Federal Reserve Bulletin, 1979-08

AUG UST 1979 FEDERAL RESERVE BULLETIN D om estic Financial D evelopm ents in the S econd Q uarter of 1979 M onetary Policy R eport to C ongress R evision of the Industrial P roduction Index R evision of C apacity U tilization R ates 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 thei Federal Reserve System, Washington, D.C. 20551. A copy of the Federal Reserve B ulletin is sent to each member bank without clnarge; 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 8 □ AUGUST 1979 F E D E R A L RESERVE BULLETIN B oard of G overnors of the Federal R eserve System W ashington, 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 Bulletin is issued monthly under the direction of the start 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 o f Contents 583 Domestic Financial Developments in 610 Industrial Production the Second Quarter op 1979 Output fell 0.1 percent in July. The quarterly report to the Congress states that growth in the three major monetary 611 Statements to Congress aggregates accelerated sharply in the pe­ riod so at midyear all were within the Governor Henry C. Wallich gives the growth ranges set by the Federal Open Board’s views on the Eurodollar market Market Committee for the period 1978 Q4 and discusses the need for measures to to 1979 Q4. monitor its growth, before the Subcom­ mittee on Domestic Monetary Policy and 591 Monetar y Policy Report to Congress on International Trade, Investment and Monetary Policy of the House Committee Submitted pursuant to the Full Employ­ on Banking, Finance and Urban Affairs, ment and Balanced Growth Act of 1978, July 12, 1979. the Board’s report states that the perform­ ance of the economy this year has been 617 Governor Wallich testifies on several cur­ distinctly unsatisfactory and poses major rent issues in international banking in­ problems for governmental policy, cluding those posed by the establishment of special international banking facilities; 603 Revision of the a proposed amendment to the Board’s Industrial Production Index regulation of Edge corporations that would allow Edge corporations to conduct any The industrial production index has been type of business with certain customers revised beginning with January 1976 to termed “qualified business entities;” reflect revised and more complete under­ Governor Wallich also comments on lying data and new seasonal adjustment foreign acquisitions of U.S. banks, and factors. says that it would not be desirable, in his view, to limit arbitrarily the growth of 606 Revision of Capacity Utilization sound international banking activity, be­ Rates fore the Senate Committee on Banking, The estimates of capacity utilization rates Housing and Urban Affairs, July 16, 1979. for manufacturing and for industrial mate­ 623 Governor Philip E. Coldwell testifies in rials have been revised to incorporate the connection with the examination of the revised industrial production index, new U.S. investments of countries that are survey data, and additional information members of the Organization of Petroleum about industry's capacity and its utilization. Exporting Countries and gives a review of the data pertinent to such investments that 608 Staff Studies are collected by the Federal Reserve and “Impact of Bank Holding Companies on the Treasury and includes the assessment Competition and Performance in Banking that OPEC investments have not reflected Markets” suggests that the presence of any factors other than those prudent in­ bank holding companies in a market does vestors usually take into account, before not lead to superior overall market per­ the Subcommittee on Commerce, Con­ formance. sumer, and Monetary Affairs of the House Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Committee on Government Operations, other procedures in making securities July 18, 1979. transactions for trust departments and other bank customers. 627 Governor Waliich discusses foreign ac­ quisitions of U.S. banks and summarizes Heavier-than-expected demand for the how the Board evaluates proposed acqui­ new Susan B. Anthony dollar coin. sitions of U.S. banks by foreign banks and Various proposed actions. how it monitors foreign ownership of U.S. Admission of five state banks to member­ banks on an ongoing basis so that any ship in the Federal Reserve System. significant ownership interests are identi­ fied and the information collected will be 641 Record of Policy Actions of the sufficient to meet policy objectives, before Federal Open Market Committee the Subcommittee on Commerce, Con­ At its meeting on May 22, 1979, the sumer, and Monetary Affairs of the House Committee decided that ranges of toler­ Committee on Government Operations, ance for the annual rates of growth in M-l August 1, 1979. and M-2 over the May-June period should be 0 to 5 percent and 4 to 8% percent 631 Announcements respectively. The Manager was instructed Appointment of Paul A. Volcker as a to direct open market operations initially, member and as Chairman of the Board of toward maintaining the weekly average Governors. federal funds rate at about the current level, represented by a rate of 1014 per­ Resignation of G. William Miller as cent. Subsequently, if the two-month Chairman and as a member of the Board growth rates of M-1 and M-2 appeared to of Governors. be close to or beyond the upper or lower Appointment of Frederick H. Schultz as limits of the indicated ranges, the objec­ a member and as Vice Chairman of the tive for the funds rate was to be raised Board of Governors. or lowered in an orderly fashion within a range of 9% to 10% percent, although Increase in the discount rate. it was understood that a reduction in the Amendment to Regulation E to make rate below 10 percent would not be sought written notice of loss or theft of an elec­ until the Committee had an opportunity for tronic fund transfer card effective when the further consultation. It was also agreed consumer mails or otherwise transmits the that in assessing the behavior of the ag­ notice. gregates, the Manager should give ap­ proximately equal weight to M-l and M-2. Amendments to regulations governing the payment of interest on deposits. 651 Law Department Statement of policy on supervision of U.S. Amendments to Regulations H and Q; branches and agencies of foreign banks. revision of Regulation L; various bank holding company and bank merger orders; Adoption of joint regulations to carry out and pending cases. the provisions of the new Depository In­ stitution Management Interlocks Act 677 Membership of the aimed at fostering competition among de­ Board of Governors of the positary institutions and depositary hold­ Federal Reserve System, 1913-79 ing companies and their affiliates. List of appointive and ex officio members. Establishment of uniform standards for bank recordkeeping, confirmation, and Al Financial and Business Statistics Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Dom estic Financial Developments in the Second Quarter o f 1 9 7 9 This report, which was sent to the Joint Eco­ of a ceiling rate advantage on MMCs. The nomic Committee of the U.S. Congress, high­ second-quarter gains left all three aggregates at lights the important developments in domestic midyear well within the growth ranges set by financial markets during the spring and early the Federal Open Market Committee for the summer. period from the fourth quarter of 1978 to the fourth quarter of 1979. Growth in the major monetary aggregates ac­ With growth in the monetary aggregates celerated sharply in the second quarter. M-l— picking up in an environment of exceptionally currency and demand deposits—grew at a l lA rapid inflation and continued high utilization of percent annual rate after having shown virtually both labor and capital resources, the Federal no net change over the preceding six months. Reserve maintained a posture of restraint in M-2 also expanded more rapidly in the second providing reserves to the banking system in the quarter, reflecting both the pickup in' M-l second quarter. But the accumulation of evi­ growth and somewhat faster expansion of inter­ dence that economic activity was weakening est-bearing deposits at commercial banks, espe­ apparently led many market participants to an­ cially six-month money market certificates ticipate an easing in credit market conditions. (MMCs). The acceleration of M-3 was less As a result, even though the federal funds rate pronounced because of diminished deposit in­ increased about 1/4 of a percentage point in late flows at thrift institutions; such institutions April and generally remained around 10lA per­ operated for the first time without the benefit cent over the remainder of the quarter, most Interest rates Notes: Percent per annum Monthly averages except for LONG-TERM Federal Reserve discount rate and Conventional conventional mortgages (based on mortgages } quotations for one day each HUD >----" month). Yields: U.S. Treasury bills, market yields on three-month issues; prime commercial paper, dealer offering rates; conventional mortgages, rates on first mortgages in primary markets, unweighted and rounded to nearest 5 basis points, from Department of Hous­ U.S. government ing and Urban Development; Aaa utility bonds, weighted averages of new publicly offered bonds rated Aaa, Aa, and A by Moody’s Inves­ State and local tors Service and adjusted to Aaa government basis; -U.S. government bonds, market yields adjusted to 20-year constant maturity by U.S. Treas­ ury; state and local government bonds (20 issues, mixed quality)* Bond Buyer. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

584 Federal Reserve Bulletin □ August 1979 Changes in selected monetary aggregates1 Seasonally adjusted annual rates of change, in percent 1978 1979 Item 1976 1977 1978 Q2 Q3 04 Ql Q2 Member bank reserves2 Total .............................................. .6 5.3 6.6 6.2 8.6 2.3 -2.9 -A.9 Nonborrowed ................................ .8 3.0 6.7 .6 6.6 4.6 -3.3 -8.8 Monetary base3 ............................. 6.7 8.3 9.1 7.6 9.3 8.4 5.7 4.0 Concepts of money4 M-l ............................................... 5.8 7.9 7.2 9.2 7.9 4.1 -2.1 7.6 M-2 .............................................. 10.9 9.8 8.4 8.4 9.8 7.6 1.8 8.6 M-3 .............................................. 12.7 11.7 9.3 8.4 10.3 9.3 4.7 7.9 Time and savings deposits at commercial banks—Total (excluding large negotiable CDs) ......................................... 15.0 11.2 9.4 7.9 11.0 10.2 4.5 9.4 Savings ......................................... 25.0 11.1 2.2 3.8 2.9 .2 -9.6 -3.1 Other time...................................... 7.5 11.4 15.6 11.4 17.9 18.2 15.6 18.5 Small time plus total savings5....... 19.2 10.5 5.9 6.2 6.9 7.0 2.2 15.1 Deposits at thrift institutions6............ 15.6 14.5 10.6 8.5 11.1 11.6 8.8 6.8 Memo (change in billions of dollars, seasonally adjusted) Large negotiable CDs at large banks ..................................... -19.0 8.0 23.1 6.6 2.6 5.5 7.0 -10.3 All other large time deposits7......... -.8 10.8 21.0 2.7 6.3 5.6 3.6 -3.3 Small time deposits............................ 16.4 14.5 17.9 3.8 5.4 6.9 7.5 17.2 Nondeposit sources of funds8_____ 14.8 12.3 15.9 .8 3.2 6.7 8.2 6.8 1. Changes are calculated from the average amounts outstanding in each quarter. 2. Annual rates of change in reserve measures have been adjusted for changes in reserve requirements. 3. Includes total reserves (member bank reserve balances in the current week plus vault cash held two weeks earlier), currency in circulation (currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of commercial banks), and vault cash of nonmember banks. 4. M-l is currency plus private demand deposits adjusted. M-2 is M-l plus bank time and savings deposits other than large negotiable CDs. M-3 is M-2 plus deposits at mutual savings banks and savings and loan associations and credit union shares. 5. Interest-bearing deposits subject to Regulation Q. 6. Savings and loan associations, mutual savings banks, and credit unions. 7. Total large time deposits less negotiable CDs at weekly reporting banks. 8. Nondeposit sources of funds include borrowings by commercial banks from other than commercial banks in the form of federal funds purchased, securities sold under agreements to repurchase, and other liabilities to own foreign branches (gross Eurodollar borrowings), loans sold to affiliates, loan repurchase agreements, borrowings from Federal Reserve Banks, and other minor items. other short-term interest rates moved downward growth, coupled with the rebound in the demand on balance over the period after edging up early for housing credit following the severe weather in the quarter.-In July, the Federal Reserve of the first quarter. Stock market price indexes moved to tighten money market conditions generally advanced during the quarter, led by somewhat as rapid growth of the money stock increases in stock prices of corporations in the and weakness of the dollar in foreign exchange petroleum and natural gas industries. markets prompted an increase of 1/2 percentage Domestic nonfinancial sectors raised about point in the discount rate to 10 percent and a $365 billion, at a seasonally adjusted annual small further rise in the federal funds rate. rate, in the U.S. credit markets in the second In long-term markets, yields on both Treasury quarter, up somewhat from the previous quarter and corporate bonds reached their highest levels but below that in 1978. Businesses maintained of the current cycle early in May, but then the strong short- and intermediate-term borrow­ declined. In contrast, rates on conventional ing evident since year-end, while long-term home mortgages posted substantial further in­ corporate security offerings increased a bit from creases in the primary market throughout the the moderate level of the first quarter, reflecting quarter. The divergent behavior of mortgage mainly a surge in public offerings of bonds in rates likely reflected the increasing pressures on June. In the household sector, mortgage bor­ thrift institutions associated with slower deposit rowing rebounded in the quarter, while con- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Developments, Q2 1979 585 sumer installment borrowing, mirroring weak­ growth roughly IV2 percentage points in the ened retail sales, remained near the reduced second quarter, about half the amount of the volume of the winter months. Net borrowing preceding three months. Moreover, Treasury by the Treasury and state and local governments delays in processing the mid-April tax payments in the second quarter remained substantially and a bunching of refunds raised quarterly M-1 below the pace of recent years. growth slightly. With the slower expansion of GNP, the velocity of M-l remained essentially unchanged following exceptionally large in­ M onetary A ggregates creases in the preceding two quarters. and Ban k Credit The interest-bearing component of M-2 ex­ M-l grew at an annual rate of IV2 percent in panded more rapidly in the second quarter. the second quarter, after declining at a 2 percent Savings deposits at commercial banks grew in rate in the preceding three-month period. The June for the first time in nine months, and net marked acceleration of M-l growth reflected outflows for the quarter as a whole were well several factors. Most importantly, it appears that below the pace in the preceding period. Mean­ the demand for transactions balances strength­ while, the heavier net issuance of MMCs by ened following two quarters when M-l growth banks and moderation in outflows from small was well short of the rate consistent with the time deposits other than MMCs more than offset historical relationships among money, gross na­ a sizable runoff of large time accounts included tional product, and interest rates. In addition, in M-2. As a result, M-2 expanded at an 8V2 the diversion of funds from household demand percent annual rate in the second quarter, sub­ deposits into savings accounts eligible for auto­ stantially above the 13A percent pace earlier in matic transfer service (ATS) and into negotiable the year. order of withdrawal (NOW) accounts in New Commercial banks reportedly intensified their York State is estimated to have reduced M-l efforts to market MMCs following the regula­ tory change in mid-March that eliminated the rate differential of 1/4 of a percentage point between MMC ceilings at thrift institutions and Changes in income velocity of M-l and M-2 commercial banks for most of the quarter. Net issuance of MMCs at commercial banks totaled a record $18V4 billion on a quarterly average basis. At the same time, thrift institutions expe­ rienced much slower growth in MMCs, ac­ counting for 43 percent of the net MMC deposit growth in the second quarter compared with 67 percent in the previous nine months. For banks and thrift institutions combined, growth in total MMC balances, not seasonally adjusted, was somewhat slower in the second quarter than in the first, perhaps reflecting the slightly reduced attractiveness of these deposits relative to alter­ native market investments following the mid- March prohibition of interest compounding on new issues of the certificates. Alternative market instruments continued to attract substantial funds in the second quarter as evidenced by a rise in the average level of noncompetitive tenders at weekly Treasury bill auctions and a large increase in net assets of money market Seasonally adjusted annual rates. Money stock data are quar­ terly averages. mutual funds. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

586 Federal Reserve Bulletin □ August 1979 During part of the quarter, savings and loan Components of Major categories of associations offset some of the sharp decline in bank credit bank loans net MMC sales by stepping up issuance of large Change, billions of dollars certificates of deposit (CDs), which are not TREASURY SECURITIES BUSINESS n 4 j 12 subject to rate ceilings. Even so, expansion of n + JH 0 8 total thrift deposits is estimated to have weak­ TT 4 ened moderately, and growth of M-3 thus ac­ n I 0 celerated less markedly than that of the narrower i REAL ESTATE aggregates. M-3 grew at a 7% percent rate in OTHER SECURITIES 112 the second quarter compared with 3% percent n n n.n 4 8 n 1 0 in the first quarter. ■ 4 TOTAL LOANS 32 With the rebound in the growth of their de­ . 0 CONSUMER mand and small-denomination time and savings 12 24 deposits, commercial banks reduced somewhat 8 their reliance on managed liabilities—that is, 116 I] 4 large-denomination time deposits and nondepos­ 1 0 it funds. Total large time deposits, including NONBANK FINANCIAL both negotiable and nonnegotiable CDs, de­ 4 + clined $13*/2 billion in the second quarter (quar­ 0 terly average basis). Partially offsetting this de­ Q2 Q3 Q4 Ql Q2 Q2 Q3 Q4 Ql Q2 cline, member banks tapped their foreign 1978 1979 1978 1979 branches for more than $9 billion by both in­ Seasonally adjusted. Total loans and business loans adjusted for transfer between banks and their holding companies, affili­ creasing their liabilities to and reducing their ates, subsidiaries, or foreign branches. claims on these branches. From year-end until late in the second quarter, Eurodollar borrowing Treasury yield curves and deposit rate ceilings was less costly than issuance of large time deposits by domestic offices because the 8 per­ Percent per annum cent reserve requirement on domestic CDs more than offset the interest rate differential between these two instruments. By May, U.S. member banks had moved into a net liability position with respect to their own foreign branches for the first time since late 1974. Commercial banks also raised about $2!4 billion from domestic nondeposit sources in the second quarter, all of which was accounted for by security repurchase agreements with the nonbank public. Total bank credit grew at a 13 percent annual rate in the second quarter, just below the rapid pace in the first. Loan growth slowed slightly during the quarter with some diminution in the advance of all major loan categories. Bank lending to businesses edged down from the brisk 1 2 3 4 5 6 7 8 ___________Years to maturity___________ first-quarter pace, as growth at small banks ■"Maximum yield on “money market” time deposits at thrift slackened after the surge early in the year. As institutions, June 27, 1979. loan growth slowed, banks increased their in­ fMaximum yield on “money market” time deposits at commercial banks, June 27, 1979. vestments, acquiring Treasury securities at a Data reflect annual effective yields. Ceiling rates are yields substantially faster rate in the second quarter derived from continuous compounding of the nominal ceiling rates. Market yield data are on an investment yield basis. than earlier in the year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Developments, Q2 1979 587 B usiness Finance Business loans and short- and intermediate-term business credit Total funds raised by businesses in financial Seasonally adjusted annual rates of change, in percent markets increased substantially in the second Short- and Period Business loans intermediate-term quarter. Among nonfinancial corporations, ex­ at banks 1 business credit2 ternal financing needs reached their highest level 1975—Ql -5.2 -2.5 since 1974, as inventory accumulation boosted Q2 ....... -8.7 -8.8 Q3 ....... -2.4 -.3 capital outlays while internal fund flows slowed. Q4 ....... 0 -1.9 Firms increased their reliance on short- and 1976—Ql -6.9 -1.6 intermediate-term borrowing to meet their fi­ Q2 ....... 1.6 5.3 Q3 ...... 5.3 4.4 nancial requirements; in addition to sizable bor­ Q4 ....... 10.6 13.3 rowing from commercial banks, the volume of 1977—Ql 11.2 13.3 commercial paper issued by nonfinancial firms Q2 ...... 12.8 15.6 Q3 ....... 11.2 11.3 surged to a record annual rate in the second Q4 ...... 11.7 15.4 quarter, and business credit at finance compa­ 1978—Ql 15.3 14.1 nies also increased rapidly, due mainly to auto Q2 ....... 17.4 16.4 Q3 ....... 11.4 10.7 dealer financing. Q4 ....... 9.3 15.4 Heavy reliance on short- and interme­ 1979—Ql 21.8 20.5 Q2 ....... 19.5 21.5 diate-term financing is not unusual during peri­ ods when economic activity begins to weaken. 1. Based on data for last Wednesday of month, adjusted Corporate managers, expecting a cyclical for outstanding amounts of loans to affiliates. 2. Short- and intermediate-term business credit is business downturn to be accompanied by lower interest loans at commercial banks plus nonfinancial company com­ rates, attempt to avoid incurring long-term debt mercial paper and finance company loans to businesses, meas­ ured from end of quarter to end of quarter. while rates remain high. For example, such periods are typically characterized by a more ing the quarter, which helped to boost total rapid expansion in the volume of bank term public offerings of corporate issues to their loans, which have maturities of one to five years largest quarterly total in almost two years. The and offer corporations an alternative to bond large volume of offerings by financial corpora­ financing. The term loan share of business loans tions mainly comprised issues by finance com­ outstanding at large banks has risen steadily panies, a record amount of floating-rate note since late 1978, surpassing previous record issues by major bank holding companies, and levels. The strong demands for business loans mortgage-backed bond issues by savings and at banks in the first half of 1979 were accom­ loan associations. modated without increases in interest rates. The In contrast to public offerings, private bond prevailing prime rate remained constant at 11% placements, which typically serve as a source percent from January until late June, when it of funds for smaller and lower-rated firms, are dropped 1/4 of a percentage point to IIV2 per­ estimated to have edged down somewhat in the cent, reflecting reductions in the cost of funds second quarter, although they remained rela­ to banks. tively large by historical standards. Available Public offerings of long-term debt by nonfi­ data suggest also that outstanding commitments nancial corporations were moderate early in the to take private placements currently are sub­ second quarter, but climbed sharply in June as stantially lower than in previous quarters, in part several industrial companies either accelerated because life insurance companies—the principal or enlarged their offerings when bond yields source of private placement money—have allo­ moved lower. The managements of these firms cated a larger fraction of their investable funds apparently believed that long-term interest rates to mortgage instruments. The spread between were unlikely to decline further in the near conventional home mortgage rates and bond future and perhaps might back up somewhat. yields widened appreciably late in the quarter, Financial corporations issued a record amount thus increasing further the attractiveness of in­ of new intermediate- and long-term bonds dur- vestment in mortgages. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

588 Federal Reserve Bulletin □ August 1979 Gross offerings of new security issues during the second quarter, nearing the postwar Seasonally adjusted annual rates, in billions of dollars lows recorded in late 1974. The resulting high cost of equity capital was a major factor contrib­ 1978 1979 Type of security uting to the continued falloff in the volume Q2 Q3 Q4 Ql p Q2" of new stock issues. As in the previous quarter, Corporate ..................... 51 54 42 43 51 * most of the new equity offerings were by public Bonds ....................... 40 42 30 36 46 Publicly offered.. 21 23 18 16 32 utilities, which are more constrained by bond Privately placed.. 19 19 12 20 14 Stocks ..................... 11 12 12 7 5 covenants than are industrial firms to maintain Foreign ......................... 12 6 5 4 14 predetermined ratios of debt to equity. State and local government ............ 50 53 47 39 39 Government Finance p Preliminary, e Estimated. The gross volume of bonds issued by state and local governments in the second quarter was unchanged from that pf the first quarter, on a Yields on corporate bonds declined on bal­ seasonally adjusted basis. Offerings continued ance over the second quarter. Early in the quar­ ' to be bolstered by bonds issued to finance hous­ ter the Federal Reserve Board’s index of yields ing. Such issues were especially heavy in April on recently offered bonds—adjusted to a Aaa- but fell off in May with the introduction of rated utility basis—reached its highest level legislation that would have banned the use of since 1974, but thee dropped sharply when tax-exempt bonds to finance single-family evidence emerged of a less robust pace in eco­ mortgages. When it appeared that the Congress nomic activity. In late July, however, the index might only limit the use of such bonds, their stood at 9.58 percent, approximately 30 basis volume picked up again in June as issues that points below its recent peak in early May and had been postponed were brought to market. roughly unchanged from its level at the begin­ Despite heavy offerings of general obligation ning of the second quarter. bonds, the average yield on these issues, as Most broad measures of stock prices posted measured by the Bond Buyer index, fell 16 basis increases over the second quarter. The Ameri­ points over the second quarter. By June, the can Stock Exchange composite index rose 12 ratio of tax-exempt to corporate bond yields had percent, substantially more than either the com­ fallen to a record low. This ratio has been posite index of the New York Stock Exchange trending downward since late 1977, apparently or the National Association of Securities because of continued demands for tax-exempt, Dealers’ index of over-the-counter stock prices. bonds by commercial banks and property-liabil- The comparative strength of the American Stock ity insurance companies. Exchange index reflected the greater relative The Treasury paid down debt in the second importance of oil and natural gas industry shares quarter, a period during which the federal bud­ in this exchange. In contrast to the upward get normally moves into surplus owing to large movement in these indexes, the Dow Jones inflows of tax revenues. Using the proceeds of Industrial Average, which reflects the equity a' large surplus, the Treasury added almost $10 values of 30 major industrial firms, declined billion to its cash balance and reduced its in­ somewhat. The price indexes of electric utility debtedness by $4.6 billion, not seasonally ad­ stocks fell in the wake of the Three Mile Island justed. Marketable debt outstanding was about incident, but recovered late in the quarter as unchanged on balance, as bill redemptions were long-term interest rates declined and some nu­ offset by increased sales of coupon issues. Ac­ clear facilities that had been shut down began counting for a large part of the decline in eonoperating again. marketable debt was the redemption in early In spite of increases in most of the major April of a special $2.6 billion issue sold to the stock-price indexes, conventional measures of Federal Reserve at the end of the first quarter price-earnings multiples continued to decline because of a delay in passage of the debt ceiling Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Developments, Q2 1979 589 Federal government borrowing and cash balance Not seasonally adjusted, in billions of dollars 1977 1978 1979 Item Q3 Q4 Ql . Q2 Q3 Q4 Ql Q2e Treasury financing Budget surplus, or deficit (-) __...___. -12.2 -28.8 -25.8 14.0 -8.1 -23.8 -20.4 21.4 Off-budget deficit1.............................. -4.9 -1.3 -3.7 -2.2 -3.1 -.1 -3.0 -5.2 New cash borrowings, or repayments (-) 19.52 20.7 20.8 2.5 15.1 15.2 10.63 -4.6 Other means of financing 4........................ .4 2.6 2.8 -3.2 1.0 2.6 4.2 -1.8 Change in cash balance ..... ................. 2.8 -6.8 -5.9 11.1 4.9 —6.1 -8.6 9.8 Federally sponsored credit agencies, net cash borrowings 5.................................. 1.8 2.0 4.5 6.5 6.1 5.2 7.4 5.5 1, Includes outlays of the Pension Benefit Guaranty Cor­ 4. Checks issued less checks paid, accrued items, and other poration, Postal Service Fund, Rural Electrification and Tele­ transactions. phone Revolving Fund, Rural Telephone Bank, Housing for 5. Includes debt of the Federal Home Loan Mortgage Cor­ the Elderly or Handicapped Fund, and Federal Financing Bank. poration, Federal Home Loan Banks, Federal Land Banks, AH data have been adjusted to reflect the return of the Export- Federal Intermediate Credit Banks, Banks for Cooperatives, Import Bank to the unified budget. and Federal National Mortgage Association (including discount 2, Includes $2.5 billion of borrowing from the Federal notes and securities guaranteed by the Government National Reserve on September 30, which was repaid October 4 fol­ Mortgage Association), lowing enactment of a new debt-ceiling bill. e Estimated. 3, Includes $2.6 billion of borrowing from the Federal Reserve on March 31, which was repaid as of April 4 following enactment of a new debt-ceiling bill. M ortgage and Consumer Credit bill. In addition, foreign holdings of special nonmarketable issues fell $1.4 billion during the Net mortgage lending recovered substantially in second quarter. the second quarter from the weather-depressed Federally sponsored credit agencies raised first quarter, but remained below the record pace approximately $5.5 billion in the second quar­ of the fourth period of last year. The decline ter, not seasonally adjusted. While substantial, and partial recovery in mortgage lending in the this volume was down significantly from the first half were concentrated in the residential record pace of the preceding quarter and re­ sector and reflected primarily changes in lending flected a large decline in funds raised by the by savings and loan associations and commer­ Federal Home Loan Banks (FHLBs). Together, cial banks. Mortgage lending by these institu­ the FHLBs and the Federal National Mortgage tions in the second quarter remained about $6 Association borrowed $2.9 billion, down from billion below the peak in the fourth quarter of $4.6 billion in the first quarter. Advances to 1978. Savings and loans continued, moreover, savings and loan associations remained sub­ to decrease their outstanding commitments to stantial, but FHLBs met these demands in part acquire new mortgages. by drawing down liquidity. The Farm Credit Because of relatively weak flows of money System borrowed $2.6 billion. market certificates and only moderate inflows Yields on Treasury securities generally fell of deposits subject to fixed ceiling rates, savings over the second quarter, along with the yields and loans turned to other sources of funds to on most private debt securities. Interest rate help meet their mortgage commitments. These decreases were more pronounced for Treasury sources included large certificates of deposit bills, however, reflecting a reduced supply of and, to a lesser extent, issuance of commercial such bills and a pickup in June of demand by paper and mortgage-backed bonds. Net borrow­ foreign central banks associated with renewed ing from the Federal Home Loan Banks during dollar-support operations. These banks had sold the second quarter was roughly unchanged from substantial quantities of bills in the first five what it had been earlier in the year. Also, months of 1979 when strong private demands savings and loans reduced their holdings of bolstered the value of the dollar on international liquid assets, thereby lowering their average markets. liquidity, measured as the ratio of cash and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

590 Federal Reserve Bulletin □ August 1979 liquid assets to the sum of short-term borrow­ Net change in mortgage debt outstanding ings and deposits, from 9 percent seasonally Seasonally adjusted annual rates, in billions of dollars adjusted at the end of the first quarter to ap­ 1978 1979 proximately SV2 percent by the end of the sec­ Mortgage debt Q2r Q3r Q4r Qlr Q2e ond. With slower deposit growth constraining the Total change ................ 146 155 162 150 158 supply of funds from key lending institutions, Type of debt Residential .................. 115 116 126 113 120 the cost of mortgage financing has increased. Other 1 .......................... 31 39 36 37 38 The average of interest rates on new commit­ Type of holder ments for 80 percent, 30-year conventional Commercial banks__ 36 39 37 28 35 Savings and loans....... 52 48 52 43 48 home mortgages at sampled savings and loan Mutual savings banks 6 7 6 6 5 Life insurance associations has risen close to 70 basis points companies .............. 9 10 12 10 11 since March to a new high of 11.13 percent FNMA and GNMA ... 12 9 9 11 8 Other2 .......................... 31 42 46 52 51 in July. Rates increased in all major regions of the country, with the largest advances taking 1. Includes commercial and other nonresidential as well as farm properties. place in the West. As market rates moved to 2. Includes mortgage pools backing securities guaranteed higher levels, several states either raised or by the Government National Mortgage Association, Federal Home Loan Mortgage Corporation, and Farmers Home Ad­ removed usury ceilings on conventional home ministration, some of which may have been purchased by the loans. Even so, usury ceilings in a number of institutions shown separately. e Partially estimated. states have continued to restrict the supply of r Revised, mortgage credit. Consumer installment credit outstanding is in automobile installment credit-—a major com­ estimated to have expanded at a 16 percent ponent of the total—accompanied a decline in annual rate during the second quarter, only auto sales in the second quarter as demand for slightly higher than in the first quarter and below large cars fell and potential buyers of some the 19 percent average in 1978. Slower growth small cars encountered supply constraints. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

591 Monetary Policy Report to Congress Report submitted to the Congress on July 17, The inflationary effects of the increases in 1979, pursuant to the Full Employment and energy prices could, in principle, be offset if Balanced Growth Act of 19781 other prices on average declined or at least rose less than they otherwise would have. There will The performance of the economy this year has be some tendency in this direction as the diver­ been distinctly unsatisfactory. Starting from a sion of a larger share of spendable income to base of rapid inflation and the lagged effects energy results in a reduction in demand for other of the 1977-78 dollar depreciation, a series of goods and services. In recent years, however, unexpected events this year has disrupted eco­ nominal wages and prices have not generally nomic activity and intensified inflationary pres­ exhibited much flexibility in a downward direc­ sures. These events have included labor tion; rather, relative price adjustments typically disputes, severe weather, and adverse agricul­ have occurred in the context of an overall rise tural supply conditions, but the most disturbing in the average level of prices as economic units development, in terms of its implications for attempted to avoid losses of real income. future economic performance, has been an It also must be recognized that the rise in enormous increase in the price of imported oil. the relative price of imported oil involves a The adjustment to this oil price shock poses transfer of real income and wealth from the U.S. major problems for governmental policy and public to foreign oil producers. This loss will, represents a serious setback to progress toward in turn, have at least temporarily depressing the longer-range goals enunciated by the Full effects on domestic economic activity as the Employment and Balanced Growth Act. demand by foreign countries for U.S. exports Increased energy costs have greatly aggra­ expands only with a lag. vated our inflation problem. In February, when Thus, over the next year or two it appears the Board submitted its first report to the Con­ that exogenous forces will be causing both in­ gress under the Humphrey-Hawkins Act, it was tensified inflationary pressures and downward anticipated that oil prices would rise moderately adjustments in the demand for goods and serv­ this year, entailing some small upward pressure ices. Clearly, the problems confronting mone­ on the general level of prices. However, the tary policy, and macroeconomic policy gener­ developments since then—including the effects ally, have been made much more difficult. If of the Iranian revolution and the latest decisions monetary policy encourages a more rapid ex­ by the Organization of Petroleum Exporting pansion of money and credit in an attempt to Countries—are generating major increases in strengthen aggregate demand, it risks building the prices of imported oil and, consequently, even greater inflation into the economic system in the prices of other energy sources as well. through the aggravation of the price-wage-price spiral. On the other hand, if no account is taken of added upward price pressures in the formula­ 1. This report was submitted to the House Committee tion of policy, the risks are increased of on Banking, Finance and Urban Affairs on July 17, deepening or lengthening the transitional down­ 1979, and to the Senate Committee on Banking, Hous­ ing and Urban Affairs, July 24, 1979. ward adjustments in real economic activity that The charts for the report are available from Publica­ now appear in train. tions Services, Division of Support Services, Board of The Federal Reserve remains firmly resolved Governors of the Federal Reserve System, Washington, D.C. 20551. to direct its policies toward a reduction in the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

592 Federal Reserve Bulletin □ August 1979 rate of inflation. But in the current circum­ of the country was disrupted by unusually in­ stances, a combination of added inflationary clement weather; the construction industries pressures, a slowing of economic activity, and were especially hard hit, but other sectors also a probable increase in unemployment may delay were affected. In the early spring, labor contract progress toward price stability. This problem disputes in the trucking, airline, and rubber highlights the need to solve some of the major industries interfered with activity in many areas structural defects in our economy. It is impor­ of the economy. However, a more pervasive— tant that we begin to break down the barriers, and less transitory—influence on the course of both private and governmental, that inhibit in­ the economy this year has been the sharp rise novation and competition and thereby contribute in energy and food prices. The resultant accel­ to the inflationary bias of the economy. We must eration of inflation has had a serious impact on ensure that our system of taxation does not real disposable personal income and has had a discourage the saving and capital investment broadly adverse effect on consumer spending necessary to reverse the deterioration of pro­ attitudes. ductivity performance observed in recent years. And it is absolutely essential that this nation Personal Consumption Expenditures. Per­ develop an energy program that reduces its sonal consumption expenditures account for al­ reliance on foreign sources of energy. most two-thirds of GNP, and their weakness during the past two quarters has been an impor­ tant element in the flatness of overall economic Recent Economic and activity. Some softness in consumer demand Financial Developments was not unexpected following the surge in spending during the final months of 1978. Economic Activity However, retail sales in real terms exhibited a During the First Half of 1979 clear downward trend through the first six Official Commerce Department data for the sec­ months of this year, with the June level sharply ond quarter of this year have yet to become depressed by a drop in auto sales. Rising gaso­ available, but it appears likely that they will line prices and uncertainty about gas supplies indicate that real gross national product declined initially had a mixed impact on auto sales: sales somewhat after advancing only marginally in of large, fuel-inefficient cars plunged, while the first quarter. The sluggishness of overall sales of smaller domestic and foreign cars re­ economic activity thus far in 1979 stands in corded an offsetting increase. Most recently, marked contrast to the gain of 4lA percent in however, the weakness in auto sales has broad­ real GNP in 1978. Although the events of the ened; this may in part reflect supply constraints first half do not in themselves compel a conclu­ as domestic makers shift facilities to the manu­ sion that the economy has entered a recession, facture of small cars, but there appears to have the pause in growth does represent a significant been a general falloff in demand during June. interruption of the relatively long cyclical The weakness in consumer spending has ex­ upswing that began early in 1975. tended beyond the market for motor vehicles, The sluggishness of economic activity since and it appears symptomatic of broader pressures the beginning of the year is partly a consequence on household finances. The personal saving rate of the rising inflationary pressures of 1978 but reached historically low levels last year, so that it is also traceable in considerable measure to a further rise in the spending propensities of special exogenous factors—as distinguished households seemed unlikely. Moreover, the from such problems as widespread inventory record indebtedness and debt repayment burdens overhangs or other fundamental imbalances or of the household sector suggested that con­ distortions that have characterized the terminal sumers might manifest, on the whole, a more stages of previous cyclical expansions. During cautious spending behavior. These influences January and February, production in many parts have been substantially reinforced this year by Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report 593 the effects of accelerated inflation on the real terms on mortgage loans and, in some localities, disposable income of households. The budgets by shortages of mortgage credit caused by usury of many families have been squeezed by the ceilings. The combination of inflated house upsurge in the prices of food, fuel, and other prices and record mortgage rates implies costs basic necessities. This has increased their un­ of homeownership that bulk large relative to the easiness about their personal financial positions current incomes of many families. This fact has and contributed to a noticeable deterioration in deterred some potential homebuyers and caused consumer sentiment, as measured by most sur­ lending institutions to reject some credit appli­ veys. cations. It also has given impetus to the devel­ opment and use of graduated-payment mort­ Residential Construction. As noted above, gages, which are designed to alleviate the cash­ adverse weather depressed building activity flow problems encountered in the early years during the opening months of 1979. Private of the traditional level-payment loan in an in­ housing starts, which had consistently run at an flationary environment; however, these instru­ annual rate of just over 2 million units since ments have not thus far attained an important a similar weather-related disruption the previous role in the mortgage market. winter, fell to a IV2 million rate in January and In recent months, localized shortages of gas­ February. However, as construction picked up oline and generally uncertain prospects about again in subsequent months, the rate of housing future fuel prices and supplies likely have been starts remained below the 1978 pace, averaging another factor deterring home purchase and about 13A million units in the March-May pe­ prompting a reassessment of building plans. riod. Thus, there has been a moderate, but Still, unit sales of new and existing single-fam­ significant, downturn in residential building ily houses have declined only moderately this since the end of 1978. year from the record pace of 1978. Stocks of Several fundamental economic and demo­ unsold single-family units, while perhaps less graphic factors have continued to bolster the comfortable than a few months ago when de­ demand for housing—especially single-family mand was stronger, do not appear to be a dwellings and condominium apartments. One of significant depressant on new building activity. these is the widespread view, based in large part Nor, in major contrast to the last—and se­ on the actual experience of the past several vere—housing cycle, is there a substantial years, that houses are a good hedge against overhang of multifamily rental and condomin­ inflation and therefore an attractive investment ium units for rent or sale. apart from the shelter services they provide. Another is the movement of a large portion of Business Investment. Business firms have our population into the age group in which the continued to pursue generally cautious spending rate of initial home purchases historically has policies, but their investment in inventories and been relatively high. fixed capital nevertheless appears to have ex­ Nonetheless, other underlying supply and de­ panded significantly in real terms during the first mand influences have acted to constrain the half. Despite this further advance in business construction of new housing units. The rise in spending, there is little evidence to date of the interest rates and the general tightening of credit development of broad imbalances between markets over the past year have been particu­ stocks or productive capacity and final sales that larly important factors. Homebuilders have might seriously impede the resumption of eco­ found that lenders are charging substantially nomic expansion. higher rates for land development and con­ The surge in final sales in the last quarter of struction credit and are showing greater selec­ 1978 drew down stocks in many lines to the tivity in the projects they will finance. At the point where it seemed quite likely that some same time, potential builders and homebuyers rebound in inventory investment would occur have been affected by increasingly stringent in ensuing months. However, the book value Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

594 Federal Reserve Bulletin □ August 1979 of business inventories increased very rapidly that some decline occurred during the second in the early part of 1979, causing some concern quarter. The first-quarter surge reflected a sharp that the unexpected strength of demand at year- rise in equipment purchases. Outlays for trans­ end and the acceleration of inflation might have portation equipment—especially airplanes and prompted a speculative hoarding of commodi­ automobiles—accounted for a good deal of the ties—perhaps reminiscent of 1973-74. These strength. During the spring, outlays for equip­ concerns abated as it became clear that the ment apparently retraced their earlier advance, accumulation of inventories was relatively well owing in part to delays in shipments caused by balanced across sectors and across levels of the labor disputes in trucking. In contrast, processing and that much of the acceleration in spending on nonresidential structures lagged in the rise of book values reflected nothing more the first quarter, as the adverse weather condi­ than the replacement of merchandise bought tions interfered with building activity, but then earlier at lower prices with stocks acquired at snapped back smartly in the spring. current, inflated prices. GNP accounts data for An important factor bolstering demands for the first quarter in fact indicate that, while there fixed capital has been the higher rates of indus­ was an appreciable pickup in real inventory trial capacity utilization that have prevailed investment, the rate of accumulation remained since the latter part of 1978. Slower growth of moderate. industrial production has resulted in a slight Inventory data for the second quarter are decline in utilization rates, but the rates have fragmentary. Book-value figures showed excep­ remained at levels that have been associated in tionally high rates of accumulation in April— the past with periods of strong investment de­ especially at manufacturing concerns—but this mand. Despite deep cutbacks in auto produc­ evidently was attributable in part to delays in tion, capacity utilization in manufacturing last shipments caused by the labor dispute in the month averaged about 85 percent—only 3 per­ trucking industry. Inventory growth, again on centage points below the peak of 1973 and a a book-value basis, slowed in May; however, fairly high level historically. Capacity utiliza­ it appears likely that real inventory investment tion rates in the materials-producing industries for the second quarter as a whole was consid­ are not, on average, so close to the 1973 peaks. erably above the pace of the first quarter. However, that period was marked by extraor­ Nevertheless, inventories appear generally to dinary pressures on production facilities caused have remained in reasonably comfortable align­ by a worldwide boom in demand for basic ment with sales. There are, of course, excep­ commodities, and by normal standards, operat­ tions, the most notable being in the motor ve­ ing rates currently are quite high in some mate­ hicle sector. With the drop in demand for large rials sectors. cars this spring, dealers’ stocks became very sizable in relation to the current pace of sales. Government Spending. Budgetary policy at Stocks of smaller cars, in contrast, have been both the federal and state and local levels of very lean in recent months, and customers de­ government has continued to be characterized siring particular models and features sometimes by restraint in spending. Indeed, government have encountered long delivery lags. On bal­ outlays for goods and services declined in real ance, the aggregate ratio of real business inven­ terms during the first half of 1979. tories to real sales in the first quarter was well Federal purchases had fallen slightly, after in line with recent norms, but there probably adjustment for inflation, during 1978, and de­ was some deterioration in the picture during the clines were recorded in each of the first two second quarter. quarters of this year. Total federal expendi­ Business spending for new plant and equip­ tures—including transfer payments as well as ment rose strongly during the first quarter, pro­ outlays for goods and services—have been run­ viding substantial impetus to overall economic ning just a bit higher in nominal terms than had activity; however, available evidence suggests been anticipated in the administration’s budget Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report 595 plans. However, the impact of inflation on in­ dent in continued relatively slow growth of comes has resulted in considerably stronger tax non-oil imports. On the other hand, the volume receipts than were projected, so that the budget of oil imports averaged about 9.3 million barrels deficit has been substantially smaller than ex­ per day (MMB/d) during the first three months pected. of the year as compared with an average of 8.7 At the state and local level, weather-related MMB/d during 1978. In April and May the curtailments of construction reduced spending trade deficit widened as exports remained at in the first quarter. However, the subsequent about their first-quarter level while the value of rebound in building activity was sluggish and both oil and non-oil imports advanced. A fall may be indicative of a tendency to defer further in the quantity of oil imported to 8.7 MMB/d capital expenditures following a surge last year. in April and May was more than offset by price Moreover, states and localities also have been changes that began to reflect the OPEC price limiting spending by holding down employ­ increases and surcharges. The unit value of ment: the number of workers on their payrolls imported oil in May was 22 percent above its in June was about the same as one year earlier. level in the fourth quarter of 1978. The growth of the economy after 1975, com­ The improvement in the U.S. trade and cur­ bined with tax-rate increases enacted earlier, rent accounts this year has helped to bolster the had led to the development of sizable surpluses private demand for dollars in foreign exchange in the budgets of many states. This pattern was markets. The dollar rose almost 5 percent, on reversed in the past year. Numerous tax cuts a trade-weighted average against other major were passed in 1978, and as a result personal currencies, during the first five months of tax receipts were 5 percent lower in the first 1979—even while the United States and other quarter of this year than in the same period last governments unwound the heavy official inter­ year—even though the tax base had increased vention of late last year. Over the past month, 16 percent. With nominal expenditures therefore however, the dollar has come under downward rising relative to receipts, the operating surplus pressure; despite official support, it has lost of state and local governments fell to $3.8 much of the earlier gain. A relative firming of billion, at an annual rate, in the first quarter; money market conditions abroad has been a it appears that the operating budgets may have factor in this recent weakness but is not likely moved into slight deficit in the second quarter. in itself to be a full explanation. Foreign ex­ change market participants seem to have been International Trade. The large decline in the questioning whether the United States will be exchange value of the dollar in 1977 and 1978 able to deal successfully with its inflation prob­ has enhanced foreign demands for U.S. exports. lem, particularly in light of the recent oil price This, along with a relative strengthening of jolt. economic expansion abroad, has brought about a distinct trend of improvement in the U.S. trade Employment and Unemployment position. The nation’s merchandise trade defi­ cit—although quite variable from month to Almost four years of exceptionally rapid growth month—has been considerably smaller this year in employment had, by the end of 1978, given than on average during 1978. Moreover, the rise to considerable tautness in labor markets. current-account balance edged into modest sur­ Although businesses reportedly were encoun­ plus in the first quarter for the first time since tering increasing difficulty in finding workers 1976 as receipts from overseas investments re­ with the desired experience and skills at pre­ mained strong. vailing wage rates, the overall unemployment Total exports advanced further in real terms rate, at just under 6 percent, was well above during the first quarter despite a falloff in ship­ past cyclical lows. This seeming paradox re­ ments of agricultural products. The impact of flects in part longer-run changes in the compo­ the 1977-78 dollar depreciation was also evi­ sition of the labor force and in the output mix Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

596 Federal Reserve Bulletin □ August 1979 of the economy; in addition, the increased of nonfarm inputs involved in processing and availability of unemployment compensation and marketing has contributed to the acceleration of other income maintenance programs may have food price inflation. The further rise of the altered the incentives to seek or accept employ­ federal minimum wage, for example, was an ment. important ingredient in the faster increase of Despite a leveling off in production during prices for restaurant meals in the first half. the first quarter of the year, monthly increases Energy prices have risen dramatically this in payroll employment averaged 330,000—well year. Enormous increases in the prices charged above the average gain of 280,000 per month by the OPEC cartel, occurring against a back­ during 1978. Gains in the manufacturing in­ drop of significant worldwide pressures of de­ dustry were quite large, and the average factory mand on available supply, contributed to a 37 workweek remained at a high 40% hours. Some percent annual rate of increase in the energy easing in labor demands has become perceptible component of the consumer price index during since March, however, with employment gains the first five months of 1979. The rise in petro­ averaging only one-third of their first-quarter leum fuel and feedstock prices has in addition pace. Manufacturers have been reducing em­ intensified cost pressures across a broad range ployment levels by about 35,000 each month— of U.S. industries. with the auto industry accounting for the bulk The acceleration in the rise of other prices of the decline—and the average workweek has has been less striking than that for food and dropped to about 40 hours due to a cutback in energy, but it has been appreciable. Exclusive overtime. Outside of manufacturing, hiring has of food and energy items, the consumer price continued in recent months, albeit at a reduced index rose at an annual rate of 10 percent pace. Still, the unemployment rate has changed through May, IV2 percentage points faster than little since year-end, and such indicators as the the average pace throughout 1978. Pressures average duration of unemployment and labor placed on prices of final products by rising turnover rates have remained at levels typical materials costs have played some role in the of fairly tight labor markets. broad pickup in inflation. Prices of nonferrous metals and of other actively traded nonfood commodities rose sharply early in the year when Wages, Productivity, and Prices the year-end strength of the economy apparently The pace of inflation has accelerated markedly led to some upward revision in expectations of this year. The consumer price index rose at an future production levels and fears of consequent annual rate of 13% percent through May com­ commodity shortages. In subsequent months, pared with the increase of 9 percent over the however, prices of many basic nonenergy com­ course of 1978. There has been a comparable modities weakened as the slackening of eco­ stepup in the advance of prices at the producer nomic activity became evident. level. Although the relatively high level of re­ In addition to materials prices, labor costs source utilization has been a factor sustaining have been a source of pressure on prices this the momentum of inflation, supply develop­ year. The rise in wage rates generally does not ments specific to the food and energy sectors appear to have accelerated, and surveys con­ have accounted for much of the acceleration this ducted by the Council on Wage and Price Sta­ year in inflation. bility indicate broad compliance with its wage Food prices played a substantial role in the standard, especially among large firms. How­ increase in inflation that occurred last year, and ever, total labor costs were boosted by enlarged agricultural supply developments have contin­ employer contributions for social security and ued to be unfavorable. In particular, beef pro­ unemployment insurance, and compensation per duction has remained on a downtrend, leading hour (including private fringe benefits) in the to sharp increases in meat prices. In addition nonfarm business sector rose at a 10Vi percent to rising farm prices, the rapid increase in costs annual rate in the first quarter of the year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report 597 Meanwhile, output per hour dropped markedly part of the spring as many investors became in the first quarter, so that the unit labor costs convinced that the peak in money market rates of nonfarm businesses increased at an annual had been reached. Mortgage interest rates have rate of more than 15 percent. Labor productivity continued to rise, however, reaching record apparently declined again in the second quarter, levels and prompting liberalization of usury and while the rise in unit labor costs likely was ceilings in many states in order to sustain lend­ not quite so rapid as in the first three months ing activity. of the year, it probably was fast enough to raise the first-half advance to a rate exceeded only Monetary Aggregates. After expanding rap­ in 1974. idly earlier in 1978, M-l—demand deposits and currency—leveled off in the fourth quarter and continued virtually flat through the first quarter Financial Developments of this year. Growth in this monetary aggregate Growth of the monetary aggregates was consid­ resumed in the spring, but the rise over the first erably slower during the first half of 1979 than half of 1979 was at only a 2.7 percent annual in 1978. At midyear, all of the major monetary rate—considerably slower than the increases of measures—M-l, M-2, and M-3—were within 7.9 percent and 7.2 percent registered in 1977 the expected ranges of expansion reported by and 1978 respectively. With nominal gross na­ the Federal Reserve to the Congress in Febru­ tional product increasing at about a 9 percent ary. Commercial bank credit at midyear stood rate thus far this year, the very moderate ex­ slightly above the path implied by its projected pansion of M-1 represents a substantial shortfall growth range, but the pace of overall credit from what might have been expected on the expansion in the economy had moderated ap­ basis of historical relations among money, preciably. Although businesses stepped up their GNP, and interest rates. borrowing somewhat during the first half of the As was noted in the Board’s February report year, there were more than offsetting declines to the Congress, some weakness in the public’s in borrowing by other nonfinancial sectors. demand for M-1 was anticipated because of the introduction last November of automatic Interest Rates. The general level of interest transfer services (ATS) nationwide and of ne­ rates on market securities has changed relatively gotiable order of withdrawal accounts in New little since the beginning of the year after a York State. The Board staff had projected that marked rise during 1978. The federal funds transfers from demand deposits to savings ac­ rate—established in trading of immediately counts associated with these innovations might available funds on an overnight basis— reduce M-l growth by roughly 3 percentage remained around 10 percent until late April, points over the year ending in the fourth quarter when it edged upward about one-quarter per­ of 1979. The impact of such transfers on M-l centage point as the Federal Reserve moved to growth was about that much early in the year, restrict bank reserve availability somewhat fur­ but it apparently has dropped off in recent ther in light of a surge in the monetary aggre­ months. Over the past two quarters it appears gates. Despite the small increase in the federal that the impact of ATS and NOWs on M-l funds rate, other short-term market rates gener­ growth has been about 2lA percent, at an annual ally have declined somewhat on balance since rate. December. This appears to be primarily a re­ Even after taking account of ATS-NOW ef­ flection of changing expectations about future fects, the demand for M-l was unusually weak interest rate movements as economic activity in the past half year, especially in the first gave evidence of weakening. quarter. It appears that, again as suggested in In long-term securities markets, bond yields the February report, the high level of interest reached new cyclical highs during the first half, rates reached in late 1978 prompted greaterbut retraced much of their advance in the latter than-normal efforts to economize on non-inter­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

598 Federal Reserve Bulletin □ August 1979 est-earning cash balances. Individuals evidently use of large-denomination time deposits, which have shifted demand balances into a variety of are not subject to regulatory rate ceilings, to interest-bearing assets, including small-denomi- offset some of the weakness in other accounts. nation time deposits, Treasury securities, and shares in money market mutual funds. The Credit Flows. Net funds raised in credit mar­ growth of the money market funds this year has kets by nonfinancial sectors of the economy been quite striking: over the past six months, during the first half totaled about $355 billion, the total assets of these funds rose from less at an annual rate, according to preliminary esti­ than $11 billion to almost $26 billion. While mates. This is well below the $393 billion figure these funds are an imperfect substitute for for 1978 and reflects the combined impacts of checking accounts for transactional purposes, monetary restraint and a number of other fac­ they have provided many individuals with a tors. high-yielding liquid asset that may be purchased One of these other factors was the diminished in small denominations. size of the federal budget deficit. With a very The relatively high level of interest rates this large year-end 1978 cash balance further reduc­ year has also had an appreciable impact on the ing the Treasury’s needs for new money during interest-bearing component of M-2—that is, the first half, federal government borrowing fell commercial bank time and savings deposits off sharply from the 1978 pace. In contrast with other than large certificates of deposit. Deposits the pattern in late 1978, when they effectively subject to fixed interest rate ceilings have been financed the Treasury ’s deficit with the proceeds weak since last fall. Inflows to six-month money of dollar-support operations, foreign central market certificates (MMCs) provided an offset banks sold a large volume of Treasury securities to this weakness in the fall and winter. With in the first half. A part of the sizable private a change in regulations in mid-March that elim­ capital inflow to the United States during the inated the differential of one-quarter of a per­ first half was channeled through the Eurodollar centage point between MMC ceilings at thrift market to the U.S. banking system, which ac­ institutions and commercial banks when the quired a substantial volume of Treasury securi­ six-month Treasury bill rate exceeds 9 percent, ties. Households were important buyers of MMC growth at banks accelerated and provided Treasury securities, as they responded to the the impetus for a pickup in the expansion of enlarged gap between rates on such instruments the time and savings deposit component of M-2. and those available on deposits subject to regu­ Over the first half as a whole, this component latory ceilings. expanded at a 7 percent annual rate and brought State and local governments have borrowed M-2 growth to a 5.2 percent rate, substantially at a reduced pace in 1979. This decline reflects below the 8.4 percent average rate of 1978. the absence of advance refundings since last Growth of M-3 also has moderated in recent August, when moire restrictive regulations were quarters, averaging 6% percent, at an annual promulgated by the Internal Revenue Service. rate, during the first half. This deceleration Was Tax-exempt bond issuance for new capital in partly a reflection of the slower growth of the the first half was maintained at about the 1978 narrower monetary aggregates, but reduced de­ level, owing largely to a sharp increase in sales posit inflows at nonbank thrift institutions also of revenue bonds for mortgage financing pur­ played a role. The slowing in deposit growth poses; the pace of such housing-related finan­ at thrift institutions was especially noticeable cing slowed markedly in the second quarter, after mid-March when a share of the MMC however, as a consequence of congressional market was lost to commercial banks, but in­ proposals to curtail the use of tax-exempt bonds flows in the second quarter still exceeded the to fund low-rate, single-family mortgages. Cas­ very low rates of past periods when high market ualty insurance companies and commercial interest rates caused serious disintermediation. banks have absorbed the bulk of tax-exempt Savings and loan associations made increased bonds sold this year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report 599 Household borrowing in the consumer in­ loans and, with pension funds, have absorbed stallment and mortgage credit markets has lev­ the bulk of a reduced volume of bond issues. eled off this year. Although interest rates on Issuance of commercial paper was an increased consumer loans have risen during the past year, source of short-term credit for businesses in the the moderation in growth of installment debt first half, and finance company business loans appears to be primarily a consequence of other continued to grow rapidly with much of the factors tending to reduce consumer spending. credit being extended to automobile dealers to The flattening in mortgage flows, on the other finance inventories. hand, does appear more directly a consequence Foreigners, who had borrowed in U.S. credit of rising interest rates and the tightening of markets when the dollar was weak in 1978, mortgage credit supplies. apparently did not expand their debt during the On the demand side, households have de­ first half of 1979. This change was a significant ferred home purchase or scaled down expendi­ element in the overall decline in funds raised ture or borrowing plans in light of the higher by nonfinancial sectors. cost of mortgage credit. On the supply side, Financial sectors increased their borrowing in even when usury ceilings have not been a con­ credit markets during the first half. Govern­ straint, depositary institutions have pursued ment-sponsored credit agencies stepped up se­ more cautious loan commitment policies be­ curity issuance to finance assistance to the resi­ cause of concerns about current or prospective dential mortgage market. Commercial banking liquidity pressures. Thrift institutions have re­ firms and finance companies sold substantial duced their mortgage lending considerably this volumes of commercial paper and of bonds, year as their deposit flows have diminished; including a number of floating-rate issues that although the aggregate liquidity ratio of savings offered investors a hedge against future interest and loan associations has remained well above rate fluctuations. Savings and loan associations, the regulatory requirement, that liquidity cush­ after receiving approval from the Federal Home ion has shrunk somewhat and the associations Loan Bank Board, issued commercial paper for have borrowed heavily from Federal Home the first time; toward midyear there were also Loan Banks and other sources. Commercial a number of mortgage-backed bond issues by banks, too, have expanded their residential savings and loan associations. mortgage portfolios at a slower pace this year, but there have been partial offsets to reduced Objectives and Plans lending by depositary institutions in the form of credit flows from state and local govern­ of the Federal Reserve ments, life insurance companies, and federally Outlook for Monetary Growth sponsored agencies. In the nonfinancial business sector, the In February the Federal Reserve reported to the growth of outlays for inventories and fixed cap­ Congress on the growth in the monetary aggre­ ital has outstripped that of internally generated gates that it expected would occur during the funds, and firms have increased their borrowing current calendar year. Expressed as ranges, and substantially. An increased share of the credit measured from the fourth quarter of 1978 to the flow to business has been accounted for by fourth quarter of 1979, the increases indicated commercial banks, as many bigger firms have were: for M-l, IV2 to 4x/2 percent; for M-2, preferred—at current interest rates— short- or 5 to 8 percent; for M-3, 6 to 9 percent. The intermediate-term bank loans to long-term bond range for M-1 reflected an expectation that shifts issues with lengthy call protection. Commercial of funds from demand deposits to newly au­ mortgage flows have remained large, however, thorized ATS and NOW accounts would reduce in reflection of the strength in nonresidential M-l growth by about 3 percentage points. In construction activity. Life insurance companies addition, bank credit was projected to expand have provided a large portion of these mortgage between IV2 and IOV2 percent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

600 Federal Reserve Bulletin □ August 1979 At its most recent meeting, the Federal Open to regulatory interest rate ceilings weakened Market Committee reassessed the ranges for markedly; investors “disintermediated,” shift­ monetary expansion in 1979 and formulated ing their funds from banks and thrift institutions preliminary monetary ranges for 1980. With into higher-yielding market securities. In the respect to 1979, the Committee decided that it past year, however, inflows to such accounts— was appropriate to retain the previously estab­ though smaller than in 1975-77—have been lished ranges for the aggregates. In reaching this fairly well maintained. The six-month money decision, particular attention was focused on the market certificate, with a rate linked to Treasury uncertainties surrounding the behavior of M-1. bill yields, has permitted the depositary institu­ As was noted earlier, the estimated impact of tions to compete successfully for savings against ATS and NOW accounts on M-1 expansion has money market mutual funds and other instru­ been somewhat smaller to date than had been ments. expected when the range was initially adopted. The growth ranges for the broader monetary However, the future extent of shifts to these aggregates imply that the depositary institutions accounts cannot be predicted with precision, will experience adequate inflows of lendable especially in light of the April court decision funds over the remainder of 1979 and in 1980. barring ATS and certain other payments services The projections for bank credit reflect an expec­ as of January 1, 1980. Thus, while the Com­ tation that loan demands at commercial banks mittee retained its original range for M-l, it will begin to moderate in the months ahead. expected growth to vary in relation to the range Business loan demands, in particular, should to the extent that the actual ATS-NOW impact diminish, with the corporate financing gap likely deviates from the figure of 3 percentage points narrowing and firms probably funding short­ projected earlier. term debts in longer-term credit markets. Even greater uncertainties faced the Commit­ The monetary ranges established by the tee in its consideration of monetary growth FOMC are consistent with a policy of gradual ranges for 1980. Apart from the question of reduction in rates of increase of the monetary possible judicial or legislative action that might aggregates in order to curb inflation. Growth in affect the menu of transactions accounts avail­ the aggregates slowed in 1978, and a further able to the public, the economic circumstances deceleration should occur this year. A further and financial requirements of a period extending deceleration in M-l is likely to develop even 18 months into the future obviously cannot be in the absence of any shifting of funds from foreseen with much confidence. The Committee demand deposits to ATS savings and NOW tentatively decided that the ranges for 1980 accounts. The ranges tentatively adopted for should be the same as those for 1979, with the 1980 would permit continued slowing in mone­ understanding that adjustments might be neces­ tary expansion. However, there is considerable sary in response to legal or legislative develop­ variability over time in the behavior of the ments affecting M-l and, more generally, in monetary aggregates, owing in part to financial light of emerging economic conditions. In any innovations and to changes in the asset prefer­ event, it was recognized that the current reex­ ences of the public. Since satisfactory economic amination of the definitions of the monetary performance remains the basic objective of the aggregates, which is being undertaken in light Federal Reserve, monetary policy, from time to of the major institutional changes that have time, may have to permit growth rates in the occurred in the payments system, might lead aggregates that temporarily interrupt the down­ in the near future to a new and improved set ward trend. of money stock measures. The ranges for the broader monetary aggre­ gates, M-2 and M-3, allow for continued mod­ Outlook for the Economy erate growth of the interest-bearing components of those aggregates. In past periods of high As noted in the introduction, the economy faces market interest rates, inflows of deposits subject a difficult adjustment to this year’s oil price Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report 601 increases, which are aggravating inflationary pressures and intensifying forces likely to Item Actual Projections depress aggregate demand. It now appears that 1978 1979 1980 economic activity may well decline somewhat Percentage change, Q4 to Q4 over the next few quarters, before turning up­ Nominal GNP......................... 13.1 8 to 10 SVi to 11 Vi ward in 1980. Real GNP.................................. 4.4 -2 to -x/2 -Vfc to 2 Implicit price deflator........... 8.3 9*/2 to 11 8V6 to 10V6 In the near term, real disposable income is likely to show no more than modest gains, and Average level, Q4 Unemployment rate consumers probably will spend cautiously. (percent) .............................. 5.8 6Va to 7 6% to SVa Business spending may decline in real terms, reflecting the correction of inventory imbal­ ances—particularly in the auto industry—and a Relationship of the mild retrenchment in fixed investment occa­ Federal Reserve’s Plans sioned by the sluggishness of consumer de­ to the A dministration’s Goals mand. Housing construction activity can be ex­ pected to decline somewhat further this year in The Administration’s Short-Term Goals response to the recent tightening of credit con­ ditions and to the weakness in income flows. The administration has recently announced its Export demand should, however, tend to sup­ forecast of key economic variables in associa­ port activity. tion with the midyear budget update.2 This During this period, industrial production and forecast (shown in the following table) assumes employment are likely to edge downward. The no major new fiscal initiatives and contains resulting easing of demands on productive re­ some significant changes from the figures in the sources should help to contain inflation. Pres­ January Economic Report of the President. In sures on credit markets may abate and lay the particular, real economic growth through 1980 groundwork for an upturn in homebuilding dur­ has been reduced and inflation has been raised. ing 1980. Moderate growth in real GNP should resume next year as the initial effects of the oil shock Item 1979 1980 abate and consumers begin to expand their Percentage change, Q4 to Q4 spending. The completion of the inventory cor­ Nominal GNP .................................... 9.2 10.3 rection should lead to a resumption in the Real GNP ............................................ -.5 2.0 Implicit price deflator ..................... 9.8 8.1 growth of orders and production. Employment growth would pick up in this environment, but Average level, Q4 Unemployment rate (percent) 6.6 6.9 it seems probable that the pace of hiring will not be strong enough to cut into unemployment. Inflation should edge lower, though progress may be quite gradual owing to the strong up­ The Administration’s Goals ward momentum of unit labor costs, the contin­ and the Federal Reserve’s Plans uing relatively tight supplies of some agricul­ for Monetary Growth tural commodities, and the further adjustment of the system to higher energy costs. The monetary ranges set by the Federal Reserve The economic outlook currently is obscured should be adequate to finance the amount of by exceptional uncertainties, and the range of spending in current dollars projected by the possible outcomes appears quite wide. How­ administration. However, the administration’s ever, in order to improve understanding of the forecast does seem to envision a somewhat more monetary objectives, an economic projection representing the consensus of the Board mem­ bers at this time has been summarized in the 2. The January Economic Report equated the following table. 1979-80 forecast with short-run goals. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

602 Federal Reserve Bulletin □ August 1979 favorable combination of real output and infla­ impediments to price competition could be tion than that suggested by the Board’s con­ helpful in tempering inflationary pressures. So, sensus projection. The actual price-output mix too, could a continuing program of voluntary will be determined primarily by supply condi­ wage-price guidelines, which may help in res­ tions and by other structural or behavioral char­ training the anticipatory actions that have made acteristics of the economy. These relationships the wage-price spiral so intractable. The na­ are not known with certainty, of course, and tion’s ability to avoid an escalation of inflation thus many different price-output combinations over the next year or so—without serious reces­ must be viewed as possible for given rates of sion—will depend in considerable degree on monetary growth. whether a means is found to overcome the Monetary growth rates are much more closely tendency for workers and businesses to seek related in the short run to nominal GNP than higher wages and prices in an effort to offset they are to the division of nominal GNP between the effects of the income transfer associated with output and prices. The tradeoff between output the rise in oil prices. Over the longer run, the and prices might be improved, however, ability of the nation to achieve sustained growth through the use of other policy tools. Govern­ of real income will depend importantly on mental action to eliminate regulatory or market whether it can solve its energy problem. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

603 Revision of Industrial Production Index This article was prepared by Kenneth Armitage Total industrial production and Joan D. Hosley of the Board's Division of Ratio scale, 1967=100 Research and Statistics. 150 The industrial production index has undergone 140 a major revision every five years and less com­ prehensive revisions in other years. The overall 130 changes in this year’s annual revision, which covers the three years from January 1976, re­ 120 flect new seasonal adjustment factors and more complete data. This revision raised the level of 110 the overall industrial production index by 0.5 1972___________1974___________1976___________1978 percent in 1976, 0.8 percent in 1977, and 0.6 percent in 1978. Both the revised and the origi­ other annual revisions, are related to the use nal index levels are shown in the table. Year- of data from the Annual Survey of Manufac­ to-year increases were revised upward 0.6 and tures, previously utilized only in connection 0.3 percentage point for 1976 and for 1977, and with major revisions. downward 0.2 percentage point for 1978 (see the chart). Larger revisions occurred in some Results of the Revision individual series. The overall changes are, in general, smaller than those of major revisions The products grouping of the industrial produc­ but somewhat larger than in most earlier annual tion index (about 60 percent of the total) was revisions. The larger changes, as compared with revised upward in 1976, 1977, and 1978 by an Industrial production levels, 1967=100 1976 level 1977 level 1978 level Grouping Old Revised Percent Old Revised Percent Old Revised Percent change change change Total index ...................................... 129.8 130.5 .5 137.1 138.2 .8 145.2 146.1 .6 Products ........................................... 129.3 129.7 .3 137.1 137.9 .6 144.3 144.8 .3 Final products ............................. 127.2 127.6 .3 134.9 135.9 .7 141.4 142.2 .6 Consumer goods .................... 136.2 137.1 .7 143.4 145.3 1.3 147.4 149.1 1.2 Durable ............................... 141.4 141.9 .4 153.1 154.0 .6 158.9 159.2 .2 Automotive ........................ 154.8 155.7 .6 174.2 175.6 .8 178.6 179.9 .7 Home goods ...................... 133.9 134.1 .1 141.3 141.9 .4 147.8 147.7 -.1 Nondurable .......................... 134.1 135.2 .8 139.6 141.9 1.6 142.8 145.1 1.6 Equipment ............................... 114.6 114.6 .0 123.2 123.0 -.2 133.1 132.8 -.2 Business ............................... 136.3 135.4 -.7 149.2 147.8 -.9 162.0 160.3 -1.0 Intermediate products ............... 137.2 137.2 .0 145.1 145.1 .0 155.3 154.1 -.8 Construction ........................... 132.6 132.6 .0 140.8 140.6 -.1 153.3 151.7 -1.0 Materials ........................................... 130.6 131.7 .8 136.9 138.6 1.2 146.5 148.3 1.2 Durable ......................................... 126.8 128.0 .9 134.5 136.1 1.2 146.9 149.0 1.4 Nondurable .................................. 146.3 147.8 1.0 153.5 155.6 1.4 162.9 165.6 1.7 Energy ......................................... 120.2 120.7 .4 122.4 123.5 .9 125.2 125.3 .1 Manufacturing ................................ 129.5 130.3 .6 137.1 138.4 .9 145.7 146.8 .8 Durable ......................................... 121.7 122.3 .5 129.5 130.0 .4 139.3 139.7 .3 Steel, subtotal ........................ 104.9 104.8 -.1 103.4 103.8 .4 113.2 113.2 .0 Nondurable .................................. 140.9 141.8 .6 148.1 150.5 1.6 154.8 156.9 1.4 Mining .............................................. 114.2 114.2 .0 117.8 118.2 .3 124.2 124.0 -.2 Utilities ............................................ 151.0 151.7 .5 156.5 156.5 .0 161.0 161.4 .2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

604 Federal Reserve Bulletin □ August 1979 average of 0.4 percent, and materials output ward revisions occurred in office and computing (about 40 percent of overall industrial produc­ machines, scientific and optical instruments, and tion) slightly more than 1.0 percent, as shown commercial aircraft parts, while construction in the table. Among products, upward revisions and mining machinery, commercial ships, and in consumer goods and downward revisions in farm equipment were revised downward. Al­ business equipment to some extent offset each though the revised series indicates slightly less other in these years; the larger adjustment of growth than the old series, the new data confirm the index for materials output mainly reflects a strong rate of growth of business equipment sizable upward revisions in equipment parts and relative to total industrial production. chemical materials. The overall effect of the revision on the The level of the final products index, which materials component of the index was to raise comprises consumer goods and equipment, was its level 0.8 percent in 1976 and 1.2 percent revised upward 0.3 percent for 1976 and 0.7 in both 1977 and 1978. Thus the rate of growth percent for 1977 largely because of changes in of materials output was stronger in both 1976 several consumer goods series, notably cloth­ and 1977 than originally reported. According ing, auto parts and allied goods, carpeting and to the revised numbers, materials output at the furniture, and consumer cjiemical products. For end of 1978 was about 15 percent higher than 1978, the upward revision for final products, the advanced levels in 1973. Most of the 0.6 percent, was moderated somewhat by net changes in the level of output of materials were downward revisions in the equipment total. due to revisions in production of chemical ma­ Within consumer goods, the durable goods terials and equipment parts. In particular, the subgrouping was revised upward slightly for the series on basic organic chemicals and on semi­ whole period under review, reflecting sharply conductors were revised upward significantly. higher levels of motorcycle and bicycle produc­ Within durable goods materials, consumer dur­ tion than previously reported. Among nondur­ able parts were revised upward in 1976 and, able goods, as noted earlier, sizable upward to a lesser extent, in 1977 but were little revisions were made for men’s and women’s changed in 1978. Energy materials sustained clothing. In addition, higher levels were indi­ little change in the revision. cated for soap and toiletries and for drugs and medicines, which together form the consumer M ethodology chemical products category. In the revised hujex, as in the old, production of nondurable Levels for individual series were based on new consumer goods has shown successively smaller annual as well as revised monthly data. For the increases since the sharp rise of 8.1 percent in series not based on physical product data (esti­ 1976; the increase was 5.0 percent in 1977 and mated with the use of data on production-worker only 2.3 percent in 1978. This trend has also hours and on electric power consumed by in­ been characteristic of durable consumer goods, dustry), revisions depended largely on annual which experienced a sharp recovery in 1976 of levels established from Bureau of the Census 16.9 percent, followed by successively smaller data contained in the periodic comprehensive increases in 1977 and 1978 of 8.5 and 3.4 Census of Manufactures and Mining and in the percent respectively. Annual Surveys of Manufactures. Such data Within the virtually unchanged total equip­ usually have been available for incorporation ment group, output of defense and space equip­ into the index only during major revisions. ment was revised upward while the production While Census annual data are available for of business equipment was revised downward. only one of the current revision years, several These revisions, particularly evident in 1976, special circumstances have led to the revision in part reflect a statistical artifact: more recent of the series not based on physical product data. data have dictated a new division in total aircraft First, since the 1976 major revision of the and parts between civilian and military use. In industrial production index, the Census Bureau the business equipment group, significant up­ has published benchmark indexes of production Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Revision of Industrial Production Index 605 for the 1967-72 period and Annual Surveys of the level of the aggregate physical product series Manufactures for 1974, 1975, and 1976. Sec­ 0.8 percent in 1978. ond, although only the 1976 annual data are While results vary among industries, trends within the time span covered in the current indicate a slowing of growth among production revision, the annual data for the earlier years worker productivity in recent years. On the provided an improved basis for extrapolation. other hand, the preliminary data indicate sub­ (Before Census annual data become available, stantial gains in output per kilowatt hour. Dur­ series based on basic nonphysical product inputs ing the 1972-77 period, value-added weighted are used in conjunction with productivity esti­ output per kilowatt hour used in the industrial mates to derive output. Current-period produc­ production index has shown an average annual tivity estimates are based on extrapolations of increase of 0.5 percent, a contrast with the trends that are dependent on the availability of period 1967-72 when it declined more than 1.2 Census annual data.) Finally, the energy situa­ percent per year. tion of recent years has greatly increased the The revision also involved an updating of the likelihood of significant changes in productivity seasonal adjustment of series in the industrial trends. production index. All series were seasonally Based on the new annual levels, revised out­ adjusted by the X-ll version of the Method II put and productivity estimates for the series seasonal adjustment procedure developed by the utilizing nonphysical product data were devel­ Bureau of the Census. The initial and terminal oped for the period 1976 to date. These data years used in the calculations were 1967 and will be subject to further revision when annual 1978 respectively. For most series, 1974 and and benchmark data become available for the 1975 data were excluded from the input to the years following 1976 (including data from the X-ll program: evidence suggested that because 1977 Census) and when revised data for the movements in output in these years were se­ 1967-75 period are published in the next major verely affected by the recession, their inclusion revision of the industrial production index. In would seriously distort the seasonal factors for the interim, the current revision represents a best several years preceding and following these two estimate of movements based on the latest pub­ years. lished annual data. The overall effect of the revisions is to raise the index for the aggregate ★ ★ ★ series on nonphysical products 0.3 percent in 1978. Revisions of series based on physical The Federal Reserve capacity utilization products resulted from the addition of monthly series, which are calculated with the use of the data unavailable for the originally published industrial production series, have also been re­ estimates. The effect of the revisions is to raise vised. (See article on page 606.) □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

606 Revision of Capacity Utilization Rates This article was prepared by Richard Raddock materials producers and for the primary pro­ of the Board’s Division of Research and Statis­ cessing grouping of manufacturing industries. tics. The revised series show that manufacturers on average operated at 86.8 percent of capacity in The Federal Reserve estimates of capacity utili­ December 1978, 0.5 percentage point above the zation rates for manufacturing and for industrial previous rate. The rate of capacity utilization materials have been revised. The new estimates in advanced processing industries was 85.0 per­ incorporate the revised industrial production cent, up 0.4 percentage point, and in primary index, as well as new survey data and additional processing, 90.1 percent, 0.7 percentage point information concerning industry’s capacity and higher. The 1967-78 average and the 1973 high its utilization. Most of these new data are for for total manufacturing were practically un­ 1975-78; but because they underlie revised ca­ changed at 82.6 percent and 88.0 percent re­ pacity trends, they also influence estimates of spectively. capacity and capacity utilization in earlier peri­ Producers of industrial materials are now in­ ods. The revisions cover the period since Jan­ dicated to have operated at 88.8 percent of uary 1970 for manufacturing and since January capacity on average in December 1978, 0.7 1967 for materials. percentage point above the old estimate. For textile and paper materials the upward revisions were particularly large. For the years before Statistical Results 1976 the revised utilization rates for materials The new estimates show rates of utilization in are generally somewhat lower than those pub­ 1978 that are slightly higher than those pre­ lished earlier, partly because new data from the viously published, in particular for industrial Census Survey of Plant Capacity indicated the Percent Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

607 existence of more capacity than was previously series was also changed. Capital stock esti­ estimated. mates, provided for the most part by the Bureau of Labor Statistics for the three-digit Standard Industrial Classification groupings, were intro­ M ethodology duced into the procedures for estimating year- In general, this revision uses the same methods to-year changes in capacity for many of the 96 as those described in Federal Reserve Measures individual series within the total materials of Capacity and Capacity Utilization. In calcu­ series. As a result, the methods used to estimate lating some of the component capacity esti­ materials capacity are more like the techniques mates, however, data from the Plant and used to estimate capacity for manufacturing. In Equipment Survey of the Bureau of Economic addition, a new materials grouping has been Analysis, U.S. Department of Commerce, have formed; it includes basic metal materials as well been used to supplement operating rates shown as consumer durable steel and equipment steel. in survey data of the McGraw-Hill Publishing This new series, “metal materials,” replaces Company. “basic metal materials” in the monthly statisti­ The methodology for the individual materials cal release on capacity utilization G.3 (402). Capacity utilization series Rate (percent of capacity) 1967 1967-78 average 1973 monthly high 1978 December Series1 proportion to o t f a l2 Revised R le e ss v is o e ld d Revised R le e ss v is o e ld d Revised R le e ss v is o e ld d Manufacturing ................................................... 87.95 82.6 -.1 88.0 0 86.8 .5 Primary processing3..................................... 30.59 85.2 0 93.8 .2 90.1 .7 Advanced processing4.................................. 57.36 81.3 -.1 85.5 .1 85.0 .4 Materials5 .......................................................... 39.29 84.5 -.6 92.6 -.5 88.8 .7 Durable goods materials............................... 20.35 81.0 -1.0 91.5 -1.0 88.4 .2 Metal materials6......................................... 6.39 85.4 .6 98.2 -.3 96.0 5.3 Nondurable goods materials........................ 10.47 87.6 -.1 94.5 -.1 90.1 1.8 Textile, paper, and chemical .................... 7.62 87.9 .9 95.1 .6 90.2 3.3 Textile materials.................................... 1.85 85.8 -.2 92.6 -1.8 87.8 5.9 Paper materials ..................................... 1.62 93.6 1.0 99.4 -1.1 93.9 7.1 Chemical materials ............................... 4.15 86.8 1.2 95.5 1.7 89.9 1.6 Energy materials............................................ 8.48 89.8 .1 94.6 0 88.2 1.3 Manufacturing, by industry Foods ............................................................... 8.75 84.3 -.1 85.7 -.9 86.2 1.3 Textile mill products........................................ 2.68 87.1 .5 95.4 .1 85.9 3.1 Paper and products ....................................... 3.21 89.3 -.5 96.7 0 91.4 .2 Chemicals and products ............................... 7.74 79.8 -.3 86.2 -.4 83.2 3.0 Petroleum products ....................................... 1.79 93.1 .2 99.1 0 93.0 2.0 Rubber and plastics products...................... 2.24 90.3 .4 97.4 0 89.2 1.1 Clay, glass, and stone products .................... 2.74 78.9 .1 88.0 .4 85.7 -.4 Iron and steel, subtotal................................ 4.21 84.8 0 103.8 0 94.7 .6 Nonferrous metals, subtotal ........................ 2.36 84.7 -.2 99.0 -1.0 97.5 .8 Fabricated metal products ........................... 5.93 79.8 .4 86.3 1.6 84.2 -2.3 Nonelectrical machinery............................... 9.15 81.0 .1 88.3 .9 81.0 -2.4 Electrical machinery..................................... 8.05 78.7 .2 88.7 .5 87.5 1.3 Motor vehicles and parts............................. 4.50 83.1 -.6 98.7 0 94.3 -1.9 Aerospace and miscellaneous transportation equipment......................... 4.77 75.2 -.4 76.4 0 85.5 .1 Instruments ..................................................... 2.11 82.9 .7 89.6 2.9 88.2 -1.4 Other7 ............................................................. 17.72 84.9 -.6 87.2 -.6 87.0 .8 1. Series shown under manufacturing and materials are 4. Advanced processing includes foods; tobacco products; published each month. Those under manufacturing by industry apparel products; printing and publishing; chemical products are published only at times of revision; at other times they such as drugs and toiletries; leather and products; ordnance; are available on request. furniture and fixtures; machinery; transportation equipment; 2. The proportions are based on value added. Total indus­ instruments; and miscellaneous manufactures. trial production covers mining, gas and electrtic utilities, and 5. A detailed list of the components of the materials group­ manufacturing. ing is found in Board of Governors of the Federal Reserve 3. Primary processing, which incorporates many of the same System, Industrial Production, 1976 Revision, pp. S-8toS-10. manufacturing industries that are represented in materials, 6. New grouping includes basic metal materials, consumer includes textile mill products; paper and products; industrial durable steel, and equipment steel. chemicals; petroleum products; rubber and plastics products; 7. This residual category includes tobacco products; apparel lumber and products; clay, glass, and stone products; primary products; printing and publishing; leather and products; ord­ metals; and fabricated metal products. nance; lumber and products; furniture and fixtures; and mis­ cellaneous manufactures. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

