latin America and Caribbean................................ 15,028 19,132 23,670 28,461 31,111 31,470 30,909 32,257 38,065 35,164 26 Argentina................................................................. 1,146 1,534 1,416 1,650 1,504 1,498 1,682 1,789 1,534 1,498 27 Bahamas................................................................... 1,874 2,770 3,596 4,870 6,309 6,615 7,391 7,283 13,087 9,961 28 Bermuda................................................................... 184 218 321 387 425 428 386 464 375 351 29 Brazil......................................................................... 1,219 1,438 1,396 1,441 1,234 1,130 1,099 1,150 1,137 1,251 30 British West Indies................................................ 1,311 1,877 3,998 5,921 6,692 5,978 5,715 6,846 6,971 6,516 31 Chile.......................................................................... 319 337 360 333 341 399 376 358 343 447 32 Colombia................................................................. 417 1,021 1,221 1,483 1,612 1,756 1,769 1,867 1,925 2,065 33 Cuba.......................................................................... 6 6 6 7 7 13 7 13 6 7 34 Ecuador.................................................................... 120 320 330 369 348 322 321 274 330 335 35 Guatemala3............................................................. 368 357 416 352 386 339 360 36 Jamaica3................................................................... 57 43 52 72 43 75 80 37 Mexico...................................................................... 2,070 2,870 2,876 3,101 3,413 3,397 3,178 3,158 3,178 3,234 38 Netherlands Antilles4............................................ 129 158 196 352 368 308 321 361 318 335 39 Panama..................................................................... 1,115 1,167 2,331 2,396 2,808 2,992 2,818 2,491 2,938 2,900 40 243 257 287 323 337 363 320 347 403 360 41 Uruguay................................................................... 172 245 243 210 211 233 222 220 236 231 42 Venezuela.................................................................. 3,309 3,118 2,929 3,696 3,550 3,809 3,336 3,705 3,201 3,424 43 Other Latin America and Caribbean................. 1,393 1,797 2,167 1,494 1,553 1,760 1,544 1,501 1,669 1,809 44 Asia................................................................................ 22,384 29,766 30,488 34,542 34,843 36,394 36,650 36,485 32,911 30,617 45 China (Mainland)................................................... 123 48 53 49 57 67 65 105 273 45 46 China (Taiwan)....................................................... 1,025 990 1,013 1,319 1,247 499 546 505 599 667 47 Hong Kong............................................................. 605 894 1,094 1,368 1,189 1,256 1,400 1,436 1,253 1,453 48 India.......................................................................... 115 638 961 899 843 790 804 838 857 929 49 Indonesia.................................................................. 369 340 410 575 439 449 575 357 479 567 50 Israel.......................................................................... 387 392 559 453 469 674 669 625 608 673 51 Japan......................................................................... 10,207 14,363 14,616 19,937 21,355 21,969 21,428 21,764 18,109 14,846 52 Korea........................................................................ 390 438 602 790 750 795 771 827 748 728 53 Philippines............................................................... 700 628 687 594 578 639 612 549 642 562 54 Thailand................................................................... 252 277 264 352 279 427 379 307 277 343 55 Middle East oil-exporting countries 5................. 7,355 9,360 8,979 6,823 6,381 7,420 8,120 7,872 7,818 8,434 56 Other Asia............................................................... 856 1,398 1,250 1,384 1,256 1,411 1,283 1,300 1,247 1,371 57 3,369 2,298 2,535 2,540 2,636 2,886 2,693 2,804 2,650 2,982 58 Egypt......................................................................... 342 333 404 322 312 404 337 278 329 359 59 Morocco................................................................... 68 87 66 84 30 32 29 32 43 34 60 South Africa............................................................ 166 141 174 266 294 168 179 207 242 246 61 Zaire.......................................................................... 62 36 39 39 43 43 48 42 50 55 62 Oil-exporting countries6........................................ 2,240 1,116 1,155 1,230 1,335 1,525 1,379 1,549 1,256 1,554 63 Other Africa............................................................ 491 585 698 600 622 715 721 697 729 734 64 Other countries........................................................... 2,119 2,012 1,297 1,189 1,214 1,076 860 1,132 1,072 1,149 65 Australia................................................................... 2,006 1,905 1,140 975 977 838 655 934 862 957 66 All other................................................................... 113 107 158 213 236 239 204 198 211 192 67 Nonmonetary international and regional organizations........................................................ 5,699 5,714 3,274 2,929 2,225 2,617 2,317 2,095 2,364 2,300 68 International............................................................ 5,415 5,157 2,752 1,789 1,033 1,485 1,210 919 1,189 1,128 69 Latin American regional...................................... 188 267 278 856 870 808 809 865 872 872 70 Other regional7....................................................... 96 290 245 284 323 324 299 311 303 300 1 Includes the Bank for International Settlements. Beginning April 5 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, 1978, also includes Eastern European countries not listed in line 23. and United Arab Emirates (Trucial States). 2 Beginning April 1978 comprises Bulgaria, Czechoslovakia, German 6 Comprises Algeria, Gabon, Libya, and Nigeria. Democratic Republic, Hungary, Poland, and Romania. 7 Asian, African, Middle Eastern, and European regional organizations, 3 Included in “Other Latin America and Caribbean” through March except the Bank for International Settlements, which is included in 1978. “Other Western Europe.” 4 Includes Surinam through December 1975. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-reported Data A61 3.17 BANKS’ OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States Payable in U.S. Dollars Millions of dollars, end of period 1978 1979 Area and country 1975 1976 1977 Oct. Nov. Dec. Jan. Feb. Mar.? Apr.P 1 58,308 79,301 90,206 97,097 105,425 114,606 105,406 103,938 108,993 104,197 2 Foreign countries......................................................... 58,275 79,261 90,163 97,057 105,379 114,550 105,366 103,899 108,947 104,150 3 Europe.......................................................................... 11,109 14,776 18,114 19,345 20,565 24,181 20,743 20,454 21,299 20,856 4 Austria...................................................................... 35 63 65 111 142 140 147 115 177 130 5 Belgium-Luxembourg............................................ 286 482 561 1,061 1,232 1,200 1,504 1,376 1 j802 1,377 6 Denmark................................................................... 104 133 173 160 193 254 172 170 166 204 7 Finland...................................................................... 180 199 172 232 260 305 281 264 297 250 8 France....................................................................... 1,565 1,549 2,082 2,752 2,716 3,737 2,629 2,275 2,921 2,874 9 Germany................................................................... 380 509 644 808 838 900 840 717 907 826 10 Greece........................................................................ 290 279 206 161 134 164 162 169 192 170 11 Italy............................................................................ 443 993 1,334 1,358 1,453 1,504 1,402 1,395 1,311 1,450 12 Netherlands............................................................. 305 315 338 494 602 680 681 619 581 532 13 131 136 162 238 282 299 251 252 206 242 14 30 88 175 106 180 171 169 173 209 208 15 Spain.......................................................................... 424 745 722 893 980 1,110 905 1,103 909 807 16 Sweden...................................................................... 198 206 218 348 465 537 449 388 313 300 17 199 379 564 781 1,045 1,283 1,051 970 1,068 878 18 Turkey...................................................................... 164 249 360 293 283 283 179 132 145 147 19 United Kingdom..................................................... 5,170 7,033 8,964 8,115 8,417 10,124 8,444 8,886 8,575 8,633 20 Yugoslavia............................................................... 210 234 311 293 302 363 400 409 448 475 21 Other Western Europe1........................................ 76 85 86 138 107 122 135 110 124 424 22 U.S.S.R..................................................................... 406 485 413 387 321 366 . 327 309 319 298 23 Other Eastern Europe2......................................... 513 613 566 617 612 638 617 621 630 633 24 Canada.......................................................................... 2,834 3,319 3,355 3,610 4,522 5,142 4,961 5,049 5,181 4,747 25 Latin America and Caribbean................................ 23,863 38,879 45,850 49,295 54,346 56,507 52,372 50,390 54,406 51,147 26 Argentina.................................................................. 1,377 1,192 1,478 1,461 1,698 2,266 2,134 2,360 2,753 2,926 27 Bahamas................................................................... 7,583 15,464 19,858 19,210 23,546 21,118 20,873 18,640 19,893 17,985 28 Bermuda................................................................... 104 150 232 352 141 189 175 155 150 135 29 Brazil......................................................................... 3,385 4,901 4,629 5,596 6,137 6,251 6,259 6,259 6,553 6,180 30 British West Indies................................................. 1,464 5,082 6,481 7,178 6,432 9,173 5,368 5,122 7,435 5,464 31 Chile.......................................................................... 494 597 675 832 862 968 1,012 939 964 978 32 Colombia.................................................................. 751 675 671 793 936 1,012 1,054 1,019 1,004 945 33 Cuba.......................................................................... 14 13 10 * 4 * * * 4 4 34 Ecuador.................................................................... 252 375 517 621 680 705 700 768 839 903 35 Guatemala 3............................................................. 