608 Staff Studies The staffs of the Board of Governors of the In all cases the analyses and conclusions set Federal Reserve System and of the Federal forth are those of the authors and do not neces­ Reserve Banks undertake studies that cover a sarily indicate concurrence by the Board of wide range of economic and financial subjects. Governors, by the Federal Reserve Banks, or In some instances the Federal Reserve System by the members of their staffs. finances similar studies by members of the aca­ Single copies of the full text of each of the demic profession. studies or papers summarized in the B u lletin From time to time the results of studies that are available without charge. The list of Federal are of general interest to the professions and Reserve Board publications at the back of each to others are summarized—or they may be B u lletin includes a separate section entitled printed in full—in this section of the Federal 6 6Staff Studies99 that lists the studies that are Reserve B u lletin . currently available. Study Summary Impact of Bank Holding Companies on Competition and Performance in Banking M arkets Stephen A. Rhoades and Roger D. Rutz —Staff, Board of Governors Prepared as a staff paper in early 1979 During the past decade, bank holding companies standard metropolitan statistical areas (SMSAs). have become prominent in the commercial Nine alternative measures of market partici­ banking industry. The increasing significance of pation by bank holding companies are used to this form of organization raises numerous and determine whether bank holding companies in­ largely unanswered empirical questions. Speci­ fluence market rivalry as measured by mobility fically, one important question for regulatory and turnover among the largest five firms in the policy concerns the impact that bank holding market. Further, the tests include nine different companies have on competition and perform­ measures of market performance; one group ance in commercial banking markets. measures market performance in terms of eco­ This study focuses on the general proposition nomic criteria, that is, allocative efficiency, and that bank holding company participation in the other group measures performance in terms banking markets will have procompetitive ef­ of public policy criteria. The results indicate that fects, which in turn will lead to superior overall the regression models perform reasonably well market performance. The empirical investiga­ with respect to the anticipated signs and statisti­ tion uses multivariate regression analysis for cal significance of many coefficients. statistical testing purposes on a sample of 184 The findings from this study suggest several Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

609 tentative conclusions. In major banking markets Moreover, the banking authorities or the federal (SMSAs), bank holding company banks are not and state legislatures should not generally as­ generally aggressive competitors and may even sume that adopting the holding company ap­ weaken rivalry and lead to inferior market per­ proach in liberalizing banking laws will yield formance. Thus, some of the procompetitive public benefits in terms of improving the overall benefits claimed in bank holding company ac­ rivalry and performance of commercial banking quisition applications may not materialize. markets. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

610 Industrial Production Released for publication August 16 July. Output of business equipment increased 0.4 percent further in July, reflecting continued Industrial production is estimated to have de­ strength in many equipment industries other clined fractionally in July—by 0.1 percent, the than business vehicles. same as the June decline. Output of most major Declines occurred in output of durable goods market groupings of the index, other than con­ materials and energy materials in July, while sumer durable goods, changed little last month production of nondurable goods materials, no­ while further reductions occurred in auto and tably paper and chemicals, increased. Within truck output. The index of industrial production the durable goods materials component, in­ for July, at 152.1 percent of the 1967 average, creases in equipment parts and basic metals was 0.6 percent below the March level and 0.2 were more than offset by a sharp decline in the percent above the December index. output of parts for consumer durable goods. A revision in the index, extending back to the beginning of 1976, raised the level of the total index for the first quarter of 1979 from 151.5 to 152.2 (1967= 100), or by about 0.5 percent. However, the month-to-month per­ centage changes in the index for 1979 were affected only minimally by the revision.1 Output of consumer durable goods declined 2.6 percent in July, as production of autos and utility vehicles (which include lightweight personal-use trucks) was reduced sharply. In order to reduce inventories, auto assemblies were cut more than 3 percent from June to an annual rate of 8.8 million units. But production remained well above the rate of sales, and auto assemblies tentatively are scheduled to be reduced further to a rate of 7.3 million units in August. Output of utility vehicles declined about 20 percent in 1. See “Revision of Industrial Production Index,” pp. Federal Reserve indexes, seasonally adjusted. Latest figures: 603-05 of this Bulletin. July. Auto sales and stocks include imports. 1967 == 100 Percentage change from preceding month to— Percentage change Industrial production 1979 1979 7/78 to June p July e Feb. Mar. Apr. May June July 7/79 Total ..................................... 152.3 152.1 .3 .7 -1.4 1.1 -.1 -.1 3.4 Products, total ......... ......... 149.8 149.3 .5 .6 -1.6 1.3 -.4 -.3 2.5 Final products.................. 147.3 146.6 .5 1.0 -1.9 1.8 -.5 -.5 2.4 Consumer goods......... 151.0 149.5 .6 .9 -2.5 2.1 -.9 -1.0 -.2 Durable .................... 158.0 153.9 .4 1.6 -7.3 5.9 -1.6 -2.6 -5.1 Nondurable ............. 148.2 147.8 .7 .6 -.4 .7 -.5 -.3 2.0 Business equipment... 171.8 172.5 .5 1.1 -1.2 1.6 .2 .4 6.7 Intermediate products ... 159.2 159.3 .4 -.6 -.4 -.1 -.3 .1 3.0 Construction supplies . 155.5 155.4 .1 -1.4 -.7 .2 -.5 -.1 2.0 Materials .............................. 156.2 156.3 .1 .7 -1.2 .6 .5 .1 4.7 p Preliminary. e Estimated. Note. Indexes are seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

611 Statements to Congress Statement by Henry C. Wallich, Member, Principal Features of the Board of Governors of the Federal Reserve E urocurrency M arket System, before the Subcommittee on Domestic The Eurocurrency market is an international Monetary Policy and the Subcommittee on In­ banking market in bank deposits and loans that ternational Trade, Investment and Monetary are denominated in currencies other than the Policy of the Committee on Banking, Finance currency of the country where the bank is lo­ and Urban Affairs, U.S. House of Repre­ cated—for example, dollar deposits and loans sentatives, July 12, 1979. of banking offices in London. The phrase “Eurocurrency” developed because the market It is a pleasure to testify before these subcom­ originated in Europe, chiefly as a market for mittees today on behalf of the Federal Reserve Eurodollars. Eurodollars still account for about Board. You have asked for our views on the three-quarters of the Eurocurrency market, with rapidly growing and now sizable Eurodollar about half of the remainder being Euromarks. market and on the possible need for legislation Also, some deposits in the market are denomi­ to deal with it. nated in pounds sterling, Swiss francs, and other U.S. monetary authorities have monitored the major currencies. I will focus my comments on development of the Eurodollar market since its the Eurocurrency market as a whole with the birth in the 1950s and its expansion into a reminder that at present it is largely, but not market for several Eurocurrencies. The Federal exclusively, a market in dollars. Reserve obtains data from affiliates of U.S. What is now considered the Eurocurrency banks operating abroad and has worked with market extends beyond Europe to include bank­ foreign central banks and the Bank for Interna­ ing activities in major industrial countries tional Settlements (BIS) to develop a reporting worldwide and in offshore banking centers such network that provides information on the market as the Bahamas, the Cayman Islands, Hong as a whole. The Federal Reserve and Comp­ Kong, and Singapore. Still, the Eurocurrency troller of the Currency also obtain information market does not embrace all of international as bank supervisors. Thus, we are well placed banking activity. Traditionally, international as an institution to observe the working of the banking has been conducted through the taking market and to assess both the benefits it provides of deposits from foreigners and lending to for­ and the problems it poses. eigners in the currency of the country where I would like first to address some general the bank is located. This form of banking con­ questions about the Eurocurrency market that tinues. On the other hand, some Eurocurrency are often asked. I will then turn to the possible activity is not international at all and occurs need for better control of the market from a within a country’s domestic market; deposits are monetary policy standpoint since the issues taken from residents and loans made to residents raised in your invitation to present testimony denominated in dollars or other foreign curren­ relate primarily to monetary policy. In addition, cies. since concern is also expressed from time to The Eurocurrency liabilities of banks usually time regarding the adequacy of supervision to take the form of time deposits of large size. assure the safety and soundness of banks par­ Eurocurrency deposits are not generally used to ticipating in Eurocurrency banking, I shall make payments directly, and only a relatively briefly touch on this aspect. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

612 Federal Reserve Bulletin □ August 1979 small part are in immediately available funds national monetary statistics, is on the order of that can be used directly to economize on con­ $100 billion to $120 billion. ventional checking account balances. Thus, for The net credit provided to nonbanks through the most part they cannot be considered money the Eurocurrency market, estimated at about in the narrow sense of M-l. The closest analogy, $225 billion to $250 billion as of the end of in U.S. monetary statistics, is perhaps with large 1978, is larger than its net monetary liabilities. negotiable certificates of deposit, which are in­ The difference arises largely because of sizable cluded in M-4. However, negotiable CDs can deposits of central banks in the market. While be issued by U.S. banks only with a maturity these deposits do not constitute part of the net of one month or more while one-third of all monetary asset holdings of nonbanks, they do Eurocurrency deposits have a remaining matu­ provide a source of funds that can be used to rity of less than one month. Thus, Eurocurrency make loans and, to the extent that they are deposits may be said to have more of a money­ largely deposits of central banks of smaller like quality than large CDs. countries, they are more likely to be shifted among currencies. The numbers I have cited tend to shrink one’s How Large is the perception of the Eurocurrency market com­ E urocurrency M arket? pared with the impression that is often con­ The scale of the Eurocurrency market is often veyed, but the importance of the market should misunderstood. For instance, one measure of not be underestimated. The absolute numbers size often cited—its so-called gross size—rep­ involved are large. Moreover, Eurocurrency resents the total of foreign currency liabilities holdings and credits have been growing more of banks in industrial countries reporting to the rapidly than the domestic monetary and credit BIS plus those of certain offshore branches of aggregates of the United States and of most U.S. banks. This figure exceeded $800 billion other countries. For example, from the end of at the end of 1978. However, it is inflated by 1974 to the end of 1978, Eurocurrency liabilities a large volume of interbank activity that neither to nonbanks are estimated to have grown at an contributes to the liquidity of the nonbank public average annual rate of about I8V2 percent, nor is associated with any extension of credit compared with growth in M-l and M-4 in the to nonbanks. On these grounds, we exclude United States at average annual rates of 6.3 interbank liabilities such as correspondent bal­ percent and 8.5 percent respectively over the ances and federal funds from U.S. domestic same four-year period. This trend can be ex­ money and credit aggregates. One should simi­ pected to continue unless checked. Thus, the larly adjust downward the stock of Eurocurrency existence of the Eurocurrency market increas­ liabilities. Commonly cited measures produced ingly will have to be taken into account in by the BIS and others put the net size of the formulating and executing domestic monetary Eurocurrency market in the neighborhood of policies; issues of surveillance, supervision, and $400 billion. However, these measures still control of the Eurocurrency market will con­ overstate the monetary significance of the mar­ tinue to be in the foreground of domestic and ket because they net out only banks’ liabilities international financial policy. to other banks within the reporting area. Elimi­ nating, insofar as possible, liabilities to banks Is the E urocurrency M arket and central banks outside the reporting area O ut of Control? yields a measure of net monetary liabilities in the Eurocurrency market of roughly $150 bil­ Because Eurocurrency banking is not subject to lion to $175 billion as of the end of 1978. Of reserve requirements or various other restric­ this amount, about one-third is counted in the tions, such as liquidity ratios or credit ceilings, monetary statistics of some country. Thus, which various monetary authorities employ to today the so-called stateless money in the Euro­ facilitate the execution of domestic monetary currency market, that which is not counted in policies, it is often alleged that the Eurocurrency Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 613 market is a source of uncontrolled liquidity. strictive and interest rates rise. In the case of However, because of its close links with do­ Eurodollars this phenomenon is a consequence mestic markets for bank funds, the Eurocur­ of two features of the U.S. monetary system: rency market is, in fact, directly subject to the first, requirements that member banks hold influence of domestic monetary policies in non-interest-bearing reserves and, second, re­ countries of financial importance. strictions on deposit interest rates (particularly Observation of interest rates confirms the the prohibition of interest payments on deposits prediction of economic theory that Eurocurrency of less than 30 days’ maturity). interest rates should be closely tied to interest As a result of reserve requirements, member rates in the domestic market for comparable banks incur additional costs in bidding for large assets denominated in the corresponding cur­ deposits domestically compared with the costs rency .» Relatively stable differentials are nor­ of raising funds in the Eurodollar market since mally observed, and these differentials reflect a portion of funds raised at home must be held costs in the domestic market arising from re­ in nonearning form. Monetary restraint in the serve requirements and other regulations that do United States, either in the form of a higher not exist in the Eurocurrency market. federal funds rate or in the form of higher These close links between domestic and reserve requirements, pushes up these additional “Euro” interest rates are maintained by flows costs of domestic banking and induces banks of funds between domestic markets and the to shift their funding efforts to the Eurodollar Eurocurrency market. For example, when do­ market even though deposit interest rates for mestic U.S. interest rates rise, depositors have dollars in that market may rise by at least as an incentive to switch funds from Eurodollar much as in the domestic market. With higher deposits to domestic U.S. bank deposits and market interest rates generally, demand deposits commercial paper. Some borrowers shift their tend to be attracted from the U.S. banking borrowing to the Eurodollar market, and banks system to the Eurodollar market since such themselves move funds raised in that market to deposits cannot, by law, earn interest in the the U.S. credit market. These responses put United States. Similar reactions occur in the upward pressure on Eurodollar interest rates response to monetary tightening in other coun­ until the normal relationship with domestic U.S. tries although the specific factors differ from rates is restored. In practice, the adjustment is country to country. These effects constitute one virtually instantaneous. Thus, the dampening reason, although by no means the only reason, effect of higher U.S. interest rates on credit why the Eurocurrency market has grown so demand and spending is felt in the Eurodollar rapidly over the past decade when inflation has market as well as in the U.S. market. risen and brought with it historically high nom­ Limitations on the free flow of funds interna­ inal interest rates. tionally, such as the Voluntary Foreign Credit As interest rates rise, the Eurocurrency mar­ Restraint program—in effect until January 1974 ket is not the only financial channel that gains as part of the U.S. balance of payments program a competitive advantage. Domestic U.S. finan­ of the 1960s—can weaken the tie between cial flows through channels not subjected to Eurocurrency and domestic interest rates. But member bank reserve requirements or interest because controls on capital movements inevita­ rate restrictions—such as the commercial paper bly have significant leakages, a fairly close market, finance companies, and money market correspondence can usually be observed even mutual funds—are also favored. when such measures are in force. Despite the tendency of the Eurocurrency While the transmission of domestic monetary market to grow relatively more rapidly when influences to the Eurocurrency market is very domestic interest rates rise, it is still true that real and effective, there is a somewhat paradox­ monetary restraint is effective. When the Fed­ ical tendency for the growth of the market to eral Reserve tightens monetary policy, it forces accelerate relative to the domestic banking mar­ interest rates to rise and growth of domestic ket when monetary policy becomes more re­ member bank deposits to slow. The expansion Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

614 Federal Reserve Bulletin □ August 1979 of the Eurodollar market will slow less than that plicit account of the Eurocurrency market would of the domestic market in response to higher arise because of the uneven effects of restrictive interest rates, and the Eurodollar market may policy on the domestic and Eurocurrency mar­ grow faster than it otherwise would if enough kets. Those smaller domestic banks and their banking activity shifts to it from the U.S. mar­ customers that have less access to the Eurocur­ ket. Nevertheless, it will normally be the case rency market than the large international banks that the application of domestic restraint will and their U.S. and foreign customers would reduce the growth of the two markets taken absorb a disproportionate share of the burden together. of a restrictive policy. This inequity, in turn, would undermine support for an appropriate counterinflationary monetary policy. D oes the E urocurrency M arket Moreover, if monetary authorities focus ex­ Create Problems for clusively on the growth of domestic aggregates, D omestic M onetary Policy? ignoring the effects of the more rapid growth of liabilities to nonbanks that is occurring in While the Eurocurrency market is linked to the Eurocurrency market, they may facilitate domestic markets and subject to control through more expansionary and more inflationary condi­ the impact of domestic monetary policy on tions than they intend, or may be aware of. interest rates, it does pose problems for mone­ Indeed, there is a risk that, over time, as the tary policy. My judgment is that these problems Eurocurrency market expands relative to do­ have been of only moderate significance to date, mestic markets, control over the aggregate vol­ but they are increasing. Moreover, the Eurocur­ ume of money may increasingly slip from the rency market adds to inflationary pressures be­ hands of central banks. Thus, it would be pru­ cause liabilities to nonbanks in this market are dent to have available instruments for control­ rising faster than domestic money supplies. In ling the Eurocurrency market as we have for the present inflationary environment we must controlling domestic monetary aggregates. This look closely at every source of inflationary ten­ is one of the principal reasons for seriously dency. considering the need for reserve requirements Let me identify some of the ways in which against Eurocurrency deposits on an interna­ the Eurocurrency market complicates the exe­ tional basis. cution of monetary policy. The presence of a Eurocurrency market confronts domestic mone­ tary authorities with a dilemma. They could, What R ole D oes the in principle, act in such a way as to provide E urocurrency M arket Play for the desired growth of liquidity, taking ac­ in Exchange-Rate D evelopments? count of both the domestic market and the Eurocurrency market. One problem that the The existence of the Eurocurrency market as a Federal Reserve would encounter in following liquid and efficient mechanism for international such an approach would arise because we cannot financial dealings has certainly had an important gauge well the extent to which growth in the influence on exchange-rate developments in re­ Eurocurrency market affects spending in the cent years. It would be wrong, however, to view United States. Dollars held or borrowed in the the market itself as having given rise to new Eurocurrency market could be spent anywhere stabilizing or destabilizing forces. Rather it has in the world, not just in the United States. On acted as a conduit and amplifier through which the other hand, it is likely that growth in the both stabilizing and destabilizing financial flows nondollar portion of the market would stimulate have been felt in exchange markets with greater spending in the United States at least margin­ speed and intensity. ally. Other monetary authorities face the same In recent years the size of current-account uncertainties. deficits has been unprecedented. Without an Perhaps an even more serious problem in efficient international financial market to channel carrying out a monetary policy that takes ex­ funds from countries in surplus to those in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 615 deficit, exchange-rate pressures at times would across national borders at low cost. In doing have been even greater than they were. The so it helps to finance temporary current-account Eurocurrency markets have played an important imbalances and improve the efficiency of in­ role in moving excess savings to private and vestment worldwide. It also exerts competitive official borrowers in countries with current- pressure on domestic banking systems to be account deficits. more responsive to their customers and to be­ At other times international capital flows have come more efficient. exacerbated pressures in exchange markets that Second, any approach adopted should have have arisen to some extent from the need to a good prospect of contributing significantly to finance current-account deficits. In some of broad control over the volume of international these episodes the capital movements undoubt­ liquid assets and credit. Little would be edly have reflected a reasonable market view achieved, and a great burden would be placed that authorities were attempting to maintain un­ on some institutions, if part of the market were tenable exchange-rate relationships. In other restricted and another part were left unrestrained episodes, however, market psychology has ap­ to take up the slack, or if Eurocurrency banking peared to drive exchange rates to unwarranted activity could easily be shifted into new unre­ levels—movements that have subsequently been stricted forms. Similarly, any burden imposed reversed. The international character and the should be as low as possible and should apply liquidity of the Eurocurrency market have equally and equitably to all banks operating in tended to swell the volume of funds moving the Eurocurrency market. Thus, for example, through exchange markets at such times. it has not seemed desirable to restrict the scale of U.S. banks’ participation in the Eurocurrency What M easures Could Be Taken market so long as banks of other major countries were unfettered. to D eal Better with The Federal Reserve has, of course, the re­ the E urocurrency M arket? sponsibility to consider the safety and soundness The thrust of my discussion of the Eurocurrency of U.S. banks abroad when reviewing proposals market has been to reject as unfounded the of banks to expand their international opera­ extreme view that the market is an unrestrained tions. Together with the Comptroller of the source of monetary and exchange-market insta­ Currency, the Federal Reserve also examines bility but to recognize that its existence makes the lending, funding, and management of U.S. the execution of monetary policy more difficult. banks abroad and considers the consolidated There is a danger that, if measures are not taken worldwide positions of U.S. banks in assessing to moderate the growth of the Eurocurrency their overall condition. Foreign central banks market, the problem will grow over time and often believe that they do not have the authority the prospects for controlling inflation will wor­ to oversee the foreign operations of their banks sen correspondingly. Thus, careful monitoring as closely as we do in the United States, but of the Eurocurrency market is in order, and they are moving, in some cases with the support careful consideration should be given to making of new grants of authority, to adopt approaches monetary restraints on the Eurocurrency market similar to ours. move more in parallel with restraints on domes­ Third, measures that were applied only to tic markets. In considering various approaches Eurodollars and not to all Eurocurrencies would we should be mindful of several factors. have limited effectiveness and might well intro­ First, any approach adopted should take ac­ duce new instabilities into international financial count of and seek to preserve the benefits that markets. Although depositors and bankers see flow from the existence of the market. I have Eurodollars, Euromarks, and Eurosterling as only alluded to these benefits, but they are being quite different and are not indifferent considerable. The market is extremely competi­ among these Eurocurrencies, forward markets tive and efficient. It facilitates movements of in foreign exchange offer a ready means of large volumes of funds from savers to investors achieving any desired foreign exchange position Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

616 Federal Reserve Bulletin □ August 1979 regardless of the actual currency of a deposit. impose special restraints on Eurocurrency loans Hence, restrictions on the availability of one or deposits in relation to capital, or to specify Eurocurrency would induce some who wished some kinds of liquidity ratios that would have to hold that currency to move into deposits to be observed in Eurocurrency banking. denominated in other currencies and then to Federal Reserve representatives have dis­ acquire the desired currency through a forward cussed our thinking concerning the use of re­ contract. serve requirements in the Eurocurrency market Taking account of these considerations, the with representatives of other central banks of Federal Reserve has been examining the advan­ the Group of Ten countries and Switzerland. tages and disadvantages of various ways that These central banks have shown a willingness the Eurocurrency market might be brought to discuss this and other possibilities. A plan under greater control. One technique we have of work has been established to examine reserve explored would entail placing reserve require­ requirements and other techniques over the next ments on the Eurocurrency liabilities of banks’ several months. The technical difficulties are head offices, branches, and affiliates no matter considerable. Neither the Federal Reserve nor where located. Those countries whose banks other central banks will be in a position to and banking affiliates have a significant, or po­ decide whether reserve requirements or any of tentially significant, presence in international the alternatives are sufficiently promising to markets would be expected to act in concert with press for their adoption until the work now respect to their banks. Deposits accepted from under way is completed. banks that were subjected to the requirement could be exempted. The objective would be to What Legislative Initiatives slow down the growth of deposits from outside the covered banks and the corresponding growth W ould Facilitate Better of credit by putting the Eurocurrency market Control over the Grow th of more nearly in a position of competitive equality the E urocurrency M arket? with domestic banking markets. If this approach At the present time the Federal Reserve has no were accepted by the important countries, it firm basis on which to make recommendations would minimize the likelihood that large, paral­ concerning legislation to enable U.S. partici­ lel, but reserve-free markets would emerge pation in an international program to control through banks with head offices in nonpar­ better the growth of the Eurocurrency market. ticipating countries. I am submitting with my The work we will be doing and the discussions testimony a paper prepared by the Federal Re­ we will be engaged in with other central banks serve Board staff that explores this approach in over the coming months may give us a better more detail.1 basis on which to make such recommendations The reserve requirement approach seems to in the future. be the most effective of several that might have H.R. 3962, introduced by Congressman Leach, merit. An alternative, unilateral approach would envisions a system of reserve requirements that be to reduce the competitive advantage of the would be adopted in concert by major countries. Eurocurrency market by removing reserve re­ To this extent, the bill parallels the thinking in quirements and interest rate restrictions on those the Federal Reserve on how the issue of the domestic deposits for which Eurocurrency de­ growth of the Eurocurrency market might be posits are close substitutes. However, this addressed. However, to embed in legislation a would have the disadvantage of giving up an specific approach based on reserve requirements important monetary policy instrument. Other at this stage could impede efforts to reach possible international approaches might be to agreement on an international solution. While not favoring specific legislative limitations with 1. The discussion paper for this statement is available respect to Eurocurrency reserve requirements, on request from Publications Services, Division of Sup­ the Board does believe that its reserve require­ port Services, Board of Governors of the Federal Re­ serve System, Washington, D.C. 20551. ment authority over banks in the international Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 617 sphere should be broadened, given the rapid and to report to the Congress before June 30, 1980, unpredictable changes that can occur in interna­ on the advisability of adopting such proposals. tional markets. The Federal Reserve has been The Board has not yet considered what action given the authority by the Congress in past it should take with respect to the international legislation to place reserve requirements on banking facility proposal. It intends to do so foreign branches and affiliates of member banks. soon, and when it does, it will weigh all the This authority should be extended to branches factors that affect the competitive position of of U.S. banks that are not members of the U.S. banks, large and small, relative to foreign Federal Reserve System, as provided in H.R. 7. banks. The Board should be free to give due H.R. 3962 contains two other provisions in weight to matters of equity, monetary control, addition to those concerning reserve require­ and relations with foreign banking institutions ments on Eurocurrency deposits. It would call in considering what action to take. for the Federal Reserve Board to prepare a These hearings and the introduction of H.R. report to the Congress on the role of U.S. banks 3962 demonstrate well-directed congressional and other financial institutions in the Eurocur­ interest in the problems posed by the Eurocur­ rency market and in foreign exchange markets. rency market. I hope my presentation will prove I would like to assure the subcommittees that useful to the members of the subcommittees in even without legislation the Board will assess the conduct of your oversight responsibilities carefully all of the related issues in formulating and in the further consideration of legislation. its approaches to Eurocurrency markets and In view of the discussions among central banks, exchange markets and will keep the Congress which I have indicated will be proceeding in informed through regular channels. the coming months, you may wish to ask the The bill would also prohibit Board approval Federal Reserve to inform the Congress of of the establishment of any international bank­ progress in this area at the start of the next ing facility in the United States before De­ session of the Congress. We would welcome cember 31, 1980, and would require the Board the opportunity to do so. □ Statement by Henry C. Wallich, Member, cations, and I cannot promise that this will be Board of Governors of the Federal Reserve the last occasion for Board discussion of this System, before the Committee on Banking, proposal. Housing and Urban Affairs, U.S. Senate, July The comments received by the Board have 16, 1979. been useful in identifying two principal issues posed by IBFs: the implications of IBFs for I am pleased to testify before your committee U.S. monetary policy and credit availability, on three current issues in international banking. and their implications for competition among First, I should like to give you my views on banks. the proposal by the New York Clearing House Because IBFs, as proposed, would offer at­ that banks in the United States be permitted to tractive obligations with highly flexible maturi­ establish special international banking facilities ties, free of reserve requirements and not subject (IBFs) that could accept deposits from foreign to risks associated with asset holdings in foreign customers free of reserve requirements and in­ countries, they are likely to be attractive to some terest rate limitations and that could make loans foreign investors that now hold funds in the only to foreigners. As you know, the Board has United States or in the Eurodollar market. twice sought public comment on specific fea­ Shifts of foreign funds from deposits in U.S. tures of the proposal, and this afternoon the banks to IBFs would affect the monetary aggre­ Board will review the most recent comments. gates, whereas shifts of foreign funds from the The proposal has a number of important impli­ Euromarket would not. Most foreign demand Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

618 Federal Reserve Bulletin □ August 1979 deposits in the United States are held by banks reserve requirements, the parent bank could and official institutions, and under a proposed fund local credits by using deposits placed in redefinition of the aggregates, these deposits the IBFs. But, if for monetary policy reasons would be excluded. Demand deposits held by the Federal Reserve were to reestablish a reserve foreign nonbanks represent only a little more requirement on borrowings by U.S. offices from than 1 percent of M-l. Time deposits held by foreign branches and, as has been proposed, nonbank foreigners are about 1 percent of M-2. apply this requirement to borrowings from IBFs, It has been argued that shifts of foreign deposits the IBFs might cease financing their U.S. parent would be sufficiently small that—with adequate banks and extend loans abroad. monitoring—they would not lead to major In that case, there could be increased foreign problems in assessing the monetary aggregates. lending by IBFs and, in the first instance, re­ There is a danger, however, that IBFs could duced domestic lending by U.S. offices of those pose difficulties for domestic monetary policy IBFs. If those domestic offices could not find by attracting funds that U.S. companies might alternative sources of funds on comparable otherwise keep in U.S. banks. The readiness terms (as, for example, by borrowing in the of domestic companies to place funds in IBFs federal funds market), availability of bank credit through their foreign affiliates likely would in certain markets could be adversely affected. depend on the availability of alternative domes­ I might note that increased foreign lending tic facilities. If the Board were to take action under those circumstances could also adversely to reduce the availability or attractiveness of affect the exchange rate for the dollar. alternative domestic investments (such as RPs), The second issue regarding IBFs, competition U.S. companies might seek to use, or to estab­ among banks, has been the focus of comments lish, new foreign affiliates to take advantage of by the banking community. Banks located out­ the attractive features of IBFs. It would be side New York have been concerned that they extremely difficult and costly for the Federal have an effective degree of competitive equality Reserve to control such shifts through supervi­ with New York City banks. Some banks have sory action or to monitor such shifts in order indicated that they would favor IBFs only if they to make adjustments to the monetary aggre­ could have a physical presence in New York gates. that would enable them to compete for deposits In its request for comment on the IBF pro­ on a comparable footing with New York banks, posal, the Board suggested two possible safe­ and if they could have access to a mechanism guards against circumvention of the ground for settlement of international transactions on rules for IBFs by domestic companies: limiting terms that they would deem equitable. maturity of deposits to seven days or longer, The Federal Reserve is currently engaged in and prohibiting IBFs from accepting deposits reviewing its role in facilitating international from foreign affiliates of U.S. companies. The settlements; once that review is completed it response of the banking community was that may be possible to determine whether a settle­ these restrictions would impair the usefulness ments mechanism can be developed that would of IBFs for conducting customary international meet the needs of IBFs as well as of the inter­ business. national banking community generally. An alternative method of dealing with the The issues that I have been discussing pose problem might be to establish limits on the rate some as yet unanswered questions regarding of growth of IBFs, thereby limiting the extent IBFs. There are, however, some areas where of possible shifting. questions can be resolved. One is supervision In my judgment, this issue remains unre­ for safety and soundness, which is distinct from solved. the regulatory aspects to which I have referred. IBFs could affect availability of bank credit Supervision of IBFs would logically fall in those markets in which foreign deposits are under the jurisdiction of the agency that super­ used to fund local lending. As long as IBFs are vised the parent bank: the Comptroller for na­ able to lend funds to their parent banks free of tional banks and the Federal Reserve for state Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 619 member banks. Because IBFs would be located financial institutions); (2) receiving and lending in the United States, they could be supervised money abroad; and (3) providing international from the standpoint of safety and soundness to banking services in the United States (on the the same extent as the U.S. offices of the same lending side, largely the financing of interna­ bank; there would be no loss in supervisory tional trade). Although the Board liberalized capability. many aspects of its regulations pertaining to Nor would IBFs be inconsistent with current Edge corporations, the amendments that have efforts to establish some measure of control over drawn the most attention are those dealing with Eurobanking. If broad international agreement the U.S. activities of Edge corporations. can be reached on measures to be applied, such One change permits Edge corporations to as reserve requirements, those measures or their establish branches in the United States. Pre­ equivalent would also be applied to IBFs. On viously, domestic branching had been prohib­ the other hand, if agreement cannot be reached, ited. However, banks had been allowed to own the establishment of IBFs would tend to draw a number of Edge corporation subsidiaries, and to the United States some of the banking activity many of the largest banks owned Edge corpora­ now taking place offshore, and we would have tion subsidiaries in several states. In the view a somewhat greater opportunity to influence that of the Board, domestic branching of Edge cor­ business if it were conducted here. porations merely provides an alternative organi­ The second topic that you have asked me to zational form through which banks can conduct discuss relates to the regulation of Edge cor­ a multistate Edge Act business that has already porations. been permitted through ownership of multiple The International Banking Act of 1978 (IBA) Edge corporation subsidiaries. The Board re­ amended the Edge Act and required the Federal gards this change as consistent with the con­ Reserve Board to revise its regulations govern­ gressional mandate to remove unnecessary reg­ ing Edge corporations by June 14, 1979. The ulatory restrictions. The Board does not believe IBA directed the Board to remove unnecessary that this change violates the spirit of the Mcregulatory restraints in order to make Edge Fadden Act ban on interstate branching by corporations more effective providers of inter­ banks. Edge corporations have not been re­ national banking services, enable them to com­ garded as commercial banks and, historically, pete effectively with similar foreign-owned in­ a principal purpose of these corporations has stitutions in the United States, and foster own­ been to provide a means by which banks could ership of Edge corporations by smaller and conduct an international banking business out­ regional institutions. However, the IBA did not side their home state. Moreover, this change amend the specific statutory language of Section may especially benefit regional and smaller 25(a) of the Federal Reserve Act that limits the banks that have been constrained the most by powers Edge corporations may exercise in the the capital requirements involved in establishing United States. In amending its regulations, the multiple Edge corporation subsidiaries. (Banks Board sought to increase the effectiveness of can invest only 10 percent of their capital in Edge corporations through the removal of un­ Edge corporations, and each corporation must necessary restraints on their activities, while at be capitalized at a minimum of $2 million.) the same time retaining the international char­ Prior approval of the Board is needed for all acter of Edge corporations and not making them domestic branches of Edge corporations and the full-scale domestic commercial banks. In some public will have an opportunity for comment. cases, execution of this task involved difficult A second change permits Edge corporations judgments. to finance the production of goods for export. Edge corporations conduct a wide range of Previously, Edge corporations were restricted to international banking activities both inside the financing the transportation, storage, and actual United States and abroad. In general, these exporting of goods sold abroad (as well as activities can be summarized as: (1) investing similar import transactions). This expansion of in foreign companies (primarily banking and powers was designed especially to meet con­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

620 Federal Reserve Bulletin □ August 1979 gressional concern about the financing of ex­ was truly incidental to international business, ports. To insure that Edge corporations retain so that Edge corporations retained their interna­ their international character and to guard against tional character and did not, in fact, become possible abuse, the Board required that the fi­ domestic banks. nancing of such working capital be extended The principal objections to this proposal have only when there were firm export orders or when arisen from concerns that it would expand too the goods being produced were readily identi­ broadly the domestic banking powers of Edge fiable as being for export. corporations and lead to the creation of a new Probably the most controversial proposal was group of domestic commercial banks that would one to allow Edge corporations to conduct any have an advantage of being able to do business type of business with certain customers, termed across state lines. Some of this concern arose “qualified business entities” (QBE). (Final ac­ because of uncertainty about the administrability tion on this proposal was deferred.) These cus­ of the QBE standards and the number and char­ tomers were to be firms engaged primarily in acteristics of companies that might be covered. exporting or importing. This proposal repre­ Data on the latter are almost nonexistent. sented a marked departure from existing Edge In the end, the Board decided to postpone Act regulations that require each Edge Act implementation of the QBE proposal and in­ transaction to be directly associated with an structed the staff to explore the matter further. international transaction, usually one involving In the coming months, it intends to review the the import or export of goods. Under this pro­ customer accounts of Edge corporations, and to posal, the transaction-by-transaction approach consult with other banks and possibly commer­ would be eliminated in the case of dealings by cial firms with the aim of developing alternatives Edge corporations with QBEs; instead, all to the present transaction-by-transaction ap­ transactions with such firms would be presumed proach to monitoring the U.S. activities of Edge to be international in character. For example, corporations. Any new proposal will, of course, if an Edge corporation did business with an be issued for public comment. export-import firm, under the proposal the cor­ I would like to emphasize that it was never poration could finance the purchase of a U.S. the Board’s intention to alter the basic interna­ warehouse by that company and the company tional character of an Edge corporation. As part could use its Edge corporation deposit account of any final action, one principle will be that to pay domestic expenses such as its payroll or Edge corporations are international banking in­ its utility bills, transactions currently prohibited. stitutions, not domestic commercial banks, and This proposal offered three principal advan­ that the rules governing Edge corporations must tages. First, it would have reduced the regula­ maintain that distinction. However, it is my tory expense currently associated with checking view that this does not preclude Edge corpora­ Edge corporation accounts to make certain a tions from taking some domestic deposits and transaction is directly related to an international making some domestic loans to a business that activity permitted under the regulation. Second, is basically international in character. it appeared to offer convenience and increased Finally I shall turn to the question of foreign efficiency to the export or import firm that might acquisitions of U.S. banks. have looked to an Edge corporation to finance Federal Reserve policy on foreign acquisi­ most of its business but could not use the Edge tions of American banks accords with U.S. account for certain normal business expendi­ policy on foreign investment generally. We be­ tures. Third, enabling Edge corporations to offer lieve that our economy and our financial system full-service banking to this limited group of benefit from foreign competition and from customers would make them more effective foreign capital, so long as the investment is competitors vis-a-vis foreign banks, as well as subject to the same rules and regulations that domestic banks. apply to domestic companies. This principle of The primary problem associated with this national treatment is embodied in the letter and approach was how to insure that the business spirit of the International Banking Act, and it Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 621 underlies the exercise of the Federal Reserve’s Foreign investment may also bring innovation responsibilities regarding foreign banking in the and improved efficiency to U.S. banks: tradi­ United States. tional bank pricing and lending techniques may The last two years have seen an increase in be modified and improved by innovative foreign the acquisition of U.S. banks by foreign parties. management, with benefits both for the bank and However, foreigners still own only a tiny frac­ for its customers. It is, of course, essential that tion of our 'more than 14,000 banks, and even a foreign bank seeking to acquire a U.S. bank when pending acquisitions are included, assets be soundly managed. of the acquired banks would only be about 3 Further, foreign investment can contribute to percent of total U.S. commercial bank assets. financial stability when the bank invested in is Most of the significant foreign acquisitions have a “problem” bank, or is in danger of failing. been by banking institutions. In this connection I should note that the Federal I should like to emphasize at the outset that Reserve has recommended that the Bank Hold­ there is a framework of law covering foreign ing Company Act be amended to permit do­ acquisitions of U.S. banks and that recent ac­ mestic banks to acquire a failing bank in another quisitions have been made in accordance with state; such an amendment would broaden the law. I refer to section 3 of the Bank Holding range of alternatives that might be open to bank Company Act. The Federal Reserve evaluates supervisors in cases of failing banks. proposed acquisitions according to standards set On the other hand, some questions have been forth in the act: the financial and managerial raised regarding possible adverse effects of capabilities of the acquiring company, the con­ foreign ownership of U.S. banks. The first con­ venience and needs of the community to be cerns the ability of the Federal Reserve to served, and the effect on competition and con­ achieve its monetary policy objectives. Most centration of resources in the United States. In large foreign-owned banks accept membership my view, these standards are appropriate for in the Federal Reserve System and thus are assessing individual applications. subject to reserve requirements and other in­ It is important to recognize the potential ben­ struments of monetary policy. Moreover, the efits from foreign investment in individual record indicates that foreign-owned banking in­ banks. One of the principal benefits of a foreign stitutions are likely to live by the spirit as well acquisition can be an addition of capital to the as the letter of U.S. monetary policy measures, bank. This would strengthen both the bank just as overseas banking offices of American invested in and the U.S. banking system as a banks abide by monetary policy and regulatory whole—at a time when U.S. bank capital has actions in force in their country of domicile. been eroded by inflation and (historically) is This is not surprising, since nonindigenous costly. Foreign purchases of U.S. bank stock banks generally regard themselves as guests in reduce the available market supply of that stock the host country. I might note, as an example, and tend to raise the price-earnings ratio of stock that foreign banks cooperated with the Federal of that bank and ratios of U.S. bank stocks Reserve’s anti-inflationary voluntary marginal generally. Higher price-earnings ratios may en­ reserve program that was in effect a number of able banks to raise capital through stock issues years ago. Bills to improve monetary control without substantially diluting the equity of ex­ that are currently under consideration in the isting stockholders. Actions that would restrict Congress would, of course, help ensure that the flow of foreign capital to the American foreign-owned banks remained subject to the banking industry would also reduce the attrac­ Board’s monetary policy measures. tiveness of that industry to domestic investors. A second question concerns supervision of In recent years the nonbanking sector has grown foreign-owned banks. When the investor is a relative to the banking sector in this country, foreign bank, the Federal Reserve has authority and if we are to have a healthy, flourishing under the Bank Holding Company Act. The banking industry, we cannot afford to discour­ Board’s policy statement on foreign bank hold­ age investment in U.S. banks. ing companies makes clear that the foreign bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

622 Federal Reserve Bulletin □ August 1979 is expected to be a source of strength— Finally, I should like to emphasize that while both financial and managerial—to its American we should work diligently to ensure that our subsidiary. Moreover, the Board recently an­ banks receive national treatment in their activi­ nounced new measures to improve the evalua­ ties abroad, it would not be appropriate for us tion of foreign banks at the time of an acquisi­ to hold up approval of otherwise desirable tion, and subsequently to monitor their condi­ foreign investments in U.S. banks because some tion and increase surveillance of their subsidiary countries may not permit nonindigenous banks banks. (including U.S. banks) to acquire majority in­ When the foreign investor is an individual, vestments in their very large banks. Large rather than a bank or bank holding company, American banks have been able to develop the standards for approval of acquisitions are extensive foreign operations, and I would expect those of the Change in Bank Control Act of that some will continue to grow internationally 1978. That act requires that individuals seeking through both branches and subsidiaries. to acquire control of a bank give the relevant U.S. banks have in the past acquired sizable Federal bank regulatory agency 60 days’ prior ownership interests in large foreign banks. For notification. The proposed acquisition may be example, in 1974-75, Citibank acquired control disapproved if it would substantially lessen of a German merchant bank and a related Ger­ competition, result in a banking monopoly in man consumer bank, with combined assets of any part of the United States, jeopardize the $2 billion. Also, in 1975, Citibank increased financial stability of the bank, or otherwise be its ownership of Grindlays Bank to 49 percent contrary to the interests of the bank to be ac­ and installed a Citibank employee as chief quired. Once a bank has been acquired by a operating officer. Grindlays is a major British foreign investor, the Board has the same super­ overseas bank whose assets at the time approxi­ visory powers that it has in dealing with possible mated $4.5 billion. It is not possible to state abuses by domestic owners—notably the ability precisely how large a foreign acquisition might to issue cease-and-desist orders. be permitted by foreign authorities because the A third question concerns the impact of only instances that come to the Board’s attention foreign acquisitions on the supply of banking are those in which a U.S. bank has successfully services to meet the needs of U.S. industry and negotiated an acquisition that has required U.S. consumers. Probably the best protection in this approval. At the present time, we have no regard is the competitiveness of U.S. banking. information that U.S. banks are seeking to pur­ Banks that do not meet the needs of their com­ chase very large foreign banks. munity quickly lose business to those that do. I fully support current efforts under way to As they are good businessmen, foreign bankers ensure national treatment for U.S. banks can be expected to recognize that fact and act abroad. However, it would be wrong in my view accordingly. Moreover, the Bank Holding to limit arbitrarily the growth of sound interna­ Company Act requires the Board in acting on tional banking activity, particularly on the basis any proposed acquisition to consider the con­ of policies that foreign authorities might follow venience and needs of the community being in hypothetical circumstances. served. In this connection, the Board reviews Nor would I favor establishing arbitrary limits how an acquisition will affect the services of on the total percentage of a particular banking the bank being acquired and generally expects market in this country that could be held by some showing in improved services. Further, foreign-owned banks as a group. Such a limit foreign-owned banks—like domestic banks— would needlessly interfere with national treat­ are subject to the Community Reinvestment ment and, if publicized, might tend to accelerate Act, which requires that the Federal bank regu­ foreign efforts to acquire U.S. banks to get in latory authorities evaluate the extent to which “under the wire.” The Bank Holding Company a bank is servicing all elements of its commu­ Act contains protection against domination of nity, and also to the Equal Credit Opportunity a market by one or more large banks—foreign Act, which prohibits discrimination in lending. as well as domestic. Under the act the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 623 may not approve acquisitions that would sub­ foreign bank would not be a substantial com­ stantially lessen competition or lead to an undue petitor in the market in question, but it concentration of resources. In most cases in­ could be considered a significant potential volving acquisition of a foreign bank, the competitor. □ Statement by Philip E. Coldwell, Member, 1978 as their surplus diminished. Of course, that Board of Governors of the Federal Reserve declining trend is now being reversed. System, before the Commerce, Consumer, and Over the years since 1970 about half of the Monetary Affairs Subcommittee of the Commit­ reported official foreign exchange reserves of tee on Government Operations, U.S. House of other countries have been held directly in the Representatives, July 18, 1979. United States—about $24 billion in 1970 and $153 billion at the end of March 1979. Of the I am pleased to appear today to testify in con­ latter figure, about $21 billion is held by OPEC nection with your examination of the invest­ countries. I should note that these figures cover ments in the United States of the countries that primarily money market assets and U.S. gov­ are members of the Organization of Petroleum ernment debt—those kinds of assets that are Exporting Countries, especially the Middle most readily susceptible to liquidation. An ad­ Eastern OPEC countries. I should like to begin ditional amount of $34 billion of foreign official with a brief review of the changes in foreign reserves is held at the foreign branches of U.S. official holdings of foreign exchange reserves banks, and OPEC countries account for about in recent years, and especially since the major two-thirds of those holdings. rise in oil prices in 1973-74, to provide a The rise in foreign official holdings of foreign framework for an evaluation of the scope of the exchange over the years has reflected a combi­ increase in OPEC reserves over that period. nation of factors. One element has been the wish Then I will take up the particular issues that of foreign authorities to strengthen their reserve you have identified. positions as the nominal value of international One of the striking phenomena of the inter­ trade and other transactions rises, so as to have national economic scene over the past decade a cushion against adverse developments. A large has been the quantum jump in the amount of part of the increase is the result of efforts on foreign exchange reserves of foreign countries. the part of some countries to avoid appreciations Such assets rose from $45 billion at the end of their currencies, that is, to support the value of 1970 to nearly $300 billion by the end of of the dollar, at times when the U.S. dollar has March this year, an increase of more than $250 been under downward pressure in the markets. billion. The share of OPEC countries in this For many OPEC countries, there is the addi­ growth has been substantial; their reserves, as tional factor that for various reasons they are recorded by the International Monetary Fund, unable to spend all of the proceeds of their have risen from less than $5 billion in 1970 to accelerating oil export revenues and must find $53 billion at the end of March 1979, with by an outlet for their savings in relatively safe and far the greatest amount accruing to OPEC liquid assets that provide a current and future countries located in the Middle East. Even stream of income. though these OPEC countries have enjoyed The flow of OPEC funds into reserve assets large increases, however, it is evident that the has varied with the changes in their investable increase in their foreign exchange holdings ac­ surplus. We have seen no indication that the counted for only about one-fifth of the total timing or choice of investments has reflected increase for the period recorded by the IMF. any factors other than those that prudent inves­ Moreover, the reserves of the OPEC countries tors normally take into account. Last year, when reached a peak in 1977 and declined during the overall OPEC surplus dropped below $5 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

624 Federal Reserve Bulletin □ August 1979 billion and there was a corresponding drop in market so that our procedures for accommo­ the rate of acquisition of foreign exchange, there dating them can be implemented at the right may have been some diversification into non- time. dollar-denominated assets. However, we have With respect to foreign accounts in U.S. no evidence indicating that the actions of these banks, withdrawals of foreign official funds countries were a major factor in foreign ex­ from one or a group of U.S. banks would in change markets. all likelihood be met by adaptations within the The substantial rise in the amount and share commercial banking system itself. The most of U.S. government securities held by foreign likely and direct consequence of such a with­ monetary authorities has increased the degree drawal would be that U.S. banks losing deposits to which Federal Reserve and Treasury market would borrow them back from the foreign banks operations may at times have to take account that had received them. There simply would be of foreign developments. For example, the no other important outlet for such a supply of Treasury at times in the early 1970s and again liquid dollar funds by foreign banks in a short in 1977-78, after consultation with Federal Re­ period. It is important to note, however, that serve officials, issued special securities to American banks would sustain a financial loss foreign governments and placed the proceeds in the process, since they would have to pay temporarily in deposits with commercial banks the foreign banks for the service they would be to avoid draining reserves from the banking performing as intermediaries. Another adjust­ system. ment available to banks that lost deposits would From January to April of this year, foreign be to sell some of their assets to the banks official holdings of Treasury securities declined receiving the deposit inflow. by $17 billion, reflecting heavy sales of dollars While we would expect that the banking in foreign exchange markets by a number of system could adjust to large withdrawals of foreign countries, notably Germany and Japan. funds through market transactions without major In this four-month period foreign official hold­ disruptions, in the event a particular member ings of Treasury bills declined from 42 percent bank were to be hit by liquidity difficulties of the total outstanding to 31 percent, and because of any abrupt withdrawal of funds, it Treasury bill rates rose relative to other U.S. could obtain short-term credit through the Fed­ short-term rates. This shift in bill holdings and eral Reserve’s discount window. rise in bill rates tended to restore interest rate Because these mechanisms are available to relationships of earlier years, and no special deal effectively with massive shifts of funds action by the Federal Reserve or Treasury was from U.S. banks, we have not undertaken any deemed necessary. If foreign sales of bills or special studies or analyses dealing with this other securities had threatened to disrupt the aspect of OPEC investments in the United markets for these instruments, the Federal Re­ States. However, we have a close and continu­ serve could have undertaken market actions to ing interest, through our regulatory and super­ moderate the impact. visory responsibilities, in the vulnerability of We are accustomed to facing a situation in U.S. banks with respect to their relationships which a number of countries, whether OPEC with individual customers. We have not singled or other countries, might wish to dispose of out any particular class of borrower in this large amounts of government securities. Based process, but we have established certain guide­ on our experience, we are confident that the lines for the examination process that would regular procedures that are available to us, and apply to OPEC countries as well as to others. that have been tested on a number of occasions, Your request for information on the amount are adequate to deal with any such contin­ of OPEC deposits in and loans from domestic gencies, so that we do not believe that a formal and foreign branches of American banks for contingency plan is necessary. However, we each individual OPEC country raises important maintain close vigilance over actual and poten­ policy questions, as you are aware. Let me tial dealings of foreign official accounts in this begin by noting the two main sources of data Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 625 on this subject. First, there are the data collected use of the dollar in the future and perhaps by the Treasury (with the Federal Reserve acting compromise its international role. as collecting agent) covering the foreign assets Second, we should recognize that the Federal and liabilities of banking offices in the United Reserve System publishes far more information States. The Treasury establishes the procedures in this area than any other major central bank, to be followed in collecting and disseminating both in depth of data and timeliness of release. such data. The second system covers the assets Since we have assured you that the OPEC and liabilities of the foreign branches of U.S.- deposits do not constitute a present threat to our chartered banks, and has been established by financial system, and the Government Account­ the Federal Reserve in connection with its ing Office confirms this position, we fail to see supervisory and regulatory responsibilities. Data why publication of individual country data for from the two systems are designed to supple­ OPEC satisfies an essential interest, while it ment each other. opens up the substantial risks of breaching our With respect to banks’ liabilities to foreign­ statistical rules on privacy, potential withdrawal ers, it is longstanding U.S. policy to release of accounts, and establishing another competi­ details of the statistics only to the extent that tive disadvantage for U.S. banks. doing so does not reveal activities of individual Finally, I believe that such individualized banks or their customers. In connection with the reporting could hamper the Federal Reserve data for which they are responsible, the Treas­ System’s relations with other central banks at ury has indicated that pursuant to that limitation a time when we have been one of the leaders the holdings of individual OPEC countries in in developing new cooperative statistical re­ U.S. offices of banks may not be released, since leases among the major central banks. If we for these countries all but a small part of the were forced to release data on foreign transac­ total is held by official agencies of those coun­ tions or deposits against the wishes of the host tries. In collecting and publishing the data on country, the central bank of that country would foreign liabilities in the foreign branches of U.S. likely be much less willing to provide detailed banks, the Federal Reserve has applied the same reports to us or to cooperate in new informa­ policy concerning the publication of data for tional data releases. We view such a potential individual countries. The proportion of OPEC development as a serious setback to the much deposits in these branches that is held by official broader aim of steadily providing more infor­ agencies of those countries is comparable with mation to all participants. Indeed, our current the proportion in their accounts in U.S. head efforts to find ways to share information about offices. We believe that it is proper to preserve troubled banks among countries that have units the confidentiality of individual depositors, and of the same bank could be blocked by a loss we apply this policy uniformly, with no special of trust in our ability to hold data on a confi­ consideration for OPEC countries. Furthermore, dential basis. although our data collection system for branch While we cannot supply data in the detail you data does not operate under the direct authority request, we have compiled data showing the of the International Investment Survey Act of deposits of Middle East oil-producing countries 1976, 22 U.S.C. 3101 et seq., we believe it in the foreign branches of major U.S. banks. is appropriate to follow the procedures for dis­ In this compilation we have followed the format closure established in that act. We have a num­ that was developed in December 1975 in order ber of other reasons for taking this position. to provide data requested by the Subcommittee First, the reputation and the effectiveness of on Multinational Corporations of the Senate the U.S. dollar as a world reserve and transac­ Foreign Relations Committee. For that purpose tions currency rest to some extent upon the free we grouped U.S. banks into three sets of banks convertibility, exchangeability, and use of the constructed so as to avoid disclosure of the dollar abroad unfettered by exchange controls positions of individual banks or of individual or personalized reporting. The publication of OPEC countries. In the updated compilation we data violating this trust would reflect upon the are able to show both the absolute growth in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

626 Federal Reserve Bulletin □ August 1979 OPEC deposits at the foreign branches of these that revelation of data for individual countries, groups of major U.S. banks between 1975 and involving as it would an unwarranted disclosure March 1979, and also the share of these deposits of confidential information^ about holdings of in the total deposit liabilities of these banks. their official agencies, could cause those coun­ Deposits of OPEC countries with the branches tries to divert their assets to deposits or other account for more than 70 percent of their total assets in other countries and other currencies. deposits in U.S. banks. These tabulations show As I have said, we believe the mechanisms that at the end of March 1979 deposits of the are in place to deal with possible diversions of Middle East oil-producing countries with the funds, so that we would not be confronted with group of six largest banks amounted to 6 percent a crisis for our financial institutions or our credit of their consolidated deposit liabilities, com­ markets. I must emphasize, however, that if the pared with 5 percent at the end of 1975. These confidentiality of these asset holdings is not banks have the great bulk of OPEC deposits; preserved, there could well be lasting and sig­ both total OPEC deposits and the ratio of OPEC nificant damage to the ability of U.S. banks to to total deposits are much lower in the two compete internationally and to the status of the groups of smaller banks. In all, nine banks had dollar as a vehicle in which foreigners, both liabilities to this group of OPEC countries official and private, could hold their reserves and amounting to 1 percent or more of their consol­ transactions balances. idated total deposits. A different situation prevails with respect to We have also compiled data on the number the compilation and release of data on loans to of U.S. banks in which each of the OPEC foreign borrowers by U.S. banks, and by com­ countries maintains deposits. (Our data are mercial banks in general. We believe that the based on the reports we have for deposits in overriding concern here is to ensure that the foreign branches, where the bulk of OPEC de­ public, and banks in particular, are as fully posits are held.) That tabulation shows that most informed as possible about the financial condi­ of the OPEC countries maintain deposits at the tion of potential borrowers. To meet that re­ foreign branches of 30 or more U.S. banks, and sponsibility the Federal Reserve and other regu­ none uses fewer than 10 U.S. banks. As I have latory agencies have been developing detailed noted above, however, the amounts deposited statistics on foreign lending by U.S. banks, tend to be concentrated in the six largest banks. consolidating the claims of the head offices and We have no record of any discussions with foreign offices of the banks. U.S. banks’ claims representatives of OPEC countries bearing on on OPEC countries reached $20 billion, in total, the question of whether they might be in­ at the end of 1978, of which $8.2 billion were fluenced to remove their assets from U.S. banks claims on public bodies. The largest OPEC if data for accounts of their countries in the borrowers were Venezuela, Iran, Indonesia, and United States were published separately. How­ Algeria. For comparison, similar claims on ever, although we cannot cite specific docu­ non-OPEC developing countries amounted to ments, we understand that many of the OPEC $52 billion on that date. countries have expressed their sensitivity to dis­ You ask whether the Federal Reserve has any closure of their accounts to the banks with reason to believe that any OPEC money has whom they do business. This issue was been deposited in banks, invested in bank eq­ thoroughly explored in 1975 in connection with uity, or been used to purchase U.S. government the Senate inquiry to which I have already securities, through third-party nominee/custody referred. We have no record of any repre­ accounts. We have no specific evidence of such sentation by the Treasury or other agencies to indirect placements or their extent, but the use the effect that data for these countries should of financial intermediaries by all classes of be given special treatment because of such sen­ foreign investors is so common that we would sitivity. Nevertheless, knowing that such sensi­ also expect to find that OPEC countries use such tivity exists for all countries, and probably in channels from time to time. For example, the great degree for the OPEC countries, we believe Treasury study, “Foreign Portfolio Investment Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 627 in the United States,” shows that in 1974 out ing the chain of transactions and ownership of a total foreign investment in U.S. corporate through which such activities are often con­ stocks valued at about $24 billion, more than ducted, the initiation of such an effort, which half ($13 billion) was reported as being held would require the cooperation of foreign finan­ for the account of foreign bankers, brokers, and cial institutions, would probably in itself cause nominees. foreign investors that wish to protect the confi­ The fact that the use of such intermediaries dentiality of their investments to shift away from makes it difficult to have precise information on institutions that come under the jurisdiction of the country distribution of beneficial ownership the United States. We would probably reduce of foreign-owned assets in the United States has the amount of information available to us if we been well known for many years. Consideration took measures that induced investors to use has been given to the possibility of going offshore financial markets to a greater extent beyond the present reporting requirements for than at present. financial institutions to try to identify the per­ I believe my comments have covered all the sons for whom transactions data are reported, questions you have raised. We have developed but no practical way of achieving such an iden­ data that we hope will be of assistance to your tification has been developed. The situation has committee in its study of these issues. I regret been made even more difficult by the growth that we could not provide some of the detailed of the facilities of offshore markets in Europe data you specifically requested, but I trust you and elsewhere for dollar-denominated deposits will understand the circumstances that limit our and securities. Apart from the difficulty of trac­ ability to do so. □ Statement by Henry C. Wallich, Member, est in U.S. banks have been many and varied. Board of Governors of the Federal Reserve The internationalization of world business has System, before the Commerce, Consumer, and led foreign banks to follow their customers to Monetary Affairs Subcommittee of the Commit­ this country in the same way that U.S. banks tee on Government Operations, U.S. House of followed U.S. companies abroad. In coming to Representatives, August 1, 1979. this country, many large foreign banks have sought to establish substantial roots here that I am pleased to testify before this committee would provide access to dollar funds to support on the subject of foreign acquisitions of U.S. their business in this country and abroad. This banks. has often entailed development of both whole­ Foreign interest in the U.S. banking market sale and retail banking business. For some of has been strong. While the bulk of foreign bank these banks, acquisition of a local, established activity has taken the form of operating branches banking institution provided a means of accom­ and agencies, an important increase in the ac­ plishing this objective. quisition of U.S. banks by foreign parties has Some of our national policies have facilitated occurred during the last two years. However, these acquisitions. Perhaps most important in I believe it important to keep in mind that this regard have been those policies that have foreigners still own only about 80 of our more led to inflation and that have made U.S. banks than 14,000 banks and, even including pending relatively cheap internationally. The factors that acquisitions, assets of the banks acquired by have attracted foreign banks to the United States foreign interests would amount to only about are still present, and one must expect continuing 3 percent of total assets of commercial banks. acquisitions of U.S. banks or investments in Most of these acquisitions have been by foreign them by foreign interests. Whether large acqui­ banking institutions. sitions of the kind that have recently been the The factors that have prompted foreign inter­ subject of so much attention will continue to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

628 Federal Reserve Bulletin □ August 1979 occur over the next few years is more problem­ Holding Company Act be amended to permit atical, and I would hesitate to make any esti­ a domestic bank to acquire a failing bank in mates. Clearly, the foreign banks that already another state; such an amendment would operate subsidiary banks in this country will broaden the range of alternatives that might be seek to acquire and merge other banks in their open to bank supervisors in cases of failing markets, just as domestic banks do. As I have banks. already indicated, the part of the U.S. banking These macroeconomic benefits can extend to system controlled in this way by foreign banks all levels of the economy and to all classes of is small. bank customers, including households and small There can be important potential benefits from businesses. While it is not possible to furnish foreign investment in individual banks. One of any precise measurements, experience with the principal benefits of a foreign acquisition can banks acquired by foreign investors suggests a be an addition of capital to the bank. This would strong interest on their part in retail banking. strengthen both the bank invested in and the European-American Bank in acquiring Franklin U.S. banking system as a whole—at a time National took on a substantial retail banking when U.S. bank capital has been eroded by business. Bankers Trust sold its retail branches inflation and (historically) is costly. Foreign in New York to three foreign banks. And it is purchases of U.S. bank stock reduce the avail­ of interest to note that when it acquired Union able market supply of that stock, and tend to Bank in Los Angeles, the Standard Chartered raise the price-earnings ratio of stock of that Bank undertook to broaden Union Bank’s retail bank and ratios of U.S. bank stocks generally. base, including a major expansion of its con­ Higher price-earnings ratios may enable banks sumer mortgage lending and adoption of an to raise capital through stock issues without active branching policy. This commitment was substantially diluting the equity of existing an important consideration in the judgment of stockholders. Actions that restrict the flow of how the acquisition would serve the conven­ foreign capital to the American banking industry ience and needs of customers in California. Data would also reduce the attractiveness of that that have been submitted to this committee industry to domestic investors. If we are to have demonstrate that the retail orientation of banks a healthy, flourishing banking industry, we can­ acquired by foreign interests has on the whole not afford to discourage investment in U.S. been maintained at its previous level or has banks. increased. Foreign investment may also bring innovation Federal Reserve policy on foreign acquisi­ and improved efficiency to U.S. banks; tradi­ tions of American banks is in accord with U.S. tional bank pricing and lending techniques may policy of welcoming foreign investment in gen­ be shaken up by innovative foreign manage­ eral. We believe that our economy and our ment—with benefits both for the bank and for financial system benefit from foreign competi­ its customers. It is, of course, essential that a tion and from foreign capital so long as the foreign bank seeking to acquire a U.S. bank investment is subject to the same rules and be soundly managed. regulations that apply to domestic companies. Foreign investment can contribute to financial This principle of national treatment is embodied stability when the bank invested in is a “prob­ in the letter and spirit of the International Bank­ lem” bank, or is in danger of failing. Under ing Act, and it underlies the exercise of the existing rules, acquisition of a failing bank by Federal Reserve’s responsibilities regarding a bank from another state is not permitted and foreign banking in the United States. sometimes local alternatives are not desirable. It needs to be emphasized that there is a In these circumstances, of which the Franklin framework of law covering foreign acquisitions National Bank case is a prime example, acqui­ of U.S. banks and that recent acquisitions have sition by a foreign bank may be the only solu­ been made in accordance with law. I refer to tion. In this connection, I should note that the section 3 of the Bank Holding Company Act. Federal Reserve has recommended that the Bank The Federal Reserve evaluates proposed acqui­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 629 sitions according to standards set forth in the on the share of a particular banking market that act; the financial and managerial capabilities of may be controlled by foreign interests as a the acquiring company, the convenience and group. Existing statutory authority does not ex­ needs of the community to be served, and the plicitly provide for the denial of an acquisition effect on competition and concentration of re­ for that reason. In the Bank Holding Company sources in the United States. In my view, these Act, the Bank Merger Act, and the Change in are appropriate standards for assessing individ­ Bank Control Act, the Congress has identified ual applications. specific factors on which the Board is to base When the foreign investor is an individual, its decisions. A ceiling on foreign bank owner­ rather than a bank or bank holding company, ship in a particular market is not one of those the standards are those of the Change in Bank factors; nor would I favor an arbitrary ceiling Control Act of 1978, which took effect this past of that sort. Such a limit would be contrary to March. That act requires individuals seeking to the principle of national treatment. Moreover, acquire control of a bank to give the relevant the Bank Holding Company Act contains pro­ federal bank regulatory agency 60 days’ prior tection against domination of a market by one notification. The proposed acquisition may be or more large banks—foreign as well as domes­ disapproved if it would substantially lessen tic. In most instances that involve a foreign bank competition, result in a banking monopoly in acquisition, the foreign bank is not a substantial any part of the United States, jeopardize the competitor in the market in question, although financial stability of the bank, or would other­ it could be considered a potential competitor. wise be contrary to the interests of the bank Foreign ownership does pose some special to be acquired. supervisory problems that are not present in As to the impact of foreign acquisitions on cases of domestic ownership. These relate to the supply of banking services to meet the needs the fact that the foreign bank owner is located of U.S. industry and consumers, probably the outside the United States and outside the juris­ best protection in this regard is the competi­ diction of the U.S. banking authorities. We do tiveness of U.S. banking. All owners of banks not, therefore, have the same kinds of knowl­ are free to change the character of the bank’s edge and insights into the workings and man­ business—for example, from retail to whole­ agement of the foreign bank as we do with sale. However, banks that do not meet the needs domestic banking organizations. Nevertheless, of their community quickly lose business to the Board believes these problems to be man­ those that do. As businessmen, foreign bankers ageable and is addressing them in a number of can be expected to recognize that fact and act ways. accordingly. Moreover, the Bank Holding On February 23, the Board issued a policy Company Act requires the Board in acting on statement on foreign bank holding companies, any proposed acquisition to consider the con­ which makes clear that the foreign bank is venience and needs of the community being expected to be a source of strength—both fi­ served. In this connection, the Board reviews nancial and managerial—to its U.S. subsidiary. the effects of an acquisition on the services That policy statement also indicated that at the offered by the bank being acquired and generally time of a proposed acquisition the Board will expects some showing of improved services. seek to obtain sufficiently comprehensive infor­ Further, foreign-owned banks—like domestic mation to make such a determination. Subse­ banks—are subject to the Community Reinvest­ quently, the Board will evaluate on an ongoing ment Act, which requires the federal bank reg­ basis the condition of the foreign parent bank ulatory authorities to evaluate the extent to through improved reporting requirements and which a bank is servicing all elements of its will monitor carefully transactions between the community, and also the Equal Credit Opportu­ U.S. subsidiary and the foreign parent. Revised nity Act, which prohibits discrimination in or new reports for this purpose (Y-7 and Y-8f) lending. are now in an advanced stage of development. It has been suggested that a limit be placed In addition, the Board is continuing to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

630 Federal Reserve Bulletin □ August 1979 strengthen its relationships and also its coopera­ holding companies when that ownership is sub­ tive efforts with foreign bank supervisory agen­ stantial. The Board believes that any significant cies. foreign ownership interests have been identified Finally, I wish to speak about how the Federal under these procedures. Moreover, under the Reserve monitors foreign ownership in U.S. recently enacted Financial Institutions Regula­ banks. The Board has not had a legislative tory and Interest Rate Control Act, the Federal mandate to collect comprehensive foreign own­ Reserve will now collect information on ership information for all banks. However, citi­ changes of ownership when the investment ex­ zenship information has been obtained on in­ ceeds 10 percent of a bank’s outstanding voting vestments representing more than 5 percent of shares. These data will be tabulated in a more any bank holding company. Moreover, we have systematic fashion than heretofore, and we be­ sought to collect information on foreign owner­ lieve that information on foreign ownership will ship interests in banks not affiliated with bank be sufficient to meet our policy objectives. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

631 Announcem ents Paul A. Volcker: A ppointment the fight against inflation. As president of As a M ember and Chairman the Federal Reserve Bank of New York and Vice Chairman of the Federal Open Market of the B oard of Governors Committee, Paul is already well prepared to step into the chairmanship of the Federal President Carter on July 25, 1979, announced Reserve. His background assures instant his intention to appoint Paul A. Volcker as a continuity. member and as Chairman of the Board of Gov­ Mr. Volcker, a native of Cape May, New ernors of the Federal Reserve System to succeed Jersey, was nominated to the Board from the G. William Miller, whose nomination as Secre­ Third Federal Reserve District. He was named tary of the Treasury was announced on July 19. to the unexpired portion of the 14-year term that Mr. Volcker’s appointments were subsequently ends on January 31, 1992. His four-year term confirmed by the Senate on August 2. The oath as Chairman began August 6, 1979. of office was administered on August 6 at a Following is a biography of Mr. Volcker. White House ceremony. In making the announcement, President Paul A. Volcker joined the Federal Re­ Carter said: “Mr. Volcker has broad economic serve Bank of New York on August 1, 1975, and financial experience and enjoys an out­ as president and chief executive officer, completing the unexpired portion of a fivestanding international reputation. He shares my year term of his predecessor, Alfred Hayes. determination to vigorously pursue the battle He was appointed to a full five-year term against inflation at home and to ensure the on March 1, 1976. strength and stability of the dollar abroad.” Before joining the New York Bank, Mr. The White House announcement also said: Volcker pursued a varied career in public service and banking. Mr. Volcker served as Deputy Under From 1969 to 1974, he was Under Secre­ Secretary of the Treasury for Monetary Af­ tary of the Treasury for Monetary Affairs. fairs, 1963 to 1965, and Under Secretary of His five-and-a-half-year tenure, under three the Treasury for Monetary Affairs, 1969 to secretaries, covered a period of rapid change 1974. Mr. Volcker is a 1949 graduate of in international and domestic financial af­ Princeton University. He received a master’s fairs. degree in political economics from Harvard Mr. Volcker played a central role in de­ and did postgraduate work at the London veloping international financial initiatives by School of Economics. He was vice president the United States during the transition from and director of planning for the Chase Man­ fixed to floating exchange rates and acted as hattan Bank from 1965 to 1969. the principal U.S. negotiator throughout the period. Chairman Miller issued the following state­ A number of important innovations were ment concerning the appointment of Mr. introduced during Mr. Volcker’s term of Volcker: office in the area of domestic financing, including the auctioning of Treasury notes President Carter has made an excellent and bonds and greater centralization of U.S. choice. The appointment of Paul Volcker as agency borrowing. Chairman of the Federal Reserve Board After leaving the Treasury, Mr. Volcker guarantees continuity in the conduct of the became senior fellow at the Woodrow Wil­ nation’s monetary policy and provides the son School of Public and International Af­ recognized leadership that is required if we fairs at Princeton University for the aca­ are to assure a sound dollar internation­ demic year 1974 to 1975. ally—areas of the utmost importance in ef­ Previously, Mr. Volcker served in a vari­ forts to achieve our economic goals and win ety of positions with the Treasury, Chase Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

632 Federal Reserve Bulletin □ August 1979 Manhattan Bank, and the New York Federal August 6, 1979 Reserve Bank. The President His experience with the New York Bank The White House began in the summers of 1949 and 1950, Washington, D. C. when Mr. Volcker worked as a research assistant in the research department. In Dear President Carter: 1952, he returned to the New York Bank as an economist in the research department, It has been a privilege for me to serve and in 1955, he became a special assistant our country as Chairman of the Federal in the securities department. Two years Reserve Board since March 8, 1978. The later, he resigned to become a financial opportunity to participate in monetary policy economist at Chase Manhattan Bank. and other areas of Federal Reserve activity In 1962 he joined the Treasury as director during a difficult period has been a matter of the Office of Financial Analysis, and in of great personal satisfaction. Thank you for 1963 was appointed Deputy Under Secretary making this possible. for Monetary Affairs. In 1965, he rejoined While it is with sadness that I leave the Chase Manhattan as vice president and Federal Reserve, I do look forward to work­ director of forward planning. ing closely with you in the new assignment As Under Secretary of the Treasury, Mr. you have asked me to undertake. I shall do Volcker also served as a member of the my best to serve with credit to you and to board of the Overseas Private Investment the nation. Corporation and the Federal National Mort­ To carry out this transition, I hereby re­ gage Association. sign as Chairman of the Board of Governors He is currently a member of the board of the Federal Reserve System effective of directors of the Council on Foreign Rela­ upon my taking office as Secretary of the tions, the American Council on Germany, Treasury. and the American Friends of the London Best wishes. School of Economics. He also serves on the Sincerely, board of trustees of the Rockefeller Founda­ Bill tion and the American National Red Cross Endowment Fund. Among various awards in the course of Frederick H. Schultz: his career, he has been named as 1 of the A ppointment as a M ember 10 Outstanding Young Men in Government; of the Board of Governors received the Alexander Hamilton award, the highest award given officials of the Treasury President Carter on April 12, 1979, announced Department; and received the first William his intention to appoint Frederick H. Schultz as F. Butler award from the New York Chapter a member of the Board of Governors of the of the National Association of Business Economists. Federal Reserve System and to designate him Mr. Volcker earned a master of arts de­ as Vice Chairman. Mr. Schultz was subse­ gree in political economy and government quently confirmed by the Senate on July 18 both from the Harvard University Graduate as a Governor and as Vice Chairman. The oath School of Public Administration in 1951 and of office was administered on July 27 in the a bachelor of arts degree, summa cum laude, from Princeton in 1949. From 1951 to 1952, Board’s offices. he was a Rotary Foundation Fellow at the The text of the White House announcement London School of Economics. follows: He is married, has two children, and lives in Manhattan. The President has announced that he will nominate Frederick H. Schultz, of Jackson­ ville, Florida, to be a member of the Board G. William M iller: of Governors of the Federal Reserve System. Resignation as Chairman Schultz was born January 16, 1929, in Jacksonville. He received an A.B. from of the Board of Governors Princeton University in 1952. He served in the U.S. Army from 1952 to 1954, and G. William Miller has resigned as Chairman of attended the University of Florida Law the Board of Governors, effective August 6, School from 1954 to 1956. 1979. Chairman Miller’s letter of resignation Schultz was employed in the Executive follows: Training Program of the Barnett National Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 633 Bank of Jacksonville in 1956 and 1957. In The EFT Act provides that a consumer’s 1957 he opened his own office, concentrat­ liability for unauthorized use of an EFT card ing his efforts in securities markets and in be limited to $50 if the consumer notifies the providing risk capital for new and expanding card issuer within two business days of learning ventures. Schultz is now chairman of the board of of loss or theft of the card, or unauthorized use. Barnett Investment Services, Inc., a subsid­ Potential liability rises to $500. if notification iary of Barnett Banks of Florida, and a occurs after two business days. If the consumer director of Barnett Banks of Florida. fails to notify the card issuer within 60 days From 1963 to 1970 Schultz served as a after transmittal of a periodic statement that member of the Florida House of Repre­ sentatives, and in 1968 he was elected shows unauthorized use of the EFT card, the speaker of the Florida House. He was chair­ consumer’s liability may be unlimited for man of the Citizens’ Committee on Educa­ transfers made after the 60 days. tion, a two-year study of education in In testimony to the Congress on May 1, 1979, Florida. He served on the Jacksonville Ex­ the Board suggested a single liability limit for pressway Authority from 1961 to 1963. unauthorized use of an EFT card. The amendment to Regulation E was adopted Change in Discount Rate as proposed in May. The Federal Reserve Board announced an in­ crease in the discount rate from 9xh percent to Changes in Paym ent 10 percent, effective July 20, 1979. of Interest on Deposits Action was taken as a further step to strengthen the dollar on the foreign exchange A series of amendments to their regulations markets, and in view of the recent rapid rate governing the payment of interest on deposits of expansion in the monetary aggregates, and has been announced by the Federal Deposit to bring the discount rate into alignment with Insurance Corporation and the Federal Reserve short-term interest rates generally. Board. The changes, effective August 1, will: In making the change, the Board acted on 1. Subject to interest rate ceilings repurchase requests from the directors of all 12 Federal agreements of less than $100,000 with maturi­ Reserve Banks. The discount rate is the interest ties of 90 days or more. To prevent undue rate that member banks are charged when they hardship, a three-year phase-out period is pro­ borrow from their district Federal Reserve vided. During this period, banks may issue such Banks. RPs without regard to interest rate ceilings so long as the total amount outstanding does not exceed the amount outstanding on August 1. Regulation E: A mendment To make arrangements for an appropriate The Federal Reserve Board announced on Au­ phase-out program, member banks with sub­ gust 2, 1979, the adoption of a change in its stantial amounts of such RPs outstanding should rules that makes written notice of loss or theft consult with the Comptroller of the Currency of an electronic fund transfer (EFT) card effec­ in the case of national banks, with the appro­ tive when the consumer mails or otherwise priate Reserve Bank in the case of state member transmits the notice. banks, and with the FDIC in the case of insured The object of the amendment to Regulation nonmember banks. RPs issued in denominations E (Electronic Fund Transfers) is to assist con­ of less than $100,000 with maturities of less sumers in limiting their potential loss due to than 90 days will continue to be exempt from unauthorized use of an EFT card to not more interest rate ceilings in order to facilitate the than $50. The amendment seeks to avoid expo­ continued use of such RPs, particularly those sure of the consumer to greater loss because of traditionally used for cash management pur­ delays in the mail or other delays in delivery poses by small businesses and local govern­ of written notice. ments. Regulation E also provides that notice can be 2. Require waiver of the penalties for early given orally, by telephone or in person. withdrawal of a time deposit in the event of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