85 89 94 87 110 89 95 36 Jamaica 3................................................................... 45 49 40 37 48 61 127 37 3,745 4,822 4,909 4,927 5,255 5,417 5,449 5,398 5,562 5,709 38 Netherlands Antilles4............................................ 72 140 224 212 242 268 259 222 282 213 39 1,138 1,372 1,410 2,485 2,531 3,074 3,179 3,493 2,900 3,575 40 Peru............................................................................ 805 933 962 945 931 918 873 846 834 839 41 Uruguay.................................................................... 57 42 80 63 58 52 50 44 46 48 42 Venezuela.................................................................. 1,319 1,828 2,318 3,105 3,367 3,474 3,324 3,481 3,527 3,555 43 Other Latin America and Caribbean................. 1,302 1,293 1,394 1,386 1,388 1,487 1,538 1,487 1,512 1,466 44 17,706 19,204 19,236 21,565 22,743 25,511 24,232 25,102 25,131 24,541 45 China (Mainland)................................................... 22 3 10 10 6 4 15 13 16 20 46 China (Taiwan)....................................................... 1,053 1,344 1,719 1,285 1,356 1,499 1,457 1,767 1,841 1,814 47 Hong Kong.............................................................. 289 316 543 1,484 1,385 1,573 1,620 1,952 2,036 1,713 48 India.......................................................................... 57 69 53 66 46 54 61 60 52 73 49 Indonesia.............................................................. 246 218 232 144 188 143 141 123 124 135 50 Israel.......................................................................... 721 755 584 555 719 872 996 896 909 760 51 Japan......................................................................... 10,944 11,040 9,839 10,629 11,997 12,734 12,566 12,220 12,811 12,077 52 1,791 1,978 2,336 1,788 1,792 2,277 2,239 2,478 2,546 2,712 53 534 719 594 732 717 680 607 692 660 710 54 Thailand.................................................................... 520 442 633 734 758 753 753 830 778 760 55 Middle East oil-exporting countries5................. 744 1,459 1,746 2,127 2,188 3,118 2,333 2,487 1,939 2,420 56 Other Asia............................................................... 785 863 947 2,012 1,592 1,804 1,446 1,585 1,419 1,346 57 Africa............................................................................ 1,933 2,311 2,518 2,219 2,163 2,221 2,145 2,092 1,968 1,977 58 Egypt......................................................................... 123 126 119 56 68 107 82 83 73 104 59 8 27 43 40 36 82 97 88 66 64 60 South Africa............................................................ 657 957 1,066 990 906 860 838 760 701 680 61 Zaire.......................................................................... 181 112 98 161 162 164 156 155 155 151 62 Oil-exporting countries6........................................ 382 524 510 438 439 452 438 456 455 462 63 Other.......................................................................... 581 565 682 534 551 556 533 550 518 516 64 Other countries........................................................... 830 772 1,090 1,023 1,041 988 914 813 961 882 65 Australia................................................................... 700 597 905 879 894 877 792 704 830 755 66 130 175 186 145 147 111 122 108 131 127 67 Nonmonetary international and regional 33 40 43 41 45 56 40 39 46 46 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 Note. Data for period prior to April 1978 include claims of banks’ 1978. domestic customers on foreigners. 4 Includes Surinam through December 1975. 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 □ June 1979 3.18 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 1978 1979 Type of claim 1975 1976 1977 Oct. Nov. Dec. Jan. Feb. Mar.*3 Apr.p 1 Total.............................................................................. 58,308 79,301 90,206 '125,641 120,639 2 Banks’ own claims on foreigners............................ 97,097 105,425 114,606 105,406 '103,938 108,993 104,197 3 Foreign public borrowers..................................... 8,378 9,235 10,047 10,304 '10,498 10,846 10,862 4 Own foreign offices1.............................................. 36,581 40,403 40,882 37,933 35,581 37,087 35,537 5 Unaffiliated foreign banks.................................... 30,912 33,552 40,379 34,494 '34,718 37.529 34,318 6 Deposits............................................................... 4,002 4,396 5,506 4,670 5,146 6,345 5,481 7 Other..................................................................... 26,910 29,157 34,873 29,824 '29,572 31,184 28,837 8 All other foreigners................................................ 21,225 22,234 23,298 22,674 '23,141 23.530 23,480 9 Claims of banks’ domestic customers 2............... '11,035 11,646 10 Deposits.................................................................... 972 1,143 11 Negotiable and readily transferable in­ struments 3........................................................ 4,762 4,863 12 Outstanding collections and other claims4.... 5,467 5,756 6,176 '5,301 5,640 13 Memo: Customer liability on acceptances '14,913 15,082 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. 3.19 BANKS’ OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States Payable in U.S. Dollars Millions of dollars, end of period 1978 1979 Maturity; by borrower and area 1978 1979 June Sept. Dec. Mar.p June Sept. 1 Total................................................................................. 55,433 59,907 73,468 71,139 By borrower 2 Maturity of 1 year or less1......................................... 44,103 47,055 58,185 54,949 3 Foreign public borrowers....................................... 3,067 3,702 4,528 4,581 4 All other foreigners.................................................. 41,036 43,353 53,658 50,368 5 Maturity of over 1 year1............................................ 11,330 12,852 15,282 16,190 6 Foreign public borrowers........................................ 2,931 3,925 5,315 5,946 7 All other foreigners.................................................. 8,399 8,927 9,967 10,245 By area Maturity of 1 year or less1 8 Europe......................................................................... 9,627 10,454 15,049 12,107 9 Canada........................................................................ 1,598 1,948 2,670 2,528 10 Latin America and Caribbean............................... 17,203 18,759 20,867 21,535 11 Asia.............................................................................. 13,695 13,769 17,534 16,939 12 Africa.......................................................................... 1,457 1,535 1,496 1,299 13 All other2................................................................... 523 591 569 541 Maturity of over 1 year1 14 Europe......................................................................... 2,920 3,104 3,158 3,108 15 Canada........................................................................ 344 794 1,426 1,456 16 Latin America and Caribbean............................... 5,886 6,859 8,448 9,312 17 Asia.............................................................................. 1,298 1,305 1,401 1,515 18 Africa.......................................................................... 631 580 636 619 19 Allother2................................................................... 252 211 214 180 1 Remaining time to maturity. Note. The first available data are for June 1978. 2 Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-reported Data A63 3.20 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks1 Billions of dollars, end of period 1977 1978 1979 1975 1976 Mar. June Sept. Dec. Mar. June2 Sept. Dec. Mar. 1 167.0 207.7 206.7 217.8 226.7 239.4 247.2 246.0 247.3 266.6 264.9 2 G-10 countries and Switzerland.................................. 88.0 100.1 99.7 104.1 108.8 115.3 116.6 112.8 113.9 125.3 119.2 3 Belgium-Luxembourg................................................ 5.3 6.1 6.4 6.3 7.1 8.4 8.3 8.3 8.4 9.0 9.4 4 France............................................................................ 8.5 10.0 10.2 10.6 10.5 11.0 11.4 11.4 11.7 12.4 11.7 5 Germany........................................................................ 7.8 8.7 7.8 8.2 8.6 9.6 9.0 9.1 9.7 11.4 10.7 6 Italy................................................................................ 5.2 5.8 6.0 6.4 6.0 6.5 6.0 6.4 6.0 6.6 5.7 7 Netherlands.................................................................. 2.8 2.8 2.6 3.1 3.0 3.5 3.4 3.4 3.5 4.4 3.8 8 Sweden.......................................................................... 1.0 1.2 1.4 1.7 1.9 1.9 2.0 2.1 2.2 2.1 2.0 9 Switzerland................................................................... 2.4 3.0 2.5 3.0 3.3 3.3 4.0 4.1 4.3 5.4 4.5 10 United Kingdom......................................................... 36.3 41.5 40.4 41.4 44.1 46.5 46.5 45.0 44.4 47.2 46.4 11 Canada.......................................................................... 3.8 5.1 6.1 6.4 6.6 5.8 6.9 5.1 4.9 5.9 5.8 12 Japan.............................................................................. 14.9 15.9 16.4 17.0 17.6 18.8 19.1 17.9 18.8 20.9 19.2 13 Other developed countries............................................ 10.7 15.1 16.3 16.9 18.1 18.6 20.5 19.3 18.7 19.2 18.2 14 Austria........................................................................... .7 1.2 1.2 1.2 1.3 1.3 1.5 1.5 1.5 1.7 1.7 15 Denmark....................................................................... .6 1.0 1.2 1.4 1.5 1.6 1.6 1.7 1.9 2.0 2.0 16 Finland.......................................................................... .9 1.1 1.1 1.1 1.2 1.2 1.2 1.1 1.0 1.2 1.1 17 Greece............................................................................ 1.4 1.7 1.7 1.8 2.0 2.2 2.7 2.3 2.2 2.3 2.3 18 Norway.......................................................................... 1.4 1.5 1.7 1.7 1.8 1.9 1.9 2.1 2.1 2.1 2.1 19 Portugal......................................................................... .3 .4 .5 .5 .6 .6 .7 .6 .5 .6 .6 20 Spain.............................................................................. 1.9 2.8 3.0 3.2 3.5 3.6 3.6 3.6 3.5 3.4 3.0 21 Turkey............................................................................ .6 1.3 1.4 1.4 1.4 1.5 1.5 1.4 1.5 1.5 1.4 22 Other Western Europe............................................... .6 .7 .8 .8 1.2 .9 1.4 1.2 1.0 1.0 1.0 23 South Africa................................................................. 1.2 2.2 2.3 2.3 2.3 2.4 2.5 2.4 2.2 2.0 1.7 24 Australia........................................................................ 