634 Federal Reserve Bulletin □ August 1979 a depositor’s death. This waiver will apply to The policy statement was prepared by the all outstanding time deposits as well as to de­ Comptroller of the Currency, the Federal De­ posits issued after the effective date. posit Insurance Corporation, and the Federal 3. Require banks to waive the penalty for Reserve Board to inform the public and the early withdrawal of a time deposit when the banking industry of the agencies’ supervisory depositor has been declared mentally incompe­ policy toward foreign banks’ U.S. branches, tent. This would apply to all outstanding time agencies, and commercial lending companies. deposits as well as to deposits issued after the The statement is as follows: effective date. The recently enacted International Bank­ 4. Authorize banks, with the consent of the ing Act of 1978 (IBA) gives the three federal depositor, to apply the new early withdrawal bank regulatory agencies expanded supervi­ penalty that went into effect last July 1 to all sory authority and responsibility with respect time deposits. The minimum penalty is three to the operations of foreign banks’ U.S. branches, agencies, and commercial lending months’ loss of interest if the deposit matures companies.1 It provides for the establish­ in one year or less and six months’ loss of ment of federal branches and agencies by interest if the deposit matures in more than one the Office of the Comptroller of the Currency year. and permits U.S. branches to apply for in­ 5. Clarify that funds added to an existing surance coverage by the Federal Deposit Insurance Corporation (FDIC). It also sub­ time account are subject to the ceiling rate of jects these U.S. offices to many provisions interest in effect at the time the additional de­ of the Federal Reserve and Bank Holding posit is made. Company Acts. 6. Increase from 5 percent to 5lA percent the In order to insure adequate supervision of ceiling rate of interest payable on time deposits these offices within the present federal-state regulatory framework, the IB A provides that with maturities of 30-89 days. This is the same the Comptroller, the FDIC, and the various rate that banks may pay on passbook savings state authorities have primary examining accounts. Savings and loan associations and authority over the offices within their juris­ mutual savings banks are generally not permit­ dictions. Additionally, the act gives the ted to issue time deposits of less than $100,000 Federal Reserve Board residual examining authority over all U.S. banking operations with maturities of less than 90 days. of foreign banks, similar to its existing au­ Similar action is expected to be taken later thority over U.S. subsidiary banks of bank by the Federal Home Loan Bank Board. holding companies. This distribution of re­ sponsibilities calls for close coordination of the efforts of the relevant authorities. Ac­ cordingly, the Comptroller, the FDIC, and Statement of Policy the Board, in coordination with the Federal on Supervision of U.S. Branches Financial Institutions Examination Council (FFIEC), are issuing this joint statement to and A gencies of Foreign Banks inform the public and the banking industry of their supervisory policy toward these U.S. The Federal Financial Institutions Examination offices. Council on July 20, 1979, announced the adop­ The agencies’ supervisory interests in the tion of a policy statement on the supervision operations of U.S. branches and agencies of of U.S. branches and agencies of foreign banks. foreign banks are directed to the safety and That policy statement was in response to the soundness of those operations in serving the needs of borrowers and depositors and other expansion of the federal bank regulatory agen­ creditors in the United States. For this rea­ cies’ authority and responsibility with regard to son, the regulatory agencies will place pri­ such operations under the International Banking mary emphasis on assessing the financial Act (IBA). In addition to outlining the responsibilities of the various regulators, the statement announces 1. The term “commercial lending companies” is the agencies’ intention of requiring reports from intended to refer to investment companies organized under article XII of the New York State Banking Law U.S. operations of foreign banks and from and to any similar corporations that may be organized foreign parent institutions. under the laws of other states. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 635 well-being of the U.S. offices. They will also planned to be implemented early in 1980, be concerned with adherence to U.S. law with some possibly in effect for the reporting and regulation by these offices. period ending December 31, 1979. Detailed At the same time, the agencies recognize requirements and instructions will be issued that, even more than in the case of U.S. prior to implementation. bank subsidiaries of foreign banks, the strength of these branches and agencies de­ volves from their head offices and organi­ zations outside the United States and that Interlocks A ct Regulations ultimate responsibility for branch and agency activities resides in head offices The government agencies that supervise feder­ overseas. Consequently, the agencies will ally insured depositary institutions have an­ seek to assure themselves that the parent nounced, effective July 18, 1979, joint regula­ institutions are financially sound. To this tions to carry out the provisions of the new end, they plan to collect information on the Depository Institution Management Interlocks consolidated operations of the foreign banks, as described below, and to expand their Act (Title II of the Financial Institutions Regu­ contacts with senior managements of the latory and Interest Rate Control Act of 1978). banks. Additionally, U.S. authorities are The general purpose of the Interlocks Act, now working and will continue to work with and of the regulations adopted by the federal bank supervisory authorities of other nations agencies to implement it, is to foster competi­ to improve both the coordinated exchange of banking information and the compatibility tion among depositary institutions (banks, sav­ of international banking regulation. ings and loan associations, mutual savings The IBA mandated that the federal regu­ banks, and credit unions) and depositary holding latory agencies cooperate closely with state companies (bank holding companies and sav­ banking authorities in examining U.S. of­ ings and loan holding companies) and their fices of foreign banks. In furtherance of this mandate, a uniform approach to examining affiliates. To this end the act; which became these offices is being developed through the effective March 10, 1979, prohibits certain in­ FFIEC in order to minimize dual examina­ terlocking relationships of management officials tions and to facilitate joint federal-state ex­ among (nonaffiliated) depositary organizations. aminations, when desirable. In exercising The final regulations adopted by the five their responsibilities, the agencies will en­ sure that each U.S. office of a foreign bank agencies (Comptroller of the Currency, Federal is examined regularly by either state or fed­ Deposit Insurance Corporation, Federal Home eral authorities. Loan Bank Board, Federal Reserve Board, and The federal regulatory agencies through National Credit Union Administration) are the FFIEC, in consultation with the relevant identical except for technical variations required state authorities, are also developing joint financial reporting requirements for these to accommodate the fact that the agencies regu­ U.S. offices. The information required will late different kinds of depositary organizations. be similar to that required for U.S. banks The interlock rules issued or proposed by the while taking into account their different or­ agencies follow publication of proposed regula­ ganizational structure. tions under the Interlocks Act in January and To gain information on the consolidated bank, the agencies will also develop new consideration of comment received. The agen­ reporting requirements for the foreign parent cies’ final regulations address certain issues not institutions. These information requirements raised in the January proposals. will be similar to' those for foreign bank The principal features of the agencies’ regu­ holding companies, including specific infor­ lations under the Interlocks Act include the mation on earnings, reserves, and capital and an explanation for material differences following: between U.S. and foreign accounting prac­ tices. In the use and handling of this infor­ General Prohibitions mation, the agencies will take into account the fact that some of the information re­ The Interlocks Act generally prohibits the fol­ quired may be confidential commercial in­ lowing types of interlocks. formation that is not generally disclosed. These new reporting requirements for both 1. Except for institutions with assets of less the U.S. offices and the foreign banks are than $20 million, a management official of a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

636 Federal Reserve Bulletin □ August 1979 depositary institution or a depositary holding agencies, when necessary and desired, to pro­ company may not serve as a management offi­ vide new institutions with experienced manage­ cial of a nonaffiliated depositary institution or ment to help them get started, with the expecta­ holding company if offices of both (or offices tion that such new institutions would increase of depositary institution affiliates or both) are the convenience and other benefits to the public located in the same standard metropolitan sta­ of added competition. tistical area (SMSA). 3. The agencies may also grant exceptions 2. Regardless of the size of the depositary to depositary institutions in a deteriorating con­ institution or holding company, a management dition when the primary federal supervisory official of one such institution may not serve agency believes the institution faces conditions in a similar capacity with another such institu­ endangering the institution’s safety and tion if offices of both (or offices of depositary soundness, subject to certain conditions. institution affiliates of both) are located in the 4. The agencies may grant exceptions to same community (the same or contiguous or credit unions sponsored by depositary institu­ adjacent cities, towns, or villages). tions or depositary holding companies primarily 3. Regardless of the geographic location of to serve the employees of the sponsoring insti­ a depositary institution or holding company, a tution or its affiliates. This exception is made management official of a depositary organization on the ground that in these circumstances no (or of an affiliated organization) with assets competition would exist. exceeding $1 billion may not serve at the same time as a management official of a nonaffiliated Generally Permitted depositary institution or holding company with Interlocking Relationships assets exceeding $500 million, or an affiliate of such an institution. A new section of the final regulations concerns The act makes an exception to permit a man­ interlocking relationships that are permitted by agement official to have an interlock between the Interlocks Act. These are interlocks among two credit unions. the following. 1. A depositary organization that does not do business within the United States except as Exemptions incident to its activities outside the United The agencies said the following four exemptions States. to the above prohibitions could be granted by 2. A corporation operating under section 25 the appropriate regulator, with specific prior or 25(a) of the Federal Reserve Act (Edge approval. corporations and agreement corporations). 1. Exemptions may be granted, for up to five 3. A depositary organization that has been years, for institutions that are located in low placed in liquidation, or that is in the hands of income or economically depressed areas; are a receiver or a similar official. controlled or managed by members of minority 4. A credit union being served by a manage­ groups; or are controlled or managed by ment official of another credit union. women. 5. A state-chartered savings and loan guar­ The purpose of these exemptions is to provide anty corporation. temporary assistance from experienced man­ 6. A Federal Home Loan Bank or any other agement, if it appears to be necessary and is bank organized solely (and not only specifically) desired, in order to encourage development of for the purpose of serving depositary institutions depositary institutions located in low income (commonly referred to as “bankers’ banks”) or areas or controlled or managed by minorities solely for the purpose of providing securities or women. clearing services and services related thereto for 2. For new institutions, temporary excep­ depositary institutions, securities companies, or tions—up to two years—may be granted by the both. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 637 Further interlocking relationships that may be the Board’s final regulation under the Interlocks permitted by order of the agencies are listed in Act reflects this conclusion. the section on exceptions. Definitions Applications to Foreign Banks The final regulations of the five agencies under In their January proposal the agencies did not the Interlocks Act include the following attempt to interpret the application of the Inter­ principal definitions: locks Act to relationships involving foreign 1. Depositary institution. Commercial banks banks or branches or agencies of foreign banks (including private banks), savings and loan as­ located in the United States, but they asked for sociations, savings banks, trust companies, comment on this subject. building and loan associations, homestead asso­ The final regulations apply the prohibitions ciations, cooperative banks, industrial banks, of the Interlocks Act to U.S. branches of two and credit unions with their principal office in foreign banks located in the same city; a U.S. the United States, and the U.S. offices of foreign branch of a foreign bank and a domestic bank commercial banks. located in the same city; and such institutions 2. Depositary holding companies. Bank located in the same SMSA if one of them has holding companies and savings and loan holding total assets of $20 million or more, or, wherever companies with their principal office in the located in the United States, if the total assets United States. of one of them exceed $500 million and the 3. Depositary organizations. Depositary in­ total assets of the other exceed $1 billion. stitutions and depositary companies when re­ The agencies defined total assets of a U.S. ferred to jointly. branch or of an agency of at foreign bank to 4. Adjacent. Cities, towns, or villages that exclude the assets of the parent foreign com­ are within 10 miles of one another at their mercial bank. The term “management official” closest point. has been defined to exclude? officials whose 5. Office. Principal offices and branches of functions relate principally to business outside depositary institutions or depositary holding the United States. companies located in the United States. Elec­ The objective of the agenciies in these rules tronic terminals, representative offices of a is to make foreign commercial banks that com­ foreign commercial bank, or loan production pete in the United States subject to rules under offices are excluded by the regulation from the the Interlocks Act to the extent of their activities definition of office. in this country. 6. Management official. An employee or of­ ficer who has management functions (including a branch manager), a director (including honor­ Effect of the Interlocks Act ary or advisory directors), a trustee of a business on the Clayton Act organization controlled by trustees, or any per­ In the proposals published in January the Fed­ son who has a representative or nominee serving eral Reserve Board said it was considering how as a management official. the first three paragraphs of section 8 of the Management official does not include, for Clayton Act might be reconciled with the pro­ purposes of the act, a person whose manage­ visions of the Interlocks Act. These paragraphs ment functions relate exclusively to retail mer­ generally prohibit employee and director inter­ chandising or to manufacturing, or a person locks between member banks and other com­ whose management functions relate principally mercial banks. to the business outside the United States of a The Board has concluded that the compre­ foreign bank. hensive prohibitions of the Interlocks Act sup­ 7. Affiliates. The agencies will determine if plant these provisions of the Clayton Act and a true commonality of interests between the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

638 Federal Reserve Bulletin □ August 1979 depositary organizations exists, or if a sham Confirmation affiliation has been effected to avoid the prohi­ Alternative confirmation requirements are pro­ bition of the act. vided depending on the type of customer rela­ 8. Total assets. Assets on a consolidated tionships involved. basis as of the close of the organization’s last When the bank uses a broker, the revised rules fiscal year. For a depositary holding company, give banks the option of sending customers their total assets include the total amounts of the own confirmation or a copy of the broker’s holding company’s affiliates in some instances confirmation within five days from the time the and all of its affiliates in others. The assets of bank executes the transaction or receives con­ the foreign parent bank of a branch or agency firmation from the broker. in the United States are excluded. In certain cases , confirmation is not required when the customer and the bank agree to a Uniform Standards different arrangement. In the case of accounts in Securities Transactions when the bank exercises investment discretion as an agent for a customer, the new rules require The federal bank regulators have adopted, ef­ quarterly statements to the customer. fective January 1, 1980, new rules establishing The rules as aidopted require banks, when uniform standards for bank recordkeeping, con­ acting in an agency capacity, to identify sepa­ firmation, and other procedures in making se­ rately their fees in transactions in these securi­ curities transactions for trust departments and ties for customers. Dealer markups need not be other bank customers. disclosed. The regulatory action by the Comptroller of the Currency, Federal Deposit Insurance Cor­ poration, and Federal Reserve Board was taken Policies and procedures subsequent to a study by the Securities and Exchange Commission (SEC) on bank securities Banks making securities transactions for cus­ activities and it responds to certain recom­ tomers are required to establish written policies mendations in the SEC report. The final rules and procedures including the following: were adopted after consideration of comment 1. Assignment of responsibility for supervis­ received on proposals the agencies published in ing employees involved in securities transac­ January 1978 and in November. The final rules tions. were substantially unchanged from the No­ 2. Provision for fair and equitable allocation vember 1978 proposals. of securities and prices to accounts when orders The revised regulations of the agencies in­ for the same security are received for execution clude the following uniform provisions. at approximately the same time. 3. Provisions for fair and equitable matching of buy and sell orders from different customers. 4. Requirements for bank employees in­ Recordkeeping volved in securities transactions for customers Banks are required to maintain for three years to report their own securities transactions quar­ the following records concerning securities terly. transactions: A bank that iis in compliance with rules of 1. Itemized daily records of purchases and the Municipal Securities Rulemaking Board sales. with respect to transactions in municipal securi­ 2. Account records for customers. ties is deemed to be in compliance with the 3. A separate record of each order to pur­ recordkeeping and confirmation requirements of chase or sell securities. the agencies. The rules provide that the required records In addition to the exemption for the activities need not be maintained in a specific manner, of banks subject to the regulations of the Mu­ so long as they form an adequate basis for audit. nicipal Securities Rulemaking Board, a new Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 639 section of the agencies’ revised regulations regulations carrying out the provisions of the would: exempt the securities activities of Depository Institution Management Interlocks foreign branches of banks from requirements of Act. The proposals concerned what existing the regulation; and exempt banks that normally management interlocks should be “grandfath­ make 200 or fewer securities transactions a year ered,” provisions for termination of interlocks for customers from certain recordkeeping re­ that become prohibited by changes in circum­ quirements. stances, criteria for determining whether an in­ dividual serving as a management official is a representative or nominee of a principal share­ Demand for D ollar Coin holder, and whether the term “person” should Demand for the new Susan B. Anthony dollar include corporations and other businesses as coin has been heavier than expected during July, well as natural persons. The agencies will re­ its first month of circulation. ceive comment on the proposed amendments The Federal Reserve and the Bureau of the through September 17, 1979. Mint announced on August 1, 1979, that 280 The Federal Reserve Board on July 23, 1979, million of the new coins have already been announced proposals to implement the provi­ placed in circulation through the nation’s com­ sions of the International Banking Act of 1978 mercial banking system. An additional 290 mil­ imposing reserve requirements and interest rate lion have been minted so far, and the Mint plans ceilings on U.S. branches and agencies of to produce a total of 950 million Anthony coins foreign banks whose parent banks have world­ by the end of 1979 to meet the unprecedented wide assets of $1 billion or more. The proposals demand for the new dollar. affecting reserve requirements would amend the The new small-sized coin was introduced on Board’s Regulation D (Reserves of Member July 2 to replace the Eisenhower dollar. Banks); those imposing interest rate ceilings Since it will last 10 times as long as a dollar would amend Regulation Q (Interest on Depos­ bill, the coin could save the American taxpayer its). as much as $50 million per year. In view of At the same time, the Board made further the circulation of the Susan B. Anthony dollar proposals under the provisions of the IBA that coin, the Bureau of Engraving and Printing will grant such branches and agencies of foreign be able to postpone plans to build a new $100 banks access to Federal Reserve services and million facility. permit them to borrow from the Federal Reserve “There has been some initial complaint of Banks. The Board asked for comment on its confusion between the Anthony dollar and the proposals by September 21, 1979. quarter, but the two coins are actually easily The Federal Reserve Board on July 25, 1979, distinguishable, far more than the $1 note and invited public comment on a number of propos­ the $10 note,” Director of the Mint Stella als bearing on disclosure to borrowers of the Hackel said. annual percentage rate (APR) required by the “It is now apparent that retailers, bankers, Truth in Lending law and its implementing and the public are beginning to realize the Regulation Z. The APR expresses the cost to advantages of the new coin and that acceptance the consumer of borrowing money and paying eventually will be good,” she added. for purchases on credit. Comment was requested by October 15, 1979. The Federal Reserve Board on August 3, Proposed A ctions 1979, proposed a new Regulation S under the The Comptroller of the Currency, the Federal Right to Financial Privacy Act for reimbursing Deposit Insurance Corporation, the Federal financial institutions that provide reports on their Home Loan Bank Board, the Federal Reserve customers’ financial records requested or re­ Board, and the National Credit Union Adminis­ quired by the federal government. The Board tration on July 18, 1979, asked for public com­ asked for comment by September 10, 1979. ment on four proposals for amendments to the The Federal Reserve Board on August 9, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

640 Federal Reserve Bulletin □ August 1979 1979, proposed for public comment a revision Colorado of its Regulation T (Margin Requirements for Aspen ....... .......Pitkin County Bank Brokers and Dealers) affecting specialists and and Trust Company options market-makers. The proposal, on which Virginia the Board requested comment by October 15, Amherst ...................Farmers and Merchants 1979, is a revision of a proposal published for Bank, Inc. comment April 28, 1977. Big Stone Gap ...........Big Stone Gap Bank The Federal Reserve Board on August 9, and Trust Company 1979, proposed to amend its Regulation T Pennington Gap ..........Farmers and Miners (Credit by Brokers and Dealers) to permit Bank of Lee County brokers and dealers to lend on mutual fund Wyoming shares. The Board asked for comment through Shoshoni ... .......First State Bank October 15, 1979. of Shoshoni The Federal Financial Institutions Examina­ tion Council on August 9, 1979, proposed for public comment a report of condition to be Erratum required quarterly from U.S. branches and Item 1 under “Lending limits and capital re­ agencies of foreign banks. The Council asked quirements for Edge corporation” (page 547 of for comment by September 17. the July 1979 B u lletin ) should read as fol­ lows: System M embership: 1. Capital of an Edge corporation engaged A dmission of State Banks in banking shall be at least 7 percent of risk The following banks were admitted to member­ assets. In general, an Edge corporation’s capital ship in the Federal Reserve System during the should be adequate in relation to the scope and period July 11 through August 10, 1979: character of its activities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

641 Record of Policy Actions of the Federal Open Market Committee MEETING HELD ON MAY 22, 1979 Domestic Policy Directive The information reviewed at this meeting suggested a moderate pickup in growth of real output of goods and services in the current quarter from the sharply reduced pace in the first quarter; then, the annual rate of expansion had slowed to only 0.4 percent, from 6.9 percent in the preceding quarter, in part because unusually severe weather adversely affected private and public construction activity. Average prices, as measured by the fixed-weight price index for gross domestic business product, appeared to be rising as rapidly as they did in the first quarter, when the annual rate was about 10 percent, and well above the rate in the third and fourth quarters of 1978. Staff projections continued to suggest sluggish growth in real output during the year ahead. The rise in average prices during the year was projected to remain rapid, but not so rapid as it was estimated to be over the first half of 1979. The rate of unemployment was expected to move up gradually. In April the index of industrial production fell 1 percent and growth in nonfarm payroll employment slowed substantially from the rapid pace in the previous six months, in large part owing to effects of a work stoppage in the trucking industry early in the month. The unemployment rate in April was 5.8 percent, about the level prevailing since midsummer 1978. The dollar value of total retail sales increased somewhat further in April, but apparently average prices rose at a faster pace and in real terms retail sales extended their first-quarter decline. Unit sales of new automobiles declined appreciably in April, to about the average rate in the first quarter, although sales of small domestic and foreign models remained strong. Total private housing starts edged down in April to an annual rate of 1% million units, following the partial recovery in March from the sharp, weather-related decline earlier in the year. In both 1977 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

642 Federal Reserve Bulletin □ August 1979 and 1978, housing starts had totaled about 2 million units. In mortgage markets, interest rates generally had risen further in recent weeks, and available information suggested that mortgage commitments out­ standing at savings and loan associations continued to decline in April. The value of manufacturers’ new orders for durable goods fell sharply in April, and declines were widespread among industry and product groupings. The decrease in orders for nondefense capital goods was especially large, following three months of sizable advances. The index of average hourly earnings of private nonfarm production workers increased at an annual rate of about 8 XA percent during the first four months of 1979, the same rate as during 1978. Hourly compensation in the nonfarm business sector, including the effects of increases in social security taxes at the beginning of 1979, rose at an annual rate of 10XA percent in the first quarter, up marginally from the average rate in 1978. In the first quarter, however, the rise in unit labor costs accelerated to an annual rate of 15 percent from 9 percent during 1978, as productivity declined. Indexes for producer prices of finished goods and of materials continued to rise sharply in April, despite declines in average prices of both consumer foods and crude foods. During the first four months of the year, producer prices of finished goods rose at an annual rate of about 13 percent, compared with about 9lA percent during 1978. Increases in prices in the four-month period were widespread. During the first quarter, the consumer price index also rose at an annual rate of 13 percent, compared with 9 percent in 1978. The acceleration was attributable largely to energy items and foods. In foreign exchange markets demand for the dollar remained strong in the five-week period after the April meeting of the Committee, partly in response to announcement of a further reduction in the U.S. merchandise trade deficit in March and to indications of persistence of increased rates of inflation abroad. The strength was reflected in a further rise of about 1 lA percent in the trade-weighted value of the dollar against major foreign currencies and in substantial sales of dollars by central banks. The trade deficit in the first quarter as a whole was slightly lower than in the preceding quarter and considerably lower than in earlier quarters of 1978. Total credit outstanding at U.S. commercial banks grew rapidly in April, as it had on balance during the first quarter of the year. The April growth was led by a rebound in expansion of business loans, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 643 which had slackened in March from rapid rates in January and February. Commercial paper issued by nonfinancial firms increased sharply in April for the second consecutive month. The narrowly defined money supply, M-l, expanded sharply in April, after having declined on the average in the first quarter. A substantial part of the April increase was attributable to delays in the Treasury’s processing of checks in payment of federal income taxes and to a bunching of tax refunds. Reflecting in part the behavior of M-l, growth of M-2 and M-3 accelerated to rapid rates in April from relatively slow rates in the first quarter. Inflows to commercial banks of the interest-bearing deposits included in M-2 rose substantially in April, following several months of considerably reduced growth, as net flows into money market certificates increased while outflows of savings deposits slowed. At nonbank thrift institutions, on the other hand, net flows into money market certificates moderated in April, and overall inflows of funds to these institutions receded from an already reduced pace in the first quarter. At its meeting on April 17 the Committee had decided on ranges of tolerance for the annual rates of growth in M-l and M-2 during the April-May period of 4 to 8 percent and 4 to 8V2 percent respec­ tively. 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 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 93A to IOV2 percent. In late April projections suggested that over the April-May period M-l and M-2 would grow at rates that were close to or above the upper limits of their respective ranges. In accordance with the directive issued at the meeting on April 17, operations were directed toward an increase in the federal funds rate to a level of about IOV4 percent. Subsequently, in early May, the two-month rates of growth projected for M-l and M-2 were somewhat stronger. However, financial markets appeared to be in a sensitive state, and recent developments affecting supplies and distribution of energy were adding to uncertainties about economic prospects. Moveover, it appeared that the rapid pace of monetary growth was attributable in part to transitory forces. In the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

644 Federal Reserve Bulletin □ August 1979 circumstances, and in view of the directive’s instruction to give due regard to developing conditions in domestic financial markets, the objective for the federal funds rate was maintained at IOV4 percent. Short-term interest rates in general changed little on balance during the intermeeting period. Declines following the April meeting were subsequently reversed in reaction to the rise in the federal funds rate and to large sales of Treasury bills by foreign monetary authorities in association with their sales of dollars in foreign exchange markets. Yields on longer-term obligations rose somewhat during the period, apparently because of worsening expectations with regard to inflation. Mortgage yields were also influenced by the further slowdown of inflows of funds to thrift institutions. In the Committee’s discussion of the economic situation and out­ look, the members in general agreed that the pace of expansion in economic activity had slowed significantly, apart from the effects of severe weather in the first quarter and of the work stoppage in the trucking industry early in the current quarter. Much of the latest information on developments in April—particularly manufacturers’ new orders for durable goods, housing starts, industrial production, personal income, and retail sales—pointed to a weakening in demands and activity. Moreover, uncertainties concerning supplies of gasoline, as well as the overall price effects of the sharp increases in costs of energy, could be expected to dampen demands. A number of members now thought that a cyclical peak in activity might well be registered in the current quarter. Despite the current risks of recession in activity, the slowing of the expansion from the excessively rapid pace in late 1978 was regarded as a desirable development, in view of the inflationary pressures that had been accumulating. It was noted that some reduction in growth of nominal GNP had been an objective of the restrictive policy actions taken last autumn, although the reduction had so far been reflected in growth of real GNP rather than in the rate of inflation. Members continued to express great concern about inflation. Com­ ments were made to the effect that inflationary expectations may have increased in recent months and that a risk of some acceleration of the rise in prices existed, along with the risk of recession, as the recent increases in the cost of oil worked their way through the price structure over a number of months. There was evidence that over time the rate of inflation had been less variable in the United States Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 645 than in other industrial countries, suggesting that it would be more difficult to reduce the rate here. According to a number of economic projections, moreover, deceleration of inflation would be a slow and lengthy process. The observation was made that if the rate of inflation was not sharply reduced in the months immediately ahead, renewed expansion in business activity would begin with prices rising at a relatively fast pace. 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 4Vi 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 l xh to lO1/^ 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 took note of a staff analysis suggesting that over the May-June period growth of M-l would be quite slow, in part because of the unwinding of the transitory effects of federal income tax payments and refunds that had contributed to its exceptionally rapid growth in April. It was expected that growth of M-2 over the twomonth period would be retarded by the slow growth of M-l but that growth of the interest-bearing component would remain relatively strong. The analysis pointed out that if M-l and M-2 grew at annual rates of about 3V2 percent and 8 percent respectively over the six months from April to October, growth of the two monetary aggregates over the whole period from the fourth quarter of 1978 to October would be at the center of the longer-run ranges adopted by the Committee at its meeting in early February. Most members of the Committee believed that, despite increasing signs of weakening in economic activity and the risks of recession, a general easing in monetary restraint at this time would be premature in view of the continuance of strong inflationary pressures. Given the staff expectations of slow growth in M-l and M-2 over the May-June period, they favored a policy of directing open market operations early in the period immediately ahead toward maintaining the money market conditions currently prevailing, as represented by a federal funds rate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

646 Federal Reserve Bulletin □ August 1979 of about IOV4 percent, and of having the objective for operations later in the period before the next meeting determined on the basis of incoming evidence on the behavior of the monetary aggregates in relation to that currently anticipated. In view of uncertainties concern­ ing interpretation of credit conditions and monetary growth in the current environment, they also favored specifying unusually wide ranges for growth of M-l and M-2 over the May-June period and giving greater weight than usual to money market conditions in the conduct of operations until the next meeting. Two members of the Committee, stressing the signs of growing weakness in economic activity, favored easing policy and placing greater weight on the behavior of the monetary aggregates. Specifi­ cally, they advocated an immediate reduction in the objective for the federal funds rate to 10 percent in an effort to guard against a cumulative shortfall in monetary growth. On the other hand, one member advocated a more restrictive policy, represented initially by an increase in the objective for the funds rate to IOV2 percent, believing that such a policy would have a beneficial impact on inflationary expectations and only a slight effect on the course of real economic activity. 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 May-June period should be 0 to 5 percent and 4 to 8% percent respectively. The Manager was instructed to direct open market operations initially toward maintaining the weekly average federal funds rate at about the current level, represented by a rate of IOV4 percent. 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, although it was understood that a reduction in the rate below 10 percent would not be sought until the Committee had an opportunity for further consultation. 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 647 The following domestic policy directive was issued to the Federal Reserve Bank of New York: The information reviewed at this meeting suggests a moderate pickup in growth of real output of goods and services in the current quarter from the sharply reduced pace in the first quarter, when public and private construction activity was adversely affected by unusually severe weather. In April, however, industrial production declined and growth in nonfarm payroll employment slowed, in large part owing to effects of a work stoppage in the trucking industry early in the month. The unemployment rate, at 5.8 percent, remained at about the level prevailing earlier in the year. The dollar value of total retail sales rose somewhat in April, although apparently by less than the increase in average prices. 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. Demand for the dollar has continued strong in exchange markets over the past five weeks, and the trade-weighted value of the dollar against major foreign currencies has risen further. The U.S. trade deficit declined further in March and was slightly lower in the first quarter as a whole than in the fourth quarter of 1978. M-l expanded sharply in April, after having declined in the first quarter, and M-2 and M-3 grew rapidly. The interest-bearing component of M-2 also grew rapidly, following several months of slow growth, as net flows into money market certificates at commercial banks increased while outflows of savings deposits slowed. At nonbank thrift institutions, net flows into money market certificates moderated, and overall inflows of funds receded from the already reduced pace of the first quarter. Since mid-April, short-term market interest rates have changed little, on balance; most longer-term rates have increased. 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. At its meeting on February 6, 1979, 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 1V2 to 4V2 percent, 5 to 8 percent, and 6 to 9 percent respectively. The associated range for bank credit is IV2 to lO1/^ 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 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

648 Federal Reserve Bulletin □ August 1979 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 May-June period of M-l and M-2 and the following ranges of tolerance: 0 to 5 percent for M-l and 4 to SV2 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 man, who will then decide whether the situation calls for supplementary instructions from the Committee. Votes for this action: Messrs. Miller, Volcker, Black, Coldwell, Kimbrel, Mayo, and Mrs. Teeters. Votes against this action: Messrs. Balles, Partee, and Wallich. Messrs. Balles and Partee dissented from this action in view of indications that a cyclical peak might be near at hand. Thus, they favored a less restrictive policy posture, especially in view of the delayed impact of policy changes on the economy. In the present uncertain environment, they believed that some prompt easing in money market conditions, along with a greater emphasis on the behavior of the monetary aggregates in guiding the conduct of opera­ tions, would reduce the risk of a continuing shortfall in monetary growth and would tend to provide needed support to the economy later in the year. Mr. Wallich dissented from this action because, in view of the strong inflationary pressures in the economy, he continued to favor a more restrictive policy posture. Believing that inflationary expectations had increased in recent months while interest rates had changed little, he thought that additional firming in money market conditions would have a favorable effect on such expectations and would have little effect on the course of real output. Subsequent to the meeting, on June 15, incoming data indicated that M-l and M-2 were growing at exceptionally rapid rates in early June, and projections suggested that for the May-June period both Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of FOMC 649 monetary aggregates would grow at annual rates above the upper limits of the ranges that had been specified by the Committee. Since the meeting on May 22 the Manager had been aiming for a weekly average federal funds rate of 10% percent. The behavior of the aggregates would have called for an increase in the objective for the funds rate toward the 10% percent upper limit of its specified range. However, in view of many indications of weakening in economic activity, the difficulties of interpreting the behavior of the aggregates in the light of these circumstances, the condition of financial markets, and the general uncertainty about the economic outlook, Chairman Miller recommended that the Manager be instructed to continue to aim for a federal funds rate of about 10% percent. On June 15, the Committee modified the domestic policy directive adopted at its meeting on May 22, 1979, to call for open market operations directed at maintaining the weekly average federal funds rate at about 10% percent. Votes for this action: Messrs. Miller, Balles, Black, Kim­ brel, Mayo, Partee, Mrs. Teeters, and Mr. Timlen. Vote against this action: Mr. Cold well. Absent: Messrs. Volcker and Wallich. (Mr. Timlen voted as alternate for Mr. Volcker.) * * * * * 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

651 L aw D ep artm en t S ta tu te s, re g u la tio n s, in te rp re ta tio n s, an d d e c isio n s Amendments to Regulation H (ii) “collective investment fund” means funds held by a State member bank as fiduciary and, The Board of Governors has adopted amend­ consistent with local law, invested collectively (A) ments to its Regulation H to require that State in a common trust fund maintained by such bank member banks that effect certain securities trans­ exclusively for the collective investment and rein­ actions for customers provide confirmation of and vestment of monies contributed thereto by the bank maintain records with respect to such transactions. in its capacity as trustee, executor, administrator, Similar regulations are being adopted by the guardian, or custodian under the Uniform Gifts Comptroller of the Currency and the Federal De­ to Minors Act, or (B) in a fund consisting solely posit Insurance Corporation. Although it is in­ of assets of retirement, pension, profit sharing, tended that these amendments become effective stock bonus or similar trusts which are exempt January 1, 1980, comment is invited by September from Federal income taxation under the Internal 24, 1979, on the confirmation requirements as they Revenue Code; apply to transactions in U.S. Government, Federal (iii) a bank shall be deemed to exercise “in­ agency, and municipal securities (paragraph vestment discretion” with respect to an account (k)(3)), and on the bank officers and employees if, directly or indirectly, the bank (A) is authorized reporting requirements as they apply to transac­ to determine what securities or other property shall tions in U.S. government or federal agency obli­ be purchased or sold by or for the account, or gations (paragraph (k)(5)(iv)). (B) makes decisions as to what securities or other Effective January 1, 1980, Regulation H is property shall be purchased or sold by or for the amended by adding a paragraph (k) to section account even though some other person may have 208.8 as set forth below: responsibility for such investment decisions. (iv) “periodic plan” (including dividend rein­ Part 208—Membership of State vestment plans, automatic investment plans and Banking Institutions in the employee stock purchase plans) means any written Federal Reserve System authorization for a State member bank acting as agent to purchase or sell for a customer a specific Section 208.8—Banking Practices security or securities, in specific amounts (calcu­ lated in security units or dollars) or to the extent of dividends and funds available, at specific time (k) Recordkeeping and confirmation of certain intervals and setting forth the commission or securities transactions effected by State member charges to be paid by the customer in connection banks. therewith or the manner of calculating them; (v) “security” means any interest or instrument (1) Definitions: For purposes of this paragraph commonly known as a “security”, whether in the (k): nature of debt or equity, including any stock, (i) “customer” shall mean any person or ac­ bond, note, debenture, evidence of indebtedness count, including any agency, trust, estate, guard­ or any participation in or right to subscribe to or ianship, committee or other fiduciary account, for purchase any of the foregoing. The term “secu­ which a State member bank effects or participates rity” does not include (A) a deposit or share in effecting the purchase or sale of securities, but account in a federally or state insured depository shall not include a broker, dealer, dealer bank or institution, (B) a loan participation, (C) a letter issuer of the securities which are the subject of of credit or other form of bank indebtedness in­ the transactions; curred in the ordinary course of business, (D) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

652 Federal Reserve Bulletin □ August 1979 currency, (E) any note, draft, bill of exchange, bank effecting a securities transaction for a cus­ or bankers acceptance which has a maturity at the tomer shall maintain for at least three years and, time of issuance of not exceeding nine months, except as provided in subparagraph (4), shall mail exclusive of days of grace, or any renewal thereof or otherwise furnish to such customer either of the maturity of which is likewise limited, (F) units the following types of notifications: of a collective investment fund, (G) interests in (i) (A) a copy of the confirmation of a bro­ a variable amount (master) note of a borrower of ker/dealer relating to the securities transaction; and prime credit, or (H) U.S. Savings Bonds. (B) if the bank is to receive remuneration from the customer or any other source in connection with the transaction, and the remuneration is not (2) Recordkeeping: Every State member bank determined pursuant to a prior written agreement effecting securities transactions for customers shall between the bank and the customer, a statement maintain the following records with respect to such of the source and the amount of any remuneration transactions for at least three years: to be received; or (i) chronological records of original entry con­ (ii) a written notification disclosing: (A) the taining an itemized daily record of all purchases name of the bank; (B) the name of the customer; and sales of securities. The records of original (C) whether the bank is acting as agent for such entry shall show the account or customer for which customer, as agent for both such customer and each such transaction was effected, the description some other person, as principal for its own ac­ of the securities, the unit and aggregate purchase count, or in any other capacity; (D) the date of or sale price (if any), the trade date and the name execution and a statement that the time of execu­ or other designation of the broker/dealer or other tion will be furnished within a reasonable time person from whom purchased or to whom sold; upon written request of such customer, and the (ii) account records for each customer which identity, price and number of shares or units (or shall reflect all purchases and sales of securities, principal amount in the case of debt securities) all receipts and deliveries of securities, and all of such security purchased or sold by such a receipts and disbursements of cash with respect customer; (E) the amount of any remuneration to transactions in securities for such account and received or to be received, directly or indirectly, all other debits and credits pertaining to transac­ by any broker/dealer from such customer in con­ tions in securities; nection with the transaction; (F) the amount of (iii) a separate memorandum (order ticket) of any remuneration received or to be received by each order to purchase or sell securities (whether the bank from the customer and the source and executed or cancelled), which shall include: (A) amount of any other remuneration to be received the account(s) for which the transaction was ef­ by the bank in connection with the transaction, fected; (B) whether the transaction was a market unless remuneration is determined pursuant to a order, limit order, or subject to special instruc­ written agreement between the bank and the cus­ tions; (C) the time the order was received by the tomer, provided, however, in the case of U.S. trader or other bank employee responsible for Government securities, federal agency obligations effecting the transaction; (D) the time the order and municipal obligations, this subparagraph (F) was placed with the broker/dealer, or if there was shall apply only with respect to remuneration re­ no broker/dealer, the time the order was executed ceived by the bank in an agency transaction; and or cancelled; (E) the price at which the order was (G) the name of the broker/dealer utilized; or, executed; and (F) the broker/dealer utilized; where there is no broker/dealer, the name of the (iv) a record of all broker/dealers selected by person from whom the security was purchased or the bank to effect securities transactions and the to whom it was sold, or the fact that such infor­ amount of commissions paid or allocated to each mation will be furnished within a reasonable time such broker during the calendar year. upon written request. Nothing contained in this subparagraph shall require a bank to maintain the records required (4) Time of Notification: The time for mailing by this rule in any given manner, provided that or otherwise furnishing the written notification the information required to be shown is clearly described in subparagraph (3) shall be 5 business and accurately reflected and provides an adequate days from the date of the transaction, or if a basis for the audit of such information. broker/dealer is utilized, within 5 business days from the receipt by the bank of the broker/dealer’s (3) Form of Notification: Every State member confirmation, but the bank may elect to use the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 653 following alternative procedures if the transaction furnish the information described in subparagraph is effected for: (3), except that any such information relating to (i) accounts (except periodic plans) where the remuneration paid in connection with the transac­ bank does not exercise investment discretion and tion need not be provided to the customer when the bank and the customer agree in writing to a paid by a source other than the customer. The bank different arrangement; provided, however, that may charge a reasonable fee for providing the such agreement makes clear the customer’s right information described in subparagraph (3). to receive the written notification within the above prescribed time period at no additional cost to the (5) Securities Trading Policies and Procedures: customer; Every State member bank effecting securities (ii) accounts (except collective investment transactions for customers shall establish written funds) where the bank exercises investment dis­ policies and procedures providing: cretion in other than an agency capacity, in which (i) assignment of responsibility for supervision instance the bank shall, upon request of the person of all officers or employees who (A) transmit or­ having the power to terminate the account or, if ders to or place orders with broker/dealers, or (B) there is no such person, upon the request of any execute transactions in securities for customers; person holding a vested beneficial interest in such (ii) for the fair and equitable allocation of se­ account, mail or otherwise furnish to such person curities and prices to accounts when orders for the the written notification within a reasonable time. same security are received at approximately the The bank may charge such person a reasonable same time and are placed for execution either fee for providing this information. individually or in combination; (iii) accounts, where the bank exercises invest­ (iii) where applicable and where permissible ment discretion in an agency capacity, in which under local law, for the crossing of buy and sell instance (A) the bank shall mail or otherwise orders on a fair and equitable basis to the parties furnish to each customer not less frequently than to the transaction; and once every three months an itemized statement (iv) that bank officers and employees who make which shall specify the funds and securities in the investment recommendations or decisions for the custody or possession of the bank at the end of accounts of customers, who participate in the such period and all debits, credits and transactions determination of such recommendations or deci­ in the customer’s accounts during such period, and sions, or who, in connection with their duties, (B) if requested by the customer, the bank shall obtain information concerning which securities are mail or otherwise furnish to each such customer being purchased or sold or recommended for such within a reasonable time the written notification action, must report to the bank, within ten days described in subparagraph (3). after the end of the calendar quarter, all transac­ (iv) a collective investment fund, in which in­ tions in securities made by them or on their behalf, stance the bank shall at least annually furnish a either at the bank or elsewhere in which they have copy of a financial report of the fund, or provide a beneficial interest. The report shall identify the notice that a copy of such report is available and securities purchased or sold and indicate the dates will be furnished upon request, to each person to of the transactions and whether the transactions whom a regular periodic accounting would ordi­ were purchases or sales. Excluded from this re­ narily be rendered with respect to each partici­ quirement are transactions for the benefit of the pating account. This report shall be based upon officer or employee over which the officer or em­ an audit made by independent public accountants ployee has no direct or indirect influence or con­ or internal auditors responsible only to the board trol, transactions in mutual fund shares, and all of directors of the bank. transactions involving in the aggregate $10,000 or (v) a periodic plan, in which instance the bank less during the calendar quarter. shall mail or otherwise furnish to the customer as promptly as possible after each transaction a writ­ (6) Exceptions: The following exceptions to ten statement showing the funds and securities in subparagraph (k) shall apply: the custody or possession of the bank, all service (i) the requirements of section (k)(2)(ii) through charges and commissions paid by the customer in (k)(2)(iv) shall not apply to banks having an connection with the transaction, and all other average of less than 200 securities transactions per debits and credits of the customer’s account in­ year for customers over the prior three calendar volved in the transaction; provided that upon the year period; written request of the customer the bank shall (ii) activities of a State member bank that are Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

654 Federal Reserve Bulletin □ August 1979 subject to regulations promulgated by the Munici­ Section 212.2—Definitions pal Securities Rulemaking Board shall not be sub­ For the purpose of this Part, the following ject to the requirements of this paragraph (k); and definitions apply: (iii) activities of foreign branches of a State (a) “Adjacent cities, towns, or villages” means member bank shall not be subject to the require­ cities, towns or villages whose borders are within ments of this paragraph (k). ten miles of each other at their closest points. The property line of an office located in an unincor­ porated city, town, or village is regarded as the Revision of Regulation L boundary line of that city, town, or village for The Board of Governors has issued a revised the purpose of this definition. Regulation L under the Depository Institution (b) “Affiliate” has the meaning given in section Management Interlocks Act (Title II of the Finan­ 202 of the Interlocks Act. For the purpose of cial Institutions Regulatory and Interest Rate Con­ section 202(3)(B) of the Interlocks Act, an affiliate trol Act of 1978) (the “Interlocks Act”), which relationship based on common ownership does not prohibits certain management official interlocks exist if the appropriate Federal supervisory agency between depository institutions, depository hold­ or agencies determine, after giving the affected ing companies, and their affiliates. Although the persons the opportunity to respond, that the as­ final Regulation is effective July 19, 1979, the serted affiliation appears to have been established Board has invited comments on the Regulation for in order to avoid the prohibitions of the Interlocks a period of 60 days. Act and does not represent a true commonality Effective July 19, 1979, Regulation L is revised of interest between the depository organizations. to read as follows: In making this determination, the agencies will consider, among other things, whether a person, including members of his or her immediate family, Part 212—Management Official Interlocks whose shares are necessary to constitute the group Section owns a nominal percentage of the shares of one 212.1 Authority, Purpose, and Scope of the organizations and the percentage is substan­ 212.2 Definitions tially disproportionate with that person’s owner­ 212.3 General Prohibitions ship of shares in the other organization. “Imme­ 212.4 Permitted Interlocking Relationships diate family” includes mother, father, child, 212.5 [Reserved] grandchild, sister, brother, or any of their spouses, 212.6 [Reserved] whether or not any of their shares are held in trust. 212.7 Effect of Interlocks Act on Clayton Act (c) “Community” means city, town, or vil­ 212.8 Enforcement lage, or contiguous or adjacent cities, towns, or villages. Section 212.1— (d) “Contiguous cities, towns, or villages” means cities, towns, or villages whose borders Authority, Purpose, and Scope actually touch each other. (a) Authority. This Part is issued under the (e) “Depository holding company” means a provisions of the Depository Institution Manage­ bank holding company or a savings and loan ment Interlocks Act (“Interlocks Act”) (12 holding company (as more fully defined in section U.S.C. 3201 et seq.). 202 of the Interlocks Act) having its principal office located in the United States. (b) Purpose and scope. The general purpose of (f) “Depository institution” means a commer­ the Interlocks Act and this Part is to foster compe­ cial bank (including a private bank), a savings tition by generally prohibiting a management offi­ bank, a trust company, a savings and loan associ­ cial of a depository institution or depository hold­ ation, a homestead association, a cooperative ing company from also serving as a management bank, an industrial bank, or a credit union, having official of another depository institution or deposi­ a principal office located in the United States. A tory holding company if the two organizations (1) United States office, including a branch or agency, are not affiliated and (2) are very large or are of a foreign commercial bank is a “depository located in the same local area. This Part applies institution.” to management officials of State member banks, (g) “Depository organization” means a depos­ bank holding companies, and their affiliates. itory institution or a depository holding company. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 655 (h) “Management official” means an employee tory organization may not serve at the same time or officer with management functions (including as a management official of another depository a branch manager), a director (including an advi­ organization not affiliated with it if: (1) offices of sory director or honorary director), a trustee of both are located in the same Standard Metropolitan a business organization under the control of trust­ Statistical Area (“SMSA”) and either has total ees (e.g., a mutual savings bank), or any person assets of $20 million or more; (2) offices of de­ who has a representative or nominee serving in pository institution affiliates of both are located any such capacity. “Management official” does in the same SMSA and either of the depository not mean a person whose management functions institution affiliates has total assets of $20 million relate exclusively to the business of retail mer­ or more; or (3) an office of one of the depository chandising or manufacturing, or a person whose organizations is located in the same SMSA as an management functions relate principally to the office of a depository institution affiliate of the business outside of the United States of a foreign other and either the depository organization or the commercial bank. “Management official” does depository institution affiliate has total assets of not include persons described in the provisos of $20 million or more. section 202(4) of the Interlocks Act. (i) “Office” means a principal office or a (c) Manor Assets. Without regard to location, branch office located in the United States, but does a management official of a depository organization not include a representative office of a foreign with total assets exceeding $1 billion or a man­ commercial bank, an electronic terminal, or a loan agement official of any affiliate of the greater than production office. $1 billion depository organization may not serve (j) [Reserved] at the same time as a management official of a (k) [Reserved] nonaffiliated depository organization with total (1) “Total assets” means assets measured on assets exceeding $500 million or a management a consolidated basis as of the close of the organi­ official of any affiliate of the greater than $500 zation’s last fiscal year. The total assets of a million depository organization. depository holding company include the total assets of its depository institution affiliates for the Section 212.4— purposes of section 212.3(b) of this Part, and Permitted Interlocking Relationships include the total assets of all of its affiliates for purposes of section 212.3(c) of this Part. Total (а) Interlocking relationships permitted by stat­ assets of a United States branch or agency of a ute. The prohibitions of section 212.3 do not apply foreign commercial bank means total assets of in the case of any one or more of the following such branch or agency itself exclusive of the assets organizations or their subsidiaries: of the other offices of the foreign commercial bank. (1) a depository organization that does not do (m) “United States” means any State of the business within the United States except as an United States, the District of Columbia, any terri­ incident to its activities outside the United States; tory of the United States, Puerto Rico, Guam, (2) a corporation operating under section 25 or American Samoa, or the Virgin Islands. 25(a) of the Federal Reserve Act (“Edge Cor­ porations” and “Agreement Corporations”); (3) a depository organization that has been Section 212.3— placed formally in liquidation, or that is in the General Prohibitions hands of a receiver, conservator, or other official (a) Community. A management official of a exercising a similar function; depository organization may not serve at the same (4) a credit union being served by a manage­ time as a management official of another deposi­ ment official of another credit union; tory organization not affiliated with it if: (1) offices (5) a State-chartered savings and loan guaranty of both are located in the same community; (2) corporation; or offices of depository institution affiliates of both (б) a Federal Home Loan Bank or any other are located in the same community; or (3) an office bank organized solely for the purpose of serving of one of the depository organizations is located depository institutions (commonly referred to as in the same community as an office of a depository “bankers’ banks”) or solely for the purpose of institution affiliate of the other. providing securities clearing services and services related thereto for depository institutions, securi­ (b) SMSA. A management official of a deposi­ ties companies, or both. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

656 Federal Reserve Bulletin □ August 1979 (b) Interlocking relationships permitted by may serve at the same time as a management Board order. A management official of a State official of a depository organization that the pri­ member bank, bank holding company, or affiliate mary Federal supervisory agency believes faces of either may apply for the Board’s prior approval conditions endangering the organization’s safety to enter into a relationship involving another de­ or soundness, subject to the following conditions: pository organization that would otherwise be (i) the appropriate Federal supervisory agency or prohibited under section 212.3 of this Part, if the agencies determine the relationship to be necessary relationship falls within any of the classifications to provide management or operating expertise to enumerated in this paragraph. If the relationship the other organization; and (ii) other conditions involves a depository organization subject to the in addition to or in lieu of the foregoing may be supervision of another Federal supervisory agency imposed by the appropriate Federal supervisory as specified in section 207 of the Interlocks Act, agency or agencies in any specific case. the management official must also obtain the prior approval of that other agency. (4) Organization sponsoring credit union. A management official of a State member bank, bank (1) Organization in low income area; minority holding company, or affiliate of either may serve or women's organization. A management official at the same time as a management official of a of a State member bank, bank holding company, Federally-insured credit union that is sponsored by or affiliate of either may serve at the same time the State member bank, bank holding company, as a management official of a depository organi­ or affiliate of either primarily to serve employees zation (i) located, or to be located, in a low income of the organization. or other economically depressed area, or (ii) con­ trolled or managed by persons who are members Section 212.5—[Reserved] of minority groups or by women, subject to the following conditions: (A) the appropriate Federal Section 212.6—[Reserved] supervisory agency or agencies determine the re­ lationship to be necessary to provide management or operating expertise to the other organization; Section 212.7— (B) no interlocking relationship permitted by this Effect of Interlocks Act on Clayton Act paragraph shall continue for more than five years; and (C) other conditions in addition to or in lieu The Board of Governors of the Federal Reserve of the foregoing may be imposed by the appro­ System regards the provisions of the first three priate Federal supervisory agency or agencies in paragraphs of section 8 of the Clayton Act (15 any specific case. U.S.C. 19) to have been supplanted by the revised and more comprehensive prohibitions on manage­ (2) Newly-chartered organization. A manage­ ment official interlocks between depository organi­ ment official of a State member bank, bank holding zations in the Interlocks Act. company, or affiliate of either may serve at the same time as a management official of a newly- Section 212.8—Enforcement chartered depository organization, subject to the following conditions: (i) no interlocking relation­ The Board of Governors of the Federal Reserve ship permitted by this paragraph shall continue for System administers and enforces the Interlocks Act more than two years after the other organization with respect to State member banks, bank holding commences business; (ii) the appropriate Federal companies, and their affiliates, and may refer the supervisory agency or agencies determine the re­ case of a prohibited interlocking relationship in­ lationship to be necessary to provide management volving any such organization, regardless of the or operating expertise to the other organization; nature of any other organization involved in the and (iii) other conditions in addition to or in lieu prohibited relationship, to the Attorney General of of the foregoing may be imposed by the appro­ the United States to enforce compliance with the priate Federal supervisory agency or agencies in Interlocks Act and this Part. If an affiliate of a any specific case. State member bank or bank holding company is primarily subject to the regulation of another Fed­ (3) Conditions endangering safety or sound­ eral supervisory agency, then the Board does not ness. A management official of a State member administer and enforce the Interlocks Act with bank, bank holding company, or affiliate of either respect to that affiliate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 657 Amendments to Regulation Q of interest as prescribed by this paragraph in the following circumstances: 1. The Board of Governors has adopted (1) Where a member bank pays all or a portion amendments to the Regulation Q early withdrawal of a time deposit representing funds contributed penalty rule. to an Individual Retirement Account or a Keogh Effective August 1, 1979, Section 217.4(d) of (H.R. 10) plan established pursuant to 26 U.S.C. Regulation Q (12 CFR 217.4(d)) is amended to (I.R.C. 1954) §§ 408, 401 when the individual read as follows: for whose benefit the account is maintained attains age 59Vfc or is disabled (as defined in 26 U.S.C. Section 217.4— (I.R.C. 1954) section 72(m) (7)) or thereafter; or Payment of Time Deposits Before Maturity (2) Where a member bank pays that portion of a time deposit on which Federal deposit insurance * * * * * has been lost as the result of the merger of two (d) Penalty for early withdrawals. Where a time or more Federally insured banks in which the deposit with an original maturity or required notice depositor previously maintained separate time de­ period of one year or less, or any portion thereof, posits, or a period of one year from the date of is paid before maturity or before the expiration the merger. of the required notice period, a depositor shall A time deposit must be paid before maturity forfeit at least three months of interest on the without a forfeiture of interest as prescribed by amount withdrawn at the rate being paid on the this paragraph in the following circumstances: deposit. If the amount withdrawn has remained (1) Where a member bank pays all or a portion on deposit for less than three months, all interest of a time deposit upon the death of any owner113 on the amount withdrawn shall be forfeited. Where of the time deposit funds; or a time deposit with an original maturity or required (2) Where a member bank pays all or a portion notice period of more than one year, or any portion of a time deposit when the owner113 of the time thereof, is paid before maturity or before the deposit is determined to be legally incompetent expiration of the required notice period, a deposi­ by a court or other administrative body of compe­ tor shall forfeit at least six months interest on the tent jurisdiction.* * * amount withdrawn at the rate being paid on the * * * * * deposit. If the amount has remained on deposit for less than six months, all interest on the amount 2. The Board of Governors has determined to withdrawn shall be forfeited.11 Where necessary increase the ceiling rate of interest payable by to comply with the requirements of this paragraph, member banks on time deposits with maturities any interest already paid to or for the account of of 30 to 89 days from 5 per cent to 5lA per cent. the depositor shall be deducted from the amount The Board also has amended Regulation Q to requested to be withdrawn. Any amendment of a clairfy that where additional deposits to an existing time deposit contract that results in an increase time deposit account are permitted, such additions in the rate of interest paid or in a reduction in are subject to the ceiling rate of interest in effect the maturity of the deposit constitutes a payment on the date the additional deposits are made. of the time deposit before maturity. A time deposit Effective August 1, 1979, Regulation Q is may be paid before maturity without a forfeiture amended as follows: Section 217.3— 11. The provisions of this paragraph apply to all time Interest on Time and Savings Deposits deposit contracts entered into on or after July 1, 1979, and to all existing time deposit contracts that are extended or (a) Maximum rate. * * * The maximum rate renewed (whether by automatic renewal or otherwise) on or of interest that may be paid by a member bank after such date. The provisions of this paragraph also may be applied, with the consent of the depositor, to all other time deposit contracts entered into before July 1, 1979. All contracts not subject to the provisions of 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 1 la. For the purposes of this provision, an “owner” of time thereof, is paid before maturity, a member bank may pay deposit funds is any individual who at the time of his or her interest on the amount withdrawn at a rate not to exceed that death or determination of incompetence has full legal and prescribed in § 217.7 for a savings deposit and the depositor beneficial title to all or a portion of such funds or, at the time shall forfeit three months of interest payable at such rate. If, of his or her death or determination of incompetence, has however, the amount withdrawn has remained on deposit for beneficial title to all or a portion of such funds and full power three months or less, all interest shall be forfeited. of disposition and alienation with respect thereto. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

658 Federal Reserve Bulletin □ August 1979 on an additional deposit to any existing time de­ obligation (written or oral) that is issued or under­ posit shall not exceed the maximum rate that may taken by a member bank principally as a means be paid in accordance with section 217.7 on the of obtaining funds to be used in its banking busi­ date the additional deposit is made. ness, except any such obligation that: * * * * * * * (2) Evidences an indebtedness arising from a Section 217.7— transfer of direct obligations of, or obligations that Maximum Rates of Interest are fully guaranteed as to principal and interest Payable by Member Banks by, the United States or any agency thereof that the bank is obliged to repurchase, and (i) is on Time and Savings Deposits issued in denominations of $100,000 or more; or $ * 9)e sfe 9|e (ii) is issued in denominations of less than $100,000, matures in less than 90 days and is not (b) Fixed ceiling time deposits of less than automatically renewable or extended;53 $100,000. Except as provided in paragraphs (a), (d), (e), (f), and (g), no member bank shall pay interest on any time deposit at a rate in excess of the applicable rate under the following sched­ ule: Bank Holding Company Maturity Maximum per cent and Bank Merger Orders 30 days or more but less 5Va Issued by the Board of Governors than 90 days 90 days or more but less 5Vi Orders Under Section 3 than 1 year of Bank Holding Company Act 1 year or more but less 6 Algemene Bank Nederland, N.V. than 30 months A. B. N. —Stichting 30 months or more but 6V2 Amsterdam, The Netherlands less than 4 years 4 years or more but 7 V* Order Approving less than 6 years Formation of Bank Holding Companies 6 years or more but less 1V2 than 8 years Algemene Bank Nederland, N.V. (“ABN”), 8 years or more 13A and A.B.N.-Stichting (“Stichting”), both of * * * * * Amsterdam, The Netherlands, have applied for the Board’s approval under section 3(a)(1) of the Bank 3. The Board has determined to amend Regu­ Holding Company Act (12 U.S.C. § 1842(a)(1)) lation Q to subject member bank repurchase to become bank holding companies by acquiring agreements (“RPs”) of United States Government 98 percent or more of the voting shares of LaSalle and agency securities of less than $100,OCX) issued National Bank (“Bank”), Chicago, Illinois. for terms of 90 days or more to deposit interest Notice of the applications, affording opportunity rate ceilings of Regulation Q. Bank, in the case for interested persons to submit comments and of State member banks, to make arrangements for views, has been given in accordance with section an appropriate phase-out program. 3(b) of the Act. The time for filing comments and Effective August 1, 1979, Regulation Q is views has expired, and the Board has considered amended as follows: the applications and all comments received in light of the factors set forth in section 3(c) of the Act Section 217.1—Definitions (12 U.S.C. § 1842(c)). * * * * * (f) Deposits as including certain promissory 5a. A member bank with such obligations issued in denom­ inations of less than $100,000 with maturities of 90 days or notes and other obligations. For the purposes of more may continue to issue such obligations until August 1, this Part, the term “deposits” also includes any 1982, without regard to this subparagraph. However, the member bank’s liability on any promissory note, aggregate amount of such obligations outstanding on a member bank’s books may not exceed the total of such obligations acknowledgment of advance, due bill, or similar outstanding on its books on August 1, 1979. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 659 ABN with consolidated assets equivalent to ap­ Bank is limited to a home office and two additional proximately $38 billion is the largest banking facilities and ABN’s branch to a single office. On organization in The Netherlands and the 27th the basis of the record the Board concludes that largest in the free world.1 It conducts banking consummation of the proposal would not eliminate operations through over 700 branches in The significant competition, significantly increase the Netherlands and 170 branches and affiliates in 44 concentration of banking resources in any relevant countries throughout the world. Its financial activ­ area, or have any other adverse effects on compe­ ities include consumer finance, mortgage banking, tition. insurance activities, trust services, securities ad­ The financial and managerial resources and fu­ ministration, factoring, leasing, and real estate ture prospects of Applicants and Bank appear management, and it also engages through subsidi­ generally satisfactory. In connection with the pro­ aries in various commercial activities outside the posal, ABN will provide Bank $15 million in United States. In the United States ABN conducts additional capital. Moreover, the Board expects banking operations through offices in seven cities, Applicants to serve as a continuing source of including Chicago, Illinois. In addition, ABN strength to Bank, and Applicants recognize their owns 25 percent of the voting shares of ABD responsibility to do so. The Board concludes that Securities Corporation, New York, New York, a banking factors are consistent with approval of the securities underwriting firm.2 applications. Stichting is a nonoperating foundation whose Affiliation with Applicants will permit Bank to governing board consists of members of the man­ provide international banking services as well as aging and supervisory boards of ABN. Upon to continue its present retail activities. Bank’s ABN’s acquisition of Bank, Stichting would be­ enhanced ability, resulting from its affiliation with come a bank holding company by virtue of its Applicants, to serve the convenience and needs ownership of all the priority voting shares of ABN. of its community is consistent with approval of Stichting has no other assets, and its functions are the applications. The Board concludes that acqui­ limited to ownership and management of ABN’s sition of Bank by ABN and Stichting would be priority shares. in the public interest and that the applications Bank, with deposits of $747.3 million, is the should be approved. 168th largest commercial bank in the United On the basis of the record, the applications are States. It is the 6th largest commercial bank in approved for the reasons summarized above. The Illinois and controls approximately 0.95 percent transaction shall not be made before the thirtieth of total deposits in the state. Bank is primarily calendar day following the effective date of this a local bank with some regional correspondent Order or later than three months after the effective business. date of this Order unless such period is extended Both ABN and Bank compete in the Chicago for good cause by the Board or by the Federal banking market.3 Bank is the 6th largest bank in Reserve Bank of Chicago pursuant to delegated the market with 1.4 percent of market deposits. authority. ABN’s Chicago branch, with deposits of approxi­ By order of the Board of Governors, effective mately $2.8 million, holds only 0.01 percent of July 13, 1979. market deposits. The Chicago market is served by 358 commercial banks including the 7th and 9th Voting for this action: Governors Wallich, Coldwell, Partee, Teeters, and Rice. Absent and not voting: largest United States banks. Under Illinois law, Chairman Miller. (Signed) Theodore E. Allison, 1. Financial data are as of December 31, 1978, except for [seal] Secretary of the Board. market data, which are as of June 30, 1978. 2. In connection with these applications ABN has commit­ ted to dispose of its interest in ABD Securities Corporation in excess of five percent within two years after it becomes Austin Bancshares Corporation, a bank holding company in accordance with section 4(a)(2) Austin, Texas of the Act (12 U.S.C. § 1843(a)(2)). The remaining two domestic subsidiaries of ABN engage in no activities. ABN also has minority interests, permissible under section Order Approving Acquisition of Bank 225.4(g)(2)(v) of the Board’s Regulation Y, in two foreign companies each of which has a representative or liaison olfice Austin Bancshares Corporation, Austin, Texas, in the United States. a bank holding company within the meaning of 3. This market is approximated by all of Cook and Du Page Counties and the southern half of Lake County, Illinois. the Bank Holding Company Act, has applied for Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

660 Federal Reserve Bulletin □ August 1979 the Board’s approval under section 3(a)(3) of the pears from the facts of record that consummation Act (12 U.S.C. § 1842(a)(3)) to acquire 100 per­ of the proposal would not result in any adverse cent of the voting shares (less directors’ qualifying effects upon competition in any relevant area. shares) of the Austin National Bank Northwest, Thus, competitive considerations are consistent Austin, Texas (“Bank”), a proposed de novo with approval of the application. bank. The financial and managerial resources and fu­ Notice of the application, affording opportunity ture prospects of Applicant and its subsidiary for interested persons to submit comments and banks are regarded as satisfactory. Bank as a views has been given in accordance with section proposed de novo bank has no financial or operat­ 3(b) of the Act. The time for filing comments and ing history; however, its prospects as a subsidiary views has expired, and the Board has considered of Applicant appear favorable. Accordingly, con­ the application and the comments received, in­ siderations relating to banking factors are consist­ cluding those of the organizers of Lakeway Na­ ent with approval of this application. The estab­ tional Bank, Lakeway, Texas (“Lakeway Bank”), lishment of Bank would provide a new and con­ in light of the factors set forth in section 3(c) of venient banking alternative for the area’s residents. the Act (12 U.S.C. § 1842(c)). Moreover, as a subsidiary of Applicant, Bank Applicant is the 13th largest banking organi­ would have access to Applicant’s financial and zation in Texas and controls two subsidiary banks managerial resources and would be able to institute with aggregate deposits of approximately $524.7 and develop a full line of banking services. Thus, million, representing 0.87 percent of the total de­ considerations relating to the convenience and posits in commercial deposits in the state.1 Since needs of the community to be served lend some this application involves the acquisition of a pro­ weight toward approval of this application. Ac­ posed de novo bank, consummation of the pro­ cordingly, it is the Board’s judgment that con­ posal would not immediately increase Applicant’s summation of the transaction would be in the share of deposits in commercial banks in Texas. public interest and that the application should be Bank is to be located in the Austin banking approved. market,2 in which Applicant ranks as the largest On the basis of the record, the application is out of 21 banking organizations, with two subsid­ approved for the reasons summarized above. The iary banks controlling 25.7 percent of total market transaction shall not be made (a) before the thir­ deposits. The proposed site of Bank is in north­ tieth calendar day following the effective date of western Austin, 12.9 miles from Applicant’s this Order of (b) later than three months after that nearest subsidiary, The Austin National Bank, date, and (c) National Bank Northwest, Austin, Austin, Texas. Applicant’s market share would not Texas, shall be opened for business not later than change initially as a result of approval of this six months after the effective date of this Order. application. Since Bank would be a de novo bank, Each of the periods described in (b) and (c) may there will be no elimination of existing competi­ be extended for good cause by the Board, or by tion. In addition, the record indicates that even the Federal Reserve Bank of Dallas, pursuant to after consummation of this proposal the Austin delegated authority. banking market would remain attractive for de By order of the Board of Governors, effective novo entry and that ample opportunities for market July 6, 1979. deconcentration remain through foothold or de novo entry into the market.3 Accordingly, it ap­ Voting for this action: Governors Wallich, Coldwell, Partee, and Teeters. Absent and not voting: Chairman Miller and Governor Rice. 1. All deposit data are as of June 30, 1978, and reflect (Signed) Edward T. Mulrenin, bank holding company formations and acquisitions approved [seal] Assistant Secretary of the Board. as of April 30, 1979. 2. The Austin banking market is approximated by the Austin Standard Metropolitan Statistical Area (“SMSA”), which consists of a major portion of Travis County, a small area in southern Williamson County, which includes the town of Round Rock, and a small area in Hays County, which includes inate or forestall competitive alternatives in the market and the town of Buda, Texas. that Applicant’s proposed application should be evaluated in 3. The organizers of Lakeway Bank, a proposed new bank light of Applicant’s position regarding new entrants into the to be located 10 miles from the proposed site of Bank in the market. As noted above, in the Board’s judgment, even after Austin banking market, have submitted comments to the consummation of this proposal the market would remain at­ Board, indicating that Applicant has filed a protest against tractive for de novo entry. Therefore, it is the Board’s opinion Lake way Bank’s application for a national bank charter. The that consummation of this proposal would not result in any organizers believe that Applicant’s protest is designed to elim- adverse competitive effects. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 661 Columbian Financial Corporation, deposits, it has not done so since its acquisition The Columbian Trust Company, by Applicant.2 Olathe, Kansas In the relevant banking market the five largest banks control 78.4 percent of total deposits.3 Ap­ Order Approving plicant has no other banking subsidiaries and Ap­ Formation of a Bank Holding Company plicant’s principals do not control any other banks and Change in Character of a in the relevant market. Consummation of the pro­ Member Bank’s Business posal would not have any adverse effects upon competition, nor would it increase the concentra­ Columbian Financial Corporation, Olathe, tion of banking resources in any relevant area. In Kansas, has applied for the Board’s prior approval, addition, the introduction of Bank as a new com­ under section 3(a)(1) of the Bank Holding Com­ mercial bank competitor in the market may ulti­ pany Act (12 U.S.C. § 1842(a)(1)), to become a mately promote a reduction of the present level bank holding company. This would be accom­ of banking concentration of the market. The Board plished by changing the activities of Applicant’s concludes that competitive considerations are con­ subsidiary, the Columbian Trust Company sistent with approval of the applications. (“Bank”), Topeka, Kansas, to those of a com­ The financial and managerial resources of Ap­ mercial bank. Bank is now a member of the plicant and its subsidiaries are regarded as gener­ Federal Reserve System as a trust company, and ally satisfactory, particularly in light of Appli­ it has itself applied under section 208.7(a)(1) of cant’s commitment to inject capital into Bank. the Board’s Regulation H (12 C.F.R. § 208.7 Although Bank has no operating history as a (a)(1)) for permission so to change the general commercial bank, its future prospects appear fa­ character of its business and the scope of the vorable based upon its planned management, corporate powers it exercises. capitalization, and projected earnings. Further­ Notice of the bank holding company applica­ more, Applicant will incur no debt in connection tion, affording opportunity for interested persons with this proposal and it appears that Applicant to submit comments and views, has been given has sufficient financial flexibility to service existing in accordance with section 3(b) of the Act. The indebtedness over the next two years; all existing time for filing comments and views has expired, indebtedness will be transferred with the nonbank and the Board has considered the application and subsidiaries upon divestiture of those subsidiaries all comments received in light of the factors set within that time. Accordingly, considerations re­ forth in section 3(c) of the Act (12 U.S.C. lating to banking factors, including those specified § 1842(c)). in section 208.5(a) of Regulation H (12 C.F.R. Applicant, a corporation organized to facilitate § 208.5(a)), are consistent with approval of the the corporate reorganization of Bank, owns 97.1 percent of Bank’s voting shares. Applicant also applications. As a de novo commercial bank in the Topeka owns 100 percent of the stock of six nonbank banking market, Bank would serve as an additional subsidiaries including one title insurance un­ source of a full range of banking services in the derwriting company, four title insurance agencies relevant market. Therefore, convenience and and abstracting companies, and a corporation that needs considerations lend some weight toward owns Bank’s premises.1 approval. Accordingly, it is the Board’s judgment Bank, which previously operated as a trust that the proposal would be in the public interest company and insurer and guarantor of titles to real and that the applications should be approved. estate, was reorganized on September 30, 1978, On the basis of the record, the applications are with the transfer of all its nontrust company busi­ approved for the reasons summarized above. Bank ness into separate subsidiary corporations of Ap­ shall not commence operations as a commercial plicant. As a trust company, Bank accepts certifi­ bank before the thirtieth calendar day following cates of deposit and trust accounts and makes commercial, real estate, and other loans. Although state law authorizes Bank to accept limited demand 2. The Kansas State Banking Department has approved Bank’s application to expand its activities to those of a com­ mercial bank, and Bank’s new corporate powers, as proposed, 1. Applicant has committed to divest all its impermissible are consistent with the purposes of the Federal Reserve Act. nonbanking subsidiaries within two years after it becomes a 3. The relevant banking market is approximated by the bank holding company, in compliance with section 4(a)(2) of Topeka RMA, as defined in Rand McNally & Co., 1978 the Bank Holding Company Act (12 U.S.C. § 1843(a)(2)). Commercial Atlas and Marketing Guide. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

662 Federal Reserve Bulletin □ August 1979 the effective date of this Order, or later than six of existing ownership interests and Applicant nei­ months after the effective date of this Order unless ther engages in any activity directly nor holds that period is extended for good cause by the shares of any other bank or nonbank organization. Board, or the Federal Reserve Bank of Kansas City A principal of Applicant is also affiliated with two pursuant to delegated authority. other bank holding companies in Oklahoma and By order of the Board of Governors, effective their subsidiary banks. Neither of these banks July 20, 1979. competes in the Logan County banking market. Accordingly, competitive considerations are con­ Voting for this action: Governors Wallich, Coldwell, sistent with approval of the application. Teeters, and Rice. Absent and not voting: Chairman Where principals of an applicant are engaged Miller and Governor Partee. in operating a chain of banking organizations, the (Signed) Griffith L. Garwood, Board, in addition to analyzing the one-bank [seal] Deputy Secretary of the Board. holding company proposal before it, also considers the total chain and analyzes the financial and managerial resources and future prospects of the chain within the context of the Board’s multi-bank holding company standards. Based upon such Crescent Bancshares, Inc., analysis in this case, the financial and managerial Crescent, Oklahoma resources and future prospects of Applicant and Order Approving Bank appear to be satisfactory. Formation of a Bank Holding Company The future prospects of Applicant are dependent upon the financial resources of Bank. Applicant Crescent Bancshares, Inc., Crescent, Oklahoma proposes to service the debt to be incurred over (“Applicant”) has applied for the Board’s ap­ a 12-year period with funds provided by dividends proval under section 3(a)(1) of the Bank Holding on Bank’s stock and the benefits derived from Company Act (12 U.S.C. § 1842(a)(1)), of for­ filing a consolidated tax return. In light of past mation of a bank holding company by acquiring earnings of Bank, the anticipated growth in Bank 80 percent or more, less directors’ qualifying earnings appears to provide Applicant with suffi­ shares of the voting shares of the Bank of Cres­ cient financial flexibility to meet its annual debt cent, Crescent, Oklahoma (“Bank”). servicing requirements, while maintaining an ade­ Notice of the application, affording opportunity quate capital position in Bank. Therefore, consid­ for interested persons to submit comments and erations relating to banking factors are consistent views, has been given in accordance with section with approval of the application. 3(b) of the Act. The time for filing comments and Although consummation of the proposal would views has expired, and the application and all effect no changes in the banking services offered comments received have been considered in light by Bank, considerations relating to convenience of the factors set forth in section 3(c) of the Act and needs of the communities to be served are (12 U.S.C. § 1842(c)). consistent with approval. Applicant is a nonoperating corporation with no On the basis of the record, the application is subsidiaries, organized for the purpose of becom­ approved for the reasons summarized above. The ing a bank holding company through the acquisi­ transaction shall not be consummated (a) before tion of Bank. Upon acquisition of Bank, (deposits the thirtieth day following the effective date of this of $7.1 million)1 Applicant would control one of Order or (b) later than three months after the the smallest banks in Oklahoma, representing 0.05 effective date of this Order, unless such period percent of total deposits in commercial banks in is extended for good cause by the Board of Gov­ the state. ernors or by the Federal Reserve Bank of Kansas Bank is the fourth largest of seven banks City pursuant to delegated authority. operating in the relevant banking market,2 and By order of the Secretary of the Board, acting controls 10.67 percent of the market’s commercial pursuant to delegated authority from the Board of deposits. This proposal represents a reorganization Governors, effective July 5, 1979. 1. Banking data are as of June 30, 1978. (Signed) Theodore E. Allison, 2. The relevant banking market is approximated by Logan County, Oklahoma. [seal] Secretary of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 663 First Harrah Corp., Board, in addition to analyzing the one-bank Harrah, Oklahoma holding company proposal before it, also considers the total chain and analyzes the financial and Order Approving managerial resources and future prospects of the Formation of a Bank Holding Company chain within the context of the Board’s multi-bank holding company standards. Based upon such an­ First Harrah Corp., Harrah, Oklahoma, has ap­ alysis in this case, the financial and managerial plied for the Board’s approval under section resources and future prospects of Applicant, Bank 3(a)(1) of the Bank Holding Company Act (12 and the affiliated banks and bank holding compa­ U.S.C. § 1842(a)(1)), to become a bank holding nies appear to be satisfactory. The future prospects company through the acquisition of 80 percent or of Applicant are dependent upon the financial more of the voting shares of First State Bank, resources of Bank. Applicant proposes to service Harrah, Oklahoma (“Bank”). the debt to be incurred over a 12-year period Notice of the application, affording an opportu­ through dividends received from Bank and tax nity for interested persons to submit comments and benefits from filing a consolidated return. It ap­ views, has been given in accordance with section pears that Bank’s earnings are sufficient to provide 3(b) of the Act. The time for filing comments and Applicant with financial flexibility to meet its an­ views has expired, and the application and all nual debt servicing requirements while maintain­ comments received have been considered in light ing an adequate capital position for Bank. There­ of the factors set forth in section 3(c) of the Act fore, the considerations relating to banking factors (12 U.S.C. § 1842(c)). in regard to this proposal are consistent with ap­ Applicant is a nonoperating corporation with no proval of the application. subsidiaries, organized for the purpose of becom­ While Applicant anticipates no changes in the ing a bank holding company through the acquisi­ services offered Bank’s customers, convenience tion of Bank. Upon acquisition of Bank ($7.8 and needs factors would be consistent with ap­ million in deposits), Applicant would control the proval. Thus, it has been determined that consum­ 329th largest bank in Oklahoma, holding .06 per­ mation of the proposal to form a bank holding cent of total deposits in commercial banks in the company would be in the public interest and that state.1 the application should be approved. Bank is the 56th largest of 62 banks operating On the basis of the record, the application is in the Oklahoma City banking market2 and con­ approved for the reasons summarized above. The trols approximately 0.19 percent of total deposits transaction shall not be consummated (a) before therein. The purpose of the transaction is to facili­ the thirtieth day following the effective date of this tate the transfer of the ownership from individuals Order or (b) later than three months after the to a corporation controlled by the same individ­ effective date of this Order, unless such period uals. Various principals of Applicant are affiliated is extended for good cause by the Board of Gov­ with other banks and bank holding companies ernors or by the Federal Reserve Bank of Kansas located in separate markets from Bank. In addi­ City, pursuant to delegated authority. tion, Applicant’s principals are associated with By order of the Secretary of the Board, acting another one bank holding company and two inde­ pursuant to delegated authority effective July 18, pendent banks within the market area; however, 1979. Applicant’s principals own less than 5 percent of each of these institutions and hold no policymak­ (Signed) Theodore E. Allison, ing positions with them. Thus, it appears that [seal] Secretary of the Board. consummation of the proposal would not have any substantially adverse effects upon existing or po­ tential competition or the concentration of banking resources in any relevant area. Accordingly, it is First Newman Grove Bankshares Corporation, concluded that competitive considerations are Newman Grove, Nebraska consistent with approval of the application. Where principals of an applicant are engaged Order Approving in operating a chain of banking organizations, the Formation of a Bank Holding Company First Newman Grove Bankshares Corporation, 1. All banking data are as of June 30, 1978. Newman Grove, Nebraska, has applied for ap­ 2. The Oklahoma City banking market is approximated by the Oklahoma City RMA. proval under section 3(a)(1) of the Bank Holding Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