1.3 1.2 1.4 1.5 1.5 1.4 1.9 1.4 1.3 1.4 1.3 25 Oil-exporting countries 3................................................ 6.9 12.6 13.3 15.0 16.5 17.6 19.2 19.1 20.4 22.8 22.7 26 Ecuador......................................................................... .4 .7 .8 .9 1.1 1.1 1.3 1.4 1.6 1.6 1.5 27 Venezuela...................................................................... 2.3 4.1 3.9 4.6 5.1 5.5 5.5 5.6 6.2 7.2 7.2 28 Indonesia....................................................................... 1.6 2.2 2.3 2.2 2.2 2.2 2.1 1.9 1.9 2.0 1.9 29 Middle East countries................................................ 1.6 4.2 5.0 5.5 6.3 6.9 8.3 8.3 8.7 9.5 9.5 30 African countries......................................................... 1.0 1.4 1.3 1.8 1.9 1.9 2.0 1.9 2.0 2.5 2.6 31 Non-oil developing countries........................................ 34.2 43.1 44.0 45.8 47.6 50.0 49.9 48.9 49.5 52.7 53.1 32 Argentina...................................................................... 1.7 1.9 2.0 2.1 2.4 2.9 3.0 3.0 2.9 3.0 2.9 33 Brazil.............................................................................. 8.0 11.1 11.5 11.8 11.8 12.7 13.0 13.3 14.0 14.9 14.6 34 Chile............................................................................... .5 .8 .7 .7 .8 .9 1.1 1.3 1.3 1.6 1.7 35 Colombia...................................................................... 1.2 1.3 1.2 1.2 1.2 1.3 1.3 1.3 1.3 1.4 1.5 36 Mexico........................................................................... 9.0 11.7 11.8 12.2 12.6 11.9 11.2 11.0 10.7 10.8 10.9 37 Peru................................................................................ 1.4 1.8 1.9 2.0 1.9 1.9 1.7 1.8 1.8 1.7 1.6 38 Other Latin America.................................................. 2.6 2.7 2.4 2.4 2.5 2.7 3.5 3.3 3.4 3.8 3.5 39 India............................................................................... .2 .2 .2 .2 .3 .3 .3 .2 .3 .2 .2 40 Israel.............................................................................. .9 1.0 .8 .8 .7 .9 .8 .7 .7 1.0 1.0 41 Korea (South).............................................................. 2.4 3.1 3.2 3.4 3.6 3.9 3.7 3.6 3.5 3.9 4.2 42 Malaysia4...................................................................... .3 .5 .6 .7 .7 .7 .6 .6 .6 .6 .6 43 Philippines.................................................................... 1.7 2.2 2.3 2.3 2.4 2.5 2.6 2.7 2.8 2.8 3.2 44 Taiwan........................................................................... 1.7 2.3 2.4 2.7 2.9 3.1 3.1 2.5 2.4 2.9 3.1 45 Thailand........................................................................ .7 .7 .8 .8 .9 1.7 1.1 1.1 1.1 1.2 1.2 46 Other Asia.................................................................... .6 .4 .2 .4 .4 .3 .4 .3 .3 .3 .3 47 Egypt.............................................................................. .4 .4 .4 .4 .4 .3 .3 .3 .4 .4 .4 48 Morocco........................................................................ .1 .2 .3 .3 .4 .5 .4 .5 .5 .6 .6 49 Zaire............................................................................... .3 .2 .3 .3 .3 .3 .3 .2 .2 .2 .2 50 Other Africa5............................................................... .5 .6 1.0 1.0 1.2 1.2 1.4 1.2 1.3 1.4 1.4 51 Eastern Europe................................................................ 3.7 5.2 5.1 5.5 5.5 6.5 6.3 6.4 6.6 6.9 6.7 52 U.S.S.R.......................................................................... 1.0 1.5 1.5 1.5 1.5 1.6 1.4 1.4 1.4 1.3 1.1 53 Yugoslavia.................................................................... .6 .8 .9 .9 1.0 1.1 1.2 1.3 1.3 1.5 1.6 54 Other.............................................................................. 2.1 2.8 2.8 3.1 3.0 3.8 3.7 3.7 3.9 4.1 4.0 55 Offshore banking centers............................................... 19.4 26.2 22.7 25.4 25.3 26.1 29.0 31.4 29.6 30.6 35.4 56 Bahamas........................................................................ 7.3 11.8 8.2 9.5 9.9 9.8 11.3 11.8 11.3 10.4 14.1 57 Bermuda........................................................................ .5 .5 .5 .5 .5 .6 .6 .7 .7 .7 .6 58 Cayman Islands and other British West Indies.. . 2.5 3.8 3.7 4.8 4.3 3.8 4.5 6.3 6.2 6.9 7.2 59 Netherlands Antilles................................................... .6 .6 .6 .5 .6 .7 .7 .6 .6 .8 .7 60 Panama.......................................................................... 2.6 2.7 2.9 2.9 2.8 3.1 3.2 3.2 3.0 2.6 3.2 61 Lebanon........................................................................ .2 .1 .2 .2 .1 .2 .2 . 1 . 1 .1 .1 62 Hong Kong................................................................... 1.6 2.3 2.6 2.8 3.1 3.7 4.0 4.1 4.0 4.3 4.6 63 Singapore...................................................................... 3.8 4.4 3.9 4.2 3.9 3.7 4.0 3.8 2.9 3.9 4.0 64 Others............................................................................ . 1 . 1 . 5 . 5 .8 .8 .9 .9 65 Miscellaneous and unallocated6.................................. 4.1 5.4 5.6 5.1 5.0 5.3 5.7 8.1 8.6 9.1 9.6 1 The banking offices covered by these data are the U.S. offices and 2 For June 1978 and subsequent dates, the claims of the U.S. offices foreign branches of U.S.-owned banks and of U.S. subsidiaries of foreign- in this table include only banks’ own claims payable in dollars. For owned banks. Offices not covered include 1) U.S. agencies and branches earlier dates the claims of the U.S. offices also include customer claims of foreign banks, and 2) foreign subsidiaries of U.S. banks. To minimize and foreign currency claims (amounting in,June 1978 to $10 billion). duplication, the data are adjusted to exclude the claims on foreign branches 3 Includes Algeria, Bahrain, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, held by a U.S. office or another foreign branch of the same banking Oman, Qatar, Saudi Arabia, and United Arab Emirates in addition to institution. The data in this table combine foreign branch claims in table countries shown individually. 3.13 (the sum of lines 7 through 10) with the claims of U.S. offices in table 4 Foreign branch claims only through December 1976. 3.17 (excluding those held by agencies and branches of foreign banks 5 Excludes Liberia. and those constituting claims on own foreign branches). However, see 6 Includes New Zealand, Liberia, and international and regional also footnote 2. organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 International Statistics □ June 1979 3.21 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Holdings and Transactions Millions of dollars 1979 1978 1979 Country or area 1977 1978 Jan.- Apr.*> Oct. Nov. Dec. Jan. Feb. Mar.*> Apr.® Holdings (end of period) 4 1 Estimated total i........................................... 38,640 44,933 43,627 43,852 44,933 46,205 45,662 47,524 48,136 2 Foreign countries1........................................ 33,894 39,812 38,476 38,474 39,812 41,336 40,958 42,926 43,182 3 Europe1......................................................... 13,936 17,072 15,260 15,654 17,072 18,360 18,501 20,171 20,603 4 Belgium-Luxembourg............................. 19 19 19 19 19 19 19 19 19 5 Germany1.................................................. 3,168 8,705 6,645 7,102 8,705 8,864 8,860 10,216 10,812 6 Netherlands.............................................. 911 1,358 1,356 1,351 1,358 1,433 1,517 1,587 1,637 7 Sweden....................................................... 100 285 231 266 285 320 355 360 415 8 Switzerland................................................ 497 977 731 915 977 1,818 1,508 1,537 1,510 9 United Kingdom..................................... 8,888 5,373 5,915 5,674 5,373 5,489 5,823 5,991 5,735 10 Other Western Europe........................... 349 354 365 327 354 417 420 461 473 11 Eastern Europe........................................ 4 12 Canada........................................................... 288 152 151 151 152 150 146 166 226 13 Latin America and Caribbean................. 551 416 426 416 416 433 417 418 397 14 Venezuela................................................. 199 144 144 144 144 183 183 183 183 15 Other Latin American and Caribbean 183 110 119 109 110 88 72 72 52 16 Netherlands Antilles.............................. 170 162 162 162 162 162 162 162 162 17 Asia................................................................. 18,745 21,483 21,942 21,565 21,483 21,704 21,205 21,483 21,268 18 Japan.......................................................... 6,860 11,528 11,560 11,483 11,528 12,226 12,422 12,729 12,982 19 Africa............................................................. 362 691 691 691 691 691 691 691 691 20 All other........................................................ 11 -3 6 -3 -3 -3 -3 -3 -3 21 Nonmonetary international and regional organizations........................................ 4,746 5,121 5,151 5,378 5,121 4,869 4,704 4,598 4,954 22 International............................................ 4,646 5,089 5,118 5,345 5,089 4,837 4,666 4,560 4,915 23 Latin American regional....................... 100 33 33 33 33 33 38 38 38 Transactions (net purchases, or sales (—), during period) 24 Total1............................................................. 22,843 6,292 3,203 1,410 225 1,081 1,272 -543 1,862 612 25 Foreign countries1...................................... 21,130 5,916 3,370 646 -3 1,338 1,524 -378 1,968 256 26 Official institutions................................ 20,377 3,712 409 577 69 -346 150 -517 524 252 27 Other foreign i........................................ 753 2,205 2,963 69 -72 1,683 1,375 141 1,443 4 28 Nonmonetary international and regional organizations....................................... 1,713 375 -167 764 227 -256 -252 -165 -106 356 Memo: Oil-exporting countries 29 Middle East 2.......................................... 4,451 -1,785 -1,636 -401 -241 -127 -461 -693 -31 -452 30 Africa 3.................................................... -181 329 200 -1 * 1 Beginning December 1978, includes U.S. Treasury notes publicly 4 Estimated official and private holdings of marketable U.S. Treasury issued to private foreign residents. securities with an original maturity of more than 1 year. Data are based 2 Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, on a benchmark survey of holdings as of Jan. 31, 1971, and monthly and United Arab Emirates (Trucial States). transactions reports. Excludes nonmarketable U.S. Treasury bonds and 3 Comprises Algeria, Gabon, Libya, and Nigeria. notes held by official institutions of foreign countries. 3.22 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS Millions of dollars, end of period 1978 1979 Assets 1976 1977 1978 Nov. Dec. Jan. Feb. Mar. Apr. MayP 1 Deposits........................................................................ 352 424 367 379 367 338 343 303 388 407 Assets held in custody 2 U.S. Treasury securities1.......................................... 66,532 91,962 117,126 112,434 117,126 116,961 114,005 107,854 99,674 91,327 3 Earmarked gold 2........................................................ 16,414 15,988 15,463 15,525 15,463 15,448 15,432 15,426 15,406 15,381 1 Marketable U.S. Treasury bills, notes, and bonds; and nonmarketable Note. Excludes deposits and U.S. Treasury securities held for inter­ U.S. Treasury securities payable in dollars and in foreign currencies. national and regional organizations. Earmarked gold is gold held for 2 The value of earmarked gold increased because of the changes in foreign and international accounts and is not included in the gold stock par value of the U.S. dollar in May 1972 and in October 1973. of the United States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Investment transactions A65 3.23 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1979 1978 1979 Transactions, and area or country 1977 1978 A J p a r n . - p Oct. Nov. Dec. Jan. Feb. Mar.*5 Apr.P U.S. corporate securities Stocks 1 Foreign purchases....................................................... 14,155 20,130i 6,300' 1,509 1,461 1,438 1,361 1,384 1,941 1,614 2 Foreign sales................................................................ 11,479 17,723 5,522 1,523 1,359 1,102 1,301 1,264 1,437 1,520 3 Net purchases, or sales (—)...................................... 2,676 2,408 779 -14 103 336 60 120' 505 94 4 Foreign countries......................................................... 2,661 2,454 760 -15 102 336 61 104 501 94 5 Europe...................................................................... 1,006 1,271 146 -91 -10 264 -7 52 104 -2 6 France.................................................................... 4C 47 74 -4 1 -38 -6 16 33 31 7 Germany.............................................................. 291 620 -58 -30 8 264 -18 20 -1 -59 8 Netherlands......................................................... 22 -22 -80 7 6 -9 -35 -15 -19 -10 9 Switzerland........................................................... 152 -585 -46 -118 -88 -23 -30 12 -12 -17 10 United Kingdom................................................. 613 1,218 265 58 67 74 85 19 109 52 11 Canada...................................................................... 65 74 88 22 6 38 7 -6 57 30 12 Latin America and Caribbean............................ 127 151 66 13 -2 16 34 -25 36 22 13 Middle East1........................................................... 1,39C 781 320 42 109 4 -16 46 242 48 14 Other Asia................................................................ 59 187 137 -4 1 15 49 30 61 -3 15 Africa........................................................................ 5 -13 3 2 -2 -1 -2 6 1 -3 16 Other countries....................................................... 8 3 -1 2 1 1 -4 1 1 2 17 Nonmonetary international and regional organizations........................................................ 15 -46 19 1 1 * -1 16 3 1 Bonds2 18 Foreign purchases....................................................... 7,739 7,955 2,254 727 437 884 641 453 581 579 19 Foreign sales................................................................ 3,560 5,509 2,118 530 439 564 704 547 489 378 20 Net purchases, or sales ( —)...................................... 4,179 2,446 135 197 -2 320 -63 -94 92 200 21 Foreign countries......................................................... 4,083 2,037 258 137 -12 128 54 28 79 96 22 Europe...................................................................... 1,850 915 279 89 -25 146 39 110 1 129 23 France................................................................... -34 30 29 -10 3 17 18 * 13 -2 24 Germany.............................................................. -20 68 78 -12 -45 10 42 13 4 19 25 Netherlands......................................................... 72 19 -61 -4 -1 -6 -4 -10 -27 -20 26 Switzerland.......................................................... 94 -100 35 9 9 39 8 6 12 8 27 United Kingdom................................................ 1,690 930 200 110 9 109 -54 93 27 134 28 Canada...................................................................... 141 102 60 -5 * 6 11 10 33 6 29 Latin America and Caribbean............................ 64 78 65 13 -1 5 23 9 24 9 30 Middle East1........................................................... 1,695 810 -176 -19 -8 -21 -34 -106 25 -61 31 Other Asia................................................................ 338 131 31 60 23 -5 16 4 -3 14 32 Africa........................................................................ -6 -1 1 * * * * 1 * * 33 Other countries....................................................... # 1 0 * * -3 * * 1 -1 34 Nonmonetary international and regional organizations........................................................ 96 409 -123 60 10 192 -118 -122 13 104 Foreign securities 35 Stocks, net purchases, or sales (—)........................ -410 527 -2 -19 163 -12 11 -28 2 13 36 Foreign purchases....................................................... 2,255 3,666 1,197 299 360 232 265 232 331 369 37 Foreign sales................................................................ 2,665 3,139 1,199 318 197 244 254 260 329 356 38 Bonds, net purchases, or sales (—)......................... -5,096 -4,017 -920 -677 -446 73 -550 -322 -39 -9 39 Foreign purchases....................................................... 8,040 11,044 3,785 941 856 1,020 783 942 1,182 879 40 Foreign sales............................................................... 13,136 15,061 4,705 1,618 1,302 948 1,333 1,264 1,220 888 41 Net purchases, or sales (—) of stocks and bonds.. -5,506 -3,490 -922 -696 -283 61 -540 -349 -37 4 42 Foreign countries......................................................... -3,949 -3,313 -682 -507 -303 19 -513 -141 -19 -9 43 Europe.......................................................................... -1,100 -40 -326 13 -102 53 -124 -42 3 -163 44 Canada.......................................................................... -2,404 -3,237 -708 -747 -246 -24 -305 -184 -228 10 45 Latin America and Caribbean................................ -82 201 240 -17 18 * 60 70 54 55 -97 350 114 236 21 -15 -141 19 152 84 47 Africa............................................................................ 2 -441 -14 1 1 * -3 -5 -8 2 48 Other countries........................................................... -267 -146 12 6 4 5 1 2 7 2 49 Nonmonetary international and regional organizations....................................................... -1,557 -177 -240 -189 20 41 -27 -209 -17 13 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 government agencies and corporations. Also includes issues of new debt States). securities 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 □ June 1979 3.24 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 Dec. Mar. June Sept. Dec. Dec. Mar. June Sept. Dec. Liabilities to foreigners Claims on foreigners 1 7,910 8,361 8,792 9,683 9,817 16,221 18,399 18,162 18,252 20,021 By type 2 Payable m dollars....................................................... 7,109 7,477 7,967 8,853 8,829 14,803 16,636 16,598 16,284 18,257 3 Payable in foreign currencies.................................. 801 884 825 831 988 1,418 1,763 1,564 1,968 1,764 4 Deposits with banks abroad in reporter’s name................................................................. 613 783 673 803 937 5 Other......................................................................... 805 980 890 1,165 827 By area or country 6 Foreign countries......................................................... 7,695 8,214 8,661 9,559 9,692 16,220 18,397 18,160 18,250 20,020 7 Europe.......................................................................... 2,491 2,820 2,993 3,173 3,394 5,764 5,508 5,273 5,884 7,007 8 21 26 26 33 45 24 21 28 25 26 9 116 171 167 165 240 211 187 155 172 167 10 14 23 22 17 17 56 47 40 34 51 11 9 12 3 3 9 13 13 53 50 19 12 238 273 302 266 336 513 545 533 622 688 13 284 335 356 391 399 450 420 436 535 808 14 85 108 82 71 37 41 42 40 44 99 15 Italy............................................................. ........... 128 104 156 188 162 387 381 451 400 446 16 232 253 220 219 216 166 184 192 174 222 17 7 9 18 23 23 40 40 45 42 66 18 11 7 25 11 8 69 27 54 34 42 19 77 94 105 110 141 387 408 376 351 317 20 28 37 38 51 70 117 117 78 80 102 21 263 211 282 308 338 220 202 285 346 253 22 108 93 92 102 55 39 35 29 31 30 23 735 937 962 1,070 1,188 2,795 2,619 2,338 2,817 3,491 24 90 82 84 76 28 20 24 27 23 34 25 Other Western Europe.......................................... 10 8 18 17 25 25 33 24 28 21 26 U.S.S.R..................................................................... 24 15 19 27 29 55 44 37 33 67 27 Other Eastern Europe........................................... 12 23 17 25 28 135 121 51 44 59 28 Canada.......................................................................... 504 530 524 566 658 2,681 3,428 3,502 3,722 3,259 29 Latin America............................................................. 1,201 1,353 1,421 1,536 1,521 4,467 5,943 6,001 5,147 6,008 30 Argentina................................................................. 40 53 74 131 124 53 53 61 65 65 31 329 327 321 353 312 2,019 3,122 3,081 2,357 2,695 32 49 62 63 87 74 493 482 479 418 618 33 Chile......................................................................... 17 14 23 14 11 45 40 37 40 57 34 42 26 42 42 38 84 80 79 69 95 35 Cuba.......................................................................... * * * * * * * * * * 36 114 169 185 238 142 314 312 331 382 436 37 Panama..................................................................... 22 12 71 59 44 91 175 97 76 107 38 Peru........................................................................... 15 22 17 19 50 32 30 30 25 27 39 Uruguay................................................................... 3 5 9 7 15 5 6 4 5 7 40 216 264 185 232 318 269 306 309 284 264 41 Other Latin American republics......................... 118 107 101 121 105 281 268 229 223 240 42 25 41 30 19 35 12 24 19 21 17 43 Other Latin America............................................. 