664 Federal Reserve Bulletin □ August 1979 Company Act of 1956 (12 U.S.C. § 1842(a)(1)), nancial condition and prospects appear favorable. to become a bank holding company through the Therefore, considerations relating to banking fac­ acquisition of 100 percent, less directors’ qualify­ tors are consistent with approval of the application. ing shares, of the voting shares of the First Na­ Although consummation of the proposal would tional Bank of Newman Grove (“Bank”), New­ effect no immediate changes in the banking serv­ man Grove, Nebraska. ices offered by Bank, considerations relating to Notice of the application, affording opportunity the convenience and needs of the community to for interested persons to submit comments and be served are consistent with approval of the views, has been given in accordance with section application. Based on the foregoing, it has been 3(b) of the Act. The time for filing comments and determined that consummation of the proposal to views has expired, and the application and all form a bank holding company would be in the comments received have been considered in light public interest and that the application should be of the factors set forth in section 3(c) of the Act approved. (12 U.S.C. § 1842(c)). On the basis of the record, the application is Applicant is a nonoperating corporation orga­ approved for the reasons summarized above. The nized for the purpose of becoming a bank holding transaction shall not be made before the thirtieth company through the acquisition of Bank. Upon day following the effective date of this Order or acquisition of Bank, which has total deposits of later than three months after the effective date of $11.2 million, Applicant would control the 174th this Order, unless such period is extended for good largest bank in Nebraska, holding 0.14 percent of cause by the Board of Governors or by the Federal total deposits in commercial banks in the state.1 Reserve Bank of Kansas City under delegated Bank is the fifth largest of eight banks in the authority. relevant banking market, approximated by Ma­ By order of the Secretary of the Board, under dison County, Nebraska, and holds 7.23 percent delegated authority, effective July 13, 1979. of total deposits in commercial banks in that mar­ ket. A principal of Applicant is also a principal (Signed) Theodore E. Allison, and director of an existing bank holding company [seal] Secretary of the Board. and a director of its subsidiary bank, which is located in Pierce, Nebraska. However, since this bank is not located in the relevant banking market, consummation of the proposed transaction would Indecorp, Inc., not eliminate any existing competition. This pro­ Chicago, Illinois posal represents a restructuring of existing owner­ Order Approving ship of Bank from individuals to a corporation Formation of a Bank Holding Company owned by the same individuals, and it does not appear that there would be any adverse effects on Indecorp, Inc., Chicago, Illinois, has applied competition in any relevant area. Thus, competi­ for the Board’s approval under section 3(a)(1) of tive considerations are consistent with approval. the Bank Holding Company Act (12 U.S.C. Where principals of an applicant are engaged § 1842(a)(1)) to become a bank holding company in operating a chain of banking organizations, the through the acquisition of all the outstanding vot­ Board, in addition to analyzing the one-bank ing shares of Independence Bank of Chicago, holding company proposal before it, also considers Chicago, Illinois (“Bank”). As part of the overall the total chain and analyzes the financial and transaction, Bank will acquire certain assets and managerial resources and future prospects of the assume substantially all of the liabilities of Gate­ chain within the context of the Board’s multi-bank way National Bank of Chicago (“Gateway”) and holding company standards. Based upon such Guaranty Bank and Trust Company (“Guaranty”), analysis in this case, the financial and managerial both of Chicago, Illinois. resources and future prospects of Applicant and In view of the emergency situation involving Bank appear to be satisfactory. The proposed Gateway and Guaranty, the Comptroller of the acquisition would be accomplished through an Currency and the Illinois Commissioner of Banks, exchange of shares of Bank for shares of Appli­ the primary supervisory authorities for both insti­ cant. Applicant would incur no debt, and its fi­ tutions, have recommended action by the Board in accordance with the provisions of section 3(b) of the Act (12 U.S.C. § 1842(b)) permitting im­ 1. All deposit data are as of June 30, 1978. mediate action by the Board in order to prevent Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 665 the probable failure of a bank. Public notice of sition of the application other than by approval the application before the Board is not required would be inconsistent with the public interest and by the Bank Holding Company Act, and in view that the proposed transaction should be approved of the emergency situation, the Board has not on a basis that would not preclude immediate followed its normal practice of affording interested consummation of the proposal. Accordingly, the parties the opportunity to submit comments and application is approved for the reasons sum­ views. The Board has considered the application marized above. The transaction may be consum­ and the comments received from the Comptroller mated immediately but in no event later than three of the Currency and the Illinois Commissioner of months after the effective date of this Order, unless Banks in light of the factors set forth in section such period is extended for good cause by the 3(c) of the Act (12 U.S.C. § 1842(c)). Board, or by the Federal Reserve Bank of Chi­ Applicant is a recently organized corporation, cago, pursuant to delegated authority. with no operating subsidiaries, formed for the By order of the Board of Governors, effective purpose of becoming a bank holding company July 16, 1979. through the acquisition of Bank following the merger into Bank of Gateway and Guaranty.1 Voting for this action: Governors Wallich, Coldwell, Partee, Teeters, and Rice. Absent and not voting: Gateway and Guaranty were declared insolvent Chairman Miller. and placed in receivership by the Comptroller of the Currency and the Illinois Commissioner of (Signed) Theodore E. Allison, Banks on July 14, 1978. At the time of these [seal] Secretary of the Board. actions, Gateway and Guaranty had aggregate total deposits of approximately $16.5 million (as of June 30, 1979), and each was one of the smaller PanNational Group, Inc., banks in the Chicago banking market.2 In view El Paso, Texas of the insolvencies of Gateway and Guaranty, the Board finds that any adverse effects on competition Order Approving that would result from consummation of the ac­ Acquisition of Bank quisition are outweighed by the public interest considerations relating to the proposal. Consid­ PanNational Group, Inc., El Paso, Texas, a erations relating to convenience and needs of the bank holding company within the meaning of the community to be served lend very strong weight Bank Holding Company Act, has applied for the toward approval of the application since the pro­ Board’s approval under section 3(a)(3) of the Act posal will protect the depositors of Gateway and (12 U.S.C. § 1842(a)(3)) to acquire 100 percent Guaranty and will ensure the continued availability of the voting shares (less directors’ qualifying of banking services in the community. The finan­ shares) of Vista Hills Bank, El Paso, Texas cial and managerial resources and future prospects (“Bank”), a proposed de novo bank. of Applicant are regarded as generally satisfactory. Notice of the application, affording opportunity The financial and managerial resources and future for interested persons to submit comments and prospects of Bank, particularly in light of the views has been given in accordance with section proposed injection of capital into Bank, are re­ 3(b) of the Act. The time for filing comments and garded as generally satisfactory. Accordingly, views has expired, and the Board has considered banking factors lend support for approval of the the application and all comments received in light application. of the factors set forth in section 3(c) of the Act On the basis of the information before the (12 U.S.C. § 1842(c)). Board, it is apparent that an emergency situation Applicant is the 12th largest banking organi­ exists so as to require that the Board act immedi­ zation in Texas and controls four subsidiary banks, ately pursuant to the emergency provisions of with aggregate deposits of approximately $605.2 sections 3(b) and 11(b) (12 U.S.C. § 1849(b)) of million, representing 0.97 percent of total deposits the Act. It is the Board’s judgment that any dispo­ in commercial banks in the state.1 Since this ap­ plication involves the acquisition of a proposed de novo bank, consummation of the proposal 1. The FDIC has approved the subject merger pursuant to the emergency provisions of the Bank Merger Act (12 U.S.C. § 1828(c)). 2. The Chicago banking market is approximated by all of 1. All deposit data are as of June 30, 1978, and reflect Cook and Dupage Counties and the southern portion of Lake bank holding company formations and acquisitions approved County, Illinois. as of May 31, 1979. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

666 Federal Reserve Bulletin □ August 1979 would not immediately increase Applicant’s share shall be opened for business not later than six of deposits in commercial banks in Texas. months after the effective date of this Order. Each Bank is to be located in the El Paso banking of the periods described in (b) and (c) may be market,2 in which Applicant has three subsidiary extended for good cause by the Board, or by the banks controlling 32.5 percent of total market Federal Reserve Bank of Dallas pursuant to dele­ deposits and ranks as the second largest out of gated authority. 13 banking organizations. The proposed site of By order of the Board of Governors, effective Bank is in eastern El Paso, approximately seven July 30, 1979. miles from Applicant’s nearest banking subsidiary. As the proposal involves a de novo bank, Appli­ Voting for this action: Vice Chairman Schultz and Governors Wallich, Partee, Teeters, and Rice. Absent cant’s market share would not change initially as and not voting: Chairman Miller and Governor Colda result of approval of this application, and there well. will be no elimination of existing competition. In addition, the record indicates that even after con­ (Signed) Edward T. Mulrenin, summation of this proposal the El Paso banking [seal] Assistant Secretary of the Board. market would remain attractive for de novo entry and that ample opportunities for market deconcen­ tration remain through foothold or de novo entry into the market. Accordingly, it appears from the Orders Under Section 4 facts of record that consummation of the proposal of Bank Holding Company Act would not result in any adverse effects upon com­ petition in any relevant area. Thus, competitive Citicorp, considerations are consistent with approval of the New York, New York application. Order Approving Continuation of The financial and managerial resources and fu­ Citicorp9s Authority to Issue Traveler’s Checks ture prospects of Applicant and its subsidiary banks are regarded as satisfactory. Bank as a Citicorp, New York, New York, a bank holding proposed de novo bank has no financial or operat­ company within the meaning of the Bank Holding ing history; however, its prospects as a subsidiary Company Act (“Act”), has applied for the of Applicant appear favorable. Accordingly, con­ Board’s approval, under section 4(c) (8) of the siderations relating to banking factors are consist­ Act (12 U.S.C. § 1843 (c)(8)) and section ent with approval of this application. The estab­ 225.4(b)(2) of the Board’s Regulation Y (12 lishment of Bank would provide a new and con­ C.F.R. § 225.4(b)(2)), to continue to issue travel­ venient banking source for area residents. More­ ers checks beyond the December 31, 1980, expi­ over, as a subsidiary of Applicant, Bank would ration of its current authority.1 The Board has not have access to Applicant’s financial and manage­ amended its Regulation Y (12 C.F.R. § 225) to rial resources and would be able to institute and include the issuance of travelers checks as a per­ develop a full line of banking services. Thus, missible activity, but in connection with two ear­ considerations relating to the convenience and lier applications the Board determined by order needs of the community to be served lend some that the activity of issuing travelers checks is weight toward approval of this application. Ac­ closely related to banking and in the public inter­ cordingly, it is the Board’s judgment that con­ est. (BankAmerica Corporation (BA Cheque Cor­ summation of the transaction would be in the poration), 59 Federal Reserve Bulletin 544 public interest and that the application should be (1973); and Republic of Texas Corporation, 62 approved. Federal Reserve Bulletin 630 (1976)).2 On the basis of the record, the application is approved for the reasons summarized above. The transaction shall not be made (a) before the thir­ 1. Applicant currently engages in the activity of issuing tieth calendar day following the effective date of travelers checks pursuant to the limited grandfather provisions this Order or (b) later than three months after that of the 1970 Amendments to the Act, but must have Board date, and (c) Vista Hills Bank, El Paso, Texas, approval to continue to engage directly in this activity beyond December 31, 1980. 2. On February 26, 1979, the Board approved an application by Applicant to sell at retail travelers checks, and amended 2. The El Paso banking market is approximated by the El Regulation Y (12 C.F.R. § 225.4(a)) to include this activity Paso Standard Metropolitan Statistical Area (“SMSA”), which on its list of permissible activities for bank holding companies consists of El Paso County, Texas. (65 Federal Reserve Bulletin 265 (1979)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 667 Applicant, with two banks, Citibank, N.A. fits to the public and would be in the public (“Citibank”), New York, New York, and Citi­ interest. Furthermore, there is no evidence in the bank (New York State), N.A., Buffalo, New record to indicate that the proposed retention of York, together controlling deposits of approxi­ this activity by Applicant would lead to any undue mately $61.1 billion, is the second largest banking concentration of resources, unfair competition, organization in the nation and the largest in New conflicts of interest, unsound banking practices, York state.3 In addition Applicant controls a num­ or other adverse effects. ber of domestic nonbank subsidiaries engaging in Based upon the foregoing and other consid­ a variety of activities including consumer, sales erations reflected in the record, the Board has and commercial finance, mortgage banking, fac­ determined that the balance of the public interest toring, the sale and underwriting of credit-related factors the Board is required to consider under insurance, and leasing. section 4(c)(8) is favorable. Accordingly, the ap­ Applicant is one of five major competitors par­ plication is hereby approved. This determination ticipating in the travelers check market. The larg­ is subject to the conditions set forth in section est issuer, American Express Company, accounts 225.4(c) of Regulation Y and to the Board’s au­ for an estimated 55 to 60 percent of the market. thority to require such modification or termination Applicant utilizes a worldwide network of affil­ of the activities of a holding company or any of iated and unaffiliated sellers to market its travelers its subsidiaries as the Board finds necessary to checks and is estimated to be the second or third assure compliance with the provisions and pur­ largest issuer with approximately 14 to 20 percent poses of the Act and the Board’s regulations and of the market.4 orders issued thereunder, or to prevent evasion Barriers to entry into the industry appear high thereof. in view of the necessity for a large international By order of the Board of Governors, effective sales organization to handle this low-margin, high July 20, 1979. volume product. Thus, potential entrants are likely to be those large money center banking organi­ Voting for this action: Governors Wallich, Coldwell, Teeters, and Rice. Absent and not voting: Chairman zations that have, or are capable of building, Miller and Governor Partee. correspondent or agency relationships worldwide. The Board has previously determined that it would (Signed) Griffith L. Garwood, be in the public interest for bank holding compa­ [seal] Deputy Secretary of the Board. nies having such capabilities to engage in the activity of issuing travelers checks, in view of the limited number of competitors currently servicing European American Bancorp, this industry.5 Applicant’s retention of this activity New York, New York should serve to continue competition among the various leading participants in the travelers check Order Approving industry.6 Accordingly, it is the Board’s view that Foreign Branch of Domestic Subsidiary approval of this application would produce bene­ European American Bancorp, New York, New York, a bank holding company, has applied for the Board’s approval, under section 4(c)(8) of the 3. All banking data are as of December 31, 1978. 4. The marketing and distributing functions as well as Bank Holding Company Act (12 U.S.C. accounting and control functions are performed by Applicant’s § 1843(c)(8)) and section 225.4(b)(2) of the direct subsidiary, Citicorp Services, Inc., which is held pur­ Board’s Regulation Y (12 C.F.R. § 225.4(b)(2)), suant to section 4(c)(1)(C) of the Act. 5. See 62 Federal Reserve Bulletin 630 (1976) and 59 to establish a Luxembourg branch of its subsidiary, Federal Reserve Bulletin 544 (1973). European American Banking Corporation 6. U.S. banking organizations active in the industry all issue travelers checks through nonbank subsidiaries rather than (“EABC”), New York, New York. This branch through their banks. Consequently, none of these companies, would engage in international banking activities, nor Applicant, is required to maintain reserves pursuant to the principally making interbank Eurodollar and Board’s Regulation D (12 C.F.R. § 204) on the proceeds from the sale of travelers checks. If the Board were to deny this Eurocurrency placements and deposits, making retention application, Applicant would likely transfer the ac­ commercial loans, and engaging in foreign ex­ tivity to its lead bank, Citibank. Since Citibank would be change transactions. required to maintain reserves on these funds, Applicant would be at a competitive disadvantage in the market place. The Notice of receipt of the application has been Board took this factor into consideration in approving a pre­ published, affording interested persons the oppor­ vious application to retain such activity in a nonbank subsidi­ ary. See 62 Federal Reserve Bulletin 630, 631-32 (1976). tunity to comment. 44 Federal Register 24,928 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

668 Federal Reserve Bulletin □ August 1979 (1979). The time for filing comments has expired, requiring significant funding, the establishment of and the Board has considered the application and this branch will enable EABC to operate more all comments received in light of the public interest efficiently in European money markets and to serve factors specified in section 4(c)(8) of the Act. its customers in foreign currency markets better. Applicant controls two principal subsidiaries: The proposal would not affect competition in do­ EABC and European American Bank and Trust mestic banking markets, although it would provide Company, New York, New York, which is the a competitive alternative overseas. There is no 10th largest commercial bank in New York and evidence that the establishment of this branch may the 27th largest in the United States, holding total result in an undue concentration of resources, deposits of $3.9 billion.1 EABC is an investment unfair competition, conflicts of interests, unsound company with assets of $2.8 billion, organized and banking practices, or other adverse effects on the operating under Article XII of New York State public interest. The Board concludes that the pub­ Banking Law, and it is principally engaged in a lic interest factors it must consider under section variety of activities related to the financing or 4(c)(8) of the Act favor approval of this applica­ facilitating of transactions in international com­ tion. merce. On May 10, 1977, the Board determined Based on the record, the application is approved that, subject to several conditions, Applicant’s for the reasons summarized in this Order. This operation of EABC was closely related to banking determination is subject to the conditions set forth and a proper incident thereto, and by order the in section 225.4(c) of Regulation Y, and to the Board authorized Applicant’s acquisition of Board’s authority to require reports by and make EABC.2 At the same time the Board authorized examinations of bank holding companies and their the retention of EABC of its branch in Nassau, subsidiaries, and to require such modification or The Bahamas, provided the branch confined its termination of the activities of a bank holding activities to those permissible for EABC under the company or any of its subsidiaries as the Board Board’s Order. finds necessary to assure compliance with the This application is for a second foreign branch provisions and purposes of the Act and the Board’s of EABC, to be established de novo in Luxem­ Orders and regulations issued thereunder, or to bourg. The Board has already determined that the prevent evasion thereof. The branch shall be operation of EABC by Applicant, including its opened for business not later than three months foreign branch operations, is closely related to after the effective date of this Order, unless that banking, and Applicant does not propose that the period is extended for good cause by the Board Luxembourg branch of EABC engage in any new or by the Federal Reserve Bank of New York activities that would require reconsideration of that pursuant to authority hereby delegated. earlier determination.3 By order of the Board of Governors, effective The Board also believes that the reasonably July 13, 1979. expected benefits to the public from this proposal outweigh its possible adverse effects. Without Voting for this action: Governors Wallich, Coldwell, Partee, Teeters, and Rice. Absent and not voting: Chairman Miller. 1. Financial data are as of December 31, 1978. 2. 63 Federal Reserve Bulletin 595 (1977). 3. As the Board’s earlier Order notes, at the time of Appli­ (Signed) Theodore E. Allison, cant’s formation there were no clear administrative procedures for the establishment of de novo foreign branches by domestic [seal] Secretary of the Board. nonbank subsidiaries of domestic bank holding companies. 63 Federal Reserve Bulletin 595, 600 n. 19 (1977). The Board has since amended section 225.4(b)(1) of Regulation Y (12 C.F.R. § 225.4(b)(1)) to permit the Reserve Banks to Trust Company of Georgia, act on those applications provided the activities of the foreign branches will be limited to those the Board has found to be Atlanta, Georgia closely related to banking. 43 Federal Register 60,261 (1978). Having found the operation of EABC by Applicant to be Order Approving closely related to banking, the Board has determined that further applications by Applicant for EABC to establish foreign Acquisition of Fickling Sc Walker, Inc. branches de novo or to expand the activities of its foreign branches may be processed in the same manner as other de Trust Company of Georgia, Atlanta, Georgia, novo applications under section 225.4(b)(1) of Regulation Y, a bank holding company within the meaning of provided the proposed activities are permissible under the the Bank Holding Company Act, has applied for Board’s earlier Order and the proposal is consistent with all other conditions of that Order, and the Board delegates author­ the Board’s approval, under section 4(c)(8) of the ity to the Federal Reserve Bank of New York to accept and Act (12 U.S.C. § 1843(c)(8)) and section take action on such notices properly filed by Applicant as prescribed in that section. 225.4(b)(2) of the Board’s Regulation Y (12 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 669 C.F.R. § 225.4(b)(2)), to acquire the mortgage 5 percent, and the smallest number of competitors banking operations of Fickling & Walker, Inc. in any one of these markets is five. Since Applicant (“F&W”), Macon, Georgia, a company that en­ and F&W hold small market shares everywhere gages in the activity of mortgage banking, and they compete with each other and elimination of transfer these operations to Adair Mortgage Com­ F&W as an independent mortgage banking com­ pany (“Adair”), a wholly-owned subsidiary of pany would not seriously reduce the number of Applicant. The activity of mortgage banking has competitors, the Board finds the effect of consum­ been determined by the Board to be closely related mation of the proposal on existing competition to banking (12 C.F.R. § 225.4(a)(1)). would be, at most, only slightly adverse. Notice of the application, affording opportunity F&W also has offices in four cities in Florida for interested persons to submit comments and and one in Tennessee, where Applicant has not views on the public interest factors, has been duly originated home mortgages. While Applicant has published (44 Federal Register 21,143 (1979)). the resources to enter each of these five markets The time for filing comments and views has ex­ de novo, F&W’s market share is so small that the pired, and the Board has considered the application proposed acquisition represents for Applicant a and all comments received, in the light of the foothold entry in each market. Also, there are public interest factors set forth in section 4(c)(8) numerous other organizations with the skill and of the Act (12 U.S.C. § 1843(c)(8)).1 resources to enter these markets and, therefore, Applicant, the second largest banking organi­ the elimination of Applicant as a potential entrant zation in Georgia, controls 12 banks with total would have little or no effect on potential or deposits of approximately $1.83 billion, repre­ probable future competition in these markets. Ac­ senting 12.22 percent of the total deposits in cordingly, the Board finds that the effect of this commercial banks in the state.2 Applicant also acquisition on potential or probable future compe­ controls a number of subsidiaries engaged in non­ tition is also, at most, only slightly adverse. banking activities, including Adair which is the The Board finds that consummation of the pro­ 137th largest mortgage company in the United posal is likely to result in public benefits. As a States and the fifth largest in Georgia. result of consummation of this proposal, Applicant F&W engages in the general business of mort­ expects there to be increased efficiencies deriving gage banking, with five offices in Georgia, four from the size of the combination of Applicant and in Florida, and one in Tennessee. F&W services F&W, which would become the 88th largest mortgages throughout Georgia and Florida and, to mortgage banking company in the United States. a more limited extent, in South Carolina, Missis­ In addition, Applicant would begin offering second sippi, Tennessee, Alabama, and Texas. With a mortgages and residential construction loans at servicing portfolio of $317.3 million, F&W is the most, if not all, of the offices to be acquired from 142nd largest mortgage company in the U.S. and F&W. The Board finds that the proposed acquisi­ the sixth largest in Georgia. tion would produce benefits to the public that While Applicant, through two of its subsidiary outweigh any slightly adverse competitive effects banks and Adair, competes with F&W in six the proposal may have. Furthermore, there is no Georgia markets in the origination of one-to-four evidence in the record indicating that consumma­ family residential mortgages, the acquisition of tion of this proposed transaction would result in F&W by Applicant would not have significant any undue concentration of resources, unfair com­ effects on existing competition. The largest of the petition, conflicts of interest, unsound banking combined market shares of a subsidiary of Appli­ practices or other adverse effects upon the public cant and F&W in any of these markets is less than interest. Based upon the foregoing and other consid­ erations reflected in the record, the Board has 1. The City wide League of Neighborhoods (“League”), determined that the balance of the public interest Atlanta, Georgia, initially protested this application, alleging factors the Board is required to consider under that Applicant’s lead bank and mortgage banking subsidiary, section 4(c)(8) is favorable. Accordingly, the ap­ Adair, failed to meet the credit needs of low- and moder­ ate-income neighborhoods in Atlanta, Georgia. As a result of plication is hereby approved. This determination the protest and ensuing discussions between Applicant and the is subject to the conditions set forth in section League, Applicant agreed to initiate and promote a mortgage 225.4(c) of Regulation Y and to the Board’s au­ lending program in low- and moderate-income neighborhoods in Atlanta and to consult the League in the future with respect thority to require such modification or termination to providing credit and other services in such areas. On the of the activities of a holding company or any of basis of Applicant’s actions, the League withdrew its protest. 2. All banking data are as of June 30, 1978. its subsidiaries as the Board finds necessary to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

670 Federal Reserve Bulletin □ August 1979 assure compliance with the provisions and pur­ ing mortgage banking and personal property leas­ poses of the Act and the Board’s regulations and ing. orders issued thereunder, or to prevent evasion Company operates six local offices for the orig­ thereof. ination of 1-4 family residential mortgage loans, The transaction shall be made not later than four of which are located in Utah and two of which three months after the effective date of this Order, are located in Wyoming. Company also engages unless such period is extended for good cause by in mortgage services through its office located in the Board or by the Federal Reserve Bank of Salt Lake City, Utah. During 1978, Company Atlanta. originated an aggregate of $65 million in 1-4 By order of the Board of Governors, effective family residential mortgage loans, and on De­ July 16, 1979. cember 31, 1978, Company had a mortgage serv­ icing portfolio of $21 million. Applicant also en­ Voting for this action: Governors Wallich, Coldwell, gages in originating and servicing 1 -4 family resi­ Partee, Teeters, and Rice. Absent and not voting: dential mortgages through its subsidiary Wells Chairman Miller. Fargo Mortgage Company (“WFMC”). WFMC (Signed) Theodore E. Allison, operates 28 local offices in the western United [seal] Secretary of the Board. States, but does not have any offices in Utah or Wyoming where Company operates, and does not derive any residential mortgage business from those states. On December 31, 1978, WFMC had Wells Fargo & Company, a loan servicing portfolio of $2.2 billion. Thus, San Francisco, California the Board regards the acquisition of Company by Order Approving Applicant as a foothold acquisition of Applicant Acquisition of Miller & Viele in the mortgage banking business in Utah and Wyoming. Accordingly, the Board concludes that Wells Fargo & Company, San Francisco, Cali­ consummation of the proposal would have no fornia (“Applicant”), a bank holding company adverse effects on competition in any relevant within the meaning of the Bank Holding Company area. Act, has applied for the Board’s approval, under Upon consummation of the proposed acquisi­ section 4(c)(8) of the Act and section 225.4(b)(2) tion, Applicant would assist Company in expand­ of the Board’s Regulation Y to acquire, through ing the types of mortgage loans it offers to its a wholly-owned subsidiary, Wells Fargo Mortgage customers to include commercial mortgage loans Company, the business and assets of Miller & and construction loans. In addition, Applicant in­ Viele, Murray, Utah (“Company”), a company tends to install data processing and transmission that engages in the activities of mortgage banking, equipment at Company’s offices, thereby enabling including the origination of residential real estate Company to service its customers more efficiently. loans and the servicing of such loans for the Accordingly, the Board concludes that the pro­ account of others. Such activities have been deter­ posed acquisition of Company by Applicant can mined by the Board to be closely related to bank­ reasonably be expected to produce benefits to the ing (12 C.F.R. § 225.4(a)(1) and (3)). public that outweight any adverse effects. Further­ Notice of the application, affording opportunity more, there is no evidence in the record indicating for interested persons to submit comments and that consummation of this proposed transaction views on the public interest factors, has been duly would result in any undue concentration of re­ published (44 Federal Register 29,723). The time sources, unfair competition, conflicts of interest, for filing comments and views has expired, and unsound banking practices or other adverse effects the Board has considered the application and all upon the public interest. comments received in the light of the public inter­ Based upon the foregoing and other consid­ est factors set forth in section 4(c)(8) of the Act erations reflected in the record, the Board has de­ (12 U.S.C. § 1843(c)(8)). termined, in accordance with the provisions of Applicant, the third largest banking organization section 4(c)(8) of the Act, that Applicant’s acqui­ in California, controls one bank with total deposits sition of Company can reasonably be expected to of approximately $14.1 billion representing 13 produce favorable public benefits. Accordingly, percent of the total deposits in commercial banks in the state.1 Applicant engages through subsidi­ aries in a variety of nonbanking activities, includ­ 1. All banking data are as of September 31, 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 671 the application is hereby approved. This determi­ a prior certification pursuant to section 1101(b) of nation is subject to the conditions set forth in the Code with respect to the proposed divestiture section 225.4(c) of Regulation Y and to the by Kyanite of all of the 21,116 shares of common Board’s authority to require such modification or stock (the “Bank Stock”) of The Bank of Phenix, termination of the activities of a holding company Phenix, Virginia (“Bank”), currently held by or any of its subsidiaries as the Board finds neces­ Kyanite, through the pro rata distribution of such sary to assure compliance with the provisions and shares to the holders of common stock of Kyanite.2 purposes of the Act and the Board’s regulations 2. The Board’s Order certified that: and orders issued thereunder, or to prevent evasion A. Kyanite is a qualified bank holding corpora­ thereof. tion, within the meaning of subsection (b) of The transaction shall be made not later than section 1103 of the Code, and satisfies the re­ three months after the effective date of this Order, quirements of that subsection; unless such period is extended for good cause by B. the shares of Bank that Kyanite proposes to the Board or by the Federal Reserve Bank of San distribute to its shareholders are all or part of the Francisco. property by reason of which Kyanite controls By order of the Board of Governors, effective (within the meaning of section 2(a) of the BHC July 6, 1979. Act) a bank or a bank holding company; and C. the distribution of such shares is necessary Voting for this action: Governors Wallich, Coldwell, or appropriate to effectuate the policies of the BHC Partee, and Teeters. Absent and not voting: Chairman Act. Miller and Governor Rice. 3. On March 29, 1979, Kyanite distributed to (Signed) Edward T. Mulrenin, its shareholders, on a pro rata basis, a total of [seal] Assistant Secretary of the Board. 16,002 shares of Bank representing all of the shares of common stock of Bank then held by Kyanite.3 Kyanite does not currently hold any interest in Bank. Certifications Pursuant to the 4. Kyanite does not directly or indirectly own, Bank Holding Company Tax Act of 1976 control or have power to vote 25 percent or more of any class of voting securities of any bank or Kyanite Mining Corporation, any company that controls a bank. Dillwyn, Virginia 5. Kyanite has represented that it does not con­ Final Certification Pursuant to the trol in any manner the election of a majority of Bank Holding Company Tax Act of 1976 directors, or exercise a controlling influence over the management or policies of Bank or any other [Docket No. TCR 76-158] bank or any company that controls a bank. Kyanite Mining Corporation, Dillwyn, Virginia On the basis of the foregoing information, it (“Kyanite”), has requested a final certification is hereby certified that Kyanite has (before the pursuant to section 1101(e) of the Internal Revenue expiration of the period prohibited property is Code (the “Code”), as amended by section 2(a) permitted under the BHC Act to be held by a bank of the Bank Holding Company Tax Act of 1976 holding company) ceased to be a bank holding (the “Tax Act”), that it has (before the expiration company. of the period prohibited property is permitted under the Bank Holding Company Act (12 U.S.C. 2. Section 1101(c) of the Code provides that, with certain § 1841 et. seq.) (“BHC Act”) to be held by a exceptions, property acquired after July 7, 1970, does not bank holding company) ceased to be a bank hold­ qualify for special tax treatment under section 1101(b) of the ing company. Code when distributed by an otherwise qualified bank holding corporation. The prior certification issued on June 30, 1978, In connection with this request, the following noted that Kyanite held a total of 21,116 shares of Bank, that information is deemed relevant for purposes of 16,052 of those shares were acquired prior to July 7, 1970, and are therefore entitled to special tax treatment under section issuing the requested certification:1 1101 of the Code, and that 5,064 of those shares were acquired 1. Effective June 30, 1978, the Board issued subsequent to that date. In February 1979, Kyanite advised the Board that 16,002 shares rather than 16,052 shares of Bank were acquired prior to July 7, 1970, and that 5,114 shares rather than 5,064 shares were acquired subsequent to that date. 1. This information derives from Kyanite’s correspondence 3. On January 5, 1979, the 5,114 shares acquired after July with the Board concerning its request for this certification, 7, 1970, v/ere used in connection with the redemption, pursuant Kyanite’s Registration Statement filed with the Board pursuant to section 303 of the Code, of certain shares of Kyanite’s Class to the BHC Act, and other records of the Board. B Common Stock. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

672 Federal Reserve Bulletin □ August 1979 This certification is based upon the repre­ 2. Between March 27, 1969, and July 7, 1970, sentations made to the Board by Kyanite and upon Republic acquired ownership and control of 15,the facts set forth above. In the event the Board 834 shares, representing approximately 79 percent should determine that facts material to this certifi­ of the outstanding voting shares, of Bank. cation are otherwise than as represented by Kyan­ 3. Republic became a bank holding company ite, or that Kyanite has failed to disclose to the on December 31, 1970, as a result of the 1970 Board other material facts, it may revoke this Amendments to the BHC Act, by virtue of its certification. ownership and control at that time of more than By order of the Board of Governors, acting 25 percent of the outstanding voting shares of through its General Counsel , pursuant to delegated Bank, and registered as such with the Board on authority (12 C.F.R. § 265.3(b)(3)), effective July September 1, 1971. Republic would have been a 10, 1979. bank holding company on July 7, 1970, if the BHC Act Amendments of 1970 had been in effect on (Signed) Theodore E. Allison, that date by virtue of its ownership and control [seal] Secretary of the Board. on that date of more than 25 percent of the out­ standing voting shares of Bank. Republic presently owns and controls 21,690 shares, representing approximately 99 percent of the outstanding voting shares, of Bank.2 Republic Industries, Inc., 4. Republic holds property acquired by it on Kansas City, Missouri or before July 7, 1970, the disposition of which Prior Certification Pursuant to the would be required by section 4 of the BHC Act, Bank Holding Company Tax Act of 1976 if Republic were to continue to be a bank holding company beyond December 31, 1980, and which [Docket No. TCR 76-162] property is “prohibited property” within the meaning of section 1103(c) of the Code. Republic Industries, Inc., Kansas City, Mis­ On the basis of the foregoing information, it souri (“Republic”), has requested a prior certifi­ is hereby certified that: cation pursuant to section 1101(c)(3) of the Inter­ (A) Republic is a qualified bank holding cor­ nal Revenue Code (“Code”), as amended by poration within the meaning of section 1103(b) of section 2(a) of the Bank Holding Company Tax the Code, and satisfies the requirements of that Act of 1976 (“Tax Act”), that its proposed dives­ section; titure of all of its 21,690 shares of Grandview (B) the shares of Bank that Republic proposes Bank and Trust Company, Grandview, Missouri to exchange for shares of Bancshares are all or (“Bank”), is necessary or appropriate to effectu­ part of the property by reason of which Republic ate the policies of the Bank Holding Company Act controls (within the meaning of section 2(a) of the (12 U.S.C. § 1841 et seq.) (“BHC Act”). BHC Act) a bank or bank holding company; and Republic proposes to exchange the 21,690 shares (C) The exchange of the shares of Bank for the of Bank that it presently owns for all of the shares shares of Bancshares and the distribution to the of Republic Bancshares Corporation (“Banc­ shareholders of Republic of the shares of Banc­ shares”), a corporation created and availed of shares are necessary or appropriate to effectuate solely for the purpose of receiving Republic’s the policies of the BHC Act. shares of Bank, and immediately thereafter, to This certification is based upon the repre­ distribute all of Bancshares’ stock pro rata to the sentations made to the Board by Republic and holders of Republic’s voting and non-voting com­ mon stock. In connection with this request, the following information is deemed relevant, for purposes of 2. Subsequent to July 7, 1970, Republic sold 50 shares of issuing the requested certification:1 Bank and later purchased 5,906 shares of Bank. Under section 1. Republic is a corporation organized under 1101(c)(1) of the Code, property acquired after July 7, 1970, the laws of Delaware on April 1, 1968. generally does not qualify for the tax benefits of section 1101(b) when distributed by an otherwise qualified bank holding com­ pany. Similarly, property sold before a prior certification is granted generally is not eligible for tax benefits. Since Republic 1. This information derives from Republic’s com­ has not claimed that any of the exceptions to these general munications with the Board concerning its request for this rules are applicable to it, neither the 5,906 shares acquired certification, Republic’s Registration Statement filed with the after July 7, 1970, or the 50 shares sold after July 7, 1970, Board pursuant to the BHC Act, and other records of the Board. appear to be eligible for tax benefits under the Tax Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 673 upon the facts set forth above. In the event the arm’s-length negotiations. There is no evidence to Board should hereafter determine that facts mate­ indicate that the sale was motivated by an intent rial to this certification are otherwise than as rep­ to evade the requirements of the Act. The terms resented by Republic or that Republic has failed governing the debt relationship between C&S and to disclose to the Board other material facts, it Mr. Bryant and DeSoto arising from C&S’s fi­ may revoke this certification. nancing of the purchase of the shares of DeSoto By order of the Board of Governors, acting are limited to those reasonably required to protect through its General Counsel, pursuant to delegated C&S’s security interest. Additionally, no other authority (12 C.F.R. § 265.2(b)(3)), effective July indebtedness to C&S by Mr. Bryant and his busi­ 16, 1979. ness interests exists and the indebtedness to C&S by DeSoto arose in the ordinary course of busi­ (Signed) Griffith L. Garwood, ness. Mr. Bryant’s personal financial resources are [seal] Deputy Secretary of the Board. sufficient to support the conclusion that C&S is not in fact capable of controlling him or DeSoto by reason of the indebtedness.1 C&S has submitted a resolution of its board of directors stating that it is not in fact capable of controlling Bryant or Orders Under Section 2 DeSoto and that it does not intend to control of Bank Holding Company Act Bryant or DeSoto in the future. Citizens and Southern National Bank, Accordingly, it is ordered that the request of Savannah, Georgia C&S for a determination pursuant to section 2(g)(3) be and hereby is granted. This determi­ Order Granting Determination nation is based upon the representations made to Under The Bank Holding Company Act the Board by C&S and Mr. Bryant. In the event Citizens and Southern National Bank, Savan­ the Board should hereafter determine that facts nah, Georgia (“C&S”), a bank holding company material to this determination are otherwise than within the meaning of section 2(a) of the Bank as represented, or that C&S, Mr. Bryant, or any of the parties has failed to disclose to the Board Holding Company Act of 1956, as amended (12 other material facts, this determination may be U.S.C. § 1841(a) (the “Act”)), has requested a determination, pursuant to the provisions of sec­ revoked, and any change in the facts and circum­ stances relied upon by the Board in making this tion 2(g)(3) of the Act (12 U.S.C. § 1841(g)(3)), determination could result in the Board recon­ that with respect to the sale by C&S of its stock sidering the determination made herein. interest in DeSoto, Inc., Savannah, Georgia (“DeSoto”), to Mr. Talbert C. Bryant, C&S is By order of the Board of Governors, acting not in fact capable of controlling Mr. Bryant or through its General Counsel, pursuant to delegated DeSoto notwithstanding the fact that Mr. Bryant authority (12 C.F.R. § 265.2(b)(1)), effective July and DeSoto are indebted to C&S. 12, 1979. Under the provisions of section 2(g)(3) of the (Signed) Edward T. Mulrenin, Act, shares transferred after January 1, 1966, by [seal] Assistant Secretary of the Board. any bank holding company to a transferee that is indebted to the transferor are deemed to be indi­ rectly owned or controlled by the transferor unless the Board determines that the transferor is not in fact capable of controlling the transferee. C&S has submitted to the Board evidence to show that it is not in fact capable of controlling Mr. Bryant 1. On the same day Mr. Bryant purchased the shares of or DeSoto. DeSoto, he sold all but 2 shares to six individuals. Except for a routine charge and checking account kept with C&S by It is hereby determined that C&S is not in fact two of the individuals there is no other indebtedness or affilia­ capable of controlling Mr. Bryant or DeSoto. This tion with C&S by these six individuals. Thus, there is no determination is based upon the evidence of record presumption of control of any of these individuals by C&S. In addition, the nature of their relationship with Mr. Bryant in this matter that reflects the following: and DeSoto, their geographical dispersion and the absence of Mr. Bryant had no previous relationship with any facts of record indicating that their purchase of DeSoto shares was other than an arm’s-length business transaction, C&S or its affiliates and the sale of C&S’s interest indicate that C&S does not in fact control any of the individ­ in DeSoto appears to have been the result of uals. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

674 Federal Reserve Bulletin □ August 1979 Orders Approved Under Bank Holding Company Act By The Board of Governors During July 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 Applicant Bank(s) date) American National Creighton The American National Bank of Creighton, July 9, 1979 Company, Creighton, Creighton, Nebraska Nebraska Ashland Bancshares, Inc., Ashland State Bank, July 9, 1979 Chicago, Illinois Chicago, Illinois Associated Banc-Corp., Kimberly State Bank, July 9, 1979 Green Bay, Wisconsin Kimberly, Wisconsin Citizens Bancorp, Peoples Bank of South Jersey, July 16, 1979 Vineland, New Jersey Clayton, New Jersey Citizens B ancorporation, Two Rivers Savings Bank, July 23, 1979 Sheboygan, Wisconsin Two Rivers, Wisconsin First National Bancshares The First National Bank of Lexington, July 30, 1979 Corporation, Lexington, Lexington, Tennessee Tennessee First National Stanton Corp., The First National Bank of Stanton, July 30, 1979 Stanton, Nebraska Stanton, Nebraska First Security Corporation, First Security State Bank of American Fork, July 13, 1979 Salt Lake City, Utah American Fork, Utah Grand Ridge Bancorporation, The First National Bank of Grand Ridge, July 25, 1979 Grand Ridge, Illinois Grand Ridge, Illinois Mannford Bancshares, Inc., Mannford State Bank, July 26, 1979 Mannford, Oklahoma Mannford, Oklahoma Republic of Texas Corporation, Bank of A&M, July 31, 1979 Dallas, Texas College Station, Texas St. Anthony National Company, St. Anthony National Bank, July 16, 1979 St. Anthony Village, Minnesota St. Anthony Village, Minnesota St. Michael Bancorporation, Inc., Security State Bank of St. Michael, July 20, 1979 St. Michael, Minnesota St. Michael, Minnesota Schuyler Bancorp, Inc., Schuyler State Bank, July 13, 1979 Springfield, Illinois Rushville, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Law Department 675 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 4 Nonbanking Company Reserve Effective Applicant (or activity) Bank date First Railroad & Banking Company to engage in underwriting Atlanta June 29, 1979 of Georgia, Augusta, Georgia insurance Orders Approved Under Bank Merger Act Reserve Effective Applicant Bank(s) Bank date * Naumkeag Trust Company, The Merchants National Bank of Boston July 17, 1979 Salem, Massachusetts Newburyport, Newburyport, Massachusetts United Jersey Bank, Hackensack, United Jersey Bank/Par-Troy, New York July 17, 1979 New Jersey Parsippany, New Jersey Pending Cases Involving the Board of Governors Independent Insurance Agents of America, et al., Does not include suits against the Federal Reserve v. Board of Governors, filed March 1979, Banks in which the Board of Governors is not U.S.C.A. for the District of Columbia. named a party. Credit and Commerce American Investment, et Donald W. Riegel, Jr. v. Federal Open Market al., v. Board of Governors, filed March 1979, Committee, filed July 1979, U.S.D.C. for the U.S.C.A. for the District of Columbia. District of Columbia. Consumers Union of the United States, v. G. Connecticut Bankers Association, et al., v. Board William Miller, et al., filed December 1978, of Governors, filed May 1979, U.S.C.A. for U.S.D.C. for the District of Columbia. the District of Columbia. Manchester-Tower Grove Community Organi­ Ella Jackson et al., v. Board of Governors, filed zation/ACORN v. Board of Governors, filed May 1979, U.S.C.A. for the Fifth Circuit. September 1978, U.S.C.A. for the District of Memphis Trust Company v. Board of Governors, Columbia. filed May 1979, U.S.C.A. for the Sixth Circuit. Beckley v. Board of Governors, filed July 1978, U.S. Labor Party v. Board of Governors, filed U.S.C.A. for the Northern District of Illinois. April 1979, U.S.C.A. for the Second Circuit. Independent Bankers Association of Texas v. First U.S. Labor Party v. Board of Governors, filed National Bank in Dallas, et al., filed July 1978, April 1979, U.S.C.A. for the Second Circuit. U.S.C.A. for the Northern District of Texas. Independent Insurance Agents of America, et al., Mid-Nebraska Bancshares, Inc. v. Board of Gov­ v. Board of Governors, filed May 1979, ernors, filed July 1978, U.S.C.A. for the Dis­ U.S.C.A. for the District of Columbia. trict of Columbia. Independent Insurance Agents of America, et al., United States League of Savings Associations v. v. Board of Governors, filed April 1979, Board of Governors, filed May 1978, U.S.D.C. U.S.C.A. for the District of Columbia. for the District of Columbia. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

676 Federal Reserve Bulletin □ August 1979 Security Bancorp and Security National Bank v. nors, filed September 1977, U.S.D.C. for the Board of Governors, filed March 1978, District of Columbia. U.S.C.A. for the Ninth Circuit. Roberts Farms, Inc. v. Comptroller of the Cur­ Wisconsin Bankers Association v. Board of Gov­ rency, et al., filed November 1975, U.S.D.C. ernors, filed January 1978, U.S.C.A. for the for the Southern District of California. District of Columbia. David R. Merrill, et al., v. Federal Open Market Vickars-Henry Corp. Board of Governors, filed Committee of the Federal Reserve System, filed December 1977, U.S.C. A. for the Ninth Circuit. May 1975, U.S.D.C. for the District of Colum­ Investment Company Institute v. Board of Gover­ bia. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

677 M em bership o f the Board o f Governors o f the Federal Reserve System, 1913-79 A ppointive M embers1 Federal Reserve Date of initial Other dates and information relating Name District oath of office ________ to membership2_________ Charles S. Hamlin .Boston................Aug. 10, 1914 Reappointed in 1916 and 1926. Served until Feb. 3, 1936.3 Paul M. Warburg ............New York .................. do Term expired Aug. 9, 1918. Frederic A. Delano .........Chicago ..................... do Resigned July 21, 1918. W. P. G. Harding ...........Atlanta ....................... do Term expired Aug. 9, 1922. Adolph C. Miller ............San Francisco ............ do Reappointed in 1924. Reappointed in 1934 from the Richmond District. Served until Feb. 3, 1936.3 Albert Strauss .................New York ..........Oct. 26, 1918 Resigned Mar. 15, 1920. Henry A. Moehlenpah__Chicago .............Nov. 10, 1919 Term expired Aug. 9, 1920. Edmund Platt ...................New York ..........June 8, 1920 Reappointed in 1928. Resigned Sept. 14,1930. David C. Wills ................Cleveland ..........Sept. 29, 1920 Term expired Mar. 4, 1921. John R. Mitchell..............Minneapolis .......May 12, 1921 Resigned May 12, 1923. Milo D. Campbell ...........Chicago .............Mar. 14, 1923 Died Mar. 22, 1923. Daniel R. Crissinger........Cleveland ..........May 1, 1923 Resigned Sept. 15, 1927. George R. James ............St. Louis ............May 14, 1923 Reappointed in 1931. Served until Feb. 3, 1936.3 Edward H. Cunningham . .Chicago .....................do ......... Died Nov. 28, 1930. Roy A. Young.................Minneapolis .......Oct. 4, 1927 Resigned Aug. 31, 1930. Eugene Meyer .................New York ..........Sept. 16, 1930 Resigned May 10, 1933. Wayland W. Magee ........Kansas City .......May 18, 1931 Term expired Jan. 24, 1933. Eugene R. Black .............Atlanta ...............May 19, 1933 Resigned Aug. 15, 1934. M. S. Szymczak..............Chicago .............June 14, 1933 Reappointed in 1936 and 1948. Resigned May 31, 1961. J. J. Thomas....................Kansas City ............... do ....... Served until Feb. 10, 1936.3 Marriner S. Eccles...........San Francisco .. .Nov. 15, 1934 Reappointed in 1936, 1940, and 1944. Resigned July 14, 1951. Joseph A. Broderick........New York ..........Feb. 3, 1936 Resigned Sept. 30, 1937. John K. McKee................Cleveland .................. do ....... Served until Apr. 4, 1946.3 Ronald Ransom ..............Atlanta ....................... do ....... Reappointed in 1942. Died Dec. 2, 1947. Ralph W. Morrison.........Dallas ................Feb. 10, 1936 Resigned July 9, 1936. ChesterC. Davis .............Richmond __...June 25, 1936 Reappointed in 1940. Resigned Apr. 15,1941. Ernest G. Draper .............New York ..........Mar. 30, 1938 Served until Sept. 1, 1950.3 Rudolph M. Evans .........Richmond ..........Mar. 14, 1942 Served until Aug. 13, 1954.3 James K. Vardaman, Jr. ..St. Louis ...........Apr. 4, 1946 Resigned Nov. 30, 1958. Lawrence Clayton ...........Boston................Feb. 14, 1947 Died Dec. 4, 1949. Thomas B. McCabe ........Philadelphia .......Apr. 15, 1948 Resigned Mar. 31, 1951. Edward L. Norton ...........Atlanta ...............Sept. 1, 1950 Resigned Jan. 31, 1952. Oliver S. Powell..............Minneapolis ............... do ....... Resigned June 30, 1952. Wm. McC. Martin, Jr. .. .New York .........Apr. 2, 1951 Reappointed in 1956. Term expired Jan. 31, 1970. A. L. Mills, Jr...................SanFrancisco ...Feb. 18, 1952 Reappointed in 1958. Resigned Feb. 28,1965. J. L. Robertson ................Kansas City ............... do ....... Reappointed in 1964. Resigned Apr. 30,1973. Paul E. Miller .................Minneapolis .......Aug. 13, 1954 Died Oct. 21, 1954. C. Canby Balderston ......Philadelphia .......Aug. 12, 1954 Served through Feb. 28, 1966. For notes, see page 678. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

678 Federal Reserve Bulletin □ August 1979 Federal Reserve Date of initial Other dates and information relating Name District oath of office to membership2 Chas. N. Shepardson .Dallas ................Mar. 17, 1955 Retired Apr. 30, 1967. G. H. King, Jr........... .Atlanta ..............Mar. 25, 1959 Reappointed in 1960. Resigned Sept. 18,1963. George W. Mitchell . .Chicago .............Aug. 31, 1961 Reappointed in 1962. Served until Feb. 13,1976.3 J. Dewey Daane ...... .Richmond .........Nov. 29, 1963 Served until Mar. 8, 1974.3 Sherman J. Maisel ... .SanFrancisco ... Apr. 30, 1965 Served through May 31, 1972. Andrew F. Brimmer . .Philadelphia ......Mar. 9, 1966 Resigned Aug. 31, 1974. William W. Sherrill . .Dallas ...............May 1, 1967 Reappointed in 1968. Resigned Nov. 15,1971. Arthur F. Burns ...... .New York .........Jan. 31, 1970 Term began Feb..l, 1970. Resigned Mar. 31, 1978. John E. Sheehan...... .St. Louis ...........Jan. 4, 1972 Resigned June 1, 1975. Jeffrey M. Bucher ... .SanFrancisco ...June 5, 1972 Resigned Jan. 2, 1976. Robert C. Holland ... .Kansas City ......June 11, 1973 Resigned May 15, 1976. Henry C. Wallich .... .Boston................Mar. 8, 1974 Philip E. Cold well ... .Dallas ................Oct. 29, 1974 Philip C. Jackson, Jr. .Atlanta ..............July 14, 1975 Resigned Nov. 17, 1978. J. Charles Partee...... .Richmond .........Jan. 5, 1976 Stephen S. Gardner .. .Philadelphia ......Feb. 13, 1976 Died Nov. 19, 1978. David M. Lilly ........ .Minneapolis ......June 1, 1976 Resigned Feb. 24, 1978. G. William Miller ... .SanFrancisco ...Mar. 8, 1978 Resigned Aug. 6, 1979. Nancy H. Teeters__ .Chicago .............Sept. 18, 1978 Emmett J. Rice........ .New York.........June 20, 1979 Frederick H. Schultz .Atlanta ..............July 27, 1979 Paul A. Volcker......... .Philadelphia ......Aug. 6, 1979 Chairmen4 Vice Chairmen4 Charles S. Hamlin.... Aug. 10, 1914-Aug. 9, 1916 Frederic A. Delano... Aug. 10, 1914-Aug. 9, 1916 W. P. G. Harding.... Aug. 10, 1916-Aug. 9, 1922 Paul M. Warburg......Aug. 10, 1916-Aug. 9, 1918 Daniel R. Crissinger .May 1, 1923-Sept. 15, 1927 Albert Strauss ...........Oct. 26, 1918-Mar. 15, 1920 Roy A. Young .........Oct. 4, 1927-Aug. 31, 1930 Edmund Platt.............July 23, 1920-Sept. 14, 1930 Eugene Meyer...........Sept 16, 1930-May 10, 1933 J. J. Thomas ............Aug. 21, 1934-Feb. 10, 1936 Eugene R. Black......May 19, 1933-Aug. 15, 1934 Ronald Ransom ........Aug. 6, 1936-Dec. 2, 1947 Marriner S. Eccles ...Nov. 15, 1934-Jan. 31, 1948 C. Canby Balderston Mar. 11, 1955-Feb. 28, 1966 Thomas B. McCabe.. Apr. 15, 1948-Mar. 31, 1951 J. L. Robertson.........Mar. 1, 1966-Apr. 30, 1973 Wm. McC.Martin, Jr. Apr. 2, 1951-Jan. 31, 1970 George W. Mitchell.. May 1, 1973-Feb. 13, 1976 Arthur F. Burns........Feb. 1, 1970-Jan. 31, 1978 Stephen S. Gardner ..Feb. 13, 1976-Nov. 19, 1978 G. William Miller.... Mar. 8, 1978-Aug. 6, 1979 Frederick H. Schultz .July 27, 1979- Paul A. Volcker ......Aug. 6, 1979- Ex -Officio M embers1 Secretaries of the Treasury Comptrollers of the Currency W. G. McAdoo........Dec. 23, 1913-Dec. 15, 1918 John Skelton Williams Feb. 2, 1914-Mar. 2, 1921 Carter Glass..............Dec. 16, 1918-Feb. 1, 1920 Daniel R. Crissinger .Mar. 17, 1921-Apr. 30, 1923 David F. Houston ....Feb. 2, 1920-Mar. 3, 1921 Henry M. Dawes......May 1, 1923-Dec. 17, 1924 Andrew W. Mellon .,Mar. 4, 1921-Feb. 12, 1932 Joseph W. McIntosh . Dec. 20, 1924-Nov. 20, 1928 Ogden L. Mills.........Feb. 12, 1932-Mar. 4, 1933 J.W. Pole .................Nov. 21, 1928-Sept. 20, 1932 William H. Woodin..Mar. 4, 1933-Dec. 31, 1933 J. F. T. O’Connor .... May 11, 1933-Feb. 1, 1936 Henry Morgenthau, Jr.. Jan. 1, 1934-Feb. 1, 1936 1. Under the provisions of the original Federal Reserve Act Secretary of the Treasury and the Comptroller of the Currency the Federal Reserve Board was composed of seven members, should continue to serve as members until Feb. 1, 1936; that including five appointive members, the Secretary of the Treas­ the appointive members in the office on the date of that act ury, who was ex-officio chairman of the Board, and the should continue to serve until Feb. 1, 1936, or until their Comptroller of the Currency. The original term of office was successors were appointed and had qualified; and that thereafter ten years, and the five original appointive members had terms the terms of members should be 14 years and that the designa­ of two, four, six, eight, and ten years respectively. In 1922 tion of Chairman and Vice Chairman of the Board should be the number of appointive members was increased to six, and for a term of four years. in 1933 the term of office was increased to 12 years. The 2. Date after words “Resigned” and “Retired” denotes Banking Act of 1935, approved Aug. 23, 1935, changed the final day of service. name of the Federal Reserve Board to the Board of Governors 3. Successor took office on this date. of the Federal Reserve System and provided that the Board 4. Chairman and Vice Chairman were designated Governor should be composed of seven appointive members; that the and Vice Governor before Aug. 23, 1935. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Al F in a n cial and Business S tatistics Contents D om estic F inancial 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 Markets A10 Maximum interest rates payable on A25 Commercial paper and bankers dollar 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 A28 Stock market—Selected statistics A12 Condition and Federal Reserve note statements A29 Savings institutions—Selected assets A13 Maturity distribution of loan and and liabilities security holdings Monetary and Credit Aggregates 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 Assets and Liabilities A34 U.S. government securities dealers— A16 Last-Wednesday-of-month series Transactions, positions, and financing A17 Call-date series A35 Federal and federally sponsored credit A18 Detailed balance sheet, September 30, 1978 agencies—Debt outstanding Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A2 Federal Reserve Bulletin □ August 1979 Securities Markets and International Statistics Corporate Finance A54 U.S. international transactions— A36 New security issues—State and local Summary governments and corporations A55 U.S. foreign trade A37 Open-end investment companies—Net A55 U.S. reserve assets sales and asset position A56 Foreign branches of U.S. banks— A37 Corporate profits and their distribution Balance sheet data 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 A62 Banks’ own and domestic customers’ Real Estate claims on foreigners A62 Banks’ own claims on unaffiliated foreigners A40 Mortgage markets A63 Claims on foreign countries— A41 Mortgage debt outstanding Combined domestic offices and foreign branches Securities Holdings and Transactions Consumer Installment Credit A64 Marketable U.S. Treasury bonds and A42 Total outstanding and net change notes—Foreign holdings and transactions A43 Extensions and liquidations A64 Foreign official assets held at Federal Reserve Banks A65 Foreign transactions in securities Flow of Funds Reported by Nonbanking Business A44 Funds raised in U.S. credit markets Enterprises in the United States A45 Direct and indirect sources of funds to credit markets A66 Liabilities to unaffiliated foreigners A67 Claims on unaffiliated foreigners Interest and Exchange Rates D om estic N onfinancial Statistics A68 Discount rates of foreign central banks A46 Nonfinancial business activity— A68 Foreign short-term interest rates Selected measures A46 Output, capacity, and capacity utilization S p ecia l T able A47 Labor force, employment, and unemployment A69 Sales, revenue, profits, and dividends of A48 Industrial production—Indexes and large manufacturing corporations gross value A50 Housing and construction In side B a ck C o ver A51 Consumer and wholesale prices A52 Gross national product and income Guide to Tabular Presentation and A53 Personal income and saving 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 1979 1979 Item Q3 Q4 Ql Q2 Feb. Mar. Apr. May r June Monetary and credit aggregates (annual rates of change, seasonally adjusted in percent)13 Member bank reserves 1 Total................................................................................................ 8.6 2.3 -2.9 -4.9 -21.0 1.8 -4.9 r—4.9 1.8 2 Required......................................................................................... 8.6 2.1 -2.8 -4.8 -20.9 3.3 -5.5 -3.9 -4.1 3 Nonborrowed................................................................................ 6.6 4.6 -3.3 -8.8 -20.6 1.3 -2.9 -30.6 8.9 4 Monetary base1............................................................................ 9.3 8.4 5.7 4.0 —. 5 4.6 4.9 3.1 6.1 Concepts of money 2 5 M-l.................................................................................................. 7.9 4.1 -2.1 7.6 -3.7 1.3 17.7 .7 14.8 6 M-1 + .............................................................................................. 6.1 r2.7 -5.0 3.6 r —6.8 '-1.0 n 1.4 -2.3 12.1 7 M-2.................................................................................................. 9.8 7.6 1.8 8.6 2.3 3.8 14.1 5.4 14.2 8 M-3.................................................................................................. 10.3 9.3 4.7 7.9 4.8 6.2 r10.5 4.9 11.9 Time and savings deposits Commercial banks 9 Total............................................................................................ 11.3 12.3 8.4 1.2 8.6 -1.4 2.1 -1.4 0.8 10 Savings........................................................................................ 2.9 0.2 -9.6 -3.1 -12.0 -4.9 0 -7.2 7.8 11 Other time.................................................................................. 17.9 18.2 15.6 18.5 20.0 M3.6 M9.8 19.9 17.6 12 Thrift institutions 3....................................................................... 11.1 11.6 8.8 6.8 8.2 9.5 5.6 4.1 8.8 13 Total loans and investments at commercial banks*............. 11.8 10.7 11.0 14.0 10.9 5.8 13.8 12.1 15.7 1978 1979 1979 Q3 Q4 Ql Q2 Mar. Apr. May June July Interest rates (levels, percent per annum) Short-term rates 14 Federal funds5.............................................................................. 8.09 9.58 10.07 10.18 10.09 10.01 10.24 10.29 10.47 15 Federal Reserve discount6......................................................... 7.50 9.09 9.50 9.50 9.50 9.50 9.50 9.50 9.69 16 Treasury bills (3-month market yield)?.................................. 7.31 8.57 9.38 9.38 9.48 9.46 9.61 9.06 9.24 17 Commercial paper (90- to 119-day)7'8.................................... 8.03 9.83 10.04 9.85 9.90 9.85 9.95 9.76 9.87 Long-term rates Bonds 18 U.S. government9..................................................................... 8.53 8.78 9.03 9.08 9.08 9.12 9.21 8.91 8.92 19 State and local government10............................................... 6.16 6.28 6.37 6.22 6.33 6.29 6.25 6.13 6.13 20 Aaa utility (new issue)11........................................................ 8.94 9.23 9.58 9.66 9.62 9.70 9.83 9.50 9.58 21 Conventional mortgages12......................................................... 9.80 10.12 10.33 10.35 10.35 10.55 10.80 10.90 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 de&lers 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. Growth rates for 5. Seven-day averages of daily effective rates (average of the rates on member bank reserves are adjusted for discontinuities in series that result a given date weighted by the volume of transactions at those rates). from changes in Regulations D and M. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A4 Domestic Financial Statistics □ August 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 May June JulyP June 13 June 20 June 27 July 4 July 11 July 18p July 25 p Supplying Reserve Funds 1 Reserve Bank credit outstanding........ 128,597 129,035 131,620 128,073 130,218 129,514 131,890 130,363 132,943 131,818 2 U.S. government securities 1.............. 106,100 106,865 109,921 106,024 108,052 107,704 109,221 108,100 110,986 110,338 3 Bought outright.............................. 106,003 105,825 108,673 106,024 105,777 107,212 106,208 107,875 109,382 108,848 4 Held under repurchase agree­ ments ........................................... 97 1,040 1,248 0 2,275 492 3,013 225 1,604 1,490 5 Federal agency securities................... 7,475 7,788 8,377 7,409 7,911 7,945 8,602 7,797 8,572 8,512 6 Bought outright.............................. 7,433 7,537 7,854 7,409 7,443 7,761 7,761 7,761 7,761 7,761 7 Held under repurchase agree- 42 251 523 0 468 184 841 36 811 751 8 Acceptances........................................ 40 310 717 0 537 185 1,198 179 711 940 9 Loans.................................................. 1,777 1.396 1,179 1,299 1,324 1,586 1,677 941 1,181 1,292 10 Float.................................................... 6,652 6,383 5,793 7,029 5,990 5,900 5,495 7,550 5,588 5,227 11 Other Federal Reserve assets............ 6,553 6,293 5,633 6,313 6,404 6,195 5,697 5,796 5,904 5,509 12 Gold stock.......................................... 11,370 11,328 11,299 11,323 11,323 11,323 11,322 11,308 11,291 11,291 13 Special drawing rights certificate account............................................ 1,413 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 14 Treasury currency outstanding.......... 12,234 12,357 12,442 12,315 12,355 12,403 12,459 12,420 12,448 12,456 Absorbing Reserve Funds 15 Currency in circulation...................... 114,276 115,819 117,697 115,852 115,870 115,837 116,973 118,135 118,082 117,480 16 Treasury cash holdings....................... 373 369 335 372 374 370 360 362 353 320 Deposits, other than member bank reserves, with Federal Reserve Banks 17 Treasury.............................................. 3,350 3,271 3,303 3,448 3,482 3,550 3,389 3,649 3,307 3,182 18 Foreign................................................ 281 284 288 245 297 297 331 309 279 248 19 Other................................................... 821 661 761 630 691 587 828 637 857 826 20 Other Federal Reserve liabilities and capital.............................................. 4,305 4,294 4,551 4,133 4,376 4,458 4,704 4,185 4,510 4,618 21 Member bank reserves with Federal Reserve Banks................................. 30,208 29,822 30,226 28,831 30,607 29,942 30,885 28,614 31,095 30,689 End-of-month figures Wednesday figures 1979 1979 May June July2* June 13 June 20 June 27 July 4 July 11 July 18» July 25» Supplying Reserve Funds 22 Reserve bank credit outstanding........ 129,733 130,972 131,134 126,316 130,156 133,052 128,822 126,085 135,348 130,004 23 U.S. government securities1.............. 106,185 109,737 111,445 103,140 105,122 109,341 106,182 103,843 111,387 108,104 24 Bought outright.............................. 106,185 106,432 109,366 103,140 103,930 106,793 105,066 103,843 109,265 107,383 25 Held under repurchase agree­ ments ........................................... 0 3,305 2,079 0 1,192 2,548 1,116 0 2,122 721 26 Federal agency securities................... 7,423 8,587 8,881 7,390 7,778 8,758 8,028 7,761 8,599 8,482 27 Bought outright.............................. 7,423 7,761 8,243 7,390 7,761 7,761 7,761 7,761 7,761 7,761 28 Held under repurchase agree- 0 826 638 0 17 997 267 0 838 721 29 Acceptances........................................ 0 1,400 1,159 0 216 840 682 0 1,064 824 30 Loans.................................................. 1,330 1,558 851 981 1,929 2,922 2,433 1,252 1,502 1,168 31 Float.................................................... 8,518 3,924 3,557 8,322 8,439 5,156 5,813 7,206 7,026 6,144 32 Other Federal Reserve assets............ 6,277 5,766 5,241 6,483 6,672 6,035 5,684 6,023 5,770 5,282 33 Gold stock.......................................... 11,354 11,323 11,290 11,323 11,323 11,323 11,321 11,295 11,291 11,291 34 Special drawing rights certificate account............................................ 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 35 Treasury currency outstanding.......... 12,362 12,525 12,475 12,347 12,365 12,409 12,409 12,447 12,456 12,456 Absorbing Reserve Funds 36 Currency in circulation...................... 115,335 116,575 117,767 116,292 116,087 116,479 117,814 118,643 118,089 117,587 37 Treasury cash holdings...................... 364 370 268 359 362 365 349 345 343 311 Deposits, other than member bank reserves, with Federal Reserve Banks 38 Treasury.............................................. 1,974 3,290 2,765 3,280 2,899 3,597 3,436 2,919 3,668 2,336 39 Foreign................................................ 407 326 373 208 294 270 315 287 269 239 40 Other................................................... 852 813 636 595 685 573 641 594 656 675 41 Other Federal Reserve liabilities and capital.............................................. 4,715 4,836 4,951 4,360 4,346 4,622 4,187 4,257 4,491 4,741 42 Member bank reserves with Federal Reserve Banks................................. 31,602 30,407 29,939 26,692 30,971 32,678 27,610 24,582 33,378 29,662 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 1978 1979 Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July35 All member banks Reserves 1 At Federal Reserve Banks............. 28,701 29,853 31,158 31,935 30,485 30,399 30,675 30,208 29,822 30,226 2 Currency and coin.......................... 9,654 9,794 10,330 11,093 10,074 9,776 9,737 10,044 10,154 10,551 3 Total held i...................................... 38,434 39,728 41,572 43,167 40,703 40,316 40,546 40,382 40,105 40,900 4 Required...................................... 38,222 39,423 41,447 42,865 40,494 40,059 40,548 40,095 39,884 40,716 5 Excess i........................................ 212 305 125 302 209 257 -2 287 221 184 Borrowings at Federal Reserve Banks2 1,261 722 874 994 973 999 897 1,777 1,396 1,179 7 Seasonal.......................................... 221 185 134 112 114 121 134 173 188 168 Large banks in New York City 6,428 6,682 7,120 7,808 6,995 6,892 6,804 6,658 6,346 6,518 6,349 6,658 7,243 7,690 6,976 6,845 6,837 6,544 6,415 6,587 79 24 -123 118 19 47 -33 114 -69 -69 157 48 99 117 0 45 61 150 78 97 Large banks in Chicago 1,672 1,791 1,907 2,011 1,824 1,822 1,801 1,730 1,726 1,715 1,649 1,765 1,900 2,010 1,823 1,809 1,824 1,712 1,697 1,713 23 26 7 1 1 13 -23 18 29 2 14 4 10 23 10 26 18 60 64 45 Other large banks 14,862 15,547 16,446 16,942 16,055 15,844 15,948 15,926 15,989 16,299 14,867 15,447 16,342 16,923 16,018 15,802 16,014 15,893 15,877 16,338 -5 100 104 19 37 42 -66 33 112 -39 408 194 276 269 275 215 271 721 586 518 All other banks 20 Reserves held...................................... 15,472 15,708 16,099 16,406 15,829 15,758 15,993 16,068 16,044 16,121 15,357 15,553 15,962 16,242 15,677 15,603 15,873 15,946 15,895 16,078 22 Excess.............................................. 115 155 137 164 152 155 120 122 149 43 682 476 489 585 688 713 547 846 668 519 Weekly averages of daily figures for weeks ending 1979 May 23 May 30 June 6 June 13 June 20 June 27 July 4 July 11 July 18? July 25p All member banks Reserves 24 At Federal Reserve Banks............. 30,133 29,663 29,383 28,831 30,607 29,942 30,885 28,614 31,095 30,689 25 Currency and coin.......................... 9,354 9,979 10,153 10,366 9,867 10,110 10,439 10,736 10,333 10,438 26 Total held i...................................... 39,613 39,771 39,665 39,327 40,604 40,181 41,448 39,476 41,543 41,251 27 Required...................................... 39,596 39,588 39,305 39,249 40,472 40,030 40,802 39,513 41,251 41,215 17 183 360 78 132 151 646 -37 292 36 Borrowings at Federal Reserve Banks2 29 Total................................................. 1,703 2,327 1,340 1,299 1,324 1,586 1,677 941 1,181 1,292 30 Seasonal.......................................... 169 198 193 181 186 194 186 162 160 168 Large banks in New York City 6,413 6,405 6,378 6,205 6,649 6,334 6,717 6,201 6,765 6,531 6,447 6,354 6,359 6,220 6,666 6,301 6,657 6,264 6,868 6.624 -34 51 19 -15 -17 33 60 -63 -103 -93 54 344 62 0 126 59 416 39 54 7 Large banks in Chicago 1,654 1,708 1,735 1,782 1,698 1,615 1,755 1,656 1,713 1,714 1,667 1,693 1,674 1,805 1,690 1,600 1,737 1,645 1,782 1,743 -13 15 61 -23 8 15 18 11 -69 -29 36 95 0 41 71 105 185 0 0 7 Other large banks 15,638 15,655 15,651 15,598 16,151 16,008 16,535 15,788 16,752 16,525 15,630 15,672 15,558 15,625 16,104 16,003 16,274 15,864 16,582 16,526 8 -17 93 -27 47 5 261 -76 170 -1 803 844 509 663 529 676 476 485 642 695 All other banks 15,908 16,003 15,901 15,742 16,106 16,224 16,441 15,831 16,058 16,322 15,852 15,869 15,714 15,599 16,012 16,126 16,134 15,740 16,019 16,322 56 134 187 143 94 98 307 91 39 0 810 1,044 769 595 598 746 600 417 485 583 1. Adjusted to include waivers of penalties for reserve deficiencies in nonmember bank joins the Federal Reserve System. For weeks for which accordance with board policy, effective Nov. 19, 1975, of permitting figures are preliminary, figures by class of bank do not add to total transitional relief on a graduated basis over a 24-month period when a because adjusted data by class are not available, nonmember bank merges into an existing member bank, or when a 2. Based on closing figures. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Financial Statistics □ August 1979 1.13 FEDERAL FUNDS TRANSACTIONS Money Market Banks Millions of dollars, except as noted 1979, week ending Wednesday Type May 30 June 6 June 13 June 20 June 27 July 4 July 11 July 18 July 25 Total, 46 banks Basic reserve position 1 Excess reserves1.................................... 31 132 -55 -10 53 297 -31 101 -41 Less: 2 Borrowings at Federal Reserve Banks................................................... 696 249 287 214 356 828 285 137 342 3 Net interbank federal funds transactions............*........................ 15,474 19,113 21,118 20,078 17,069 19,195 23,670 20,926 20,175 4 E A q m u o a u l n s: t . N .... e .. t . .. s . u ... r . p ... l . u .. s .. , . . o ... r . .. d .. e .. f . i . c .. i . t .. . ( .. — .... ) .. -16,138 -19,231 -21,460 -20,302 -17,372 -19,726 -23,986 -20,962 -20,558 5 Percent of average required reserves............................................... 98.0 117.3 130.1 119.2 105.2 115.5 145.5 118.4 118.7 Interbank federal funds transactions Gross transactions 6 Purchases............................................ 23,585 27,054 28,832 28,818 26,009 29,014 31,723 29,583 27,484 7 Sales.................................................... 8,111 7,941 7,714 8,740 8,941 9,819 8,053 8,657 7,308 8 Two-way transactions2....................... 5,824 6,549 5,363 5,729 5,584 6,716 6,786 6,378 6,372 Net transactions 9 Purchases of net buying banks — 17,761 20,505 23,469 23,089 20,425 22,298 24,937 23,205 21,112 10 Sales of net selling banks............... 2,287 1,391 2,351 3,011 3,356 3,102 1,267 2,280 937 Related transactions with U.S. government securities dealers 11 Loans to dealers 3......................... 3,591 4,407 4,053 4,144 2,630 3,628 4,919 2,738 2,492 12 Borrowing from dealers4........... 1,870 1,844 1,949 1,770 2,078 1,868 1,344 1,843 2,088 13 Net loans........................................ 1,722 2,563 2,103 2,374 552 1,760 3,575 895 404 8 banks in New York City Basic reserve position 14 Excess reserves1......................... 51 21 7 -18 23 63 -6 35 -42 Less: 15 Borrowings at Federal Reserve Banks........................................ 344 62 0 112 59 413 29 54 7 16 Net interbank federal funds transactions............................. 2,874 3,794 6,053 6,112 4,804 5,833 7,082 4,159 5,383 Equals : Net surplus, or deficit ( 17 Amount...................................... -3,167 -3,834 -6,046 -6,242 -4,839 -6,183 -7,116 -4,178 -5,432 18 Percent of average required reserves.................................. 55.3 66.8 108.2 104.0 85.5 103.5 126.5 67.9 91.6 Interbank federal funds transactions Gross transactions 19 Purchases............................................ 4,521 5,250 6,824 6,979 5,788 6,999 7,905 6,252 6,497 20 Sales..................................................... 1,647 1.456 771 867 984 1,166 823 2,093 1.114 21 Two-way transactions2....................... 1,361 1.456 771 867 984 1,057 823 1,052 1.114 Net transactions 22 Purchases of net buying banks---- 3,160 3,794 6,053 6,112 4,804 5,942 7,082 5,200 5,383 23 Sales of net selling banks............... 286 0 0 0 0 109 0 1,041 0 Related transactions with U.S. government securities dealers 24 Loans to dealers3......................... 1,387 2,073 2,188 2,677 1,465 2,165 3,478 1,652 1,630 25 Borrowing from dealers4........... 541 579 612 752 739 628 633 686 632 26 Net loans........................................ 846 1,494 1,576 1,925 725 1,537 2,844 966 999 38 banks outside New York City Basic reserve position -19 110 -62 7 30 234 -25 66 1 Less: 28 Borrowings at Federal Reserve , 352 187 287 101 298 416 256 84 335 29 Net interbank federal funds transactions.......................................... 12,600 15,320 15,065 13,966 12,265 13,362 16,588 16,767 14,792 Equals: Net surplus, or deficit (—) -12,971 -15,397 -15,414 -14,060 -12,533 -13,543 -16,869 -16,784 -15,126 31 Percent of average required 120.8 144.4 141.3 127.5 115.5 121.9 155.3 145.4 132.7 Interbank federal funds transactions Gross transactions 19,064 21,805 22,008 21,839 20,221 22,015 23,819 23,331 20,986 6,464 6,485 6,943 7,873 7,957 8,653 7,231 6,564 6,194 4,463 5,094 4,592 4,862 4,601 5,659 5,964 5,326 5,258 Net transactions 35 Purchases of net buying banks........ 14,601 16,711 17,416 16,978 15,621 16,356 17,855 18,005 15,729 36 Sales of net selling banks................. 2,001 1,391 2,351 3,011 3,356 2,993 1,267 1,238 937 Related transactions with U.S. government securities dealers 37 Loans to dealers3.................................... 2,205 2,334 1,865 1,467 1,165 1,463 1,441 1,087 861 38 Borrowing from dealers4...................... 1,329 1,266 1,338 1,018 1,339 1,240 711 1,158 1,456 876 1,069 527 449 -174 224 731 -71 -595 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 May 30 June 6 June 13 June 20 June 27 July 4 July 11 July 18 July 25 5 banks in City of Chicago Basic reserve position 40 Excess reserves1.............. 49 15 71 21 19 Less: 41 Borrowings at Federal Reserve Banks............................... 91 0 41 64 102 181 0 0 7 42 Net interbank federal funds transactions..................... 6,112 7,567 8,133 7,232 6,026 6,541 7,965 8,063 6,944 Equals: Net surplus, or deficit (—). 43 Amount.............................................. -6,198 -7,518 -8,181 -7,293 -6,112 -6,652 -7,944 -8,045 -6,949 44 Percent of average required reserves........................................... 392.3 477.8 483.6 462.6 410.4 423.0 519.2 483.5 427.5 Interbank federal funds transactions Gross transactions 45 Purchases........................................ 7,378 8,890 9,219 8,469 7,581 8,033 9,327 9,280 8,252 46 Sales................................................ 1,266 1,323 1,086 1.237 1.555 1.491 1,363 1,216 1.309 47 Two-way transactions2..................... 1,266 1,322 1,086 1.237 1.555 1.491 1,355 1,216 1.309 Net transactions 48 Purchases of net buying banks---- 6,112 7,567 8,133 7,232 6,026 6,541 7,972 8,063 6,944 49 Sales of net selling banks.............. 0 0 0 0 0 7 0 0 Related transactions with U.S. government securities dealers 50 Loans to dealers3....................... 621 626 430 320 126 291 387 162 120 51 Borrowing from dealers4.......... 2 49 75 98 89 28 55 8 52 Net loans.................................... 62i 625 381 246 29 202 359 107 112 33 other banks Basic reserve position 53 Excess reserves1......................... -24 61 -54 14 163 -46 48 -1 Less: 54 Borrowings at Federal Reserve Banks....................................... 260 187 246 37 196 234 256 84 328 55 Net interbank federal funds transactions............................. 6,488 7,753 6,932 6,734 6,239 6,821 8,623 8,703 7,848 Equals: Net surplus, or deficit (—) 56 Amount.............................................. -6,773 -7,879 -7,233 -6,767 -6,421 -6,892 -8,926 -8,739 -8,178 57 Percent of average required reserves........................................... 73.9 86.7 78.5 71.6 68.6 72.3 95.7 88.4 83.7 Interbank federal funds transactions Gross transactions 58 Purchases........................................ 11,686 12,915 12,789 13,370 12,640 13,982 14,491 14,051 12,734 59 Sales................................................ 5,198 5,126 5,857 6,636 6,401 7,161 5,868 5,348 4,886 60 Two-way transactions2..................... 3,197 3,771 3,506 3,625 3,045 4,168 4,608 4,109 3,949 Net transactions 61 Purchases of net buying banks.... 8,489 9,144 9,283 9,746 9,595 9,814 9,883 9,942 8,785 62 Sales of net selling banks.............. 2,001 1,391 2,351 3,011 3,356 2,993 1,260 1,238 937 Related transactions with U.S. government securities dealers 63 Loans to dealers3....................... 1,584 1,708 1,435 1,146 1,039 1,172 1,055 925 742 64 Borrowing from dealers4.......... 1,329 1,264 1,288 943 1,241 1,150 683 1,103 1,448 65 Net loans............................................... 255 147 203 -202 n 37? — 17R — 707 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 □ August 1979 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per annum Current and previous levels Loans to member banks Loans to all others Under sc5C. 10(b)2 under sec. 13, last par.4 Federal Reserve Under secs. 13 and 13a1 Bank Regular rate Special rate 3 Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous 7/31/79 date rate 7/31/79 date rate 7/31/79 date rate 7/31/79 date rate Boston.................. 10 7/20/79 9i/i 10% 7/20/79 10 11 7/20/79 lOVi 13 7/20/79 12Vi New York............ 10 7/20/79 9i/i 10Vi 7/20/79 10 11 7/20/79 lOVi 13 7/20/79 12% Philadelphia......... 10 7/20/79 9i/i 10% 7/20/79 10 11 7/20/79 lOVi 13 7/20/79 12% Cleveland............. 10 7/20/79 9i/i lOVi 7/20/79 10 11 7/20/79 lOVi 13 7/20/79 12% Richmond............ 10 7/20/79 9% lOVi 7/20/79 10 11 7/20/79 lOVi 13 7/20/79 12% Atlanta................. 10 7/20/79 9Vi 101/2 7/20/79 10 11 7/20/79 lOVi 13 7/20/79 12% Chicago................ 10 7/20/79 9 Vi lOVi 7/20/79 10 11 7/20/79 lOVi 13 7/20/79 12% St. Louis............... 10 7/20/79 9 Vi 101/2 7/20/79 10 11 7/20/79 lOVi 13 7/20/79 12% Minneapolis......... 10 7/20/79 9Vi lOVi 7/20/79 10 11 7/20/79 lOVi 13 7/20/79 12% Kansas City.......... 10 7/20/79 9Vi lOVi 7/20/79 10 11 7/20/79 lOVi 13 7/20/79 12% Dallas................... 10 7/20/79 9Vi 10% 7/20/79 10 11 7/20/79 lOVi 13 7/20/79 12% San Francisco.... 10 7/20/79 9Vi lOVi 7/20/79 10 11 7/20/79 lOVi 13 7/20/79 12% 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% 5% 1973—May 4.................. 53/4 534 1976—Jan. 19.................. 5%-6 5% 11.................. 534-6 6 23.................. 5% 5% 1971—Jan. 8................... 514-5% 514 18.................. 6 Nov. 22.................. 514-5% 514 15................... 514 514 June 11.................. 6i/i 26.................. 514 514 19................... 5-514 514 15.................. 6 % 6i/i 22.................... 5-5V4 5 July 2.................. 7 7 1977—Aug. 30.................. 5V4-534 5V4 29................... 5 5 Aug. 14......... 7-7% 7Vi 31.................. 51/4-534 534 Feb. 13................... 434-5 5 23.................. m 7i/i Sept. 2................. 534 534 19................... 434 434 Oct. 26................. 6 6 July 16.................... 434-5 5 1974—Apr. 25.................. m -z 8 23.................... 5 5 30.................. 8 8 1978—Jan. 9................. 6-6% 6% Nov. 11.................... 434-5 5 Dec. 9.................. 7%-s 734 20................. 6% 6% 19.................... 434 434 16.................. 734 734 May 11................. 6%-7 7 Dec. 13.................... 4%-434 434 12................. 7 7 17.................... 4%-434 4% 1975—Jan. 6.................. 714-734 July 3................. 7-714 7V4 24.................... 4% 4% 10.................. 7*4-7*4 7i4 10................. 7i4 7V4 24.................. 714 714 Aug. 21................. 734 734 1973—Jan. 15.................... 5 5 Feb. 5.................. 634-714 634 Sept. 22................. 8 8 Feb. 26................... 5-5% 5% 7.................. 634 634 Oct. 16................. 8-8% 8% Mar. 2................... 5% 5% Mar. 10.................. 614-634 614 20................. 8% 8% Apr. 23................... 5%-534 5% 14.................. 614 614 Nov. 1................. 8%-9% 9% May 16.................. 6-614 6 3................. 9% 9% 23.................. 6 6 1979—July 20................. 10 10 In effect July 31, 1979.... 10 10 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 and 1941-1970; Annual Regulation A. Statistical Digest, 1971-1975, 1972-1976, and 1973-1977. 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 July 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.............................................................................................................. 12/30/76 10 2/13/75 10-100................................................................................................. im 12/30/76 12 2/13/75 100-400........................................................................................................ 123/4 12/30/76 13 2/13/75 Over 400...................................................................................................... 16 Va 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 3/2/67 180 days to 4 years........................................................................... 2lA 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........................................................................... 2 Vi 1/8/76 3 12/12/74 4 years or more................................................................................. 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 □ August 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 July 31, 1979 Previous maximum In effect July 31, 1979 Previous maximum Percent Effective Percent Effective Percent Effective Percent Effective date date date date 1 Savings...................................................... 5V4 7/1/79 5 7/1/73 5ft 7/1/79 5V4 (7) 2 Negotiable order of withdrawal accounts1.............................................. 5 1/1/74 (8) 5 1/1/74 (8) Time accounts2 Fixed ceiling rates by maturity 3 30—89 days............................................. 5 7/1/73 (9) (9) (8) (8) 4 90 days to 1 year................................... 5ft 7/1/73 5 (10) 3534 (7) 51/4 1/21/70 6 5 2 1 t t o o 2 2 f y t e a y r e s a 3 rs .. 3 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J I g 6 7'/I1I/7'3J J I 5 53 1 / /2 4 1 1 / / 2 2 1 1 / / 7 7 0 0 I f (0A/L2 I') J 6 534 1 1 / / 2 2 1 1 / / 7 70 0 7 2ft to 4 years 3...................................... 61/2 7/1/73 53/4 1/21/70 6V4 (7) 6 1/21/70 8 4 to 6 years4.......................................... 7% 11/1/73 (n) 7ft 11/1/73 (U) 9 6 to 8 years4.......................................... 7ft 12/23/74 1V4 11/1/73 73/4 12/23/74 71/2 11/1/73 10 8 years or more4................................... m 6/1/78 (8) 8 6/1/78 (8) 11 Issued to governmental units (all 8 6/1/78 7V4 12/23/74 8 6/1/78 73/4 12/23/74 12 Individual retirement accounts and Keogh (H.R. 10) plans ( 3 years or more) 5............................... 8 6/1/78 7V4 7/6/77 8 6/1/78 734 7/6/77 Special variable ceiling rates by maturity 13 6 months (money market time deposits)6........................................... (12) (12) (12) (12) (12) (12) (1 2) (12) 14 4 years or more..................................... (13) (13) (13) (13) (13) (13) (13> (13) 1. For authorized states only. Federally insured commercial banks, Effective Nov. 1, 1973, ceilings were reimposed on certificates maturing savings and loan associations, cooperative banks, and mutual savings in 4 years or more with minimum denominations of $1,000. There is no banks in Massachusetts and New Hampshire were first permitted to offer limitation on the amount of these certificates that banks can issue. negotiable order of withdrawal (NOW) accounts on Jan. 1, 1974. 12. Commercial banks, savings and loan associations, and mutual Authorization to issue NOW accounts was extended to similar institutions savings banks were authorized to offer money market time deposits effec­ throughout New England on Feb. 27, 1976, and in New York State on tive June 1,1978. The ceiling rate for commercial banks is the discount rate Nov. 10, 1978. on most recently issued 6-month U.S. Treasury bills. Until Mar. 15, 2. For exceptions with respect to certain foreign time deposits see the 1979, the ceiling rate for savings and loan associations and mutual savings Federal Reserve Bulletin for October 1962 (p. 1279), August 1965 (p. banks was 1/a percentage point higher than the rate for commercial banks. 1094), and February 1968 (p. 167). Beginning Mar. 15, 1979, the % percentage point interest differential 3. No minimum denomination. Until July 1, 1979, a minimum of is removed when the 6-month Treasury bill rate is 9 percent or more. $1,000 was required for savings and loan associations, except in areas The full differential is in effect when the 6-month bill rate is 8% percent where mutual savings banks permitted lower minimum denominations. or less. Thrift institutions may pay a maximum 9 percent when the 6-month This restriction was removed for deposits maturing in less than 1 year, bill rate is between 8% and 9 percent. Also effective March 15, 1979, effective Nov. 1, 1973. interest compounding was prohibited on money market time deposit- 4. No minimum denomination. Until July 1,1979, minimum denomina­ at all offering institutions. For both commercial banks and thrift institu­ tion was $1,000 except for deposits representing funds contributed to an tions, the maximum allowable rates in July were as follows: July 5, 8.867 Individual Retirement Account (IRA) or a Keogh (H.R. 10) Plan es­ (thrifts, 9.0); July 12, 9.164; July 19, 9.255; July 25, 9.473. tablished pursuant to the Internal Revenue Code. The $1,000 minimum 13. Effective July 1, 1979, commercial banks, savings and loan associa­ requirement was removed for such accounts in December 1975 and No­ tions, and mutual savings banks are authorized to offer variable ceiling vember 1976, respectively. accounts with no required minimum denomination and with maturities of 5. Accounts maturing in less than 3 years subject to regular ceilings. 4 years or more. The maximum rate for commercial banks is 1 % percent­ 6. Must have a maturity of exactly 26 weeks and a minimum denomina­ age points below the yield on 4-year U.S. Treasury securities; the ceiling tion of $10,000, and must be nonnegotiable. rate for thrift institutions is 1/a percentage point higher than that for com­ 7. July 1, 1973, for mutual savings bank; July 6, 1973 for savings and mercial banks. In July, the ceiling was 7.60 percent at commercial banks loan associations. and 7.85 percent at thrift institutions. 8. No separate account category. 9. Multiple maturity: 4% percent, January 21, 1970; single maturity: Note. Maximum rates that can be paid by federally insured commer­ 5 percent, September 26, 1966. cial banks, mutual savings banks, and savings and loan associations are 10. Multiple maturity: July 20, 1966; single maturity: September 26, established by the Board of Governors of the Federal Reserve System, 1966. the Board of Directors of the Federal Deposit Insurance Corporation, 11. Between July 1, 1973, and Oct. 31, 1973, there was no ceiling for and the Federal Home Loan Bank Board under the provisions of 12 certificates maturing in 4 years or more with minimum denominations CFR 217, 329, and 526, respectively. The maximum rates on time de­ of $1,000; however, the amount of such certificates that an institution posits in denominations of $100,000 or more with maturities of 30-89 could issue was limited to 5 percent of its total time and savings deposits. days were suspended in June 1970; such deposits maturing in 90 days or Sales in excess of that amount, as well as certificates of less than $1,000, more were suspended in May 1973. For information regarding previous were limited to the 6ft percent ceiling on time deposits maturing in 2ft interest rate ceilings on all types of accounts, see earlier issues of the years or more. Federal Reserve Bulletin, the Federal Home Loan Bank Board Journal, and the Annual Report of the Federal Deposit Insurance Corporation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments All 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS Millions of dollars 1978 1979 1976 1977 1978 Type of transaction Dec. Jan. Feb. Mar. Apr. May June U.S. Government Securities Outright transactions (excluding matched salepurchase transactions) Treasury bills 1 Gross purchases........................................................ 14,343 13,738 16,628 0 0 0 2,012 22,361 0 518 2 Gross sales................................................................. 8,462 7,241 13,725 2,751 3,758 228 475 100 251 623 3 Redemptions.............................................................. 2 5,017 2,136 2,033 0 500 400 400 21,240 200 0 Others within 1 year1 4 Gross purchases........................................................ 472 3,017 1,184 0 0 48 2,600 0 0 42 5 Gross sales................................................................. 0 0 0 0 0 0 0 0 0 0 6 Exchange, or maturity shift.................................... 792 4,499 -5,170 705 -673 -30 724 439 4,660 1,152 7 Redemptions............................................................. 0 2,500 0 0 0 0 0 2 3,240 0 0 1 to 5 years 8 Gross purchases........................................................ 2 3,202 2,833 4,188 0 0 426 0 2 640 0 0 9 Gross sales.................................................................. 177 0 0 0 0 0 0 0 0 0 10 Exchange, or maturity shift.................................... -2,588 -6,649 -178 -705 673 2,205 -724 -439 -5,209 -1,152 5 to 10 years 11 Gross purchases........................................................ 1,048 758 1,526 0 0 134 0 0 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 0 -2,975 0 0 350 0 Over 10 years 14 Gross purchases........................................................ 642 553 1,063 0 0 93 0 0 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 0 800 0 0 200 0 All maturities1 17 Gross purchases........................................................ 219,707 20,898 24,591 0 0 700 4,612 23,000 0 561 18 Gross sales................................................................. 8,639 7,241 13,725 2,751 3,758 228 475 100 251 623 19 Redemptions.............................................................. 25,017 4,636 2,033 0 500 400 400 2 4,480 200 0 Matched sale-purchase transactions 20 Gross sales............................................................. 196,078 425,214 511,126 52,661 64,691 56,291 61,669 62,362 54,343 52,640 21 Gross purchases................................................... 196,579 423,841 510,854 51,586 60,750 58,426 63,707 61,968 53,692 52,949 Repurchase agreements 22 Gross purchases................................................... 232,891 178,683 151,618 8,133 3,117 6,931 11,817 5,784 2,188 15,531 23 Gross sales............................................................. 230,355 180,535 152,436 7,049 4,201 6,931 10,137 6,163 3,488 12,226 24 Net change in U.S. government securities......... 9,087 5,798 7,743 -2,743 -9,283 2,207 7,454 -2,352 -2,403 3,552 Federal Agency Obligations Outright transactions 25 Gross purchases.................................................... 891 1,433 301 0 0 0 0 0 0 371 26 Gross sales............................................................. 0 0 173 0 379 20 0 0 0 0 27 Redemptions......................................................... 169 223 235 3 10 * 23 * 40 33 Repurchase agreements 28 Gross purchases.................................................... 10,520 13,811 40,567 4,307 713 1,152 2,851 1,173 1,149 4,443 29 Gross sales............................................................. 10,360 13,638 40,885 4,174 846 1,152 2,482 1,392 1,298 3,617 30 Net change in federal agency obligations.......... 882 1,383 -426 130 -522 -20 345 -219 -189 1,163 Bankers Acceptances 31 Outright transactions, net...................................... -545 -196 0 0 0 0 0 0 0 0 32 Repurchase agreements, net................................... 410 159 -366 587 -587 0 204 48 -252 1,400 33 Net change in bankers acceptances...................... -135 -37 -366 587 -587 0 204 48 -252 1,400 34 Total net change in System Open Market Account............................................................. 9,833 7,143 6,951 -2,026 -10,392 2,187 8,003 -2,524 -2,844 6,115 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

A 12 Domestic Financial Statistics □ August 1979 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements Millions of dollars Wednesday End of month Account 1979 1979 June 27 July 4 July 11 July 18*> July 25? May June July? Consolidated condition statement Assets 1 Gold certificate account............................................. 11,323 11,321 11,295 11,291 11,291 11,354 11,323 11,290 2 Special drawing rights certificate account............ 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1.800 3 368 358 337 349 380 411 371 397 Loans 4 Member bank borrowings........................................ 2,922 2,433 1,252 1,502 1,168 1,330 1,558 851 5 Other.............................................................................. 0 0 0 0 0 0 0 0 Acceptances 6 0 0 0 0 0 0 0 0 7 Held under repurchase agreements......................... 840 682 0 1,064 824 0 1,400 1,159 Federal agency obligations 8 Bought outright........................................................... 7,761 7,761 7,761 7,761 7,761 7,423 7,761 8,243 9 Held under repurchase agreements......................... 997 267 0 838 721 0 826 638 U.S. government securities Bought outright 10 Bills............................................................................ 38,731 36,312 35,089 40,511 38,629 38,166 38,370 40,612 11 Certificates—Special............................................... 0 0 0 0 0 0 0 0 12 0 0 0 0 0 0 0 0 13 54,505 55,055 55,055 55,055 55,055 54,462 54,505 55,055 14 13,557 13,699 13,699 13,699 13,699 13,557 13,557 13,699 15 Total i......................................................................... 106,793 105,066 103,843 109,265 107,383 106,185 106,432 109,366 16 2,548 1,116 0 2,122 721 0 3,305 2,079 17 109,341 106,182 103,843 111,387 108,104 106,185 109,737 111,445 18 Total loans and securities.......................................... 121,861 117,325 112,856 122,552 118,578 114,938 121,282 122,336 19 Cash items m process of collection......................... 12,169 14,417 14,162 14,135 12,349 14,910 10,488 11,373 20 398 397 397 397 399 395 397 399 Other assets 21 Denominated in foreign currencies2....................... 3,095 2,935 2,933 2,711 2,174 3,664 2,942 2,182 22 2,542 2,352 2,693 2,662 2,709 2,218 2,427 2,660 23 153,556 150,905 146,473 155,897 149,680 149,690 151,030 152,437 Liabilities 24 104,803 106,112 106,878 106,326 105,822 103,748 104,794 105,957 Deposits 25 Member bank reserves............................................... 32,678 27,610 24,582 33,378 29,662 31,602 30,407 29,939 26 U.S. Treasury—General account............................ 3,597 3,436 2,919 3,668 2,336 1,974 3,290 2,765 27 270 315 287 269 239 407 326 373 28 573 641 594 656 675 852 5,614 636 29 37,118 32,002 28,382 37,971 32,912 34,835 39,637 33,713 30 Deferred availability cash items............................. 7,013 8,604 6,956 7,109 6,205 6,392 1,763 7,816 31 Other liabilities and accrued dividends3................ 1,699 1,843 1,711 1,761 1,828 1,673 1,846 1,884 32 150,633 148,561 143,927 153,167 146,767 146,648 148,040 149,370 Capital Accounts 33 1,126 1,127 1,128 1,129 1,129 1,124 1,126 1,129 34 1,078 1,078 1,078 1,078 1,078 1,078 1,078 1,078 35 719 139 340 523 706 840 786 860 36 Total liabilities and capital accounts....................... 153,556 150,905 146,473 155,897 149,680 149,690 151,030 152,437 37 Memo: Marketable U.S. government securities held in custody for foreign and international 77,594 78,949 79,484 79,904 82,093 76,123 78,140 82,405 Federal Reserve note statement 38 Federal Reserve notes outstanding (issued to Bank)..................................................................... 118,127 118,345 118,562 119,204 119,792 116,615 118,148 120,035 Collateral held against notes outstanding 39 11,323 11,321 11,295 11,291 11,291 11,354 11,323 11,290 40 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 41 1,908 1,624 807 1,090 1,027 1,182 1,116 652 42 U.S. government and agency securities............... 103,096 103,600 104,660 105,023 105,674 102,279 103,909 106,293 43 118,127 118,345 118,562 119,204 119,792 116,615 118,148 120,035 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 June 27 July 4 July 11 July 18 July 25 May 31 June 30 July 31 2,922 2,434 1,252 1,502 1,168 1,333 1,558 851 2 Within 15 days......................................................... 2,898 2,332 1,147 1,479 1,144 1,261 1,469 786 3 16 days to 90 days................................................... 24 102 105 23 24 72 89 65 4 91 days to 1 year...................................................... 0 0 0 0 0 0 0 0 840 682 0 1,064 824 0 400 1,159 6 Within 15 days......................................................... 840 682 0 1,064 824 0 400 1,159 7 16 days to 90 days................................................... 0 0 0 0 0 0 0 0 8 91 days to 1 year...................................................... 0 0 0 0 0 0 0 0 9 U.S. government securities...................................... 109,341 106,182 103,843 111,387 108,104 106,185 109,737 111,445 10 Within 15 days i....................................................... 5,677 3,644 4,058 6,208 3,535 597 5,748 5,851 11 16 days to 90 days................................................... 19,089 17,493 14,569 20,304 18,713 19,267 19,434 19,553 12 91 days to 1 year...................................................... 31,948 32,600 32,771 32,430 33,411 33,694 31,928 34,125 28,634 28,214 28,214 28,214 28,214 28,634 28,634 27,685 14 Over 5 years to 10 years.......................................... 12,225 12,321 12,321 12,321 12,321 12,225 12,225 12,321 15 Over 10 years........................................................... 11,768 11,910 11,910 11,910 11,910 11,768 11,768 11,910 16 Federal agency obligations....................................... 8,758 8,028 7,761 8,599 8,482 7,423 8,587 8,881 17 Within 15 days i....................................................... 1,093 305 82 960 761 234 922 678 18 16 days to 90 days................................................... 401 455 372 365 377 357 401 377 19 91 days to 1 year...................................................... 915 942 1,005 972 994 793 915 1,185 20 Over 1 year to 5 years............................................. 4,064 4,041 4,025 4,025 4,052 3,776 4,064 4.340 21 Over 5 years to 10 years.......................................... 1,510 1,510 1,502 1,502 1,502 1,488 1,510 1,505 775 775 775 775 796 775 775 796 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. 1979 Bank group, or type 1976 1977 1978 of customer Feb. Mar. Apr. May June Debits to demand deposits 2 (seasonally adjusted) 1 All commercial banks............... 29,180.4 34,322.8 40,300.3 43,878.3 44,920.4 46,612.2 47,545.4 50,388.3 2 Major New York City banks.. 11,467.2 13,860.6 15,008.7 15,432.8 15,644.9 16,898.7 16,960.3 19,747.4 3 Other banks............................... 17,713.2 20,462.2 25,291.6 28,445.5 29,275.5 29,713.5 30,585.2 30,641.0 Debits to savings deposits 3 (not seasonally adjusted) 4 All customers............................. 174.0 418.1 448.4 598.3 698.0 764.4 658.8 5 Business *................................... 21.7 56.7 54.1 76.1 71.7 69.4 72.6 6 Others......................................... 152.3 361.4 394.3 522.2 626.4 695.0 586.2 Demand deposit turnover 2 (seasonally adjusted) 7 All commercial banks............... 116.8 129.2 139.4 150.4 154.4 156.8 160.3 167.3 8 Major New York City banks.. 411.6 503.0 541.9 565.1 571.8 618.4 619.1 685.4 9 Other banks............................... 79.8 85.9 96.7 107.6 111.1 110.1 113.6 112.5 Savings deposit turnover 3 (not seasonally adjusted) 10 All customers............................. 1.6 1.9 2.1 2.8 3.2 3.6 3.1 11 Business 1................................... 4.1 5.1 5.3 7.4 7.0 6.8 7.2 12 Others......................................... 1.5 1.7 1.9 2.5 3.0 3.4 2.9 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 Support Services, Board of Governors of the Federal Reserve 2. Represents accounts of individuals, partnerships, and corporations, System, Washington, D.C. 20551. Debits and turnover data for savings and of states and political subdivisions. 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 □ August 1979 1.21 MONEY STOCK MEASURES AND COMPONENTS Billions of dollars, averages of daily figures 1979 1975 1976 1977 1978 Dec. Dec. Dec. Dec. Item Jan. Feb. Mar. Apr. May June Seasonally adjusted Measures1 1 M-l........................................................... 295.4 313.8 338.7 361.2 359.7 358.6 359.0 364.3 364.5 369.0 2 M-l + ....................................................... 456.8 517.2 560.6 587.2 r583.4 r580.1 r579.6 r585.1 *•584.0 589.9 3 M-2........................................................... 664.8 740.6 809.4 875.8 875.0 876.7 879.5 889.8 893.8 904.4 4 M-3........................................................... 1,092.4 1,235.6 1,374.3 1,500.1 1,503.7 1,509.7 1,517.5 rl,530.8 rl,537.0 1,552.3 5 M-4........................................................... 745.8 803.0 883.1 972.4 975.5 978.8 978.5 984.8 984.4 989.3 6 M-5........................................................... 1,173.5 1,298.0 1,448.0 1,596.7 1,604.2 1,611.8 1,616.5 r1,625.9 r1,627.6 1,637.2 Components 73.8 80.8 88.6 97.5 98.2 98.9 99.4 100.2 100.7 101.5 Commercial bank deposits 8 Demand................................................... 221.7 233.0 250.1 263.7 261.5 259.7 259.5 264.1 263.8 267.5 9 Time and savings................................... 450.3 489.2 544.4 611.2 615.8 620.2 619.5 620.6 619.9 620.3 160.7 202.1 219.7 223.0 220.8 218.6 217.7 217.7 216.4 217.8 11 Negotiable CDs 2............................... 81.0 62.4 73.7 96.6 100.5 102.1 99.0 95.0 90.6 84.9 12 Other time........................................... 208.6 224.7 251.0 291.5 294.6 299.5 r302.9 307.9 313.0 317.6 13 Nonbank thrift institutions 3............... 427.7 495.0 564.9 624.4 628.7 633.0 638.0 r641.0 r643.2 647.9 Not seasonally adjusted Measures1 14 M-l........................................................... 303.9 322.6 348.2 371.3 365.4 351.9 353.7 367.4 359.1 368.2 15 M-l + ....................................................... 463.6 524.2 568.0 r595.2 *■588.3 r572.8 r575.6 r590.7 r580.5 590.8 16 M-2........................................................... 670.0 745.8 814.9 881.5 879.6 871.0 878.2 r896.8 892.1 906.0 17 M-3........................................................... 1,095.0 1,238.3 1,377.2 1,502.8 1,506.8 1,502.1 1,517.4 ’•1,540.8 rl,536.4 1,556.3 18 M-4........................................................... 753.5 810.0 890.8 981.0 980.7 970.6 975.7 989.5 981.1 990.4 19 M-5........................................................... 1,178.4 1,302.6 1,453.2 1,602.4 1,607.9 1,601.7 1,614.9 rl,633.5 rl,625.4 1,640.7 Components 20 Currency................................................... 75.1 82.1 90.1 99.1 97.4 97.6 98.6 99.9 100.6 101.8 Commercial bank deposits 21 Demand................................................... 228.8 240.5 258.1 272.2 268.0 254.2 255.1 267.5 258.5 266.4 22 Member............................................... 162.8 169.4 177.5 183.0 179.3 169.6 170.4 178.5 171.8 177.1 62.6 67.5 76.2 85.2 84.6 80.7 80.6 85.1 82.6 84.8 24 Time and savings.................................. 449.6 487.4 542.6 609.7 615.3 618.7 622.0 622.1 622.0 622.2 25 Savings................................................. 159.1 200.2 217.7 220.9 219.9 218.0 218.9 220.1 218.2 219.4 26 Negotiable CDs 2............................... 83.5 64.3 75.9 99.5 101.1 99.6 97.5 92.6 88.9 84.4 207.1 222.9 249.0 289.2 294.3 301.1 305.5 r309.3 314.9 318.3 28 Other checkable deposits4................... .7 1.4 2.1 r3.0 r2.9 r2.9 r3.0 r3.2 r3.2 3.1 29 Nonbank thrift institutions 3............... 424.9 492.5 562.3 621.4 627.1 631.1 639.2 644.0 *•644.3 650.3 30 U.S. government deposits (all commercial banks)............................ 4.1 4.4 5.1 10.2 11.9 8.3 6.5 5.3 8.4 10.8 1. Composition of the money stock measures is as follows: M-4: M-2 plus large negotiable CDs. M-l: Averages of daily figures for (1) demand deposits at commercial M-5: M-3 plus large negotiable CDs. banks other than domestic interbank and U.S. government, less cash items 2. Negotiable time CDs issued in denominations of $100,000 or more in process of collection and Federal Reserve float; (2) foreign demand by large weekly reporting commercial banks. balances at Federal Reserve Banks; and (3) currency outside the Treasury, 3. Average of the beginning- and end-of-month figures for deposits of Federal Reserve Banks, and vaults of commercial banks. mutual savings banks, for savings capital at savings and loan associations, M-l -f: M-l plus savings deposits at commercial banks, NOW accounts and for credit union shares. at banks and thrift institutions, credit union share draft accounts, and 4. Includes NOW accounts at thrift institutions, credit union share demand deposits at mutual savings banks. draft accounts, and demand deposits at mutual savings banks. M-2: M-l plus savings deposits, time deposits open account, and time certificates of deposit (CDs) other than negotiable CDs of $100,000 or Note. Latest monthly and weekly figures are available from the Board’s more at large weekly reporting banks. H.6 (508) release. Back data are available from the Banking Section, M-3: M-2 plus the average of the beginning- and end-of-month deposits Division of Research and Statistics. of mutual savings banks, savings and loan shares, and credit union shares (nonbank thrift). NOTES TO TABLE 1.23: 1. Adjusted to exclude domestic commercial interbank loans and 6. As of Dec. 31, 1978, commercial and industrial loans were reduced federal funds sold to domestic commercial banks. $0.1 billion as a result of reclassifications. 2. Loans sold are those sold outright to a bank’s own foreign branches, 7. As of Dec. 31, 1978, commercial and industrial loans sold outright nonconsolidated nonbank affiliates of the bank, the bank’s holding were increased $0.7 billion as the result of reclassifications, but $0.1 company (if not a bank), and nonconsolidated nonbank subsidiaries of billion of this amount was offset by a balance sheet reduction of $0.1 the holding company. billion as noted above. 3. As of Dec. 31, 1978, total loans and investments were reduced by 8. As of May 1979, as the result of reclassification, total loans and $0.1 billion. Total loans were reduced $1.6 billion, and “Other invest­ investments and total loans were increased $600 million, and business ments” were increased $1.5 billion largely as the result of reclassifications loans were increased $400 million. of certain tax-exempt obligations. 4. As of Mar. 31, 1976, reclassification of loans reduced these loans Note. Data are for last Wednesday of month except for June 30 and about $1.2 billion. December 31 call report data. Data revised beginning July 1978 to reflect 5. As of Dec. 31, 1977, reclassification of loans at one large bank adjustments to preliminary December 31, 1978, call report data. reduced these loans about $200 million. 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 1975 1976 1977 Dec. Dec. Dec. Nov. Dec. Jan. Feb. Mar. Apr. May June Seasonally adjusted 1 Reserves1.................................................. 34.67 34.89 36.10 39.75 41.27 41.48 40.75 40.81 40.65 40.48 40.41 2 Nonborrowed.............................................. 34.54 34.84 35.53 39.05 40.40 40.48 39.78 39.82 39.73 38.72 39.00 3 Required....................................................... 34.40 34.61 35.91 39.53 41.04 41.26 40.54 40.66 40.47 40.34 40.20 4 Monetary base2.......................................... 106.7 118.4 127.8 140.0 142.3 143.4 143.3 143.9 144.5 144.9 145.5 5 Deposits subject to reserve requirements3 504.2 528.6 568.6 616.9 616.7 621.1 619.7 616.4 618.6 613.9 613.1 6 Time and savings........................................ 336.8 354.1 386.7 427.5 429.4 433.5 436.1 434.1 432.0 428.7 425.9 Demand 7 Private........................................................... 164.5 171.5 178.5 187.0 185.1 185.6 181.9 180.5 184.7 183.5 184.9 8 U.S. government........................................ 2.9 3.0 3.5 2.3 2.3 1.9 1.8 1.8 1.8 1.7 2.4 Not seasonally adjusted 9 Monetary base2.......................................................... 108.3 120.3 129.8 140.5 144.6 144.4 141.9 142.3 144.2 144.4 145.5 10 Deposits subject to reserve requirements3................. 510.9 534.8 575.3 615.1 624.0 627.1 614.3 614.3 621.1 610.9 614.0 11 Time and savings........................................................ 337.2 353.6 386.4 425.2 429.6 433.8 434.2 434.9 432.3 429.8 427.2 Demand 12 Private......................................................................... 170.7 177.9 185.1 188.0 191.9 191.5 178.2 177.5 186.8 179.2 184.0 13 U.S. government........................................................ 3.1 3.3 3.8 2.0 2.5 1.9 1.8 1.9 2.0 1.8 2.8 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 Jan. 8 and Dec. 30, 1976; and Nov. 2, 1978. In addition, effective Jan. 1, process of collection and demand balances due from domestic commercial 1976, statewide branching in New York was instituted. The subsequent banks. merger of a number of banks raised required reserves because of higher reserve requirements on aggregate deposits at these banks. Note. Back data and estimates of the impact on required reserves 2. Includes total reserves (member bank reserve balances in the current and changes in reserve requirements are shown in table 14 of the Board’s week plus vault cash held two weeks earlier); currency outside the U.S. Annual Statistical Digest, 1971-1975. 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 1979 1976 1977 1978 Category Dec. 31 Dec. 31 Dec. 31* Jan. 31* Feb. 28* Mar. 28* Apr. 25* May 30* June 30* July 25* Seasonally adjusted 1 Loans and investments1...................... 785.1 870.6 3977.7 998.6 1,007.7 1,012.6 1,024.3 81,035.2 1,048.7 1,059.8 2 Including loans sold outright2.... 788.9 875.5 3981.5 1,002.2 1,011.3 1,016.2 1,027.9 81,038.9 1,052.5 1,063.5 Loans 3 Total i.................................................. 538.9 617.0 3715.4 732.4 738.3 743.4 753.0 8760.2 771.7 779.9 4 Including loans sold outright2.... 542.7 621.9 3719.2 736.0 741.9 747.0 756.6 8763.9 775.5 783.6 5 Commercial and industrial................ 4179.7 5201.4 6230.9 237.8 240.6 243.5 247.3 8252.2 255.6 259.3 6 Including loans sold outright2.... 4182.1 5204.2 7233.4 240.3 243.1 246.1 249.9 8254.9 258.5 262.1 Investments 7 U.S. Treasury..................................... 98.0 95.6 88.8 89.4 92.1 90.5 91.9 94.6 95.7 97.6 8 Other................................................... 148.2 158.0 3173.5 176.8 177.3 178.7 179.4 180.4 181.3 182.3 Not seasonally adjusted 9 Loans and investments1...................... 801.6 888.9 5998.2 994.6 1,000.0 1,009.5 1,023.0 81,033.8 1,056.1 1,055.4 10 Including loans sold outright2.... 805.4 893.8 31,002.0 998.2 1,003.6 1,013.1 1,026.6 81,037.5 1,059.9 1,059.2 Loans 11 Total i.................................................. 550.2 629.9 3730.4 726.0 730.3 737.5 748.1 8759.1 780.9 780.6 12 Including loans sold outright2.... 554.0 634.8 3734.2 729.6 733.9 741.1 751.7 8762.8 784.8 784.3 13 Commercial and industrial................ 4182.9 5205.0 6235.1 235.3 238.6 243.0 248.0 8252.2 258.7 259.9 14 Including loans sold outright2.... 4185.3 5207.8 7237.6 237.8 241.1 245.6 250.7 8254.9 261.6 262.7 Investments 15 U.S. Treasury..................................... 102.5 100.2 93.6 92.2 93.3 93.9 94.4 93.5 92.9 92.5 16 Other................................................... 148.9 158.8 3174.3 176.4 176.5 178.2 180.4 181.2 182.2 182.3 For notes see bottom of opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics □ August 1979 1.24 COMMERCIAL BANK ASSETS AND LIABILITIES Last-Wednesday-of-Month Series Billions of dollars except for number of banks 1978 1979 Account Sept.3* Oct.2* Nov.® Dec.* Jan.® Feb.® Mar.® Apr.® May® June® July® All Commercial Banks1 1 Loans and investments............ 1,002.2 1,010.8 1,029.2 1,051.3 1,041.6 1,048.1 1.059.8 1,074.8 1,090.1 1.103.8 1,112.6 2 Loans, gross............................. 738.0 746.7 764.3 782.6 773.0 778.3 787.7 799.9 815.4 829.9 837.8 3 Interbank.............................. 45.1 46.0 48.8 56.0 47.0 48.1 50.2 51.9 56.3 55.3 57.2 4 Commercial and industrial.. 224.5 227.1 230.7 232.8 235.3 238.6 243.0 248.1 252.2 257.2 259.9 5 Other..................................... 468.4 473.6 484.8 493.8 490.7 491.6 494.5 500.0 506.9 517.4 520.7 6 U.S. Treasury securities.......... 95.6 94.4 93.7 94.0 92 2 93.3 93.9 94.5 93.5 91.9 92.5 7 Other securities........................ 168.5 169.7 171.2 174.7 176.4 176.5 178.2 180.4 181.2 181.9 182.3 8 Cash assets, total................................... 146.8 148.5 150.7 174.7 150.5 158.8 148.1 148.8 169.1 159.7 155.2 9 Currency and coin............................. 15.2 15.1 16.7 17.2 15.3 15.1 15.3 15 7 16.1 16.4 16.1 10 Reserves with Federal Reserve Banks 32.6 34.6 32.6 37.7 29.6 29.4 29.9 33.7 32.7 32.6 29.6 11 Balances with depositary institutions 49.4 47.1 48.0 56.3 50.8 54.1 48.8 47.8 54.3 53.6 55.9 12 Cash items in process of collection.. 49.7 51.7 53.5 63.5 54.7 60.2 54.1 51.6 66.0 57.0 53.6 13 Other assets........................................... 70.5 69.9 74.0 77.9 77.3 76.1 72.9 69.9 66.7 69.4 68.2 14 Total assets/total liabilities and capital. 1,219.5 1,229.2 1,254.0 1,303.9 1,269.5 1,283.0 1.280.8 1,293.4 1,325.9 1.332.9 1.336.1 15 Deposits.................. 956.0 957.2 968.1 1,005.8 979.9 988.2 979.4 984.2 998.7 996.9 1.002.2 16 Demand............... 351.9 348.7 349.0 382.1 350.8 355.7 343.1 350.8 363.4 359.7 361.3 17 Time and savings. 604.1 608.5 619.1 623.7 629.1 632.5 635.2 633.3 635.4 637.2 640.8 18 Savings............ n.a. n.a. n.a. n.a. 216.5 216.6 218.6 217.5 217.4 217.9 219.8 19 Time................. n.a. n.a. n.a. n.a. 412.7 415.9 417.7 415.8 418.0 419.3 421.1 20 Borrowings............................................ 112.1 117.8 126.9 136.8 122.3 122.1 125.1 134.2 143.5 147.4 148.9 Memo: 21 U.S. Treasury note balances included in borrowing...................................... 7.5 12.4 11.6 3.7 4.7 5.9 4.9 12.9 11.9 22 Number of banks.................................. 14,723 14,712 14,724 14,730 14,701 14,711 14,716 14,731 14,738 14,743 14,707 Member Banks 23 Loans and investments.. 706.9 713.4 724.3 739.5 732.5 736.9 741.2 753.1 761.2 769.0 777.4 24 Loans, gross................... 527.0 533.9 544.6 558.3 549.6 553.2 555.5 565.1 573.7 582.4 590.2 25 Interbank..................... n.a. n.a. n.a. n.a. 30.3 30.6 30.7 31.1 32.9 32.2 33.2 26 Other........................... n.a. n.a. n.a. n.a. 519.3 522.6 524.8 534.0 540.9 550.2 556.9 27 U.S. Treasury securities. 65.4 64.1 63.5 63.6 62.3 63.4 64.1 64.7 63.9 62.3 62.7 28 Other securities.............. 114.5 115.3 116.2 117.6 120.4 120.2 121.5 123.2 123.6 124.3 124.5 29 Cash assets, total............................... 115.4 118.6 121.3 140.2 119.1 125.4 115.5 119.0 135.6 125.9 119.8 30 Currency and coin......................... 11.1 11.1 12.3 12.7 11.2 11.1 11.2 11.5 11.7 12.0 11.8 31 Reserves with Federal Reserve Banks 32.6 34.6 32.6 37.7 29.6 29.4 29.9 33.7 32.7 32.6 29.6 32 Balances with depositary institutions 24.0 23.2 25.1 28.6 25.8 27.0 22.3 24.1 27.7 26.5 27.0 33 Cash items in process of collection.. 47.7 49.7 51.4 61.2 52.5 57.9 52.1 49.7 63.5 54.8 51.4 34 Other assets........................................... 60.0 59.3 62.9 65.5 65.5 64.2 61.3 58.1 54.8 57.1 56.1 35 Total assets/total liabilities and capital. 882.2 891.2 908.5 945.2 917.1 926.5 918.0 930.1 951.6 952.1 953.3 36 Deposits.................. 679.6 682.5 688.6 716.3 696.6 701.7 687.9 691.8 699.2 693.1 695.9 37 Demand............... 262.3 262.6 262.3 286.8 263.5 267.6 253.2 262.0 270.6 265.0 265.9 38 Time and savings. 417.2 420.0 426.4 429.5 433.1 434.1 434.5 429.8 428.6 428.1 430.1 39 Savings............ n.a. n.a. n.a. n.a. 146.5 146.4 147.7 147.1 145.4 146.0 147.1 40 Time................. n.a. n.a. n.a. n.a. 286.6 287.7 286.8 282.7 283.2 282.1 282.9 41 Borrowings............................................ 97.2 101.4 108.1 115.9 102.3 104.0 107.1 115.3 123.4 126.3 128.3 Memo: 42 U.S. Treasury note balances included in borrowing...................................... 6.3 11.1 9.3 3.0 3.7 4.5 3.8 11.0 10.1 43 Number of banks.................................. 5,593 5,585 5,586 5,591 5,556 5,545 5,544 5,542 5,534 5,532 5,473 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 Loans and investments, gross............................... 827,696 854,733 914,779 956,431 476,610 488,240 523,000 542,218 Loans 2 578,734 601,122 657,509 695,443 340,691 351,311 384,722 403,812 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 5 147,500 153,042 157,936 163,986 80,191 83,583 86,033 87,886 6 129,562 130,726 159,264 157,393 76,072 74,641 92,050 90,728 7 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 3,022 2,817 7,310 7,956 1,676 1,632 4,172 4,483 10 44,064 44,965 49,843 47,203 23,149 22,876 25,646 22,416 11 285,200 284,544 319,873 312,707 163,346 161,358 181,821 176,025 Time and savings 12 8,248 7,721 8,731 8,987 4,907 4,599 5,730 5,791 13 484,467 507,324 536,899 569,020 276,296 285,915 302,795 318,215 14 75,291 81,137 89,339 98,351 54,421 57,283 63,218 68,948 15 Total capital accounts............................................ 75,061 75,502 79,082 83,074 41,319 43,142 44,994 47,019 16 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 18 102,277 102,117 110,243 115,736 135,766 147,694 162,543 175,894 19 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 22,874 23,183 24,091 24,841 44,434 46,275 47,812 51,259 22 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 25 429 371 1,241 1,158 917 813 1,896 2,315 26 19,295 20,568 22,346 23,117 1,619 1,520 1,849 1,669 27 52,204 52,570 57,605 55,550 69,648 70,615 80,445 81,131 Time and savings 28 2,384 2,134 2,026 2,275 956 988 973 920 29 75,178 76,827 80,216 85,301 132,993 144,581 153,887 165,502 30 17,310 19,697 21,736 23,167 3,559 4,155 4,384 6,235 31 Total capital accounts............................................ 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 Loans and investments, gross............................... 18,819 22,940 24,415 28,699 225,904 244,837 263,681 285,448 Loans 34 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......................................... 1,054 993 879 869 27,938 28,919 29,788 30,465 37 1,428 1,081 849 1,082 45,863 47,357 48,662 52,341 38 6,496 8,330 9,458 9,360 27,127 28,497 34,367 32,967 39 26,790 33,390 36,433 42,279 257,877 279,139 304,343 326,501 40 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 1,277 1,504 1,868 2,067 2,896 3,025 3,718 3,736 43 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 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 □ August 1979 1.26 COMMERCIAL BANK ASSETS AND LIABILITIES Detailed Balance Sheet, September 30, 1978 Millions of dollars, except for number of banks. [ember banks1 Insured Non- Asset account commercial Large banks member banks banks1 Total All other New York City of Other City Chicago large 1Cash 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 3 Reserves with Federal Reserve Banks..................................... 28,043 28,041 3,621 1,152 12,200 11,067 3 4 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 11 121,260 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 n 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 19 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 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 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 68 Total loans and securities, net...................................................... 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 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 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 85 Accumulated for personal loan payments............................ 79 66 0 0 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 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 96 U.S. government..................................................................... 82 65 2 3 24 35 17 97 States and political subdivisions............................................ 4,298 2,682 215 4 437 2,025 1,616 98 30 27 18 * 8 2 3 960,918 701,195 114,753 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 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 1,366 110 Equity capital............................................................................. 85,540 63,174 12,871 2,947 21,177 26,178 22,380 Ill Preferred stock........................................................................... 88 36 0 0 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 33,517 26,013 5,554 921 8,680 10,858 7,509 1,719 1,182 132 52 337 661 538 116 Total liabilities and equity capital............................................. 1,198,495 904,182 170,899 44,170 338,079 351,034 294,595 Memo items 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- 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 33,454 944,593 687,543 107,028 28,922 250,804 300,789 257,062 123 Federal funds purchased and securities sold under agreements to repurchase................................................................ 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 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 34,284 127 160,227 129,667 27,950 11,590 56,383 33,743 30,560 128 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 □ August 1979 1.27 ALL LARGE WEEKLY REPORTING COMMERCIAL BANKS with Domestic Assets of S750 Million or More on December 31, 1977, Assets and Liabilities Millions of dollars, Wednesday figures 1979 Account May 30 June 6 June 13 June 20 June 27 July 4^ July 11 p July 18^ July 25p 1 Cash items in process of collection............... 53,926 43,511 47,096 48,388 47,000 58,958 45,982 47,325 43,179 2 Demand deposits due from banks in the United States................................................................. 17,441 13,636 13,817 15,277 15,794 16,009 16,592 14,902 15,095 3 All other cash and due from depositary institutions......................................................... 31,063 26,179 26,752 29,370 32,524 26,842 25,601 34,039 29,968 4 Total loans and securities..................................... 471,855 479,142 478,885 480,234 477,744 488,506 486,151 481,242 482,737 Securities 5 U.S. Treasury securities....................................... 37,006 39,297 38,821 37,381 35,531 36,399 36,693 35,744 35,641 6 Trading account................................................ 5,342 6,642 6,186 5,552 4,699 4,853 5,142 4,755 5,009 7 Investment account, by maturity..................... 31,664 32,654 32,634 31,829 30,832 31,546 31,551 30,989 30,632 8 One year or less............................................ 9,212 9,554 9,593 9,301 8,587 8,601 8,541 8,559 8,499 9 Over one through five years......................... 17,906 18,674 18,534 18,117 17,895 18,696 18,773 18,222 17,878 10 Over five years.............................................. 4,546 4,426 4,507 4,412 4,350 4,250 4,237 4,208 4,255 11 Other securities...................................................... 67,217 67,148 68,205 67,374 68,085 67,222 67,930 67,749 67,982 12 Trading account................................................ 3,090 3,179 3,918 3,359 3.797 3,751 4,074 3,806 3.780 13 Investment account........................................... 64,127 63,969 64,287 64,016 64,288 63,471 63,856 63,942 64,202 14 U.S. government agencies............................ 12,376 12,484 13,000 13,481 13,692 13,420 13,842 13,846 14,021 15 States and political subdivision, by maturity. 48,884 48,620 48,482 47,727 47,799 47,230 47,199 47,313 47,401 16 One year or less........................................ 8,256 7,804 7,608 6,661 6,704 6,344 6,177 6,187 6,201 17 Over one year...................................... 40,628 40,817 40,874 41,066 41,095 40,886 41,022 41,126 41,199 18 Other bonds, corporate stocks and securities 2,867 2,864 2,804 2,808 2.797 2,821 2,814 2,782 2.780 Loans 19 Federal funds sold1.............................................. 26,715 27,960 27,972 27,775 25,294 29,843 28,091 24,687 25,010 20 To commercial banks....................................... 19,077 18,313 19,040 18,542 17,606 20,355 18,709 17,932 17,100 21 To nonbank brokers and dealers in securities. 5,906 6,658 6,511 7,018 5,984 7,398 7,214 5,117 5,699 22 To others............................................................ 1,732 2,989 2,420 2,214 1,704 2,089 2,168 1,638 2,211 23 Other loans, gross................................................. 351,875 355,754 354,990 358,854 359,997 366,152 364,662 364,365 365,437 24 Commercial and industrial............................... 141,281 141,818 142,083 143,509 143,723 145,183 145,805 146,205 146,336 25 Bankers’ acceptances and commercial paper...................................................... 3,575 3,448 3,450 3,581 3,749 4,098 4,184 3,968 3,832 26 All other........................................................ 137,706 138,370 138,633 139,928 139,974 141,085 141,621 142,236 142,504 27 U.S. addresses............................................ 131,588 132,182 132,482 133,815 133,849 134,890 135,454 135,901 136,194 28 Non-U.S. addressees.................................. 6,118 6,188 6,151 6,113 6,124 6,194 6,167 6,336 6,310 29 Real estate......................................................... 86,220 86,502 86,959 87,530 88,235 88,699 89,176 89,796 90,158 30 To individuals for personal expenditures........ 64,277 64,481 64,742 65,039 65,403 65,508 65,638 65,462 65,743 To financial institutions 31 Commercial banks in the United States.... 2,811 2,985 2,801 3,163 3,204 3,496 3,061 2,907 3,131 32 Banks in foreign countries........................... 6,225 6,740 6,295 6,012 6,137 6,823 7,144 6,343 6.507 33 Sales finance, personal finance companies, 8,844 9,258 8,705 8,656 8,801 9,377 9,447 9,656 9,355 34 Other financial institutions................ 14,705 14,985 14,986 15,223 15,244 15,416 15,315 15,438 15,220 35 To nonbank brokers and dealers in securities. 7,774 9,053 8,877 9,675 9,113 10,500 8,886 8,835 9,395 36 To others for purchasing and carrying securities2...................................................... 2,460 2,457 2,459 2,468 2,460 2,510 2,489 2,516 2.508 37 To finance agricultural production................. 4,833 4,805 4,824 4,896 4,919 4,921 4,945 4,913 4,910 38 All other............................................................ 12,443 12,672 12,258 12,682 12,758 13,718 12,755 12,294 12,174 39 Less: Unearned income........................................ 6,241 6,236 6,306 6,344 6,376 6,340 6,424 6,465 6,489 40 Loan loss reserve........................................ 4,718 4,782 4,796 4,806 4,787 4,771 4,801 4,838 4,845 41 Other loans, net..................................................... 340,916 344,736 343,888 347,703 348,834 355,042 353,436 353,063 354,103 42 Lease financing receivables................................... 6,561 6,584 6,713 6,723 6,756 6,774 6,843 6,846 6,860 43 All other assets...................................................... 53,991 56,197 56,699 57,444 56,503 56,483 58,257 55,858 56,580 44 Total assets............................................................ 634,837 625,248 629,962 637,438 636,320 653,572 639,426 640,212 634,419 Deposits 45 Demand deposits.................................................. 181,168 175,920 180,202 182,461 178,718 193,342 185,002 183,151 177,076 46 Mutual savings banks....................................... 622 702 648 688 637 945 747 726 587 47 Individuals, partnerships, and corporations.. 129,350 125,087 130,832 126,815 124,620 135,638 129,930 128,146 124,658 48 States and political subdivisions..................... 4,547 4,531 4,433 4,906 4,632 4,848 4,413 4,646 4,503 49 U.S. government............................................... 732 833 870 3,311 1,837 937 1,622 2,297 1,668 50 Commercial banks in the United States.......... 30,093 27,344 28,389 30,058 30,529 31,995 30,721 31,016 29,828 51 Banks in foreign countries.............................. 7,206 7,744 6,504 7,110 6,757 8,143 7,475 6,805 7,452 52 Foreign governments and official institutions. 2,210 1,356 1,345 1,848 1,919 1,475 1,748 1,324 1,192 53 Certified and officers’ checks........................... 6,407 8,322 7,181 7,725 7,787 9,360 8,346 8,192 7,188 54 Time and savings deposits................................... 248,873 246,348 246,508 245,996 247,812 248,598 246,321 246,848 248,265 55 Savings............................................................... 76,585 77,154 77,128 77,056 77,123 77,916 78,257 78,100 77,912 56 Individuals and nonprofit organizations.... 71,510 72,052 72,027 71,956 71,946 72,805 73,122 73,012 72,827 57 Partnerships and corporations operated for profit.......................................................... 4,184 4,193 4,185 4,123 4,184 4,183 4,210 4,199 4,258 58 Domestic governmental units....................... 871 880 892 957 970 911 901 866 803 59 Allother........................................................ 20 28 24 20 23 16 24 23 24 60 Time................................................................... 172,287 169,194 169,381 168,939 170,688 170,682 168,064 168,748 170,353 61 Individuals, partnerships, and corporations 137,453 135,629 136,278 136,316 137,975 138,477 136,583 137,331 138,660 62 States and political subdivisions................. 22,914 22,086 21,874 21,446 21,481 21,000 20,757 20,828 21,106 63 U.S. government........................................... 486 475 472 470 466 455 453 438 444 64 Commercial banks in the United States.... 5,452 5,098 4,959 4,932 4,984 4,968 4,696 4,664 4,678 65 Foreign governments, official institutions, and banks.................................................. 5,982 5,905 5,798 5,775 5,782 5,783 5,574 5,486 5,464 66 Federal funds purchased 3..................................... 93,387 92,947 92,103 89,607 89,676 91,559 93,865 94,055 90,777 Other liabilities for borrowed money * 67 Borrowings from Federal Reserve Banks---- 2,352 905 420 1,238 2,007 1,753 829 965 575 68 Treasury tax-and-loan notes............................. 2,476 1,580 2,152 9,749 8,723 7,118 5,002 5,972 7,358 69 All other liabilities for borrowed money........ 11,316 11,294 11,225 11,386 13,303 14,290 13,086 13,351 14,870 70 Other liabilities and subordinated note and debentures...................................................... 52,454 53,178 54,162 54,033 52,985 53,340 51,692 52,442 51,983 71 Total liabilities...................................................... 592,025 582,171 586,773 594,470 593,223 610,001 595,798 596,784 590,906 72 Residual (total assets minus total liabilities)4... 42,812 43,076 43,190 42,967 43,097 43,571 43,628 43,429 43,513 1. Includes securities purchased under agreements to resell. 4. This is not a measure of equity capital for use in capital adequacy 2. Other than financial institutions and brokers and dealers. analysis or 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 $\ Billion or More on December 31, 1977 Assets and Liabilities Millions of dollars, Wednesday figures 1979 Account May 30 June 6 June 13 June 20 June 27 July 4* July 11* July 18* July 25* 1 Cash items in process of collection..................... 51,330 41,275 44,810 46,022 44,839 56,065 43,755 44,947 41,123 2 Demand deposits due from banks in the United 16,587 12,889 13,034 14,503 15,079 15,172 15,891 14,197 14,360 3 All other cash and due from depositary institutions......................................................... 29,412 24,882 25,179 27,704 30,802 25,139 24,055 32,071 28,373 4 Total loans and securities..................................... 441,868 448,485 448,168 449,253 447,013 457,524 454,818 450,299 451,630 Securities 5 U.S. Treasury securities....................................... 34,589 36,791 36,317 34,896 33,116 34,028 34,320 33,361 33,259 6 Trading account................................................ 5,304 6,563 6,117 5,492 4,662 4,812 5,100 4,703 4,973 7 Investment account, by maturity..................... 29,285 30,228 30,200 29,404 28,454 29,217 29,220 28,658 28,286 8 One year or less............................................ 8,622 8,913 8,939 8,672 7,993 8,044 7,986 8,005 7,937 9 Over one through five years......................... 16,438 17,208 17,074 16,641 16,432 17,244 17,318 16,766 16,404 10 Over five years.............................................. 4,226 4,106 4,187 4,091 4,028 3,929 3,916 3,887 3,946 11 Other securities...................................................... 62,150 62,068 63,072 62,246 62,933 62,065 62,755 62,562 62,716 12 Trading account................................................ 3,027 3,118 3,836 3,288 3,717 3,669 3,993 3,739 3,702 13 Investment account........................................... 59,123 58,950 59,236 58,958 59,216 58,396 58,763 58,823 59,015 14 U.S. government agencies............................. 11,497 11,603 12,096 12,568 12,714 12,435 12,856 12,830 12,989 15 States and political subdivision, by maturity. 45,004 44,727 44,585 43,837 43,899 43,339 43,290 43,382 43,416 16 One year or less........................................ 7,576 7,257 7,061 6,123 6,158 5,811 5,615 5,623 5,620 17 Over one year............................................ 37,428 37,470 37,524 37,715 37,741 37,528 37,674 37,759 37,796 18 Other bonds, corporate stocks and securities 2,622 2,620 2,555 2,553 2,602 2,622 2,616 2,611 2,609 Loans 25,102 25,810 25,891 25,637 23,447 27,779 25,779 22,800 23,023 20 To commercial banks....................................... 17,805 16,420 17,267 16,717 16,119 18,627 16,760 16,372 15,417 21 To nonbank brokers and dealers in securities. 5,583 6,418 6,227 6,739 5,661 7,102 6,907 4,826 5,427 1,714 2,972 2,397 2,180 1,668 2,049 2,112 1,602 2,179 23 Other loans, gross................................................. 330,189 334,037 333,188 336,816 337,873 343,959 342,380 342,067 343,150 24 Commercial and industrial............................... 134,052 134,584 134,824 136,159 136,367 137,838 138,400 138,788 138,928 25 Bankers’ acceptances and commercial paper....................................................... 3,520 3,395 3,395 3,526 3,696 4,043 4,130 3,916 3,777 26 Allother........................................................ 130,532 131,189 131,429 132,632 132,670 133,795 134,270 134,872 135,150 27 U.S. addresses............................................ 124,465 125,050 125,328 126,570 126,597 127,650 128,150 128,584 128,890 28 Non-U.S. addressees.................................. 6,068 6,139 6,102 6,063 6,074 6,145 6,120 6,288 6,260 29 Real estate.......................................................... 80,903 81,178 81,605 82,147 82,833 83,290 83,758 84,334 84,667 30 To individuals for personal expenditures........ 57,104 57,297 57,530 57,761 58,082 58,167 58,276 57,998 58,215 To financial institutions 31 Commercial banks in the United States.... 2,729 2,903 2,729 3,082 3,128 3,418 2,985 2,826 3,059 32 Banks in foreign countries........................... 6,176 6,688 6,242 5,962 6,074 6,766 7,070 6,281 6,445 33 Sales finance, personal finance companies, 8,673 9,090 8,530 8,484 8,619 9,192 9,256 9,475 9,178 34 Other financial institutions........................... 14,263 14,540 14,536 14,764 14,786 14,939 14,836 14,976 14,768 35 To nonbank brokers and dealers in securities. 7,688 8,967 8,799 9,583 9,002 10,371 8,764 8,711 9,277 36 To others for purchasing and carrying 2,229 2,227 2,223 2,231 2,239 2,276 2,265 2,290 2,287 37 To finance agricultural production................. 4,677 4,648 4,665 4,735 4,754 4,753 4,777 4,752 4,740 38 All other............................................................ 11,695 11,915 11,506 11,910 11,990 12,948 11,992 11,636 11,587 5,714 5,709 5,773 5,807 5,836 5,804 5,883 5,921 5,943 4,449 4,513 4,527 4,536 4,519 4,503 4,533 4,569 4,576 41 Other loans, net..................................................... 320,026 323,816 322,888 326,474 327,517 333,652 331,964 331,577 332,630 42 Lease financing receivables................................... 6,379 6,400 6,528 6,539 6,570 6,588 6,658 6,660 6,674 43 All other assets...................................................... 52,472 54,704 55,216 55,936 55,025 54,946 56,772 54,354 55,002 598,050 588,635 592,937 599,958 599,328 615,435 601,950 602,529 597,163 Deposits 45 Demand deposits.................................................. 170,301 165,077 169,085 171,369 168,061 181,582 173,871 172,028 166,364 600 669 615 660 615 906 713 702 562 47 Individuals, partnerships, and corporations.. 120,818 116,646 122,147 118,247 116,363 126,673 121,268 119,551 116,346 48 States and political subdivisions..................... 4,023 3,925 3,834 4,296 4,066 4,258 3,859 3,956 3,866 49 U.S. government............................................... 672 750 764 3,035 1,647 850 1,495 2,114 1,538 50 Commercial banks in the United States.......... 28,679 26,066 27,032 28,818 29,275 30,320 29,316 29,737 28,540 51 Banks in foreign countries.............................. 7,143 7,696 6,441 7,039 6,678 8,082 7,419 6,742 7,392 52 Foreign governments and official institutions. 2,203 1,354 1,340 1,827 1,906 1,474 1,747 1,323 1,186 53 Certified and officers’ checks........................... 6,163 7,970 6,912 7,447 7,510 9,018 8,053 7,902 6,933 54 Time and savings deposits................................... 231,577 229,176 229,369 228,847 230,578 231,364 229,167 229,715 231,183 71,056 71,588 71,564 71,510 71,566 72,311 72,623 72,458 72,310 56 Individuals and nonprofit organizations.... 66,369 66,867 66,851 66,790 66,792 67,596 67,901 67,790 67,625 57 Partnerships and corporations operated for 3,870 3,878 3,873 3,814 3,866 3,866 3,882 3,878 3,935 58 Domestic governmental units....................... 797 816 818 887 886 833 818 768 727 59 All other........................................................ 19 27 22 19 22 15 23 21 22 160,521 157,588 157,804 157,337 159,012 159,053 156,544 157,257 158,873 61 Individuals, partnerships, and corporations 128,130 126,399 127,046 127,028 128,600 129,096 127,266 128,004 129,326 62 States and political subdivisions................. 20,765 19,986 19,808 19,418 19,464 19,021 18,830 18,912 19,195 63 U.S. government........................................... 481 470 465 464 460 448 447 432 438 64 Commercial banks in the United States.... 5,188 4,852 4,709 4,677 4,731 4,724 4,449 4,430 4,458 65 Foreign governments, official institutions, 5,957 5,882 5,776 5,749 5,756 5,765 5,551 5,478 5,456 66 Federal funds purchased3..................................... 89,254 88,704 87,941 85,431 85,533 87,148 89,311 89,541 86,148 Other liabilities for borrowed money 67 Borrowings from Federal Reserve Banks.... 2,324 902 399 1,218 1,957 1,718 804 856 553 68 Treasury tax-and-loan notes............................. 2,294 1,464 1,989 8,990 8,106 6,568 4,631 5,513 6,803 69 All other liabilities for borrowed money........ 10,917 10,882 10,685 10,972 12,894 13,987 12,718 12,869 14,518 70 Other liabilities and subordinated note and 51,244 52,008 52,967 52,842 51,773 52,168 50,518 51,275 50,815 557,912 548,214 552,436 559,669 558,902 574,535 561,021 561,798 556,386 72 Residual (total assets minus total liabilities)4... 40,138 40,421 40,501 40,289 40,426 40,900 40,929 40,731 40,776 1. Includes securities purchased under agreements to resell. 4. This is not a measure of equity capital for use in capital adequacy 2. Other than financial institutions and brokers and dealers. analysis or for other analytic uses. 3. Includes securities sold under agreements to repurchases. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Financial Statistics □ August 1979 1.29 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1979 Account May 30 June 6 June 13 June 20 June 27 July 4® July 11® July 18® July 25® 1 Cash items in process of collection..................... 17,513 14,018 16,159 17,222 17,361 20,411 16,424 16,931 15,785 2 Demand deposits due from banks in the United States .................................................................. 11,314 8,455 8,775 10,191 11,158 9,326 11,197 9,878 10,506 3 All other cash and due from depositary institutions......................................................... 7,733 6,927 5,895 6,023 7,268 4,811 4,381 6,701 5,931 4 Total loans and securities1................................... 98,738 101,566 101,371 103,092 101,217 107,673 105,056 104,089 103,718 Securities 5 U.S. Treasury securities2...................................... 6 Trading account2.............................................. 7 Investment account, by maturity..................... 6,452 6,775 6,695 6,540 6,454 6,952 6,903 6,542 6,321 8 One year or less............................................ 934 1,007 1,071 1,043 1,094 1,163 1,167 1,188 1,175 9 Over one through five years......................... 4,550 4,970 4,829 4,736 4,654 5,145 5,092 4,717 4,470 10 Over five years.............................................. 968 798 795 761 706 643 644 637 676 11 Other securities 2.................................................... 12 Trading account2.............................................. 13 Investment account........................................... 11,264 11,227 11,248 11,240 11,230 10,978 11,089 11,112 11,100 14 U.S. government agencies............................. 1,416 1,426 1,533 1,596 1,599 1,590 1,715 1,719 1,719 15 States and political subdivision, by maturity. 9,196 9,158 9,134 9,059 9,025 8,776 8,758 8,764 8,755 16 One year or less......................................... 1,696 1,668 1,662 1,543 1,532 1,342 1,355 1,318 1,313 17 Over one year............................................ 7,500 7,490 7,473 7,516 7,493 7,434 7,403 7,446 7,442 18 Other bonds, corporate stocks and securities 652 643 580 585 606 612 616 628 626 Loans 19 Federal funds sold 3........*..................................... 5,358 6,394 6,759 7,227 5,848 8,658 6,846 7,019 6,266 20 To commercial banks....................................... 2,926 3,396 3,619 3,783 3,360 4,881 3,927 4,924 3,338 21 To nonbank brokers and dealers in securities. 1,922 2,337 2,426 2,734 2,001 3,070 2,225 1,626 1,835 22 To others............................................................ 510 662 714 710 486 706 694 470 1,093 23 Other loans, cross................................................. 77,957 79,480 79,007 80,432 80,032 83,418 82,568 81,776 82,390 24 Commercial and industrial............................... 40,534 40,436 40,579 41,131 41,386 41,889 42,192 42,143 42,210 25 Bankers’ acceptances and commercial paper....................................................... 1,261 1,033 1,048 1,255 1,274 1,394 1,379 1,249 1,123 26 All other........................................................ 39,273 39,404 39,531 39,876 40,112 40,495 40,813 40,893 41,087 27 U.S. addressees.......................................... 36,980 37,092 37,268 37,631 37,867 38,220 38,557 38,651 38,878 28 Non-U.S. addressees................................. 2,293 2,312 2,263 2,244 2,246 2,275 2,255 2,243 2,209 29 Real estate.......................................................... 10,858 10,879 10,948 11,042 11,070 11,115 11,155 11,268 11,390 30 To individuals for personal expenditures.... 7,589 7,624 7,653 7,685 7,722 7,734 7,746 7,761 7,769 To financial institutions 31 Commercial banks in the United States.... 831 1,068 977 937 997 1,220 1,006 927 1,114 32 Banks in foreign countries........................... 3,005 3,347 2,947 2,808 2,813 3,346 3,618 2,937 2,960 33 Sales finance, personal finance companies, etc................................................................ 3,316 3,525 3,194 3,166 3,198 3,450 3,572 3,534 3,283 34 Other financial institutions........................... 4,256 4,324 4,391 4,563 4,567 4,575 4,459 4,458 4,407 35 To nonbank brokers and dealers in securities. 4,472 5,250 5,323 5,978 5,332 6,544 5,483 5,543 5,977 36 To others for purchasing and carrying securities4....................................................... 419 412 415 414 410 439 441 451 453 37 To finance agricultural production................. 238 235 235 230 237 222 222 222 215 38 All other............................................................ 2,438 2,377 2,344 2,477 2,299 2,884 2,675 2,530 2,611 39 Less: Unearned income........................................ 831 825 833 845 851 849 856 864 862 40 Loan loss reserve........................................ 1,462 1,485 1,504 1,502 1,496 1,483 1,494 1,496 1,497 41 Other loans, net.................................................... 75,664 77,170 76,670 78,084 77,684 81,086 80,219 79,416 80,031 42 Lease financing receivables................................... 1,185 1,184 1,279 1,281 1,282 1,280 1,303 1,299 1,306 43 All other assets5.................................................... 27,630 28,743 29,899 30,747 28,819 27,439 29,809 26,871 27,915 164,113 160,894 163,378 168,555 167,106 170,941 168,171 165,770 165,161 ' Deposits 45 Demand deposits.................................................. 55,610 53,285 54,811 57,629 58,036 59,200 59,292 57,592 56,317 46 Mutual savings banks....................................... 314 342 328 324 330 508 395 391 276 47 Individuals, partnerships, and corporations... 29,272 27,466 29,405 28,277 28,640 30,041 29,664 28,986 28,408 48 States and political subdivisions...................... 448 520 441 499 517 481 504 464 412 49 U.S. government............................................... 84 127 120 939 338 92 326 574 364 50 Commercial banks in the United States.......... 15,382 14,139 15,530 17,103 17,749 16,343 17,651 17,580 17,215 51 Banks in foreign countries............................... 5,459 5,551 4,597 5,314 4,980 6,195 5,654 4,802 5,579 52 Foreign governments and official institutions. 1,862 1,069 1,068 1,558 1,613 1,126 1,397 1,036 826 53 Certified and officers’ checks........................... 2,788 4,071 3,322 3,615 3,869 4,415 3,702 3,758 3,237 54 Time and savings deposits................................... 42,910 41,784 41,280 40,634 40,648 40,776 40,083 40,298 40,215 55 9,872 9,950 9,989 10,012 9,998 10,104 10,123 10,077 10,044 56 Individuals and nonprofit organizations.... 9,272 9,313 9,348 9,345 9,349 9,481 9,509 9,480 9,450 57 Partnerships and corporations operated for profit........................................................... 402 402 404 398 403 403 401 403 410 58 Domestic governmental units....................... 190 218 224 258 233 213 199 181 169 59 9 17 12 11 13 7 14 13 14 60 33,038 31,833 31,291 30,621 30,650 30,671 29,960 30,221 30,171 61 Individuals, partnerships, and corporations. 25,974 25,085 24,739 24,297 24,418 24,682 24,177 24,402 24,502 62 States and political subdivisions.................. 1,704 1,636 1,601 1,497 1,464 1,262 1,281 1,317 1,353 63 U.S. government........................................... 42 42 41 40 41 44 45 44 50 64 Commercial banks in the United States.... 1,871 1,675 1,604 1,516 1,463 1,412 1,304 1,362 1,262 65 Foreign governments, official institutions, and banks.................................................. 3,446 3,395 3,307 3,271 3,262 3,271 3,153 3,095 3,003 66 Federal funds purchased 6.................................... 25,416 26,120 27,498 28,026 27,237 28,154 27,598 25,298 27,236 Other liabilities for borrowed money 67 Borrowings from Federal Reserve Banks........ 550 435 785 410 995 275 375 49 68 Treasury tax-and-loan notes........................... 621 350 403 1,701 1,628 1,255 970 1,154 1,398 69 All other liabilities for borrowed money........ 5,262 5,243 5,210 5,353 6,916 7,081 7,183 7,234 7,432 70 Other liabilities and subordinated note and debentures...................................................... 20,458 20,350 20,815 21,160 18,937 20,116 19,352 20,400 19,121 71 Total liabilities...................................................... 150,829 147,568 150,017 155,288 153,811 157,576 154,754 152,350 151,768 72 Residual (total assets minus total liabilities)?.. 13,284 13,326 13,362 13,267 13,295 13,364 13,417 13,420 13,392 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 4. Other than financial institutions and brokers and dealers. analysis or 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 Category May 30 June 6 June 13 June 20 June 27 July 4p July 11 p July 18* July 25 p Banks with Assets of $750 Million or More 1 Total loans (gross) and investments adjusted J... 460,925 468,861 468,148 469,680 468,097 475,766 475,606 471,706 473,840 2 Total loans (gross) adjusted i.................................. 356,702 362,416 361,122 364,924 364,481 372,144 370,983 368,213 370,216 3 Demand deposits adjusted 2.................................... 96,416 104,232 103,847 100,705 99,351 101,453 106,678 102,513 102,402 4 Time deposits in accounts of $100,000 or more. 117,997 114,912 114,586 113,968 115,667 115,474 113,176 113,469 114,933 5 Negotiable CDs..................................................... 83,096 80,628 80,481 79,926 81,461 81,533 79,404 79,522 80,900 6 Other time deposits.............................................. 34,901 34,283 34,105 34,042 34,206 33,942 33,772 33,947 34,032 7 Loans sold outright to affiliates 3.......................... 3,737 3,800 3,744 3,785 3,832 3,682 3,737 3,675 3,734 8 Commercial and industrial.................................. 2,722 2,788 2,785 2,843 2,893 2,738 2,792 2,734 2,79 4 1,016 1,012 958 942 939 944 945 940 940 Banks with Assets of $1 Billion or More 10 Total loans (gross) and investments adjustedi... 431,498 439,383 438,473 439,797 438,122 445,787 445,490 441,591 443,673 11 Total loans (gross) adjusted *.................................. 334,758 340,524 339,084 342,654 342,074 349,693 348,414 345,668 347,697 12 Demand deposits adjusted 2.................................... 89,620 96,986 96,478 93,494 92,300 94,347 99,304 95,230 95,163 13 Time deposits in accounts of $100,000 or more. 110,322 107,416 107,158 106,506 108,164 107,991 105,821 106,152 107,535 77,940 75,577 75,475 74,909 76,380 76,496 74,486 74,622 75,920 15 Other time deposits.............................................. 32,381 31,838 31,683 31,597 31,785 31,494 31,335 31,530 31,615 3,691 3,751 3,696 3,738 3,787 3,638 3,691 3,629 3,691 17 Commercial and industrial.................................. 2,704 2,767 2,765 2,824 2,874 2,718 2,771 2,713 2,776 18 Other........................................................................ 987 984 930 914 914 919 920 916 915 Banks in New York City 19 Total loans (gross) and investments adjustedi*4. 97,274 99,412 99,113 100,719 99,206 103,904 102,473 100,599 101,625 79,558 81,410 81,170 82,938 81,522 85,974 84,481 82,944 84,204 22,631 25,002 23,002 22,365 22,587 22,355 24,892 22,506 22,952 22 Time deposits in accounts of $100,000 or more. 27,283 26,104 25,444 24,762 24,798 24,741 24,035 24,244 24,186 19,881 18,742 18,083 17,491 17,534 17,484 16,752 16,937 16,853 7,402 7,362 7,361 7,271 7,265 7,257 7,283 7,308 7,333 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 □ August 1979 1.31 LARGE WEEKLY REPORTING COMMERCIAL BANKS Domestic Classified Commercial and Industrial Loans Millions of dollars Outstanding Net change during Industry classification 1979 1979 1979 Mar. 28 Apr. 25 May 30 June 27 July 25 Ql Q2 May June July35 1 Durable goods manufacturing.......... 19,581 20,699 20,648 20,905 21,431 1,677 1,324 -51 257 526 2 Nondurable goods manufacturing... 17,489 17,589 17,303 17,443 17,397 311 -46 -286 140 -46 3 Food, liquor, and tobacco............. 4,810 4,753 4,365 4,411 4,246 11 -400 -388 46 -165 4 Textiles, apparel, and leather........ 4.206 4,339 4,547 4,701 4,842 396 495 208 154 140 5 Petroleum refining.......................... 2,277 2,113 2,067 1,967 1,928 -380 -310 -46 -100 -38 6 Chemicals and rubber.................... 3,510 3,605 3,496 3,448 3,435 45 -62 -109 -48 -13 7 Other nondurable goods................ 2,686 2,779 2,827 2,916 2,946 236 230 49 89 30 8 Mining (including crude petroleum and natural gas).............................. 10,150 10,383 10,888 11,008 11,221 11 858 505 120 213 9 Trade................................................... 22,481 22,957 23,574 23,975 24,524 1,327 1,495 617 401 549 10 Commodity dealers......................... 1,892 1,815 1,957 1,917 2,099 -78 25 143 -40 182 11 Other wholesale............................... 10,963 11,262 11,401 11,741 11,983 760 778 139 340 242 12 Retail............................................... 9,626 9,880 10,216 10,317 10,442 645 692 336 102 125 13 Transportation, communication, and other public utilities................... 14,063 14,474 14,610 15,284 15,384 437 1,222 136 674 99 14 Transportation................................ 6,266 6,319 6,405 6,451 6,478 443 185 86 46 26 15 Communication............................... 1,851 1,886 1,886 2,010 2,104 138 159 124 94 16 Other public utilities....................... 5,945 6,269 6,319 6,823 6,801 -146 877 50 504 -22 17 Construction....................................... 5,372 5,478 5,744 5,580 5,712 168 208 265 -164 132 18 Services................................................ 16,070 16,490 16,868 17,248 17,565 721 1,177 378 380 317 19 All other1............................................ 14,626 14,926 14,829 15,153 15,657 -1,259 527 -97 324 504 20 Total domestic loans........................... 119,832 122,997 124,465 126,596 128,890 3,393 6,764 1,467 2,132 2,294 21 Memo: Term loans (original maturity more than 1 year) included in domestic loans................................. 60,182 62,354 63,142 64,352 64,255 4,038 3,540 788 1,210 -97 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. Dec. Mar. June Sept. Dec. Mar. 2 June 2 1 All holders, individuals, partnerships, and corporations..................................................... 225.0 236.9 250.1 274.4 262.5 271.2 278.8 294.6 270.4 285.6 2 Financial business.......................................... 19.0 20.1 22.3 25.0 24.5 25.7 25.9 27.8 24.4 25.4 3 Nonfinancial business.................................... 118.8 125.1 130.2 142.9 131.5 137.7 142.5 152.7 135.9 145.1 4 Consumer......................................................... 73.3 78.0 82.6 91.0 91.8 92.9 95.0 97.4 93.9 98.6 2.3 2.4 2.7 2.5 2.4 2.4 2.5 2.7 2.7 2.8 6 Other................................................................. 11.7 11.3 12.4 12.9 12.3 12.4 13.1 14.1 13.5 13.7 At weekly reporting banks 1978 1979 1975 1976 1977 Dec. Dec. Dec. Aug. Sept. Oct. Nov. Dec. Mar. 3 June3 7 All holders, individuals, partnerships, and corporations....................................................... 124.4 128.5 139.1 137.7 139.7 141.3 142.7 147.0 121.9 128.8 8 Financial business............................................ 15.6 17.5 18.5 19.4 18.9 19.1 19.3 19.8 16.9 18.4 9 Nonfinancial business...................................... 69.9 69.7 76.3 72.0 74.1 75.0 75.7 79.0 64.6 68.1 10 Consumer........................................................... 29.9 31.7 34.6 36.8 37.1 37.5 37.7 38.2 31.1 33.0 2.3 2.6 2.4 2.4 2.4 2.5 2.5 2.5 2.6 2.7 12 Other................................................................... 6.6 7.1 7.4 7.1 7.3 7.2 7.5 7.5 6.7 6.6 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 DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period 1978 1979 1975 1976 1977 Instrument Dec. Dec. Dec. Dec. Jan. Feb. Mar. Apr. May June Commercial paper (seasonally adjusted) 1 All issuers...................................................................... 48,471 52,971 65,101 83,665 85,226 87,358 90,796 92,725 96,106 101,516 Financial companies1 Dealer-placed paper 2 2 Total.......................................................................... 6,212 7,261 8,884 12,296 12,915 13,419 14,247 14,961 15,551 16,537 3 Bank-related............................................................. 1,762 1,900 2,132 3,521 4,413 3,969 3,793 4,251 4,141 3,826 Directly placed paper 3 4 Total.......................................................................... 31,404 32,511 40,484 51,630 52,880 54,586 55,653 55,313 57,886 61,256 6,892 5,959 7,102 12,314 12,191 12,166 12,642 12,788 13,799 15,130 10,855 13,199 15,733 19,739 19,431 19,353 20,896 22,451 22,669 23,723 Bankers dollar acceptances (not seasonally adjusted) 7 Total.............................................................................. 18,727 22,523 25,450 33,700 33,749 34,337 34,617 34,391 35,286 36,989 Holder 8 Accepting banks......................................................... 7,333 10,442 10,434 8,579 7,339 7,715 7,645 7,535 7,844 8,180 9 Own bills.................................................................. 5,899 8,769 8,915 7,653 6,214 6,708 6,535 6,685 6,895 6,956 1,435 1,673 1,519 927 1,125 1,007 1,110 849 950 1,224 Federal Reserve Banks 1,126 991 954 1 0 0 204 252 0 1,400 293 375 362 664 765 750 793 861 940 971 13 Others............................................................................ 9,975 10,715 13,904 24,456 25,646 '25,872 25,975 25,744 26,501 27,837 Basis 3,726 4,992 6,378 8,574 8,869 9,114 9,281 8,679 9,007 9,202 4,001 4,818 5,863 7,586 7,762 7,858 8,104 8,087 8,367 8,599 16 All other........................................................................ 11,000 12,713 13,209 17,540 17,118 17,365 17,232 17,625 17,912 19,189 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 Digitized for FuRndAerSwEriRtin g; 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. http://fraser.smtloaurkisetf.ed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Financial Statistics □ August 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—May 5............. 000 0 1978—Oct. 13........... 10 I977—Oct....................... 7.52 1978—Sept...................... 9.41 26............. 27........... IOV4 Nov...................... 7.75 Oct....................... 9.94 Dec....................... 7.75 Nov...................... 10.94 June 16............. m Nov. 1........... 10% Dec....................... 11.55 30............. 9 6........... 10* 1978—Jan....................... 7.93 17........... Feb....................... 8.00 I979—jan........................ 11.75 Aug. 31............. 91/4 24........... 11% Mar...................... 8.00 Feb.. . .. 11.75 Apr...................... 8.00 Mar...................... 11.75 Sept. 15............. 9 Vi Dec. 26........... lm May..................... 8.27 Apr....................... 11.75 28............. 9 y4 June..................... 8.63 May..................... 11.75 I979—June 19........... 11% July...................... 9.00 11.65 July 27........... 11 y4 Aug...................... 9.01 July...................... 11.54 1.35 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 7-12, 1979 Size of loan (in thousands of dollars) All Item sizes 1,000 1-24 25-49 50-99 100-499 500-999 and over Short-Term Commercial and Industrial Loans 1 Amount of loans (thousands of dollars).......... 8,576,070 949,806 637,101 588,718 1,427,889 673,770 4,298,785 2 Number of loans.................................................... 162,509 122,951 19,944 9,112 8,161 1,061 1,281 3 Weighted average maturity (months)............... 2.9 3.4 3.3 3.2 3.1 3.2 2.5 4 Weighted average interest rate (percent per annum)............................................................. 12.34 12.30 12.69 13.02 12.61 12.68 12.07 5 Interquartile range *.......................................... 11.50-13.02 10.67-13.42 11.19-13.83 12.36-13.75 12.00-13.37 12.16-13.17 11.50-12.40 Percentage of amount of loans 6 With floating rate.................................................. 47.6 20.8 25.4 29.2 48.7 65.4 56.2 7 Made under commitment.................................... 47.2 24.0 30.0 44.2 47.6 60.0 53.2 Long-Term Commercial and Industrial Loans 8 Amount of loans (thousands of dollars).......... 1,485,131 423,381 376,270 127,185 558,296 9 Number of loans.................................................... 25,164 22,615 2,161 181 208 10 Weighted average maturity (months)................ 48.2 40.2 58.5 47.3 47.6 11 Weighted average interest rate (percent per annum)............................................................. 12.08 11.57 11.80 12.90 12.48 12 Interquartile range 1.......................................... 11.30-13.16 10.00-13.24 10.75-13.00 11.75-13.52 11.75-13.00 Percentage of amount of loans 13 With floating rate................................................... 47.4 13.2 29.2 82.2 77.6 14 Made under commitment.................................... 50.0 38.6 23.4 59.5 74.5 Construction and Land Development Loans 15 Amount of loans (thousands of dollars).......... 1,019,842 96,803 108,609 131,421 307,713 375.295 16 Number of loans.................................................... 18,490 11,506 3,209 1,826 1,680 268 17 Weighted average maturity (months)................ 7.6 8.9 6.3 7.7 8.4 6.9 18 Weighted average interest rate (percent per annum)............................................................. 12.23 12.39 11.94 11.89 12.36 12.28 19 Interquartile range *.......................................... 11.25-13.45 11.30-13.35 10.76-12.62 10.00-12.73 10.64-13.72 11.25--13.75 Percentage of amount of loans 20 With floating rate.................................................. 49.3 28.5 19.6 44.5 40.3 72.4 21 Secured by real estate........................................... 79.5 87.7 96.4 95.1 70.3 74.7 50.3 45.9 23.4 27.0 41.2 74.9 Type of construction 23 1- to 4-family.......................................................... 43.0 81.5 75.2 76.8 41.9 12.7 24 Multifamily............................................................. 11.6 2.3 2.0 2.5 8.5 22.7 24 Nonresidential........................................................ 45.4 16.1 22.8 20.7 49.7 64.6 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).......... 1,057,427 200,607 181,082 145,374 178,938 157,441 193,955 74,330 53,495 12,330 4,309 2,717 1,104 375 7.5 8.1 8.5 6.5 11.4 5.4 5.0 29 Weighted average interest rate (percent per annum)............................................................. 11.20 10.56 10.69 10.73 10.89 11.97 12.35 30 Interquartile range*.......................................... 10.21-12.24 9.88-11.19 10.00-11.24 10.00-11.46 10.12-11.30 11.00-13.16 11.41-13.52 By purpose of loan 31 Feeder livestock..................................................... 11.21 10.57 10.68 10.83 10.80 11.52 12.31 3 3 2 3 O O t t h h e e r r c li u v r e r s e t n o t c k op ... e .. r . a .. t .. i . n .. g .. .. e .. x .. p .. e .. n .. s .. e .. s .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 1 1 . .7 2 4 0 1 1 0 0 . . 4 5 6 2 1 1 0 0. . 9 0 5 8 1 1 0 0 . . 1 8 1 7 1 11 1 . . 0 9 0 6 1 12 2 . . 4 8 1 3 (2) 12.50 34 Farm machinery and equipment........................ 10.61 10.70 10.27 10.40 11.52 (2) (2) 35 Other......................................................................... 11.15 10.70 10.82 10.95 10.03 11.79 12.70 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 G. 14 (416) statistical release. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Markets A ll 1.36 INTEREST RATES Money and Capital Markets Averages, percent per annum 1979 1979, week ending Instrument 1976 1977 1978 Apr. May June July June 30 July 7 July 14 July 21 July 28 Money market rates 1 Federal funds1.............................................. 5.05 5.54 7.94 10.01 10.24 10.29 10.47 10.32 10.42 10.28 10.35 10.63 Prime commercial paper2*3 2 90- to 119-day........................................... 5.24 5.54 7.94 9.85 9.95 9.76 9.87 9.67 9.68 9.83 9.89 9.99 3 4- to 6-month........................................... 5.35 5.60 7.99 9.87 9.98 9.71 9.82 9.61 9.62 9.75 9.83 9.98 4 Finance company paper, directly placed, 3- to 6-month2*3................................... 5.22 5.49 7.78 10.15 9.75 9.44 9.39 9.29 9.25 9.31 9.36 9.51 5 Prime bankers acceptances, 90-day3*4....... 5.19 5.59 8.11 10.42 9.98 9.79 9.99 9.72 9.73 9.94 10.03 10.17 6 Large negotiable certificates of deposit, 3-month, secondary market5............... 5.26 5.58 8.20 10.05 10.15 9.95 10.11 c9.89 9.84 9.94 10.10 10.29 7 Eurodollar deposits, 3-month6.................. 5.57 6.05 8.74 *10.60 10.73 10.52 10.87 c10.68 10.73 10.64 10.73 11.04 U.S. Treasury Bills3*7 Market yields 8 3-month.................................................... 4.98 5.27 7.19 9.46 9.61 9.06 9.24 8.83 9.10 9.28 9.31 9.28 9 6-month.................................................... 5.26 5.53 7.58 9.49 9.54 9.06 9.24 8.88 8.97 9.19 9.31 9.39 10 1-year........................................................ 5.52 5.71 7.74 9.28 9.27 8.81 8.87 8.64 8.70 8.79 8.93 9.00 Rates on new issue 8 11 3-month.................................................... 4.989 5.265 7.221 9.493 9.592 9.045 9.262 8.802 8.968 9.265 9.336 9.479 5.266 5.510 7.572 9.498 9.562 9.062 9.190 8.903 8.867 9.164 9.255 9.473 Capital market rates Government Notes and Bonds U.S. Treasury Constant maturities9 1-yea r 5.88 6.09 8.34 10.12 10.12 9.57 9.64 9.39 9.44 9.53 9.70 9.82 2-yea r 6.45 8.34 9.78 9.78 9.22 9.14 9.00 8.97 9.03 9.13 9.32 3-yea r 6.77 6.69 8.29 9.43 9.42 8.95 8.94 8.81 8.78 8.88 8.96 9.05 5-year.............................................. 7.18 6.99 8.32 9.25 9.24 8.85 8.90 8.76 8.73 8.86 8.94 8.98 7-year.............................................. 7.42 7.23 8.36 9.21 9.23 8.86 8.92 8.78 8.74 8.87 8.97 9.00 10-year..........................•................. 7.61 7.42 8.41 9.18 9.25 8.91 8.95 8.83 8.79 8.93 9.01 9.01 20-year............................................ 7.86 7.67 8.48 9.12 9.21 8.91 8.92 8.82 8.79 8.88 8.97 8.98 30-year............................................ 8.49 9.08 9.19 8.92 8.93 8.85 8.82 8.90 8.97 8.99 Notes and bonds maturing in10 21 3 to 5 years............................... 6.94 6.85 8.30 9.32 9.30 8.89 8.88 8.78 8.71 8.82 8.91 9.00 22 Over 10 years (long-term)........ 6.78 7.06 7.89 8.44 8.55 8.32 8.35 8.25 8.24 8.32 8.38 8.42 State and local Moody’s series11 23 Aaa....................... 5.66 5.20 5.52 5.80 5.81 5.54 5.58 5.50 5.50 5.60 5.60 5.60 24 Baa....................... 7.49 6.12 6.27 6.25 6.38 6.19 6.11 6.10 6.10 6.20 6.15 6.00 25 Bond Buyer series12. 6.64 5.68 6.03 6.29 6.25 6.13 6.13 6.12 6.08 6.11 6.15 6.19 Corporate Bonds Seasoned issues13 26 All industries.............................. 9.01 8.43 9.07 9.81 9.96 9.81 9.69 9.72 9.68 9.67 9.67 9.70 By rating groups 27 Aaa.......................................... 8.43 8.02 8.73 9.38 9.50 9.29 9.20 9.23 9.16 9.17 9.19 9.23 28 Aa............................................ 8.75 8.24 8.92 9.65 9.86 9.66 9.49 9.53 9.49 9.47 9.48 9.51 29 A.............................................. 9.09 8.49 9.12 9.88 10.00 9.89 9.75 9.82 9.78 9.73 9.73 9.75 30 Baa.......................................... 9.75 8.97 9.45 10.33 10.47 10.38 10.29 10.32 10.30 10.29 10.27 10.30 Aaa utility bonds14 31 New issue.................................... 8.48 8.19 8.96 9.70 9.83 9.50 9.58 9.43 9.57 9.63 32 Recently offered issues............... 8.49 8.19 8.97 9.74 9.84 9.50 9.53 9.39 9.41 9.50 9.58 9.59 Dividend/Price Ratio 15 33 Preferred stocks.......................... 7.97 7.60 8.25 8.29 8.82 8.87 8.93 8.91 8.92 8.92 8.90 8.97 34 Common stocks.......................... 3.77 4.56 5.28 5.35 5.58 5.53 5.50 5.52 5.53 5.44 5.56 5.45 1. Weekly figures are 7-day averages of daily effective rates for the week 9. Yield 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. 10. 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 (in the case of commercial paper), or finance all bonds neither due nor callable in less than 10 years, including a num­ companies (in the case of finance paper). Previously, most representative ber of very low yielding “flower” bonds. rate quoted by those dealers and finance companies. 11. General obligations only, based on figures for Thursday, from 3. Yields are quoted on a bank-discount basis. Moody’s Investors Service. 4. Average of the midpoint of the range of daily dealer closing rates 12. Twenty issues of mixed quality. offered for domestic issues. 13. Averages of daily figures from Moody’s Investors Service. 5. Weekly figures (week ending Wednesday) are 7-day averages of the 14. 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 6. Averages of daily quotations for the week ending Wednesday. issues (included only for first 4 weeks after termination of underwriter 7. Except for new bill issues, yields are computed from daily closing price restrictions), on Friday close-of-business quotations. bid prices. 15. Provided by Standard and Poors’ Corporation. 8. 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 □ August 1979 1.37 STOCK MARKET Selected Statistics 1979 Indicator 1976 1977 1978 Jan. Feb. Mar. Apr. May June July Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31,1965 = 50). 54.45 53.67 53.76 55.76 55.06 56.18 57.50 56.21 57.61 58.38 60.44 57.84 58.30 61.31 60.42 61.89 63.64 62.21 63.57 64.24 39.57 41.07 43.25 43.69 42.27 43.22 45.92 45.60 47.53 48.85 4 Utility............................................................................ 36.97 40.91 39.23 38.79 39.22 38.94 38.63 37.48 38.44 38.88 5 Finance......................................................................... 52.94 55.23 56.74 57.59 56.09 57.65 59.50 58.80 61.87 64.43 6 Standard & Poor's Corporation (1941-43 = 10)1.. 102.01 98.18 96.11 99.70 98.23 100.11 102.10 99.73 101.73 102.71 7 American Stock Exchange (Aug. 31,1973 = 100). 101.63 116.18 144.56 159.26 160.92 171.51 181.14 180.81 196.08 197.63 Volume of trading (thousands of shares) 8 New York Stock Exchange...................................... 21,189 20,936 28,591 27,988 25,037 29,536 31,033 28,352 34,662 32,416 9 American Stock Exchange....................................... 2,565 2,514 3,922 3,150 2,944 4,105 4,262 3,888 5,236 3,890 Customer financing (end-of-period balances, in millions of dollars) 10 Regulated margin credit at brokers/dealers2 8,166 9,993 11,035 10,955 10,989 11,056 11,416 11,314 11,763 t 11 Margin stock3................................................... 7,960 9,740 10,830 10,750 10,790 10,870 11,220 11,130 11,590 12 Convertible bonds............................................ 204 250 205 204 195 185 194 183 172 13 Subscription issues........................................... 2 3 1 1 4 1 2 1 1 n.a. Free credit balances at brokers4 14 Margin-account................................................ 585 640 835 810 775 830 835 84*) 897 15 Cash-account..................................................... 1,855 2,060 2,510 2,565 2,430 2,490 2,550 2,590 2,880 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 21.0 29.0 21.0 23.0 22.0 21.0 18 40-49.............................................................................. 23.0 36.0 28.0 32.0 31.0 29.0 29.0 30.0 28.0 n.a. 19 50-59.............................................................................. 35.0 23.0 18.0 22.0 18.0 25.0 23.0 23.0 26.0 20 60-69.............................................................................. 15.0 11.0 10.0 12.0 11.0 12.0 12.0 12.0 12.0 21 70-79.............................................................................. 8.7 6.0 6.0 7.0 6.0 7.0 7.0 7.0 7.0 22 80 or more.................................................................... 6.0 5.0 5.0 6.0 5.0 6.0 6.0 6.0 6.0 Special misceilaneous-account balances at brokers (end of period) 23 Total balances (millions of dollars) 6.. 8,776 9,910 13,092 13,010 13,002 13,147 13,218 13,099 13,634 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 and 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 Account 1975 1976 1977 Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June* Savings and loan associations 1 Assets..................................... 338,233 391,907 459,241 515,352 520,677 523,649 529,820 534,168 539,715 543,459 549,181 555,338 2 Mortgages.............................. 278,590 323,005 381,163 425,236 429,420 432,858 435,460 437,905 441,420 445,705 451,054 456,502 3 Cash and investment securities1........................... 30,853 35,724 39,150 45,577 45,869 44,855 47,653 49,018 50,130 48,674 48,257 48,133 28,790 33,178 38,928 44,539 45,388 45,936 46,707 47,245 48,165 49,080 49,870 50,703 5 Liabilities and net worth........ 338,233 391,907 459,241 515,352 520,677 523,649 529,820 534,168 539,715 543,459 549,181 555,338 6 Savings capital....................... 285,743 335,912 386,800 423,050 425,207 431,009 435,752 438,633 446,981 445,831 447,872 454,718 7 Borrowed money................... 20,634 19,083 27,840 39,873 40,981 42,960 42,468 41,368 41,592 43,765 44,380 46,865 8 FHLBB.............................. 17,524 15,708 19,945 29,456 30,322 31,990 31,758 31,004 31,123 32,389 33,003 34,227 9 Other.................................. 3,110 3,375 7,895 10,417 10,659 10,970 10,610 10,364 10,469 11,376 11,377 12,638 10 Loans in process.................... 5,128 6,840 9,911 11,165 11,015 10,737 10,445 10,287 10,346 10,706 11,136 11,259 11 Other...................................... 6,949 8,074 9,506 12,832 14,666 9,918 11,971 14,250 10,919 12,971 15,283 11,707 19,779 21,998 25,184 28,432 28,808 29,025 29,284 29,630 29,877 30,186 30,510 30,789 13 Memo: Mortgage loan com­ mitments outstanding 3.. 10,673 14,826 19,875 21,503 20,738 18,911 18,053 19,038 21,085 22,923 23,569 22,766 Mutual savings banks 9 14 Assets..................................... 121,056 134,812 147,287 156,843 157,436 158,174 158,892 160,078 161,866 Loans 15 Mortgage........................... 77,221 81,630 88,195 93,903 94,497 95,157 95,552 95,821 96,136 4,023 5,183 6,210 8,272 7,921 7,195 7,744 8,455 9,421 Securities 17 U.S. government.............. 4,740 5,840 5,895 5,105 5,035 4,959 4,838 4,801 4,814 n.a. n.a. 18 State and local government. 1,545 2,417 2,828 3,190 3,307 3,333 3,328 3,167 3,126 19 Corporate and other4....... 27,992 33,793 37,918 39,651 39,679 39,732 40,007 40,307 40,658 20 Cash....................................... 2,330 2,355 2,401 2,735 3,033 3,665 3,274 3,306 3,410 21 Other assets........................... 3,205 3,593 3,839 3,988 3,962 4,131 4,149 4,222 4,300 22 Liabilities............................... 121,056 134,812 147,287 156,843 157,436 158,174 158,892 160,078 161,866 n.a. 23 Deposits................................. 109,873 122,877 134,017 141,026 141,155 142,701 142,879 143,539 145,650 145,096 145,056 24 Regular s........................... 109,291 121,961 132,744 139,422 139,697 141,170 141,388 142,071 144,042 143,210 143,271 25 Ordinary savings............ 69,653 74,535 78,005 74,124 72,398 71,816 69,244 68,817 68,829 67,758 67,577 26 Time and other.............. 39,639 47,426 54,739 65,298 67,299 69,354 72,145 73,254 75,213 75,213 75,694 27 Other.................................. 582 916 1,272 1,604 1,458 1,531 1,491 1,468 1,608 1,608 1,784 28 Other liabilities..................... 2,755 2,884 3,292 5,040 5,411 4,565 5,032 5,485 5,048 5,1048 n.a. 29 General reserve accounts.... 8,428 9,052 9,978 10,777 10,870 10,907 10,980 11,054 11,167 11,167 n.a. 30 Memo: Mortgage loan com­ mitments outstanding. 1,803 2,439 4,066 4,843 4,843 4,400 4,366 4,453 4,482 4,449 4,352 Life insurance companies 31 Assets..................................... 289,304 321,552 351,722 382,446 385,562 389,021 393,402 395,553 399,530 402,426 405,627 Securities 32 Government....................... 13,758 17,942 19,553 19,757 19,711 19,579 19,829 19,922 20,119 19,958 20,381 33 United States7............... 4,736 5,368 5,315 5,183 4,934 4,795 5,049 5,209 5,324 5,147 5,149 34 State and local............... 4,508 5,594 6,051 6,035 6,235 6,250 6,236 6,132 6,106 5,979 6,272 4,514 6,980 8,187 8,539 8,542 8,534 8,544 8,581 8,689 8,832 8,960 36 Business............................. 135,317 157,246 175,654 195,883 197,615 197,342 201,061 201,869 203,971 205,247 207,775 n.a. 37 Bonds............................. 107,256 122,984 141,891 161,347 162,347 161,923 165,552 166,693 167,625 168,862 171,762 38 Stocks............................. 28,061 34,262 33,763 34,536 34,780 35,419 35,509 35,176 36,346 36,385 36,013 39 Mortgages.............................. 89,167 91,552 96,848 103,161 104,106 105,932 106,397 107,137 108,189 109,009 109,614 40 Real estate............................. 9,621 10,476 11,060 11,693 11,707 11,776 11,841 11,919 11,959 12,071 12,101 24,467 25,834 27,556 29,521 29,818 30,202 30,506 30,835 31,224 31,586 31,832 42 Other assets........................... 16,971 18,502 21,051 22,431 22,605 24,190 23,768 23,871 24,068 24,555 23,924 Credit unions 43 Total assets/liabilities and 38,037 45,225 54,084 61,194 61,614 62,595 61,756 62,319 63,883 63,247 64,372 65,603 20,209 24,396 29,574 33,823 34,215 34,681 34,165 34,419 35,289 34,653 35,268 35,986 45 State....................................... 17,828 20,829 24,510 27,371 27,399 27,914 27,591 27,900 28,594 28,594 29,104 29,617 46 Loans outstanding................ 28,169 34,384 42,055 50,393 51,103 51,807 51,526 51,716 52,480 52,542 53,100 53,831 47 Federal............................... 14,869 18,311 22,717 27,545 28,031 28,583 28,340 28,427 28,918 28,849 29,109 29,525 48 State.............................. 13,300 16,073 19,338 22,848 23,072 23,224 23,186 23,289 23,562 23,693 23,991 24,306 49 Savings................................... 33,013 39,173 46,832 52,240 52,418 53,048 51,916 52,484 54,243 53,745 54,638 55,949 50 Federal (shares)................. 17,530 21,130 25,849 28,865 28,992 29,326 28,427 28,743 29,741 29,339 29,755 30,563 S1 State (shares and deposits). 15,483 18,043 20,983 23,375 23,426 23,722 23,489 23,741 24,502 24,406 24,883 25,386 For notes see bottom of page A30. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Financial Statistics □ August 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 1978 1979 1979 Sept. 1977 1978 1976) HI H2 HI Apr. May June U.S. budget 1 Receipts1.............................................. 81,772 357,762 401,997 210,650 206,275 246,574 52,230 38,287 53,910 2 Outlays1................................................ 94,729 402,725 450.836 222,518 238,150 245,616 40,752 41,618 40,687 3 Surplus, or deficit (—)......................... -12,956 -44,963 -48,839 -11,870 -31,875 958 11,478 -3,331 13,223 4 Trust funds...................................... -1,952 7,833 12,693 4,334 11,755 4,041 705 6,274 1,981 5 Federal funds2................................. -11,004 -52,796 -61,532 -16,204 -43,630 -4,999 10,774 -9,605 11,241 Off-budget entities surplus, or deficit (—) 6 Federal Financing Bank outlays....... -2,564 -8,201 -10,614 -5,105 -5,082 -7,712 -1,102 -1,560 -1,723 7 Other 3.................................................. 779 -483 287 -790 1,841 -447 -542 69 -264 U.S. budget plus off-budget, including Federal Financing Bank 8 Surplus, or deficit (—)....................... -14,741 -53,647 -59,166 -17,765 -35,117 -7,201 9,834 -4,822 11,236 Financed by 9 Borrowing from the public............ 18,027 53,516 59,106 23,374 30,308 6,039 -4,965 1,806 -1,458 10 Cash and monetary assets (de­ crease, or increase (—)).......... -2,899 -2,238 -3,023 -5,098 3,381 -8,878 -2,991 -16 -13,044 11 Other*............................................. -387 2,369 3,083 -511 1,428 10,040 -1,878 3,032 3,266 Memo: 12 Treasury operating balance (level, end of period)............................. 17,418 19,104 22,444 17,526 16,291 17,485 8,342 4,657 17,485 13 Federal Reserve Banks.................. 13,299 15,740 16,647 11,614 4,196 3,290 3,100 1,974 3,290 14 Tax and loan accounts.................. 4,119 3,364 5,797 5,912 12,095 14,195 5,242 2,683 14,195 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 biased 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. The NAMSB reports that, effective April 1979, balance sheet data Credit unions: Estimates by the National Credit Union Administration are not strictly comparable with previous months. This largely reflects: for a group of federal and state-chartered credit unions that account for (1) changes in FDIC reporting proceedures; and (2) reclassification of about 30 percent of credit union assets. Figures are preliminary and certain items. 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 1978 1979 1979 Sept. 1977 1978 1976) HI H2 HI Apr. May June Receipts 1 All sources1.......................................... 81,772 357,762 401,997 210,650 206,275 246,574 52,230 38,287 53,910 2 Individual income taxes, net............... 38,800 157,626 180,988 90,336 98,854 111,603 25,029 14,575 25,568 3 Withheld........................................... 32,949 144,820 165,215 82,784 90,148 98,683 15,537 16,736 18,080 4 Presidential Election Campaign Fund.......................................... 1 37 39 36 3 32 7 7 4 5 Nonwithheld..................................... 6,809 42,062 47,804 37,584 10,777 44,116 17,975 5,696 8,424 6 Refunds1........................................... 958 29,293 32,070 30,068 2,075 31,228 8,489 7,864 940 Corporation income taxes 7 Gross receipts................................... 9,808 60,057 65,380 38,496 28,536 42,427 10,418 1,870 16,016 8 Refunds............................................ 1,348 5,164 5,428 2,782 2,757 2,889 651 467 376 9 Social insurance taxes and contribu­ tions, net....................................... 25,760 108,683 123,410 66,191 61,064 75,609 14,165 18,652 9,375 10 Payroll employment taxes and contributions 2......................... 21,534 88,196 99,626 51,668 51,052 59,298 9,051 12,932 8,374 11 Self-employment taxes and contributions 3......................... 269 4,014 4,267 3,892 369 4,616 2,993 318 322 12 Unemployment insurance............... 2,698 11,312 13,850 7,800 6,727 8,623 1,608 4,864 188 13 Other net receipts 4......................... 1,259 5,162 5,668 2,831 2,917 3,072 513 538 491 14 Excise taxes.......................................... 4,473 17,548 18,376 8,835 9,879 8,984 1,529 1,601 1,464 15 Customs deposits................................. 1,212 5,150 6,573 3,320 3,748 3,682 623 645 637 16 Estate and gift taxes........................... 1,455 7,327 5,285 2,587 2,691 2,657 323 559 414 17 Miscellaneous receipts 5..................... 1,612 6,536 7,413 3,667 4,260 4,501 794 852 811 Outlays 18 All types1............................................. 94,729 402,725 450,836 222,518 238,150 245,616 40,752 41,618 40,687 19 National defense.................................. 22,307 97,501 105,186 52,979 55,129 57,643 9,439 9,965 9,973 20 International affairs............................. 2,197 4,813 5,922 2,904 2,221 3,538 407 743 482 21 General science, space, and technology..................................... 1,161 4,677 4,742 2,395 2,362 2,461 256 442 461 22 Energy.................................................. 794 4,172 5,861 2,487 4,461 4,417 665 737 789 23 Natural resources and environment.. 2,532 10,000 10,925 4,959 6,119 5,672 965 969 900 24 Agriculture........................................... 581 5,532 7,731 2,353 4,854 3,020 502 69 -525 25 Commerce and housing credit............ 1,392 -44 3,325 -946 3,291 60 100 16 95 26 Transportation..................................... 3,304 14,636 15,444 7,723 8,758 7,688 1,251 1,326 1,340 27 Community and regional development................................. 1,340 6,286 11,000 5,928 6,108 4,499 602 787 912 28 Education, training, employment, and social services....................... 5,162 20,985 26,463 12,792 13,676 14,467 2,595 2,559 2,193 29 Health................................................... 8,721 38,785 43,676 21,391 23,942 24,860 4,060 4,258 4,268 30 Income security1................................. 32,797 137,915 146,212 75,201 73,305 81,173 13,316 13,588 13,595 31 Veterans benefits and services............ 3,962 18,038 18,974 9,603 9,545 10,127 840 1,694 2,497 32 Administration of justice.................... 859 3,600 3,802 1,946 1,973 2,096 369 364 323 33 General government............................ 883 3,374 3,777 1,803 2,111 2,291 305 454 405 34 General-purpose fiscal assistance....... 2,092 9,499 9,601 4,665 4,385 3,890 1,752 160 76 35 Interest 6.............................................. 7,216 38,009 43,966 22,280 24,110 26,934 3,993 4,241 7,834 36 Undistributed offsetting receipts 6i7.. -2,567 -15,053 -15,772 -7,945 -8,200 -8,999 -664 -755 -4,931 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. 4. Supplementary medical insurance premiums, federal employee re­ Source. “Monthly Treasury Statement of Receipts and Outlays of the tirement contributions, and Civil Service retirement and disability fund. U.S. Government” and the Budget of the U.S. Government, Fiscal Year 5. Deposits of earnings by Federal Reserve Banks and other miscel­ 1980. laneous receipts. 6. Effective September 1976, “Interest” and “Undistributed Offsetting Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Financial Statistics □ August 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 Mar. Apr. May June July 1 Total gross public debt.......................................... 576.6 653.5 718.9 789.2 796.8 796.4 804.8 804.9 807.5 By type 2 Interest-bearing debt............................................ 575.7 652.5 715.2 782.4 792.3 795.4 803.8 799.9 806.5 3 Marketable............................................................ 363.2 421.3 459.9 487.5 500.4 504.6 506.9 499.3 507.0 4 Bills.................................................................... 157.5 164.0 161.1 161.7 165.5 163.7 163.1 159.9 159.9 167.1 216.7 251.8 265.8 270.8 275.3 276.1 272.1 278.3 38.6 40.6 47.0 60.0 64.1 65.5 67.7 67.4 68.8 7 Nonmarketable1.................................................... 212.5 231.2 255.3 294.8 8 291.9 290.8 296.9 300.5 299.5 8 Convertible bonds 2........................................... 2.3 2.3 2.2 2.2 2.2 2.2 2.2 2.2 2.2 1.2 4.5 13.9 24.3 24.2 24.0 24.0 24.1 24.2 10 Foreign issues 3.................................................. 21.6 22.3 22.2 29.6 28.2 25.4 25.2 26.8 28.0 11 Government................................................... 21.6 22.3 22.2 28.0 24.0 21.3 21.0 22.7 23.9 12 Public.............................................................. 0 0 0 1.6 4.2 4.2 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 80.8 80.9 14 Government account series4............................ 119.4 129.7 139.8 157.5 153.8 158.2 164.6 166.3 163.9 15 Non-interest-bearing debt..................................... 1.0 1.1 3.7 6.8 4.4 .9 1.0 5.1 1.0 By holder* 16 U.S. government agencies and trust funds........ 139.1 147.1 154.8 170.0 166.3 170.7 177.1 89.8 97.0 102.5 109.6 110.3 108.6 106.2 18 Private investors.................................................... 349.4 409.5 461.3 508.6 519.6 517.1 521.5 85.1 103.8 101.4 93.4 96.3 97.0 98.5 4.5 5.9 5.9 5.2 5.2 5.2 5.2 21 Insurance companies............................................ 9.5 12.7 15.1 15.0 15.1 14.8 14.7 22 Other corporations............................................... 20.2 27.7 22.7 20.6 23.8 23.6 26.2 n.a. n.a. 34.2 41.6 55.2 68.6 68.8 69.1 69.2 Individuals 67.3 72.0 76.7 80.7 80.6 80.6 80.6 24.0 28.8 28.6 30.0 31.1 31.5 31.8 66.5 78.1 109.6 137.8 132.8 124.8 118.0 27 Other miscellaneous investors7........................... 38.0 38.9 46.1 57.4 66.0 70.6 77.5 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% 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 Apr. May Apr. May All maturities 1 to 5 years 1 All holders.................................................................... 459,927 487,546 504,585 506,867 151,264 162,886 169,540 161,719 2 U.S. government agencies and trust funds.............. 14,420 12,695 12,683 12,682 4,788 3,310 2,748 2,509 3 Federal Reserve Banks.......................................................... 110011,,119911 109,616 108,588 106,185 27,012 31,283 34,255 28,634 4 Private investors.......................... 344,315 365,235 383,315 388,001 119,464 128,293 132,538 130,576 5 Commercial banks.................. 75,363 68,890 69,729 70,704 38,691 38,390 37,878 38,157 Mutual savings banks............. 4,379 3,499 3,415 3,379 2,112 1,918 1,840 1,811 Insurance companies............... 12,378 11,635 11,934 11,792 4,729 4,664 5,022 4,822 Nonfinancial corporations.... 9,474 8,272 8,769 9,925 3,183 3,635 3,048 3,299 Savings and loan associations. 4,817 3,835 3,859 3,555 2,368 2,255 2,083 1,989 State and local governments.. 15,495 18,815 18,763 18,544 3,875 3,997 4,179 4,385 All others................................. 222,409 250,288 266,846 270,101 64,505 73,433 78,488 76,112 Total, within 1 year 5 to 10 years 12 All holders...................................................... 230,691 228,516 238,544 243,856 45,328 50,400 45,161 47,786 13 U.S. government agencies and trust funds. 1,906 1,488 2,042 2,280 2,129 1,989 1,989 1,989 14 Federal Reserve Banks................................. 56,702 52,801 50,777 53,558 10,404 14,809 11,937 12,225 15 Private investors............................................ 172,084 174,227 185,725 188,018 32,795 33,601 31,235 33,572 16 Commercial banks..................................... 29,477 20,608 22,102 22,347 6,162 7,490 7,095 7,542 17 Mutual savings banks................................ 1,400 817 855 847 584 496 456 457 18 Insurance companies.................................. 2,398 1,838 1,811 1,870 3,204 2,899 2,670 2,768 19 Nonfinancial corporations......................... 5,770 4,048 5,021 5,759 307 369 293 470 20 Savings and loan associations................... 2,236 1,414 1,608 1,407 143 89 93 82 21 State and local governments..................... 7,917 8,194 7,406 6,811 1,283 1,588 1,565 1,669 22 All others.................................................... 122,885 137,309 146,921 148,978 21,112 20,671 19,064 20,584 Bills, within 1 year 10 to 20 years 23 All holders....................................................... 161,081 161,747 163,730 163,076 12,906 19,800 22,595 24,968 24 U.S. government agencies and trust funds., 32 2 * * 3,102 3,876 3,875 4,524 25 Federal Reserve Banks.................................. 42,004 42,397 39,815 38,165 1,510 2,088 2,142 3,118 26 Private investors............................................. 119,035 119,348 123,916 124,910 8,295 13,836 16,578 17,326 27 Commercial banks..................................... 11,996 5,707 5,775 6,373 456 956 1,176 1,135 28 Mutual savings banks................................. 484 150 114 151 137 143 138 142 29 Insurance companies.................................. 1,187 753 518 506 1,245 1,460 1,594 1,488 30 Nonfinancial corporations......................... 4,329 1,792 2,205 2,916 133 86 236 247 31 Savings and loan associations................... 806 262 257 223 54 60 59 61 32 State and local governments..................... 6,092 5,524 4,511 4,177 890 1,420 1,689 1,749 33 All others.................................................... 94,152 105,161 110,536 110,564 5,380 9,711 11,686 12,505 Other, within 1 year Over 20 years 34 All holders..................................................... 69,610 66,769 74,814 80,780 19,738 25,944 28,746 28,538 35 U.S. government agencies and trust funds 1,874 1,487 2,042 2,280 2,495 2,031 2,030 1,380 36 Federal Reserve Banks................................ 14,698 10,404 10,962 15,393 5,564 8,635 9,478 8,650 37 Private investors........................................... 53,039 54,879 61,810 63,108 11,679 15,278 17,239 18,508 38 Commercial banks................................... 15,482 14,901 16,327 15,973 578 1,446 1,477 1,523 39 Mutual savings banks............................... 916 667 741 696 146 126 126 121 40 Insurance companies................................ 1,211 1,084 1,294 1,364 802 774 837 844 41 Nonfinancial corporations....................... 1,441 2,256 2,816 2,843 81 135 171 150 42 Savings and loan associations.................. 1,430 1,152 1,352 1,184 16 17 16 17 43 State and local governments................... 1,825 2,670 2,896 2,634 1,530 3,616 3,924 3,930 44 All others.................................................. 28,733 32,149 36,385 38,414 8,526 9,164 10,687 11,922 Note. Direct public issues only. Based on Treasury Survey of Owner­ (1) 5,451 commercial banks, 463 mutual savings banks, and 725 insurance ship from Treasury Bulletin (U.S. Treasury Department). companies, each about 80 percent; (2) 431 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 May 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 □ August 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 Apr. May June Apr. 25 May 2 May 9 May 16 May 23 May 30 1 U.S. government securities... 10,449 10,838 10,285 14,280 13,354 15,284 13,992 14,892 10,584 10,716 15,140 16,942 By maturity 2 Bills........................................ 6,676 6,746 6,173 9,906 7,555 9,286 9,608 9,739 5,876 5,991 7,946 9,556 3 Other within 1 year.............. 210 237 392 434 347 446 445 503 230 373 361 437 4 1-5 years............................... 2,317 2,320 1,889 2,184 2,257 2,563 2,188 2,154 1,442 1,671 3,096 3,559 5 5-10 years............................. 1,019 1,148 965 674 1,560 1,472 583 1,267 1,103 1,411 1,970 1,636 6 Over 10 years......................... 229 388 866 1,083 1,635 1,518 1,168 1,229 1,932 1,272 1,766 1,754 By type of customer 7 U.S. government securities dealers................................ 1,360 1,267 1,135 1,617 1,205 1,335 1,740 1,452 1,009 1,028 1,312 1,421 8 U.S. government securities brokers............................... 3,407 3,709 3,838 5,043 5,262 6,118 5,202 5,048 4,019 4,088 6,495 7,013 9 Commercial banks................ 2,426 2,295 1,804 2,095 2,009 2,448 2,077 2,250 1,572 1,551 2,294 2,507 10 All othersi............................. 3,257 3,568 3,508 5,525 4,878 5,383 4,973 6,141 3,984 4,049 5,040 6,001 11 Federal agency securities.... 1,548 1,729 1,894 2,219 2,621 3,231 2,549 2,521 1,541 2,288 3,536 3,635 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 Apr. May June Apr. 4 Apr. 11 Apr. 18 Apr. 25 May 2 May 9 Positions2 1 U.S. government securities... 7,592 5,172 2,656 4,278 r5t265 7,166 939 6,002 4,985 4,533 2,856 4,522 2 Bills........................................ 6,290 4,772 2,452 4,698 '6,090 7,445 2,059 6,460 5,360 4,500 3,384 4,084 3 Other within 1 year.............. 188 99 260 -276 -34 101 -428 -349 -375 -108 -33 9 4 1-5 years............................... 515 60 -92 -264 -744 -437 -690 -109 -311 -169 -393 -851 5 5-10 years............................. 402 92 40 -83 377 224 7 -7 -122 -88 -139 458 198 149 -4 202 567 -167 -9 8 422 398 37 823 7 Federal agency securities.... 729 693 606 953 1,660 2,168 990 928 871 910 1,165 1,237 Financing3 8 All sources............................. 8,715 9,877 10,204 14,680 14,849 17,111 10,951 16,572 15,838 14,213 13,045 13,151 Commercial banks 9 New York City................. 1,896 1,313 599 1,266 733 1,638 -50 1,699 1,531 1,319 850 522 10 Outside New York City... 1,660 1,987 2,174 2,724 2,839 2,883 2,226 3,478 2,927 2,489 1,879 2,417 11 Corporations1....................... 1,479 2,423 2,370 3,000 2,901 3,410 2,509 3,541 3,438 2,624 2,373 2,363 12 All others............................... 3,681 4,155 5,052 7,690 8,377 9,180 6,265 7,854 7,942 7,780 7,943 7,830 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 Nov. Dec. Jan. Feb. Mar. Apr. 1 Federal and federally sponsored agencies1........... 103,325 112,472 137,063 134,322 137,063 138,726 140,999 143,265 145,556 2 Federal agencies......................................................... 21,896 22,760 23,488 23,073 23,488 23,431 23,485 23,507 23,568 3 Defense Department2........................................... 1,113 983 868 876 868 864 859 839 822 4 Export-import Bank3*4........................................ 7,801 8,671 8,711 8,392 8,711 8,515 8,499 8,326 8,322 5 Federal Housing Administration5..................... 575 581 588 594 588 582 586 580 576 6 Government National Mortgage Association participation certificates6............................ 4,120 3,743 3,141 3,166 3,141 3,141 3,141 3,141 3,099 7 Postal Service7....................................................... 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 7,325 7,460 7,620 7,690 7,900 7,985 9 United States Railway Association7................. 104 336 356 356 356 345 346 357 400 10 Federally sponsored agencies1................................ 81.429 89,712 113,575 111,249 113,575 115,295 117,514 119,758 121,988 11 Federal Home Loan Banks................................ 16,811 18,345 27,563 26,777 27,563 27,677 28,447 28,265 28,121 12 Federal Home Loan Mortgage Corporation.. 1,690 1,686 2,262 2,062 2,262 2,262 2,461 2,333 2,330 13 Federal National Mortgage Association......... 30,565 31,890 41,080 39,814 41,080 41,917 42,405 43,625 44,792 14 Federal Land Banks............................................. 17,127 19,118 20,360 20,360 20,360 19,275 19,275 19,275 18,389 15 Federal Intermediate Credit Banks................... 10,494 11,174 11,469 11,548 11,469 9,978 8,958 7,890 6,994 16 Banks for Cooperatives....................................... 4,330 4,434 4,843 4,668 4,843 4,392 3,852 3,351 2,473 17 Farm Credit Banks1............................................. 2,548 5,081 5,183 5,081 8,877 11,134 13,987 17,838 18 Student Loan Marketing Association8............. 410 515 915 835 915 915 980 1,030 1,050 19 Other........................................................................ 2 2 2 2 2 2 2 2 1 Memo items 20 Federal Financing Bank debt7*9............................. 28,711 38,580 51,298 49,645 51,298 52,154 53,221 55,310 56,610 Lending to federal and federally sponsored agencies 21 Export-import Bank4............................................... 5,208 5,834 6,898 6,568 6,898 6,898 6,898 7,131 7,131 22 Postal Service7........................................................... 2,748 2,181 2,114 2,114 2,114 2,114 2,114 2,114 2,114 23 Student Loan Marketing Association8................. 410 515 915 835 915 915 980 1,030 1,050 24 Tennessee Valley Authority.................................... 3,110 4,190 5,635 5,500 5,635 5,795 5,865 6,075 6,260 25 United States Railway Association7..................... 104 336 356 356 356 345 346 357 400 Other lending10 26 Farmers Home Administration.............................. 10,750 16,095 23,825 23,050 23,825 24,445 25,160 25,985 26,890 27 Rural Electrification Administration.................... 1,415 2,647 4,604 4,489 4,604 4,680 4,735 4,962 5,122 28 Other............................................................................. 4,966 6,782 6,951 6,733 6,951 6,962 7,123 7,656 7,643 1. In September 1977 the Farm Credit Banks issued their first consoli­ Department of Housing and Urban Development; Small Business Ad­ dated bonds, and in January 1979 they began issuing these bonds on a ministration; and the Veterans Administration. regular basis to replace the financing activities of the Federal Land Banks, 7. Off-budget. the Federal Intermediate Credit Banks, and the Banks for Cooperatives. 8. Unlike other federally sponsored agencies, the Student Loan Line 17 represents those consolidated bonds outstanding, as well as any Marketing Association may borrow from the Federal Financing Bank discount notes that have been issued. Lines 1 and 10 reflect the addition (FFB) since its obligations are guaranteed by the Department of Health, of this item. Education, and Welfare. 2. Consists of mortages assumed by the Defense Department between 9. The FFB, which began operations in 1974, is authorized to purchase 1957 and 1963 under family housing and homeowners assistance programs. or sell obligations issued, sold, or guaranteed by other federal agencies. 3. Includes participation certificates reclassified as debt beginning Since FFB incurs debt solely for the purpose of lending to other agencies, Oct. 1, 1976. its debt is not included in the main portion of the table in order to avoid 4. Off-budget Aug. 17, 1974, through Sept. 30, 1976; on-budget double counting. thereafter. 10. Includes FFB purchases of agency assets and guaranteed loans; 5. Consists of debentures issued in payment of Federal Housing Ad­ the latter contain loans guaranteed by numerous agencies with the ministration insurance claims. Once issued, these securities may be sold guarantees of any particular agency being generally small. The Farmers privately on the securities market. Home Administration item consists exclusively of agency assets, while the 6. Certificates of participation issued prior to fiscal 1969 by the Govern­ Rural Electrification Administration entry contains both agency assets ment National Mortgage Association acting as trustee for the Farmers and guaranteed loans. Home Administration; Department of Health, Education, and Welfare; Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Financial Statistics □ August 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 Dec. Jan. Feb. Mar. Apr. May 35,313 46,769 48,607 3,694 2,831 2,516 4,485 3,067 3,089 Type of issue 18,040 18,042 17,854 1,698 1,304 937 1,034 1,127 1,125 17,140 28,655 30,658 1,992 1,506 1,575 3,443 1,929 1,962 4 Housing Assistance Administration 2...................................... 133 72 95 4 21 4 8 11 2 Type of issuer 7,054 6,354 6,632 497 467 580 435 297 204 7 Special district and statutory authority................................... 15,304 21,717 24,156 2,148 961 1,139 2,832 1,516 1,567 8 Municipalities, counties, townships, school districts............ 12,845 18,623 17,718 1,043 1,382 793 1,210 1,243 1,316 32,108 36,189 37,629 3,379 2,802 2,489 4,472 3,039 3,080 Use of proceeds 4,900 5,076 5,003 319 485 410 268 426 736 2,586 2,951 3,460 337 247 207 202 124 117 9,594 8,119 9,026 705 539 732 1,130 464 535 6,566 8,274 10,494 1,126 766 712 1,978 1,303 691 483 4,676 3,526 276 266 168 260 136 313 7,979 7,093 6,120 616 499 260 634 586 688 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 1978 *• or use Sept.r Oct.r Nov.r Dec.r Jan. Feb. 1 All issues 1.................................... 53,488 53,792 47,230 4,236 3,799 3,207 4,367 3,668 3,165 2 Bonds............................................ 42,380 42,015 36,872 3,302 2,615 2,481 3,247 3,004 2,252 Type of offering 3 Public............................................ 26,453 24,072 19,815 1,610 1,651 1,608 1,227 1,282 1,336 4 Private placement....................... 15,927 17,943 17,057 1,692 964 873 2,020 1,722 916 Industry group 5 Manufacturing............................ 13,264 12,204 9,572 968 403 805 1,031 866 350 6 Commercial and miscellaneous, 4,372 6,234 5,246 503 537 114 690 434 249 7 Transportation........................... 4,387 1,996 2,007 145 67 96 123 111 219 8 Public utility................................ 8,297 8,262 7,092 953 826 384 364 532 517 9 Communication.......................... 2,787 3,063 3,373 205 302 456 285 259 558 10 Real estate and financial.......... 9,274 10,258 9,586 528 479 627 755 802 359 11 Stocks........................................... 11,108 11,777 10,358 934 1,184 726 1,120 664 913 Type 12 Preferred...................................... 2,803 3,916 2,832 127 62 149 424 171 201 13 Common...................................... 8,305 7,861 7,526 807 1,122 577 696 493 712 Industry group 14 Manufacturing............................ 2,237 1,189 1,241 148 95 35 42 41 121 15 Commercial and miscellaneous 1,183 1,834 1,816 168 111 111 303 169 93 16 Transportation........................... 24 456 263 12 12 113 17 Public utility................................ 6,121 5,865 5,140 426 800 377 271 358 669 18 Communication.......................... 776 1,379 264 10 175 19 Real estate and financial........... 771 1,049 1,631 171 178 190 216 96 29 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 Dec. Jan. Feb. Mar. Apr. May June Investment Companies1 1 Sales of own shares2............................................. 6,401 6,645 602 648 451 523 594 549 676 2 Redemptions of own shares3............................. 6,027 7,231 545 607 548 646 761 715 667 3 357 -586 57 41 -97 -123 -175 -166 9 4 Assets4..................................................................... 45,049 44,980 44,980 46,591 45,016 47,051 47,142 46,431 48,064 5 Cash position5....................................................... 3,274 4,507 4,507 4,624 4,851 4,746 4,862 4,869 5,012 6 Other........................................................................ 41,775 40,473 40,473 41,967 40,165 42,305 42,280 41,562 43,052 1. Excluding money market funds. 5. Also includes all U.S. government securities and other short-term 2. Includes reinvestment of investment income dividends. Excludes debt securities. reinvestment of capital gains distributions and share issue of conversions from one fund to another in the same group. Note. Investment Company Institute data based on reports of mem­ 3. Excludes share redemption resulting from conversions from one fund bers, which comprise substantially all open-end investment companies to another in the same group. registered with the Securities and Exchange Commission. Data reflect 4. Market value at end of period, less current liabilities. 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 r 1978 r 1979 ' Account 1976r 1977 r 1978 r Q3 Q4 Ql Q2 Q3 Q4 Ql 1 Profits before tax.......................................................... 156.0 177.1 206.0 180.9 183.0 177.5 207.2 212.0 227.4 233.3 2 Profits tax liability........................................................ 63.8 72.6 84.5 73.7 75.1 70.8 84.7 87.5 95.1 91.3 3 Profits after tax............................................................. 92.2 104.5 121.5 107.2 107.9 106.7 122.5 124.5 132.3 142.0 4 Dividends................................................................... 37.5 42.1 47.2 42.7 43.4 45.1 46.0 47.8 49.7 51.5 5 Undistributed profits............................................... 54.7 62.4 74.3 64.5 64.5 61.6 76.5 76.7 82.6 90.5 6 Capital consumption allowances............................... 97.1 109.3 119.8 111.6 113.0 116.5 119.1 120.5 123.0 125.4 7 Net cash flow................................................................. 151.8 171.7 194.1 176.2 177.6 178.1 195.6 197.3 205.7 216.0 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 □ August 1979 1.51 NONFINANCIAL CORPORATIONS Current Assets and Liabilities Billions of dollars, except for ratio 1977 1978 1979 Account 1975 1976 Q2 Q3 Q4 Qlr Q2' Q3r Q4r Ql 759.0 826.3 858.5 881.8 900.9 925.0 954.2 992.6 1,028.1 1,078.2 2 Cash.............................................................................. 82.1 87.3 83.3 83.5 94.3 88.8 91.3 91.6 103.5 102.2 3 U.S. government securities...................................... 19.0 23.6 19.9 19.3 18.7 18.6 17.3 16.1 17.8 19.1 4 Notes and accounts receivable................................ 272.1 293.3 313.0 326.9 325.0 337.4 356.0 376.4 381.9 405.0 315.9 342.9 359.9 368.3 375.6 390.5 399.3 415.5 428.3 452.6 69.9 79.2 82.5 83.8 87.3 89.6 90.3 92.9 96.5 99.3 451.6 492.7 514.1 533.2 546.8 574.2 593.5 626.3 662.2 701.8 8 Notes and accounts payable.................................... 264.2 282.0 295.9 306.1 313.7 325.2 337.9 356.2 375.1 392.6 187.4 210.6 218.1 227.1 233.1 249.0 255.6 270.0 287.1 309.2 307.4 333.6 344.5 348.6 354.1 350.7 360.7 366.3 365.9 376.4 1.681 1.677 1.670 1.654 1.648 1.611 1.608 1.585 1.552 1.536 1. Ratio of total current assets to total current liabilities. All data in this table have been revised to reflect the most current benchmarks. Complete data are available upon request from the Flow Note. For a description of this series, see “Working Capital of Non- of Funds Section, Division of Research and Statistics, 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 Q4 Ql Q2 Q3 Q4 Qlr Q2r Q32 1 All industries.............................................................. 135.72 153.60 138.11 144.25 150.76 155.41 163.96 165.94 170.30 174.74 Manufacturing 2 Durable goods industries........................................... 27.75 31.59 28.19 28.72 31.40 32.25 33.99 34.00 36.60 38.09 3 Nondurable goods industries................................... 32.33 35.86 33.22 32.86 35.80 35.50 39.26 37.56 39.75 41.80 Nonmanufacturing 4 Mining.......................................................................... 4.49 4.81 4.50 4.45 4.81 4.99 4.98 5.46 5.40 5.11 Transportation 5 Railroad.................................................................... 2.82 3.33 2.80 3.35 3.09 3.38 3.49 4.02 2.76 3.89 6 Air.............................................................................. 1.63 2.34 1.76 2.67 2.08 2.20 2.39 3.35 2.92 2.60 7 Other.......................................................................... 2.55 2.42 2.32 2.44 2.23 2.47 2.55 2.71 2.93 3.01 Public utilities 8 Electric...................................................................... 21.57 24.71 22.05 23.15 23.83 24.92 26.95 27.70 27.63 27.96 9 Gas and other......................................................... 4.21 4.72 4.18 4.78 4.62 4.70 4.78 4.66 4.79 4.83 1 11 0 C Co o m m m m e u r n c i i c a a l t a io n n d . . o ... t . h .. e .. r .. . * .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1 2 5 . . 9 4 5 3 2 1 5 8 . . 6 1 7 5 2 1 3 5 . . 2 8 7 2 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 2 1 7 8 . . 7 7 3 5 j 47.51 47.45 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 1.53 DOMESTIC FINANCE COMPANIES Assets and Liabilities Billions of dollars, end of period 1978 1979 Account 1973 1974 1975 1976 1977 Q2 Q3 Q4 Ql Q2 Assets Account receivable, gross 35.4 36.1 36.0 38.6 44.0 47.1 49.7 52.6 54.9 58.7 32.3 37.2 39.3 44.7 55.2 59.5 58.3 63.3 66.7 70.1 3 Total..................................................................... 67.7 73.3 75.3 83.4 99.2 106.6 108.0 116.0 121.6 128.8 4 Less : Reserves for unearned income and losses. 8.4 9.0 9.4 10.5 12.7 14.1 14.3 15.6 16.5 17.7 5 Accounts receivable, net........................................... 59.3 64.2 65.9 72.9 86.5 92.6 93.7 100.4 105.1 111.1 2.6 3.0 2.9 2.6 2.6 2.9 2.7 3.5 ) .8 .4 1.0 1.1 .9 1.3 1.8 1.3 [ 123.8 24.6 10.6 12.0 11.8 12.6 14.3 16.2 17.1 17.3 73.2 79.6 81.6 89.2 104.3 112.9 115.3 122.4 128.9 135.8 Liabilities 10 Bank loans................................................................... 7.2 9.7 8.0 6.3 5.9 5.4 5.4 6.5 6.5 7.3 19.7 20.7 22.2 23.7 29.6 31.3 29.3 34.5 38.1 41.0 Debt 4.6 4.9 4.5 5.4 6.2 6.6 6.8 8.1 6.7 8.8 24.6 26.5 27.6 32.3 36.0 40.1 41.3 43.6 44.5 46.0 5.6 5.5 6.8 8.1 11.5 13.6 15.2 12.6 15.1 14.4 15 Capital, surplus, and undivided profits................. 11.5 12.4 12.5 13.4 15.1 16.0 17.3 17.2 18.0 18.2 73.2 79.6 81.6 89.2 104.3 112.9 115.3 122.4 128.9 135.8 1. Beginning Ql, 1979, asset items on lines 6, 7, and 8 are combined. Note. Components may not add to totals due to rounding. 1.54 DOMESTIC FINANCE COMPANIES Business Credit Millions of dollars, seasonally adjusted except as noted Changes in accounts Extensions Repayments Accounts receivable receivable Type outstanding May 31, 1979 1979 1979 19791 Mar. Apr. May Mar. Apr. May Mar. Apr. May 1 Total........................................................................ 68,897 689 937 892 17,268 17,722 17,432 16,579 16,785 16,540 2 Retail automotive (commercial vehicles)........ 15,466 269 60 17 1,391 1,210 1,167 1,122 1,150 1,150 3 Wholesale automotive........................................ 16,248 310 705 757 6,745 6,731 6,790 6,435 6,026 6,033 4 Retail paper on business, industrial and farm equipment............................................ 16,230 251 -17 -95 1,130 1,071 1,084 879 1,088 1,179 5 Loans on commercial accounts receivable2.. 6 Factored commercial accounts receivable2... } 6,753 —225 78 4 5,920 6,228 6,191 6,145 6,150 6,187 14,200 84 111 209 2,082 2,482 2,200 1,998 2,371 1,991 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 □ August 1979 1.55 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1978 1979 Item 1976 1977 1978 Dec. Feb. Mar. Apr. May June Terms and yields in primary and secondary markets Primary Markets Conventional mortgages on new homes Terms1 48.4 54.3 62.6 68.1 68.3 68.1 75.4 72.3 73.7 35.9 40.5 45.9 49.6 49.5 49.9 54.9 51.4 52.5 3 Loan/price ratio (percent)...................................... 74.2 76.3 75.3 75.1 74.5 75.4 75.1 73.2 73.5 4 Maturity (years)......................................................... 27.2 27.9 28.0 28.1 28.6 28.5 29.0 28.2 28.4 5 Fees and charges (percent of loan amount)2........ 1.44 1.33 1.39 1.49 1.56 1.65 1.75 1.59 1.53 6 Contract rate (percent per annum)...................... 8.76 8.80 9.30 9.76 9.94 10.02 10.06 10.20 10.39 Yield (percent per annum) 8.99 9.01 9.54 10.02 10.20 10.30 10.36 10.47 10.66 8 HUD series4............................................................... 8.99 8.95 9.68 10.30 10.35 10.35 10.55 10.80 10.90 Secondary Markets Yield (percent per annum) 8.82 8.68 9.70 10.16 10.17 10.19 n.a. 10.61 10.49 10 GNMA securities6..................................................... 8.17 8.04 8.98 9.54 9.67 9.70 9.79 9.89 9.78 FNMA auctions7 8.99 8.73 9.77 10.50 10.54 10.42 10.59 10.84 10.77 9.11 8.98 10.01 10.85 11.04 10.94 11.03 11.35 11.57 Activity in secondary markets Federal National Mortgage Association Mortgage holdings (end of period) 13 Total.............................................................................. 32,904 34,370 43,311 43,311 45,155 46,410 47,028 47,757 48,206 18,916 18,457 21,243 21,243 21,967 22,601 22,773 23,008 23,204 15 VA-guaranteed....................................................... 9,212 9,315 10,544 10,544 10,606 10,616 10,591 10,543 10,502 4,776 6,597 11,524 11,524 12,582 13,193 13,664 14,206 14,500 Mortgage transactions (during period) 3,606 4,780 12,303 974 1,173 1,291 r883 '1,023 739 86 67 5 0 0 0 0 0 0 Mortgage commitments8 6,247 9,729 18,960 1,051 388 565 1,075 1,400 634 3,398 4,698 9,201 9,201 7,381 6,573 6,656 6,862 6,476 Auction of 4-month commitments to buy Government-underwritten loans 21 Offered9................................................................... 4,929.8 7,974.1 12,978 627.0 210.6 508.4 1,322.7 426.3 219.9 2,787.2 4,846.2 6,747.2 319.6 161.2 284.4 638.5 185.0 99.9 Conventional loans 23 Offered*.................................................................... 2,595.7 5,675.2 9,933.0 417.4 63.0 144.9 661.9 458.6 357.5 1,879.2 3,917.8 5,110.9 220.9 45.4 113.5 363.6 214.3 195.3 Federal Home Loan Mortgage Corporation Mortgage holdings {end of period)™ 25 Total............................................................................. 4,269 3,276 3,064 3,064 3,207 3,510 3,377 3,310 3,334 26 FHA/VA.................................................................. 1,618 1,395 1,243 1,243 1,220 1,260 1,198 1,186 1,171 2,651 1,881 1,822 1,822 1,989 2,250 2,180 2,124 2,163 Mortgage transactions (during period) 1,175 3,900 6,524 596 300 350 358 560 447 29 Sales.............................................................................. 1,396 4,131 6,211 540 r494 116 364 572 382 Mortgage commitments11 1,54,75746 7,451 455 357 547 540 652 528 333 1,063 1,410 1,410 1,177 1,342 1,487 1,541 1,590 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 participation 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 1.56 MORTGAGE DEBT OUTSTANDING Millions of dollars, end of period 1978 1979 Type of holder, and type of property 1975 1976 1977 1978 Q2 Q3 Q4 Ql 1 All holders...................................................... 801,537 889,327 1,023,505 1,172,502 1,092,451 1,133,699 1,172,502 1,204,762 2 1- to 4-family................................................. 490,761 556,557 656,566 761,905 706,230 734,740 761,905 783,500 3 Multifamily.................................................... 100,601 104,516 111,841 122,004 116,419 119,442 122,004 124,125 4 Commercial................................................... 159,298 171,223 189,274 212,597 198,926 205,744 212,597 218,042 5 Farm............................................................... 50,877 57,031 65,824 75,996 70,876 73,773 75,996 79,095 6 Major financial institutions....................... 581,193 647,650 745,011 847,910 794,009 822,184 847,910 865,808 7 Commercial banks1................................. 136,186 151,326 178,979 213,963 194,469 205,445 213,963 220,063 8 1- to 4-family........................................ 77,018 86,234 105,115 126,966 115,389 121,911 126,966 130,585 9 Multifamily............................................ 5,915 8,082 9,215 10,912 9,925 10,478 10,912 11,223 10 Commercial........................................... 46,882 50,289 56,898 67,056 60,950 64,386 67,056 68,968 11 Farm....................................................... 6,371 6,721 7,751 9,029 8,205 8,670 9,029 9,287 12 Mutual savings banks.............................. 77,249 81,639 88,104 95,157 91,535 93,403 95,157 96,136 13 1- to 4-family........................................ 50,025 53,089 57,637 62,252 59,882 61,104 62,252 62,892 14 Multifamily............................................ 13,792 14,177 15,304 16,529 15,900 16,224 16,529 16,699 15 Commercial........................................... 13,373 14,313 15,110 16,319 15,698 16,019 16,319 16,488 16 Farm....................................................... 59 60 53 57 55 56 57 57 17 Savings and loan associations............... 278,590 323,130 381,163 432,858 407,965 420,971 432,858 441,420 18 1- to 4-family........................................ 223,903 260,895 310,686 356,156 334,164 345,617 356,156 363,200 19 Multifamily............................................ 25,547 28,436 32,513 36,057 34,351 35,362 36,057 36,770 20 Commercial........................................... 29,140 33,799 37,964 40,645 39,450 39,992 40,645 41,450 21 Life insurance companies....................... 89,168 91,555 96,765 105,932 100,040 102,365 105,932 108,189 22 1- to 4-family........................................ 17,590 16,088 14,727 14,449 * 14,129 14,189 14,449 14,757 23 Multifamily............................................ 19,629 19,178 18,807 19,026 18,745 18,803 19,026 19,431 24 Commercial........................................... 45,196 48,864 54,388 62,086 57,463 59,268 62,086 63,409 25 Farm....................................................... 6,753 7,425 8,843 10,371 9,703 10,105 10,371 10,592 26 Federal and related agencies..................... 66,891 66,753 70,006 81,853 73,991 78,672 81,853 86,689 27 Government National Mortgage Assn. 7,438 4,241 3,660 3,509 3,283 3,560 3,509 3,448 28 1- to 4-family........................................ 4,728 1,970 1,548 877 922 897 877 821 29 Multifamily............................................ 2,710 2,271 2,112 2,632 2,361 2,663 2,632 2,627 30 Farmers Home Administration............. 1,109 1,064 1,353 926 618 1,384 926 956 31 1- to 4-family........................................ 208 454 626 288 124 460 288 302 32 Multifamily............................................ 215 218 275 320 102 240 320 180 33 Commercial........................................... 190 72 149 101 104 251 101 283 34 Farm....................................................... 496 320 303 217 288 433 217 191 35 Federal Housing and Veterans Admin. 4,970 5,150 5,212 5,419 5,225 5,295 5,419 5,522 36 1- to 4-family........................................ 1,990 1,676 1,627 1,641 1,543 1,565 1,641 1,693 37 Multifamily............................................ 2,980 3,474 3,585 3,778 3,682 3,730 3,778 3,829 38 Federal National Mortgage Association 31,824 32,904 34,369 43,311 38,753 41,189 43,311 46,410 39 1- to 4-family........................................ 25,813 26,934 28,504 37,579 32,974 35,437 37,579 40,702 40 Multifamily............................................ 6,011 5,970 5,865 5,732 5,779 5,752 5,732 5,708 41 Federal Land Banks................................ 16,563 19,125 22,136 25,624 23,857 24,758 25,624 26,893 42 1- to 4-family........................................ 549 601 670 927 727 819 927 1,042 43 Farm....................................................... 16,014 18,524 21,466 24,697 23,130 23,939 24,697 25,851 44 Federal Home Loan Mortgage Corp... 4,987 4,269 3,276 3,064 2,255 2,486 3,064 3,460 45 1- to 4-family....................................... 4,588 3,889 2,738 2,407 1,856 1,994 2,407 2,685 46 Multifamily............................................ 399 380 538 657 399 492 657 775 47 Mortgage pools or trusts2.......................... 34,138 49,801 70,289 88,633 78,602 82,730 88,633 94,551 48 Government National Mortgage Assn. 18,257 30,572 44,896 24,347 48,032 50,844 54,347 57,955 49 1- to 4-family........................................ 17,538 29,583 43,555 52,732 46,515 49,276 52,732 56,269 50 Multifamily............................................ 719 989 1,341 1,615 1,517 1,568 1,615 1,686 51 Federal Home Loan Mortgage Corp... 1,598 2,671 6,610 11,892 9,423 10,511 11,892 12,467 52 1- to 4-family........................................ 1,349 2,282 5,621 9,657 7,797 8,616 9,657 10,088 53 Multifamily............................................ 249 389 989 2,235 1,626 1,895 2,235 2,379 54 Farmers Home Administration............. 14,283 16,558 18,783 22,394 21,147 21,375 22,394 24,129 55 1- to 4-family........................................ 9,194 10,219 11,379 13,400 12,742 12,851 13,400 13,883 56 Multifamily............................................ 295 532 759 1,116 1,128 1,116 1,116 1,465 57 Commercial........................................... 1,948 2,440 2,945 3,560 3,301 3,369 3,560 3,660 58 Farm....................................................... 2,846 3,367 3,682 4,318 3,976 4,039 4,318 5,121 59 Individuals and others3.............................. 119,315 125,123 138,199 154}106 145,849 150,113 154,106 157,714 60 1- to 4-family............................................. 56,268 62,643 72,115 82,574 77,466 80,004 82,574 84,806 61 Multifamily................................................ 22,140 20,420 20,538 21,395 20,904 21,119 21,395 21,645 62 Commercial............................................... 22,569 21,446 21,820 212,830 21,960 22,459 22,830 23,267 63 Farm........................................................... 18,338 20,614 23,726 27,307 25,519 26,531 27,307 27,996 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 the 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, when required, are estimated mainly by the Federal Reserve. Multi­ noninsured pension funds, credit unions, and U.S. agencies for which family 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 □ August 1979 1.57 CONSUMER INSTALLMENT CREDIT1 Total Outstanding, and Net Change Millions of dollars 1978 1979 Holder, and type of credit 1976 1977 1978 Dec. Jan. Feb. Mar. Apr. May June Amounts outstanding (end of period) 1 Total............................. 193,977 230,829 275,640 275,640 275,346 275,818 278,347 282,395 287,595 292,481 By major holder 2 Commercial banks 93,728 112,373 136,189 136,189 136,452 136,671 137,445 139,772 142,050 144,545 3 Finance companies........ 38,919 44,868 54,309 54,309 55.004 55,728 56,885 58,225 59,967 61,111 4 Credit unions................... 31,169 37,605 45,939 45,939 45,526 45,661 46,301 46,322 46,832 47,478 5 Retailers2......................... 19,260 23,490 24,876 24,876 23,962 23,246 22,929 23,097 23,421 23,672 6 Savings and loans...... 6,246 7,354 8,394 8,394 8,427 8,488 8,671 8,833 9,066 9,290 7 Gasoline companies 2,830 2,963 3,240 3,240 3.338 3,274 3,292 3,383 3,537 3,704 8 Mutual savings banks.., 1,825 2,176 2,693 2,693 2.637 2,750 2,824 2,763 2,722 2,681 By major type of credit 9 Automobile..................... 67,707 82,911 102,468 102,468 102,890 103,780 105,426 107,115 109,161 111,373 10 Commercial banks... 39,621 49,577 60,564 60,564 60,682 61,053 61,742 62,795 63,841 64,923 11 Indirect paper......... 22,072 27,379 33,850 33,850 33,928 34,261 34,592 35,251 35,869 36,701 12 Direct loans............ 17,549 22,198 26,714 26,714 26,754 26,792 27,150 27,544 27,972 28,222 13 Credit unions.............. 15,238 18,099 21,967 21,967 21,769 21,834 22,140 22,150 22,394 22,703 14 Finance companies.., 12,848 15,235 19,937 19,937 20,439 20,893 21,544 22,170 22,926 23,747 15 Revolving....................... 