209 250 299 213 255 768 1,045 1,245 1,182 1,381 44 2,835 2,814 3,008 3,534 3,324 2,777 2,970 2,810 2,904 3,136 45 China, Mainland.................................................... 8 1 1 2 47 9 22 21 23 23 46 China, Taiwan........................................................ 156 167 170 178 150 157 144 173 157 269 47 Hong Kong............................................................. 40 32 30 61 67 98 85 92 127 142 48 37 26 10 23 27 38 85 93 85 80 49 56 57 59 49 67 375 185 152 167 144 50 63 68 59 68 69 38 47 43 85 64 51 695 761 807 865 898 1,068 1,379 1,142 1,157 1,239 52 Korea...................................................................... 103 99 107 103 42 171 133 168 161 177 53 74 95 107 157 98 99 94 96 107 110 54 17 11 27 43 55 23 32 30 29 37 55 Other Asia............................................................... 1,588 1,498 1,631 1,985 1,804 702 764 800 804 850 56 571 594 603 661 708 386 402 430 439 452 57 Egypt........................................................................ 13 19 25 34 40 34 31 36 29 35 58 Morocco................................................................... 112 130 148 145 166 21 22 16 16 15 59 20 30 36 34 45 75 71 88 73 79 60 Zaire.......................................................................... 46 55 57 56 88 15 11 16 12 12 61 Other Africa............................................................ 380 360 338 391 371 241 268 274 309 311 62 Other countries........................................................... 93 104 111 89 86 146 145 143 154 158 63 Australia................................................................... 75 89 97 75 75 111 111 109 114 120 64 All other................................................................... 18 14 14 14 11 35 34 34 40 38 65 Nonmonetary international and regional 215 147 132 125 125 1 1 2 2 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 3.25 SHORT-TERM CLAIMS ON FOREIGNERS Reported by Large Nonbanking Concerns in the United States Millions of dollars, end of period 1978 Type and country 1975 1976 1977 1978 July Aug. Sept. Oct. Nov. Dec. 1 Total.............................................................................. 3,799 5,720 7,136 9,604 8,957 10,107 8,644 10,533 11,288 9,604 By type 2 Payable in dollars....................................................... 3,042 4,984 6,121 8,301 7,643 8,820 7,410 9,262 9,979 8,301 3 Deposits.................................................................... 2,710 4,505 5,703 7,786 7,172 8,284 6,986 8,710 9,342 7,786 4 Short-term investments 1...................................... 332 479 418 515 471 536 424 552 637 515 5 Payable in foreign currencies.................................. 757 735 1,015 1,302 1,314 1,288 1,234 1,271 1,309 1,302 6 Deposits................................................................... 511 404 547 873 698 668 738 797 839 873 7 Short-term investments 1...................................... 246 331 468 429 616 620 496 474 470 429 By country 8 United Kingdom........................................................ 1,306 1,838 2,120 2,754 1,878 1,869 2,245 2,981 3,168 2,754 9 Canada.......................................................................... 1,156 1,698 1 777 2,151 2,537 3,013 2,452 2,858 2,851 2,151 10 Bahamas........................................................................ 546 1,355 1,896 2,519 3,217 3,543 2,247 2,819 3,038 2,519 11 Japan.............................................................................. 343 133 153 246 279 276 253 226 249 246 12 All other........................................................................ 446 716 1,190 1,934 1,046 1,406 1,447 1,649 1,934 1,934 1 Negotiable and other readily transferable foreign obligations payable Note. Data represent the assets abroad of large nonbanking con­ on demand or having a contractural maturity of not more than 1 year cerns in the United States. They are a portion of the total claims on from the date on which the obligation was incurred by the foreigner. foreigners reported by nonbanking concerns in the United States and are included in the figures shown in table 3.26. 3.26 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 Dec. Mar. June Sept. Dec. Dec. Mar. June Sept. Dec. Liabilities to foreigners Claims on foreigners 1 Total.............................................................................. 3,175 3,149 3,077 3,102 2,985 5,077 5,143 5,067 5,008 5,139 2 Europe.......................................................................... 2,425 2,498 2,422 2,460 2,347 864 937 943 927 1,081 3 Germany.................................................................. 255 295 282 290 265 74 75 71 76 73 4 Netherlands............................................................. 287 292 266 275 258 82 81 76 74 71 5 Switzerland.............................................................. 241 241 236 246 162 49 48 55 58 52 6 United Kingdom.................................................... 1,222 1,228 1,214 1,242 1,174 310 332 363 341 497 7 Canada.......................................................................... 62 58 56 60 60 1,776 1,792 1,811 1,781 1,833 8 Latin America............................................................. 284 248 248 230 226 1,402 1,387 1,298 1,283 1,233 9 Bahamas................................................................... 148 142 141 138 143 40 42 2 2 2 10 Brazil........................................................................ 7 6 7 7 6 144 154 143 144 158 11 Chile......................................................................... 1 1 1 1 1 203 194 190 176 139 30 27 26 26 23 177 183 188 217 212 13 Asia................................................................................ 342 284 290 289 292 817 810 803 812 762 14 Japan........................................................................ 305 250 255 254 261 66 83 78 70 66 2 2 2 3 3 161 156 154 149 170 16 All other1..................................................................... 60 60 60 61 57 59 60 59 56 59 1 Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 International Statistics □ June 1979 3.27 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Percent per annum Rate on May 31, 1979 Rate on May 31, 1979 Rate on May 31, 1979 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............................... 3.75 Jan. 1979 Germany, Fed. Rep. of. 4.0 Mar. 1979 6.5 July 1978 Belgium.............................. 8.0 May 1979 10.5 Sept. 1978 1.0 Feb. 1978 Brazil.................................. 33.0 Nov. 1978 4.25 Apr. 1979 United Kingdom........... 12.0 Apr. 1979 Canada............................... 11.25 Jan. 1979 4.5 June 1942 5.0 Oct. 1970 Denmark............................ 8.0 July 1977 Netherlands.................... 7.0 May 1979 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. 3.28 FOREIGN SHORT-TERM INTEREST RATES Percent per annum, averages of daily figures 1978 1979 Country, or type 1976 1977 1978 Dec. Jan. Feb. Mar. Apr. May 1 Eurodollars................................................................ 5.58 6.03 8.74 11.62 11.16 10.79 10.64 10.60 10.75 2 United Kingdom....................................................... 11.35 8.07 9.18 12.28 12.61 13.28 11.98 11.64 11.76 3 Canada......................................................................... 9.39 7.47 8.52 10.44 10.87 10.94 11.08 11.18 11.26 4 Germany..................................................................... 4.19 4.30 3.67 4.09 3.85 4.13 4.42 5.50 5.89 5 Switzerland................................................................. 1.45 2.56 0.74 0.22 0.05 0.13 0.03 0.93 1.54 6 Netherlands................................................................. 7.02 4.73 6.53 10.25 8.69 7.42 7.35 7.23 7.82 7 France.......................................................................... 8.65 9.20 8.10 6.59 6.55 6.83 7.05 6.96 7.63 8 Italy.............................................................................. 16.32 14.26 11.40 11.24 11.12 11.38 11.46 11.52 11.37 9 Belgium........................................................................ 10.25 6.95 7.14 9.28 8.93 8.23 7.63 7.63 8.16 10 Japan............................................................................ 7.70 6.22 4.75 4.76 4.52 4.50 4.54 5.13 5.25 Note. Rates are for 3-month interbank loans except for—Canada, over; and Japan, loans and discounts that can be called after being held finance company paper; Belgium, time deposits of 20 million francs and over a minimum of two month-ends. 3.29 FOREIGN EXCHANGE RATES Cents per unit of foreign currency 1978 1979 Country/currency 1976 1977 1978 Dec. Jan. Feb. Mar. Apr. May 1 Australia/dollar.................... 122.15 110.82 114.41 114.15 114.04 113.12 112.15 110.85 110.57 2 Austria/schilling................... 5.5744 6.0494 6.8958 7.2621 7.3821 7.3510 7.3312 7.1862 7.1222 3 Belgium/franc....................... 2.5921 2.7911 3.1809 3.3637 3.4276 3.4153 3.3971 3.3271 3.2732 4 Canada/dollar....................... 101.41 94.112 87.729 84.763 84.041 83.638 85.187 87.235 86.534 5 Denmark/krone................... 16.546 16.658 18.156 19.063 19.487 19.423 19.269 18.958 18.562 6 Finland/markka................... 25.938 24.913 24.337 24.957 25.252 25.186 25.161 24.976 24.974 7 France/franc......................... 20.942 20.344 22.218 23.178 23.570 23.395 23.328 22.967 22.691 8 Germany/deutsche mark... 39.737 43.079 49.867 53.217 54.056 53.862 53.754 52.745 52.422 9 India/rupee............................ 11.148 11.406 12.207 12.174 12.185 12.124 12.138 12.191 12.066 10 Ireland/pound....................... 180.48 174.49 191.84 198.61 200.53 200.42 203.73 201.97 198.43 11 Italy/lira................................. .12044 .11328 .11782 .11863 .11955 .11899 .11888 .11858 .11744 12 Japan/yen.............................. .33741 .37342 .47981 .51038 .50571 .49877 .48470 .46241 .45797 13 Malaysia/ringgit................... 39.340 40.620 43.210 45.524 45.487 45.488 45.440 45.023 44.934 14 Mexico/peso......................... 6.9161 4.4239 4.3896 4.3950 4.4038 4.3952 4.3835 4.3780 4.3805 15 Netherlands/guilder............. 37.846 40.752 46.284 49.120 50.082 49.856 49.801 48.794 48.132 16 New Zealand/dollar............. 99.115 96.893 103.64 105.45 105.64 105.32 105.39 104.96 104.37 17 Norway/krone...................... 18.327 18.789 19.079 19.574 19.730 19.610 19.619 19.444 19.270 18 Portugal/escudo................... 3.3159 2.6234 2.2782 2.1472 2.1358 2.1065 2.0855 2.0482 2.0214 19 South Africa/rand............... 114.85 114.99 115.01 115.01 114.96 116.76 118.40 117.94 118.22 20 Spain/peseta.......................... 1.4958 1.3287 1.3073 1.4085 1.4293 1.4427 1.4490 1.4679 1.5131 21 Sri Lanka/rupee................... 