17,189 39,274 47,051 47,051 46,516 45,586 45,240 45,781 46,487 47,456 16 Commercial banks.. 14,359 18,374 24,434 24,434 24,677 24,502 24,442 24,767 25,052 25,650 17 Retailers..................... 17,937 19,377 19,377 18,501 17,810 17,506 17,631 17,898 18,102 18 Gasoline companies. 2,830 2,963 3,240 3,240 3.338 3,274 3,292 3,383 3,537 3,704 19 Mobile home............... 14,573 15,141 16,042 16,042 16.004 16,008 16,092 16,198 16,453 16,612 20 Commercial banks. 8,737 9,124 9,553 9,553 9,511 9,495 9,509 9,549 9,702 9,764 21 Finance companies. 3,263 3,077 3,152 3,152 3,149 3,147 3,148 3,159 3,177 3,191 22 Savings and loans.. 2,241 2,538 2,848 2,848 2,859 2,880 2,942 2,997 3,076 3,152 23 Credit unions........... 332 402 489 489 485 486 493 493 498 505 24 Other................................... 94,508 93,503 110,079 110,079 109,936 110,444 111,589 113,301 115,494 117,040 25 Commercial banks 31,011 35,298 41,638 41,638 41,582 41,621 41,752 42,661 43,455 44,208 26 Finance companies 22,808 26,556 31,220 31,220 31,416 31,688 32,193 32,896 33,864 34,173 27 Credit unions................. 15,599 19,104 23,483 23,483 23,272 23,341 23,668 23,679 23,940 24,270 28 Retailers......................... 19,260 5,553 5,499 5,499 5,461 5,436 5,423 5,466 5,523 5,570 29 Savings and loans......... 4,005 4,816 5,546 5,546 5,568 5,608 5,729 5,836 5,990 6,138 30 Mutual savings banks., 1,825 2,176 2,693 2,693 2.637 2,750 2,824 2,763 2,722 2,681 Net change (during period3) 31 Total......................................................... 21,647 35,278 45,066 4,400 3,061 3,308 3,731 4,038 3,732 2,881 By major holder 32 Commercial banks................................ 10,792 18,645 24,058 2,080 1,330 1,630 1,465 2,050 1,662 1,496 33 Finance companies................................ 2,946 5,948 9,441 1,098 1,341 1,205 1,334 1,377 1,322 724 5,503 6,436 8,334 773 360 402 528 139 124 144 35 Retailers1................................................ 1,059 2,654 1,386 196 -90 -221 143 306 283 288 36 Savings and loans.................................. 1,085 1,111 1,041 115 67 86 173 158 280 240 37 Gasoline companies.............................. 124 132 276 96 100 68 20 73 96 39 38 Mutual savings banks........................... 138 352 530 42 -47 138 68 -65 -35 -50 By major type of credit 39 Automobile............................................. 10,465 15,204 19,557 1,780 1,680 1,565 1,486 1,319 1,225 1,155 40 Commercial banks............................ 6,334 9,956 10,987 845 633 739 617 672 633 573 41 Indirect paper................................ 2,742 5,307 6,471 530 387 530 290 409 397 541 42 Direct loans.................................... 3,592 4,649 4,516 315 246 209 327 263 236 32 43 Credit unions...................................... 2,497 2,861 3,868 391 187 190 245 64 60 45 44 Finance companies............................ 1,634 2,387 4,702 544 860 636 624 583 532 537 45 Revolving................................................ 2,170 6,248 7,776 869 433 317 742 918 746 796 46 Commercial banks............................ 2,046 4,015 6,060 610 375 492 588 605 415 494 47 Retailers.............................................. 2,101 1,440 163 -42 -243 134 240 235 263 48 Gasoline companies.......................... 124 132 276 96 100 68 20 73 96 39 49 Mobile home.......................................... 140 565 897 71 40 56 108 84 235 107 50 Commercial banks............................ 70 387 426 21 12 15 31 22 125 17 51 Finance companies........................... -182 -189 74 11 7 9 11 7 14 14 52 Savings and loans..................... 192 297 310 30 19 28 59 56 94 74 53 Credit unions...................................... 60 70 87 9 2 4 7 -1 2 2 54 Other........................................................ 8,872 13,261 16,836 1,680 908 1,370 1,395 1,717 1,526 823 55 Commercial banks............................ 2,342 4,287 6,585 604 310 384 229 751 489 412 56 Finance companies........................... 1,494 3,750 4,665 543 474 560 699 787 776 173 57 Credit unions...................................... 2,946 3,505 4,379 373 171 208 276 76 62 97 58 Retailers.............................................. 1,059 553 -54 33 -48 22 9 66 48 25 59 Savings and loans.............................. 893 814 731 85 48 58 114 102 186 166 60 Mutual savings banks....................... 138 352 530 42 -47 138 68 -65 -35 -50 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. 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Consumer Debt A43 1.58 CONSUMER INSTALLMENT CREDIT Extensions and Liquidations Millions of dollars 1978 1979 Holder, and type of credit 1976 1977 1978 Dec. Jan. Feb. Mar. Apr. May June Extensions2 1Total......................................................... 211,028 254,071 298,574 26,500 25,544 26,202 26,698 26,889 28,027 26,644 By major holder 2 Commercial banks................................ 97,397 117,896 142,965 12,521 12,153 12,430 12,412 12,958 13,499 12,785 3 Finance companies................................ 36,129 41,989 50,483 4,679 4,547 4,822 5,123 5,271 5,213 4,639 4 Credit unions.......................................... 29,259 34,028 40,023 3,526 3,241 3,238 3,250 2,753 3.124 2,986 5 Retailers1................................................. 29,447 39,133 41,619 3,612 3,565 3,460 3,611 3,742 3,721 3,853 6 Savings and loans.................................. 3,898 4,485 5,050 516 481 468 583 559 723 682 7 Gasoline companies.............................. 13,387 14,617 16,125 1,451 1,440 1,486 1,493 1,505 1,613 1,589 8 Mutual savings banks........................... 1,511 1,923 2,309 195 117 298 226 101 134 110 By major type of credit 9 Automobile............................................. 63,743 75,641 88,986 7,833 7,545 7,756 7,797 7,845 8,227 7,471 10 Commercial banks............................ 37,886 46,363 53,028 4,443 4,286 4,430 4,424 4,553 4,648 4,347 11 Indirect paper................................ 20,576 25,149 29,336 2,451 2,318 2,472 2,449 2,630 2,541 2,551 12 Direct loans.................................... 17,310 21,214 23,692 1,992 1,968 1,958 1,975 1,923 2,107 1,796 13 Credit unions...................................... 14,688 16,616 19,486 1,738 1,635 1,624 1,587 1,415 1,566 1,485 14 Finance companies........................... 11,169 12,662 16,472 1,652 1,624 1,702 1,786 1,877 2,013 1,639 15 Revolving................................................ 43,934 86,756 104,587 9,424 9,417 9,357 9,714 9,722 10,170 10,136 16 Commercial banks............................ 30,547 38,256 51,531 4,814 4,799 4,860 5,024 4,923 5,285 5,166 17 Retailers.............................................. 33,883 *6,931 3,159 3,178 3,011 3,197 3,294 3,272 3,381 18 Gasoline companies.......................... 13,387 14,617 16,125 1,451 1,440 1,486 1,493 1,505 1,613 1,589 19 Mobile home.......................................... 4,859 5,425 6,067 502 369 454 516 502 659 552 20 Commercial banks............................ 3,064 3,466 3,704 295 235 295 296 305 411 309 21 Finance companies............................ 702 643 886 74 33 60 61 50 49 59 22 Savings and loans.............................. 929 1,120 1,239 111 88 81 139 134 182 167 23 Credit unions...................................... 164 196 238 22 13 18 20 13 17 17 24 Other........................................................ 98,492 86,249 98,934 8,741 8,213 8,635 8,671 8,820 8,971 8,485 25 Commercial banks............................ 25,900 29,811 34,702 2,969 2,833 2,845 2,668 3,177 3,155 2,963 26 Finance companies........................... 24,258 28,684 33,125 2,953 2,890 3,060 3,276 3,344 3,151 2,941 27 Credit unions...................................... 14,407 17,216 20,299 1,766 1,593 1,596 1,643 1,325 1,541 1,484 28 Retailers.............................................. 29,447 5,250 4,688 453 387 449 414 448 449 472 29 Savings and loans.............................. 2,969 3,365 3,811 405 393 387 444 425 541 515 30 Mutual savings banks....................... 1,511 1,923 2,309 195 117 298 226 101 134 110 Liquidations2 31 Total......................................................... 189,381 218,793 253,508 22,100 22,483 22,894 22,967 22,851 24,295 23,763 By major holder 32 Commercial banks................................ 86,605 99,251 118,907 10,441 10,823 10,800 10,947 10,908 11,837 11,289 33 Finance companies................................ 33,183 36,041 41,042 3,581 3,206 3,617 3,789 3,894 3,891 3,915 34 Credit unions.......................................... 23,756 27,592 31,689 2,753 2,881 2,836 2,722 2,614 3,000 2,842 35 Retailers i................................................. 28,388 36,479 40,233 3,416 3,655 3,681 3,468 3,436 3,438 3,565 36 Savings and loans.................................. 2,813 3,374 4,009 401 414 382 410 401 443 442 37 Gasoline companies.............................. 13,263 14,485 15,849 1,355 1,340 1,418 1,473 1,432 1,517 1,550 38 Mutual savings banks........................... 1,373 1,571 1,779 153 164 160 158 166 169 160 By major type of credit 39 Automobile............................................. 53,278 60,437 69,429 6,053 5,865 6,191 6,311 6,526 7,002 6,316 40 Commercial banks............................ 31,552 36,407 42,041 3,598 3,653 3,691 3,807 3,881 4,015 3,774 41 Indirect paper................................ 17,834 19,842 22,865 1,921 1,931 1,942 2,159 2,221 2,144 2,010 42 Direct loans.................................... 13,718 16,565 19,176 1,677 1,722 1,749 1,648 1,660 1,871 1,764 43 Credit unions...................................... 12,191 13,755 15,618 1,347 1,448 1,434 1,342 1,351 1,506 1,440 44 Finance companies........................... 9,535 10,275 11,770 1,108 764 1,066 1,162 1,294 1,481 1,102 45 Revolving................................................ 41,764 80,508 96,811 8,555 8,984 9,040 8,972 8,804 9,424 9,340 46 Commercial banks............................ 28,501 34,241 45,471 4,204 4,424 4,368 4,436 4,318 4,870 4,672 47 Retailers.............................................. 31,782 35,491 2,996 3,220 3,254 3,063 3,054 3,037 3,118 48 Gasoline companies.......................... 13,263 14,485 15,849 1,355 1,340 1,418 1,473 1,432 1,517 1,550 49 Mobile home.......................................... 4,719 4,860 5,170 431 329 398 408 418 424 445 50 Commercial banks............................ 2,994 3,079 3,278 274 223 280 265 283 286 292 51 Finance companies............................ 884 832 812 63 26 51 50 43 35 45 52 Savings and loans.............................. 737 823 929 81 69 53 80 78 88 93 53 Credit unions...................................... 104 126 151 13 11 14 13 14 15 15 54 Other......................................................... 89,620 72,988 82,098 7,061 7,305 7,265 7,276 7,103 7,445 7,662 55 Commercial banks............................ 23,558 25,524 28,117 2,365 2,523 2,461 2,439 2,426 2,666 2,551 56 Finance companies............................ 22,764 24,934 28,460 2,410 2,416 2,500 2,577 2,557 2,375 2,768 57 Credit unions...................................... 11,461 13,711 15,920 1,393 1,422 1,388 1,367 1,249 1,479 1,387 58 Retailers.............................................. 28,388 4,697 4,742 420 435 427 405 382 401 447 59 Savings and loans.............................. 2,076 2,551 3,080 320 345 329 330 323 355 349 60 Mutual savings banks....................... 1,373 1,571 1,779 153 164 160 158 166 169 160 1 Includes auto dealers and excludes 30-day charge credit held by 2 Monthly figures are seasonally adjusted, travel and entertainment companies. 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A44 Domestic Financial Statistics □ August 1979 1.59 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 Public debt securities...................................... 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 Agency issues and mortgages....................... .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 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 Multifamily residential....................... 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 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 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 -.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 IJ_S_ covemment................. .7 .9 -.4 -1.2 0 * -.7 -2.3 0 0 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 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 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 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 1.60 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 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 Total 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 □ August 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 ' Dec.r Jan.r Feb.r Mar.r Apr.r May r Juner July 1 Industrial production1..................................................... 130.5 138.2 146.1 151.8 151.5 152.0 153.0 150.8 152.4 152.3 152.1 Market groupings 2 Products, total................................................................ 129.7 137.9 144.8 149.0 149.2 149.9 150.8 148.4 150.4 149.8 149.3 3 Final, total................................................................... 127.6 135.9 142.2 146.1 146.1 146.8 148.2 145.4 148.0 147.3 146.6 137.1 145.3 149.1 151.5 150.6 151.5 152.9 149.1 152.3 151.0 149.5 5 Equipment................................................................ 114.6 123.0 132.8 138.6 139.9 140.4 141.7 140.4 142.0 142.3 142.6 6 Intermediate................................................................. 137.2 145.1 154.1 159.9 160.8 161.4 160.4 159.7 159.6 159.2 159.3 131.7 138.6 148.3 156.2 155.0 155.2 156.3 154.5 155.4 156.2 156.3 Industry groupings 8 Manufacturing................................................................. 130.3 138.4 146.8 152.9 152.5 153.3 154.5 151.6 153.8 153.6 153.2 Capacity utilization (percent)1 ■2 9 Manufacturing................................................................. 79.5 81.9 84.4 86.8 86.4 86.7 87.1 85.3 86.3 86.0 85.6 10 Industrial materials industries...................................... 81.1 82.7 85.6 88.8 87.9 87.8 88.3 86.9 87.3 87.3 87.2 11 Construction contracts3................................................ 190.2 160.5 174.3 184.0 181.0 231.0 186.0 202.0 178.0 177.0 n.a. 12 Nonagricultural employment, total4............................. 120.7 125.0 130.3 133.5 133.0 133.5 134.1 134.1 134.6 134.8 134.9 13 Goods-producing, total.................................................. 100.2 104.2 108.9 111.7 112.0 112.4 113.3 113.1 113.4 113.5 113.5 14 Manufacturing, total.................................................. 97.7 101.0 104.5 106.6 107.1 107.4 107.8 107.6 107.5 107.5 107.1 15 Manufacturing, production-worker........................ 95.3 98.6 102.1 104.3 104.8 105.2 105.4 105.1 104.9 104.7 104.3 16 Service-producing............................................................ 131.9 136.4 142.1 144.2 144.5 145.0 145.5 145.7 146.2 146.5 146.6 17 Personal income, total5................................................... 220.5 244.4 274.1 291.5 292.7 295.5 298.8 300.2 302.2 303.7 n.a. 18 Wages and salary disbursements.................................. 208.2 230.2 258.1 272.9 275.3 278.0 281.2 282.1 283.4 284.8 n.a. 19 Manufacturing................................................................. 177.0 198.3 222.4 236.8 239.7 242.3 244.7 244.1 244.7 244.8 n.a. 20 Disposable personal income.......................................... 176.8 194.8 217.7 234.7 239.1 21 Retail sales6...................................................................... 203.5 224.4 248.0 270.0 270.7 271.8 275.3 272.7 274.8 273.1 274.1 Prices7 170.5 181.5 195.4 202.9 204.7 207.1 209.1 211.5 214.1 216.6 n.a. 23 Producer finished goods................................................ 170.3 180.6 194.6 202.4 205.2 207.4 208.8 211.2 211.4 213.4 215.8 1. The industrial production and capacity utilization series have been 6. Based on Bureau of Census data published in Survey of Current revised. For a description of the changes see “Revision of Industrial Business (U.S. Department of Commerce). Production Index” and “Revision of Capacity Utilization Rates” in this 7. Data without seasonal adjustment, as published in Monthly Labor Bulletin. Review (U.S. Department of Labor). Seasonally adjusted data for changes 2. Ratios of indexes of production to indexes of capacity. Based on data in the price indexes may be obtained from the Bureau of Labor Statistics, from Federal Reserve, McGraw-Hill Economics Department, and De­ U.S. Department of Labor. partment of Commerce. 3. Index of dollar value of total construction contracts, including Note. Basic data (not index numbers) for series mentioned in notes residential, nonresidential, and heavy engineering, from McGraw-Hill 4, 5, and 6, and indexes for series mentioned in notes 3 and 7 may also be Informations Systems Company, F. W. Dodge Division. found in the Survey of Current Business (U.S. Department of Commerce). 4. Based on data in Employment and Earnings (U.S. Department of Figures for industrial production for the last two months are preliminary Labor). Series covers employees only, excluding personnel in the Armed and estimated, respectively. Forces. 5. Based on data in Survey of Current Business (U.S. Department of Commerce). Series for disposable income is quarterly. 2.11 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION A Seasonally adjusted 1978 r 1979 ^ 1978 *■ 1979 r 1978r 1979 r Series Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Output (1967 = 100) Capacity (percent of 1967 output) Utilization rate (percent) 1 Manufacturing.................................................. 148.6 151.7 153.4 153.0 174.5 175.6 176.9 178.2 85.2 86.4 86.7 85.9 2 Primary processing.......................................... 158.2 162.2 162.1 161.8 179.9 181.2 182.7 184*2 87.9 89.5 88.7 87.9 3 Advanced processing....................................... 143.6 146.1 148.7 148.3 171.6 172.7 173.8 175.0 83.7 84.6 85.6 84.8 4 Materials........................................................... 150.2 154.6 155.5 155.4 173.9 175.4 176.8 178.1 86.4 88.2 88.0 87.2 5 Durable goods.................................................. 151.9 157.3 158.4 157.6 178.5 180.1 181.5 183.0 85.1 87.4 87.3 86.1 6 Metal materials............................................ 126.6 132.2 124.7 124.2 139.3 139.6 139.8 140.3 90.9 94.7 89.2 88.5 7 Nondurable goods........................................... 165.9 170.3 172.2 173.3 188.5 190.2 191.9 193.7 88.0 89.6 89.7 89.4 8 Textile, paper, and chemical..................... 172.2 177.1 179.1 181.2 196.2 197.9 199.6 201.5 87.8 89.5 89.7 89.9 9 Textile........................................................ 116.0 119.5 118.2 118.3 136.3 136.6 136.9 137.3 85.1 87.5 86.3 86.1 10 Paper.......................................................... 134.1 138.1 136.9 140.4 146.9 147.8 148.7 149.9 91.3 93.4 92.0 93.7 212.3 218.0 222.7 225.2 242.2 244.6 247.4 250.6 87.6 89.1 90.0 89.9 12 Energy................................................................ 126.9 128.9 127.9 127.8 144.7 145.7 146.7 147.5 87.7 88.5 87.2 86.6 A The capacity utilization series has been revised. For a description of the changes, see “Revision of Capacity Utilization Rates” in this Bulletin. 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. 1979 Category 1976 1977 1978 Jan. Feb. Mar. Apr. May June July Household Survey Data 1 Noninstitutional population1................ 156,048 158,559 161,058 162,448 162,633 162,909 163,008 163,260 163,469 163,685 2 Labor force (including Armed Forces)1............................................... 96,917 99,534 102,537 104,277 104,621 104,804 104,193 104,325 104,604 105,141 3 Civilian labor force............................... 94,773 97,401 100,420 102,183 102,527 102,714 102,111 102,247 102,528 103,059 Employment 4 Nonagricultural industries2........ 84,188 87,302 91,031 93,068 93,335 93,499 92,987 93,134 93,494 93,949 5 Agriculture...................................... 3,297 3,244 3,342 3,232 3,311 3,343 3,186 3,184 3,260 3,262 Unemployment 6 Number........................................... 7,288 6,855 6,047 5,883 5,881 5,871 5,937 5,929 5,774 5,848 7 Rate (percent of civilian labor force)............................................ 7.7 7.0 6.0 5.8 5.7 5.7 5.8 5.8 5.6 5.7 8 Not in labor force.................................. 59,130 59,025 58,521 58,170 48,012 58,105 58,815 58,935 58,865 58,545 Establishment Survey Data 9 Nonagricultural payroll employment3 79,382 82,256 85,760 87,524 87,818 88,263 r88,248 88,539 88,709 88,753 10 Manufacturing........................................ 18,997 19,647 20,331 20,825 20,895 20,964 r20,922 20,906 20,898 20,836 11 Mining..................................................... 779 809 837 905 c919 922 >•922 923 931 939 12 Contract construction........................... 3,576 3,833 4,213 4,381 4,385 4,526 r4,507 *•4,594 4,622 4,670 13 Transportation and public utilities... 4,582 4,696 4,858 4,974 5,001 5,025 r4,935 5,031 5,075 5,085 14 Trade........................................................ 17,755 18,492 19,392 19,817 19,883 19,945 *•19,959 *•19,985 *•19,969 19,950 15 Finance..................................................... 4,271 4,452 4,676 4,809 4,829 4,839 *■4,853 *•4,867 *•4,889 4,904 16 Service...................................................... 14,551 15,249 15,976 16,352 16,438 16,535 *•16,575 *•16,622 *•16,688 16,722 14,871 15,079 15,478 15,461 15,468 15,507 *•15,575 *•15,611 *•15,637 15,647 1. Persons 16 years of age and over. Monthly figures, which are based 3. Data include all full- and part-time employees who worked during, on sample data, relate to the calendar week that contains the 12th day; or received pay for, the pay period that includes the 12th day of the annual data are averages of monthly figures. By definition, seasonality month, and exclude proprietors, self-employed persons, domestic servants, does not exist in population figures. Based on data from Employment unpaid family workers, and members of the Armed Forces. Data are and Earnings (U.S. Dept, of Labor). adjusted to the February 1977 benchmark. Based on data from Employ­ 2. Includes self-employed, unpaid family, and domestic service workers. ment and Earnings (U.S. Dept, of Labor). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics □ August 1979 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value A Monthly data are seasonally adjusted. 1967 1978 1979 1978 por­ aver­ tion age May June July Nov. Dec. Jan. Feb. Mar. Apr. May June*> July6 Index (1967 = 100) Major Market 1Total index..................................................... 100.00 146.1 144.8 146.1 147.1 150.6 151.8 151.5 152.0 153.0 150.8 152.4 152.3 152.1 60.71 144.8 143.8 144.6 145.6 148.0 149.0 149.2 149.9 150.8 148.4 150.4 149.8 149.3 3 Final products........................................... 47.82 142.2 141.4 142.1 143.2 145.3 146.1 146.1 146.8 148.2 145.4 148.0 147.3 146.6 4 Consumer goods................................... 27.68 149.1 149.0 149.3 149.8 151.3 151.5 150.6 151.5 152.9 149.1 152.3 151.0 149.5 5 Equipment.............................................. 20.14 132.8 131.0 132.3 134.0 137.1 138.6 139.9 140.4 141.7 140.4 142.0 142.3 142.6 6 Intermediate products............................. 12.89 154.1 152.4 154.0 154.7 157.8 159.9 160.8 161.4 160.4 159.7 159.6 159.2 159.3 7 39.29 148.3 146.5 148.3 149.3 154.5 156.2 155.0 155.2 156.3 154.5 155.4 156.2 156.3 Consumer goods 8 Durable consumer goods............................ 7.89 159.2 160.2 161.1 162.1 162.9 161.8 160.4 161.1 163.6 151.6 160.6 158.0 152.9 9 Automotive products............................... 2.83 179.9 181.2 181.6 183.8 190.2 186.9 181.4 179.3 186.8 163.0 182.9 176.2 168.0 10 Autos and utility vehicles................... 2.03 172.5 175.4 174.5 176.7 185.0 179.2 173.2 170.3 178.8 147.4 176.3 167.4 155.1 11 Autos................................................... 1.90 148.6 151.5 150.1 152.7 159.7 151.9 145.8 144.9 153.8 128.6 153.1 148.0 141.8 12 Auto parts and allied goods............... 80 198.5 195.8 199.4 201.9 203.2 206.5 202.2 202.2 207.2 202.7 199.6 198.5 201.0 13 Home goods.............................................. 5.06 147.7 148.4 149.6 150.0 147.6 147.7 148.6 150.9 150.6 145.2 148.1 147.8 146.0 14 Appliances, A/C, and TV................... 1.40 133.3 137.8 140.1 138.8 129.1 129.8 124.0 129.8 128.4 115.6 128.7 129.2 125.4 15 Appliances and TV.......................... 1.33 135.4 140.3 142.4 141.3 130.1 130.6 124.8 131.4 130.3 116.5 130.4 130.9 n.a. 16 Carpeting and furniture...................... 1.07 164.2 164.2 166.8 168.2 164.2 164.3 170.7 171.8 173.5 170.7 170.2 168.4 n.a. 17 Miscellaneous home goods................. 2.59 148.6 147.7 147.7 148.6 150.7 150.6 152.8 153.7 153.2 150.8 149.6 149.5 148.3 18 Nondurable consumer goods..................... 19.79 145.1 144.6 144.5 144.9 146.7 147.3 146.7 147.7 148.6 148.0 149.0 148.2 147.8 19 Clothing..................................................... 4.29 131.1 130.8 131.1 130.4 132.4 132.2 130.1 130.7 130.9 127.7 127.6 n.a. n.a. 20 Consumer staples...................................... 15.50 148.9 148.4 148.3 148.9 150.6 151.5 151.3 152.4 153,6 153.7 154.9 153.6 153.2 21 Consumer foods and tobacco............ 8.33 140.6 140.5 140.0 141.1 141.7 143.2 141.8 142.4 145.1 145.2 146.8 145.3 n.a. 22 Nonfood staples.................................... 7.17 158.5 157.6 157.9 158.0 161.0 161.2 162.4 164.0 163.4 163.5 164.2 163.3 163.6 23 Consumer chemical products......... 2,63 192.7 191.0 191.9 193.3 195.9 196.5 200.3 203.1 202.8 201.6 205.2 202.6 n.a. 24 Consumer paper products.............. 1.92 118.4 117.5 118.0 117.8 119.0 118.0 119.2 122.7 121.4 120.9 121.3 119.9 n.a. 25 Consumer energy products............. 2.62 153.6 153.5 153.0 152.3 156.8 157.6 156.0 155.2 154.7 156.4 154.6 155.7 n.a. 26 Residential utilities....................... 1.45 162.1 162.2 162.1 161.7 162.7 162.5 166.2 167.7 167.9 169.1 n.a. n.a. n.a. Equipment 27 Business........................................................... 12.63 160.3 158.4 160.1 161.7 165.0 166.8 168.1 169.0 170.8 168.7 171.4 171.8 172.5 28 Industrial................................................... 6.77 145.8 145.1 146.1 147.0 147.6 148.4 151.4 152.5 152.8 150.4 151.9 152.0 152.2 29 Building and mining............................ 1.44 207.3 207.9 210.5 210.3 207.8 206.3 208.8 207.9 205.2 204.2 203.7 204.5 206.0 30 Manufacturing...................................... 3.85 121.2 120.6 121.6 121.4 123.3 124.5 127.4 129.1 130.3 128.0 130.1 129.8 129.8 31 Power....................................................... 1.47 149.4 147.4 147.0 151.7 152.1 154.2 157.8 159.1 160.2 156.0 158.0 158.5 157.8 32 Commercial transit, farm....................... 5.86 177.2 173.7 176.2 178.8 185.0 188.0 187.4 188.1 191.6 189.9 194.0 194.7 195.9 33 Commercial............................................ 3.26 212.0 207.6 211.6 214.4 217.8 218.7 220.8 221.2 224.4 223.0 225.0 227.1 229.0 34 Transit..................................................... 1.93 133.8 132.8 131.9 134.7 145.7 151.0 146.8 146.6 150.5 148.8 156.7 156.2 156.0 35 Farm........................................................ 67 132.8 127.0 131.7 132.4 138.5 144.6 142.0 146.9 150.0 147.7 150.8 148.2 n.a. 36 Defense and space........................................ 7.51 86.5 84.9 85.6 87.5 90.3 91.4 92.4 92.4 92.9 92.9 92.5 92.6 92.4 Intermediate products 37 Construction supplies.................................. 6.42 151.7 149.9 151.5 152.4 156.1 158.3 159.1 159.3 157.1 156.0 156.3 155.5 155.4 38 Business supplies........................................... 6.47 156.5 154.9 165.5 156.9 159.6 161.5 162.5 163.6 163.8 163.2 162.8 162.9 n.a. 39 Commercial energy products................. 1.14 168.2 166.6 167.3 167.8 171.3 175.0 173.6 173.7 173.5 174.6 174.3 173.8 n.a. Materials 40 Durable goods materials............................. 20.35 149.0 145.5 147.7 150.5 157.0 159.5 158.1 158.0 159.2 155.7 157.6 159.4 159.2 41 Durable consumer parts.......................... 4.58 140.8 138.1 140.3 142.3 147.2 148.6 148.5 146.0 145.8 136.9 142.2 141.6 138.6 42 Equipment parts........................................ 5.44 166.5 163.1 165.7 169.4 176.7 179.2 182.2 184.4 186.8 187.0 187.5 190.9 191.6 43 Durable materials n.e.c............................ 10.34 143.3 139.4 141.5 144.2 151.0 154.0 149.7 149.4 150.6 147.7 148.7 150.7 151.2 44 Basic metal materials........................... 5.57 121.2 116.7 118.8 122.1 130.2 132.0 124.4 124.1 126.7 123.2 122.9 125.7 n.a. 45 Nondurable goods materials...................... 10.47 165.6 164.8 166.3 164.5 170.2 171.9 171.0 172.4 173.1 173.0 173.8 173.0 174.2 46 Textile, paper, and chemical materials. 7.62 171.8 170.3 172.3 171.3 177.1 178.9 177.5 179.6 180.1 180.7 181.5 181.3 182.7 47 1.85 116.9 116.3 116.5 115.5 118.8 120.1 118.3 117.4 119.0 117.0 118.8 119.0 n.a. 48 Paper materials...................................... 1.62 137.0 138.2 139.4 134.6 137.9 139.1 133.3 137.4 139.9 140.8 140.1 140.4 n.a. 49 Chemical materials............................... 4.15 210.0 207.0 210.1 210.7 218.4 220.8 221.2 223.9 223.0 224.7 225.7 225.1 n.a. 50 Containers, nondurable........................... 1.70 159.8 160.4 160.8 154.2 163.1 164.8 167.8 165.8 167.3 162.0 163.3 159.1 n.a. 51 Nondurable materials n.e.c..................... 1.14 132.7 134.5 134.3 134.2 135.2 135.7 132.5 134.1 135.6 138.2 138.3 138.3 n.a. 52 Energy materials........................................... 8.48 125.3 126.2 127.6 127.7 129.3 128.8 127.8 127.1 128.7 128.4 127.4 127.6 127.4 53 Primary energy.......................................... 4.65 112.6 115.4 116.2 116.5 117.0 116.1 111.9 110.6 114.6 113.0 111.9 112.3 n.a. 54 Converted fuel materials......................... 3.82 140.8 139.4 141.6 141.5 144.4 144.4 147.0 147.2 145.9 147.1 146.2 146.2 n.a. Supplementary groups 9.35 140.0 140.3 141.1 141.0 140.6 140.6 140.1 141.6 141.6 137.2 138.7 139.0 137.9 12.23 135.4 135.8 136.8 136.7 139.1 139.1 138.1 137.5 138.4 138.7 137.6 137.9 137.9 57 3.76 158.0 157.5 157.3 157.0 161.2 162.2 161.4 160.8 160.3 161.9 160.6 161.2 n.a. 58 8.48 125.3 126.2 127.6 127.7 129.3 128.8 127.8 127.1 128.7 128.4 127.4 127.6 127.4 For notes 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 ageP May June July Nov. Dec. Jan.r Feb.r Mar.r Apr.r May June? July* Index (1967 == 100) Major Industry 12.05 141.7 142.1 143.1 143.6 144.8 145.0 143.9 143.0 143.5 143.8 143.0 143.5 144.0 2 Mining........................................... 6.36 124.0 126.5 127.4 127.1 128.0 127.4 123.8 120.9 122.3 122.7 122.7 123.5 124.1 5.69 161.4 159.5 160.6 162.0 163.7 164.7 166.2 167.7 167.1 167.4 165.7 165.8 166.1 3.88 182.2 179.6 181.1 183.2 185.2 186.7 188.4 189.9 188.8 189.0 n.a. n.a. 87.95 146.8 145.2 146.4 147.7 151.6 152.9 152.5 153.3 154.5 151.6 153.8 153.6 155.2 6 Nondurable.................................. 35.97 156.9 155.8 157.0 157.2 160.4 161.7 160.7 162.0 163.0 161.7 162.8 162.3 162.6 7 Durable......................................... 51.98 139.7 137.9 139.0 141.1 145.5 146.8 146.8 147.2 148.6 144.6 147.7 147.6 146.7 Mining 8 Metal.................................................. 10 .51 121.0 120.1 121.0 117.0 124.3 123.8 124.2 125.3 126.9 128.9 123.4 123.6 n.a. 9 Coal.................................................... 11,12 .69 114.7 131.1 136.0 133.1 144.6 144.7 115.9 104.5 124.0 130.1 133.4 137.5 136.6 10 Oil and gas extraction.................... 13 4.40 124.6 125.8 126.2 126.6 124.8 123.8 123.0 120.4 119.3 118.6 118.4 119.0 120.1 11 Stone and earth minerals............... 14 .75 131.2 130.6 130.8 131.4 133.8 134.8 135.9 135.7 135.6 135.3 137.8 137.1 n.a. Nondurable manufacturers 12 Foods................................................. 20 8.75 142.7 142.9 142.8 143.1 143.7 144.7 143.9 145.5 147.6 147.0 149.3 148.8 n.a. 13 Tobacco products........................... 21 .67 118.3 120.2 118.5 118.2 118.8 119.1 120.6 116.2 123.3 120.0 122.2 n.a. n.a. 14 Textile mill products....................... 22 2.68 137.5 135.9 136.6 137.0 140.4 141.7 141.6 139.9 142.3 141.2 141.5 143.1 n.a. 15 Apparel products............................ 23 3.31 134.2 132.7 133.7 132.7 135.8 136.5 130.3 133.5 136.5 130.8 128.2 n.a. n.a. 16 Paper and products......................... 26 3.21 144.8 146.0 148.0 142.1 146.7 148.5 144.6 144.6 149.0 148.7 147.9 148.5 150.0 17 Printing and publishing................. 27 4.72 131.5 129.8 131.1 131.4 133.7 134.4 135.6 138.2 137.3 135.7 136.8 135.8 136.9 18 Chemicals and products................. 28 7.74 197.4 194.1 196.4 198.6 204.6 207.2 206.5 208.6 107.4 207.7 209.7 208.2 n.a. 19 Petroleum products......................... 29 1.79 145.2 144.5 143.3 144.1 150.2 151.3 147.0 146.0 143.8 145.4 143.1 143.6 145.1 20 Rubber and plastic products........ 30 2.24 253.6 252.1 257.3 260.3 263.0 263.3 267.4 267.5 270.4 265.5 268.7 266.9 n.a. 21 Leather and products..................... 31 .86 73.8 74.3 74.2 73.2 73.4 73.8 74.8 73.4 72.9 69.6 72.3 71.6 n.a. Durable manufactures 22 Ordnance, private and govern­ ment ............................................... 19,91 3.64 73.7 73.8 74.1 74.1 74.2 74.6 74.9 75.8 75.1 75.1 75.3 74.9 75.4 23 Lumber and products..................... 24 1.64 136.3 134.4 136.3 136.2 140.1 144.0 137.3 137.2 137.7 137.2 136.1 137.3 n.a. 24 Furniture and fixtures.................... 25 1.37 155.8 155.3 156.9 159.3 158.6 157.6 161.7 163.1 163.6 159.4 159.6 160.6 n.a. 25 Clay, glass, stone products........... 32 2.74 157.2 156.4 156.7 157.0 162.1 164.0 167.4 166.9 164.9 161.2 163.4 161.6 n.a. 26 Primary metals................................. 33 6.57 119.9 116.0 118.3 122.5 130.8 132.1 123.4 120.4 123.7 121.7 121.0 123.9 124.0 27 Iron and steel............................... 331,2 4.21 113.2 111.0 113.1 116.5 124.4 125.3 113.3 110.8 116.2 115.8 114.3 118.3 n.a. 28 Fabricated metal products............ 34 5.93 141.6 140.2 141.1 142.8 145.6 147.1 149.1 150.8 150.2 148.8 150.3 149.5 150.0 29 Nonelectrical machinery................ 35 9.15 153.6 151.4 152.9 154.7 157.8 158.1 161.2 162.9 164.0 161.8 164.4 164.9 166.0 30 Electrical machinery....................... 36 8.05 159.4 157.6 158.8 162.5 165.2 167.7 170.9 173.2 174.2 170.6 174.7 175.1 172.1 31 Transportation equipment............. 37 9.27 132.5 131.0 131.4 133.4 142.1 142.9 141.2 139.9 143.7 131.6 141.9 139.3 135.8 32 Motor vehicles and parts........... 371 4.50 169.9 169.1 168.9 171.5 181.9 182.1 177.9 173.1 179.7 156.0 176.3 169.6 159.9 33 Aerospace and miscellaneous transportation equipment... 372-9 4.77 97.2 95.1 96.1 97.5 104.7 106.0 106.6 108.6 109.7 108.6 109.6 110.9 113.1 34 Instruments....................................... 38 2.11 167.1 165.1 166.2 167.7 171.3 173.1 175.2 176.0 177.3 176.3 175.7 176.1 176.7 35 Miscellaneous manufactures......... 39 1.51 151.0 149.9 150.3 150.6 151.1 151.7 152.0 154.0 154.5 152.3 150.7 150.5 149.5 Gross value (billions of 1972 dollars, annual rates) Major Market 36 Products, total.................................. 1507.4 610.2 608.2 609.7 610.8 625.0 631.1 626.8 627.3 636.1 620.8 632.7 627.5 622.9 37 Final................................................... 1390.9 471.0 470.3 470.8 471.2 482.8 486.6 481.7 482.0 491.0 476.4 488.3 484.1 479.6 38 Consumer goods......................... 1277.5 326.6 327.5 326.6 326.0 332.8 334.1 328.9 329.4 334.7 323.9 331.5 328.4 326.0 39 Equipment.................................... 1113.4 144.4 142.8 144.2 145.1 150.0 152.4 152.9 152.6 156.3 152.5 156.8 155.7 153.6 40 Intermediate...................................... 1116.6 139.2 138.0 138.9 139.7 142.3 144.5 145.1 145.3 145.1 144.4 144.4 143.5 143.3 1. 1972 dollars. Production—1976 Revision (Board of Governors of the Federal Reserve System: Washington, D.C.), December 1977. Note. Published groupings include some series and subtotals not shown separately. For description and historical data, see Industrial A The industrial production series has been revised. For a description of the changes, see “Revision of Industrial Production Index” in this Bulletin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics □ August 1979 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates except as noted. 1978 1979 1976 1977 1978 Item Dec. Jan. Feb. Mar. Apr.r Mayr June Private residential real estate activity (thousands of units) New Units 1 Permits authorized................................ 1,296 1,677 1,801 1,827 1,442 1,425 1,621 1,517 1,618 1,684 2 1-family................................................ 894 1,126 1,182 1,268 920 881 1,056 1,036 1,047 1,012 3 2-or-more-family................................ 402 551 619 557 522 544 565 481 571 672 4 Started...................................................... 1,538 1,986 2,019 2,074 1,679 1,381 1,786 1,745 1,830 1,935 5 1-family................................................ 1,163 1,451 1,433 1,539 1,139 953 1,266 1,278 1,226 1,281 6 2-or-more-family................................ 377 535 586 535 540 428 520 467 604 654 7 Under construction, end of period i.. 1,147 1,442 1,355 1,345 1,360 1,344 r1,304 1,259 1,248 n.a. 8 1-family................................................ 655 829 1,378 799 812 793 mo 740 732 n.a. 9 2-or-more-family................................ 492 613 553 546 549 551 r534 519 516 n.a. 10 Completed............................................... 1,362 1,652 1,866 1,888 1,815 1,894 r 1,957 2,015 2,015 n.a. 11 1-family................................................ 1,026 1,254 1,368 1,805 1,331 1,376 rl,412 1,438 1,336 n.a. 12 2-or-more-family................................ 336 398 498 1,892 484 518 r545 577 679 n.a. 13 Mobile homes shipped.......................... 246 277 276 303 311 272 270 273 271 293 Merchant builder activity in 1-family units 14 Number sold........................................... 639 819 817 802 774 697 784 724 718 679 15 Number for sale, end of period1......... 433 407 423 413 412 410 424 425 431 420 Price (thousands of dollars)2 Median 16 Units sold............................................ 44.2 48.9 55.9 59.9 60.3 61.2 60.4 62.7 63.1 64.2 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 67.4 67.7 68.7 68.5 71.1 72.0 74.2 Existing Units (1-family) 19 Number sold........................................... 3,002 3,572 3,905 4,160 3,710 3,620 3,650 3,760 3,860 3,560 Price of units sold (thous. of dollars)2 20 Median..................................................... 38.1 42.9 48.7 50.9 52.0 51.9 53.8 54.7 55.9 56.8 21 Average.................................................... 42.2 47.9 55.1 58.1 59.8 59.5 61.8 62.5 64.2 66.1 Value of new construction * (millions of dollars) Construction 148,778 172,552 202,219 223,216 212,195 210,849 216,824 216,785 223,218 221,483 23 Private...................................................... 110,416 134,723 157,455 173,773 165,768 169,262 172,820 171,962 174,827 177,048 24 Residential.......................................... 60,519 80,957 93,088 99,736 93,660 97,724 96,591 95,992 95,478 97,043 25 Nonresidential, total......................... 49,897 53,766 64,367 74,037 72,108 71,538 76,229 75,970 79,349 80,005 Buildings 26 Industrial.................................... 7,182 7,713 10,762 13,461 12,711 13,401 15,201 14,034 14,504 14,749 27 Commercial................................ 12,757 14,789 18,280 20,486 19,775 18,985 20,990 21,463 23,601 24,444 28 Other............................................ 6,155 6,200 6,659 6,883 6,764 6,511 7,071 7,150 7,141 7,114 29 Public utilities and other............. 23,803 25,064 28,666 33,208 32,859 32,640 32,967 33,325 34,101 33,697 30 Public....................................................... 38,312 37,828 44,762 49,443 46,427 41,587 44,004 44,823 48,391 44,435 31 Military................................................ 1,521 1,517 1,462 1,577 1,645 1,059 1,983 1,550 1,517 1,636 32 Highway.............................................. 9,439 9,280 8,627 11,870 10,015 9,037 9,332 n.a. n.a. n.a. 33 Conservation and development... 3,751 3,882 3,697 4,349 4,865 4,476 4,862 n.a. n.a. n.a. 34 Other3.................................................. 23,601 23,149 23,503 31,647 29,902 27,015 27,827 n.a. n.a. 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 Item 1978 1979 1979 June 1978 1979 1979 June June (1967 Sept. Dec. Mar. June Feb. Mar. Apr. May June = 100)3 Consumer Prices1 1 7.4 10.9 8.5 8.5 13.0 13.4 1.2 1.0 1.1 1.1 1.0 216.6 2 Commodities..................................................... 6.9 11.1 7.3 9.6 14.5 13.3 1.2 1.1 1.2 .9 1.0 208.4 3 10.4 10.1 4.8 10.2 17.7 7.5 1.6 1.1 1.0 .7 .2 235.4 4 Commodities less food............................... 5.4 11.6 8.3 9.6 12.9 15.8 1.0 1.1 1.3 1.1 1.3 194.7 5 6.1 9.9 9.1 11.3 10.0 9.1 1.0 .5 .9 .5 .8 191.1 6 4.3 13.8 6.9 6.7 16.5 25.8 .8 1.9 1.9 1.8 2.1 197.6 7 Services............................................................... 8.4 10.6 10.3 7.2 10.6 13.8 1.1 .9 .9 1.3 1.0 232.1 8 7.0 6.8 7.3 7.7 3.6 8.7 .4 .2 .5 1.0 .5 174.7 9 Services less rent.......................................... 8.6 11.1 10.8 7.1 11.7 14.5 1.1 1.0 1.0 1.3 1.1 242.6 Other groupings 10 All items less food........................................... 6.8 11.1 9.3 8.5 12.0 14.9 1.0 1.0 1.2 1.2 1.1 211.8 11 All items less food and energy..................... 7.0 9.5 9.7 7.7 9.3 11.2 .9 .8 .9 .9 .8 205.8 12 Homeownership.............................................. 10.5 14.9 14.6 10.9 16.7 18.0 1.8 1.3 1.4 1.3 1.4 258.8 Producer Prices 7.8 9.7 7.4 10.5 13.7 7.5 1.1 .8 .9 .4 .5 213.4 14 7.6 10.1 7.5 11.1 15.6 6.5 1.2 1.0 .8 .3 .5 212.4 15 9.9 6.8 4.9 15.3 20.1 -10.5 1.8 1.0 -.3 -1.3 -1.2 223.8 16 Excluding foods....................................... 6.3 11.9 8.8 8.8 12.9 17.3 .9 1.0 1.4 1.3 1.4 204.7 17 8.2 8.8 7.0 8.8 9.8 9.6 .9 .5 1.1 .7 .5 215.5 8.0 12.4 7.5 13.0 17.3 11.8 1.6 1.0 1.0 1.0 .9 248.3 19 6.8 11.5 6.9 11.2 13.2 15.1 1.0 1.0 1.6 1.0 1.0 240.8 Crude 20 10.3 21.9 16.9 19.8 29.5 21.7 2.7 2.2 -.5 2.3 3.3 348.7 21 16.5 11.0 2.8 21.2 30.6 -6.8 3.8 .2 -.3 -.3 -1.2 248.2 1. Figures for consumer prices are those for all urban consumers. 3. Not seasonally adjusted. 2. Excludes intermediate materials for food manufacturing and manu­ factured animal feeds. Source. Bureau of Labor Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 Domestic Nonfinancial Statistics □ August 1979 2.16 GROSS NATIONAL PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates. 1978 1979 Account 1976 1977 1978 Ql Q2 Q3 Q4 Ql Q2 Gross National Product 1 1,702.2 1,899.5 2,127.6 2,011.3 2,104.2 2,159.6 2,235.2 2,292.1 2,327.2 By source 2 Personal consumption expenditures..................... 1,089.9 1,210.0 1,350.8 1,287.2 1,331.2 1,369.3 1,415.4 1,454.2 1,474.2 3 Durable goods....................................................... 157.4 178.8 200.3 185.3 200.3 203.5 212.1 213.8 207.3 4 Nondurable goods................................................. 443.9 481.3 530.6 505.9 521.8 536.7 558.1 571.1 578.7 5 Services.................................................................... 488.5 549.8 619.8 596.0 609.1 629.1 645.1 669.3 688.2 6 Gross private domestic investment....................... 243.0 303.3 351.5 327.0 352.3 356.2 370.5 373.8 391.3 7 Fixed investment................................................... 233.0 281.3 329.1 304.1 326.5 336.1 349.8 354.6 360.0 8 Nonresidential................................................... 164.9 189.4 221.1 203.7 218.8 225.9 236.1 243.4 247.1 9 Structures........................................................ 57.3 62.6 76.5 66.9 75.2 79.7 84.4 84.9 90.2 10 Producers’ durable equipment................... 107.6 126.8 144.6 136.8 143.6 146.3 151.8 158.5 156.9 11 Residential structures....................................... 68.1 91.9 108.0 100.5 107.7 110.2 113.7 111.2 112.9 12 Nonfarm......................................................... 65.7 88.8 104.4 96.8 104.3 106.4 110.0 107.8 109.2 13 Change in business inventories.......................... 10.0 21.9 22.3 22.8 25.8 20.0 20.6 19.1 31.4 14 Nonfarm............................................................. 12.1 20.7 21.3 22.0 25.3 18.5 19.3 18.8 31.5 15 Net exports of goods and services......................... 8.0 -9.9 -10.3 -22.2 -7.6 -6.8 -4.5 4.0 -7.0 16 Exports.................................................................... 163.3 175.9 207.2 184.4 205.7 213.8 224.9 238.5 242.5 17 Imports.................................................................... 155.4 185.8 217.5 206.6 213.3 220.6 229.4 234.4 249.5 18 Government purchases of goods and services... 361.3 396.2 435.6 419.4 428.3 440.9 453.8 460.1 468.7 19 Federal..................................................................... 129.7 144.4 152.6 150.9 148.2 152.3 159.0 163.6 162.9 20 State and local....................................................... 231.6 251.8 283.0 268.5 280.1 288.6 294.8 296.5 305.8 By major type of product 21 Final sales, total......................................................... 1,692.1 1,877.6 2,105.2 1,988.5 2,078.4 2,139.5 2,214.5 2,272.9 2,295.8 22 Goods....................................................................... 762.7 842.2 930.0 873.0 922.5 940.9 983.8 1,011.8 1,011.9 23 Durable................................................................ 305.9 345.9 380.4 358.7 378.0 382.6 402.3 425.5 416.9 24 Nondurable......................................................... 456.8 496.3 549.6 514.3 544.5 558.3 581.6 586.2 595.0 25 Services.................................................................... 776.7 866.4 969.3 934.1 956.2 981.7 1,005.3 1,041.4 1,066.9 26 Structures................................................................ 162.7 190.9 228.2 204.2 225.6 237.0 246.0 238.9 248.4 27 Change in business inventories.............................. 10.0 21.9 22.3 22.8 25.8 20.0 20.6 19.1 31.4 28 5.3 11.9 13.9 18.6 13.1 10.3 13.4 18.4 22.4 29 Nondurable goods................................................. 4.7 10.0 8.4 4.2 12.7 9.7 7.2 .7 9.0 30 1,273.0 1,340.5 1,399.2 1,367.8 1,395.2 1,407.3 1,426.6 1,430.6 1,418.8 National Income 31 1,359.8 1,525.8 1,724.3 1,621.0 1,703.9 1,752.5 1,820.0 1,869.0 n.a. 32 Compensation of employees.................................... 1,037.8 1,156.9 1,304.5 1,244.0 1,288.2 1,321.1 1,364.8 1,411.2 1,439.0 33 Wages and salaries................................................ 890.0 984.0 1,103.5 1,052.0 1,090.0 1,117.4 1,154.7 1,189.4 1,210.8 34 Government and government enterprises .. 188.0 201.3 218.0 212.3 215.3 219.2 225.1 228.1 231.3 35 Other.................................................................... 702.0 782.7 885.5 839.7 874.6 898.1 929.6 961.3 979.5 36 Supplement to wages and salaries..................... 147.8 172.9 201.0 192.0 198.3 203.7 210.1 221.8 228.2 37 Employer contributions for social insurance..................................................... 70.4 81.2 94.6 91.0 93.6 95.5 98.2 105.8 107.8 38 Other labor income.......................................... 77.4 91.8 106.5 101.1 104.7 108.2 111.9 116.0 120.3 39 Proprietors’ income1................................................. 89.3 100.2 116.8 109.1 115.0 117.4 125.7 129.0 129.2 40 Business and professional1.................................. 71.0 80.5 89.1 83.4 87.3 91.3 94.4 94.8 95.5 41 Farm1...................................................................... 18.3 19.6 27.7 25.7 27.7 26.1 31.3 34.2 33.7 42 Rental income of persons2...................................... 22.1 24.7 25.9 25.2 24.4 26.8 27.1 27.3 26.8 43 Corporate profits1..................................................... 126.8 150.0 167.7 141.2 169.4 175.2 184.8 178.9 n.a. 44 Profits before tax3................................................. 156.0 177.1 206.0 177.5 207.2 212.0 227.4 233.3 n.a. 45 Inventory valuation adjustment......................... -14.6 -15.2 -25.2 -23.9 -25.1 -23.0 -28.8 -39.9 -36.4 46 Capital consumption adjustment....................... -14.5 -12.0 -13.1 -12.4 -12.6 -13.8 -13.8 -14.5 -14.7 83.8 94.0 109.5 101.5 106.8 111.9 117.6 122.6 126.1 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. 1978 1979 1976 1977 1978 Ql Q2 Q3 Q4 Ql Q2 Personal Income and Saving 1 Total personal income. 1.381.6 1.531.6 1,717.4 1.634.8 1.689.3 1.742.5 1.803.1 1.852.6 1.892.6 2 Wage and salary disbursements...................... 890.0 984.0 1.103.3 1.052.0 1.090.0 1,116.8 1.154.3 1,189.3 1.211.7 3 Commodity-producing industries............... 307.2 343.1 387.4 363.9 383.4 393.7 408.6 423.0 431.1 4 Manufacturing............................................ 237.4 266.0 298.3 285.6 294.1 300.8 312.7 324.8 328.0 5 Distributive industries................................... 216.3 239.1 269.4 257.6 265.9 272.5 281.6 291.1 296.2 6 Service industries........................................... 178.5 200.5 228.7 218.2 225.4 231.9 239.4 247.2 252.3 7 Government and government enterprises. 188.0 201.3 217.8 212.3 215.3 218.7 224.7 228.0 232.1 8 Other labor income............................................ 77.4 91.8 106.5 101.1 104.7 108.2 111.9 116.0 120.3 9 Proprietors’ income1............. 89.3 100.2 116.8 109.1 115.0 117.4 125.7 129.0 129.2 10 Business and professional1 71.0 80.5 89.1 83.4 87.3 91.3 94.4 94.8 95.5 11 Farm1................................... 18.3 19.6 27.7 25.7 27.7 26.1 31.3 34.2 33.7 12 Rental income of persons2. 22.1 24.7 25.9 25.2 24.4 26.8 27.1 27.3 26.8 13 Dividends.............................. 37.5 42.1 47.2 45.1 46.0 47.8 49.7 51.5 52.3 14 Personal interest income... 127.0 141.7 163.3 152.2 159.4 167.2 174.3 181.0 188.3 15 Transfer payments............................................ 193.8 208.4 224.1 217.4 218.8 228.3 231.8 237.3 243.7 16 Old-age survivors, disability, and health insurance benefits.................................. 92.9 105.0 116.3 111.4 112.4 119.8 121.5 123.8 127.2 17 Less: Personal contributions for social insurance............................................... 55.6 61.3 69.6 67.3 69.0 70.2 71.8 78.7 79.8 18 Equals: Personal income....................................... 1.381.6 1.531.6 1.717.4 1.634.8 1.689.3 1.742.5 1.803.1 1.852.6 1.892.6 19 Less: Personal tax and nontax payments.... 197.1 226.4 259.0 239.8 252.1 266.0 278.2 280.4 290.9 20 Equals: Disposable personal income.................. 1,184.5 1.305.1 1.458.4 1.395.0 1.437.3 1.476.5 1,524.8 1,572.2 1.601.7 21 Less: Personal outlays......................................... 1,115.9 1.240.2 1.386.4 1,320.4 1.366.1 1.405.6 1.453.4 1,493.0 1,514.5 22 Equals: Personal saving......................................... 68.9 65.0 72.0 74.6 71.2 70.9 71.5 79.2 87.2 Memo: Per capita (1972 dollars) 23 Gross national product....................... 5,916 6,181 6,402 6,277 6,392 6,433 6,506 6,514 6,443 24 Personal consumption expenditures. 3,813 3,974 4,121 4,051 4,099 4,138 4,197 4,197 4,149 25 Disposable personal income............... 4,144 4,285 4,449 4,390 4,426 4,462 4,522 4,536 4,508 26 Saving rate (percent).............................. 5.8 5.0 4.9 5.3 5.0 4.8 4.7 5.0 4.5 Gross Saving 27 Gross private saving................... 271.9 295.6 324.9 308.9 324.2 330.4 336.1 345.2 28 Personal saving.................................................. 68.6 65.0 72.0 74.6 71.2 70.9 71.5 79.2 87.2 29 Undistributed corporate profits1................... 25.5 35.2 36.0 25.3 38.7 40.0 40.1 36.1 n.a. 30 Corporate inventory valuation adjustment. -14.6 -15.2 -25.2 -23.9 -25.1 -23.0 -28.8 -39.9 -36.4 Capital consumption allowances 31 Corporate............................................................ 111.6 121.3 132.9 128.9 131.7 134.3 136.8 139.9 145.1 32 Noncorporate..................................................... 66.1 74.1 84.0 80.2 82.7 85.2 87.7 89.9 93.9 33 Wage accruals less disbursements................. 34 Government surplus, or deficit (—), national income and product accounts........................ -35.7 -19.5 -.3 -19.2 5.0 2.3 10.8 15.8 n.a. 35 Federal.................................................................... -53.6 -46.3 -27.7 -49.4 -24.6 -20.4 -16.3 -11.7 n.a. 36 State and local....................................................... 17.9 26.8 27.4 30.2 29.6 22.7 27.1 27.6 n.a. 37 Capital grants received by the United States, net.................................................................... 1.1 1.1 38 Investment........................... 242.3 283.6 327.9 292.7 331.5 336.5 351.0 362.8 370.1 39 Gross private domestic. 243.0 303.3 351.5 327.0 352.3 356.2 370.5 373.8 391.3 40 Net foreign..................... -.1 -19.6 -23.5 -34.2 -20.8 -19.6 -19.4 -11.0 -21.2 41 Statistical discrepancy. 6.1 7.5 3.3 3.0 2.3 3.9 4.1 .6 1. With inventory valuation and capital consumption adjustments. Source. Survey of Current Business (U.S. Dept, of Commerce). 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics □ August 1979 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data are seasonally adjusted except as noted.1 1978 1979 Item credits or debits 1976 1977 1978 Ql Q2 Q3 Q4 Ql 1Balance on current account......................................................... 4,605 -14,092 -13,895 -6,935 -3,426 -3,227 -313 157 2 -5,805 -2,858 -5,955 722 1,475 3 Merchandise trade balance2................................................... -9,306 -30,873 -34,187 -11,899 -7,907 -8,012 -6,369 -6,098 4 Merchandise exports............................................................. 114,745 120,816 141,884 30,811 35,267 36,491 39,315 41,350 5 Merchandise imports............................................................ -124,051 -151,689 -176,071 -42,710 -43,174 -44,503 -45,684 -47,448 6 Military transactions, net......................................................... 674 1,679 492 244 237 247 -239 -125 7 Investment income, net3.......................................................... 15,975 17,989 21,645 5,239 4,854 4,952 6,599 6,776 8 Other service transactions, net............................................... 2,260 1,783 3,241 708 703 819 1,010 933 9 Memo: Balance on goods and services3.4........................... 9,603 -9,423 -8,809 -5,707 -2,113 -1,994 1,001 1,486 10 Remittances, pensions, and other transafers....................... -1,851 -1,895 -1,934 -463 -486 -463 -524 -525 11 U.S. government grants (excluding military)...................... -3,146 -2,775 -3,152 -765 -827 -770 -790 -804 12 Change in U.S. government assets, other than official reserve assets, net (increase, —)........................................ -4,214 -3,693 -4,656 -1,009 -1,263 -1,390 -994 -1,096 13 Change in U.S. official reserve assets (increase, —).............. -2,558 -375 732 187 248 115 182 -3,589 14 Gold............................................................................................. 0 -118 -65 0 0 0 -65 0 15 Special drawing rights (SDRs)............................................... -78 -121 1,249 -16 -104 -43 1,412 -1,142 16 Reserve position in International Monetary Fund............ -2,212 -294 4,231 324 437 1<95 3,275 -86 17 Foreign currencies..................................................................... -268 158 -4,683 -121 -85 — 37 -4,440 -2,361 18 Change in U.S. private assets abroad (increase, — )3........... -44,498 -31,725 -57,033 -14,366 -4,451 — 8,774 -29,442 -1,473 19 Bank-reported claims............................................................... -21,368 -11,427 -33,023 -6,270 715 -5,488 -21,980 5,836 20 Nonbank-reported claims........................................................ -2,296 -1,940 -3,853 -2,241 315 -29 -1,898 n.a. 21 Long-term................................................................................ -42 -99 -53 -63 78 61 -129 n.a. 22 Short-term............................................................................... -2,254 -1,841 -3,800 -2,178 237 -90 -1,769 n.a. 23 U.S. purchase of foreign securities, net................................ -8,885 -5,460 -3,487 -999 -1,095 -475 -918 -1,056 24 U.S. direct investments abroad, net3.................................... -11,949 -12,898 -16,670 -4,856 -4,386 -2,782 -4,646 -6,253 25 Change in foreign official assets in the United States (increase, +)........................................................................... 17,573 36,656 33,758 15,618 -5,265 4,641 18,764 -8,490 26 U.S. Treasury securities........................................................... 9,319 30,230 23,542 12,904 -5,813 3,029 13,422 -8,871 27 Other U.S. government obligations..................................... 573 2,308 656 117 211 443 -115 -5 28 Other U.S. government liabilities5....................................... 4,507 1,240 2,754 723 -136 122 2,045 19 29 Other U.S. liabilities reported by U.S. banks..................... 969 773 5,411 1,456 -164 963 3,156 153 30 Other foreign official assets6................................................... 2,205 2,105 1,395 418 637 84 156 215 31 Change in foreign private assets in the United States (increase, +)3........................................................................ 18,826 14,167 29,956 2,557 6,207 10,717 10,475 12,832 32 U.S. bank-reported liabilities.................................................. 10,990 6,719 16,975 -404 1,865 7,958 7,556 8,124 33 U.S. nonbank-reported liabilities.......................................... -578 473 1,640 498 315 1,004 -177 n.a. 34 Long-term............................................................................... -1,000 -520 -194 28 -63 86 -245 n.a. 35 Short-term............................................................................... 422 993 1,834 470 378 918 68 n.a. 36 Foreign private purchases of U.S. Treasury securities, net......................................................................................... 2,783 534 2,180 881 803 -1,053 1,549 2,586 37 Foreign purchases of other U.S. securities, net................. 1,284 2,713 2,867 453 1,347 528 540 790 38 Foreign direct investments in the United States, net3........ 4,347 3,728 6,294 1,130 1,877 2,280 1,008 1,332 39 Allocation of SDRs....................................................................... 0 0 0 0 0 0 0 1,139 10,265 -937 11,139 3,947 7,950 -2,082 1,328 519 41 Owing to seasonal adjustments.............................................. 901 517 -2,716 1,301 999 42 Statistical discrepancy in recorded data before seasonal adjustment............................................................................... 10,265 -937 11,139 3,046 7,433 634 27 -480 Memo: Changes in official assets 43 U.S. official reserve assets (increase, —)............................ -2,558 -375 732 187 248 115 182 -3,589 44 Foreign official assets in the United States (increase, +).. 13,066 35,416 31,004 14,895 -5,129 4,519 16,719 -8,508 45 Changes in Organization of Petroleum Exporting Countries official assets in the United States (part of line 25 9,581 6,351 -727 1,969 -2,705 -1,794 1,803 -1,059 46 Transfers under military grant programs (excluded from lines 4, 6, and 11 above)........................................................... 373 204 259 76 50 69 63 33 1. Seasonal factors are no longer calculated for lines 13 through 46. makes various adjustments to merchandise trade and service transactions. 2. Data are on an international accounts (IA) basis. Differs from the 5. Primarily associated with military sales contracts and other transac­ census basis primarily because the IA basis includes imports into the tions arranged with or through foreign official agencies. U.S. Virgin Islands, and it excludes military exports, which are part of 6. Consists of investments in U.S. corporate stocks and in debt securi­ line 6. ties of private corporations and state and local governments. 3. Includes reinvested earnings of incorporated affiliates. 4. Differs from the definition of “net exports of goods and services” in Note. Data are from Bureau of Economic Analysis, Survey of Current the national income and product (GNP) account. The GNP definition 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 Dec. Jan. Feb. Mar. Apr. May June 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments............................................ 115,156 121,150 143,574 13,282 13,132 13,507 14,452 13,883 13,862 15,037 2 GENERAL IMPORTS including merchandise for immediate con­ sumption plus entries into bonded warehouses.......................................... 121,009 147,685 172,026 15,032 16,231 14,806 r15,274 16,036 16,342 16,937 3 Trade balance.......................................... -5,853 -26,535 -28,452 -1,749 -3,099 -1,299 -822 -2,153 -2,480 -1,900 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 1979 Type 1976 1977 1978 Jan. Feb. Mar. Apr. May Juner July® 1 Total i....................................................... 18,747 19,312 18,650 20,468 20,292 21,658 21,403 22,230 21,246 20,023 2 Gold stock, including Exchange Stabilization Fund2........................... 11,598 11,719 11,671 11,592 11,544 11,479 11,418 11,354 11,323 11,290 2,395 2,629 1,558 2,661 2,672 2,667 2,602 2,624 2,670 2,690 4 Reserve position in International 4,434 4,946 1,047 1,017 1,120 1,121 1,097 1,193 1,204 1,200 5 Foreign currencies4............................... 320 18 4,374 5,198 4,956 6,391 6,286 7,059 6,049 4,843 1. Beginning July 1974, the IMF adopted a technique for valuing the 3. Includes allocations by the International Monetary Fund of SDRs as SDR based on a weighted average of exchange rates for the currencies follows: $867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; $710 of 16 member countries. The U.S. SDR holdings and reserve position in million on Jan. 1, 1972; and $1,139 million on Jan. 1, 1979; plus net the IMF also are valued on this basis beginning July 1974. transactions in SDRs. 2. Gold held under earmark at Federal Reserve Banks for foreign and 4. Beginning November 1978, valued at current market exchange rates. international accounts is not included in the gold stock of the United States; see table 3.24. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A56 International Statistics □ August 1979 3.13 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data Millions of dollars, end of period 19782 1979 Asset account 1975 1976 1977 Nov. Dec. Jan. Feb. Mar. Apr. MayP All foreign countries 1Total, all currencies............................... 176,493 219,420 258,897 295,980 306,145 295,118 295,341 '305,823 303,003 310,096 2 Claims on United States...................... 6,743 7,889 11,623 13,476 16,690 15,340 15,065 '21,688 19,359 23,847 3 Parent bank........................................ 3,665 4,323 7,806 9,046 12,161 10,789 10,188 '16,094 13,636 17,199 4 Other.................................................... 3,078 3,566 3,817 4,430 4,529 4,551 4,877 5,594 5,723 6,648 5 Claims on foreigners............................. 163,391 204,486 238,848 271,418 278,135 268,116 268,052 271,189 270,757 273,944 6 Other branches of parent bank___ 34,508 45,955 55,772 68,403 70,340 66,653 64,249 64,973 64,079 65,898 7 Banks................................................... 69,206 83,765 91,883 r101 - 311 '103,109 '97,984 '99,435 '101,523 101,620 103,023 8 Public borrowers1............................. 5,792 10,613 14,634 '23,006 '23,737 '23,772 '24,586 '24.895 24.842 24,708 9 Nonbank foreigners.......................... 53,886 64,153 76,560 78,698 80,949 79,707 79,782 79,798 80,216 80,315 10 Other assets............................................. 6,359 7,045 8,425 11,086 11,320 11,662 12,224 '12,946 12,887 12,305 11 Total payable in U.S. dollars.............. 132,901 167,695 193,764 218,289 224,290 214,312 213,089 '222,656 221,201 227,460 12 Claims on United States...................... 6,408 7,595 11,049 12,580 15,732 14,506 14,130 '20,823 18,389 22,899 13 Parent bank........................................ 3,628 4,264 7,692 8,877 11,975 10,596 9,958 '15,902 13,397 17,017 14 Other.................................................... 2,780 3,332 3,357 3,703 3,757 3,910 4,172 '4,921 4,992 5,882 15 Claims on foreigners............................. 123,496 156,896 178,896 200,727 203,498 194,416 193,258 195,918 196,308 198,387 16 Other branches of parent bank.. •. 28,478 37,909 44,256 54,721 55,410 51,799 49,615 49,735 49,615 50,737 17 Banks................................................... 55,319 66,331 70,786 '76,732 '78.684 '73,732 '74,657 '77,008 77,408 78,846 18 Public borrowers1............................. 4,864 9,022 12,632 '19,303 '19,567 '19,818 '20,338 '21,091 20,898 20,834 19 Nonbank foreigners.......................... 34,835 43,634 51,222 49,971 49,837 49,067 48,648 48,084 48,387 47,970 20 Other assets............................................ 2,997 3,204 3,820 4,982 5,060 5,390 5,701 '5,915 6,504 6,174 United Kingdom 21 Total, all currencies............................... 74,883 81,466 90,933 102,032 106,593 100,786 101,179 102,144 102,876 104,915 22 Claims on United States...................... 2,392 3,354 4,341 3,706 5,370 3,960 3,912 5,019 5,268 6,303 23 Parent bank........................................ 1,449 2,376 3,518 2,779 4,448 2,930 2,689 3,544 3,679 4,410 24 Other.................................................... 943 978 823 927 922 1,030 1,223 1,475 1,589 1,893 25 Claims on foreigners............................. 70,331 75,859 84,016 95,220 98,137 93,690 94,032 93,840 94,120 95,266 26 Other branches of parent bank.... 17,557 19,753 22,017 25,802 27,830 25,911 24,474 24,911 24,435 25,248 27 Banks................................................... 35,904 38,089 39,899 44,353 45,013 42,531 44,032 42,964 43,308 43,657 28 Public borrowers1............................. 881 1,274 2,206 4,526 4,522 4,549 4,548 4,608 4,547 4,579 29 Nonbank foreigners.......................... 15,990 16,743 19,895 20,539 20,772 20,699 20,978 21,357 21,830 21,782 30 Other assets............................................. 2,159 2,253 2,576 3,106 3,086 3,136 3,235 3,285 3,488 3,346 31 Total payable in U.S. dollars.............. 57,361 61,587 66,635 71,761 75,860 70,502 70,525 71,499 72,015 73,480 32 Claims on United States...................... 2,273 3,275 4,100 3,475 5,113 3,738 3,618 4,710 4,946 5,981 33 Parent bank........................................ 1,445 2,374 3,431 2,727 4,386 2,878 2,610 3,488 3,612 4,374 34 Other.................................................... 828 902 669 748 727 860 1,008 1,222 1,334 1,607 35 Claims on foreigners............................. 54,121 57,488 61,408 67,031 69,416 65,364 65,416 65,214 65,356 65,968 36 Other branches of parent bank.... 15,645 17,249 18,947 21,197 22,838 21,171 19,884 20,370 19,866 20,505 37 Banks................................................... 28,224 28,983 28,530 30,565 31,482 29,113 30,185 29,393 29,924 30,211 38 Public borrowers1............................. 648 846 1,669 3,467 3,317 3,342 3,414 3,523 3,429 3,331 39 Nonbank foreigners.......................... 9,604 10,410 12,263 11,802 11,779 11,738 11,933 11,928 12,137 11,921 40 Other assets............................................ 967 824 1,126 1,255 1,331 1,400 1,491 1,575 1,713 1,531 Bahamas and Caymans 41 Total, all currencies............................... 45,203 66,774 79,052 89,720 91,085 87,899 87,993 '96,309 93,237 97,317 42 Claims on United States...................... 3,229 3,508 5,782 7,551 8,985 9,753 8,994 '14,574 12,261 15,685 43 Parent bank........................................ 1,477 1,141 3,051 4,437 5,779 6,646 5,780 '10,958 8,737 11,519 44 Other.................................................... 1,752 2,367 2,731 3,114 3,206 3,107 3,214 3,616 3,524 4,166 45 Claims on foreigners............................. 41,040 62,048 71,671 79,956 79,774 75,792 76,507 79,057 77,995 78,809 46 Other branches of parent bank.... 5,411 8,144 11,120 13,526 12,906 11,477 11,841 12,086 11,756 11,886 47 Banks................................................... 16,298 25,354 27,939 33,010 33,675 31,638 31,534 33,821 33,524 34,006 48 Public borrowers1............................. 3,576 7,105 9,109 11,529 11,514 11,392 12,125 12,573 12,360 12,702 49 Nonbank foreigners.......................... 15,756 21,445 23,503 21,891 21,679 21,285 21,007 20,577 20,355 20,215 50 Other assets............................................ 933 1,217 1,599 2,213 2,326 2,354 2,492 '2,678 2,981 2,823 51 Total payable in U.S. dollars.............. 41,887 62,705 73,987 83,710 84,767 81,669 81,725 '89,984 87,280 91,089 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 Nov. Dec. Jan. Feb. Mar. Apr. May** All foreign countries 52 Total, all currencies............................... 176,493 219,420 258,897 295,980 306,145 295,118 295,341 '305,823 303,003 310,096 53 To United States................................... 20,221 32,719 44,154 '55,922 '57,298 '52,480 '53,725 '55,262 55,447 56,972 54 Parent bank........................................ 12,165 19,773 24,542 '29,227 '27,914 '24,162 '23,523 '20,297 23,397 22,771 55 Other banks in United States........ '9,096 '12,338 '8,200 '9,196 '12,544 9,888 9,900 56 Nonbanks............................................ '17,599 '17,046 '20,118 '21,006 '22,421 22,162 24,301 57 Foreigners............................................... 149,815 179,954 206,579 '230,666 '238,912 '232,649 '231,665 '240,303 237,184 241,946 58 Other branches of parent bank.... 34,111 44,370 53,244 '65,304 '67,496 '64,755 '62,159 '62,179 62,068 63,696 59 Banks................................................... 72,259 83,880 94,140 '93,925 '97,711 '92,819 '94,121 '102,124 100,046 101,707 60 Official institutions........................... 22,773 25,829 28,110 32,212 31,936 31,137 '32,028 34,262 33,007 34,097 61 Nonbank foreigners.......................... 20,672 25,877 31,085 '39,225 41,769 '43,938 '43,357 41,738 42,063 42,446 62 Other liabilities...................................... 6,456 6,747 8,163 '9,392 '9,935 '9,989 '9,951 '10,258 10,372 11,178 63 Total payable in U.S. dollars............... 135,907 173,071 198,572 222,873 230,160 220,211 '219,733 '228,179 225,759 231,365 64 To United States.................................... 19,503 31,932 42,881 '53,960 '55,161 '50,444 '51,571 '53,170 53,478 54,840 65 Parent bank......................................... 11,939 19,559 24,213 '28,354 '26,843 '23,179 '22,517 '19,265 22,453 21,834 6 6 7 6 N O o th n e b r a b n a k n s k .. s .. . i . n ... . U .... n .. i . t . e ... d .. . S ... t . a ... t . e .. s .. . . . . . . . . . . . . . . . . J / j D04 '1 '8 6 , ,7 8 8 2 1 5 ' ' 1 1 6 2 , , 2 0 3 8 4 4 '1 '7 9 , , 9 3 3 2 9 6 '2 '8 0 , , 8 1 5 99 5 ' '1 2 2 1 , , 2 6 9 0 9 6 2 9 1 , , 6 3 8 4 5 0 2 9 3 , , 6 33 6 9 7 68 To foreigners.......................................... 112,879 137,612 151,363 '164,161 '169,927 '164,387 '162,723 '169,332 166,817 170,360 69 Other branches of parent bank___ 28,217 37,098 43,268 '52,820 '53,396 '50,814 '48,250 '47,963 48,467 49,402 70 Banks................................................... 51,583 60,619 64,872 '58,824 '63,000 '58,504 '59,190 '65.561 63,883 65,190 71 Official institutions........................... 19,982 22,878 23,972 26,667 26,404 25,567 '26,413 28,511 27,108 28,300 72 Nonbank foreigners.......................... 13,097 17,017 19,251 '25,850 '27,127 '29,502 '28,870 27,297 27,359 27,468 73 Other liabilities...................................... 3,526 3,527 4,328 '4,752 '5,072 '5,380 '5,439 '5,677 5,464 6,165 United Kingdom 74 Total, all currencies............................. 74,883 81,466 90,933 102,032 106,593 100,786 101,179 102,144 102,876 104,915 75 To United States.................................. 5,646 5,997 7,753 8,295 9,730 8,118 '9,214 10,086 10,781 11,697 76 Parent bank...................................... 2,122 1,198 1,451 1,609 1,887 1,585 '1,731 1,461 1,814 2,113 7 7 7 8 N O o th n e b r a b n a k n s k .. s .. . i . n ... . U .... n .. i . t .. e .. d .. . S ... t . a .. t .. e .. s .. . .. . . . .. . . | 3,523 4A , 7U00o A0 9Jin\)'Z) 3 3 , , 4 2 5 3 2 4 4 3 , ,6 2 1 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 5 3, , 5 4 4 2 1 6 6 3 , , 2 3 0 8 4 0 79 To foreigners........................................ 67,240 73,228 80,736 90,105 93,202 88,942 '88,122 88,068 88,174 88,796 80 Other branches of parent bank... 6,494 7,092 9,376 13,015 12,786 12,712 11,303 10,910 11,023 10,931 81 Banks................................................. 32,964 36,259 37,893 37,795 39,917 36,142 36,655 38,318 39,391 38,417 82 Official institutions......................... 16,553 17,273 18,318 20,940 20,963 19,700 '20,637 21,845 20,115 21,312 83 Nonbank foreigners....................... 11,229 12,605 15,149 18,355 19,536 20,388 19,527 16,995 17,645 18,136 84 Other liabilities.................................... 1,997 2,241 2,445 3,632 3,661 3,726 3,843 3,990 3,921 4,422 85 Total payable in U.S. dollars............ 57,820 63,174 67,573 72,812 77,030 72,048 72,293 72,639 72,653 74,127 86 To United States.................................. 5,415 5,849 7,480 7,908 9,328 7,736 '8,855 9,756 10,439 11,200 87 Parent bank...................................... 2,083 1,182 1,416 1,563 1,836 1,539 '1,694 1,418 1,780 2,047 88 Other banks in United States.... 3,178 4,144 2,601 3,122 3,636 3,492 3,321 89 Nonbanks.......................................... 3,332 4,667 6,064 3,167 3,348 3,596 4,039 4,712 5,167 5,832 90 To foreigners......................................... 51,447 56,372 58,977 63,389 66,216 62,629 '61,729 61,215 60,689 60,948 91 Other branches of parent bank... 5,442 5,874 7,505 10,174 9,635 9,890 8,393 7,985 7,706 7,777 92 Banks................................................. 23,330 25,527 25,608 22,672 25,287 21,642 21,911 23,017 24,002 22,684 93 Official institutions......................... 14,498 15,423 15,482 17,075 17,091 15,834 '16,868 18,030 16,197 17,486 94 Nonbank foreigners....................... 8,176 9,547 10,382 13,468 14,203 15,263 14,557 12,183 12,784 13,001 95 Other liabilities.................................... 959 953 1,116 1,515 1,486 1,683 1,709 1,668 1,525 1,979 Bahamas and Caymans 96 Total, all currencies............................. 45,203 66,774 79,052 89,720 91,085 87,899 87,993 '96,309 93,237 97,317 97 To United States.................................. 11,147 22,721 32,176 40,631 38,781 36,927 36,546 '37,487 37,103 38.071 98 Parent bank...................................... 7,628 16,161 20,956 22,252 19,806 17,054 15,726 '13,690 16,032 15,388 1 9 0 9 0 O N t o h n e b r a b n a k n s k .. s .. . i .. n .. . U .... n .. i . t .. e .. d .. . S ... t .. a .. t . e ... s .. . . . . . .. . . 3,520 6,560 11,220 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 , , 0 7 4 5 1 6 1 5 5 , , 2 85 2 1 0 1 5 7 , , 4 2 0 83 0 101 To foreigners........................................ 32,949 42,899 45,292 47,400 50,447 49,153 49,534 '56,727 54,124 57,097 102 Other branches of parent bank... 10,569 13,801 12,816 14,715 16,094 14,266 13,697 '13,944 14,716 15,997 103 Banks................................................. 16,825 21,760 24,717 21,974 23,104 22,290 23,299 '28,728 25,964 28,543 104 Official institutions......................... 3,308 3,573 3,000 4,306 4,208 4,602 4,429 5,168 5,328 4,970 105 Nonbank foreigners....................... 2,248 3,765 4,759 6,405 7,041 7,995 8,109 8,887 8,116 7,587 106 Other liabilities.................................... 1,106 1,154 1,584 1,689 1,857 1,819 1,913 '2,095 2,010 2,149 107 Total payable in U.S. dollars............ 42,197 63,417 74,463 85,012 86,364 83,152 83,331 91,473 88,347 92,057 1. In May 1978 a broader category of claims on foreign public bor­ 2. In May 1978 the exemption level for branches required to report rowers, including corporations that are majority owned by foreign govern­ was increased, which reduced the number of reporting branches. ments, replaced the previous, more narrowly defined claims on foreign official institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics □ August 1979 3.14 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1978 1979 Item 1976 1977 1978 Dec. Jan.r Feb.r Mar.r Apr. May June? A. By type 1 Total1............................................................................ 95,634 131,097 162,345 162,345 162,606 159,869 153,650 147,494 140,725 143,528 2 Liabilities reported by banks in the United 17,231 18,003 23,097 23,097 22,519 23,034 22,534 24,252 25,384 24,904 3 U.S. Treasury bills and certificates 3....................... 37,725 47,820 67,651 67,651 68,415 65,714 59,652 51,460 43,747 46,304 U.S. Treasury bonds and notes 11,788 32,164 35,907 35,907 36,056 35,538 36,063 36,305 36,156 36,454 20,648 20,443 20,970 20,970 20,952 20,912 20,471 20,467 20,467 20,697 6 U.S. securities other than U.S. Treasury 8,242 12,667 14,720 14,720 14,664 14,671 14,930 15,010 14,971 15,169 B. By area 7 Total............................................ 95,634 131,097 162,345 162,345 162,606 159,869 153,650 147,494 140,725 143,528 8 Western Europe^....................... 45,882 70,748 92,984 92,984 94,456 92,867 90,191 85,040 80,995 83,460 9 Canada........................................ 3,406 2,334 2,486 2,486 2,150 1,908 3,088 3,044 1,993 2,014 10 Latin America and Caribbean 4,926 4,649 5,026 5,026 4,331 4,402 4,201 4,773 4,802 4,569 11 Asia.............................................. 37,767 50,693 58,662 58,662 58,845 57,532 53,363 51,275 49,518 50,030 12 Africa........................................... 1,893 1,742 2,443 2,443 2,299 2,371 2,135 2,529 2,604 2,738 13 Other countries6........................ 1,760 931 744 744 525 789 672 833 813 717 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.r Dec.r Mar. 1 Banks* own liabilities............................................................................ 560 781 925 rl,474 1,772 2,235 1,989 2 Banks' own claims i.............................................................................. 1,459 1,834 2,356 2,622 2,957 3,547 2,646 3 Deposits............................................................................................... 656 1,103 941 1,084 1,375 1,672 1,157 4 Other claims....................................................................................... 802 731 1,415 1,538 1,582 1,875 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 Holder and type of liability 1975 Jan.r Feb.r Mar. Apr. May* June* 1 All foreigners................. 95,590 110,657 126,168 167,005 164,575 163,738 166,307 159,252 158,329 165,967 2 Banks’ own liabilities.. 78,959 75,307 77,178 85,242 85,727 92,920 98,066 3 Demand deposits.... 13,564 16,803 18,996 19,201 17,765 17,201 16,696 18,367 18,092 19,365 4 Time deposits1.......... 10,267 11,347 11,521 12,473 12,336 12,145 12,389 12,520 12,738 12,133 5 Other2......................... 9,615 8,927 9,247 8,321 10,000 13,291 11,928 6 Own foreign offices3. 37,669 36,278 38,585 47,836 44,840 48,799 54,640 7 Banks’ custody liabilities4........................................ 88,046 89,268 86,560 81,065 73,525 65,410 67,901 8 U.S. Treasury bills and certificates 5.................. 37,414 40,744 48,906 68,182 69,000 66,508 60,587 53,280 45,137 47,425 9 Other negotiable and readily transferable instruments6........................................................ 17,371 17,849 17,889 18,309 18,096 18,070 18,107 10 Other......................................................................... 2,493 2,418 2,162 2,169 2,150 2,203 2,369 11 Nonmonetary international and regional organizations7........................................... 5,699 5,714 3,274 2,617 2,317 2,095 2,364 2,300 2,757 2,851 12 Banks’ own liabilities. 916 762 506 769 791 1.306 1,500 13 Demand deposits... 139 290 231 330 333 272 276 270 298 264 14 Time deposits1........ 148 205 139 94 88 102 99 100 85 87 15 Other2....................... 492 340 131 394 422 923 1.150 16 Banks’ custody liabilities4....................................... 1,701 1,555 1,589 1,595 1,509 1,451 1,350 17 U.S. Treasury bills and certificates................. 2,554 2,701 706 201 183 193 211 212 175 199 18 Other negotiable and readily transferable instruments6.................................................... 1,499 1,367 1,395 1,382 1,294 1,274 1.151 19 Other........................................................................ 5 1 2 1 1 20 Official institutions8.. 50,461 54,956 65,822 90,492 90,749 88,591 82,186 75,713 69,131 71,209 21 Banks’ own liabilities. 11,960 10,725 11,275 10,425 12,411 13,647 12,885 22 Demand deposits... 2,644 3,394 3,528 3,390 2,699 2,759 2,864 3,583 3,170 3,300 23 Time deposits1........ 3,423 2,321 1,797 2,546 2,504 2,365 2,524 2,491 2,572 2,486 24 Other2....................... 6,024 5,522 6,151 5,036 6,337 7,905 7,098 25 Banks’ custody liabilities4.................................... 78,532 80,024 77,317 71,762 63,301 55,484 58,324 26 U.S. Treasury bills and certificates 5.............. 34,199 37,725 47,820 67,395 68,230 65,558 59,652 51,460 43,747 46,304 27 Other negotiable and readily transferable instruments6.................................................... 10,967 11,603 11,703 12,067 11,802 11,667 11,980 28 Other..................................................................... 170 191 55 43 40 70 40 29 Banks9. 29,330 37,174 42,335 57,873 55,542 56,637 65,915 64,192 69,688 75,570 30 Banks’ own liabilities............. 53,088 50,808 51,929 61,005 59,225 64,520 70,545 31 Unaffiliated foreign banks. 15,419 14,530 13,344 13,169 14,385 15,721 15,905 32 Demand deposits.............. 7,534 9,104 10,933 11,239 10,405 9,426 9,349 10,202 10,265 11,124 33 Time deposits1................... 1,873 2,297 2,040 1,479 1,479 1,322 1,262 1,306 1,315 1,397 34 Other2.................................. 2,700 2,646 2,596 2,558 2,877 4,141 3,385 35 Own foreign offices 3. 37,669 36,278 38,585 47,836 44,840 48,799 54,640 36 Banks’ custody liabilities4.................................... 4,785 4,733 4,708 4,910 4,967 5,168 5,025 37 U.S. Treasury bills and certificates............... 335 119 141 300 302 399 425 456 522 407 38 Other negotiable and readily transferable instruments6.................................................... 2,425 2,404 2,336 2,421 2,489 2,579 2,480 39 Other..................................................................... 2,060 2,027 1,973 2,064 2,022 2,066 2,138 40 Other foreigners.......... 10,100 12,814 14,736 16,023 15,967 16,415 15,842 17,047 16,753 16,338 41 Banks' own liabilities. 12,995 13,012 13,469 13,044 13,299 13,446 13,136 42 Demand deposits... 3,248 4,015 4,304 4,242 4,328 4,744 4,207 4,312 4,358 4,677 43 Time deposits1........ 4,823 6,524 7,546 8,353 8,264 8,357 8,504 8,623 8,767 8,164 44 Other2....................... 399 420 368 333 364 322 295 45 Banks’custody liabilities4.................................... 3,028 2,956 2,946 2,798 3,748 3.307 3,202 46 U.S. Treasury bills and certificates................ 325 198 240 285 285 358 299 1,152 693 515 47 Other negotiable and readily transferable instruments 6.................................................... 2,481 2,476 2,455 2,439 2,511 2,549 2,497 48 Other..................................................................... 262 195 133 60 85 66 190 49 Memo: Negotiable time certificates of deposit held in custody for foreigners............................. 11,007 11,132 10,992 11,254 11,118 10,809 10,590 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 borrowing 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 □ August 1979 3.16 LIABILITIES TO FOREIGNERS Continued 1978 1979 Area and country 1975 1976 1977 Dec. Jan. Feb. Mar. Apr. May? June? 1 Total.............................................................................. 95,590 110,657 126,168 167,005 '164,575 '163,738 166,307 159,252 158,329 165,967 2 Foreign countries......................................................... 89,891 104,943 122,893 r164,388 '162,258 '161,644 163,943 156,952 155,573 163,116 3 Europe.......................................................................... 44,072 47,076 60,295 '85,502 '84,672 '82,050 81,899 77,241 75,195 79,271 4 Austria...................................................................... 759 346 318 r513 '562 505 524 484 475 449 5 Belgium-Luxembourg............................................ 2,893 2,187 2,531 '2,552 '2,746 '2,192 2,443 2,359 2,287 2,418 6 Denmark.................................................................. 329 356 770 1,946 2,036 2,074 2,131 1,596 1,526 1,164 7 Finland...................................................................... 391 416 323 346 379 357 361 367 399 456 8 France....................................................................... 7,726 4,876 5,269 '9,208 '8,609 '8,207 8,891 9,291 9,755 9,591 9 Germany................................................................... 4,543 6,241 7,239 17,286 15,770 13,868 12,997 9,364 7,619 8,490 10 Greece....................................................................... 284 403 603 826 683 761 671 656 673 684 11 Italy........................................................................... 1,059 3,182 6,857 7,674 8,723 8,056 8,142 8,939 9,751 9,652 12 Netherlands............................................................. 3,407 3,003 2,869 2,402 2,536 2,786 2,766 2,816 2,889 2,627 13 Norway..................................................................... 994 782 944 1,271 1,411 1,445 1,572 1,477 1,456 1,349 14 Portugal.................................................................... 193 239 273 330 254 246 279 231 244 353 15 Spain.......................................................................... 423 559 619 r870 759 '868 763 950 897 1,201 16 Sweden...................................................................... 2,277 1,692 2,712 r3,121 2,955 ' 2,656 2,520 2,596 2,524 2,436 17 Switzerland............................................................... 8,476 9,460 12,343 r18,612 '20,014 '19,810 18,563 15,587 13,730 15,933 18 Turkey...................................................................... 118 166 130 157 141 141 132 110 127 156 19 United Kingdom..................................................... 6,867 10,018 14,125 '14,379 ' 13,292 '13,861 15,370 16,005 16,682 17,874 20 Yugoslavia............................................................... 126 189 232 254 174 184 176 207 184 151 21 Other Western Europe *........................................ 2,970 2,673 1,804 r3,346 '3,328 '3,800 3,284 3,863 3,664 3,941 22 U.S.S.R..................................................................... 40 51 98 82 150 62 59 84 58 62 23 Other Eastern Europe2......................................... 197 236 236 325 150 171 258 258 254 283 24 Canada.......................................................................... 2,919 4,659 4,607 '6,966 6,622 '6,813 8,044 8,819 7,980 6,601 25 Latin America and Caribbean................................ 15,028 19,132 23,670 '31,622 '30,956 '32,671 38,067 36,081 39,907 43,762 26 Argentina................................................................. 1,146 1,534 1,416 '1,484 1,682 1,789 1,534 1,483 1,886 1,865 27 Bahamas................................................................... 1,874 2,770 3,596 '6,743 '7,429 '7,695 13,078 10,014 11,164 15,774 28 Bermuda................................................................... 184 218 321 428 386 464 375 351 345 402 29 Brazil........................................................................ 1,219 1,438 1,396 '1,125 1,099 1,150 1,137 1,251 1,581 1,329 30 British West Indies................................................ 1,311 1,877 3,998 '5,991 5,717 '6,845 6,971 6,916 9,313 8,937 31 Chile......................................................................... 319 337 360 399 376 358 343 447 368 391 32 Colombia................................................................. 417 1,021 1,221 1,756 1,769 1,867 1,925 2,074 2,192 2,339 33 Cuba.......................................................................... 6 6 6 13 7 13 6 7 9 7 34 Ecuador................................................................ 120 320 330 322 321 274 330 335 318 367 35 Guatemala 3............................................................. 416 '387 386 339 360 318 272 36 Jamaica3................................................................J 52 72 43 75 80 78 54 37 Mexico...................................................................... 2,070 2,870 2,876 '3,417 3,178 3,158 3,178 3,234 3,215 3,455 38 Netherlands Antilles4............................................ 129 158 196 308 321 361 318 335 396 403 39 Panama..................................................................... 1,115 1,167 2,331 2,992 '2,823 2,491 2,938 3,368 2,909 3,095 40 Peru........................................................................... 243 257 287 363 320 347 403 360 321 357 41 Uruguay................................................................... 172 245 243 '231 222 220 236 230 223 247 42 Venezuela................................................................. 3,309 3,118 2,929 '3,821 '3,339 '3,709 3,211 3,426 3,672 2,846 43 Other Latin America and Caribbean................. 1,393 1,797 2,167 1,760 '1,509 1,501 1,669 1,809 1,601 1,622 44 Asia................................................................................ 22,384 29,766 30,488 '36,336 '36,449 '36,169 32,211 30,674 28,227 28,950 China 45 Mainland............................................................. 123 48 53 67 65 105 280 45 41 46 46 Taiwan..............................*................................. 1,025 990 1,013 '502 '552 '534 600 667 605 740 47 Hong Kong............................................................. 605 894 1,094 1,256 1,400 '1,390 1,254 1,459 1,496 1,554 48 India.......................................................................... 115 638 961 790 804 838 857 929 1,016 940 49 Indonesia.................................................................. 369 340 410 449 575 357 479 567 394 400 50 Israel.......................................................................... 387 392 559 674 '642 '598 608 673 650 709 51 Japan......................................................................... 10,207 14,363 14,616 '21,927 21,428 r21,769 18,110 14,896 12,262 12,579 52 Korea........................................................................ 390 438 602 795 771 827 748 728 996 807 53 Philippines............................................................... 700 628 687 '644 '617 549 642 562 609 689 54 Thailand................................................................... 252 277 264 427 379 307 277 343 302 409 55 Middle East oil-exporting countries 5................. 7,355 9,360 8,979 '7,392 '7,934 '7,595 7,107 8,435 8,444 8,444 56 Other Asia............................................................... 856 1,398 1,250 '1,414 '1,285 1,300 1,249 1,371 1,412 1,634 57 Africa............................................................................ 3,369 2,298 2,535 2,886 2,693 2,804 2,650 2,986 3,056 3,356 58 Egypt......................................................................... 342 333 404 404 337 278 329 359 297 305 59 Morocco................................................................... 68 87 66 32 29 32 43 34 36 45 60 South Africa............................................................ 166 141 174 168 179 207 242 246 206 316 61 Zaire.......................................................................... 62 36 39 43 48 42 50 55 47 56 62 Oil-exporting countries6....................................... 2,240 1,116 1,155 1,525 1,379 1,549 1,256 1,554 1,523 1,687 63 Other Africa............................................................ 491 585 698 715 721 697 729 738 946 947 64 Other countries........................................................... 2,119 2,012 1,297 1,076 '865 '1,136 1,072 1,149 1,207 1,176 65 Australia................................................................... 2,006 1,905 1,140 838 655 934 862 957 992 890 66 All other................................................................... 113 107 158 239 '209 '202 211 192 215 286 67 Nonmonetary international and regional organizations....................................................... 5,699 5,714 3,274 2,617 2,317 2,095 2,364 2,300 2,757 2,851 68 International............................................................ 5,415 5,157 2,752 1,485 1,210 919 1,189 1,128 1,535 1,738 69 Latin American regional...................................... 188 267 278 808 809 865 872 872 892 829 70 Other regional7....................................................... 96 290 245 324 299 311 303 300 330 284 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 Dec. Jan. Feb. Mar. Apr. May* June? 1 58,308 79,301 90,206 r115,030 '105,583 '103,933» 108,736i 105,266 105,505 113,725 2 Foreign countries......................................................... 58,275 79,261 90,163 r114,974 '105,543 '103,894 108,690i 105,220 105,459 113,680 3 Europe.......................................................................... 11,109 14,776 18,114 '24,231 '20,790 '20,474 21,299 20,890 20,285 24,280 4 Austria...................................................................... 35 63 65 140 147 115 177 130 150 151 5 Belgium-Luxembourg............................................ 286 482 561 1,200 1,504 1,378 1,804 1,377 1,330 1,684 6 Denmark................................................................... 104 133 173 254 172 170 166 204 168 153 7 Finland...................................................................... 180 199 172 305 281 264 297 250 184 186 8 France........................................................................ 1,565 1,549 2,082 '3,742 '2,664 '2,286 2,921 2,907 2,701 3,505 9 Germany................................................................... 380 509 644 900 840 717 907 806 792 840 10 Greece........................................................................ 290 279 206 164 162 169 192 170 155 168 11 Italy............................................................................ 443 993 1,334 1,504 1,402 1,395 1,311 1,420 1,440 1,334 12 Netherlands............................................................. 305 315 338 680 681 619 581 532 531 515 13 Norway..................................................................... 131 136 162 299 251 252 206 242 196 200 14 Portugal.................................................................... 30 88 175 171 169 173 209 208 190 172 15 Spain.......................................................................... 424 745 722 1,110 905 1,103 909 806 926 994 16 Sweden...................................................................... 198 206 218 537 449 388 312 300 231 247 17 Switzerland............................................................... 199 379 564 1,283 1,051 970 1,068 878 959 1,071 18 Turkey....................................................................... 164 249 360 283 179 132 144 148 119 136 19 United Kingdom..................................................... 5,170 7,033 8,964 '10,156 8,444 8,886 8,575 8,684 8,546 11,196 20 Yugoslavia................................................................ 210 234 311 363 400 409 448 475 492 535 21 Other Western Europe i........................................ 76 85 86 122 135 110 124 424 171 189 22 U.S.S.R..................................................................... 406 485 413 366 327 309 319 298 291 301 23 Other Eastern Europe2......................................... 513 613 566 '652 '629 '628 628 633 713 704 24 Canada.......................................................................... 2,834 3,319 3,355 '5,145 4,961 5,049 5,181 4,775 4,718 4,880 25 Latin America and Caribbean................................ 23,863 38,879 45,850 '56,850 '52,514 '50,379 54,149 52,055 52,584 55,918 26 Argentina.................................................................. 1,377 1,192 1,478 '2,274 '2,137 '2,359 2,753 3,098 3,406 3,207 27 Bahamas.................................................................... 7,583 15,464 19,858 '21,116 '21,006 18,640 19,899 18,715 18,825 17,872 28 Bermuda................................................................... 104 150 232 189 175 155 150 135 198 131 29 Brazil......................................................................... 3,385 4,901 4,629 6,251 '6,261 '6,254 6,291 6,198 6,274 6,086 30 British West Indies................................................. 1,464 5,082 6,481 '9,505 5,368 5,122 7,435 5,524 4,895 9,161 31 Chile.......................................................................... 494 597 675 '968 1,012 939 964 970 1,058 1,086 32 Colombia.................................................................. 751 675 671 1,012 1,054 1,019 1,004 945 1,017 1,097 33 Cuba.......................................................................... 14 13 10 * * * 4 4 4 4 34 Ecuador.................................................................... 252 375 517 705 700 768 839 903 877 893 35 Guatemala3............................................................. 94 87 110 89 95 101 91 36 Jamaica3................................................................... 40 37 48 61 63 64 40 37 Mexico...................................................................... 3,745 4,822 4,909 5,417 5,449 5,398 5,562 5,778 6,024 6,434 38 Netherlands Antilles4............................................ 72 140 224 '273 '264 '217 282 213 234 280 39 Panama..................................................................... 1,138 1,372 1,410 3,074 3,179 3,493 2,900 3,504 3,728 3,567 40 Peru............................................................................ 805 933 962 918 873 846 834 839 744 720 41 Uruguay.................................................................... 57 42 80 52 50 44 46 48 61 58 42 1,319 1,828 2,318 3,474 3,324 3,481 3,527 3,555 3,601 3,748 43 Other Latin America and Caribbean................. 1,302 1,293 1,394 1,487 1,538 1,487 1,512 1,468 1,472 1,444 44 17,706 19,204 19,236 '25,538 '24,219 '25,088 25,131 24,641 24,949 25,508 China 45 Mainland.............................................................. 22 3 10 4 15 13 16 20 22 10 46 Taiwan.................................................................. 1,053 1,344 1,719 1,499 1,457 1,767 1,841 1,823 1,812 1,891 47 289 316 543 1,573 1,620 '1,960 2,036 1,717 1,993 2,112 48 India.......................................................................... 57 69 53 54 61 60 52 73 56 86 49 246 218 232 143 141 123 124 135 138 138 50 721 755 584 872 996 896 909 781 826 841 51 10,944 11,040 9,839 '12,739 '12,550 '12,196 12,811 12,121 12,342 12,476 52 Korea........................................................................ 1,791 1,978 2,336 2,277 '2,241 2,478 2,546 2,712 2,966 3,364 53 Philippines................................................................ 534 719 594 680 607 692 660 710 705 675 54 Thailand.................................................................... 520 442 633 '758 '757 '832 778 760 836 887 55 Middle East oil-exporting countries 5................. 744 1,459 1,746 '3,135 2,333 2,487 1,939 2,437 1,723 1,603 56 Other Asia................................................................ 785 863 947 1,804 '1,444 1,585 1,419 1,352 1,531 1,426 57 Africa............................................................................ 1,933 2,311 2,518 2,221 2,145 2,092 1,968 1,977 1,967 2,111 58 Egypt......................................................................... 123 126 119 107 82 83 73 104 121 177 59 8 27 43 82 97 88 66 64 46 37 60 South Africa............................................................ 657 957 1,066 860 838 760 701 680 719 743 61 Zaire.......................................................................... 181 112 98 164 156 155 155 151 151 151 62 Oil-exporting countries «........................................ 382 524 510 452 438 456 455 462 460 474 63 581 565 682 556 533 550 518 516 471 529 64 Other countries........................................................... 830 772 1,090 988 914 813 961 882 956 982 65 700 597 905 877 792 704 830 755 789 774 66 130 175 186 111 122 108 131 127 167 208 67 Nonmonetary international and regional organizations7........................................................ 33 40 43 56 40 39 46 46 46 45 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, Czechoslavkia, 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 □ August 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 Dec.r Jan.r Feb.r Mar. Apr.r May June? 1 Total.............................................................................. 58,308 79,301 90,206 126,139 120,383 115,030 105,583 103,933 108,736 105,266 105,505 113,725 3 Foreign public borrowers......................................... 10,095 10,312 10,509 10,774 11,000 10,536 11,090 4 Own foreign offices1.................................................. 41,217 38,073 35,583 36,931 36,206 34,701 36,136 5 Unaffiliated foreign banks........................................ 40,381 34,496 34,759 37,388 34,509 35,525 41,423 6 Deposits.................................................................... 5,664 4,862 5,397 6,340 5,698 5,566 7,370 7 Other........................................................................ 34,716 29,635 29,362 31,048 28,811 29,960 34,053 8 All Other foreigners........................................................ 23,338 22,701 23,081 23,643 23,552 24,742 25,077 9 Claims of banks’ domestic customers 2................ 11,109 11,646 1 o Deposits........................................................................ 994 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 5,353 5,640 13 Memo: Customer liability on acceptances 14,917 15,082 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States5....................................................................... 11,674 14,515 15,470 15,534 16,229 17,149 1. U.S. banks: includes amounts due from own foreign branches and 4. Data for March 1978 and for period prior to that are outstanding foreign subsidiaries consolidated in “Consolidated Report of Condition” collections only. filed with bank regulatory agencies. Agencies, branches, and majority- 5. Includes demand and time deposits and negotiable and nonnegotiable owned subsidiaries of foreign banks: principally amounts due from head certificates of deposit denominated in U.S. dollars issued by banks abroad. office or parent foreign bank, and foreign branches, agencies, or wholly- For description of changes in data reported by nonbanks, see July 1979 owned subsidiaries of head office or parent foreign bank. Bulletin, page 550. 2. Assets owned by customers of the reporting bank located in the United States that represent claims on foreigners held by reporting banks Note. Beginning April 1978, data for banks’ own claims are given for the account of their domestic customers. on a monthly basis, but the data for claims of banks’ domestic customers 3. Principally negotiable time certificates of deposit and bankers ac­ are available on a quarterly basis only. ceptances. 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 Sept.r Dec.r Mar. June Sept. 1 Total................................................... 55,470 59,948 73,557 71,139 By borrower 2 Maturity of 1 year or less1............ 44,138 47,097 58,277 54,949 3 Foreign public borrowers.......... 3,067 3,702 4,558 4,581 4 All other foreigners..................... 41,071 43,395 53,719 50,368 5 Maturity of over 1 year1............... 11,333 12,850 15,280 16,190 6 Foreign public borrowers.......... 3,226 4,230 5,328 5,946 7 All other foreigners..................... 8,107 8,620 9,952 10,245 By area Maturity of 1 year or less1 8 Europe............................................ 9,631 10,463 15,116 12,107 9 Canada........................................... 1,598 1,948 2,670 2,528 10 Latin American and Caribbean, 17,221 18,775 20,850 21,535 11 Asia................................................. 13,707 13,786 17,575 16,939 12 Africa.............................................. 1,457 1,535 1,496 1,299 13 All other 2...................................... 523 591 569 541 Maturity of over 1 year1 14 Europe............................................ 2,920 3,102 3,152 3,108 15 Canada........................................... 344 794 1,426 1,456 16 Latin America and Caribbean.. 5,889 6,859 8,452 9,312 17 Asia................................................ 1,298 1,305 1,401 1,515 18 Africa............................................. 631 580 636 619 19 All other2...................................... 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. June 7 Sept. Dec. Mar. 1Total................................................................................... 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 countries2................................................ 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 China 35 Mainland................................................................... * * * * * * * * * * .1 36 Taiwan........................................................................... 1.7 2.3 2.4 2.7 2.9 3.1 2.5 2.4 2.9 3.1 3.1 37 Colombia...................................................................... 1.2 1.3 1.2 1.2 1.2 1.3 1.3 1.3 1.3 1.4 1.5 38 Mexico........................................................................... 9.0 11.7 11.8 12.2 12.6 11.9 11.2 11.0 10.7 10.8 10.9 39 Peru................................................................................ 1.4 1.8 1.9 2.0 1.9 1.9 1.7 1.8 1.8 1.7 1.6 40 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 41 India............................................................................... .2 .2 .2 .2 .3 .3 .3 .2 .3 .2 .2 42 Israel.............................................................................. .9 1.0 .8 .8 .7 .9 .8 .7 .7 1.0 1.0 43 Korea (South).............................................................. 2.4 3.1 3.2 3.4 3.6 3.9 3.7 3.6 3.5 3.9 4.2 44 Malaysia 3...................................................................... .3 .5 .6 .7 .7 .7 .6 .6 .6 .6 .6 45 Philippines.................................................................... 1.7 2.2 2.3 2.3 2.4 2.5 2.6 2.7 2.8 2.8 3.2 46 Thailand........................................................................ .7 .7 .8 .8 .9 1.7 1.1 1.1 1.1 1.2 1.2 47 Other Asia.................................................................... .4 .4 .2 .3 .4 .3 .4 .3 .3 .2 .3 48 Egypt.............................................................................. .4 .4 .4 .4 .4 .3 .3 .3 .4 .4 .4 49 Morocco........................................................................ .1 .2 .3 .3 .4 .5 .4 .5 .5 .6 .6 50 Zaire............................................................................... .3 .2 .3 .3 .3 .3 .3 .2 .2 .2 .2 51 Other Africa4............................................................... .5 .6 1.0 1.0 1.2 1.2 1.4 1.2 1.3 1.4 1.4 52 3.7 5.2 5.1 5.5 5.5 6.5 6.3 6.4 6.6 6.9 6.7 53 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 54 Yugoslavia.................................................................... .6 .8 .9 .9 1.0 1.1 1.2 1.3 1.3 1.5 1.6 55 Other.............................................................................. 2.1 2.8 2.8 3.1 3.0 3.8 3.7 3.7 3.9 4.1 4.0 56 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 57 Bahamas........................................................................ 7.3 11.8 8.2 9.5 9.9 9.8 11.3 11.8 11.3 10.4 14.1 58 Bermuda........................................................................ .5 .5 .5 .5 .5 .6 .6 .7 .7 .7 .6 59 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 60 Netherlands Antilles................................................... .6 .6 .6 .5 .6 .7 .7 .6 .6 .8 .7 61 Panama.......................................................................... 2.6 2.7 2.9 2.9 2.8 3.1 3.2 3.2 3.0 2.6 3.2 62 Lebanon........................................................................ .2 .1 .2 .2 .1 .2 .2 .1 .1 .1 .1 63 Hong Kong................................................................... 1.6 2.3 2.6 2.8 3.1 3.7 4.0 4.1 4.0 4.3 4.6 64 Singapore...................................................................... 3.8 4.4 3.9 4.2 3.9 3.7 4.0 3.8 2.9 3.9 4.0 65 Others 5.......................................................................... .1 * * * .1 .5 .5 .8 .8 .9 .9 66 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 Oman, Qatar, Saudi Arabia, and United Arab Emirates in addition to foreign branches of U.S.-owned banks and of U.S. subsidiaries of foreign- countries shown individually. owned banks. Offices not covered include (1) U.S. agencies and branches 3. Foreign branch claims only through December 1976. of foreign banks, and (2) foreign subsidiaries of U.S. banks. To minimize 4. Excludes Liberia. duplication, the data are adjusted to exclude the claims on foreign branches 5. Foreign branch claims only. held by a U.S. office or another foreign branch of the same banking 6. Includes New Zealand, Liberia, and international and regional institution. The data in this table combine foreign branch claims in table organizations, 3.13 (the sum of lines 7 through 10) with the claims of U.S. offices in table 7. For June 1978 and subsequent dates, the claims of the U.S. offices 3.17 (excluding those held by agencies and branches of foreign banks in this table include only banks’ own claims payable in dollars. For and those constituting claims on own foreign branches). However, see earlier dates the claims of the U.S. offices also include customer claims also footnote 2. and foreign currency claims (amounting in June 1978 to $10 billion). 2. Includes Algeria, Bahrain, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 International Statistics □ August 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 J J u a n n e . P - Dec. Jan. Feb. Mar. Apr. May? June® Holdings (end of period)4 1 Estimated total1........................................... 38,640 '44,938 '44,938 '46,210 '45,667 '47,529 48,131 47,218 47,494 2 Foreign countries1........................................ 33,894 '39,817 '39,817 '41,341 '40,963 '42,932 43,177 43,055 43,454 3 Europe1......................................................... 13,936 17,072 17,072 18,360 '18,502 '20,172 20,593 20,667 21,047 4 Belgium-Luxembourg............................. 19 19 19 19 19 19 19 20 24 5 Germany1.................................................. 3,168 8,705 8,705 8,864 8,860 10,216 10,812 10,828 10,751 6 Netherlands.............................................. 911 1,358 1,358 1,433 1,517 1,587 1,637 1,672 1,695 7 Sweden....................................................... 100 285 285 320 355 360 415 479 484 8 Switzerland................................................ 497 977 977 1,818 1,508 1,537 1,510 1,458 1,582 9 United Kingdom...................................... 8,888 5,373 5,373 5,489 5,823 5,991 5,735 5,697 6,016 10 Other Western Europe........................... 349 354 354 417 420 461 464 513 496 11 Eastern Europe........................................ 4 12 Canada........................................................... 288 152 152 150 146 166 226 216 227 13 Latin America and Caribbean.................. 551 416 416 433 417 418 397 387 387 14 Venezuela................................................... 199 144 144 183 183 183 183 183 183 15 Other Latin American and Caribbean, 183 110 110 88 72 72 52 42 42 16 Netherlands Antilles.............................. 170 162 162 162 162 162 162 162 162 17 Asia................................................................. 18,745 '21,488 '21,488 '21,709 '21,210 '21,488 21,273 21,097 21,103 18 Japan.......................................................... 6,860 11,528 11,528 12,226 12,422 12,729 12,982 13,014 13,040 19 Africa............................................................. 362 691 691 691 691 691 691 691 691 20 All other........................................................ 11 -3 -3 -3 -3 -3 -3 -3 -3 21 Nonmonetary international and regional organizations........................................ 4,746 5,121 5,121 4,869 4,704 '4,597 4,954 4,163 4,040 22 International............................................. 4,646 5,089 5,089 4,837 4,666 4,560 4,915 4,114 3,993 23 Latin American regional....................... 100 33 33 33 38 38 38 48 48 Transactions (net purchases, or sales ( —), during period) 24 Total i............................................................. 22,843 '6,297 2,557 1,081 1,272 -543 1,862 602 -913 277 25 Foreign countries1....................................... 21,130 '5,921 3,637 1,338 1,524 -378 1,968 246 -122 399 26 Official institutions.................................. 20,377 '3,734 547 -346 150 -517 524 242 -149 298 27 Other foreign1.......................................... 753 '2,188 3,091 1,683 1,375 141 1,443 4 27 101 28 Nonmonetary international and regional organizations........................................ 1,713 375 -1,079 -256 -252 -165 -106 356 -791 -121 Memo: Oil-exporting countries 29 Middle East 2............................................... 4,451 -1,785 -1,819 -127 -461 -693 -31 -452 -190 8 30 Africa 3........................................................... -181 329 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 1979 Assets 1976 1977 1978 Jan. Feb. Mar. Apr. May June July? 352 424 367 338 343 303 388 407 326 337 Assets held in custody 66,532 91,962 117,126 116,961 114,005 107,854 99,674 91,327 95,301 99,344 16,414 15,988 15,463 15,448 15,432 15,426 15,406 15,381 15,356 15,322 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 J J u a ne n * - > Dec. Jan. Feb. Mar. Apr. May^ June* U.S. corporate securities Stocks 1 Foreign purchases....................................................... 14,155 '20,142 9,737 1,438 1,361 1,384 1,941 1,614 1,578 1,859 2 Foreign sales................................................................ 11,479 17,723 8,700 1,102 1,301 1,264 1,437 1,520 1,386 1,792 3 Net purchases, or sales (—)...................................... 2,676 '2,420 1,037 336 60 120 504 94 191 67 4 Foreign countries......................................................... 2,661 '2,466 1,019 336 61 104 501 94 191 68 5 Europe.......................................................................... 1,006 '1,283 294 264 -7 52 104 -2 136 12 6 France........................................................................ 40 47 163 -38 -6 16 33 31 48 41 7 Germany.................................................................. 291 620 -74 264 -18 20 -2 -59 -1 -15 8 Netherlands............................................................. 22 -22 -102 -9 -35 -15 -19 -10 -7 -15 9 Switzerland............................................................... 152 -585 -32 -23 -30 12 -12 -17 18 -3 10 United Kingdom..................................................... 613 '1,230 343 74 85 19 109 52 74 5 11 Canada.......................................................................... 65 74 169 38 7 -6 57 30 47 33 12 Latin America and Caribbean................................. 127 151 20 16 34 -25 36 22 -18 -28 13 Middle East*................................................................ 1,390 781 355 4 -16 46 242 48 20 15 14 Other Asia.................................................................... 59 187 185 15 49 30 61 -3 9 39 15 Africa............................................................................ 5 -13 -2 -1 -2 6 1 -3 -2 -3 16 Other countries........................................................... 8 3 -3 1 -4 1 1 2 -1 -1 17 Nonmonetary international and regional 15 -46 18 * -1 16 3 1 * -1 Bonds 2 18 Foreign purchases....................................................... 7,739 7,955 4,208 884 641 453 581 589 863 1,081 19 Foreign sales................................................................ 3,560 5,509 3,853 564 704 547 489 378 922 813 20 Net purchases, or sales ( —)...................................... 4,179 2,446 354 320 -63 -94 92 210 -59 268 21 Foreign countries......................................................... 4,083 2,037 590 128 54 28 79 106 87 234 22 Europe.......................................................................... 1,850 915 553 146 39 110 1 139 121 143 23 France....................................................................... -34 30 36 17 18 * 13 -2 -1 8 24 Germany.................................................................. -20 68 97 10 42 13 4 19 6 13 25 Netherlands............................................................. 72 19 -130 -6 -4 -10 -27 -20 -37 -32 26 Switzerland.............................................................. 94 -100 -16 39 8 6 12 8 -41 -10 27 United Kingdom..................................................... 1,690 930 521 109 -54 93 27 134 151 169 28 Canada.......................................................................... 141 102 64 6 11 10 33 6 4 * 29 Latin America and Caribbean................................ 64 78 63 5 23 9 24 9 7 -10 30 Middle East i............................................................... 1,695 810 -197 -21 -34 -106 25 -61 -73 52 31 Other Asia.................................................................... 338 131 107 -5 16 4 -3 14 28 48 32 Africa............................................................................ -6 -1 1 * * 1 * * * * 33 Other countries........................................................... * 1 * -3 * * 1 -1 * * 34 Nonmonetary international and regional organizations............................................................ 96 409 -235 192 -118 —122 13 104 -146 34 Foreign securities 35 Stocks, net purchases, or sales (—)........................ -410 527 46 -12 11 -28 2 13 67 -18 36 Foreign purchases.................................................. 2,255 3,666 2,153 232 265 232 331 369 554 403 37 Foreign sales............................................................ 2,665 3,139 2,106 244 254 260 329 356 487 421 38 Bonds, net purchases, or sales ( —)........................ -5,096 -4,017 -1,648 73 -600 -322 -39 -21 5 -672 39 Foreign purchases................................................... 8,040 11,044 5,642 1,020 783 942 1,182 879 851 1,006 40 Foreign sales........................................................... 13,136 15,061 7,291 948 1,383 1,264 1,220 900 847 1,677 41 Net purchases, or sales (—) of stocks and bonds.. -5,506 -3,490 -1,602 61 -590 -349 -37 -8 71 -690 42 Foreign countries......................................................... -3,949 -3,313 -1,031 19 -513 -141 -19 -21 70 -408 43 Europe.......................................................................... -1,100 -40 -495 53 -124 -42 3 -174 -31 -127 44 Canada.......................................................................... -2,404 -3,237 -843 -24 -305 -184 -228 10 85 -221 45 Latin America and Caribbean................................ -82 201 319 * 60 70 54 55 26 53 46 Asia................................................................................ -97 350 -14 -15 -141 19 152 84 -14 -114 47 Africa............................................................................ 2 -441 -7 * -3 -5 -8 2 4 4 48 Other countries........................................................... -267 -146 9 5 1 2 7 2 1 -4 49 Nonmonetary international and regional organizations............................................................ -1,557 -177 -571 41 -77 -209 -17 13 1 -282 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 □ August 1979 3.24 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States A Millions of dollars, end of period 1978 1979 Type, and area or country 1976 1977 June Sept. Dec.r Mar.? June Sept. Dec. 1 Total............................................................................. 10,099 11,085 11,870 12,786 13,888 13,370 9,390 10,284 11,044 11,955 11,166 10,930 709 801 825 831 2,723 2,440 By type 5,407 5,238 3,465 3,419 1,942 1,819 8,481 8,131 3,930 3,431 4,552 4,700 7,701 7,511 11 Payable in foreign currencies,............................ 780 620 By area or country Financial liabilities 3,467 3,281 287 254 157 133 334 293 360 391 207 187 1,947 1,852 19 Canada..................................................................... 205 233 20 Latin America and Caribbean............................ 971 969 21 Bahamas.............................................................. 422 407 22 Bermuda.............................................................. 56 41 23 Brazil................................................................... 10 13 24 British West Indies............................................ 122 132 25 Mexico................................................................. 77 73 26 Venezuela............................................................ 46 52 27 Asia.......................................................................... 754 745 28 Japan................................................................... 671 667 29 Middle East oil-exporting countries2.......... 48 36 30 Africa....................................................................... 5 5 31 Oil exporting countries 3.................................. 2 1 32 All other4................................................................ 5 5 Commercial liabilities 33 Europe. ........................................................... 2,927 2,809 34 Belgium-Luxembourg....................................... 73 68 35 France.................................................................. 312 336 36 Germany............................................................. 519 390 37 Netherlands........................................................ 206 193 38 Switzerland........................................................ 321 343 39 United Kingdom............................................... 760 811 40 Canada..................................................................... 653 601 41 Latin America........................................................ 1,031 1,102 42 Bahamas.............................................................. 25 16 43 Bermuda.............................................................. 95 40 44 Brazil................................................................... 75 62 45 British West Indies............................................ 53 89 46 Mexico................................................................. 130 240 47 Venezuela............................................................ 306 359 2,942 2,627 49 Japan ......................................................... 430 411 50 Middle East oil-exporting countries2...... 1,543 1,117 724 754 52 Oil-exporting countries 3.................................. 313 345 53 All other4 ............................................................. 204 239 1. Prior to December 1978, foreign currency data include only liabilities 3. Comprises Algeria, Gabon, Libya, and Nigeria. denominated in foreign currencies with an original maturity of less than 4. Includes nonmonetary international and regional organizations. one year. 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, A For a description of the changes in the International Statistics and United Arab Emirates (Trucial States). tables, see July 1979 Bulletin, p. 550. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-reported Data A67 3.25 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States ▲ Millions of dollars, end of period 1978 1979 Type, and area or country 1976 1977 June Sept. Dec.r Mar.p June Sept. Dec. 1 Total.............................................................................. 19,350 21,298 23,229 23,260 27,138 29,859 18,300 19,880 21,665 21,292 24,160 27,036 1,050 1,418 1,564 1,968 2,978 2,823 By type 15,843 19,097 10,735 13,989 9,694 13,087 1,041 903 5,108 5,108 3,528 3,573 1,580 1,535 11,295 10,762 10,647 10,008 647 754 14 Payable in dollars.................................................. 10,938 10,377 357 385 By area or country Financial claims 5,054 5,333 48 63 179 180 529 263 107 91 21 Switzerland......................................................... 98 96 22 United Kingdom............................................... 3,850 4,409 23 Canada..................................................................... 4,454 5,130 24 Latin America and Caribbean............................ 5,197 7,566 25 Bahamas.............................................................. 2,836 4,124 26 Bermuda.............................................................. 80 62 27 Brazil.................................................................... 151 137 28 British West Indies............................................ 1,231 2,394 29 Mexico................................................................. 146 145 30 Venezuela............................................................ 149 142 31 Asia.......................................................................... 918 825 32 Japan.................................................................... 306 206 33 Middle East oil-exporting countries2........... 18 17 34 Africa........................................................................ 180 203 35 Oil-exporting countries 3.................................. 10 26 36 All other4................................................................ 41 39 Commercial claims 37 Europe...................................................................... 3,935 3,800 38 Belgium-Luxembourg....................................... 145 172 39 France.................................................................. 607 487 40 Germany............................................................. 392 495 41 Netherlands........................................................ 256 270 42 Switzerland......................................................... 213 253 43 United Kingdom............................................... 802 678 44 Canada..................................................................... 1,102 1,106 45 Latin America and Caribbean............................ 2,535 2,461 46 Bahamas.............................................................. 109 117 47 Bermuda.............................................................. 215 241 48 Brazil.................................................................... 624 489 49 British West Indies............................................ 9 10 50 Mexico................................................................. 513 497 51 Venezuela............................................................ 293 273 52 Asia..................................................................... 3,087 2,748 53 Japan.................................................................... 978 894 54 Middle East oil-exporting countries2.......... 711 665 55 Africa....................................................................... 449 445 56 Oil-exporting countries 3.................................. 137 132 57 All other4................................................................ 187 201 1. Prior to December 1978, foreign currency data include only liabilities 3. Comprises Algeria, Gabon, Libya, and Nigeria. denominated in foreign currencies with an original maturity of less than 4. Includes nonmonetary international and regional organizations. one year. 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, A For a description of the changes in the International Statistics and United Arab Emirates (Trucial States). tables, see July 1979 Bulletin, p. 550. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 International Statistics □ August 1979 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Percent per annum Rate on July 31,1979 Rate on July 31, 1979 Rate on July 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. 5.0 July 1979 7.0 July 1979 Belgium.............................. 9.0 June 1979 10.5 Sept. 1978 1.0 Feb. 1978 33.0 Nov. 1978 5.25 July 1979 United Kingdom........... 14.0 June 1979 Canada............................... 11.75 July 1979 4.5 June 1942 5.0 Oct. 1970 Denmark............................ 9.0 June 1979 Netherlands.................... 8.0 July 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. 3.27 FOREIGN SHORT-TERM INTEREST RATES Percent per annum, averages of daily figures 1979 Country, or type 1976 1977 1978 Feb. Mar. Apr. May June July 1 Eurodollars................................................................ 5.58 6.03 8.74 10.79 10.64 10.60 10.75 10.52 10.87 2 United Kingdom....................................................... 11.35 8.07 9.18 13.28 11.98 11.64 11.76 13.02 13.87 9.39 7.47 8.52 10.94 11.08 11.18 11.26 11.17 11.29 4 Germany..................................................................... 4.19 4.30 3.67 4.13 4.42 5.50 5.89 6.40 6.77 5 Switzerland................................................................. 1.45 2.56 0.74 0.13 0.03 0.93 1.54 1.51 1.19 7.02 4.73 6.53 7.42 7.35 7.23 7.82 8.55 9.53 7 France.......................................................................... 8.65 9.20 8.10 6.83 7.05 6.96 7.63 8.63 9.90 8 Italy.............................................................................. 16.32 14.26 11.40 11.38 11.46 11.52 11.37 11.27 11.46 10.25 6.95 7.14 8.23 7.63 7.63 8.16 9.09 11.18 10 Japan............................................................................ 7.70 6.22 4.75 4.50 4.54 5.13 5.25 5.46 6.26 Note. Rates are for 3-month interbank loans except for the following: francs and over; and Japan, loans and discounts that can be called after Canada, finance company paper; Belgium, time deposits of 20 million being held over a minimum of two month-ends. 3.28 FOREIGN EXCHANGE RATES Cents per unit of foreign currency 1979 Country/currency 1976 1977 1978 Feb. Mar. Apr. May June July 122.15 110.82 114.41 113.12 112.15 110.85 110.57 111.11 112.83 2 Austria/schilling................... 5.5744 6.0494 6.8958 7.3510 7.3312 7.1862 7.1222 7.2081 7.4628 3 Belgium/franc....................... 2.5921 2.7911 3.1809 3.4153 3.3971 3.3271 3.2732 3.3048 3.4240 4 Canada/dollar....................... 101.41 94.112 87.729 83.638 85.187 87.235 86.534 85.296 85.920 5 Denmark/krone................... 16.546 16.658 18.156 19.423 19.269 18.958 18.562 18.401 19.072 6 Finland/markka................... 25.938 24.913 24.337 25.186 25.161 24.976 24.974 25.250 26.040 7 France/franc......................... 20.942 20.344 22.218 23.395 23.328 22.967 22.691 22.914 23.535 8 Germany/deutsche mark... 39.737 43.079 49.867 53.862 53.754 52.745 52.422 53.084 54.817 9 India/rupee........................... 11.148 11.406 12.207 12.124 12.138 12.191 12.066 12.317 12.651 10 Ireland/pound....................... 180.48 174.49 191.84 200.42 203.73 201.97 198.43 200.01 206.79 11 Italy/lira................................. .12044 .11328 .11782 .11899 .11888 .11858 .11744 .11828 .12192 12 Japan/yen.............................. .33741 .37342 .47981 .49877 .48470 .46241 .45797 .45750 .46189 13 Malaysia/ringgit................... 39.340 40.620 43.210 45.488 45.440 45.023 44.934 45.474 46.422 14 Mexico/peso......................... 6.9161 4.4239 4.3896 4.3952 4.3835 4.3780 4.3805 4.3767 4.3767 15 Netherlands/guilder............. 37.846 40.752 46.284 49.856 49.801 48.794 48.132 48.374 49.821 99.115 96.893 103.64 105.32 105.39 104.96 104.37 103.29 102.04 18.327 18.789 19.079 19.610 19.619 19.444 19.270 19.398 19.824 18 Portugal/escudo................... 3.3159 2.6234. 2.2782 2.1065 2.0855 2.0482 2.0214 2.0192 2.0551 19 South Africa/rand............... 114.85 114.99 115.01 116.76 118.40 117.94 118.22 118.31 118.46 1.4958 1.3287 1.3073 1.4427 1.4490 1.4679 1.5131 1.5131 1.5118 11.908 11.964 6.3834 6.4439 6.4593 6.4455 6.4239 6.4059 6.3786 22 Sweden/krona....................... 22.957 22.383 22.139 22.898 22.901 22.772 22.755 23.028 23.687 23 Switzerland/franc................. 40.013 41.714 56.283 59.699 59.473 58.220 57.894 58.884 60.650 24 United Kingdom/pound... 180.48 174.49 191.84 200.42 203.. 78 207.34 205.87 211.19 225.98 Memo: 25 United States/dollar i.......... 105.57 103.31 92.39 88.25 88.39 89.49 90.31 89.56 86.93 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