11.908 11.964 6.3834 6.4700 6.4491 6.4439 6.4593 6.4455 6.4239 22 Sweden/krona....................... 22.957 22.383 22.139 22.808 22.987 22.898 22.901 22.772 22.755 23 Switzerland/franc................. 40.013 41.714 56.283 59.703 59.840 59.699 59.473 58.220 57.894 24 United Kingdom/pound... 180.48 174.49 191.84 198.61 200.53 200.42 203.78 207.34 205.87 Memo: 25 United States/dollar i.......... 105.57 103.31 88.52 87.77 88.25 88.39 89.49 90.31 1 Index of weighted average exchange value of U.S. dollar against cur- the Weighted-Average Exchange Value of the U.S. Dollar: Revision” on rencies of other G-10 countries plus Switzerland. March 1973 = 100. page 700 of the August 1978 Bulletin. 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 Note. Averages of certified noon buying rates in New York for cable transfers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 69 Guide to Tabular Presentation and Statistical Releases G uide to Tabular Presentation Symbols and Abbreviations c Corrected 0 Calculated to be zero e Estimated n.a. Not available P Preliminary n.e.c. Not elsewhere classified r Revised (Notation appears on column head­ IPCs Individuals, partnerships, and corporations ing when more than half of figures in that REITs Real estate investment trusts column are changed.) RPs Repurchase agreements * Amounts insignificant in terms of the last SMSAs Standard metropolitan statistical areas decimal place shown in the table (for Cell not applicable example, less than 500,000 when the smallest unit given is millions) General Information Minus signs are used to indicate (1) a decrease, (2) as well as direct obligations of the Treasury. “State a negative figure, or (3) an outflow. and local government” also includes municipalities, “U.S. government securities” may include guaran­ special districts, and other political subdivisions. teed issues of U.S. government agencies (the flow of In some of the tables details do not add to totals funds figures also include not fully guaranteed issues) because of rounding. Statistical Releases List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for individual releases................................................. June 1979 A-76 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 70 Federal Reserve Board of Governors G. William Miller, Chairman Philip E. Coldwell Henry C. Wallich J. Charles Partee Office of Board M embers Office of Staff Director for M onetary and Financial Policy Joseph R. Coyne, Assistant to the Board Kenneth A. Guenther, Assistant to the Board Stephen H. Axilrod, Staff Director Jay Paul Brenneman, Special Assistant to the Edward C. Ettin, Deputy Staff Director Board Murray Altmann, Assistant to the Board Frank O’Brien, Jr., Special Assistant to the Peter M. Keir, Assistant to the Board Board Stanley J. Sigel, Assistant to the Board Joseph S. Sims, Special Assistant to the Board Normand R. V. Bernard, Special Assistant to Donald J. Winn, Special Assistant to the Board the Board Legal Division Division of Research and Statistics Neal L. Petersen, General Counsel James L. Kichline, Director Robert E. Mannion, Associate General Joseph S. Zeisel, Deputy Director Counsel John H. Kalchbrenner, Associate Director Allen L. Raiken, Associate General Counsel John J. Mingo, Senior Research Division Officer Charles R. McNeill, Assistant to the General Counsel Eleanor J. Stockwell, Senior Research Division Officer J. Virgil Mattingly, Assistant General James M. Brundy, Associate Research Division Counsel Officer Gilbert T. Schwartz, Assistant General Robert A. Eisenbeis, Associate Research Counsel Division Officer Jared J. Enzler, Associate Research Division Officer Office of the Secretary J. Cortland G. Peret, Associate Research Division Officer Theodore E. Allison, Secretary Michael J. Prell, Associate Research Division Griffith L. Garwood, Deputy Secretary Officer *Edward T. Mulrenin, Assistant Secretary Helmut F. Wendel, Associate Research Richard H. Puckett, Manager, Regulatory Division Officer Improvement Project Robert M. Fisher, Assistant Research Division Officer Frederick M. Struble, Assistant Research Division of Consumer Affairs Division Officer Stephen P. Taylor, Assistant Research Janet O. Hart, Director Division Officer Nathaniel E. Butler, Associate Director Levon H. Garabedian, Assistant Director Jerauld C. Kluckman, Associate Director Anne Geary, Assistant Director Division of International Finance Edwin M. Truman, Director Division of Banking Robert F. Gemmill, Associate Director Supervision and Regulation George B. Henry, Associate Director Charles J. Siegman, Associate Director John E. Ryan, Director Samuel Pizer, Senior International Division IFrederick C. Schadrack, Deputy Director Officer Frederick R. Dahl, Associate Director Jeffrey R. Shafer, Associate International William Taylor, Associate Director Division Officer William W. Wiles, Associate Director Dale W. Henderson, Assistant International Jack M. Egertson, Assistant Director Division Officer Don E. Kline, Assistant Director Larry J. Promisel, Assistant International Robert S. Plotkin, Assistant Director Division Officer Thomas A. Sidman, Assistant Director Ralph W. Smith, Jr., Assistant International Samuel H. Talley, Assistant Director Division Officer Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 71 and Official Staff Nancy H. Teeters Office of Office of Staff Director for Staff Director for M anagement Federal Reserve Bank A ctivities John M. Denkler, Staff Director William H. Wallace, Staff Director Robert J. Lawrence, Deputy Staff Director Joseph W. Daniels, Sr., Director of Equal Employment Opportunity Division of Federal Reserve Harry A. Guinter, Program Director for Bank Examinations and B udgets Contingency Planning Albert R. Hamilton, Director Clyde H. Farnsworth, Jr., Associate Division of Data Processing Director Charles W. Bennett, Assistant Director Charles L. Hampton, Director P. D. Ring, Assistant Director Bruce M. Beardsley, Associate Director Raymond L. Teed, Assistant Director Uyless D. Black, Assistant Director Glenn L. Cummins, Assistant Director Robert J. Zemel, Assistant Director Division of Federal Reserve Bank Operations Division of Personnel James R. Kudlinski, Director David L. Shannon, Director Walter Althausen, Assistant Director John R. Weis, Assistant Director Brian M. Carey, Assistant Director Charles W. Wood, Assistant Director Harry A. Guinter, Assistant Director Lorin S. Meeder, Assistant Director Office of the Controller John Kakalec, Controller Division of Support Services Donald E. Anderson,Director John L. Grizzard, Associate Director Walter W. Kreimann, Associate Director John D. Smith, Assistant Director *On loan from Office of the Controller. 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 □ June 1979 FOMC and Advisory Councils Federal Open Market Committee G. William Miller, Chairman Paul A. Volcker, Vice Chairman John Balles Monroe Kimbrel J. Charles Partee Robert Black Robert Mayo Nancy H. Teeters Philip E. Coldwell Henry C. Wallich Murray Altmann, Secretary George B. Henry, Associate Economist Normand R. V. Bernard, Assistant Secretary Peter M. Keir, Associate Economist Neal L. Petersen, General Counsel Michael Keran, Associate Economist James H. Oltman, Deputy General Counsel James L. Kichline, Associate Economist Robert E. Mannion, Assistant General Counsel James Parthemus, Associate Economist Stephen H. Axilrod, Economist Karl Scheld, Associate Economist Harry Brandt, Associate Economist Edwin M. Truman, Associate Economist Richard G. Davis, Associate Economist Joseph S. Zeisel, Associate Economist Edward C. Ettin, 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 J. W. McLean, tenth district, President Richard H. Vaughan, ninth district, Vice President Henry S. Woodbridge, Jr., first district Frank A. Plummer, sixth district Walter B. Wriston, second district Roger E. Anderson, seventh district William B. Eagleson, Jr., third district Clarence C. Barksdale, eighth district Merle E. Gilliand, fourth district James D. Berry, eleventh district J. Owen Cole, fifth district Chauncey E. Schmidt, twelfth district Herbert V. Prochnow, Secretary William J. Korsvik, Associate Secretary Consumer Advisory Council William D. Warren, Los Angeles, California, Chairman Marcia A. Hakala, Omaha, Nebraska, Vice Chairman Roland E. Brandel, San Francisco, California Percy W. Loy, Portland, Oregon James L. Brown, Milwaukee, Wisconsin R. C. Morgan, El Paso, Texas Mark E. Budnitz, Boston, Massachusetts Florence M. Rice, New York, New York John G. Bull, Fort Lauderdale, Florida Ralph J. Rohner, Washington, D. C. Robert V. Bullock, Frankfort, Kentucky Raymond J. Saulnier, New York, New York Carl Felsenfeld, New York, New York Henry B. Schechter, Washington, D. C. Jean A. Fox, Pittsburgh, Pennsylvania E. G. Schuhart II, Amarillo, Texas Richard H. Holton, Berkeley, California Blair C. Shick, Cambridge, Massachusetts Edna DeCoursey Johnson, Baltimore, Mary­ Thomas R. Swan, Portland, Maine land Anne Gary Taylor, Alexandria, Virginia Richard F. Kerr, Cincinnati, Ohio Richard A. Van Winkle, Salt Lake City, Utah Robert J. Klein, New York, New York Richard D. Wagner, Simsbury, Connecticut Harvey M. Kuhnley, Minneapolis, Minnesota Mary W. Walker, Monroe, Georgia 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 Robert M. Solow Frank E. Morris Robert P. Henderson James A. McIntosh NEW YORK*............... 10045 Robert H. Knight Paul A. Volcker Boris Yavitz Thomas M. Timlen Buffalo........................ 14240 Frederick D. Berkeley 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 Arnold R. Weber Walter H. MacDonald Cincinnati...................45201 Lawrence H. Rogers, II Robert E. Showalter Pittsburgh................... 15230 G. Jackson Tankersley Robert D. Duggan RICHMOND*...............23261 Vacant Robert P. Black Maceo A. Sloan George C. Rankin Baltimore....................21203 1. E. Killian Jimmie R. Monhollon Charlotte....................28230 Robert E. Elberson Stuart P. Fishburne Culpeper Communications and Records Center . 