Time and Savings Deposits A69 4.10 TIME AND SAVINGS DEPOSITS Held by Insured Commercial Banks on Recent Survey Dates Deposits Number of issuing banks Type of deposit, denomination, Millions of dollars Percentage change and original maturity Oct. 25, Jan. 31, Apr. 25, Oct. 25, Jan. 31, Apr. 25, Oct. 25- Jan. 31- 1978 1979 1979 1978 1979 1979 Jan. 31 Apr. 25 Total time and savings deposits............................. 14,299 14,269 14,285 595,194 613,147 615,427 3.0 .4 Savings........................................................................ 14,299 14,269 14,285 222,114 214,791 216,901 -3.3 1.0 Holder Individuals and nonprofit organizations......... 14,299 14,269 14,285 205,863 200,193 202,133 -2.8 1.0 Partnerships and corporations operated for profit (other than commercial banks)......... 9,857 9,735 9,684 11,293 10,475 10,255 -7.2 -2.1 Domestic governmental units........................... 8,285 8,050 8,039 4,842 3,991 4,386 -17.6 9.9 All other................................................................. 1,228 1,244 1,474 116 133 126 14.7 -5.0 Interest-bearing time deposits, less than $100,000............................................................. 14,008 14,179 14,191 180,373 190,314 201,067 5.5 5.7 Holder Domestic governmental units1.......................... 10,646 10,539 10,506 3,725 3,252 2,928 -12.7 -10.0 30 up to 90 days............................................... 4,903 4,636 5,220 988 662 595 -33.1 -10.0 90 up to 180 days............................................ 7,544 7,716 7,750 1,095 1,245 890 13.7 -28.5 180 days up to 1 year...................................... 5,438 4,752 4,749 620 367 537 -40.9 46.4 1 year and over................................................. 8,175 8,379 8,424 1,022 979 906 -4.1 -7.5 Other than domestic governmental units1. . . 14,008 14,179 14,110 159,766 151,579 145,433 -5.1 -4.1 30 up to 90 days............................................... 5,510 5,104 5,187 4,385 3,758 3,144 -14.3 -16.4 90 up to 180 days............................................ 11,439 11,236 11,065 28,929 25,606 25,156 -11.5 -1.8 180 days up to 1 year...................................... 8,172 8,321 8,447 3,248 3,350 3,476 3.1 3.8 1 up to 2% years............................................. 13,751 13,765 13,840 31,006 28,349 25,257 -8.6 -10.9 2 lA up to 4 years.............................................. 12,822 13,002 12,892 17,475 16,420 15,626 -6.0 -4.8 4 up to 6 years.................................................. 12,920 13,416 13,467 49,571 48,273 46,367 -2.6 -3.9 6 up to 8 years.................................................. 10,965 11,470 11,693 22,847 23,071 23,406 1.0 1.5 8 years and over.............................................. 7,790 7,909 8,569 2,306 2,753 3,002 19.4 9.0 IRA and Keogh Plan time deposits, 3 years or more........................................................... 9,329 10,015 10,209 3,005 3,533 4,159 17.6 17.7 Money market certificates, $10,000 or more, exactly 6 months.......................................... 10,428 12,228 12,395 13,877 31,949 48,547 130.2 52.0 Interest-bearing time deposits, $100,000 or 11,789 11,875 11,973 186,328 202,807 191,664 8.8 -5.5 Non-interest-bearing time deposits...................... 1,730 1,604 1,489 4,222 4,379 4,248 3.7 -3.0 Less than $100,000............................................... 1,411 1,254 1,163 722 658 826 -8.9 25.5 680 745 663 3,500 3,721 3,422 6.3 -8.0 Club accounts (Christmas savings, vacation, 9,230 9,193 9,334 2,159 857 1,548 -60.3 80.7 1. Excludes all money market certificates, IRAs, and Keogh Plan as issuing banks. However, small amounts of deposits held at banks accounts. that had discontinued issuing certain types of deposits are included in the amounts outstanding. Note. All banks that had either discontinued offering or never Details may not add to totals because of rounding, offered certain types of deposits as of the survey date are not counted Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables □ August 1979 4.11 SMALL-DENOMINATION TIME AND SAVINGS DEPOSITS Held by Insured Commercial Banks on April 25, 1979, Compared with Previous Survey, by Type of Deposit, by Most Common Rate Paid on New Deposits in Each Category, and by Size of Bank Size of bank Size of bank (total deposits in millions of dollars) (total deposits in millions of dollars) Deposit group, original All banks All banks maturity, and distribu­ tion of deposits by Less than 100 100 and over Less than 100 100 and over most common rate Apr. 25, Jan. 31, Apr. 25, Jan. 31, Apr. 25, Jan. 31, Apr. 25, Jan. 31, Apr. 25, Jan. 31, Apr. 25, Jan. 31, 1979 1979 1979 1979 1979 1979 1979 1979 1979 1979 1979 1979 Amount of deposits (in millions of dollars), Number of banks, or percentage distribution or percentage distribution Savings deposits Individuals and nonprofit organizations Issuing banks...................... 14,285 14,269 13,130 13,160 1,155 1,109 202,133 200,193 75,826 76,208 126,307 123,985 Distribution, total......... 100 100 100 100 100 100 100 100 100 100 100 100 4.00 or less...................... 4.4 4.3 4.4 4.3 4.7 4.0 3.4 3.2 3.6 3.6 3.2 2.9 4.01-4.50.......................... 5.8 6.7 5.9 6.9 4.2 4.3 5.0 5.1 6.0 7.0 4.4 3.9 4.51-5.00.......................... 89.9 89.0 89.8 88.8 91.1 91.7 91.7 91.7 90.4 89.3 92.4 93.1 Paying ceiling rate1.. . 89.9 89.0 89.8 88.8 91.1 91.7 91.7 91.7 90.4 89.3 92.4 93.1 Partnerships and corpora­ tions Issuing banks...................... 9,684 9,735 8,559 8,651 1,125 1,084 10,255 10,475 3,150 3,395 7,105 7,080 ............. 100 100 100 100 1D0i0stributio10n0, total100 100 100 100 100 100 4.00 or less...................... 1.4 1.5 1.5 1.6 .8 8 .5 .4 1.4 1.0 .1 . 1 4.01-4.50.......................... 3.0 4.5 3.1 4.8 2.0 2.1 3.4 4.0 2.9 3.6 3.7 4.2 4.51-5.00.......................... 95.6 94.0 95.4 93.6 97.3 97. 1 96.1 95.6 95.7 95.4 96.3 95.7 Paying ceiling rate1.. . 95.6 93.7 95.4 93.3 97.3 97.1 96.1 95.6 95.7 95.2 96.3 95.7 Domestic governmental units Issuing banks...................... 8,038 8,024 7,215 7,250 823 774 4,386 3,989 2,330 2,010 2,056 1,980 Distribution, total............. 100 100 100 100 100 100 100 100 100 100 100 100 4.00 or less...................... 3.6 2.9 3.9 3.2 .7 .3 1.4 2.1 2.4 4.1 .3 .2 4.01-4.50.......................... 4.3 6.2 4.7 6.6 1.1 2.3 2.3 4.7 3.9 7.1 .5 2.3 4.51-5.00......................... 92.1 90.9 91.4 90.2 98.3 97.4 96.3 93.2 93.7 88.9 99.2 97.6 Paying ceiling rate1.. . 91.8 90.6 91.0 89.9 98.3 97.4 96.2 93.1 93.6 88.7 99.2 97.6 All other Issuing banks...................... 1,467 1,241 1,299 1,081 168 160 123 133 51 43 72 90 Distribution, total............. 100 100 100 100 100 100 100 100 100 100 100 100 4.00 or less...................... 7.8 3.1 8.5 3.3 2.1 2.1 .9 .2 .6 (2) 1.2 .2 4.01-4.50......................... 1.8 . 1 2.1 (2) (2) .7 (2) (2) (2) (2) (2) (2) 4.51-5.00......................... 90.4 96.8 89.4 96.7 97.9 97.2 99.1 99.8 99.4 100.0 98.8 99.8 Paying ceiling rate1.. . 90.4 96.8 89.4 96.7 97.2 97.2 99.1 99.8 99.4 100.0 98.8 99.8 Time deposits less than $100,000 Domestic governmental units 30 up to 90 days Issuing banks................. 5,219 4,610 4,530 3,947 690 663 595 658 412 457 183 201 Distribution, total......... 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less.................. .1 .2 (2) (2) .7 1.3 (2) .1 (2) (2) .1 .3 4.51-5.00..................... 59.1 58.9 58.1 58.9 66.0 59.0 42.8 35.4 40.6 32.6 47.6 41.8 5.01-5.50..................... 14.4 7.9 15.4 7.6 8.4 9.6 12.5 5.1 16.4 5.1 3.7 5.0 5.51-8.00..................... 26.4 33.1 26.6 33.5 24.9 30.2 44.7 59.4 43.0 62.3 48.7 52.9 Paying ceiling rate1.. . 15.3 20.2 14.6 20.8 19.7 16.7 24.9 41.4 17.3 40.3 41.7 43.8 90 up to 180 days Issuing banks.................. 7,621 7,715 6,786 6,887 836 828 876 1,245 581 918 295 327 Distribution, total......... 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less.................. .2 .1 (2) (2) 1.6 .6 .4 .2 (2) (2) 1.3 .8 4.51-5.00..................... 14.4 14.3 14.8 14.8 10.7 10.5 4.8 5.5 5.1 6.7 4.4 2.2 5.01-5.50..................... 67.1 66.9 66.9 66.8 69.1 67.6 71.9 58.1 70.0 54.5 75.7 68.2 5.51-8.00..................... 18.3 18.7 18.3 18.4 18.6 21.3 22.8 36.2 24.9 38.9 18.6 28.7 Paying ceiling rate1.. . 12.2 10.0 12.0 9.9 14.1 11.3 18.0 27.7 19.4 32.2 15.1 15.0 180 days up to 1 year Issuing banks................. 4,712 4,704 4,035 4,063 677 640 536 362 371 208 165 154 Distribution, total......... 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less................. (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) 4.51-5.00..................... 9.5 8.4 9.6 8.8 8.7 5.5 .8 .5 .5 (2) 1.4 1.2 5.01-5.50..................... 61.2 60.1 61.2 60.1 61.3 60.1 49.2 63.5 39.4 66.1 71.1 60.1 5.51-8.00..................... 29.3 31.6 29.2 3,. 1 30.0 34.4 50.0 36.0 60.0 33.9 27.5 38.7 Paying ceiling ratei... 12.7 11.5 11.4 9.8 20.6 22.0 38.3 20.8 44.3 11.4 24.7 33.5 1 year and over Issuing banks................. 8,423 8,378 7,606 7,552 817 826 906 979 776 813 130 167 Distribution, total......... 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less................. 2.2 1.2 2.1 1.0 2.4 2.7 5.3 2.4 6.1 .1 .4 13.4 5.01-5.50..................... 2.2 2.6 2.0 2.4 4.4 4.6 .8 .9 (2) (2) 5.5 4.8 5.51-6.00..................... 50.6 58.8 57.2 58.4 61.7 62.8 51.3 52.6 50.6 53.8 55.6 46.8 6.01-8.00..................... 38.0 37.4 38.7 38.2 31.4 29.9 42.5 44.1 43.2 46.0 38.5 35.0 Paying ceiling ratei.. . 7.8 4.9 7.5 4.4 11.3 9.2 9.9 10.7 7.7 9.0 23.1 19.0 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Time and Savings Deposits A71 4.11 SMALL-DENOMINATION TIME AND SAVINGS DEPOSITS Continued Size of bank Size of bank (total deposits in millions of dollars) (total deposits in millions of dollars) Deposit group, original All banks All banks maturity, and distribu­ tion of deposits by Less than 100 100 and over Less than 100 100 and over most common rate Apr. 25, Jan. 31, Apr. 25, Jan. 31, Apr. 25, Jan. 31, Apr. 25, Jan. 31, Apr. 25, Jan. 31, Apr. 25, Jan. 31, 1979 1979 1979 1979 1979 1979 1979 1979 1979 1979 1979 1979 Amount of deposits (in millions of dollars), Number of banks, or percentage distribution or percentage distribution Time deposits less than $100,000 (cont.) Other than domestic gov­ ernmental units 30 up to 90 days Issuing banks................. 5,178 5,100 4,249 4,188 929 912 3,143 3,745 660 778 2,483 2,967 Distribution, total......... 100 100 100 100 100 100 100 100 100 100 100 100 3.5 1.0 3.7 .8 2.5 1.6 1.8 1.5 .7 (2) 2.1 1.9 4.51-5.00..................... 96.5 99.0 96.3 99.2 97.5 98.4 98.2 98.5 99.3 100.0 97.9 98.1 Paying ceiling rate1.. . 96.5 99.0 96.3 99.2 97.5 98.4 98.2 98.5 99.3 100.0 97.9 98.1 90 up to 180 days 11,065 11,236 9,917 10,134 1,148 1,102 25,156 25,606 9,922 10,331 15,234 15,274 Distribution, total......... 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less................. (2) (2) (2) (2) (2) .3 (2) (2) (2) (2) (2) (2) 4.51-5.00..................... 7.9 5.6 8.5 6.0 2.2 2.4 3.9 3.4 5.4 4.5 2.9 2.7 5.01-5.50..................... 92.1 94.3 91.5 94.0 97.8 97.3 96.1 96.6 94.6 95.5 97.1 97.3 Paying ceiling rate1.. . 91.4 93.6 90.7 93.3 97.6 96.3 95.5 95.1 94.6 95.5 96.2 94.8 180 days up to 1 year Issuing banks................. 8,420 8,292 7,503 7,407 917 885 3,467 3,343 1,731 1,720 1,736 1,622 Distribution, total......... 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less.................. .6 .5 .4 .5 1.7 .9 .2 .1 (2) (2) .5 .3 4.51-5.00..................... 7.1 4.0 7.8 4.1 1.7 3.5 14.8 1.6 29.4 3.0 .2 . 1 5.01-5.50..................... 92.3 95.5 91.8 95.4 96.6 95.6 85.0 98.3 70.6 97.0 99.4 99.6 Paying ceiling rate1.. . 92.3 95.5 91.8 95.4 96.6 95.6 85.0 98.3 70.6 97.0 99.4 99.6 1 up to 2 y-i years Issuing banks................. 13,837 13,762 12,690 12,659 1,147 1,102 25,255 28,348 16,092 18,198 9,163 10,150 Distribution, total......... 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less.................. .2 .6 .2 .6 (2) .7 (2) .2 . 1 .2 (2) .2 5.01-5.50..................... 3.4 1.9 3.7 2.1 .8 .3 2.0 .5 3.0 .7 .3 .2 5.51-6.00..................... 96.4 97.4 96.1 97.3 99.2 99.0 97.9 99.2 96.9 99.1 99.7 99.6 Paying ceiling rate1.. . 96.1 97.3 95.9 97.3 98.0 97.5 97.5 98.8 96.8 99.1 98.6 98.3 2 Vi up to 4 years Issuing banks................. 12,859 12,967 11,723 11,876 1,136 1,091 15,620 16,414 9,172 9,636 6,448 6,778 Distribution, total......... 100 100 100 100 100 100 100 100 100 100 100 100 6.00 or less.................. 3.2 .9 3.4 .8 1.2 2.5 2.9 .7 4.8 .1 .3 1.5 6.01-6.50..................... 96.8 99.1 96.6 99.2 98.8 97.5 97.1 99.3 95.2 99.9 99.7 98.5 Paying ceiling rate1.. . 96.6 98.8 96.6 99.0 97.2 96.8 96.8 99.1 95.2 99.8 99.1 98.2 4 up to 6 years Issuing banks................. 13,467 13,337 12,336 12,256 1,131 1,082 46,367 48,194 25,554 26,755 20,813 21,440 Distribution, total......... 100 100 100 100 100 100 100 100 100 100 100 100 6.50 or less.................. .4 .4 .3 .3 1.4 2.1 .4 .7 (2) (2) .8 1.7 6.51-7.00..................... 8.5 7.7 8.8 8.0 5.3 4.7 7.3 7.4 9.1 9.9 5.1 4.2 7.01-7.25..................... 91.1 91.8 90.9 91.7 93.3 93.1 92.4 91.9 90.9 90.1 94.1 94.1 Paying ceiling rate1.. . 90.6 91.6 90.5 91.5 92.5 92.4 91.9 91.5 90.2 89.6 94.0 94.0 6 up to 8 years Issuing banks................. 11,612 11,466 10,529 10,427 1,083 1,039 23,340 23,032 10,073 9,919 13,267 13,113 Distribution, total......... 100 100 100 100 100 100 100 100 100 100 100 100 7.00 or less.................. .3 .5 .3 .3 .1 2.2 (2) 1.1 (2) (2) (2) 2.0 7.01-7.25..................... 2.9 1.9 2.9 1.7 2.7 3.9 1.4 1.3 .8 1.0 1.9 1.6 7.26-7.50..................... 96.9 97.6 96.8 98.0 97.2 93.9 98.6 97.5 99.2 99.0 98.1 96.4 Paying ceiling rate1.. . 96.8 97.6 96.8 98.0 96.4 93.9 98.6 97.5 99.2 99.0 98.1 96.4 8 years and over Issuing banks................. 8,560 7,909 7,607 6,995 953 914 2,964 2,753 1,142 932 1,822 1,821 Distribution, total......... 100 100 100 100 100 100 100 100 100 100 100 100 7.25 or less.................. 1.4 1.4 1.2 .9 3.3 5.2 5.5 6.0 5.6 .3 5.5 8.9 7.26-7.50..................... 2.3 4.9 1.5 5.0 8.8 4.7 10.5 12.1 .1 1.2 17.0 17.7 7.51-7.75..................... 96.2 93.7 97.3 94.1 87.9 90.1 84.0 81.9 94.3 98.5 77.5 73.3 Paying ceiling rate1.. . 96.2 93.2 97.3 93.6 87.6 90.1 84.0 81.5 94.3 97.6 77.5 73.3 IRA and Keogh Plan time deposits, 3 years or more Issuing banks..................... 10,205 10,013 9,140 8,986 1,064 1,027 4,124 3,522 1,615 1,368 2,508 2,155 Distribution, total............. 100 100 100 100 100 100 100 100 100 100 100 100 6.00 or less...................... 3.8 4.7 4.0 5.0 1.9 2.3 .8 1.6 1.5 1.1 .4 1.8 6.01-7.00......................... 5.1 3.7 5.3 3.7 3.5 3.1 2.6 1.8 2.8 1.3 2.5 2.1 7.01-7.50......................... 26.3 33.0 27.4 34.3 17.3 22.0 14.5 21.4 19.1 31.6 11.6 14.9 7.51-7.75......................... 64.8 58.6 63.4 57.0 77.3 72.6 82.0 75.2 76.6 66.0 85.5 81.1 Paying ceiling rate1.. . 50.7 44.8 49.1 43.4 64.4 56.9 69.7 60.5 63.7 50.3 73.7 67.0 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Special Tables □ August 1979 4.11 SMALL DENOMINATION TIME AND SAVINGS DEPOSITS Continued Size of bank Size of bank (total deposits in millions of dollars) (total deposits in millions of dollars) Deposit group, original All banks All banks maturity, and distribu­ tion of deposits by Less than 100 100 and over Less than 100 100 and over most common rate Apr. 25, Jan. 31, Apr. 25, Jan. 31, Apr. 25, Jan. 31, Apr. 25, Jan. 31, Apr. 25, Jan. 31, Apr. 25, Jan. 31, 1979 1979 1979 1979 1979 1979 1979 1979 1979 1979 1979 1979 Amount of deposits (in millions of dollars), Number of banks, or percentage distribution or percentage distribution Time deposits less than $100,000 (cont.) Money market certificates, $70,000 or more, 6 months Issuing banks...................... 12,395 12,228 11,257 11,147 1,138 1,081 48,547 31,949 21,188 13,480 27,359 18,469 Distribution, total............. 100 100 100 100 100 100 100 100 100 100 100 100 9.00 or less..................... 1.9 5.4 2.0 5.7 .3 2.1 .2 1.1 .3 1.9 . 1 .6 9.01-9.25........................ 2.2 5.4 2.4 5.9 .4 1.1 .8 2.4 1.2 4.0 .4 1.3 9.26-9.50........................ 15.2 89.2 16.2 88.4 6.1 96.8 7.6 96.4 8.7 94.1 6.8 98.2 9.51-9.63........................ 80.7 (2) 79.5 (2) 93.1 (2) 91.4 (2) 89.8 (2) 92.7 (2) Paying ceiling rate1.. . 74.4 87.5 72.7 (2) 91.5 (2) 88.7 (2) 85.0 (2) 91.5 (2) Club accounts Issuing banks...................... 9,334 9,193 8,515 8,423 819 770 1,521 838 654 378 867 460 Distribution, total............. 100 100 100 100 100 100 100 100 100 100 100 100 0.00.................................... 41.1 40.4 42.8 42.0 23.2 23.0 19.7 17.8 29.3 23.9 12.4 12.9 0.01-4.00.......................... 18.7 18.2 18.9 18.4 16.5 15.9 18.3 21.9 24.7 29.3 13.4 15.8 4.01-4.50.......................... 7.2 7.6 7.2 7.6 6.7 7.0 13.7 12.2 14.1 13.0 13.5 11.5 4.51-5.50.......................... 33.1 33.8 31.1 31.9 53.6 54.0 48.3 48.1 31.9 33.9 60.7 59.7 1. See table 1.16, page A10, for the ceiling rates that existed at the in the amounts outstanding. Therefore, the deposit amounts shown time of each survey. in table 4.10 may exceed the deposit amounts shown in this table. 2. Less than .05 percent. The most common interest rate for each instrument refers to the stated rate per annum (before compounding) that banks paid on the Note. All banks that either had discontinued offering or had largest dollar volume of deposit inflows during the 2-week period never offered particular types of deposits as of the survey date are not immediately preceding the survey date. counted as issuing banks. Moreover, the small amounts of deposits Details may not add to totals because of rounding. held at banks that had discontinued issuing deposits are not included 4.12 AVERAGE OF MOST COMMON INTEREST RATES PAID on Various Categories of Time and Savings Deposits at Insured Commercial Banks, April 25, 1979 Bank size (total deposits in millions of dollars) Type of deposit, holder, and original maturity All size Less 20 up 50 up 100 up 500 up 1,000 groups than 20 to 50 to 100 to 500 to 1,000 and over Savings and small-denomination time deposits......................... 6.09 6.17 6.28 6.13 6.07 5.93 5.96 Savings, total................................................................................... 4.94 4.94 4.95 4.88 4.93 4.90 4.96 Individuals and nonprofit organizations............................... 4.93 4.94 4.95 4.88 4.92 4.89 4.96 Partnerships and corporations................................................ 4.98 5.00 4.97 4.96 4.99 4.97 4.98 Domestic governmental units.................................................. 4.97 4.92 4.99 4.92 4.99 4.99 4.99 All other....................................................................................... 4.83 5.00 4.93 5.00 4.66 5.00 5.00 Other time deposits in denominations of less than $100,000, total...................................................................................... 6.58 6.46 6.67 6.65 6.60 6.50 6.53 Domestic governmental units, total...................................... 6.28 6.13 6.42 6.65 5.83 6.50 6.70 30 up to 90 days..................................................................... 6.27 6.52 5.55 6.62 5.83 6.53 6.79 90 up to 180 days................................................................... 5.88 5.84 5.99 5.82 5.61 6.35 6.46 180 days up to 1 year........................................................... 6.58 5.82 7.13 7.51 5.85 6.34 6.69 1 year and over...................................................................... 6.48 6.21 6.68 6.68 6.41 6.84 6.86 6.58 6.48 6.67 6.65 6.61 6.50 6.53 30 up to 90 days..................................................................... 4.98 4.99 5.00 5.00 4.94 4.94 5.00 90 up to 180 days................................................................... 5.48 5.48 5.49 5.45 5.49 5.49 5.47 180 days up to 1 year........................................................... 5.41 5.23 5.50 5.35 5.44 5.50 5.49 1 up to 2% years................................................................... 5.99 5.97 5.99 6.00 5.99 5.99 6.00 2 Vi up to 4 years................................................................... 6.48 6.42 6.50 6.50 6.50 6.49 6.50 4 up to 6 years........................................................................ 7.23 7.23 7.22 7.24 7.23 7.20 7.24 6 up to 8 years........................................................................ 7.48 7.49 7.46 7.50 7.44 7.50 7.50 Over 8 years............................................................................ 7.58 7.75 7.75 7.64 7.26 7.70 7.62 IRA and Keogh Plan time deposits, 3 years or more........... 7.81 7.75 7.87 7.73 7.82 7.66 7.90 Money market certificates, exactly 6 months........................... 9.59 9.54 9.58 9.61 9.60 9.60 9.59 Club accounts1................................................................................ 3.66 2.11 3.33 3.20 4.09 3.86 4.26 1. Club accounts are excluded from all of the other categories. amount of that type of deposit outstanding. All banks that had either discontinued offering or never offered particular types of deposit as Note. The average rates were calculated by weighting the most of the survey date were excluded from the calculations for those common rate reported on each type of deposit at each bank by the specific types of deposits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Business Finance A73 4.13 SALES, REVENUE, PROFITS, AND DIVIDENDS—Large Manufacturing Corporations1 Millions of dollars 1977 1978 Industry 1977 1978 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Total (170 corporations) 1 Sales.......................................................................... 748,757 842,408 177,430 190,302 180,384 200,641 194,193 210,546 207,767 229,902 2 Total revenue........................................................... 758,013 853,266 179,496 192,996 182,488 203,033 196,611 212,932 210,962 232,761 3 Profits before taxes................................................. 78,909 88,202 18,874 21,468 18,146 20,421 19,707 22,684 20,817 24,994 4 Profits after taxes................................................... 37,854 43,940 9,056 10,472 9,337 8,989 9,693 11,599 10,422 12,226 Memo: PAT unadjusted2................................. 38,391 44,882 9,107 10,553 8,656 10,075 9,684 11,585 10,521 13,092 6 Dividends................................................................. 17,532 18,471 3,840 4,269 3,985 5,438 4,306 4,556 4,471 5,138 Nondurable goods industries (86 corporations) 3. 7 Sales.......................................................................... 404,141 448,630 95,836 101,035 97,144 110,126 104,522 109,310 111,760 123,038 8 Total revenue........................................................... 409,601 445,013 96,948 102,807 98,232 111,614 105,877 110,824 113,607 124,705 9 Profits before taxes................................................. 45,906 49,583 11,074 12,064 11,195 11,573 11,347 12,178 12,146 13,912 10 Profits after taxes................................................... 22,284 22,515 4,837 5,160 5,144 4,430 5,137 5,729 5,517 6,132 11 Memo: PAT unadjusted2................................. 19,768 23,175 4,880 5,224 5,234 5,249 5,136 5,741 5,536 6,762 12 Dividends................................................................. 8,944 9,918 2,185 2,227 2,268 2,264 2,402 2,419 2,481 2,616 Durable goods industries (84 corporations)4___ 13 Sales.......................................................................... 344,616 393,778 81,594 89,267 83,240 90,515 89,671 101,236 96,007 106,864 14 Total revenue........................................................... 348,412 398,253 82,548 90,189 84,256 91,419 90,734 102,108 97,355 108,056 15 Profits before taxes................................................. 33,003 38,619 7,800 9,404 6,951 8,848 8,360 10,506 8,671 11,082 16 Profits after taxes................................................... 18,283 21,425 4,219 5,312 4,193 4,559 4,556 5,870 4,905 6,094 17 Memo: PAT unadjusted2................................. 17,804 21,707 4,227 5,329 3,422 4,826 4,548 5,844 4,985 6,330 18 Dividends................................................................. 8,588 8,553 1,655 2,042 1,717 3,174 1,904 2,137 1,990 2,522 Selected industries Food and kindred products (28 corporations) 19 Sales.......................................................................... 68,422 77,130 15,903 16,776 16,947 18,796 17,470 18,763 19,361 21,536 20 Total revenue........................................................... 69,168 77,960 16,155 17,136 17,239 18,638 17,860 19,180 19,490 21,430 21 Profits before taxes................................................ 6,040 6,918 1,448 1,560 1,526 1,506 1,535 1,767 1,802 1,814 22 Profits after taxes................................................... 3,172 3,772 739 825 826 782 839 967 982 984 23 Memo: PAT unadjusted2................................. 3,309 3,861 746 835 836 892 840 975 983 1,063 24 Dividends................................................................. 1,433 1,621 342 352 364 375 397 400 409 415 Chemical and allied products (22 corporations) 25 Sales.......................................................................... 70,251 80,181 17,103 17,347 17,586 18,215 18,930 19,981 19,880 21,390 26 Total revenue........................................................... 70,906 80,978 17,271 17,526 17,743 18,366 19,117 20,143 20,086 21,632 27 Profits before taxes................................................. 8,530 9,884 2,112 2,290 2,062 2,066 2,353 2,459 2,478 2,594 28 Profits after taxes................................................... 4,604 5,559 1,192 1,288 1,184 940 1,334 1,403 1,406 1,416 29 Memo: PAT unadjusted2................................. 4,831 5,578 1,181 1,289 1,178 1,183 1,317 1,382 1,389 1,490 30 Dividends................................................................. 2,186 2,469 514 539 553 580 567 587 592 723 Petroleum refining (15 corporations) 31 Sales.......................................................................... 221,694 242,740 52,344 55,903 51,593 61,854 56,996 58,419 60,130 67,195 32 Total revenue........................................................... 225,338 246,985 52,891 57,096 52,130 63,221 57,695 59,195 61,418 68,677 33 Profits before taxes................................................. 28,144 29,543 6,746 7,396 6,818 7,184 6,832 7,020 7,248 8,443 34 Profits after taxes................................................... 10,072 11,405 2,498 2,655 2,694 2,225 6,615 2,828 2,846 3,116 35 Memo: PAT unadjusted2................................. 10,684 11,911 2,546 2,708 2,756 2,674 2,627 2,847 2,861 3,576 36 Dividends................................................................. 4,615 5,048 1,163 1,160 1,166 1,126 1,247 1,239 1,282 1,280 Primary metals and products (23 corporations) 37 Sales.......................................................................... 58,713 68,444 13,773 15,573 14,454 14,913 15,459 17,560 17,348 18,077 38 Total revenue.......................................................... 59,488 69,449 13,963 15,769 14,636 15,120 15,681 17,822 17,693 18,253 39 Profits before taxes................................................. 1,476 3,889 460 100 239 677 372 1,275 1,128 1,114 40 Profits after taxes................................................... 1,579 2,454 260 536 493 290 173 794 661 826 41 Memo: PAT unadjusted2................................. 1,474 2,535 274 553 287 360 183 810 711 831 42 1,088 975 234 246 266 342 226 239 242 268 Machinery (27 corporations) 43 Sales.......................................................................... 96,820 111,932 22,727 24,380 24,317 25,396 25,472 27,857 27,848 30,755 44 Total revenue........................................................... 98,380 113,491 23,051 24,702 24,767 25,860 25,831 27,977 28,374 31,309 45 Profits before taxes................................................. 13,158 15,396 2,900 3,318 3,264 3,676 3,209 3,996 3,458 4,733 46 Profits after taxes................................................... 7,158 8,486 1,573 1,805 1,771 2,009 1,749 2,270 1,974 2,493 47 Memo: PAT unadjusted2................................. 7,204 8,563 1,571 1,804 1,782 2,047 1,745 2,254 2,015 2,549 48 Dividends................................................................. 3,495 3,399 712 767 702 1,314 823 892 821 863 Motor vehicles and equipment (9 corporations) 49 Sales.......................................................................... 127,049 140,732 31,069 33,502 28,835 33,643 32,834 38,055 31,982 37,861 50 Total revenue........................................................... 127,816 141,652 31,350 33,716 29,104 33,646 33,127 38,301 32,298 37,926 51 Profits before taxes................................................ 10,738 10,585 2,988 3,489 1,575 2,686 2,986 3,178 1,665 2,756 52 Profits after taxes................................................... 5,747 5,620 1,599 1,914 892 1,342 1,654 1,640 901 1,425 53 Memo: PAT unadjusted2................................. 5,861 5,761 1,603 1,926 898 1,434 1,648 1,637 903 1,573 54 Dividends................................................................. 2,607 2,480 392 698 413 1,104 473 620 477 910 1. This series has been discontinued and will no longer appear in the Note. Data are obtained from published reports of companies and Bulletin. Historical data are available upon request from the Capital reports made to the Securities and Exchange Commission. Sales are net Markets Section, Division of Research and Statistics. of returns, allowances, and discounts, and exclude excise taxes paid di­ 2. Profits after taxes unadjusted are as reported by the individual com­ rectly by the company. Total revenue data include, in addition to sales, panies. These data are not adjusted to eliminate differences in accounting income from nonmanufacturing operations and nonoperating income. treatments of special charges, credits, and other nonoperating items. Profits are before dividend payments and have been adjusted to exclude 3. Includes 21 corporations in groups not shown separately. special charges and credits to surplus reserves and extraordinary items not 4. Includes 25 corporations in groups not shown separately. related primarily to the current reporting period. Income taxes (not shown) include federal, state and local government, and foreign. Previous series last published in June 1972 Bulletin, p. A50. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 74 Federal Reserve Board of Governors Paul A. Volcker, Chairman Henry C. W allich Frederick H. Schultz, Vice Chairman Philip E. Coldwell Office of Board Members Office of Staff Director for M onetary and Financial Policy Joseph R. Coyne, Assistant to the Board Kenneth A. G uenther, Assistant to the Board Stephen H. Axilrod, Staff Director Jay Paul Brenneman, Special Assistant to the Edward C. Ettin, Deputy Staff Director Board M urray Altm ann, 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. W inn, 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. M annion, Associate General Joseph S. Zeisel, Deputy Director Counsel John H. K alchbrenner, Associate Director John J. Mingo, Senior Research Division Charles R. M cNeill, Assistant to the General Officer Counsel Eleanor J. Stockw ell, Senior Research J. Virgil M attingly, Assistant General Division Officer Counsel James M. Brundy, Associate Research Division G ilbert T. Schw artz, Assistant General Officer Counsel Robert A. Eisenbeis, Associate Research Division Officer Jared J. Enzler, Associate Research Division Office of the Secretary Officer J. C ortland G. Peret, Associate Research Theodore E. Allison, Secretary Division Officer G riffith L. Garwood, Deputy Secretary M ichael J. Prell, Associate Research Division *Edward T. M ulrenin, Assistant Secretary Officer Richard H. Puckett, Manager, Regulatory Helmut F. W endel, Associate Research Improvement Project Division Officer Robert M. Fisher, Assistant Research Division Officer Division of Consumer Affairs Frederick M. Struble, Assistant Research Division Officer Janet O. H art, Director Stephen P. Taylor, Assistant Research N athaniel E. B utler, Associate Director Division Officer Jerauld C. Kluckman, Associate Director Levon H. Garabedian, Assistant Director Anne Geary, Assistant Director Division of International Finance Division of Banking Edwin M. Truman, Director Supervision and Regulation Robert F. Gemmill, Associate Director George B. Henry, Associate Director John E. Ryan, Director Charles J. Siegman, Associate Director f Frederick C. Schadrack, Deputy Director Samuel Pizer, Senior International Division Frederick R. D ahl, Associate Director Officer W illiam Taylor, Associate Director Jeffrey R. Shafer, Associate International W illiam W. W iles, Associate Director Division Officer Jack M. Egertson, Assistant Director Dale W. Henderson, Assistant International Robert A. Jacobsen, 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 75 and Official Staff J. Charles Partee Emmett J. Rice Nancy H. Teeters Office of Office of Staff Director for Staff Director for Management Federal Reserve Bank Activities John M. D enkler, Staff Director W illiam H. W allace, Staff Director Joseph W. Daniels, Sr., Director of Equal H arry A. G uinter, Assistant Director for Employment Opportunity Contingency Planning Division of Data Processing Division of Federal Reserve Bank Examinations and Budgets Charles L. Hampton, Director Bruce M. Beardsley, Associate Director A lbert R. Hamilton, Director Uyless D. Black, Assistant Director Clyde H. Farnsw orth, Jr., Associate G lenn L. Cummins, Assistant Director Director Robert J. Zemel, Assistant Director Charles W. B ennett, Assistant Director John F. Hoover, Assistant Director Division of Personnel P. D. Ring, Assistant Director Raymond L. Teed, Assistant Director David L. Shannon, Director John R. Weis, Assistant Director Division of Federal Reserve Charles W. Wood, Assistant Director Bank Operations Office of the Controller James R. Kudlinski, Director W alter A lthausen, Assistant Director John Kakalec, Controller Brian M. Carey, Assistant Director Lorin S. M eeder, Assistant Director Division of Support Services Donald E. Anderson,Director John L. G rizzard, Associate Director W alter 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

A76 Federal Reserve Bulletin □ August 1979 FOMC and Advisory Councils Federal Open M arket Committee Paul A. Volcker, Chairman John Balles Monroe Kimbrel Frederick H. Schultz Robert Black Robert Mayo Nancy H. Teeters Philip E. Coldwell J. Charles Partee Henry C. Wallich Emmett J. Rice 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 A dvisory Council J. W. McLean, tenth district, 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 dtric Merle E. Gilliand, fourth district Clarence G. Frame, ninth district J. Owen Cole, fifth district James D. Berry, eleventh district Chauncey E. Schmidt, twelfth district Herbert V. Prochnow, Secretary William J. Korsvik, Associate Secretary Consumer A dvisory 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, Atlanta, Georgia 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 77 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 Vacancy Boris Yavitz Thomas M. Timlen Buffalo...................... 14240 Frederick D. Berkeley, III 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. J. Tankersley Robert D. Duggan RICHMOND*..............23261 Vacant Robert P. Black Maceo A. Sloan George C. Rankin Baltimore...................21203 I. 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 78 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. The Bank Holding Company .Movement to 1978: Regulations of the Board of Governors of the 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 Improving the Monetary Aggregates: Staff ernors, as of Dec. 31, 1978. $7.50. 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 19 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. One-Bank Holding Companies Before the 1970 Staff Studies Amendments. 12/72. (Studies and papers on economic and financial sub­ Yields on Recently Offered Corporate Bonds. jects that are of general interest.) 5/73. Rates on Consumer Instalment Loans. 9/73. New Series for Large Manufacturing Corpora­ Summaries Only Printed in the Bulletin tions. 10/73. (Limited supply of mimeographed copies of full text U.S. Energy Supplies and Uses, Staff Economic available upon request for single copies.) Study by Clayton Gehman. 12/73. The Structure of Margin Credit. 4/75. The Behavior of Member Bank Required Reserve New Statistical Series on Loan Commitments at Ratios and the Effects of Board Action, Selected Large Commercial Banks. 4/75. 1968-77, by Thomas D. Simpson. July 1978. 39 An Assessment of Bank Holding Companies, Staff Economic Study by Robert J. Lawrence and Sam­ PPuel H. Talley. 1/76. Foothold Acquisitions and Bank Market Struc­ ture, by Stephen A. Rhoades and Paul Schweit­ Industrial Electric Power Use. 1/76. zer, July 1978. 8 pp. Revision of Money Stock Measures. 2/76. Interest Rate Ceilings and Disintermediation, by Survey of Finance Companies, 1975. 3/76. Edward F. McKelvey. Sept. 1978. 105 pp. Revised Series for Member Bank Deposits and The Relationship Between Reserve Ratios and Aggregate Reserves. 4/76. the Monetary Aggregates Under Reserves Industrial Production— 1976 Revision. 6/76. and Federal Funds Rate Operating Targets, Federal Reserve Operations in Payment Mecha-* by Kenneth J. Kopecky. Dec. 1978. 58 pp. nisms: A Summary. 6/76. Tie-ins Between the Granting of Credit and New Estimates of Capacity Utilization: Manu­ Sales of Insurance by Bank Holding Compa­ facturing and Materials. 11/76. nies and Other Lenders, by Robert A. Eisenbeis Bank Holding Company Financial Developments and Paul R. Schweitzer. Feb. 1979. 75 pp. in 1976. 4/77. Geographic Expansion of Banks and Changes in Survey of Terms of Bank Lending—New Series. Banking Structure, by Stephen A. Rhoades. 5/77. Mar. 1979. 40 pp. The Commercial Paper Market. 6/77. Impact of the Dollar Depreciation on the U.S. The Federal Budget in the 1970’s. 9/78. Price Level: An Analytical Survey of Em­ Summary Measures of the Dollar’s Foreign Ex­ pirical Estimates, by Peter Hooper and Barbara change Value. 10/78. R. Lowrey. Apr. 1979. 53 pp. 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 80 Index to Statistical Tables References are to pages A-3 through A-73 although the prefix “A 99 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, 19,20-23,29,69-72 Production, 48, 49 Federal Reserve Banks, 4, 12 Subject to reserve requirements, 15 BANKERS balances, 16, 18, 20, 21, 22 Turnover, 13 (See also Foreigners) Discount rates at Reserve Banks (See Interest rates) Banks for Cooperatives, 35 Discounts and advances by Reserve Banks (See Loans) Bonds (See also U.S. government securities) Dividends, corporate, 37, 73 New issues, 36 Yields, 3 EMPLOYMENT, 46, 47 Branch banks Eurodollars, 27 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 CAPACITY utilization, 46 Federal Financing Bank, 30, 35 Capital accounts Federal funds, 3, 6, 18, 20, 21, 22, 27, 30 Banks, by classes, 16, 17, 19, 20 Federal Home Loan Banks, 35 Federal Reserve Banks, 12 Federal Home Loan Mortgage Corporation, 35, 40, 41 Central banks, 68 Federal Housing Administration, 35, 40, 41 Certificates of deposit, 23, 27 Federal Intermediate Credit Banks, 35 Commercial and industrial loans Federal Land Banks, 35, 41 Commercial banks, 15, 18, 26 Federal National Mortgage Association, 35, 40, 41 Weekly reporting banks, 20, 21, 22, 23, 24 Federal Reserve Banks Commercial banks Condition statement, 12 Assets and liabilities, 3, 15-19, 20-23, 69-72 Discount rates (See Interest rates) Business loans, 26 U.S. government securities held, 4, 12, 13, 32, 33 Commercial and industrial loans, 24, 26 Federal Reserve credit, 4, 5, 12, 13 Consumer loans held, by type, 42, 43 Federal Reserve notes, 12 Loans sold outright, 23 Federally sponsored credit agencies, 35 Number, by classes, 16, 17, 19 Finance companies Real estate mortgages held, by type of holder and Assets and liabilities, 39 property, 41 Business credit, 39 Commercial paper, 3, 25, 27, 39 Loans, 20, 21, 22, 42, 43 Condition statements (See Assets and liabilities) Paper, 25, 27 Construction, 46, 50 Financial institutions, loans to, 18, 20-22 Consumer installment credit, 42, 43 Float, 4 Consumer prices, 46, 51 Flow of funds, 44, 45 Consumption expenditures, 52, 53 Foreign Corporations Currency operations, 12 Profits, taxes, and dividends, 37 Deposits in U.S. banks, 4, 12, 19, 20, 21, 22 Sales, revenue, profits, and dividends of large Exchange rates, 68 manufacturing corporations, 73 Trade, 55 Security issues, 36, 65 Foreigners Cost of living (See Consumer prices) Claims on, 56, 58, 61, 62, 63, 67 Credit unions, 29, 42, 43 Liabilities to, 23, 56-60, 64-66 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 81 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, 18, 19, 69-72 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 SALES, revenue, profits, and dividends Time and savings deposits, 10, 72 of large manufacturing corporations, 73 International capital transactions of the United Saving States, 56-67 Flow of funds, 44, 45 International organizations, 56-61, 64-67 National income accounts, 53 Inventories, 52 Savings and loan assns., 3, 10, 29, 33, 41, 44 Investment companies, issues and assets, 37 Savings deposits (See Time deposits) Investments (See also specific types) Savings institutions, selected assets, 29 Banks, by classes, 16, 17, 18, 20, 21, 22, 29 Securities (See also U.S. government securities) Commercial banks, 3, 15, 16, 17, 18 Federal and federally sponsored agencies, 35 Federal Reserve Banks, 12, 13 Foreign transactions, 65 Life insurance companies, 29 New issues, 36 Savings and loan associations, 29 Prices, 28 Special Drawing Rights, 4, 12, 54, 55 LABOR force, 47 State and local governments Life insurance companies (See Insurance companies) Deposits, 19, 20, 21, 22 Loans (See also specific types) Holdings of U.S. government securities, 32, 33 Banks, by classes, 16, 17, 18, 20-23, 29 New security issues, 36 Commercial banks, 3, 15-18, 20-23, 24, 26 Ownership of securities of, 18, 20, 21, 22, 29 Federal Reserve Banks, 3, 4, 5, 8, 12, 13 Yields of securities, 3 Insurance companies, 29, 41 State member banks, 17 Insured or guaranteed by United States, 40, 41 Stock market, 28 Savings and loan associations, 29 Stocks (See also Securities) New issues, 36 MANUFACTURING Prices, 28 Capacity utilization, 46 Production, 46, 49 TAX receipts, federal, 31 Margin requirements, 28 Time deposits, 3, 10, 13, 15, 16, 17, 19, 20, 21, Member banks 22, 23, 69-72 Assets and liabilities, by classes, 16, 17, 18 Trade, foreign, 55 Borrowings at Federal Reserve Banks, 5, 12 Treasury currency, Treasury cash, 4 Number, by classes, 16, 17, 19 Treasury deposits, 4, 12, 30 Reserve position, basic, 6 Treasury operating balance, 30 Reserve requirements, 9 Reserves and related items, 3, 4, 5, 15 UNEMPLOYMENT, 47 Mining production, 49 U.S. balance of payments, 54 Mobile home shipments, 50 U.S. government balances Monetary aggregates, 3, 15 Commercial bank holdings, 19, 20, 21, 22 Money and capital market rates (See Interest rates) Member bank holdings, 15 Money stock measures and components, 3, 14 Treasury deposits at Reserve Banks, 4, 12, 30 Mortgages (See Real estate loans) U.S. government securities Mutual funds (See Investment companies) Bank holdings, 16, 17, 18, 20, 21, 22, 29, Mutual savings banks, 3, 10, 20-22, 29, 32, 33, 41 32, 33 Dealer transactions, positions, and financing, 34 NATIONAL banks, 17 Federal Reserve Bank holdings, 4, 12, 13, 32, 33 National defense outlays, 31 Foreign and international holdings and National income, 52 transactions, 12, 32, 64 Nonmember banks, 17, 18, 19 Open market transactions, 1 1 Outstanding, by type and ownership, 32, 33 OPEN market transactions, 1 1 Rates, 3, 27 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, 51 Production, 46, 48 Profits, corporate, 37, 73 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 82 The Federal Reserve System Boundaries of Federal R eserve D istricts and Their Branch Territories Minneapolis Detroit Chicago Omaha* Denver iSfCMW' Kansas City 11. L ,\s o ) u i . s Louisville tfichJ2?Z barton \Oklahoma City l*geles jackse**®* Houston \San Antonio January 1978 Legend — Boundaries of Federal Reserve Districts ® Federal Reserve Bank Cities ----- Boundaries of Federal Reserve Branch • Federal Reserve Branch Cities Territories Federal Reserve Bank Facility Q Board of Governors of the Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Guide to Tabular Presentation and Statistical Releases Guide 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,OCX) 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