22701 Albert D. Tinkelenberg ATLANTA....................30303 Clifford M. Kirtland, Jr. Monroe Kimbrel William A. Fickling, Jr. Robert P. Forrestal Birmingham...............35202 William H. Martin, III Hiram J. Honea Jacksonville...............32203 Copeland D. Newbern Charles D. East Miami.........................33152 Castle W. Jordan F. J. Craven, Jr. Nashville....................37203 Cecelia Adkins Jeffrey J. Wells New Orleans..............70161 Levere C. Montgomery 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, Jr. Little Rock ...............72203 G. Larry Kelley John F. Breen Louisville .................40232 James F. Thompson Donald L. Henry Memphis ...................38101 Frank A. Jones, Jr. L. Terry Britt MINNEAPOLIS............55480 Stephen F. Keating Mark H. Willes William G. Phillips Thomas E. Gainor 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 Gerald D. Hines Robert H. Boykin El Paso........................79999 A. J. Losee Fredric W. Reed Houston......................77001 Gene M. Woodfin J. Z. Rowe San Antonio...............78295 Pat Legan 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 ........84125 Wendell J. Ashton 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 at Oriskany, 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 Sup­ quest and be made payable to the order of the Board port Services, Board of Governors of the Federal Re­ of Governors of the Federal Reserve System. Remit­ serve System, Washington, D.C. 20551. Where a tance from foreign residents should be drawn on a U.S. charge is indicated, remittance should accompany re- bank. (Stamps and coupons are not accepted.) The Federal Reserve System—Purposes and Bank Credit-Card and Check-Credit Plans. 1968. Functions. 1974. 125 pp. 102 pp. $1.00 each; 10 or more to one address, $.85 each. Annual Report. Survey of Changes in Family Finances. 1968. 321 Federal Reserve Bulletin. Monthly. $20.00 per pp. $1.00 each; 10 or more to one address, $.85 year or $2.00 each in the United States, its posses­ each. sions, Canada, and Mexico; 10 or more of same Report of the Joint Treasury-Federal Reserve issue to one address, $18.00 per year or $1.75 Study of the U.S. Government Securities each. Elsewhere, $24.00 per year or $2.50 each. Market. 1969. 48 pp. $.25 each; 10 or more to one address, $.20 each. Banking and Monetary Statistics, 1914-1941. (Reprint of Part 1 only) 1976. 682 pp. $5.00. Joint Treasury-Federal Reserve Study of the Government Securities Market: Staff Stud­ Banking and Monetary Statistics, 1941-1970. ies—Part 1. 1970. 86 pp. $.50 each; 10 or more 1976. 1,168 pp. $15.00. to one address, $.40 each. Part 2. 1971. 153 pp. Annual Statistical Digest and Part 3. 1973,. 131 pp. Each volume $1.00; 1971-75. 1976. 339 pp. $4.00 per copy for each 10 or more to one address, $.85 each. paid subscription to Federal Reserve Bulletin; Open Market Policies and Operating Proce­ all others $5.00 each. dures— Staff Studies. 1971. 218 pp. $2.00 1972-76. 1977. 338 pp. $10.00 per copy. each; 10 or more to one address, $1.75 each. 1973-77. 1978. 361 pp. $12.00 per copy. Reappraisal of the Federal Reserve Discount Mechanism. Vol. 1. 1971. 276 pp. Vol. 2. 1971. Federal Reserve Chart Book. Issued four times a 173 pp. Vol. 3. 1972. 220 pp. Each volume $3.00; year in February, May, August, and November. 10 or more to one address, $2.50 each. Subscription includes one issue of Historical Chart The Econometrics of Price Determination Con­ Book. $7.00 per year or $2.00 each in the United ference, October 30-31, 1970, Washington, D.C. States, its possessions, Canada, and Mexico. Else­ 1972. 397 pp. Cloth ed. $5.00 each; 10 or more where, $10.00 per year or $3.00 each. to one address, $4.50 each. Paper ed. $4.00 each; Historical Chart Book. Issued annually in Sept. 10 or more to one address, $3.60 each. Subscription to Federal Reserve Chart Book in­ Federal Reserve Staff Study: Ways to Moderate cludes one issue. $1.25 each in the United States, Fluctuations in Housing Construction . its possessions, Canada, and Mexico; 10 or more 1972. 487 pp. $4.00 each; 10 or more to one to one address, $1.00 each. Elsewhere, $1.50 each. address, $3.60 each. Capital Market Developments. Weekly. $15.00 per Lending Functions of the Federal Reserve year or $.40 each in the United States, its posses­ Banks. 1973. 271 pp. $3.50 each; 10 or more sions, Canada, and Mexico; 10 or more of same to one address, $3.00 each. issue to one address, $13.50 per year or $.35 each. Improving the Monetary Aggregates: Report of Elsewhere, $20.00 per year or $.50 each. the Advisory Committee on Monetary Sta­ Selected Interest and Exchange Rates—Weekly tistics. 1976. 43 pp. $1.00 each; 10 or more to Series of Charts. Weekly. $15.00 per year or one address, $.85 each. $.40 each in the United States, its possessions, Annual Percentage Rate Tables (Truth in Lend­ Canada, and Mexico; 10 or more of same issue ing—Regulation Z) Vol. I (Regular Transactions). to one address, $13.50 per year or $.35 each. 1969. 100 pp. Vol. II (Irregular Transactions). Elsewhere, $20.00 per year or $.50 each. 1969. 116 pp. Each volume $1.00, 10 or more The Federal Reserve Act, as amended through De­ of same volume to one address, $.85 each. cember 1976, with an appendix containing provi­ Federal Reserve Measures of Capacity and Ca­ sions of certain other statutes affecting the Federal pacity Utilization. 1978. 40 pp. $1.75 each, 10 or more to one address, $1.50. each. Reserve System. 307 pp. $2.50. Regulations of the Board of Governors of the The Bank Holding Company Movement to 1978: A Compendium. 1978. 289 pp. $2.50 each, 10 Federal Reserve System or more to one address, $2.25 each. Published Interpretations of the Board of Gov­ ernors, as of June 30, 1978. $7.50. Improving the Monetary Aggregates: Staff Papers. 1978. 170 pp. $4.00 each, 10 or more Industrial Production— 1976 Edition. 1977. 304 to one address, $3.75 each. pp. $4.50 each; 10 or more to one address, $4.00 1977 Consumer Credit Survey. 1978. 119 pp. $2.00 each. each. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve Board Publications A 75 Consumer Education Pamphlets Innovations in Bank Loan Contracting: Recent (Short pamphlets suitable for classroom use. Multiple Evidence, by Paul W. Boltz and Tim S. Camp­ copies available without charge.) bell. May 1979. 40 pp. Consumer Handbook To Credit Protection Laws. Printed in Full in the Bulletin The Equal Credit Opportunity Act and . . . Age. (Included under “Reprints.”) The Equal Credit Opportunity Act and . Credit Rights in Housing. The Equal Credit Opportunity Act and . . . Reprints Doctors, Lawyers, Small Retailers, and (Except for Staff Papers, Staff Studies, and some Others Who May Provide Incidental Credit. leading articles, most of the articles reprinted do not The Equal Credit Opportunity Act and . exceed 12 pages.) Women. Fair Credit Billing. Measures of Security Credit. 12/70. A Guide to Federal Reserve Regulations. Revision of Bank Credit Series. 12/71. How to File A Consumer Credit Complaint. Assets and Liabilities of Foreign Branches of If You Borrow To Buy Stock. U.S. Banks. 2/72. If You Use A Credit Card. Bank Debits, Deposits, and Deposit Turnover— Truth in Leasing. Revised Series. 7/72. U.S. Currency. Yields on Newly Issued Corporate Bonds. 9/72. What Truth in Lending Means to You. Recent Activities of Foreign Branches of U.S. Banks. 10/72. Revision of Consumer Credit Statistics. 10/72. Staff Studies One-Bank Holding Companies Before the 1970 (Studies and papers on economic and financial sub­ Amendments. 12/72. jects that are of general interest.) Yields on Recently Offered Corporate Bonds. 5/73. Summaries Only Printed in the Bulletin Rates on Consumer Instalment Loans. 9/73. New Series for Large Manufacturing Corpora­ (Limited supply of mimeographed copies of full text tions. 10/73. available upon request for single copies.) U.S. Energy Supplies and Uses, Staff Economic Study by Clayton Gehman. 12/73. The Behavior of Member Bank Required Reserve The Structure of Margin Credit. 4/75. Ratios and the Effects of Board Action, New Statistical Series on Loan Commitments at 1968-77, by Thomas D. Simpson. July 1978. 39 Selected Large Commercial Banks. 4/75. pp. An Assessment of Bank Holding Companies, Staff Economic Study by Robert J. Lawrence and Sam­ Foothold Acquisitions and Bank Market Struc­ ture, by Stephen A. Rhoades and Paul Schweit­ uel H. Talley. 1/76. zer, July 1978. 8 pp. Industrial Electric Power Use. 1/76. Interest Rate Ceilings and Disintermediation, by Revision of Money Stock Measures. 2/76. Edward F. McKelvey. Sept. 1978. 105 pp. Survey of Finance Companies, 1975. 3/76. The Relationship Between Reserve Ratios and Revised Series for Member Bank Deposits and the Monetary Aggregates Under Reserves Aggregate Reserves. 4/76. and Federal Funds Rate Operating Targets, Industrial Production— 1976 Revision. 6/76. by Kenneth J. Kopecky. Dec. 1978. 58 pp. Federal Reserve Operations in Payment Mecha­ Tie-ins Between the Granting of Credit and nisms: A Summary. 6/76. Sales of Insurance by Bank Holding Compa­ New Estimates of Capacity Utilization: Manu­ nies and Other Lenders, by Robert A. Eisenbeis facturing and Materials. 11/76. and Paul R. Schweitzer. Feb. 1979. 75 pp. Bank Holding Company Financial Developments Geographic Expansion of Banks and Changes in in 1976. 4/77. Banking Structure, by Stephen A. Rhoades. Survey of Terms of Bank Lending— New Series. Mar. 1979. 40 pp. 5/77. Impact of the Dollar Depreciation on the U.S. The Commercial Paper Market. 6/77. Price Level: An Analytical Survey of Em­ The Federal Budget in the 1970’s. 9/78. pirical Estimates, by Peter Hooper and Barbara Summary Measures of the Dollar’s Foreign Ex­ R. Lowery. Apr. 1979. 53 pp. change Value. 10/78. Survey of Time and Savings Deposits at Commer­ cial Banks, January 1979. 5/79. Redefining the Monetary Aggregates. 1/79. U.S. International Transactions in 1978. 4/79. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 76 Federal Reserve Bulletin □ June 1979 Anticipated Schedule of Release Dates for Public Periodic Releases- -Board of Gover- NORS OF THE FEDERAL RESERVE SYSTEM1 Date or Period Approximate to which Data Weekly Releases Release Day 2 Refer Aggregate Reserves and Member Bank Deposits. H.3 (502) Tuesday Week ended previous Wednesday Applications and Reports Received or Acted on and All Other Friday Week ended previous Actions of the Board. H.2 (501) Saturday Assets and Liabilities of All Commercial Banks in the United Wednesday Wednesday, 2 weeks States. H.8 (510) earlier Changes in State Member Banks. K.3 (615) Tuesday Week ended previous Saturday Deposits, Reserves, and Borrowings of Member Banks. H.7 (509) Wednesday Week ended 3 Wed­ nesdays earlier Factors Affecting Bank Reserves and Condition Statement of Thursday Week ended previous Federal Reserve Banks. H.4.1 (503) Wednesday Foreign Exchange Rates. H.10 (512) Monday Week ended previous Friday Money Stock Measures. H.6 (508) Thursday Week ended Wednes­ day of previous week Reserve Positions of Major Reserve City Banks. H.5 (507) Friday Week ended Wednes­ day of previous week Selected Interest Rates and Bond Prices. H.15 (519) Monday Week ended previous Saturday Weekly Condition Report of Large Commercial Banks and Wednesday Wednesday, 1 week Domestic Subsidiaries. H.4.2 (504) earlier Weekly Summary of Banking and Credit Measures. H.9 (511) Thursday Week ended previous Wednesday; and week ended Wed­ nesday of previous week Semimonthly Release Research Library—Recent Acquisitions. J.2 (601) 1st and 16th Period since last of month release Monthly Releases Bank Credit at all Commercial Banks in the U.S. G.7 (407) 15th of month Previous month Capacity Utilization: Manufacturing and Materials. G.3 (402) 17th of month Previous month 1 The Board’s official mailing list is being computerized, and three-digit identification codes have been assigned to each individual release. 2 Release dates are those anticipated or usually met. However, it should be noted that for some releases there is normally a certain variability because of reporting or processing procedures. Moreover, for all series unusual circumstances may, from time to time, result in a release date being later than anticipated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 77 Date or Period Approximate to which Data Monthly Releases (cont.) Release Day Refer Changes in Status of Banks and Branches. G.4.5 (404) 25th of month Previous month Commercial and Industrial Loans Outstanding 1st Wednesday Last Wednesday of by Industry. G.27 (429) of month previous month Consumer Instalment Credit. G.19 (421) 3rd working 2nd month previous day of month Debits and Deposit Turnover at Commercial Banks. G.6 (406) 25th of month Previous month Federal Reserve System Memorandum on Exchange Charges. 5th of month Period since last K. 14 (628) release Finance Companies. G.20 (422) 5th working 2nd month previous day of month Foreign Exchange Rates. G.5 (405) 1st of month Previous month Industrial Production. G.12.3 (414) 15th of month Previous month Loan Commitments at Selected Large Commercial Banks. G.21 (423) 20th of month 2nd month previous Maturity Distribution of Outstanding Negotiable Time Certificates of 24th of month Last Wednesday of Deposit. G.9 (410) previous month Monthly Report of Condition for U.S. Agencies, Branches, and 15th of month 2nd month previous Domestic Banking Subsidiaries of Foreign Banks. G.ll (412) Selected Interest Rates and Bond Prices. G.13 (415) 6th of month Previous month Summary of Equity Security Transactions. G.16 (418) Last week of Release date month Monthly Supplement to Survey of Terms of Bank Lending. G.14 15th of month 3rd month previous (416) Quarterly Releases Automobile Credit E.4 (114) 14th of April, Previous quarter July, October, and January Finance Rates and Other Terms on Selected Types of Consumer 25th of January, 2nd month previous Instalment Credit Extended by Major Finance Companies. April, July, and E. 10 (120) October Flow of Funds: Seasonally adjusted and unadjusted. Z.l (780) 15th of Febru­ Previous quarter ary, May, August, and November Geographical Distribution of Assets and Liabilities of Major Foreign 15th of Previous quarter Branches of U.S. Banks. E.ll (122) March, June, September, and December Interest Rates on Selected Consumer Instalment Loans at 15th of March, February, May, Reporting Commercial Banks. E.12 (122) June, Septem­ August, and ber, and November December Sales Revenue, Profits, and Dividends of Large Manufacturing 10th of March, 2nd quarter previous Corporations. E.6 (116) July, Septem­ ber, and Decem­ ber Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 78 Federal Reserve Bulletin □ June 1979 Date or Period Approximate to which Data Semiannual Releases Release Day Refer Assets and Liabilities of Commercial Banks, by Class of Bank. May and No­ End of previous De­ E.3.4 (113) vember cember and June List of OTC Margin Stocks. E.7 (117) April, and Release date October Assets, Liabilities, and Capital Accounts of Commercial and Mutual May and No­ End of previous De­ Savings Banks—Reports of Call (Joint Release of the Federal vember cember and June Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, and Office of the Comptroller of the Currency. Published and distributed by FDIC.) Annual Releases Aggregate Summaries of Annual Surveys of Security Credit February End of previous June Extension. C.2 (101) Insured Bank Income by Size of Bank. C.4 (103) End of May Previous year State Member Banks of Federal Reserve System and Nonmember 1st quarter of End of previous year Banks that Maintain Clearing Accounts with Federal Reserve year Banks. G.4 (403) (Supplements issued monthly) 15th of month Previous month Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 79 Index to Statistical Tables References are to pages A-3 through A-68 although the prefix “A” is omitted in this index ACCEPTANCES, bankers, 11, 25, 27 Demand deposits Agricultural loans, commercial banks, 18, 20-22, 26 Adjusted, commercial banks, 13, 15, 19 Assets and liabilities (See also Foreigners) Banks, by classes, 16, 17, 19, 20-23 Banks, by classes, 16, 17, 18, 20-23, 29 Ownership by individuals, partnerships, and Domestic finance companies, 39 corporations, 25 Federal Reserve Banks, 12 Subject to reserve requirements, 15 Nonfinancial corporations, current, 38 Turnover, 13 Automobiles Deposits (See also specific types) Consumer installment 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 Reserve Banks (See Interest rates) (See also Foreigners) Discounts and advances by Reserve Banks (See Loans) Banks for Cooperatives, 35 Dividends, corporate, 37 Bonds (See also U.S. government securities) New issues, 36 EMPLOYMENT, 46, 47 Yields, 3 Eurodollars, 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 Federal funds, 3, 6, 18, 20, 21, 22, 27, 30 CAPACITY utilization, 46 Federal Home Loan Banks, 35 Capital accounts Federal Home Loan Mortgage Corporation, 35, 40, 41 Banks, by classes, 16, 17, 19, 20 Federal Housing Administration, 35, 40, 41 Federal Reserve Banks, 12 Federal Intermediate Credit Banks, 35 Central banks, 68 Federal Land Banks, 35, 41 Certificates of deposit, 23, 27 Federal National Mortgage Association, 35, 40, 41 Commercial and industrial loans Federal Reserve Banks Commercial banks, 15, 18, 26 Condition statement, 12 Weekly reporting banks, 20, 21, 22, 23, 24 Discount rates (See Interest rates) Commercial banks U.S. government securities held, 4, 12, 13, 32, 33 Assets and liabilities, 3, 15-19, 20-23 Federal Reserve credit, 4, 5, 12, 13 Business loans, 26 Federal Reserve notes, 12 Commercial and industrial loans, 24, 26 Federally sponsored credit agencies, 35 Consumer loans held, by type, 42, 43 Finance companies Loans sold outright, 23 Assets and liabilities, 39 Number, by classes, 16, 17, 19 Business credit, 39 Real estate mortgages held, by type of holder and Loans, 20, 21, 22, 42, 43 property, 41 Paper, 25, 27 Commercial paper, 3, 25, 27, 39 Financial institutions, loans to, 18, 20-22 Condition statements (See Assets and liabilities) Float, 4 Construction, 46, 50 Flow of funds, 44, 45 Consumer installment credit, 42, 43 Foreign Consumer prices, 46, 51 Currency operations, 12 Consumption expenditures, 52, 53 Deposits in U.S. banks, 4, 12, 19, 20, 21, 22 Corporations Exchange rates, 68 Profits, taxes, and dividends, 37 Trade, 55 Security issues, 36, 65 Foreigners Cost of living (See Consumer prices) Claims on, 56, 58, 61, 62, 63, 66, 67 Credit unions, 29, 42, 43 Liabilities to, 23, 56-60, 64-67 Currency and coin, 5, 16, 18 Currency in circulation, 4, 14 GOLD Customer credit, stock market, 28 Certificates, 12 Stock, 4, 55 DEBITS to deposit accounts, 13 Government National Mortgage Association, 35, 40, 41 Debt (See specific types of debt or securities) Gross national product, 52, 53 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 80 Federal Reserve Bulletin □ June 1979 HOUSING, new and existing units, 50 REAL estate loans Banks, by classes, 18, 20-22, 29, 41 INCOME, personal and national, 46, 52, 53 Life insurance companies, 29 Industrial production, 46, 48 Mortgage terms, yields, and activity, 3, 40 Installment 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, !8, 19 Reserve requirements, member banks, 9 Interbank loans and deposits, 16, 17 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. government securities) Investments (See also specific types) 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 associations, 29 State and local govts. Deposits, 19, 20, 21, 22 LABOR force, 47 Holdings of U.S. government securities, 32, 33 Life insurance companies (See Insurance companies) New security issues, 36 Loans (See also specific types) Ownership of securities of, 18, 20, 21, 22, 29 Banks, by classes, 16, 17, 18, 20-23, 29 Yields of securities, 3 Commercial banks, 3, 15-18, 20-23, 24, 26 State member banks, 17 Federal Reserve Banks, 3, 4, 5, 8, 12, 13 Stock market, 28 Insurance companies, 29, 41 Stocks (See also Securities) Insured or guaranteed by United States, 40, 41 New issues, 36 Savings and loan associations, 29 Prices, 28 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, 28 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. government 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 rates) U.S. government securities Money stock measures and components, 3, 14 Bank holdings, 16, 17, 18, 20, 21, 22, 29, Mortgages (See Real estate loans) 32, 33 Mutual funds (See Investment companies) Dealer transactions, positions, and financing, 34 Mutual savings banks, 3, 10, 20-22, 29, 32, 33, 41 Federal Reserve Bank holdings, 4, 12, 13, 32, 33 Foreign and international holdings and NATIONAL banks, 17 transactions, 12, 32, 64 National defense outlays, 31 Open market transactions, 11 National income, 52 Outstanding, by type of security, 32, 33 Nonmember banks, 17, 18, 19 Ownership, 32, 33 Rates in money and capital markets, 3, 27 OPEN market transactions, 11 Yields, 3 Utilities, production, 49 PERSONAL income, 53 Prices VETERANS Administration, 40, 41 Consumer and producer, 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 81 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories Minneapolis$ Detroit Chicago \saltLake City Omaha* Denver Kansas City 'f. Louis Louisvil fichn>?S. 'harlot^ ' Q/wtii Naskyill> I Oklahoma Cit] ls Angeles UJttleRock Birmingh<ii"^ianf0' vSan Antonio January T97S LEGEND Boundaries of Federal Reserve Districts ® Federal Reserve Bank Cities Boundaries of Federal Reserve Branch • Federal Reserve Branch Cities Territories Federal Reserve Bank Facility © Board of Governors of the Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis