Federal Reserve Bulletin, 1980-03

Volume 66 □ N umber 3 □ March 1980 FEDERAL RESERVE BULLETIN Board of Governors of the Federal Reserve System Washington, 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 staff publications committee. This committee is responsible for opinions expressed except in official statements and signed articles. Direction for the art work is provided by Mack R. Rowe. Editorial support is furnished by the Economic Editing Unit headed by Mendelle T. Berenson. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Table of Contents 177 Monetary Policy Report to to the Congress (see article, pages 177-89) Congress and emphasizes the Federal Reserve’s de­ termination to make every reasonable ef­ Submitted pursuant to the Full Employ­ fort to work toward reducing monetary ment and Balanced Growth Act of 1978, the growth from the levels of recent years, be­ Board’s report states that the objectives of fore the House Committee on Banking, Fi­ the monetary and fiscal authorities should nance and Urban Affairs, February 19, be to impart a sense of long-range stability 1980. in policy and in the economic environment. 217 Governor Nancy H. Teeters presents the 190 Treasur y and Federal Reser ve views of the Board on the Home Mortgage Foreign Exchange Operations Disclosure Act (HMDA) and concludes According to the semiannual report, the that the information provided under the act, October 6 measures by the Federal Reserve if confined to truly urban areas, is useful for alleviated many of the concerns that had analysis of community reinvestment and built up in the exchange markets and helped civil rights issues and that the cost of re­ the dollar weather the numerous shocks porting the information, if reduced accord­ that occurred over the rest of 1979 and ing to certain recommendations of the early 1980. Board, would be reasonable; however, Mrs. Teeters suggests that HMDA has been 209 Industrial Production supplanted by the Community Reinvest­ ment Act and should be allowed to lapse, Output increased about 0.2 percent in Feb­ before the Senate Committee on Banking, ruary. Housing, and Urban Affairs, February 19, 1980. 211 Statements to Congress Peter M. Keir, Assistant to the Board of 221 Governor J. Charles Partee discusses the fi­ Governors, gives an assessment of the nancial reform measures contained in sev­ coordination between the Commodity Fu­ eral bills before the House and focuses on tures Trading Commission and the Federal those sections of the proposed legislation Reserve, primarily in the area of Treasury that deal with maximum rates payable on futures contracts, in which he concludes deposits and the payment of interest on that the coordination has been good and transaction accounts, before the Sub­ that neither the extreme enthusiasm about committee on Financial Institutions Super­ Treasury futures markets nor the grave vision, Regulation, and Insurance of the concerns that have sometimes been ex­ House Committee on Banking, Finance and pressed about those markets have been Urban Affairs, February 20, 1980. justified, before the Subcommittee on Conservation and Credit of the House 227 Announcements Committee on Agriculture, February 12, 1980. Resignation of Governor Philip E. Coldwell. 213 Chairman Paul A. Volcker discusses the Federal Reserve’s monetary policy report Increase in the discount rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Limitation on rate of interest to be paid on 264 Membership of the Board of 21/2-year variable-rate time deposits. Governors of the Federal Reserve S ystem, 1913-80 Adoption of examination policy for the classification of delinquent consumer in­ List of appointive and ex officio members. stallment loans held by member state banks. 266 Directors of Federal Reser ve Banks and Branches Delay in the effective date of the revocation of an amendment to Regulation Z. List of directors by Federal Reserve Dis­ trict. Meeting of International Conference on Banking and Payments Systems. Ai Financial and Business Statistics Approval of several technical changes in A3 Domestic Financial Statistics Regulation T. A46 Domestic Nonfinancial Statistics Admission of five state banks to member­ A54 International Statistics ship in the Federal Reserve System. A69 Special Tables 231 Record of Policy A ctions of the A73 Guide to Tabular Presentation Federal Open Market Committee and Statistical Releases At the meeting of January 8-9, 1980, the A74 Board of Governors and Staff Committee agreed that open market opera­ tions in the period until the next meeting A76 federal Open Market Committee should be directed toward expansion of re­ and Staff; Advisor y Councils serve aggregates consistent with growth over the first quarter of 1980 at an annual A ll Federal Reserve Banks, Branches, rate between 4 and 5 percent for M-1 and on and Offices the order of 7 percent for M-2, provided that the weekly average federal funds rate A78 Federal Reserve Board remained within a range of IIV2 to 15V2 Publications percent. A80 Index to Statistical Tables 237 Legal Developments A82 map of Federal Reserve S ystem Amendments to Regulation Q; revised in­ terpretation; bank holding company and bank merger orders; and pending cases. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to Congress Report submitted to the Congress on February of the longer-range problems of the economy, 19, 1980, pursuant to the Full Employment and such as the inadequacy of business capital forma­ Balanced Growth Act of 1978.1 tion, and the related declines in the productivity and real earnings of American workers, and the Federal Reserve Policy vulnerability of the dollar in foreign exchange and the Outlook for 1980 markets. Monetary policy clearly has a major role to The Objectives of Monetary Policy in 1980 play in the restoration of price stability. Regard­ less of the source of the initial impetus, inflation Frequently in the past the decisions about stabili­ can be sustained over the long run only if the zation policy seemed—perhaps sometimes mis­ resulting higher level of dollar expenditures is leadingly—to come down to a choice of how accommodated through monetary expansion. strongly to encourage recovery or to retard ex­ The Federal Reserve is determined not to provide pansion. Decisionmakers face a much more that sustenance but will adhere instead to a complicated set of circumstances today. For course, in 1980 and beyond, aimed at wringing some time now, most forecasters have suggested the inflation out of the economy over time. that the economy is on the verge of recession, If recessionary tendencies should develop dur­ but the recession has not appeared. Over the ing 1980—as many expect—the steady anti-infla­ same period inflation has continued apace. The tionary policy stance represented by continuing outlook for the economy remains obscured by restraint on growth in the supply of money and major uncertainties, ranging from the possible credit would be consistent with an easing of con­ economic effects of current international ten­ ditions in financial markets, as demands for sions and the prospects for world oil prices and money and credit weaken. That would provide supplies to the attitudes of investors around the support for economic activity and would help world toward the dollar and the threat that infla­ assure the avoidance of a cumulating, deepening tion may bring increasing distortions of tradition­ downswing. If, on the other hand, inflationary al spending and saving patterns. It is not within pressures mount, a policy of restrained growth in the powers of monetary and fiscal policy to re­ money and credit would lead to greater tautness solve all of these uncertainties and to ensure a in financial markets, thereby damping the expan­ fully satisfactory economic performance. sion of aggregate demand. In any event, pros­ Nonetheless, the appropriate direction for pol­ pects for dealing with the inflation problem icy is clear. The greatest contribution the mone­ without serious economic disruption will be tary and fiscal authorities can make is to impart a materially enhanced if other elements of govern­ sense of long-range stability in policy and in the ment also exhibit a firm anti-inflationary commit­ economic environment. In present circumstan­ ment and if workers and management recognize ces, that requires an approach that provides assur­ that a moderation of their wage demands and ance that the momentum of inflation will be ar­ pricing policies is in their own long-range in­ rested. Inflation not only represents an imminent terests as well as those of the nation as a whole. threat to the sustainability of the current busi­ ness expansion but also lies at the heart of many The Growth of Money and Credit in 1980 1. The charts and appendixes for this report are available » . . t on request from Publications Services, Board of Governors its meeting earlier this month, the Federal of the Federal Reserve System, Washington, D.C. 20551. Open Market Committee (FOMC) established Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

178 Federal Reserve Bulletin □ March 1980 ranges of growth for the monetary aggregates from regular savings deposits and probably other that it believed, in light of the prospects for fiscal assets to the newly offered transaction accounts— policy and for private demands, would impose the reverse of the experience with M-1A. For appropriate restraint on inflationary forces in similar reasons, enactment of nationwide NOW 1980. Measured from the fourth quarter of 1979 account legislation would be expected to raise to the fourth quarter of 1980, the ranges are: for the growth of this money stock measure this M-1A, 3V2 to 6 percent; for M-1B, 4 to 6V2 per­ year, and the present range would have to be cent; for M-2, 6 to 9 percent; and for M-3, 6V2 to reconsidered in that light. 9V2 percent. These ranges are based on the new­ M-2 likely would not be affected importantly ly adopted definitions of the monetary aggre­ by NOW account legislation, since it encompass­ gates; a description of this redefinition appeared es the major categories of assets that are close in the Federal Reserve Bulletin, volume 66 substitutes for NOW accounts. Besides M-1B, (February 1980) pages 97-114. The FOMC also M-2 includes savings and small-denomination projected that bank credit would expand between 6 time deposits at commercial banks and thrift in­ and 9 percent during the current year. stitutions, plus certain other highly liquid in­ The FOMC’s ranges indicate the Federal struments—namely, money market mutual fund Reserve’s intention to seek an appreciable slowing shares, overnight repurchase agreements (RPs), of monetary expansion from the rates observed and overnight Eurodollar deposits at Caribbean in 1979, and thus to move toward noninflationary branches of U.S. banks. The recently introduced rates of growth. The deceleration is especially 2!/2-year certificate, which has no specified mini­ marked in the case of the narrower aggregates. mum denomination and carries a ceiling rate The midpoint of the range for M-1A, for in­ close to that on Treasury notes, should serve to stance, is 43/4 percent; in 1979, M-1A increased bolster growth of small time deposits. Six-month 5V2 percent. The difference between these two money market certificates likely also will remain figures actually understates the degree of decel­ popular. Nonetheless, absent a steep decline in eration in economic terms, however, since the market interest rates, the total of interest-bearing adjustment of the public to the introduction of deposits subject to federal rate ceilings probably automatic transfer service (ATS) and New will continue in the months ahead to grow slowly York State negotiable order of withdrawal by historical standards. However, growth of M-2 (NOW) accounts probably reduced the growth of should be buoyed in 1980 as in 1979 by sizable M-1A last year by roughly VU percentage points flows into the money market funds. On balance, as funds were transferred out of existing demand the prospect is that M-2 this year will grow at a deposits to such accounts. In setting the range rate somewhat below the increase of 8.8 percent for 1980, the FOMC assumed, in the context of in 1979. present law, that the public’s adjustment process The final monetary measure, M-3, includes, in is about completed and that any shifting from addition to M-2, large-denomination time depos­ demand deposits to ATS and NOW accounts will its of $100,000 or more and term (more than onehave little further impact on M-1A this year. Of day) RPs at banks and thrift institutions. It is course, if NOW accounts were authorized on a thus a very broad aggregate, encompassing most nationwide basis, some downward adjustment of of the liabilities of the depositary institutions plus the present M-1A range might be needed in order money market mutual funds. Given the modera­ to take account of the accelerated shift out of tion of demands for credit—especially at com­ conventional demand deposits that might result. mercial banks—anticipated for the current year, The range for M-IB—which includes check­ M-3 appears likely to grow less than the 9.5 per­ able interest-bearing deposits in addition to cent increase recorded in 1979. currency and demand deposits—also implies a It should be emphasized that, although we substantial slowing; the midpoint of the range, at view these new monetary definitions as better 5V4 percent, is well below the actual 7.3 percent measures of financial behavior today than the old expansion in 1979. Of course, because ATS and definitions, the institutional framework is chang­ NOW accounts are included in M-1B, the expan­ ing rapidly, and this implies an inevitable uncer­ sion in 1979 was enlarged by one-time transfers tainty about the behavior of any monetary aggre­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to Congress 179 gate. Furthermore, the Committee recognizes As can be seen, even with these common as­ that other aspects of financial and economic de­ sumptions, the range of probable outcomes is rel­ velopments will require careful monitoring in the atively wide. Even so, there is recognition that, process of policy determination and implementa­ while considered less likely, the actual outcomes tion. The ranges specified for the monetary could fall outside of the indicated ranges. Such is aggregates appear adequate to the Committee the nature of the uncertainties in the economic to provide the necessary degree of flexibility. outlook at present. Most members of the Board believe that a downturn in activity is likely sometime in 1980. The Outlook for the Economy in 1980 Production cutbacks in the auto sector and a drop in residential construction activity already It is never an easy matter to project the course of have occurred; meanwhile, a rising oil import bill the economy, but the current circumstances pose continues to act as a drag on aggregate demand. exceptional difficulties for forecasters. Aside With these depressants on employment and in­ from the uncertainties associated with inter­ come growth, consumer spending is expected to national political tensions, we find ourselves in slacken in the months ahead. It is likely that the an economic environment characterized by his­ tighter consumer and mortgage credit conditions torically high rates of interest and inflation, so now existing and the already high debt obliga­ that past experience may provide only a limited tions of households will encourage some recov­ guide to prospective behavior. In order, though, ery in the abnormally low personal saving rate in to give the Congress an indication of the Federal coming quarters. The weakening of consumer Reserve’s views about the outlook for the econo­ demand would also tend to damp plant and my, the Board of Governors has assembled, in the equipment spending as softer markets tend to accompanying table, ranges that encompass the deter businesses from outlays that would add to judgements of its individual numbers about the excess productive capacity. Net exports might most likely outcomes for several key variables. rise somewhat, however, owing to the impact on import volume of the weakness in domestic spending and production. Range In the labor markets, employment may be flat Item Actual Projected this year and could well decline somewhat in the 1979 1980 goods-producing sectors. At the same time, the Change from fourth quarter growth of the labor force probably will slow, re­ to fourth quarter, percent Nominal gross national product ............ 9.9 Vh to 11 flecting in part the reduced growth of the work­ Real gross national product .................. .8 -Vh to Vi Implicit price deflator ............................. 9.0 9 to 11 ing-age population but also the usual cyclical response to slack demand for workers. The Average level in fourth quarter Employment (millions)............................ 97.7 97 to 983/4 unemployment rate, which turned upward last Unemployment rate (percent) .............. 5.9 63/4 to 8 month, is likely to remain in an uptrend over the Annual rate of change remainder of the year. in fourth quarter, percent Consumer price index ............................. 13.2 83/4 to 12 Even in such an economic environment, prog­ ress in reducing inflation will be delayed. Indeed, in the first quarter, the rise of the consumer price The Board members’ projections, it must be index could accelerate, owing in large measure to emphasized, rest on certain important assump­ the latest round of oil price increases and to the tions. It is, for example, assumed that, although lagged impact on the index of the rise in mort­ the cost of imported oil may rise moderately fur­ gage rates last fall. Throughout the coming year, ther over the course of this year, there will not be wage demands will reflect efforts of workers to a repetition of the 1979 price runup and fuel sup­ catch up with past inflation, and pressures on plies will not be disrupted. It is also assumed that unit labor costs may be intensified by cyclical overall federal spending in 1980 will generally be weakness in productivity. Energy prices prob­ in line with the administration’s current forecast ably will continue to rise rapidly, as recent in­ and that there will be no federal tax cut. creases in prices by the Organization of Petro­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

180 Federal Reserve Bulletin □ March 1980 leum Exporting Countries (OPEC) are passed the Federal Reserve’s 1980 monetary growth through to consumers and as domestic gas and ranges and the economic forecast of the adminis­ oil markets are gradually freed from controls. tration for 1980. The administration has project­ Should aggregate demand prove relatively ed a rise in nominal GNP of about 8 percent; this strong, as some think possible, inflationary pres­ figure is well within the capacity of the FOMC’s sures across the economy could prove more per­ monetary ranges to finance. sistent. For example, it must be recognized that With regard to the more distant future, the pat­ any substantial increase in defense spending tern of developments that appears likely this year beyond what already is contemplated in the ad­ would seem to be consistent with the resumption ministration’s budget could significantly alter the of moderate expansion in economic activity in economic outlook. The lag between authoriza­ 1981. However, the chances of sustaining an ad­ tion and actual federal outlay may be quite long vance over time would be greatly enhanced, in in the case of military hardware, but expecta- an environment of continued monetary restraint, tional impacts on employment, production, and if there were greater progress in reducing infla­ private spending can emerge fairly quickly. tionary pressures than is suggested by the admin­ istration’s price forecast. Such progress would depend on, among other things, continued fiscal The Administration s Short-Term prudence, moderate wage and price behavior by Economic Goals and the Relationship labor and business, an improved productivity of the Federal Reserve's Monetary performance, and maintenance of a strong dollar Objectives to those Goals in exchange markets. The President’s Economic Report, submitted to the Congress last month, lays out the following A Review of Recent Economic and short-term goals for the economy: Financial Developments Overview of Developments in 1979 Item 1980 1981 One year ago the Federal Reserve reported to Change from fourth quarter , to fourth quarter percent the Congress, as required by the Full Employ­ Real gross national product ................... -1.0 2.8 Consumer prices......................................... 10.7 8.7 ment and Balanced Growth Act, its objectives Real disposable income ............................ .5 1.1 Productivity................................................. -.3 1.3 for 1979. The Board indicated that, in light of growing pressures on resource availability, a Average level in fourth quarter Employment (millions)............................... 97.8 99.7 moderation in the rate of economic expansion Unemployment rate (percent) ................. 7.5 7.3 was essential if inflationary forces were to be contained. The pace of price advance had al­ These goals, the Economic Report indicates, ready accelerated over the preceding year, and it should be viewed as forecasts rather than as in­ was recognized that if this tendency toward fast­ dications of the administration’s desires. The ad­ er inflation were not reversed, the progress that ministration expects a mild recession, not lasting had been achieved by the November 1, 1978, much past the middle of 1980. A recovery then program to bolster the dollar on foreign exchange begins and carries through 1981. The consumer markets would be jeopardized and the dangers of price index rises much less rapidly this year than serious economic disruption would be height­ in 1979 (when it increased 13.3 percent), largely ened. Consequently, at its February meeting, the in reflection of an expected slowing in the rise of Federal Open Market Committee had set growth energy prices and of home purchase and financ­ ranges for the major monetary aggregates that ing costs. A broad price measure less affected by would be consistent with reasonable restraint of these special factors, the implicit GNP deflator, demands for goods and services in the economy. is projected to rise 9 percent in 1980, the same as The first half of 1979 saw a number of unantici­ in 1979, and to slow to only 8.6 percent in 1981. pated, negative developments. Economic activi­ There is no apparent incompatibility between ty was depressed by inclement weather, by labor Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to Congress 181 disputes, and by gasoline shortages. More criti­ fluence on aggregate private demand: a near cally, foreign oil producers posted drastic price doubling of the average cost of imported oil, increases, giving added impetus to inflation and which drained income to foreign producers and draining income from the U.S. economy. In this exacerbated underlying inflationary pressures, environment, the Board reported in July that and a posture of increasing restraint by monetary there appeared a significant threat of a mild re­ and fiscal policy to contain those pressures and cession in the months ahead. It also noted that to prevent a worsening of long-range price there was little hope of a near-term slowing of trends. inflation. Under these circumstances, the FOMC While these factors were tending to moderate reaffirmed the previous ranges for monetary growth of output and expenditure throughout the aggregates at its July meeting. past year, quarterly movements in activity were Aggregate demand actually proved stronger importantly influenced by a series of unexpected than generally expected in the second half of shocks. In the winter months, unusually severe 1979, largely because consumers displayed a sur­ weather in many parts of the nation depressed prising willingness to spend, reducing their rate activity in several sectors. In the spring, real of saving to an extraordinarily low level. Real GNP declined appreciably in response to strikes gross national product rose moderately, and the that disrupted production and transportation and overall unemployment rate remained stable. In­ to shortages of gasoline. As the strikes ended and flation, as measured by the implicit GNP defla­ gasoline lines disappeared in the summer, activi­ tor, did not abate, but neither did it accelerate, as ty snapped back smartly, especially in the retail labor costs and food prices behaved somewhat sector where auto sales were boosted by price more favorably than anticipated. incentives offered by dealers and manufacturers Taking 1979 as a whole, monetary expansion in an effort to cut back inventories. Real GNP was broadly consistent with the FOMC’s objec­ growth slowed again in the final months of the tives—with the major money stock measures year, as the special elements of strength in the falling close to or within the upper halves of the third quarter dissipated and the basic restraining Committee’s announced ranges. Meanwhile, real influences in the economy dominated. GNP growth was somewhat less rapid and infla­ Among the major sectors of the economy, the tion somewhat more rapid than might have been greatest weakness during 1979 was in residential expected last February. Energy supply and price construction and consumer durable goods. This developments provide much of the explanation pattern is typical of periods when aggregate ac­ for this adverse mix of output and inflation; they tivity levels off, particularly when there is a tight­ also represent a major peril to the satisfactory ening of financial markets, as there was last year. performance of the economy in 1980. Indeed, In 1979, however, the softness of spending on more secure energy supplies and control of infla­ consumer durable goods was exacerbated by the tion are necessary conditions for the longer- effects of gasoline price and supply develop­ range progress of our economy and must remain ments on the demand for automobiles. Consumer priority matters for public policy until they are spending on other items proved quite robust, and achieved. total personal consumption expenditures rose even though real disposable income was virtually flat. Business fixed investment, which normally Economic Activity in 1979 lags cyclical turning points, posted a small real gain in 1979; at the same time, perhaps because Economic activity registered only a small gain an economic slowdown was widely anticipated, last year, following almost four years of brisk ex­ firms maintained a tight rein on stocks, and de­ pansion. Real gross national product increased spite the problems of the auto sector, inventory about 1 percent over the four quarters of 1979; accumulation was reduced over the year. Gov­ industrial production rose a bit early in the year ernment outlays were flat in 1979, reflecting at but then edged off, finishing the year just margin­ least in part public sentiment for restraint on tax­ ally above the December 1978 level. Two fun­ es and spending. The one major area of strength damental factors exerted a pervasive damping in­ was the international trade sector; in constant- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

182 Federal Reserve Bulletin □ March 1980 dollar terms, the net export balance grew sub­ rates and lessened credit availability. Given the stantially as a result of the relatively faster ex­ already reduced liquidity of the household sector pansion of foreign economies and the continuing associated with further heavy borrowing in 1979, effects on exports and imports of past exchange a turn toward somewhat more cautious spending rate changes. patterns would not be at all surprising. Personal consumption expenditures. Real con­ Residential construction. Expenditures for sumer outlays grew IV2 percent during 1979, residential construction, in constant dollars, fell compared with 4V2 percent during 1978. Under­ about 8 percent in 1979; given the magnitude of lying the weakness in consumer spending was a the rise in interest rates over 1978 and 1979, this still sharper deceleration in real disposable in­ is a modest decline by historical standards. The come, which rose only lU percent during 1979 af­ demand for housing was sustained by underlying ter a rise of \ XU percent in the preceding year. demographic trends—including substantial popu­ Growth of nominal income slowed significantly, lation migration and rapid household forma­ and household buying power was further eroded tion—and by the growing interest in homes as an by accelerating inflation and by the rise in tax investment and as an inflation hedge. The com­ burdens related to higher social security taxes bined effects of rising house prices and mortgage and to the interaction of inflation and a progres­ interest rates caused the monthly carrying costs sive income tax. of homeownership to climb steeply, but buyers All of the advance in real consumer spending were willing to allocate an increasing share of occurred in the second half of the year when the their income to housing. At the same time, the saving propensities of households fell to histori­ potentially disruptive effects of rising market in­ cally low levels. The personal saving rate in the terest rates on mortgage credit availability were fourth quarter was about VU percent—1 percent­ considerably ameliorated by such institutional age point less than the previous post-Korean- developments as the improved ability of thrift in­ War record low. The rise in consumer spending stitutions to compete for lendable funds, most after midyear was to some extent a rebound from notably through issuance of six-month money the weak second quarter, when gasoline short­ market certificates, and the increasing use of ages had disrupted normal spending patterns and mortgage-related securities. cut demand for large fuel-inefficient cars. In re­ Private housing starts averaged 1.8 million, at sponse to falling sales and excessive inventories, an annual rate, during the first three quarters of domestic automobile producers instituted major 1979, down from the pace of 2.1 million in the sales promotion campaigns in the third quarter latter part of 1978. Starts fell to about a 1.5-mil­ and again near the end of the year. As a result, lion rate in November and December, however, sales were boosted noticeably; indeed, the higher when the terms and availability of construction selling rates may well have involved some “bor­ and mortgage credit tightened dramatically in re­ rowing” from future periods. sponse to the October 6 monetary actions by the Consumer sentiment, as measured by opinion Federal Reserve. Home sales also fell in the clos­ surveys, began to deteriorate in 1978 and wors­ ing months of the year, and prices gave some ened in 1979, reaching levels that in the past have sign of leveling off. In contrast, though, to the been associated with recessionary periods. Pre­ 1973 housing downturn, builders are not saddled vious experience with these surveys suggests with outsized inventories of unsold units, and that there should have been a cyclical downturn rental vacancy rates generally are very low. in consumer spending. That such a decline did Over the course of 1979, single-family starts not occur appears at least partly attributable to fell almost a third from the very high level of the the strength of inflationary expectations, which preceding year. Starts of multifamily units de­ encouraged a buy-in-advance mentality. In the clined only 10 percent. An increase in starts of latter part of the year, however, consumers be­ multifamily units built for sale as condominiums gan to exhibit less eagerness to purchase durable or cooperatives was more than offset by a decline goods in anticipation of future price increases in unsubsidized rental units. Building under the and to show greater concern about high interest section 8 rental subsidy program of the U.S. De­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to Congress 183 partment of Housing and Urban Development creasing inventory carrying costs. By year-end, accounted for one-quarter of all multifamily the real stock-sales ratio for manufacturing and units, about the same proportion as in 1978. trade was in the normal range, suggesting an ab­ sence of the kind of inventory imbalances that Business spending. Spending policies of busi­ frequently have aggravated recessionary tenden­ nesses were generally cautious last year as firms, cies in the past. anticipating some slowing of sales, attempted to avoid creating excess capacity or accumulating Government sector. Government outlays for unwanted inventories. Real business fixed in­ goods and services were about unchanged during vestment rose only VU percent during 1979 com­ 1979 following a moderate rise during the pre­ pared with IOV2 percent in the previous year. As vious year. Public sentiment for spending re­ has been common in the advanced stages of eco­ straint continued to affect decisionmaking by all nomic expansions, spending increases were con­ levels of government; federal fiscal policy was centrated in structures, for which there is a long additionally influenced by the need to avoid any lag between the formulation of plans and the aggravation of inflationary forces in the econo­ completion of new facilities; earlier in the expan­ my. sion, capital spending had been dominated by Real federal purchases grew about 1 percent shorter-lived producers’ durable equipment such during 1979, as higher defense spending more as trucks and fleet autos. Most of the advance in than offset slower growth of outlays in the strate­ nonresidential structures during 1979 was for gic petroleum reserve and farm price support commercial and industrial buildings. Investment programs. Total federal expenditures—including in equipment was little changed over the year, transfers—recorded a faster rate of growth in with gains in machinery and aircraft offsetting 1979 than in 1978, owing in part to a large mid­ declines in motor vehicles. year cost-of-living increase for social security re­ Given the continuing need for new capital to cipients and to higher interest payments on the improve productivity, and thereby to alleviate in­ public debt. However, inflation-induced increases flationary pressures and to support rising living in nominal incomes and previously legislated standards, the level of business fixed investment increases in social security taxes resulted in a last year left much to be desired. After allowance sizable rise in federal tax collections, and as a for replacement requirements, the net addition to result, the federal budget deficit—on a national the nation’s capital stock was small. At the end income accounts basis—declined considerably of 1979, the ratio of the stock of business fixed over the year. The high employment budget sur­ capital to the size of the labor force differed little plus, an indicator of the thrust of discretionary from the 1975 level; in contrast, the capital-labor fiscal policy, increased, signaling greater re­ ratio increased at an average annual rate of 2.7 straint on aggregate demand. percent over the decade of the 1960s, when pro­ At the state and local level, real purchases of ductivity and real income per capita grew goods and services declined marginally during rapidly. 1979 following a sizable increase a year earlier. Businesses generally attempted to maintain Construction spending was particularly de­ lean inventories last year. Total inventory invest­ pressed following federal cutbacks in grants for ment in constant dollars did accelerate during the local public works and public employment pro­ first half of the year, however, reflecting primari­ grams. Moreover, states and localities also at­ ly an inventory imbalance for large domestic tempted to limit spending by holding down em­ automobiles. After midyear, however, auto makers ployment growth; the increase in employment combined production cutbacks with price in­ during 1979 was about the same as in the pre­ centives to bring stocks back into line with sales. vious year but was considerably less than the av­ Outside of the automobile industry, businesses erage annual gains recorded earlier in the de­ generally succeeded in controlling inventory po­ cade. Despite this slowdown in the pace of sitions throughout 1979. This goal became espe­ spending, the fiscal position of states and local­ cially important toward the end of the year when ities deteriorated in 1979 as revenue growth fell short-term interest rates rose substantially, in­ far short of the gains posted in the previous year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

184 Federal Reserve Bulletin □ March 1980 Tax cuts by many governmental units and lower ing continued economic expansion abroad, the car sales and gasoline consumption limited the favorable effects of the 1977-78 depreciation on growth of income and sales tax revenues. As a the dollar value of foreign profits, and the surge result, states and localities showed their first op­ in overseas earnings of U.S. oil companies. Total erating deficit (budget position net of social in­ earnings on U.S. direct investments abroad were surance funds) in three years. on the order of $37 billion; perhaps half of these earnings were reinvested abroad and therefore International trade and payments. Net exports recorded also as an outflow of U.S. private capi­ of goods and services were the only major sector tal. Earnings of foreign direct investments in the that turned in as strong a performance in 1979 as United States also rose, but they are on a much in 1978. On a GNP basis, real net exports in­ smaller scale. creased about $8 billion last year. The U.S. mer­ chandise trade deficit, although swollen by an $18 billion increase in the cost of imported oil, Prices, Wages, and Productivity was $29 billion in 1979, $5 billion less than in 1978. In 1979, prices advanced at historically high rates, The volume of exports continued to expand primarily as a result of pressures from energy rapidly during the past year. Agricultural exports and labor costs. The fixed-weight price index for jumped to record rates in the second half as gross domestic business product, a broad mea­ drought in the Soviet Union and Eastern Europe sure of aggregate prices, rose about 10 percent boosted sales. More importantly, the volume of during 1979, a pace more than VU percentage nonagricultural exports rose about 12 percent in points above the previous year’s rate of increase. 1979; U.S. producers benefited from an im­ Other price measures increased even more: the proved competitive position brought about by fixed-weight price index for personal consump­ the depreciation of the dollar in 1977 and 1978 tion expenditures (PCE) rose 103A percent while and from relatively robust economic growth the consumer price index (CPI) increased 13V4 abroad. percent. The differences between these two in­ In contrast, U.S. import demand was damped dicators reflected mainly alternative conceptual by the sluggish performance of domestic income treatments of homeownership costs. At the pro­ and industrial production. Imports other than oil ducer level, prices of finished consumer goods rose only marginally in volume terms in 1979, al­ were up about 12V2 percent over the course of though foreign auto producers captured a record last year. share of the U.S. market as consumer prefer­ Rapid increases in energy prices, particularly ences shifted toward fuel-efficient cars. At the for petroleum products, dominated inflation de­ same time, the volume of oil imports was virtual­ velopments during the year. Imported oil priced ly unchanged from the 1978 level, with reduced under long-term contracts rose steadily, from an consumption offsetting the impact of a rebuilding official OPEC contract price of $12.91 per barrel of inventories. World oil prices, after remaining in December 1978 to prices ranging from $24 to flat for two years, jumped sharply. The average $30 per barrel one year later. Moreover, the cost per barrel of imported oil in December 1979 stockpiling of petroleum by some countries and was 87 percent above the level at the end of 1978. production cutbacks in Iran resulted in spot mar­ By the fourth quarter, U.S. oil imports were at ket prices that were considerably above official an annual rate of $75 billion, compared with a OPEC levels. At the same time, in the U.S. mar­ $43 billion rate a year earlier. ket the producer price index for crude oil was up The current account, which was in deficit by about 50 percent during 1979, reflecting both about $14 billion in each of the two previous price increases for domestic uncontrolled oil and years, was roughly in balance in 1979. Net the initiation of the administration’s decontrol receipts from service transactions, continuing program on June 1. their rapid growth of recent years, offset the mer­ The large increases experienced in petroleum chandise trade deficit. The net return on foreign prices had significant direct and indirect effects. direct investment was especially strong, reflect­ Retail gasoline prices rose more than 50 percent, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to Congress 185 and fuel oil prices advanced almost 60 percent percent in 1979. The poor performance of pro­ despite some softening in demand that was at­ ductivity reflected in part the continuation of the tributable both to conservation and to mild weak trend of recent years, associated with weather late in the year. In addition, rising ener­ sluggish growth of the capital stock, changes in gy costs led to faster price increases for a number the composition of the labor force, and other of other consumer goods, including transporta­ long-range factors. In addition, however, there tion services and residential rents. At the pro­ was a cyclical element in the drop in productiv­ ducer level, prices of goods such as industrial ity; there is normally a tendency for output per chemicals and plastics also reflected the steep hour to drop when economic expansion deceler­ runup in energy costs. ates, as employers initially are loath to lay off In contrast to energy prices, food prices in­ trained workers for what might prove a short creased less sharply in 1979 than in 1978. Over period of slack. the four quarters, consumer food prices rose 10V4 Many workers saw their wage gains out­ percent, following an ll3/4 percent increase in stripped by price increases during 1979. The lack 1978. Although beef remained in relatively short of progress in real wages is not surprising, given supply during 1979, the greater availability of the drop in productivity and the adverse termsother meats and poultry contributed to some de­ of-trade impact of the surge in foreign oil prices. celeration of food prices during the summer. Nonetheless, American workers have become Inflationary pressures persisted in sectors out­ accustomed to an upward trend in their purchas­ side energy and food. Prices of consumer goods ing power, and there are likely to be strong excluding food and energy accelerated during catchup demands this year. The administra­ 1979: the PCE fixed-weight price subindex for tion’s 1980 wage standards take this fact into ac­ such items rose 73A percent in 1979 compared count, permitting somewhat bigger wage hikes with 7 percent the previous year, and the corre­ for those workers who experienced relatively sponding CPI subindex rose at an even faster small gains in 1979. rate. Prices of capital equipment and nonresidential structures rose at a faster pace in 1979 than in 1978. Price movements in commodity Labor Markets markets were quite volatile throughout the year and reflected considerable speculative activity The demand for labor remained quite strong in related in part to international political and mili­ 1979, despite the sluggishness of output growth. tary tensions. Firms experiencing gains in sales added to their Wage increases in the nonfarm business sector payrolls, while those encountering dips in the de­ moderated very slightly to 8 percent in 1979, mand for their products evidently tended to re­ compared with 8V2 percent the year before. tain their workers—with the negative conse­ Compensation per hour, which includes fringe quences for productivity and unit labor costs benefits and employer contributions for social in­ noted in the preceding section. Over the year as a surance as well as wages, rose almost 9 percent, whole, the number of workers on the payrolls of just a shade less than in 1978. The administra­ nonfarm establishments increased 2.1 million, tion’s voluntary pay standard probably re­ less than in 1978, but nonetheless a sizable gain. strained the advance in compensation somewhat The major area of greatest strength in hiring in the face of accelerated price inflation; how­ was the service sector, in which employment ever, sectors in which cost-of-living protection is rose fairly steadily throughout the year. Manu­ prevalent, such as manufacturing, generally ex­ facturing payrolls, in contrast, declined slightly perienced the largest gains even though demand in the second half of 1979. This weakness was for labor in those sectors was relatively weak. concentrated among durable goods producers, Labor productivity—that is, output per hour especially in the motor vehicles and steel indus­ worked—declined 2lU percent in the nonfarm tries. By the end of the year, about 130,000 auto business sector. As a result, despite the slowing workers were on indefinite layoff. of compensation, the rise in unit labor costs ac­ The strength of labor demand in the service celerated sharply, from 8 percent in 1978 to IIV2 sector may help to explain the large increase in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

186 Federal Reserve Bulletin □ March 1980 the number of women in the labor force last year. demands for money and credit and correspond­ Many of the occupational groups in the service ingly intense upward pressures on interest rates. sector traditionally have had high proportions of These pressures were most evident in the second female workers. Adult women have accounted half of the year, when the Federal Reserve had to for a large percentage of labor force growth in the adopt an increasingly restrictive posture in order past several years, and this pattern continued in to keep the monetary aggregates within the 1979, when they accounted for two-thirds of the ranges set earlier and reported to the Congress. expansion both in the labor force and in total On October 6, the System took certain actions employment. aimed at providing greater assurance that its The overall labor force participation rate grew monetary objectives would be achieved. A fun­ less rapidly in 1979 so that the smaller increase in damental change was made in the System’s oper­ employment was still sufficient to hold the ating procedures, shifting the day-to-day focus of unemployment rate almost constant throughout open market operations from the federal funds the year, at about 5.8 percent. This is a level that, rate to the growth of member bank reserves.2 At given the composition of the work force and oth­ the same time, the discount rate was raised 1 per­ er characteristics of the labor market, most ana­ centage point to 12 percent, and an 8 percent lysts agree is today consistent with relatively marginal reserve requirement was applied to cer­ tight labor supplies. Certainly, the proportion of tain managed liabilities of commercial banks.3 the population employed remained at an all-time Over the course of 1979, interest rates on high during 1979, and many employers continued short-dated money market instruments such as to report difficulty in finding well qualified work­ Treasury bills, large certificates of deposit (CDs), ers. Some statistical indicators of labor market and commercial paper generally rose 2lh to 3 tautness did, however, begin to move in the di­ percentage points. In long-term debt markets, rection of greater ease as the year progressed; for taxable bond yields increased IV2 to 2 percent­ example, the share of the labor force on layoff, age points, and interest rates on conventional the unemployment rate for males 25 and over, home mortgage loans increased about 2V2 per­ and the blue-collar jobless rate all increased a bit centage points. Short-term rates have fluctuated after the first quarter. In January 1980, when around their year-end levels during the past sev­ the unemployment rate rose from 5.9 to 6.2 per­ eral weeks, but bond yields have risen to new cent, the increase largely reflected layoffs of highs, apparently at least in part a reflection of adult male, blue-collar workers. concerns about the consequences of a possible There were no significant changes over the stepup in defense spending on the federal budget past year in the structure of unemployment. The and on inflation. jobless rates for non whites, for teenagers, and for black teenagers have not improved relative to Monetary aggregates. The major monetary ag­ those for other major population groups. This gregates grew more slowly in 1979 than they had January, the nonwhite unemployment rate was in 1978.4 The deceleration was particularly ll3/4 percent, teenage unemployment was I6V4 percent, and black teenage unemployment was 2. Appendix B describes the new operating procedures. 3. The marginal reserve requirement applies to increases, 34V2 percent. The unemployment rate among above a base level, in the total managed liabilities of member nonwhites has remained about twice the level for banks, Edge corporations, and U.S. agencies and branches of whites, and teenage unemployment continues to foreign banks. These liabilities include large time deposits ($100,000 and over with maturities of less than a year), Eu­ be about three times the rate for adults. rodollar borrowings, repurchase agreements against U.S. government and agency securities, and federal funds borrow­ ings from nonmember institutions. (Federal funds borrowings from member banks, Edge corporations, and agencies and Domestic Financial Markets branches are exempt to avoid double counting for reserve re­ quirements, and a deduction is permitted against RPs for Interest rates. Market rates of interest rose U.S. government and agency securities held in trading ac­ counts.) substantially during 1979, surpassing the pre­ 4. The discussion in this section is cast in terms of the vious highs recorded in 1974. As in that earlier former definitions of the monetary aggregates since those year, sharply accelerated inflation created strong were the basis for decisions during 1979. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to Congress 187 marked in the case of M-l. The FOMC last Feb­ percentage point that had previously given thrift ruary established a range of IV2 to 4V2 percent institutions a competitive advantage in the MMC for growth of M-1 (currency and demand depos­ market. These actions were taken partly to re­ its) in the year ending with the fourth quarter of duce cost pressures on thrift institutions and 1979; this compared with an increase of l lU per­ partly to help moderate the flow of funds to de­ cent in the preceding year. As the Board in­ positary institutions so as to restrain inflationary dicated to the Congress in its initial report under pressures. the Humphrey-Hawkins Act, it was estimated M-3, which is M-2 plus deposits at thrift insti­ that growth in M-l during 1979 might be reduced tutions, rose 8.1 percent in 1979, within the as much as 3 percentage points by the shifting of FOMC’s range of 6 to 9 percent. Deposits at sav­ funds from existing demand deposits to newly ings and loan associations, mutual savings authorized ATS accounts across the nation and banks, and credit unions expanded VU percent, NOW accounts in New York State. This meant down from about IOV2 percent in 1978 but still that the observed growth rate of M-l might un­ well above rates recorded in previous periods of derstate by 3 percentage points its expansion in high market interest rates. The key to the sus­ terms of actual economic impact. tained growth of thrift institution deposits—par­ In its midyear report, the Board stated that the ticularly for savings and loans and mutual sav­ FOMC had reaffirmed the range of IV2 to 4V2 ings banks—was the MMC; however, there was percent, with the understanding that this range also a sizable increase in large-denomination would be adjusted upward to the extent that the time deposits outstanding at savings and loans. impact of ATS-NOW account shifts fell short of the original estimate of 3 percentage points. With Credit flows. Because market interest rates inflows to ATS and NOW accounts falling off rose further relative to the returns on fixed-intersharply, the FOMC employed an adjusted M-l est-ceiling time and savings deposits at com­ range of 3 to 6 percent during the remainder of mercial banks and thrift institutions, a large vol­ the year based on an expected ATS-NOW effect ume of funds was placed instead in market debt of around IV2 percent. instruments and in mutual funds or investment In any event, M-l increased 5.5 percent during trusts during 1979. Money market mutual funds 1979, and the estimated depressing effect of registered spectacular growth, their total assets ATS-NOW accounts amounted to about VU per­ increasing from $10 billion to $45 billion. (A rec­ centage points. The aggregate was approaching ord surge since year-end has boosted their total the upper bound of its range in the late summer, assets above the $55 billion mark.) However, the but its growth moderated in the closing months depositary institutions, confronted with heavy of the year. This slower growth has continued credit demands, were able to obtain the lendable into 1980. funds they desired through the issuance of ceil- M-2, which includes, in addition to M-l, bank ing-free liabilities such as large CDs, RPs, federal time and savings deposits other than large nego­ funds, and Eurodollar borrowings and, in the tiable CDs, increased 8.3 percent between the case of savings and loan associations, through fourth quarters of 1978 and 1979. This is slightly borrowing from Federal Home Loan Banks. above the FOMC’s range of 5 to 8 percent, estab­ Consequently, depositary institutions continued lished last February and reaffirmed in July. Ex­ to account for a large proportion of credit pro­ pansion of the interest-bearing component was vided to nonfinancial sectors of the economy, in strong, as small-denomination time deposits contrast to the pattern observed at other times grew at a very brisk pace, offsetting a contraction when market interest rates have been high. Com­ in passbook savings accounts. Six-month money mercial bank credit increased 12.2 percent over market certificates (MMCs) accounted for all of the year ending in the fourth quarter of 1979— the growth in small time and savings accounts; compared with the FOMC’s projection of l xh to inflows were especially strong after March, when IOV2 percent—despite a leveling off in the fall. the federal regulatory agencies eliminated (for The total volume of funds raised by domestic periods when the six-month Treasury bill rate ex­ nonfinancial sectors of the economy in 1979 was ceeds 9 percent) the interest differential of lU about the same as in 1978. Reduced borrowing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

188 Federal Reserve Bulletin □ March 1980 by governmental units approximately offset an This “financing gap” was particularly large dur­ increase in takings by business firms. Aggregate ing the first three quarters of the year; in the credit expansion was greatest in the first three fourth quarter the gap narrowed somewhat with quarters of the year, as the tightening of financial the slowing of inventory accumulation. markets that accompanied the System’s October Increases in business loans at banks and in net actions contributed to a steep drop in borrowing issuance of commercial paper accounted for by households and businesses in the fourth most of the growth in borrowing by nonfinancial quarter. enterprises. Mortgage loans rose somewhat, re­ The credit needs of the U.S. Treasury declined flecting the strength of commercial construction, markedly in 1979 owing to the reduction in the but corporate bond issuance remained around federal budget deficit. The operating budgets of the moderate 1978 level as companies were re­ state and local governments meanwhile moved in luctant to incur long-term debts at historically the opposite direction, from surplus to deficit, high interest rates. The relatively heavy reliance but their net borrowing, too, diminished. Al­ on shorter-term borrowings was reflected in a though the tax-exempt market was used much further deterioration of traditional measures of more extensively as a source of funds for resi­ balance-sheet strength. Flow of funds account dential mortgage finance, restrictive Internal estimates for nonfinancial corporations indicate Revenue Service regulations brought a virtual that the aggregate ratio of short-term debt to total cessation of the advance refunding activity that debt has reached a record high and that the ratio had swelled state and local government bond of liquid assets to current liabilities has reached a issuance in the previous year. low level seen before only in 1974. Perhaps part­ The strong demand for housing, both as shelter ly for this reason, the dropoff in business borrow­ and as an investment, and an evident desire to ing in the fourth quarter was concentrated in the maintain past spending levels in the face of de­ short-term area. clining real disposable income kept borrowing by the household sector at an historically high level during 1979. Over the first three quarters, debt Foreign Exchange Markets and the Dollar expansion exceeded income growth, and loan repayments as a percent of disposable income The dollar was quite strong on foreign exchange moved to a new high. By the latter part of 1979, markets in the first five months of 1979, following signs had begun to emerge—in data on loan de­ the tightening of U.S. money market conditions linquencies and bankruptcies—that families were and the announcement by the Treasury and the encountering some difficulty in meeting their fi­ Federal Reserve of a dollar support program on nancial obligations. November 1, 1978. The dollar rose more than 5 The heavy debt burdens may have combined percent on a trade-weighted average basis, gain­ with the higher level of interest rates to damp use ing 5lh percent against the mark, 7V2 percent of household credit in the fourth quarter. In addi­ against the Swiss franc, and 14V2 percent against tion, however, credit availability became a sig­ the yen between the end of December and the nificant factor as institutions tightened credit end of May. During this period, U.S. and foreign standards or curtailed lending in response to monetary authorities entered the markets to greater uncertainty about financial prospects and moderate exchange rate movements, reversing in reduced earnings margins. Credit supplies were the process a large portion of their 1978 inter­ most severely constrained in those parts of the vention purchases of dollars. By the end of May country with low usury ceilings; the year-end fed­ the Federal Reserve had repaid all its out­ eral legislation providing a three-month override standing swap debts to other central banks, the of state usury ceilings may provide some relief Treasury had reconstituted all of the balances it for borrowers in such areas. had raised through the issuance of notes denomi­ Borrowing by nonfinancial business firms in­ nated in foreign currencies, and the Federal creased substantially in 1979, as the growth of Reserve and the Treasury both completed repay­ outlays for inventories and fixed capital out­ ment of their pre-1971 Swiss franc indebtedness. stripped the advance in internal funds generated. In early summer, however, the dollar weak­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to Congress 189 ened, mainly in response to the failure of U.S. ceding^ection—was accompanied by a sharp ad­ inflation to moderate and to the absence of a con­ vance of the dollar on exchange markets. By certed U.S. program to solve its energy problem. mid-November, the dollar had risen about 4 per­ The dollar’s weakness intensified in early June cent on a weighted-average basis from its early and continued into September, despite a series of October lows. Foreign monetary authorities sub­ increases in the Federal Reserve’s discount rate, sequently tightened their policies to deal with a gradual rise in the federal funds rate, and re­ similar inflationary pressures abroad, and the newed heavy exchange-market intervention in dollar lost strength. From mid-November support of the dollar. through the end of the year the dollar drifted By early October the dollar had retraced all of lower in thin markets unsettled by developments its rebound of earlier in the year, and selling associated with the taking of American hostages pressures were mounting rapidly amidst acceler­ in Iran. At year-end, the dollar stood close to its ating price rises in gold and other commodities early October lows on a weighted-average basis. and other signs of a worsening in expectations of The dollar has been relatively stable in recent inflation. In these circumstances, the Federal weeks, with trading rather light in an environ­ Reserve’s announcement on October 6 of a series ment of heightened international political uncer­ of anti-inflation measures—described in the pre­ tainties. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

190 Treasury and Federal Reserve Foreign Exchange Operations This 36th joint report reflects the Treasury-Fed­ many commodity and real estate markets on the eral Reserve policy of making available addition­ expectation of more inflation to come. As the de­ al information on foreign exchange operations mand for money had increased in the United from time to time. The Federal Reserve Bank of States, the Federal Reserve had acted to raise New York acts as agent for both the Treasury interest rates, but the growth of the monetary and the Federal Open Market Committee of the aggregates remained uncomfortably high and Federal Reserve System in the conduct of for­ market participants were concerned that more eign exchange operations. restraint might be needed. Nevertheless, since This report was prepared by Scott E. Pardee, the U.S. economy was widely believed to be Manager of Foreign Operations of the System moving into recession, market participants open­ Open Market Account and Senior Vice President ly questioned whether the Federal Reserve in the Foreign Function of the Federal Reserve would be in a position to continue to tighten Bank of New York. It covers the period August monetary policy further in order to deal with in­ 1979 through January 1980. Previous reports flationary expectations. have been published in the March and Septem­ By contrast, the monetary authorities of other ber Bulletins of each year beginning with Sep­ countries were believed to have scope to tighten tember 1962. further. Economic activity was expanding more rapidly in most other countries, and monetary The October 6 measures by the Federal Reserve policies were becoming increasingly restrictive had a profound effect on exchange markets for in response to buoyant domestic credit demands the U.S. dollar. In addition to a rise in the dis­ count rate and the imposition of a marginal re­ 1. Federal Reserve reciprocal currency serve requirement on managed liabilities, the arrangements Federal Reserve announced that it would place Millions of dollars greater emphasis on the supply of bank reserves and less emphasis on the federal funds rate in Amount of facility Institution seeking to moderate the growth of money and Jan. 1,1979 Jan. 31,1980 credit in the U.S. economy. These measures Austrian National Bank ................... 250 250 alleviated many of the concerns that had National Bank of Belgium ................ 1,000 1,000 Bank of Canada ................................... 2,000 2,000 built up in the market and helped the dollar National Bank of Denmark ............. 250 250 weather the numerous political and economic Bank of England ................................ 3,000 3,000 Bank of France ................................... 2,000 2,000 shocks that occurred over the rest of 1979 and German Federal Bank ..................... 6,000 6,000 early 1980. Bank of Italy ..................................... 3,000 3,000 Bank of Japan ..................................... 5,000 5,000 Previously, the dollar had come under very Bank of Mexico ................................... 360 7001 heavy selling pressure as market psychology be­ Netherlands Bank ............................. 500 500 Bank of Norway ................................ 250 250 came increasingly bearish. Last year’s upsurge Bank of Sweden ................................ 300 300 Swiss National Bank ........................ 4,000 4,000 in international oil prices was already adding Bank for International Settlements massively to our oil import bill, slowing the prog­ Swiss francs/dollars ..................... 600 600 ress in improving our trade and current-account Other authorized European currencies/dollars ..................... 1,250 1,250 balances, and exacerbating domestic inflation. Total ..................................................... 29,760 30,100 Many other prices were also advancing, and speculative buying pressures had erupted in 1. Increased by $340 million effective Aug. 17, 1979. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 191 2. Foreign exchange operations under reciprocal currency arrangements, January 1, 1979-January 31, 1980 Millions of dollars equivalent; drawings, or repayments (—) Federal Reserve System activity1 Commitments 1979 1980 Commitments Transactions with Jan. 1, 1979 Jan .31, 1980 Q1 Q2 Q3 Q4 January 334.2 790.8 3,024.0 448.5 200.6 1 German Federal Bank ............................. 4,434.2 j 2,630.92 -1,762.8 -3,020.8 -292.4 -913.4 -742.1 ( Bank of Japan ............................................. 106.5 -106.5 0 0 0 0 0 74.1 32.6 63.5 12.5 22.7 1 Swiss National Bank ................................ 786.3 j 0 -860.5 0 -67.9 -44.2 -22.7 j 408.4 826.9 3,087.5 461.0 223.3 1 Total .......................................................... 5,327.0 j 2,729.8 -3,020.8 -360.2 -957.7 -764.8 j 2,630.92 Activity by foreign central banks and the BIS3 Outstanding 1979 1980 Outstanding Bank drawing on System Jan. 1, 1979 Jan. 31, 1980 Q1 Q2 Q3 Q4 January Bank for International Settlements4 (against German marks) .......................... 0 0 I1 31.0 0 39.0 49.0 1 0 | -31.0 0 -39.0 -49.0 ( U.S. Treasury activity5 Commitments 1979 1980 Commitments Jan. 1, 1979 Jan.31,1980 Transactions with Q1 Q2 Q3 Q4 January 0 0 337.7 German Federal Bank ............................. 889.4 j 0 0 1 ° col cJo- )k 0 -337.7 1. Because of rounding, details may not add to totals. Data are on a value-date basis with the exception of the last two columns, which include transactions executed in late January for value after the reporting period. 2. Outstanding commitments as of January 31, 1980, also include revaluation adjustments resulting from swap renewals, which amounted to $130.1 million for drawings on the German Federal Bank renewed during 1979 and January 1980. 3. Data are on a value-date basis. 4. BIS drawings and repayments of dollars against European currencies other than Swiss francs to meet temporary cash requirements. 5. Because of rounding, details do not add to total. Data are on a value-date basis. 6. Repayments include revaluation adjustments from swap renewals, which amounted to $11.3 million for drawings on the German Federal Bank renewed during the first quarter. and to inflationary pressures arising out of the es­ change markets might have broken down. Mar­ calation of international oil prices. With interest ket concerns about the outlook for international rates rising in nearly all industrial countries, mar­ monetary stability were reflected in the runup of ket participants began to fear that the monetary prices in gold and other commodities. authorities of major countries were in com­ In fact, the central banks were in close consul­ petition with each other in pressing for even tation throughout that time in an effort to deter­ higher interest rates. In addition, market partici­ mine what could be done individually and jointly pants became concerned that the authorities of to relieve the strains that had built up in the ex­ some countries might act to blunt the effects of change markets. When selling pressure increased higher oil prices on domestic price levels through on the dollar in September, the U.S. authorities promoting appreciations of their currencies at first intervened heavily, operating mainly in against the dollar. The swiftness of the authori­ German marks but also in Swiss francs. The Ger­ ties of many countries to intervene in support of man and Swiss central banks, as well as others, their currencies, even those that had appreciated also bought sizable amounts of dollars in their sharply in earlier months, reinforced this view. markets. When speculative pressures erupted By September, market participants questioned within the European Monetary System (EMS), whether central bank cooperation in the ex­ central banks participating in that arrangement Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

192 Federal Reserve Bulletin □ March 1980 U.S. Treasury securities, foreign currency denominated1 Millions of dollars equivalent; issues, or redemptions (—) 1979 1980 Commitments, Commitments, Issues Jan.1,1979 Jan. 31, 1980 Ql Q2 Q3 Q4 January Government series Swiss National Bank 600.4 -597.2 -3.2 0 0 0 0 Public series Switzerland ........... 0 1,203.0 0 0 0 0 1,203.0 Germany ................ 1,595.2 1,351.5 0 0 1,118.9 1,168.0 5,233.6 Total ..................... 2,195.6 -597.2 -3.2 0 } 6,436.6 2,554.5 0 0 1,118.9 1,168.0 j 1. Data are on a value-date basis. increasingly used currencies other than the dollar Federal Reserve’s new policy approach, helped in support operations so as not to aggravate pres­ shield the dollar against the various political sures on the dollar. By late September, however, shocks that soon followed. On November 4, Iran­ it became clear that the dimensions of the flows ian militants seized the U.S. Embassy in Tehe­ of funds out of the dollar were too large to be ran and held its diplomatic personnel hostage. contained by intervention alone. The U.S. au­ On November 14, the Iranian authorities threat­ thorities scaled back their intervention, while ened to withdraw funds from U.S. banks and to new measures to combat inflation in the United repudiate debts. In response, the United States States were being discussed and while senior blocked Iranian official assets in U.S. banks. U.S. officials reviewed the matter of policy coor­ Then late in the year the Soviet Union intervened dination with their counterparts in other major militarily in Afghanistan. There were worrisome countries. Although the dollar continued to de­ economic developments as well. With the do­ cline against most major currencies through the mestic economy proving much more buoyant end of September, the market began to sense that than expected, inflation in the United States con­ something was in the works, and early in Octo­ tinued to increase. A further runup in oil ber selling pressure on the dollar evaporated on prices by the Organization of Petroleum Ex­ expectations that major policy action by the porting Countries (OPEC) and a mind-boggling Federal Reserve was imminent. surge of prices in the markets for gold, silver, The October 6 measures were followed by and other precious metals also occurred. strong expressions of support by major foreign As these various uncertainties piled up over central banks. Although interest rates continued the year-end, bearish sentiment toward the dollar to advance in several other countries, in few in­ deepened once again, and dollar rates began to stances did they rise by as much as the increase decline. But selling pressures on the dollar did in market rates in the United States over the next not cumulate, as before. In part, traders re­ few weeks. Moreover, as the dollar gradually mained cautious in the face of rapid-fire and un­ firmed, foreign central banks sought to avoid the predictable events. Moreover, on those occa­ impression that they would, at that critical junc­ sions in late 1979 and early 1980 when selling ture, impede its recovery. In the exchange mar­ pressures threatened to build, the U.S. authori­ kets, traders reacted cautiously at first but were ties, in close coordination with the German and soon influenced by the sharply higher interest Swiss central banks, intervened forcefully and rates that emerged in the domestic and Eu­ quickly to restore two-way trading. By early rodollar markets, providing for more favorable 1980, the very fact that the dollar was weathering interest differentials. Basically, the dollar had be­ so many uncertainties began to be taken as a pos­ come a much more attractive medium for invest­ itive sign. The market then focused greater atten­ ment and a very expensive currency in which to tion on other countries’ problems, including carry a short position. adverse shifts in their trade and current-account The pull of interest rates, coupled with the balances, sharply rising prices, and dangers to market’s generally favorable response to the them arising out of the Iranian and Afghan situa- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 193 4. Net profits and losses (-) on U.S. Treasury and government securities were being liquidated. To Federal Reserve current foreign exchange augment balances, the U.S. Treasury on two operations1 separate occasions issued medium-term mark- Millions of dollars denominated notes in the German capital mar­ U.S. Treasury ket. The first in November, with maturities of 272 Period Federal Exchange and 3V2 years, was for $1,118.9 million equiva­ Reserve General Stabilization lent of marks. The second, in January, also with Account Fund maturities o il112 and 372 years was for $1,168.0 1979-Q1 ........................ .7 5.7 17.3 million equivalent. Q2 ........................ 30.8 4.6 21.7 Q3 ........................ -12.3 63.4 37.0 Also during the period the Federal Reserve’s Q4 ........................ -29.8 20.8 7.5 reciprocal swap arrangement with the Bank of 1980—January ................ -22.1 0 61.2 Valuation profits and Mexico was increased by $340 million to $700 losses on outstanding assets and liabilities million. as of Jan. 31, 1980 -16.3 -375.0 -296.3 As indicated in table 4, the Federal Reserve 1. Data are on a value-date basis. recorded losses on current operations and on the valuation of balances. The Treasury recorded tions. By the month-end, dollar rates were firm­ profits on balances and losses on the valuation of ing against major currencies. balances. On balance for the six months, the U.S. dollar declined a net IV2 to 5 percent against the Ger­ man mark and currencies linked to the mark in German Mark the EMS, by 13U percent against the Swiss franc, and by 1 percent against the pound sterling. By Coming into the period, the upturn in the Ger­ contrast, the Japanese yen declined against the man economy was in full swing. Strong con­ dollar by 9 percent. The Canadian dollar ad­ sumption, a surge in business investment, and a vanced by 1 percent against the U.S. dollar. boom in construction made it likely that the gov­ In intervention during the six-month period, ernment’s 4 percent growth target for 1979 would the Federal Reserve and the Treasury sold a total be met, if not exceeded. But progress in achiev­ of $5,415.8 million of German marks and $67.0 ing faster growth was accompanied by escalating million of Swiss francs. System operations en­ inflation. The explosion in imported oil and raw tailed drawings under the Federal Reserve swap materials prices, together with the strength of the lines in the amount of $2,296.0 million equivalent domestic recovery, had generated a sharp rise in of marks from the German Federal Bank and wholesale and consumer prices. At the same $67.0 million of Swiss francs from the Swiss Na­ time, the current-account surplus had virtually tional Bank. The drawings on the German Feder­ disappeared as higher oil import costs and the al Bank started at a level of $2,053.3 million in fast pace of economic activity led to a sharp ex­ early August, reached a peak of $3,746.0 million pansion of imports. To contain inflationary pres­ on October 4, and were reduced to $2,630.9 sures, the German authorities progressively million by January 31, 1980, with repayments tightened monetary policy, leading to a sub­ throughout the period stemming from mark ac­ stantial increase in domestic interest rates that quisitions from correspondents. Use of the swap outpaced increases in the United States and else­ line with the Swiss National Bank was more spo­ where. As the exchange market focused on radic, with peak drawings of $44.2 million on Oc­ monetary conditions in Germany relative to condi­ tober 1; all drawings in Swiss francs were repaid tions in other major industrial countries, the by January 31, 1980. mark came into strong demand, particularly in U.S. Treasury intervention in marks was fi­ June and July. Heavy intervention by the U.S. nanced out of previously acquired balances. The and German authorities blunted the mark’s rise Treasury’s $337.7 million equivalent drawing and against the dollar and was partly reflected in an repayment on the German Federal Bank swap increase in the Federal Reserve’s outstanding line early in the period reflected temporary fi­ swap debt with the German Federal Bank to nancing, while Treasury holdings of German $2,053.3 million equivalent of marks on July 31. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

194 Federal Reserve Bulletin □ March 1980 In August, the exchange markets settled down intervened forcefully once again, selling sub­ and the mark eased off its highs to trade around stantial amounts of marks almost daily during DM 1.83 against the dollar. The German authori­ September, largely in the New York market. The ties then moved to absorb some of the liquidity German Federal Bank also intervened as a buyer generated by the summer’s intervention, lest it of dollars in Frankfurt. On September 19, the aggravate inflationary pressures at a time when Federal Reserve raised the federal funds rate fur­ domestic credit expansion was increasing sharp­ ther and hiked the discount rate V2 percentage ly. The German Federal Bank introduced quan­ point to 11 percent. But the fact that the Board of titative limits on commercial banks’ Lombard Governors had approved the discount rate in­ borrowings, engaged in foreign exchange swaps crease by a split vote of 4 to 3 did little to alle­ against dollars, entered into open-market pur­ viate the market’s concern about the U.S. re­ chases of marks against shares of U.S. Treasury solve to combat inflation, and pessimism toward bills held at the central bank, and otherwise sig­ the dollar deepened. naled its intention to bring down the growth of In this environment, the upward adjustment of central bank money to its target range of 6 to 9 the mark by 5 percent against the Danish krone percent. These various operations provided a fur­ and by 2 percent against other EMS currencies ther boost to German interest rates. Moreover, over the September 22-23 weekend relieved ten­ inasmuch as a substantial reflux of funds out of sions within the joint float, but not the pressures marks back into dollars had not materialized, against the dollar. Meanwhile, spot oil prices many in the market interpreted the German Fed­ were again vaulting upward, and several oil-pro­ eral Bank’s actions as indicating an unwilling­ ducing countries raised their official sales prices ness to let the mark depreciate should the dollar above limits set by OPEC last June. With the dol­ come into demand. By contrast, in the United lar declining again, fears mounted that the oil States the monetary aggregates were expanding producers would abandon dollar oil pricing in fa­ rapidly and inflation continued to accelerate at vor of a basket of currencies, including the mark, double-digit annual rates. The Federal Reserve or even demand payment for oil in currencies increased the discount rate to IOV2 percent and other than the dollar. More broadly, all com­ moved the federal funds rate higher. Nonethe­ modities markets were hit by a speculative fever less, in view of considerable talk of an impending as asset holders shifted from 4 ‘paper’ ’ currencies recession in the United States, market partici­ into tangible assets—particularly into gold, pants increasingly questioned whether monetary whose price soared to $447 per ounce early in policy would be tightened sufficiently to contain October. Corporate treasurers, investment man­ strong inflationary forces. agers, and central banks, all seeking to diversify By early September the mark was again in their portfolios, shifted a massive amount of strong demand against the dollar. Bidding for funds into the mark from the dollar. With the marks also gained momentum against European strength and diversity of these pressures raising currencies amid fears that the currencies of most concerns about international financial stability, other EMS members, who might find it difficult the U.S. authorities scaled back their inter­ to match the tightening of monetary policy taking vention operations in late September while pol­ place in Germany, would be unable to keep pace icy discussions were being held. By October 2, with the mark’s rise. Market participants there­ these pressures had propelled the mark to DM fore came to expect that the mark would be re­ 1.7250—near its record highs—about 6 percent valued within the EMS as part of an upcoming above early-August levels and some 11 percent technical review of the new joint float. The Ger­ above the levels of mid-June. man Federal Bank and other participating central In the period from early August through early banks sold progressively larger amounts of October, the Trading Desk sold $4,169.0 million marks to maintain exchange rate limits within the equivalent of marks, shared about evenly be­ EMS. Even so, the demand for marks was suffi­ tween the Federal Reserve and the U.S. Treas­ ciently powerful to pull up EMS currencies as a ury. Most of the Federal Reserve’s mark inter­ group against the dollar. vention was financed by drawings of $1,844.1 In these circumstances, the U.S. authorities million equivalent on the swap line with the Ger­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 195 man Federal Bank, bringing total drawings to initially unsure about the implications of the new $3,746.0 million after allowing for further repay­ policy procedures, participants reacted positive­ ments of $177.9 million and revaluation adjust­ ly on balance to the change in U.S. monetary ments from swap renewals. The remainder of the policy and to the rise in dollar interest rates. In System’s mark sales and all the Treasury’s inter­ fact, the dollar firmed and the mark fell back to vention were financed out of balances. The trade for several weeks around DM 1.79-DM 1.80 Treasury’s $337.7 million equivalent drawing and without intervention from the U.S. or German repayment on the German Federal Bank swap authorities. line reflected temporary financing, while Treas­ Meanwhile, with the German economy contin­ ury holdings of German government securities uing to expand even more rapidly than expected, were being liquidated. Meanwhile, net purchases money market rates had again risen rapidly. On of dollars together with the sizable intervention October 31, the German Federal Bank raised in EMS currencies boosted Germany’s foreign both the discount and Lombard rates by 1 per­ exchange reserves $3.7 billion from the end of centage point to 6 and 7 percent respectively so July to $47.0 billion by the end of September. as to eliminate distortions in the banking system With the mark now approaching the levels and bring official rates in line with those pre­ reached just before the November 1, 1978, U.S. vailing in the market. But, although the authori­ policy package, the exchange markets were alive ties also increased rediscount quotas by DM 4.4 with rumors of a new support program for the billion to prevent liquidity from tightening too dollar. In the days surrounding the Hamburg far, short-term German market interest rates meeting between U.S. and German officials and moved higher, eroding part of the increased in­ the annual meetings of the International Mone­ terest differential favorable to dollar-denominated tary Fund (IMF) and the World Bank in Bel­ assets. With respect to fiscal policy, the gov­ grade, Yugoslavia, there was increasing dis­ ernment’s draft 1980 budget also moved toward cussion of the need for improved monetary restraint. The central government’s net borrow­ policy coordination between the United States ing requirement was cut to less than DM 30 bil­ and Germany and, in particular, for the United lion in 1980 through a virtual freeze on real States to take more effective action to bring its spending coupled with higher tax revenues. inflation under control. When the market learned After mid-November, new shocks emanating of Chairman Volcker’s early return to Washing­ from the revolutionary upheaval in Iran upset the ton from Belgrade, the mark rate dropped back tenuous balance in the exchange markets. The 13/4 percent from its peak to DM 1.7555 on ex­ seizure by Iranian militants of American diplo­ pectations of dramatic new policy action, and the matic personnel at the Embassy in Teheran pro­ U.S. authorities had no further need to inter­ duced a crisis in U.S.-Iranian relations, with vene. adverse implications for the already fragile world On Saturday, October 6, the Federal Reserve oil market. The Iranian government announced announced wide-ranging policy measures aimed plans to withdraw its foreign exchange reserves at bringing the growth of money and credit under from U.S. banks, threatened to repudiate its for­ better control and thereby dampening inflation­ eign debts, and called on OPEC members to ary forces. The actions included an increase of abandon the dollar as a reserve and transactions 1 percentage point in the discount rate to 12 per­ currency. Accusations that the United States cent and the imposition of a marginal reserve was involved in the attack on the Grand Mosque requirement of 8 percent on increases in managed in Mecca, Saudi Arabia, incited violent antiliabilities. In addition, the System announced that American demonstrations in Pakistan and Libya, it would place greater emphasis on the supply of and the Ayatollah Khomeini remained adamant bank reserves in its open market operations and in calling for the Shah’s return to Iran before re­ less emphasis on the federal funds rate in seeking leasing the U.S. hostages. During all of this, the to reach its monetary aggregate objectives. Inter­ U.S. government sought in various ways to re­ est rates in the U.S. and Eurodollar markets solve these challenges without the use of force moved up sharply in the days following these and, to assure that claims of the United States measures. Although the exchange markets were and its citizens on Iran would be protected, Pres­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

196 Federal Reserve Bulletin □ March 1980 ident Carter blocked all official Iranian assets in equivalent of mark swap debt through purchases U.S. banks, their foreign branches, and sub­ from correspondents so that total drawings out­ sidiaries. standing on the swap line with the German Fed­ In the face of these developments, sentiment eral Bank stood at $3,126.4 million equivalent at toward the mark turned bullish. The exchange the year-end. The Treasury’s intervention was fi­ markets focused on the dangers to the strategic nanced out of Exchange Stabilization Fund (ESF) and financial position of the United States in the balances that were augmented by the proceeds Middle East and on the dangers to the dollar’s of a new Treasury issue of mark-denominated role as a reserve asset. Concern over inter­ securities floated on the German capital market national oil prices was further heightened when on November 12, 1979. The issue comprised OPEC members, at their semiannual meeting in $451.0 million equivalent of 2V2-year securities Caracas on December 17, raised official sales at 8.55 percent and $667.9 million equivalent of prices another 30 percent, bringing the oil price 3V2-year securities at 8.5 percent. increase over the year to about 100 percent. So Coming into the new year, the buildup of senti­ sharp a rise in the price of oil was particularly ment favoring the mark was reinforced by the damaging for a country as heavily dependent as Soviet Union’s military intervention in Afghani­ Germany on imports for its energy needs and stan. The shift in the Middle East strategic bal­ was likely to drive the current account deeply in­ ance against the United States raised the possi­ to deficit. But, given the prevailing market psy­ bility that, with the Soviet Union better posi­ chology, the OPEC decision was interpreted tioned to exploit instabilities in the vital Per­ bearishly for the dollar since it reinforced the sian Gulf area, Middle Eastern holders of dollars market’s pessimism about the U.S. inflation out­ would accelerate their purchases of marks and look. Nonetheless, a sustained surge of buying other currencies. Moreover, with oil prices still pressure on the mark did not materialize, in part rising even after the substantial OPEC price hike because traders became increasingly reluctant to in December, there was little hope for a nearassume new positions in such an unpredictable term reduction of U.S. inflation. All of this con­ political atmosphere, particularly ahead of the tributed to an unsettling rise in the price of gold year-end. As a result, the market was thinner and to $660 an ounce at the onset of the month and less resilient than normal, and the mark tended to led to widespread demand for the mark, propel­ ratchet unsteadily upward. At times commercial ling the rate to as high as DM 1.6996. But as soon sales, for instance, by large U.S. multinationals as trading had resumed in the new year, and on repatriating funds slowed the mark’s rise. On several occasions thereafter, the U.S. and Ger­ other occasions when upward pressure on the man authorities intervened swiftly and forcefully mark threatened to gather momentum, the U.S. to steady the rate in their own markets and over­ and German authorities intervened. Nonethe­ night in Hong Kong and Singapore. less, by the year-end the mark had advanced 4lU This open and coordinated intervention had a percent from mid-November levels back to DM strong impact on market psychology and cast 1.7250. doubt on the mark’s continued appreciation. At After mid-November the U.S. and German au­ the same time, the implications of the Afghani­ thorities resumed intervening once again, but stan invasion were reassessed in a way that was their operations were relatively modest, com­ less favorable for the mark. The continuing dete­ pared with previous months. In the six weeks rioration in great power relations underscored through the end of December, the Trading Desk Western Europe’s exposure in case of further sold $716.5 million equivalent of marks, includ­ Soviet aggression. These uncertainties led to a ing $396.1 million equivalent for the System and further rise in the price of gold to a record $875 $320.4 million equivalent for the Treasury. The an ounce. But, in the exchange markets, portfo­ System’s mark sales were largely financed by lio shifts into marks slowed. Indeed, some capi­ drawings of $251.3 million equivalent on the tal started to flow out of Germany as market par­ swap line with the German Federal Bank. How­ ticipants sought safer havens for their funds, ever, between early October and the year-end, with a substantial part of this flow coming into the System was also able to repay $939.6 million dollars. Moreover, the recent round of oil price Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 197 increases, retroactive to January 1, generated ished during January through the placement of some transaction demand for dollars on the part $1,168.0 million equivalent of mark-denominated of several oil companies. In these circumstances, bearer bonds in the capital market in Frankfurt, the swing of the German current account into a comprising a $560.6 million equivalent 2V2-year deficit of DM 9 billion for 1979 began to show security at 8.5 percent and a $607.4 million through in the exchanges, and traders found they equivalent 3V2-year security at 8.45 percent. Re­ had fewer outlets than previously for the marks flecting the repayment of swap debt by the U.S. they had accumulated. As dealers moved to cov­ authorities and by the German Federal Bank’s er their positions, the mark moved lower to partners in the EMS, as well as the conversion of around DM 1.7250 by midmonth. capital exports by the German Federal Bank, In the final weeks of January, as the exchanges Germany’s foreign exchange reserves declined became more settled, market participants fo­ $1.2 billion during January to $46.2 billion by the cused more closely on changing economic condi­ end of the month. However, for the six-month tions in Germany. Inflation was accelerating rap­ period as a whole, Germany’s reserves rose $2.9 idly just ahead of key wage negotiations. billion on balance. Moreover, with the oil import bill continuing to swell and with the German economy slowing less rapidly than the economies of its major trading Swiss Franc partners, there were expectations that the current-account deficit would widen further this With the Swiss franc no longer appreciating in year. These concerns began to weigh on the the exchanges during 1979, rising international mark at a time when the dollar was being sup­ oil and raw materials prices were quickly trans­ ported by expectations that U.S. interest rates mitted to the domestic economy, and inflation in would move higher. Increased defense ex­ Switzerland accelerated rapidly. The rise in oil penditures in the President’s budget, new evi­ prices also boosted imports at a time when ex­ dence that the U.S. economy had not weakened port growth was virtually stagnant, leading to a as expected, and statements by U.S. administra­ narrowing of the current-account surplus. More­ tion officials before the Congress, as well as by over, economic activity remained sluggish, in Chairman Volcker, that U.S. interest rates sharp contrast to the buoyant economic picture would not come down before inflation declined in Germany, and domestic interest rates did not all supported this view. As a result, the mark keep pace with the rise in interest rates abroad or edged lower to close the period at DM 1.7414, for with the pickup in domestic inflation. a net gain of 5lU percent over the six-month peri­ In these circumstances, the franc tended to od under review. come on offer in August as it had in earlier peri­ During January, the U.S. authorities inter­ ods during the year, especially against the Ger­ vened to sell $290.5 million equivalent of marks man mark, trading at SF 1.6550 early in the peri­ for the, System, financed in part by drawings of od. The Swiss authorities took advantage of the $200.6 million equivalent on the swap line with relative stability of the dollar to sell sizable the German Federal Bank, and $239.9 million amounts of dollars, thereby avoiding a deprecia­ equivalent of marks for the Treasury. Mean­ tion in the franc that would exacerbate inflation­ while, the Trading Desk took advantage of fur­ ary pressures, while also absorbing excess li­ ther opportunities to buy marks through non- quidity in the domestic market. Meanwhile, the market transactions with correspondents, which Federal Reserve bought francs mostly from the were used to repay swap debt. Thus, by the end Swiss National Bank to repay the remaining of January, the System’s outstanding swap in­ $31.7 million equivalent of swap debt incurred debtedness to the German Federal Bank declined earlier in the summer. some $495.5 million equivalent net over the During September the sharp deterioration in month to stand at $2,630.9 million equivalent af­ sentiment toward the dollar was reflected in up­ ter allowing for revaluation adjustments from ward pressure on the Swiss franc. But, with in­ swap renewals. The Treasury financed its mark terest differentials against the franc having wid­ sales out of balances, which were further replen­ ened, participants shifting funds out of dollars Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

198 Federal Reserve Bulletin □ March 1980 moved more heavily into currencies like the Ger­ where, for previous years, price increases had man mark that appeared to have greater upward been close to 1 percent per year. Domestic mon­ leeway and offered a higher rate of return. Even ey supply growth remained worrisome, and there though the franc did not lead the generalized rise were some fears of a pickup in wage inflation. in the European currencies against the dollar, the Pay raises during the winter wage round—al­ Swiss National Bank intervened forcefully both ready clouded by a shortage of labor in the con­ in Zurich and in New York through the Federal struction sector—threatened to escalate sharply Reserve Bank of New York as agent to moderate if industrial workers’ demands to be fully com­ the franc’s advance. In addition, during Septem­ pensated for the rising price of oil were success­ ber and early October, the Federal Reserve sold fully negotiated. Even so, the Swiss authorities $44.2 million equivalent of Swiss francs, fi­ held off intervening in the exchanges to avoid nanced by drawings on the swap line with the jeopardizing the dollar’s recovery following the Swiss National Bank. October 6 monetary measures. Instead, the Largely reflecting these operations, Switzer­ Swiss National Bank allowed foreign exchange land’s foreign exchange reserves, after declining swaps executed in the third quarter to mature, in August, rose during September to $14.7 bil­ thereby draining liquidity from the Swiss money lion, up $1.2 billion from levels at the end of July. market. The central bank then followed up by By October 2, the franc spot rate had risen 73A raising, on November 2, its discount and Lom­ percent above the range of early August to a high bard rates by 1 percentage point to 2 and 3 per­ of SF 1.5410. At this point, as rumors of a dollar cent respectively and further liberalized re­ support package began to spread through the ex­ straints on capital inflows by reducing the changes, many participants started covering negative interest charge on nonresident deposits their long franc positions, and in subsequent from 10 to 2.5 percent per quarter. days the franc slipped back to around SF 1.5750. But with foreign interest rates still on the rise, Following the October 6 announcement of pol­ particularly in Germany, interest differentials icy measures aimed at curbing U.S. money and remained highly adverse to franc-denominated credit expansion, the Swiss franc fell back more assets, and the franc spot rate continued to weak­ rapidly against the dollar than against the mark. en. In response, the authorities removed entirely The rise first in dollar-based interest rates and the negative interest charge on nonresident franc then in German money market rates widened the deposits on December 1, supported the franc in already adverse interest differentials against the exchanges by selling German marks in the franc-denominated assets. Moreover, the public forward market against receipts coming due in authorities were having difficulty borrowing in 1980 and 1981, and provided a smaller-than-usual the Swiss capital market at the prevailing low amount of liquidity to the commercial banks at level of long-term interest rates. Expectations the month-end. These measures provided a boost developed that Swiss interest rates would also to the franc, which rebounded in early December firm, and, as the capital market weakened, the to trade around SF 1.59 against the dollar. incentive increased for bondholders to shift Meanwhile, the international crisis touched off funds out of Switzerland to avoid prospective by the Iranian seizure of American hostages at capital losses. By the end of October the franc the U.S. Embassy in Teheran was creating con­ declined another 53U percent to SF 1.67 against fusion and uncertainty in the exchanges. At the dollar and 2XU percent vis-a-vis the mark. times, the franc benefited from expectations that During this time, the Federal Reserve was able certain Middle Eastern oil producers would di­ to acquire sufficient Swiss francs from cor­ versify heavily out of dollars. But these inflows respondents to liquidate outstanding swap debt did not cumulate. Moreover, in the midst of tur­ with the Swiss National Bank. bulent events, most traders were hesitant to take The Swiss authorities were concerned about positions that would affect their year-end ac­ the decline of the franc in the exchanges. Infla­ counts. As the market thinned out during De­ tion had quickened to 5 percent on a year-on- cember, the franc responded mainly to the ebb year basis, a dramatic upsurge for a country and flow of commercial orders. On balance, sell Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 199 orders mainly from U.S. and German corpora­ spond to the earlier appreciation of the yen and tions repatriating dividends ahead of the year- to various administrative programs designed spe­ end outweighed the demand for francs by Swiss cifically to reduce the trade surplus. As a result, corporations, and the franc eased lower toward the current account swung from a record $16.5 the year-end. billion surplus in 1978 to near balance in the first Early in January, the franc was caught up in a half of 1979, and into progressively deeper deficit wave of demand as part of the market’s initial thereafter. The large deficit on the capital ac­ response to the Soviet invasion of Afghanistan. count also continued during the first half of the In response, the Federal Reserve sold $22.7 mil­ year, and the implication of the oil shortage for lion equivalent of Swiss francs, financed by Japan weighed on the yen. The exchange mar­ drawings on the swap line with the Swiss Nation­ kets reacted to these developments in the spring al Bank, while the Swiss authorities bought dol­ and summer, and from the beginning of the year lars in Zurich and in New York through the to the end of July the yen declined a net IOV2 Federal Reserve Bank of New York as agent. percent against the dollar. During that time the This intervention helped blunt the franc’s rise. Bank of Japan had intervened in substantial vol­ Moreover, the continuing increase in Swiss ume and foreign exchange reserves plummeted inflation was still of concern, and market par­ by $8 billion to $21.0 billion. ticipants were keenly aware that interest dif­ By the opening of the period under review, the ferentials adverse to the franc had widened thrust of Japanese economic policy was shifting further. from stimulus to restraint. The authorities were Once the mark started to ease against the dol­ concerned that the yen’s depreciation and the lar, the franc declined even faster to end the six- sharp rise in prices of oil and other imported com­ month period under review at SF 1.6325, up VU modities were adding to inflationary pressures, percent on balance against the dollar. Against the particularly on the wholesale level. Consequently, German mark, however, the franc declined Vh government investment expenditures—the main percent over the six-month period. By the end of force sustaining the domestic expansion in ear­ January, the Federal Reserve was able to liqui­ lier years—were trimmed back to ease capacity date in full its swap debt with the Swiss National constraints in the construction sector and to Bank, using the proceeds of interest earnings on combat the growth of the budget deficit. More­ franc-denominated balances as well as some over, monetary policy turned less accommoda­ francs acquired in the market. Switzerland’s for­ tive as signaled by a full-percentage-point in­ eign exchange reserves declined $1.6 billion from crease in the Bank of Japan’s discount rate to 574 September levels to $13.1 billion on January 31. percent in late July. These actions, particularly on the monetary front, helped bring the exchange market into better balance, and the yen rate trad­ Japanese Yen ed quietly between =¥216 and ¥218 during most of August. Over the course of 1979, the previous efforts by Beginning in late August, however, the yen the Japanese authorities to boost domestic de­ came under renewed selling pressure, as concern mand and to reduce excessively large trade and over Japan’s vulnerability to oil-supply dis­ current-account surpluses took hold. A strong ruptions resurfaced. In the face of disarray in the revival in consumer spending and an upsurge in world oil markets, importers in Japan, as else­ business investment promoted a far more rapid where, sought to anticipate future oil needs. In rate of growth, at 8 percent or more, of industrial the process, spot oil prices began rising sharply production in Japan than in any other major once again, and the demand for dollars to pay for country. It also generated a sharp upturn in all oil weighed on the exchange market for the yen. types of imports, at a time when the prices of oil Exchange market participants came to fear an and other imported commodities were mounting even more massive oil import bill for Japan than rapidly. previously expected. Consequently, the yen re­ Export and import volumes continued to re­ sumed its decline, prompting other Japanese im­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

200 Federal Reserve Bulletin □ March 1980 porters to hasten to cover their future needs dropped to as low as ¥251.50, some 13 percent while exporters held off converting their dollar below the levels in late August. Reflecting the receipts. heavy intervention by the Japanese authorities, Meanwhile, the combined force of the depreci­ official reserves declined $4.8 billion to $16.2 bil­ ation of the yen and the rise in prices of petroleum lion by the end of November. and other imported commodities had an ex­ On November 27 the Finance Ministry and the plosive effect on the wholesale price index, Bank of Japan jointly announced a series of mea­ which accelerated to an annual rate of 18 percent sures to support the yen. The authorities sus­ by September. Steps to deal with these problems pended the import settlement scheme providing were widely discussed, but action was postponed Japanese commercial banks with lost-cost yen through early October, largely because Japan import financing, decided to increase ceilings on was in the throes of an election campaign. Even the amount of foreign currency convertible into after the election, on October 7, the market was yen by banking institutions (both domestic and concerned that the unexpectedly small majority foreign), and tightened reporting requirements for the ruling Liberal Democratic Party and in­ on the foreign exchange dealings of banks and tense strains within that party would leave little major trading houses. At the same time, to coun­ scope for decisive action on the part of the Japa­ ter domestic inflationary pressures, the Ohira nese government. The upward trend in interest government initiated major restraints on already rates abroad, punctuated by the jump in interest scheduled public works expenditures, sub­ rates in the United States following the Federal stantially slashing the amount of such outlays for Reserve’s October 6 measures, led to a heavy the January to March 1980 quarter. The Bank of outflow of capital from Japan. Japan followed up on these measures with force­ To blunt the yen’s decline in the late summer ful intervention in the exchanges. These various and early fall, the Japanese authorities inter­ actions helped settle the market, and the yen be­ vened heavily in the exchanges. Most of these gan to firm somewhat. Beginning in early Decem­ operations were conducted in Tokyo, but some ber, capital outflows tapered off sharply, and the were carried out in New York through the Feder­ yen came into demand by some countries seek­ al Reserve Bank of New York as agent. In Octo­ ing to diversify their reserves. ber the Japanese authorities also initiated re­ In this generally more balanced atmosphere, straints on capital outflows, closely monitoring the yen weathered the uncertainties arising out of foreign borrowing in the yen bond market as well the inconclusive OPEC meeting at Caracas in as foreign currency syndicated lending on the mid-December and the generally heightened part of Japanese banks and other financial insti­ world tensions as a result of the Soviet invasion tutions. On November 2 the Bank of Japan raised of Afghanistan. The yen rate firmed through midits discount rate 1 percentage point to 6lU per­ December and advanced to as high as ¥230.90 in cent. By that time, Prime Minister Ohira had early January. The yen’s rally was not sustained, mended important political fences so that atten­ however. Final figures for 1979 showed a curtion could be turned to the variety of economic rent-account deficit of $8.6 billion, and there was problems facing the government. little expectation in the market of any early re­ International events nevertheless continued to versal in view of the unfavorable outlook for weigh on exchange market sentiment toward the Japan’s oil import bill, particularly as a further yen. Skyrocketing spot oil prices and leapfrog­ round of official oil price increases was precipi­ ging of official prices by OPEC members were tated by OPEC members. The continuing up­ seen as especially ominous for Japan. The crisis surge of wholesale prices also remained a con­ in United States-Iranian relations exacerbated cern, and market participants noted the these concerns, since some 10 percent of Japan’s continuing unfavorable interest rate differential oil imports had come from Iran. Market senti­ between investments in yen and placements in ment toward the yen, therefore, remained bear­ most other major currencies. By the end of Janu­ ish, and the yen continued to decline through late ary, the yen had settled back to around ¥239, November. By November 27, the yen had some 5 percent above its November lows. Ja­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 201 pan’s foreign exchange reserves showed little by formal intervention limits. Sterling is not part further change in December and January, ending of that intervention arrangement. But some trad­ the period at $16.8 billion as compared with $21 ers shifted funds out of the pound into the mark billion at the end of July. on the possibility that sterling might be brought into the EMS at a depreciated rate. A formal ad­ justment of the currencies linked to the mark Sterling within the EMS on the weekend of September 22- 23 relieved the immediate strains among those From early in 1979, sterling had advanced sharp­ currencies as well as on the pound’s rela­ ly as the positive implications of Britain’s near tionship to the mark. Over the next weeks, the self-sufficiency in oil and the pull of high interest pound joined in the broader swings of European rates more than offset concern about Britain’s currencies against the dollar, rising as the dollar domestic inflation. The markets were further im­ weakened through late September, dropping pressed by the tough anti-inflationary measures back in response to the tightening measures by taken in June by the new Conservative govern­ the Federal Reserve in early October, and then set­ ment headed by Margaret Thatcher. By mid- tling in around the $2.15 level toward midmonth. July, sterling had been bid up to as high as By this time, however, the British authorities $2.3324 before dropping back to $2.2480 at the were facing an important policy dilemma. Do­ month-end. The pound had also advanced in mestic economic growth had virtually stalled, trade-weighted terms to as high as 74 percent and many analysts were projecting a downturn in before closing at 72.7 percent of its Smithsonian 1980. Nevertheless, the case for stimulus was parities. From the beginning of the year, Britain’s weakened by several facts: inflation was still ac­ foreign currency reserves had risen by $2.3 bil­ celerating; the international trade and current-aclion to $19.2 billion as of July 31. count deficits were still large; the demand for In August and September, sterling lost some of credit was very strong, both by private com­ its buoyancy. During August, the market reacted panies and by the public sector; and the mone­ adversely to a jump in consumer prices to a rate tary aggregates continued to rise sharply. Unlike of 15.8 percent per year, which, however, rates in most other countries, interest rates in the partly reflected the government’s decision to United Kingdom, while still high by international raise the value-added tax as an offset to a cut in comparison, had not risen since June. As a re­ personal income taxes. Moreover, there was sult, favorable interest differentials had progres­ some concern that the gradual easing of ex­ sively narrowed. In late October, the authorities change controls, announced as part of the Con­ took the calculated risk of eliminating the re­ servative government’s budget message, might maining exchange controls on resident outflows lead to heavy outflows of funds. But with the do­ of funds. Although the actual movement of funds mestic money market remaining tight, sterling was not large, market participants expressed held fairly firm until early September. concern that the potential for outflows added to In September, key elements of the Thatcher the downside risk for sterling. Spot sterling program were coming under challenge as orga­ on November 2 dropped back to as low as nized labor showed signs of increasing restive­ $2,058 with the Bank of England intervening to ness. The latest pay settlements showed that smooth the decline. On balance, from August wage inflation was still accelerating, with even through October, Britain’s foreign currency re­ larger wage demands still to be negotiated. Do­ serves declined by $1.1 billion. mestic uncertainties were thus viewed in the Sterling steadied over the next days, as traders market as limiting the pound’s upside potential began to trim positions in anticipation of a hike in for the time being, and sterling declined against interest rates in the United Kingdom. Such a the dollar. move was widely expected in view of the grow­ Meanwhile, the German mark had come into ing difficulty facing the authorities in placing giltheavy demand against both the dollar and the edged securities at current rates. When the ac­ other currencies within the EMS that were linked tion came, it exceeded market expectations. On Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

202 Federal Reserve Bulletin □ March 1980 November 15, the Bank of England’s minimum what against other European currencies in Janu­ lending rate was jumped by 3 percentage points ary, sterling continued to advance across the to a record 17 percent. This move was accom­ board to as high as $2.2950 by midmonth. The panied by a strong statement by the authorities rate dropped back on concerns that the outbreak that they would not accommodate the recent of a national steel strike could lead to a major surge in monetary growth. In addition, the sup­ challenge to the government’s wage policies. The plementary special deposit scheme, the k‘cor­ influx of hot money funds nevertheless contin­ set,” was extended for a further six months; ued, and the spot rate closed firm at $2.2715 on banks were subsequently asked not to avoid the January 31. Both against the dollar and on a corset by recourse to the Eurosterling market. trade-weighted basis, sterling rose almost IV2 After the announcement of these new measures, percent over the six-month period. Largely re­ the government was able to resume financing its flecting the intervention late in the period, the deficit, selling large amounts of gilt-edged secu­ United Kingdom’s foreign currency reserves rities. The higher interest rates prompted re­ moved back up to $18.9 billion as of January 31, newed bidding for sterling, which advanced to for a $300 million decline on balance. $2.1920 at the end of November. By that time also, the political crisis in Iran and the U.S. freeze of Iranian assets had gener­ French Franc ated fears that oil supplies would be cut off, that Iran would decide to take payment for oil in cur­ By the time of the formal inauguration of the rencies other than the dollar, and that funds EMS in March 1979, the French franc was trad­ would move out of the dollar. Individual OPEC ing comfortably in the middle of the new joint members announced new increases in the price floating arrangement and, against the German of oil, and this leapfrogging continued even after mark, around levels prevailing at the time the OPEC’s semiannual meeting in Caracas. Among EMS had first been proposed. The relative buoy­ the industrial countries, the United Kingdom ancy of the franc reflected in part an improve­ was seen in the market as especially able to pro­ ment of France’s economic performance after tect itself in view of the following considerations: several years of stabilization policies aimed at an assured supply of oil from the North Sea, an curbing inflation, securing a strong balance of oil-pricing policy linked to current world prices, payments, and improving the competitiveness of close traditional relationships with many OPEC French industry. France’s current account had members currently piling up reserves, capacious swung into surplus. Also the rate of inflation, money and capital markets available to foreign after a brief upsurge in response to the govern­ investors, and higher interest rates than available ment’s relaxation of longstanding price controls, almost anywhere else. had fallen back to around 9 percent by early Consequently, during the period of inter­ 1979. In addition, the franc was bolstered by rel­ national tensions in late 1979 and early 1980, atively high interest rates at home that reflected a heavy flows of funds came into sterling from the continuation of the rather restrictive monetary Middle East, Europe, and the United States. As policy directed to narrowing France’s remaining the spot pound began to rise, commercial leads adverse inflation differentials vis-a-vis its key and lags swung in favor of sterling, adding to the trading partners, particularly Germany. upward pressure on the rate. The Bank of Eng­ Around midyear, however, market partici­ land intervened to smooth the rise in the rate but pants began to question whether the franc could did not meet the market’s full demand for sterling maintain its relative firmness. Inflation in France lest more substantial intervention might under­ as elsewhere picked up considerably in response cut the authorities’ domestic monetary policy ob­ to the upsurge in international oil prices. The jectives. As funds continued to flow into sterling, government’s increase in public utility charges market professionals sensed more upward poten­ and household rents, part of its longer-term strat­ tial in sterling than in other European currencies. egy of decontrolling prices and reducing public - As a result, even though the dollar firmed some­ sector financing needs, also contributed to the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 203 overall rise in domestic prices. Meanwhile, of the EMS approached. Expectations grew that unemployment was high and increasing again, the franc, along with the other EMS currencies, even as economic growth remained reasonably would be adjusted downward against the German strong, partly because of the rapid growth of the mark, which again was rising rapidly against the labor force and partly because of the shift in pol­ dollar in the exchanges. Adverse commercial icy emphasizing a shakeout of inefficient labor to leads and lags and speculative short positions moderate unit labor costs and to increase com­ built up against the franc. Thus, the French cur­ petitiveness. Traders became concerned that the rency fell toward its lower limit against the mark French authorities might not have as much scope within the joint float even as it gained 2V2 percent as those in Germany and elsewhere to tighten against the dollar to trade around FF 4.15. As monetary policy in response to the rekindling of selling pressures intensified, the Bank of France inflationary pressures. The authorities in fact al­ once again intervened forcefully, selling sub­ lowed domestic money market rates to rise, stantial amounts of marks almost every day dur­ thereby maintaining interest differentials favor­ ing September. able to the franc. Moreover, to the extent that Over the September 22-23 weekend, as part of the franc came under selling pressure within the an overall realignment within the EMS, the EMS, the Bank of France intervened increas­ parity of the franc was cut 2 percent against the ingly through sales of German marks rather than mark. Meanwhile, the authorities had presented exclusively in dollars, so as not to aggravate their policy proposals for 1980, reflecting a con­ pressure on the dollar at the time. As the ex­ tinued commitment to fight against inflation change markets became more settled in early Au­ while boosting employment largely through se­ gust, the franc steadied within the EMS and traded lective measures. The Bank of France reinforced around FF 4.25 against the dollar. With the the cautiously restrictive stance of monetary pol­ impact of the intervention more than offset by icy by maintaining, in the face of higher inflation, valuation adjustments, especially those associat­ the 11 percent target for monetary growth in ed with the French entry into the EMS, official 1980. The government’s draft budget projected a foreign exchange reserves rose to $14.5 billion by slight reduction of the government’s borrowing the end of July. requirement to 1.5 percent of gross national By September, however, concerns about the product (GNP) as a result of some tax increases prospects for the French economy intensified. and stricter limits on current expenditures. At Efforts to improve upon business profitability the same time, investment expenditures were in­ had failed to generate a strong revival in private creased and youth employment programs were investment as had been hoped. Consequently expanded. These actions helped clear the air. economic growth tapered off, as consumption Once the speculative pressures in the exchange began to slow under the influence of rising infla­ market dissipated, following the October mea­ tion, increased social security contributions, and sures of the Federal Reserve, the selling of francs sluggish real wages. Also, the current-account dried up. Indeed, as French interest rates contin­ surplus was being eroded by a sharp swing of ued to rise, thereby preserving the favorable in­ the trade account back into deficit. The favorable terest differential on franc-denominated assets impact of the franc’s appreciation during 1978 on vis-a-vis mark-denominated instruments, funds France’s terms of trade had run its course. More­ began to flow back into the franc and previously over, a buildup of stocks and inflation-induced adverse leads and lags started to be unwound. anticipatory purchases underpinned a more rapid These reflows provided sufficient support to the growth of import volume, while markedly higher spot rate that it held steady around FF 4.20 oil prices bloated import values. As these devel­ through late October and early November even opments brought the government’s economic as the current-account surplus narrowed further. policies under growing domestic criticism and In the aftermath of the sharp deterioration in cast doubt on the durability of the Barre govern­ relations between the United States and Iran and ment’s austerity program, market confidence in the U.S. freeze of Iranian assets in mid-Novemthe franc weakened just as the technical review ber, demand for the franc gathered momentum. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

204 Federal Reserve Bulletin □ March 1980 France’s traditionally good relations with the moved up to LIT 818.70 by July 31. Meanwhile, Middle East benefited the franc in two ways. Part the authorities bought substantial amounts of of any anticipated increase in OPEC’s dollar dollars, increasing Italy’s foreign exchange re­ sales was expected to gravitate into the franc serves to $17.6 billion by July 31 even after and, in fact, some inflows from the Middle East repayment of some official debt. did materialize. In addition, market participants By summer, Italy’s inflation performance was felt that the impact of potential oil supply dis­ again a major cause for concern. Prices had ac­ ruptions resulting from the Iranian crisis would celerated to 14 to 15 percent per annum, largely be less severe for France than for most other ma­ in response to increased economic growth and jor economies. In this atmosphere, French resi­ rising import prices, and were expected to reach dents accelerated their spot and forward franc 17 to 18 percent by the year-end once the dramat­ purchases, while nonresidents increasingly cov­ ic rise in international oil prices worked its way ered short positions taken up earlier. Con­ through the economy. An unsettled political situ­ sequently, the franc moved to the top of the EMS ation ahead of the elections in June had pre­ in mid-November. These inflows tapered off vented parliamentary approval of the longerafter the passing of the year-end, but somewhat range stabilization program, which aimed at more favorable figures on output, employment, diminishing the size of the government deficit in and prices moderated some of the earlier con­ relation to GNP while also orienting expend­ cerns about prospects for the French economy. itures increasingly toward productive investment. The franc then recovered, trading at the close Indeed, capital projects had been delayed and of the period at around FF 4.07 against the dol­ the public-sector borrowing requirement was lar, and rebounded to the upper end of the joint taking up an even larger share of GNP. More­ float. over, major wage contracts already signed During the last 2xh months of the period, the pointed to sizable pay raises above and be­ Bank of France on occasion intervened both to yond the comprehensive cost-of-living increases moderate the rise in the rate and to keep the provided under the scalamobile. The June franc within the obligatory EMS margin of 2XU election resulted in a loss for the Commu­ percent. These operations, which more than off­ nist Party and in its return to opposition and pro­ set earlier intervention sales, together with re­ duced a coalition minority government headed valuation adjustments, contributed to a $3.3 bil­ by the Christian Democrats. lion rise in France’s foreign exchange reserves To moderate inflationary pressures, the au­ over the six months to $17.8 billion on January 31. thorities absorbed surplus liquidity by placing government bonds with the banks and, increas­ ingly, with the general public. Also, the govern­ Italian Lira ment continued to use some of the increase in foreign exchange reserves to repay outstanding Following the implementation of the EMS in the official debt. With respect to interest rates, how­ early spring of 1979, the Italian lira moved quick­ ever, the authorities faced a dilemma. Given the ly to its 6 percent upper limit and traded for acceleration of inflation, interest rates appeared several months at the top of the new joint float. low from a domestic standpoint. But the current- Underpinning the lira was Italy’s current-account account surplus was already creating excess de­ position, which, after having registered a $6.4 bil­ mand for the lira in the exchanges and the central lion surplus in 1978, remained in sizable surplus bank was already intervening and facing the as­ even as the economy expanded through the early sociated risk of a renewed burst in money supply spring. In addition, the lira was buoyed by high growth. Consequently, Italian interest rates were domestic interest rates and restrictions on do­ kept fairly stable through the summer. Even so, mestic credit expansion, which encouraged Ital­ with tourist receipts exceptionally strong, the lira ian commercial banks and companies to satisfy appreciated more rapidly against the dollar than their financing needs through external borrow­ most European currencies and was trading at ings. With the lira in heavy demand, the rate LIT 812.00 in early September. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 205 During September when strains developed would soon be faced with an oil shortage. By the within the EMS, the lira continued to trade at the year-end, however, domestic liquidity had be­ top of the joint float. It was nonetheless adverse­ come exceedingly tight, and Italian money mar­ ly affected by the continued firming of interest ket rates, after adjusting more fully to the rise in rates abroad, which narrowed differentials in the discount rate, increased to 18 percent or favor of lira placements. As earlier capital inflows more. Moreover, the government moved unex­ dried up and even began to be reversed and as pectedly to curb energy demand by raising do­ tourist receipts tapered off, the lira began to de­ mestic prices of gasoline, heating oil, and electric cline within the EMS and the Bank of Italy sold power. In view of these developments, sentiment some dollars to support the rate. Then, following toward the lira improved somewhat. Conse­ the realignment of the currencies within the joint quently, as the dollar firmed in the final weeks of float, which included a downward adjustment of January, the lira eased back somewhat less than 2 percent for the Italian lira against the German the German mark and most other European cur­ mark, the lira emerged well away from the upper rencies. In fact, by the month-end the lira was intervention point. The authorities, therefore, again trading nearly at the top of the EMS and, at had greater scope to raise interest rates to coun­ LIT 807.50, was l3/s percent higher against the ter increasing domestic inflationary pressures. dollar over the six-month period under review. On October 8 the discount rate was hiked IV2 Meanwhile, Italy’s foreign exchange reserves in­ percentage points to 12 percent. But in view of creased to $18.5 billion as of January 31. the sharp advance in foreign interest rates, par­ ticularly Eurodollar rates, Italian banks and com­ panies continued to repay previously uncovered European Monetary S ystem Eurocurrency debts and the lira declined more rapidly than other European currencies against After having been launched in March, the EMS, the dollar. By mid-November the lira had fallen with intervention arrangements among seven of to the middle of the EMS band, while dropping the member currencies of the European Commu­ off 2V2 percent to LIT 832.50 against the U.S. nity, had experienced some tugging and pulling currency. among exchange rate relationships but no major Meanwhile, the less buoyant economic out­ strains. The authorities had initially planned to look for other countries diminished Italy’s export review some of the technical features of the EMS prospects in the months ahead. Consequently, mechanism after the first six months of opera­ the government’s 1980 draft budget sought to tion. As this review approached in September, provide some stimulus through tax relief, to alle­ some strains began to build within the array of viate the risk of an abrupt economic slowdown. currencies in the joint float in view of disparities Concern developed, however, in view of the al­ in economic performance, current-account posi­ ready massive fiscal deficit, the public’s growing tions, and inflation rates among the participants. reluctance to buy long-term government debt, Even though the German mark’s sharp rise the already high rates of domestic inflation, and against the dollar pulled up all the EMS cur­ the renewed rise in international oil prices that rencies and helped reduce inflationary pressures was likely to exacerbate inflation further. in the member countries, serious questions re­ On December 6, the Bank of Italy again acted mained about whether all the currencies could to tighten monetary policy, by hiking the dis­ keep pace with the mark. Belgium and Denmark count rate 3 percentage points to 15 percent and in particular faced widening current-account by tightening credit ceilings. Initially, the bold­ deficits even though their economies were slug­ ness of these initiatives was undercut by the lag gish and unemployment remained high. The in Italian short-term interest rates behind the of­ Dutch current account was also in deficit, al­ ficial rate increase. Also, Saudi Arabia’s decision though the gap was reduced by large exports of to suspend oil deliveries in the wake of reported natural gas. Increases in the price of oil widened irregularities in the arrangement of a major oil the payments imbalances of all joint float mem­ supply agreement prompted fears that Italy bers. But the market remained fearful that many Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

206 Federal Reserve Bulletin □ March 1980 countries with large deficits would be unable to other EMS members. This move was linked to attract sufficient capital inflows to maintain exist­ the government’s announcement of a new eco­ ing parities within the joint float. nomic program, combining staff wage and price During September, while European monetary restraint with heavier taxation. Following these officials were engaged in their scheduled six- actions, the krone rose briefly to the top of the month review of the new currency arrangement, joint float before moving back toward the bottom exchange market participants began to speculate where it required further official support in Janu­ on a change in parities within the joint float. By ary. late September, funds were flowing heavily into The Belgian franc also came under persistent the mark out of other member currencies, which selling pressure within the joint float. These pres­ then fell toward the bottom of the joint float. In sures reflected a widening of the Belgian currentresponse, the respective central banks inter­ account deficit to $3 billion in 1979, linked to an vened heavily, mostly by selling marks against increasing budget deficit. The Belgian authorities their own currencies. reacted to these pressures by intervening heavily On September 23, the EMS currencies were and raising domestic interest rates. But political realigned, with a 5 percent upward adjustment of and social difficulties reduced the government’s the mark against the Danish krone and a 2 per­ ability to deal forcefully with the country’s un­ cent upward adjustment against all other member derlying payments imbalances. The increases in currencies. This adjustment, together with the Belgian interest rates were not sufficient to pre­ Federal Reserve’s October 6 announcement of vent capital outflows as foreign interest rates new measures to restrain monetary growth, re­ rose even more sharply. Moreover, the two duced the immediate strains within the EMS. downward adjustments in the Danish krone left The mark moved back toward the center of the the franc even more exposed. In response, the realigned joint float, while the lira, the French Belgian authorities sold large amounts of dollars franc, and the krone traded toward the top. The and other EMS currencies, financing this inter­ Irish pound and the Dutch guilder fluctuated in vention mostly out of the foreign exchange pro­ the middle of the band, while the Belgian franc ceeds of government borrowings. The franc thus remained near the bottom. stayed above the floor of the joint float through The EMS currencies traded in a fairly well-bal­ the end of January. anced market during the rest of October and into November. But flows of funds back out of the mark remained modest. Meanwhile, the current- Canadian Dollar account deficits of all member countries contin­ ued to widen, and in late November strains reap­ Through early 1979, exchange market sentiment peared in the markets for the currencies of these toward the Canadian dollar had been pessismistic. countries. Canada’s trade and current-account positions The Dutch authorities responded by raising in­ had not improved as rapidly as had been hoped, terest rates sharply and squeezing domestic li­ leaving a gap of some $5 billion to $6 billion to be quidity. As short-term interest rates snapped financed by capital inflows. Moreover, inter­ higher, the guilder rebounded to trade firmly in national borrowings by Canada’s provincial and the upper half of the joint float by mid-Decem­ municipal corporations tapered down. This left ber. The French and Italian authorities respond­ the Canadian dollar dependent on interest-sensied in a similar fashion, and the French franc and tive capital flows and other potentially volatile Italian lira strengthened within the EMS. In Ire­ sources of funds to cover the current-account land, interest rates had remained firm throughout deficit. But the strain in international oil markets the period, and the Irish pound traded comfort­ over the course of the year changed the market ably in the joint float through the end of January. atmosphere for the Canadian dollar. Canada’s By contrast, on November 30 the Danish au­ wealth of natural resources sheltered it from the thorities announced a further 4.76 percent down­ uncertainties facing other industrial countries re­ ward adjustment in the krone’s parity against garding energy supplies and even afforded it the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Foreign Exchange Operations 207 opportunity to increase its exports of natural gas. ther 3/4 percentage point to 13 percent. But com­ In addition, interest rates in Canada had risen to mercial leads and lags moved heavily against the levels that attracted funds from abroad. As a re­ Canadian dollar, and the rate dropped some 2xh sult, the Canadian dollar bottomed out in early percent to as low as Can.$1.1881 by October 23. February, and though it had been higher during The Bank of Canada responded to these pres­ the spring, the spot rate was still up on balance sures by intervening to moderate the decline in by 23U percent at Can.$1.1700 by the end of July. the rate. On balance, Canada’s official reserves Net intervention purchases of U.S. dollars dur­ declined a net $183 million to $1.9 billion in the ing that recovery plus the dollar proceeds of me­ three months ending October 31. dium- and long-term borrowings in Swiss francs By early November, however, the outlook for and Japanese yen enabled the Canadian authori­ the Canadian dollar began to improve. The Bank ties to make large repayments on outstanding of Canada had moved further in the direction of drawings under the standby facilities with com­ monetary restrictiveness by raising its discount mercial banks. Foreign exchange reserves stood rate again, this time by a full percentage point to at $2.1 billion through the end of July. 14 percent on October 25. Export figures for the In August and early September, the Canadian year to date were revised upward, which led dollar nevertheless was again vulnerable to bouts forecasters to scale back their estimates of the of selling pressure. The most recent figures sug­ 1979 current-account deficit, eventually to $5 bil­ gested that Canada’s trade performance re­ lion. The crisis in Iran shifted much of the mar­ mained disappointing. Production was running ket’s focus back to concerns about energy. Trad­ up against capacity restraints in key export in­ ers therefore moved to cover short positions, dustries, and import substitution in response to and some adverse commercial leads and lags the previous decline in the exchange rate was were unwound. Moreover, the reappointment of proceeding surprisingly slowly. In addition, in­ Bank of Canada Governor Bouey and Deputy flation was accelerating, the budget deficit was Governor Lawson to new seven-year terms was already large, and the fiscal gap was likely to welcomed in the market as signaling a continuing widen further if domestic energy prices were not policy of restraint. In this environment, ex­ soon brought up to international levels. More­ pectations grew that the government’s budget, to over, the continuous rise in interest rates in the be announced in mid-December, would tilt cau­ United States and Western Europe was squeez­ tiously toward restraint. By early December the ing out the interest differentials favorable to Canadian dollar had risen to Can.$1.16. Canada. As a result, the Canadian dollar came on As expected, the December 11 budget message offer from time to time. focused on the need to cut Canada’s fiscal deficit On September 10 the Bank of Canada raised its and to raise domestic energy prices. Two days discount rate V2 percentage point to 12V4 per­ later, however, the Clark government lost a vote cent, a move that was well received in the mar­ of confidence on its budget proposals, forcing a ket, and restored favorable interest differentials national election. Although the Canadian dollar for a time. Later in the month, inflows from initially came on offer, a net influx of funds con­ Europe and the Middle East in advance of another tinued in response to Canada’s attractive interest OPEC meeting helped push the Canadian dollar rates and favorable energy availability. The spot up to as high as Can.$1.1563 by September 28. rate soon bounced back, and by January the Ca­ Also, the Canadian dollar was bid up by con­ nadian dollar was in strong demand. Following versions of external borrowings of some govern­ news of a 30 percent increase in natural gas ex­ ment agencies and private corporations. But this port prices as well as of a larger-than-expected buoyancy was short lived in view of the sub­ November trade surplus, the rate rose to as high stantial increase in interest rates in other coun­ as Can.$1.1566 on January 24. tries, particularly in the United States following By that time, concerns that the general elec­ the Federal Reserve’s October 6 measures. Sell­ tion to be held in mid-February might result in ing pressure on the Canadian dollar resumed. On another minority government began to dampen October 9, Canada raised its discount rate a fur­ demand for Canadian dollars. Moreover, another Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

208 Federal Reserve Bulletin □ March 1980 advance in U.S. interest rates, including a partic­ value), were used to repay remaining drawings ularly sharp rise in bond yields, weighed on the under the short-term credit facilities with Cana­ Canadian dollar, which drifted back to dian commercial banks. The short-term revolv­ Can.$1.1574 on January 31. On balance, over the ing standby facilities with Canadian banks and six-month period, the Canadian dollar rose lVs with foreign banks remained available to the gov­ percent. ernment of Canada. Canada’s foreign exchange Meanwhile, purchases of U.S. dollars by the reserves changed little during the last three Bank of Canada over the last three months of the months of the period and stood at $1.9 billion as period, together with sales of more than 250,000 of January 31, down $199 million net over the ounces of gold at market prices (well above book six-month period. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

209 Industrial Production Released for publication March 14 steel, nondurable goods materials, and energy materials. Among durable goods materials, out­ put of parts for consumer durable goods in­ Industrial production edged up 0.2 percent in creased more than 3 percent due to the large rise February, mainly reflecting increased output of in automobile assemblies, while production of automobiles, trucks, and related parts from very equipment parts declined 0.5 percent after a rise low levels in January. Aside from the large in­ of 2 percent in January. crease in motor vehicles, production in most in­ dustries showed little change or declined somewhat. At 153.0 percent of the 1967 level, the Seasonally adjusted, ratio scale, 1967 = 100 index for February is 0.7 percent above its level a year earlier and equal to its recent high in March 1979. Output of consumer goods increased 0.9 per­ cent in February, due mainly to the rise in autos and utility vehicles. Autos were assembled at an annual rate of 7.2 million units—about 19 percent higher than the rate in January but still about 19 percent below that in February 1979. Home goods production, such as appliances and furni­ ture, declined 0.6 percent, whib production of nondurable consumer goods increased slightly further in February. Primarily because of in­ creases in transit equipment and building and mining equipment, output of business equipment rose 0.3 percent; this rise followed increases of 0.6 percent in January and 1.0 percent in Decem­ ber. Output of construction supplies decreased 0.8 percent. Output of materials edged down in February, Federal Reserve indexes, seasonally adjusted. Latest figures: Febru­ reflecting declines in the production of basic ary. Auto sales and stocks include imports. 1967 == 100 Percentage change from preceding month Percentage change Industrial production 1980 1979 1980 Feb.1979 to Jan.p Feb.6 Sept. Oct. Nov. Dec. Jan. Feb. Feb. 1980 Total................................................. 152.7 153.0 .5 -.1 -.1 .1 .3 .2 .7 Products, total ............................... 149.8 150.4 .8 -.2 -.1 .2 .1 .4 .3 Final products ............................ 146.9 147.9 1.1 -.3 -.1 .2 0 .7 .7 Consumer goods .................... 147.8 149.2 1.0 0 -.5 -.4 -.3 .9 -1.5 Durable................................ 142.4 146.6 2.9 .5 -2.2 -1.7 -2.9 2.9 -9.0 Nondurable ........................ 149.9 150.2 .3 -.2 .1 .2 .6 .2 1.7 Business equipment 175.1 175.7 1.2 -.9 .3 1.0 .6 .3 4.0 Intermediate products 160.3 159.9 -.5 0 0 -.1 .4 -.3 -.9 Construction supplies ................. 156.7 155.5 -.6 3 — .1 -.6 .6 -.8 -2.4 Materials ................................................ 157.2 157.1 .2 0 .1 -.2 .7 -.1 1.2 p Preliminary. e Estimated. Note. Indexes are seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

211 Statements to Congress Testimony of Peter M. Keir, Assistant to the futures. These requests sought to extend trading Board of Governors of the Federal Reserve Sys­ to additional commodity exchanges and to types tem, before the Subcommittee on Conservation of contracts not previously traded—involving the and Credit of the Committee on Agriculture, delivery of intermediate-term Treasury secu­ U.S. House of Representatives, February 12, rities—as well as long-term bonds and bills. 1980. Since the bill and bond contracts already trading were then showing rapid growth, the 1978 Mr. Chairman, I am pleased to respond to your requests for additional new contracts raised im­ request for an assessment of how well coordina­ portant questions regarding the possible impact tion between the Commodity Futures Trading of such contracts on the basic cash market for Commission (CFTC) and the Federal Reserve Treasury securities. The answers to these ques­ has worked in the areas of our mutual interest. tions were important to the Treasury and to the One of my functions has been to serve as the Federal Reserve because an effectively function­ Board’s liaison officer to the CFTC on questions ing cash market in government securities is criti­ involving markets for Treasury futures. I am ac­ cal both to the successful execution of federal companied by Donald Kohn who as chief of the debt management and to the effective implemen­ Board’s Capital Markets Section has participated tation of Federal Reserve open market opera­ in much of the research we have been doing on tions. financial futures. To assure a considered assessment of such As you know the 1978 legislation that renewed questions, the Treasury and the Federal Reserve the authority of the CFTC to regulate futures urged the CFTC to defer approval of the large markets also directed the Commission to elicit backlog of pending requests for new Treasury fu­ the advice of the Treasury and the Federal Re­ tures contracts until their economic implications serve before authorizing any additional futures could be more carefully evaluated. The two contracts calling for delivery of Treasury secu­ agencies volunteered to undertake and complete rities. When reviewing this advice, the Commis­ such a study by the spring of 1979. The CFTC sion is expected to assess the likely effects of acknowledged that a study of this type would be such contracts on the debt management respon­ beneficial if it could be completed expeditiously. sibilities of the Treasury and on the general effi­ In retrospect, we believe this pause for a more ciency and integrity of cash markets for U.S. considered evaluation of the proposed expansion government securities. in Treasury futures contracts was very useful. In the period since passage of the 1978 act, the We believe it helped both us and the CFTC to CFTC has taken the lead in assuring needed gain a better understanding of the developing in­ coordination with the Treasury, the Federal Re­ teraction between the cash and futures markets serve, and the Securities and Exchange Commis­ in Treasury securities. In addition, the study pro­ sion (SEC). Shortly after the 1978 legislation was vided a full interchange of ideas on what ap­ signed, the Commission invited these agencies to peared to be deficiencies in the specification of participate with it on an informal interagency deliverable supplies for some of the proposed (as coordinating committee. This group has served well as some existing) Treasury futures con­ since then as a useful forum for face-to-face dis­ tracts. cussion of common problems. During the course of our study we had several At the time the authority of the CFTC was re­ extended discussions with members and staff of newed, a sizable number of requests had accu­ the CFTC. Once our report and recommenda­ mulated for additional new contracts in Treasury tions were completed, the CFTC reviewed them Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

212 Federal Reserve Bulletin □ March 1980 thoroughly and responded with a detailed set of yield relationships in the cash market. One such counterproposals. They accepted some of our situation developed last spring when demands suggestions, adapted others in alternative ways for delivery on the June contract threatened to that seemed reasonable, and explained their rea­ run very high. At that time, speculators were soning regarding points on which they disagreed. widely expected to seek delivery on a significant In the roughly nine months that have elapsed part of their heavy long positions, in order to since our study was completed, discussions with profit from a cyclical downturn in interest rates the CFTC on additional new contract proposals that appeared to be developing. If interest rate have continued in the same cooperative vein. In expectations had not been abruptly reversed by short, the record of interagency coordination on the publication of unexpectedly strong economic Treasury futures contracts has been good. statistics around mid-June, deliveries on the June This does not mean, however, that all of the contract could have run much higher and might Federal Reserve’s questions and concerns about then have produced larger distortions in the cash markets for Treasury futures have been re­ market than actually developed. solved. For example, we would have preferred Again in December of last year, deliveries on that the CFTC adopt a more gradual timetable the three-month bill contract expanded sharply, than it did in the extension of new contracts to reaching a record $1 billion—or nearly 50 percent additional maturity areas and to competing ex­ of the estimated supply available for delivery in changes—even though we acknowledge that the the cash market. The strong interest in taking de­ drive for competitive equity among exchanges livery of bills at year-end appears to have been would have made the implementation of such a traceable in part to efforts of some participants to gradual timetable difficult. reduce their tax liabilities. Current Internal Rev­ The liberal approach actually followed by the enue Service rules require that losses incurred on CFTC in authorizing a broader range of contracts futures contracts closed out by offsetting trades on additional exchanges does not appear thus far be treated as capital losses. However, if delivery to have added seriously to pressures on deliv­ is taken on a bill futures contract, and the bill is erable supplies, at least partly because the re­ then sold in the cash market, any loss incurred cently authorized contracts have not attracted can be charged against current income. much of a following. Instead, most of the contin­ These recent episodes of pressure on the cash ued expansion of trading in Treasury futures has market supply of bills deliverable against regular occurred in the limited number of older contracts three-month bill futures contracts have admit­ that have developed a high degree of liquidity. tedly created fairly minor and short-lived market This pattern of growth is about what had been distortions. These episodes do raise enough predicted by old hands on the commodity ex­ questions, however, to warrant further efforts by changes, who had urged the CFTC to authorize the CFTC to redefine the terms of bill contracts, new contracts freely and then to allow market so they will be less vulnerable to a squeeze. competition to determine which contracts sur­ While the CME argues that its emergency rules vived. However, it still remains to be seen are perfectly adequate to cope with the limited whether pressures on deliverable supplies from number of situations in which a squeeze might new contracts will intensify once the better capi­ develop, the record suggests that commodity ex­ talized New York Futures Exchange enters the changes typically have a strong incentive to defer competition and the New York Commodity Ex­ emergency action until the last minute. Given change gains more experience with its still rela­ this propensity to temporize, it would seem de­ tively new contracts. sirable to avoid such potential problems by re- Among the older high-volume contracts, per­ specifying the existing contracts to encompass a formance has generally been satisfactory. How­ broader deliverable supply, so long as this can be ever, the fact that deliveries on the Chicago Mer­ accomplished without appreciably reducing the cantile Exchange’s (CME) active three-month contracts’ financial appeal. I understand that the Treasury bill contract are limited to a single CFTC and the exchanges have been exploring maturity has on occasion exerted pressure on the possible ways to achieve this objective, and I deliverable supply and created some distortion of hope their efforts are successful. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 213 Looking more broadly at the economic func­ bulk of transactions appears to be designed tions being served by markets for Treasury fu­ largely to facilitate interest rate speculation, and tures, it is clear that the Treasury—as the pro­ a growing share of activity apparently reflects ef­ ducer of debt deliverable in these markets—does forts to avoid taxes. Of course, some speculators not have the need to hedge against price changes seek to limit their risks by confining their opera­ that farmers do in agricultural commodity mar­ tions essentially to arbitrage transactions—that kets, or that mortgage bankers do in markets for is, they take positions in anticipation of changes Government National Mortgage Association in rate spreads, rather than in anticipation of securities. In these other markets the production changes in interest rate levels. But their purpose process itself creates the need to hedge. Hedgers is still speculative. using Treasury futures are simply buying an In conclusion, it seems clear from the record available service that happens to dovetail with to date that neither the extreme enthusiasm their particular financial strategies. about Treasury futures markets nor the grave Unfortunately, no reliable statistical measures concerns that have sometimes been expressed are available that identify the particular financial about these markets have been justified. Most of objectives being sought by market participants the time these markets have operated fairly using Treasury futures. Moreover, when hedging smoothly, and the few signs of problems that does occur, it seldom assumes the classic text­ have emerged have been fairly well contained. book form of complete risk avoidance. For ex­ Nevertheless, in markets that have been evolv­ ample, government securities dealers who typi­ ing so rapidly, it is difficult to keep in touch with cally earn a large share of their income by taking all of the ramifications and implications of what positions in anticipation of interest rate changes is happening. Under such conditions, all of the still frequently find it useful to establish short po­ government agencies involved—as well as the sitions in bond futures as a means of hedging in­ market participants themselves—would seem terest rate risks when underwriting Treasury of­ well advised to maintain a close surveillance of ferings of new longer-term debt. In fact, if future developments to make sure that no signifi­ dealers had not had access to such hedging possi­ cant problems are emerging. bilities over the past year, the general efficiency That completes my comments Mr. Chairman. of financial markets might well have suffered You will note that I have not addressed the sub­ substantially more than it has in view of the ject of stock futures that Chairman Stone re­ greatly increased interest rate volatility that has ferred to this morning as one of the more exotic developed in this period. types of new contract requests. The Federal Re­ Rough judgments expressed by market partici­ serve as the regulator of margin requirements on pants do suggest that the share of transactions trades in stocks and stock options does, of undertaken in Treasury futures for essentially course, also have a special interest in proposals hedging purposes is probably not very large. The for stock futures. □ Statement by Paul A. Volcker, Chairman, Board sents the objectives for monetary growth of Governors of the Federal Reserve System, adopted by the Federal Open Market Committee before the Committee on Banking, Finance and for the coming year and relates those objectives Urban Affairs, U.S. House of Representatives, to economic trends over the past year and to the February 19, 1980. outlook for the year ahead. In presenting the report to the committee, I I welcome this opportunity—my first—to ap­ would like to make a few more personal remarks pear before this committee to discuss the Federal about the direction that monetary policy is taking Reserve Board’s semiannual report on monetary and how those policies fit into a broader frame­ policy. As required by the Full Employment and work of action to deal with the evident problems Balanced Growth Act of 1978, that report pre­ of the economy. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

214 Federal Reserve Bulletin □ March 1980 The first point that I would emphasize is that maturely or excessively stimulative, or insuffi­ the near-term outlook for real economic activity ciently restrictive. The result has been our now and employment remains highly uncertain. It chronic inflationary problem, with a growing never has been easy to forecast the direction of conviction on the part of many that this process aggregate activity around cyclical turning points, is likely to continue. Anticipations of higher and as one prediction of imminent recession after prices themselves help speed the inflationary another has gone awry, the past year has been a process. particularly humbling experience for economic Nor can we demonstrate that the result has forecasters. been beneficial in terms of other objectives. To Important uncertainties continue to cloud the the contrary, unemployment has been higher in outlook for 1980. One of the most critical ques­ the 1970s than in earlier decades. Growth in pro­ tions is whether consumers, faced with lower ductivity has declined. Capital spending has not real incomes and expecting higher prices, will kept up with the needs of a growing labor force. continue to spend an extraordinarily high propor­ Financial markets have been disturbed and de­ tion of their income despite heavy debt burdens pressed, and institutions responsible for a sub­ and reduced liquidity. Purchasing power is again stantial share of mortgage financing are coming being absorbed by sharply higher oil prices, and under strain. The recurrent weakness of the for­ there is no assurance that that process will quick­ eign exchange value of the dollar has undercut ly come to an end. The President has, of course, our economic stability at home and our lead­ submitted his budget for fiscal 1981. But inter­ ership abroad. national political developments have raised some The broad objective of policy must be to break new questions about prospects for defense that ominous pattern. That is why dealing with spending in the years ahead, and there are uncer­ inflation has properly been elevated to a position tainties about other elements in the budget as it of high national priority. Success will require makes its way through the Congress. that policy be consistently and persistently ori­ In looking ahead and making judgments about ented to that end. Vacillation and procras­ these and other questions, most members of the tination, out of fears of recession or other­ Federal Reserve Board have shared the view of wise, would run grave risks. Amid the present the administration and of most other economists uncertainties, stimulative policies could well be that an economic downturn will probably devel­ misdirected in the short run; more importantly, op sometime this year. However, such a result is far from assuring more growth over time, by ag­ by no means inevitable and many forecasters ap­ gravating the inflationary process and psycholo­ pear to be raising their sights. gy such policies would threaten more instability Unfortunately, the range of uncertainty with and unemployment. respect to inflation is one of how much prices will The implications for monetary policy are clear. rise, not whether. Price increases, at least as re­ While there may be legitimate debate about the corded in the most widely read indexes, could impacts of monetary policy in the short run, well accelerate in the first quarter partly because there is little doubt that inflation cannot persist in the latest round of oil price increases will be re­ the long run unless it is accommodated by exces­ flected in those numbers. The real question is sive expansion of money and credit. Put more af­ how much progress can be made in reducing the firmatively, restraint on growth in money and inflation rate in the latter part of the year. credit, maintained over a considerable period of In the past, at critical junctures for economic time, must be an essential part of any program to stabilization policy, we have usually been more deal with entrenched inflation and inflationary preoccupied with the possibility of near-term expectations. Accordingly, I see no alternative weakness in economic activity or other objec­ to a progressive slowing of growth of the mone­ tives than with the implications of our actions for tary aggregates to lay the base for restored stabil­ future inflation. To some degree, that has been ity and growth. true even during the long period of expansion The 1980 growth ranges established by the since 1975. As a consequence, fiscal and mone­ Federal Open Market Committee (FOMC) for tary policies alike too often have been pre­ the key monetary aggregates are in line with that Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 215 basic, continuing objective. In the short run, we pering any weakness in real activity and tending believe those targets are fully consistent with an to support investment activity and housing. At orderly process of economic adjustment and the same time, persistent restraint on monetary modest growth, provided the inflation rate sub­ growth would be consistent with our resolve to sides as the year wears on. We also believe that, resist inflation. The other side of the coin is that should inflationary pressures begin to build more continued strong inflationary forces, accom­ strongly in the context of strengthening demand, panied by bulging credit demands, would tend to those same targets would imply strong financial keep financial markets under strong pressure— restraint. In fact, the restraint implied by the new and that pressure should confine and dissipate targets would be inconsistent with higher rates of those inflationary forces. In either case, move­ inflation over a significant period of time. ments of short-term market interest rates—such The precise growth ranges are described in the as the federal funds rate—should not necessarily semiannual report on monetary policy and can be be taken as harbingers of a fundamental change seen in the perspective of recent years in an at­ in the stance of monetary policy; that policy will tachment to this statement.1 I should emphasize in any event continue to be directed toward rein­ that all these data are on the basis of revised defi­ ing in excessive monetary growth. nitions (Federal Reserve Bulletin, volume Let there be no doubt; the Federal Reserve is 66, February 1980, pp. 97-114). These definitions determined to make every reasonable effort to incorporate some of the recently developed finan­ work toward reducing monetary growth from the cial instruments that increasingly have been used levels of recent years, not just in 1980, but in the in place of more conventional means of payment years ahead. or claims on well-established financial institu­ The policy actions taken on October 6 of last tions. Because these new forms of “money” or year, which entailed changes in our operating “near money” generally have been expanding techniques to provide better assurance of con­ rapidly in recent years, the redefined aggregates taining the growth in the money supply, were one tend to have somewhat faster growth rates over demonstration of that commitment. And I can re­ the past few years than the comparable aggre­ port that developments since that time with re­ gates as previously defined. The FOMC’s new spect to monetary and credit growth have been growth ranges for 1980 should not be directly remarkably consistent with our immediate objec­ compared with results based on the former defi­ tives. nitions of the aggregates. What is significant is We cannot conclude from those results that that the ranges for the newly defined aggregates our procedures ensure that money growth will al­ in 1980 are expected to result in further slowing ways remain tightly on a narrow path over short of monetary growth this year, following some de­ periods of time, or that that is necessarily wholly celeration over the course of 1979. desirable. From week to week or month to As I implied earlier, the behavior of interest month, the relationship between bank reserves rates and the degree of pressure on financial mar­ and the money stock is influenced by unpredict­ kets in the year ahead will depend critically on able shifts between different types of deposits the performance of the economy and the strength and among institutions. There are transitory of inflationary pressures and expectations. Expe­ shifts in demands for money, associated for ex­ rience suggests that if real activity in fact weak­ ample with tax refunds, strikes, or the weather. ens, interest rates—particularly for short-term Nonetheless, our new procedures should contin­ instruments—could tend to decline as demands ue to give us better control over the monetary for money and credit moderate. As inflationary aggegates, and we are studying what, if any, oth­ forces tend to recede, the decline could be more er aspects of our institutional arrangements pronounced and spread more fully into longer- might be changed to enhance the efficacy of term markets. In those circumstances, such mar­ those procedures. ket developments would be constructive, tem­ The increase in the discount rate announced on Friday is another reflection of our com­ 1. The attachments to this statement are available on re­ quest from Publications Services, Board of Governors of the mitment to keep credit expansion under control. Federal Reserve System, Washington, D.C. 20551. The most recent data for overall economic activi­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

216 Federal Reserve Bulletin □ March 1980 ty have, as you know, been relatively strong, and Rising demands for wages and cost-of-living the inflation rate is currently responding to the protection, anticipatory price increases, sky­ new oil price increases. Stimulated in large part rocketing gold and commodity prices, sharply by international developments, indications are declining values in the bond markets—all of that inflationary anticipations have tended to rise these are symptomatic of the inflationary process once again, and in combination, these develop­ and undermine the economic outlook. But none ments appear to be generating somewhat greater of them are inevitable, provided we turn around demands for money and credit. In the judgment the expectations of inflation. of the Board, these developments underscore the To achieve that essential objective will require need to take such measures as may be required sustained discipline, not just in monetary policy, to maintain firm control over the growth of mon­ but in other areas of public policy. That dis­ ey and credit. cipline will certainly need to be reflected in the Sustained monetary restraint is not an easy, budgetary decisions of this Congress. automatic, and painless solvent for our economic I fully appreciate the need for structural re­ difficulties—the only claim I will make is that it is form and reduction in taxation. Partly because of essential. It works, in part, by limiting the poten­ inflation, the total tax take, relative to gross na­ tial growth in nominal economic activity—that tional product, is reaching a new peacetime is, growth measured in current, inflated dollars. high, discouraging investment, adding to costs, If other policies are working at cross purposes, and blunting incentives. We need to reverse that the restraint can be blunt, uneven, and decidedly process. But the President nonetheless seems to uncomfortable, with too much of the impact in me correct in emphasizing that the time has not the short term falling on employment and income yet come for tax reduction. Budgetary balance is rather than on prices. neither here nor in prospect. Tax cuts, to put the Our aim must be otherwise. What all of us point simply, need to be earned by spending re­ would like to achieve is as rapid a transition as straint. That is where the challenge lies. we can manage to a more stable and productive Beyond the broad decisions about monetary economy—an economy in which we can have and fiscal policy, there is much more that can be real growth and less unemployment because in­ done here and now to speed up the process of flation is dwindling away; an economy in which restoring price stability. For instance: real incomes are rising even though nominal 1. We can curtail more decisively our depen­ wages are rising less rapidly; an economy in dence on foreign energy, even at the expense of which we can compete effectively abroad with­ increased costs in the short run, because the al­ out a weak dollar. ternative is to have still higher prices imposed on That transition will be speeded to the extent all us by foreign suppliers over the indefinite future. of us show, not just in our words but in our 2. We can move to eliminate the impediments deeds, that the fight on inflation is in fact of the to competition still imposed in some industries highest priority. We cannot expect that workers by governing regulation. will long be restrained in their wage demands, or 3. We can revise legislation that tends to ratch­ businessmen in their pricing policies, if they feel et up wages at the expense of employment. the consequence of self-restraint will be to fall 4. We can review the mass of environmental, behind in a race with their peers or their costs. safety, and consumer regulations to make sure We cannot simply rail at “speculators” in for­ these worthy objectives are reached without un­ eign exchange, or gold, or commodity markets if due impact on costs. our own policies seem to justify their pessimism 5. We can resist pressures to protect indus­ about the future course of inflation. We cannot tries from foreign competition, particularly those reasonably bemoan low savings, historically high industries with relatively high wage structures interest rates, and congestion in credit markets and wage settlements, which have been sluggish so long as the return on savings does not reflect in responding to the changing needs of the Amer­ the anticipated rate of inflation and the federal ican consumer. government itself runs large deficits, adding to The list is neither exhaustive nor new. We borrowing demands. have been slow to act because so much of it Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 217 seems to cut across the grain of political sensitiv­ ity, and energy dependence are not sustainable ities and, taken individually, many of the mea­ options for the United States. In concept, poli­ sures will not have a dramatic effect. But taken cies to wind down inflation have wide support. together, the effect would be large and none of it What remains is the challenge of converting in­ is out of keeping with our basic objectives in eco­ tellectual consensus into practical action. nomic and social policy. The Federal Reserve has a key role to play in I sense we are rightly coming to the conclusion that process. We intend to do our part—and to that accelerating inflation, declining productiv­ stick with it. □ Chairman Volcker gave a similar statement be­ fore the Senate Committee on Banking, Housing, and Urban Affairs, February 25, 1980. Statement by Nancy H. Teeters, Member, Board with increased deposits, while an institution with of Governors of the Federal Reserve System, be­ a poor record would suffer a deposit outflow. The fore the Committee on Banking, Housing, and public was to be provided with information, and Urban Affairs, U.S. Senate, February 19, 1980. “the free market [would] do the rest.” Two years later, however, the Congress de­ I appreciate having this opportunity to present cided that “more coordinated efforts” were nec­ the views of the Federal Reserve Board on the essary “in order to increase the viability of our Home Mortgage Disclosure Act. In discussing urban communities.” Consequently, it adopted the act’s future, we must address two issues: the Community Reinvestment Act (CRA). With first, whether the life of the act should be extend­ the passage of the CRA, the primary vehicle for ed beyond its June 27 termination date; and sec­ monitoring “to determine whether depositary in­ ond, if extended, whether its coverage should be stitutions are filling their obligations to serve the broadened or narrowed. housing needs of the communities and neighbor­ In order to determine what course to follow, I hoods in which they are located” shifted from think that we must ask ourselves three basic the public to the federal financial regulatory questions: agencies. (Incidentally, the focus also shifted 1. How useful has the information produced from narrower “housing needs” to broader under the act been? “credit needs.”) While citizens used home loan 2. How much does producing the information disclosure information before the CRA and per­ cost? haps use it even more now, that use is still small 3. If the information has been useful for certain in comparison with the number of disclosure re­ purposes, how can the reporting requirements be ports prepared each year. The predominant use modified to further those purposes in the most of the information is by the financial regulatory cost-effective way? agencies, which analyze it to help monitor lend­ The original purpose of the act was to provide ing performance under CRA and to help detect local citizens and public officials with informa­ possible ethnic or racial discrimination in viola­ tion about the home purchase and home im­ tion of the Equal Credit Opportunity and Fair provement lending patterns of depositary institu­ Housing Acts. tions located in their communities. Armed with Thus, the answer to the first question about the this information, citizens and public officials utility of the information is that it provides the could, as Senator Proxmire stated in March 1975 principal quantifiable measure by which to gauge upon introducing the legislation, “intelligently the performance of depositary institutions lo­ decide which institution deserved their busi­ cated in urban areas in helping to meet commu­ ness.” Presumably, an institution with a good nity credit needs that are housing related. Al­ community lending record would be rewarded though the yardstick is a more appropriate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

218 Federal Reserve Bulletin □ March 1980 measure of overall performance for thrift institu­ 3. Simplify the reporting categories by group­ tions than commercial banks, it nevertheless is a ing together conventional home purchase loans useful one even for banks with their relatively and governmentally insured or guaranteed ones lower volume of home loans. and by eliminating separate disclosure of loans Even if home loan disclosure information is made to nonoccupant borrowers. useful to the agencies, there still is the question The current exemption, based upon asset size, of cost. In a study jointly sponsored by the Fed­ treats commercial banks and thrift institutions eral Deposit Insurance Corporation (FDIC) and unequally. Because commercial banks almost the Federal Home Loan Bank Board (FHLBB), universally devote a smaller percentage of their the 1977 cost of reporting the information was es­ lendable funds to home loans than do thrift insti­ timated at about $1.50 per loan on average or ap­ tutions, a bank with assets just above the exemp­ proximately $6 million for all loans subject to dis­ tion level almost always will report making or closure. (That figure should be considered only purchasing fewer home loans than a comparable­ as a rough estimate because of the difficulty of sized thrift institution. With the reporting cost determining the number, as opposed to the per loan rising as the number of loans declines, amount, of covered home mortgage and home smaller-sized banks bear a disproportionate improvement loans made nationwide in any giv­ share of the total cost of disclosure, given their en year.) The cost of compliance, however, is relatively low profile in the residential loan mar­ not an insignificant burden on depositary institu­ ket. tions, particularly smaller-sized ones. Indeed, as To distribute the cost burden more fairly, the one would expect, the cost per loan rises appre­ asset-size exemption should be eliminated in fa­ ciably—threefold and more—as the number of vor of an exemption based upon the size of an loans to be reported declines. Consequently, if institution’s home purchase and home improve­ reporting is continued, efforts should be made to ment loan portfolio and the number of home pur­ reduce the cost, especially for institutions mak­ chase loans made in a year. This two-part test of ing fewer than 200 loans per year. (The FDIC- home loan stock and flow appears better adapted FHLBB study shows a significant per-loan cost than an asset-size test to measuring whether an escalation for loan volume of less than 200.) institution is a sufficiently prominent participant Since home mortgage disclosure information is in the home lending market to be required to re­ useful for helping to monitor CRA performance port. The Board recommends that an institution and for enforcing various civil rights laws, the is­ be subject to disclosure requirements only if it sue becomes how the reporting requirements has a home loan purchase and improvement port­ could be modified to support those uses in the folio of more than $10 million or it makes more most cost-effective way. The Board believes that than 200 home purchase loans each calendar the essential usefulness of the information could year. The cutoff of 200 loans per year is based be preserved while reducing the costs for report­ upon the finding of the FDIC-FHLBB study that ing institutions if three steps were taken: per-loan reporting costs escalate sharply when 1. Exempt an institution from reporting re­ fewer than 200 loans have to be reported. On the quirements if it has a residential mortgage and other hand, the loan flow measure would require home improvement loan portfolio of up to $10 reporting by institutions that make a significant million unless it originates more than 200 home number of home purchase loans each year but purchase loans each calendar year, instead of on­ sell them in the secondary market, thereby not ly exempting an institution that has assets of $10 increasing the size of their portfolios. million or less. Under the current asset exemption, 5,160 of 2. Require disclosure by census tract only for the nearly 6,000 commercial banks with a head loans relating to homes located in standard met­ office in an SMSA were required to report loan ropolitan statistical area (SMSA) counties that information in 1978. If the exemption cutoff were have a population of more than 50,000 persons— changed along the lines suggested, about 1,394 rather than require disclosure by census tract of banks would be required to report (assuming all loans on homes within an SMSA—and by 1978 portfolio size; we have, however, no readily county in other areas within an SMSA. available information on how the cutoff point of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 219 200 loans would affect the number of reporting To illustrate the point, consider the Atlanta banks). Although that cutoff would result in a sig­ SMSA. It currently is composed of 15 counties, nificant decrease in the number of reporting but the 2 central counties have two-thirds of the banks (a decrease of about 3,766 banks, or 73 population. Based upon 1970 census figures, percent), it still would require the major bank lend­ none of the outer 10 counties had a population of ers in the home loan area to make disclosures. more than 31,000 people, and 2 counties had as About 67 percent of the amount of all home pur­ few as 11,000 persons. Moreover, those 10 outer chase and home improvement loans held by counties are predominantly rural in character. banks headquartered in SMSAs would be held by The Atlanta situation is not unique. At least 36 of banks subject to the changed reporting require­ the 288 SMSAs have 2 or more counties with ments. fewer than 50,000 people (based upon the 1970 As indicated previously, a combined portfolio- census), and many more have at least 1 county in flow measure would significantly reduce the cost that category. of compliance by eliminating from coverage Although CRA has no geographic limits to its those institutions—particularly smaller com­ coverage, the major thrust behind its passage mercial banks—with high reporting expenses per was, as the conference committee report states, loan. Furthermore, the home lending perform­ “to increase the viability of our urban commu­ ance of those institutions under both CRA and nities.” As noted, however, many of the coun­ the civil rights laws is easier to judge since they ties in the 288 currently designated SMSAs are make relatively few home loans. In most cases, not “urban” in character. Generally, fewer loans examiners could review all or a sufficient number are made in those nonurban counties, making in­ of their loan files to determine their lending poli­ terpretation of the data more tenuous. Moreover, cies and patterns; that would not be feasible for the critical comparisons between lending pat­ institutions with larger home loan portfolios. Of terns and information on race, national origin, course, there is a trade-off in reducing institu­ family income, and housing stock—comparisons tional compliance costs; the amount of time that are at the heart of CRA monitoring and civil spent examining institutions that were previously rights enforcement—are more difficult to per­ subject to reporting requirements would in­ form for nonurban areas and in some instances crease, thereby diminishing the net saving from would be meaningless. Consequently, requiring cutting back on disclosures. disclosure by census tract of loans relating to The second recommendation that the Board homes in nonurban counties does relatively little would make to focus home loan reporting re­ to advance CRA monitoring or civil rights en­ quirements on the areas where the information forcement. Therefore, the Board believes that, to would be most useful is to require reporting of maximize utility and efficiency, census tract re­ loans by census tract within SMSAs only for porting should be refocused on urban areas with­ counties with a population of more than 50,000 in SMSAs where the information has been used persons—that is, those counties that are most ur­ in the past and where it would be most helpful in ban. Loans relating to properties located in the future. Continued reporting of the nonurban SMSA counties with a population of 50,000 or areas of an SMSA on a county basis would still fewer persons would be reported by county. permit comparisons of the volume of urban ver­ When we see or hear the term “standard met­ sus suburban lending patterns. ropolitan statistical area,” we think of cities like At this juncture, let me say a few words about Boston, Chicago, Dallas, Denver, Los Angeles, expanding home loan reporting to depositary in­ maybe even Milwaukee—metropolitan areas stitutions located outside SMSAs. The Board be­ with populations greater than one million per­ lieves that expansion would be unwise and gen­ sons. Although an SMSA, by definition, must erally unnecessary. If the act were extended and have a population of at least 50,000 persons, geographic coverage expanded without any fur­ many SMSAs, particularly in areas of rapid pop­ ther changes, the 8,700 institutions currently ulation growth, encompass counties that are pre­ subject to disclosure would be joined by approxi­ dominantly rural and that have much smaller mately 6,800 additional institutions. About 1,000 populations. institutions that have offices both inside and out­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

220 Federal Reserve Bulletin □ March 1980 side SMSAs would be required to make addition­ sense and would not increase compliance costs. al disclosures. Thus, expansion would signifi­ Another suggestion is that the financial regula­ cantly increase (perhaps double) total reporting tory agencies establish central collection cen­ costs because of the additional institutions cov­ ters—for example, at public libraries or local ered and the higher per-loan cost for institutions government offices—for the disclosure reports. reporting fewer loans (which would be a common While centralized collection and maintenance of characteristic of institutions that are located out­ the reports would be helpful to the public, we are side SMSAs). Moreover, those 6,800 institutions concerned about the potential costs and logistical account for less than 15 percent of the home problems of specifying convenient repositories loans held by all depositary institutions. Hence, for each SMSA. The Comptroller, FDIC, the cost for obtaining that marginal increase in FHLBB, and Federal Reserve System have loan coverage would be high. banks, branches, or regional offices in only 40 of Although expansion would provide some use­ the 288 SMSAs. Therefore, post offices and li­ ful information for urbanized areas outside braries would be the most likely candidates for SMSAs, generally it would not materially further collection centers, but presumably both the Post­ the purpose of CRA, nor would it particularly en­ al Service and local library authorities would ob­ hance civil rights enforcement. The critical link ject to having the burden placed on them; in the between geographic reporting units—which, for case of libraries, the federal government has no practical purposes, would have to be ZIP code— authority to require them to serve as collection and population and housing stock characteristics centers. On the other hand, renting space and would be either nonexistent or too tenuous in paying for minimum maintenance of the records most cases to be of any real help. ZIP codes sim­ could be more expensive than the cost of report­ ply encompass too much territory; in rural areas ing. The Board does not support this proposal. a town or perhaps several towns and the sur­ There also has been some discussion of requir­ rounding countryside may have a single ZIP ing a nationwide, standardized reporting format. code. The Board has no objection to that requirement Returning to the Board’s third major recom­ for federally chartered institutions. We would mendation, we believe that the reporting cate­ only point out that such a requirement might pre­ gories should be simplified. The current dis­ empt to some degree the home loan disclosure tinction between conventional and government- requirements of five states—California, Con­ insured or guaranteed loans should be eliminat­ necticut, Massachusetts, New Jersey, and New ed. While it might be interesting information, it York—all of which have adapted those require­ has not been critical in any CRA review that the ments to their own perceived needs. Board has conducted. It is simply too fine a dis­ That brings me to the ultimate question regard­ tinction, and it contributes to reporting errors. ing the Home Mortgage Disclosure Act: should it The same is true of the requirement that home be renewed? On balance, the Board believes that loans to borrowers who do not intend to reside in the reported information, if confined to truly ur­ the home be disclosed separately. It is a theoreti­ ban areas, is useful for analysis of community cally interesting piece of information, but it has reinvestment and civil rights issues. We also be­ not been used—either by the public or by the lieve that the cost of reporting, if reduced along agencies. The consequences of these proposed the lines suggested, would be reasonable in rela­ changes are illustrated in the two exhibits ap­ tion to the value of the information gained. But pended to my testimony.1 the original purpose of the act has been sup­ Community groups have suggested that the re­ planted by CRA. Therefore, we suggest that the porting period be standardized by substituting Home Mortgage Disclosure Act, as a distinct calendar-year disclosures for the current fiscal- statute, be allowed to lapse and that more limited year dislosures. In our view, the change makes and finely focused reporting requirements be in­ corporated in CRA. The Board also recommends that a sunset pro­ 1. The attachments to this statement are available on request from Publications Services, Board of Governors of vision-similar to the one that has prompted this the Federal Reserve System, Washington, D.C. 20551. review—be attached to any new reporting re­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 221 quirements. We suggest that three years would rights enforcement systems to determine how be an appropriate extension period because by useful the proposed home loan disclosures would then we will have developed sufficient experi­ be for those purposes and whether further ence with CRA evaluations and with new civil changes or elimination would be appropriate. □ Statement by J. Charles Partee, Member, Board pressures on depositary institutions to find addi­ of Governors of the Federal Reserve System, be­ tional ways to reduce their costs and sustain their fore the Subcommittee on Financial Institutions earnings. For member commercial banks, this is Supervision, Regulation and Insurance of the likely to induce accelerated withdrawals from the Committee on Banking, Finance and Urban Af­ Federal Reserve System, thereby undermining fairs, U.S. House of Representatives, February the ability of the central bank to administer an 20, 1980. effective monetary policy. The enactment of these legislative proposals would thus ex­ I am pleased to appear today on behalf of the acerbate the monetary control problem, adding Federal Reserve Board to discuss the numerous to the already urgent need for a system of univer­ financial reform measures contained in the Sen­ sal mandatory reserve requirements. Since this is ate-amended H.R. 4986, the related topics con­ a matter of absolute top priority, the Board’s tained in H.R. 6198 and H.R. 6216, and recent views presented today have been framed in the proposals by Chairman St Germain regarding expectation that monetary improvement legisla­ deposit interest rate ceilings. tion will be enacted soon, and certainly before Most of the proposed financial reform mea­ any of the cost-raising proposals considered here sures being considered this morning address a are scheduled to take effect. range of problems that have as their root cause In keeping with the chairman’s request, I will our escalating rate of inflation. Today’s record- focus my comments on those sections of the pro­ high interest rates are a direct product of that in­ posed legislation that deal with maximum rates flation, and these have put great pressure on our payable on deposits and the payment of interest depositary institutions, with their heritage of on transaction accounts. However, the Senateloans and investments yielding the lower interest amended H.R. 4986 addresses many other topics rates of the past. Moreover, the high current of importance for the financial system. For your yields available in the market have reinforced the information, I have attached as an appendix a efforts of the public to seek interest-bearing sub­ summary of the Board’s views on the many pro­ stitutes for traditional money balances. Thus, visions of H.R. 4986 of relevance to us that can­ changes in the operating policies of the institu­ not be fully covered in my prepared remarks.1 I tions—and in underlying law and regulation—are would like to discuss briefly three of these provi­ being made necessary by the force of events. But sions before turning to the main subject of these the basic problem of the depositary institutions is hearings. unlikely to be solved until we begin to make sig­ Senate-amended H.R. 4986 would override nificant progress in reducing the inflation that existing Board policy by lengthening the per­ plagues our nation. missible maturity of acquisition debt in one-bank The Federal Reserve Board supports the es­ holding company formations. The Board op­ sential thrust common to the major financial re­ poses this provision because we believe that the form proposals before this subcommittee today. proposed 25-year debt retirement period would We endorse measures that mandate the phasing lead to substantial increases in the leverage and out of deposit interest rate controls and we favor debt burdens of one-bank holding companies, the authorization of nationwide negotiable order of withdrawal (NOW) accounts. But such ac­ 1. The appendix to this statement is available on request tions, in an environment of inflation-induced high from Publications Services, Board of Governors of the Feder­ interest rates, will work also to intensify the al Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

222 Federal Reserve Bulletin □ March 1980 and could adversely affect the financial sound­ taken only if there is clear evidence of harmful ness of many of our country’s smaller banks. effects that cannot be dealt with under existing However, the Board has recently requested pub­ authority. In the absence of such evidence—and lic comment on proposals that would introduce none has yet been found—we see no justification greater flexibility into our existing policies on ac­ for a moratorium. quisition debt but would not jeopardize the Senate-amended H.R. 4986 also calls for the safety and soundness of bank holding com­ federal preemption of existing state usury ceil­ panies. These proposals would shift the Board’s ings on mortgage interest rates, unless over­ focus to the attainment of a reasonable, specified ridden by state legislative action. The Board debt-to-equity ratio within a 12-year period, endorses this provision—although we would while maintaining adequate capital throughout in have preferred the states to act themselves be­ the underlying bank. I might note that industry cause usury ceilings can at times distort the im­ reaction to date on the proposed new procedure pact of monetary policy. When market rates ex­ has generally been quite favorable. ceed such ceilings, credit flows are dramatically Another provision of H.R. 4986 calls for a reduced in the affected markets. If there were no moratorium of indefinite duration on takeovers usury ceilings, restrictive monetary policy could of U.S. financial institutions by foreign interests. still be expected to impact on housing markets, The Board has been reviewing the operations of but the threat of sudden and severe disruptions foreign-owned banks in this country in the would be much reduced. It is in the best interests course of implementing the International Bank­ of public policy to avoid these excessive pres­ ing Act. This review has included issues con­ sure points. The Federal Reserve would then cerned with the acquisition of U.S. banks by for­ rely on general credit restraint, in this market as eign bank holding companies and supervisory in others, to accomplish its policy objectives. problems that may be associated with such ac­ Moreover, the elimination of mortgage interest quisitions. The Board has found no evidence that rate ceilings would allow thrift institutions and foreign ownership has produced harmful con­ others to lend at a market rate of return in the sequences for our banking system or for bank local mortgage markets. The Board has long sup­ customers, and we believe that U.S. bank super­ ported actions, such as the recent authorization visors have adequate powers to deal with any of variable-rate mortgages by the Federal Home abuses that might develop. Loan Bank Board, that would help thrift institu­ We are continuing to review the operations of tions to earn returns on their overall portfolio of foreign banks, in cooperation with other supervi­ investments that would respond more flexibly to sory agencies. In addition, the General Account­ market conditions because this must necessarily ing Office is studying these issues at the request accompany the ultimate freeing of these institu­ of the chairman of this subcommittee. A morato­ tions from deposit rate ceiling control. Most rium on foreign takeovers of U.S. banks is not thrift institutions and many commercial banks needed to provide time to study the issues and are constrained in their capacity to pay com­ would not help in the continuing process of re­ petitive yields on all deposit liabilities because a view and evaluation of foreign-owned banks. substantial share of their assets, being long term Meanwhile, it would restrict the ability of some in character, carry the lower interest rate returns U.S. banks to strengthen their capital base of the past. The competitive position of depos­ through sales of stock to foreigners—a restric­ itary institutions has eroded further in each suc­ tion that would be most burdensome on those ceeding period of credit stringency, as depositors banks that may be in the greatest need of capital. have become more aware of the growing number More generally, a moratorium could be regarded of alternative higher-yielding investment outlets as a reversal of this country’s longstanding pol­ available to small savers. Indeed, the increased icy of neutrality on foreign investment and the attractiveness of market instruments to depos­ free international flow of capital. And it could itors has led banks and thrift institutions to pro­ lead to retaliation by some foreign countries that mote aggressively the money market certifi­ would adversely impact on U.S. banks abroad. cate—their one short-term deposit instrument In sum, a moratorium is a step that should be whose ceiling rate rises in tandem with market Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 223 rates. This promotion has increased markedly in Senate-amended H.R. 4986 to provide effec­ the average cost of deposits, and so thrift institu­ tive relief for depositary institutions and their tions have been experiencing substantial down­ customers. A five-year phaseout of deposit inter­ ward pressure on their earnings margins. est rate ceilings—beginning toward the end of In light of these considerations, the Board also this year—should provide the regulatory favors the widening of the asset powers of thrift agencies sufficient flexibility in managing the institutions so that their portfolio returns may transition so as to balance the sometimes con­ move more closely with market rates of interest. flicting needs for consumer equity, thrift institu­ We support those provisions of the legislative tion viability, and a stable flow of funds to local proposals that authorize federally chartered housing markets. thrift institutions to hold up to 20 percent of their In this connection, I want to emphasize the im­ assets in consumer loans, commercial paper, and portance of maintaining maximum flexibility in a broader list of market securities. By shortening the phaseout schedule. The prudent speed of the the average maturity of thrift assets, these in­ ceiling rate phaseout is largely dependent on pre­ vestment powers should increase the flexibility vailing market conditions. The regulatory agen­ of average portfolio returns. Such a limited wid­ cies should be authorized—as stipulated in ening in thrift institution asset possibilities would Senate-amended HR. 4986 and H.R. 6198—to not likely have a significant adverse impact on postpone, adjust, or accelerate the decontrol overall mortgage credit flows, given the growing process as economic conditions warrant or per­ variety of alternative sources of mortgage credit. mit. And as also stipulated in both these bills, the Along with the liberalization of thrift institu­ regulators should be empowered to reinstate de­ tion asset powers, the Board strongly endorses posit rate ceilings after the end of the phaseout the gradual elimination of deposit interest rate period in emergency situations. controls. We believe that such controls are anti­ In addition, the Board believes that money competitive, are inequitable to small savers, and market certificates and the longer-term variablecan be disruptive to financial and housing mar­ ceiling certificates should be exempt from man­ kets. By restricting competition among com­ datory increases in ceiling rates until the end of mercial banks and thrift institutions, deposit rate the phaseout period. These deposit instruments ceilings have retarded the adjustment of many of already are designed to provide returns that will these institutions to a changing market environ­ vary with market conditions and that yield very ment. Moreover, when market rates of interest close to what can be obtained on market secu­ move well above deposit rate ceilings, a sub­ rities of comparable quality. Increasing these stantial volume of savings tends to shift to non­ ceilings on any fixed schedule would quickly deposit investment alternatives. In consequence, eliminate binding restrictions on such deposit during such periods the housing market—the rates and could lead to earnings problems arising very market these ceilings were meant to protect from competition between types of depositary in­ and assist—experiences disproportionate de­ stitutions during the transition period. Similar clines in credit availability. exemptions should, of course, apply to any other Allowing the thrift institutions to earn more variable-ceiling instruments that float with the market-oriented rates of return on their portfo­ market and are introduced during the phaseout lios by widening their asset powers will help pro­ period. vide the additional earnings flexibility needed to With respect to H.R. 6198, introduced by Con­ allow them to pay market rates of return on an gressman Barnard, the Board cautions that the increasing portion of their deposit liabilities. But “maturity ratchet” phaseout, by means of which the Board believes that the phaseout of deposit rate controls are progressively eliminated begin­ rate ceilings must be gradual so as not to threaten ning with the longest-term instruments on July 1, unduly the viability of the institutions. The five- 1980, would have several undesirable aspects. year horizon provided in H.R. 6198 and Chair­ This proposal effectively eliminates a true transi­ man St Germain’s proposal seems an appropri­ tion period because the longest-term account ate goal. Market developments are proceeding ceiling would be eliminated almost immediately too rapidly for the ten-year phaseout contained and such accounts might well be marketed at the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

224 Federal Reserve Bulletin □ March 1980 highest institutional rates offered. Thus, a matu­ man St Germain at the beginning of these hear­ rity phaseout could encourage institutions to ac­ ings, the Board is concerned that there would be cept large flows of funds into the longer-term de­ no mandated phaseout schedule, but still a com­ posit categories during a period when interest plete elimination of all deposit rate ceilings rates might in retrospect prove to have been un­ would take place in 1985. Unless there is move­ usually high. ment toward this goal in the interim, a sudden Indeed, the maturity ratchet would act to removal of ceilings could be very disruptive to lengthen the average maturity of liabilities of thrift institutions. Although Chairman St Ger­ thrift institutions at the very time that expanded main calls on the regulatory agencies to raise de­ asset powers, such as those included in this bill, posit rate ceilings gradually over the five-year pe­ would be shortening the average maturity of as­ riod, it is important to recognize that present law set portfolios of thrift institutions, making their gives any one regulatory agency the authority to return more responsive to movements in market prevent any increase in ceiling rates since the rates. This could render thrift earnings particu­ existing ceiling rate differential cannot be elimi­ larly vulnerable if interest rates should begin to nated without congressional approval. The decline for any extended period. The Board Board believes that a specific phaseout schedule, would recommend that the phaseout procedure with a limited ability for modification by the reg­ permit the institutions, to the extent possible, to ulatory agencies, would be preferable. This ap­ choose the maturity structure of their liabilities proach would allow for more certain planning best fitting their own interest rate expectations both by financial institutions and by their cus­ and portfolio structure. Raising all ceilings simul­ tomers. taneously best achieves this goal, even though it As is true of a phaseout of deposit rate ceil­ may delay the time that any one deposit category ings, the Board for some time has supported the becomes free of rate control. principle of interest payments on transaction ac­ The Board also has a problem with the matu­ counts at all depositary institutions. Our support rity structure incentives implicit in H.R. 6216, in­ of this principle is based on considerations of troduced by Congressman Patterson. This bill consumer equity and economic efficiency. I want specifically mandates an increase only in the to emphasize, however, that we believe that it is passbook savings account rate as soon as pos­ important to ensure an orderly transition to this sible after five years. A sudden sharp rate in­ new environment. This might best be achieved crease in this account category, which would ap­ by extending an activity with which the institu­ ply to both existing as well as new deposits, tions already have some experience. Authorizing would be extremely costly and might well threat­ NOW accounts nationwide would be a logical ex­ en the viability of some institutions—especially tension of existing programs in New England, those, like savings banks, with a large proportion New York, and most recently New Jersey. of their total deposits in passbook form. More­ Moreover, our concern with transitional prob­ over, any passbook ceiling rate consistent with lems in the move to interest on transaction ac­ the safety and soundness of the institutions prob­ counts suggests that NOWs be subject for a time ably would be well below market yields and to a deposit rate ceiling. As with the earnings ef­ therefore lead to little if any additional deposit fect of a phaseout of deposit rate ceilings, the inflow. Determining the relevant market rate for earnings impact of NOW accounts could be espe­ passbook accounts would be difficult, moreover, cially marked for thrift institutions; thrift institu­ since there is no market instrument that has tions are expected to compete vigorously with equivalent liquidity, convenience, and safety. banks for the new interest-bearing transaction The Board looks forward to the day when market account business. The Board therefore supports forces determine the rate paid on all deposits and an interest rate ceiling on NOWs—a ceiling that is opposed to those provisions of H.R. 6216 that would be phased out in concert with all deposit would require the regulatory agencies to admin­ rate ceilings. ister interest rate controls for the indefinite fu­ While the Board endorses nationwide exten­ ture. sion of NOW account authority, it also urges that With respect to the proposals made by Chair­ these accounts—and indeed all transaction bal­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 225 ances at all depositary institutions—be subject to downward pressure on institutional earnings is Federal Reserve reserve requirements. Nation­ certain to make banks more acutely aware of the wide NOW accounts would make legislative costs of sterile Federal Reserve reserves and enactment of this authority even more impera­ could sharply accelerate the rate of membership tive because there is ample evidence from our attrition, eroding our ability to conduct an effec­ experience in New England and New York that tive anti-inflationary monetary policy. I would NOW accounts encourage consumers to shift note that the rate of withdrawal from Federal funds out of traditional checking accounts at Reserve membership has already increased dra­ commercial banks into NOW accounts at banks matically in recent months and has included the and thrift institutions. The expansion of the asset two largest banks ever to leave the System. Thus, powers of thrift institutions, the phaseout of de­ as I stated at the outset, the Board strongly re­ posit rate ceilings, and the introduction of nation­ iterates its sense of urgency that there be prompt wide NOW accounts all will serve to increase action by the Congress on monetary improve­ competition in the financial sector. The resulting ment legislation. □ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

227 Announcements Philip E. Coldwell: THE WHITE HOUSE Resignation as a Member WASHINGTON of the Board of Governors February 26, 1980 Philip E. Coldwell has resigned as a member of To Philip Coldwell the Board of Governors, effective February 29, 1980. Mr. Coldwell’s letter of resignation and Thank you for your letter of February 8. It is with President Carter’s letter of acceptance follow: regret that I accept your decision to resign as a Mem­ ber of the Board of Governors of the Federal Reserve February 8, 1980 System, effective, as you requested, on February 29, 1980. Your distinguished career has been a model of pro­ Dear Mr. President: fessional accomplishment and public service as you have assumed jobs of ever greater responsibility in the On January 31, 1980, I completed the term of office Federal Reserve. Your special efforts to cut spending to which I was appointed as a Member of the Board of by the Federal Reserve deserve particular com­ Governors of the Federal Reserve System. Since then mendation. I have remained on the Board awaiting nomination and I read your views on the conduct of anti-inflation qualification of my successor. However, for personal policy with genuine personal interest. Ending inflation reasons, I must now resign this position effective Feb­ is a most difficult goal we share, and I appreciate the ruary 29, 1980. This resignation also terminates my as­ spirit in which your suggestions were offered. sociation with the Federal Reserve System which I I know that in the years ahead you will be able to have served for nearly 29 years. The Board of Gover­ look back with pride on your accomplishments. nors’ position has been a truly challenging one and I have enjoyed working with the dedicated and produc­ Sincerely, tive people in the Federal Reserve System. I leave with a feeling of accomplishment in contrib­ Jimmy Carter uting to both the efficiency of the Federal Reserve Sys­ tem and the financial and regulatory policies of our na­ tion. However, I leave with a sense of frustration that government stabilization efforts have not achieved Change in Discount Rate control over inflation, nor seem to be fully dedicated to a prompt resolution of the problem. I hope that future The Federal Reserve Board approved an in­ government efforts will abandon the policy of gradu­ crease in the discount rate from 12 percent to 13 alism which has permitted the continuing rise of infla­ percent, effective February 15, 1980. The dis­ tionary expectations. Vigorous and accelerating action against inflation is critical to the financial protection of count rate is the interest rate that member banks our people and to the economic strength of our nation are charged when they borrow from their district at home and abroad. Federal Reserve Banks. With all best wishes to you. The Board has been particularly concerned that recent economic developments, including Sincerely, the large increase in the price of imported oil, are P. E. Coldwell adding to inflationary pressures and may lead to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

228 Federal Reserve Bulletin □ March 1980 further destabilizing pricing decisions. These de­ The variable ceiling is established monthly velopments underscore the need to take such based on the rate announced by the Treasury measures as may be required to maintain firm three business days before the beginning of each control over growth of money and credit. month. The yield on Treasury securities that ma­ In making the change, the Board acted on ture in 2V2 years averaged about 14 percent over requests from the directors of the Federal Re­ the five business days ending February 26. This serve Banks of New York, Cleveland, Rich­ would have meant a ceiling rate during March for mond, Atlanta, Chicago, St. Louis, Minneapolis, this certificate of 13 V2 percent for thrift institu­ Kansas City, Dallas, and San Francisco. Sub­ tions and 13V4 percent for commercial banks, sequently, the Board approved actions by the di­ which, with compounding, would have permitted rectors of the Federal Reserve Banks of Boston effective yields of 14.67 percent and 14.47 per­ and Philadelphia, increasing the discount rate at cent respectively. those Banks from 12 to 13 percent, effective Feb­ This action was necessary because the agencies ruary 19, 1980. believe that a sudden increase of this magnitude would be disruptive to many financial institu­ tions, particularly those holding a high propor­ Limitation on Interest Rate tion of longer-term fixed-rate loans. The agencies will continue to monitor conditions in the finan­ A limitation on the rate of interest that may be cial markets closely and will be prepared to make paid on 21/2-year variable-rate time deposits was whatever future adjustments in the ceiling rate announced on February 27, 1980, by the Federal are appropriate. Reserve Board, the Federal Deposit Insurance Corporation, the Federal Home Loan Bank Board, and the National Credit Union Adminis­ Policy for Classification of tration. Consumer Installment Credit Based The action places a temporary ceiling of 12 on Delinquency Status percent for savings and loan associations, mutual savings banks, and credit unions and IP/4 per­ The Federal Reserve Board has adopted an ex­ cent for commercial banks and is effective March amination policy for the classification of delin­ 1. Compounding of interest is permitted and the quent consumer installment loans held by state new ceiling will result in an effective yield for 272- banks that are members of the Federal Reserve year instruments of 12.94 percent for thrift in­ System. stitutions and 12.65 percent for commercial The Board acted on a recommendation by the banks. Federal Financial Institutions Examination The 2V2-year certificate has been offered since Council to the three federal bank regulators for a January 1 with a ceiling rate tied to the yield on uniform examination policy. The Federal Depos­ U.S. Treasury securities of similar maturity. Un­ it Insurance Corporation and the Comptroller of der the change, the ceiling rate on 2V2-year cer­ the Currency are expected to act on the recom­ tificates will be the lower of the new fixed ceiling mendation shortly. or the rate determined by the variable formula The new policy, which becomes effective for that has been in effect since January. Ceilings bank examination purposes on June 30, 1980, is on all other deposit categories remain unchanged. as follows: Under the variable-rate formula, savings and This examination policy establishes uniform guide­ loan associations and mutual savings banks had lines for the classification of installment credit based on been able to pay 50 basis points below the yield delinquency status. This use of a formula approach in on Treasury securities maturing in 2lh years. determining consumer loan classifications parallels, in The ceiling rate for banks had been 75 basis principle, current industry practices and recognizes the statistical validity of measuring losses predicated points below the Treasury yield. Federal credit on past-due status. The policy covers both open- and unions had been able to offer the same variable closed-end credit. Although the three federal banking rate as thrift institutions on share certificates of agencies have historically relied on delinquency status 90 days or more. as a major determinant in classifying consumer in­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 229 stallment credit, no interagency standard has been em­ cles, the balance is considered 5 days delinquent. If no ployed. The policy seeks to provide that standard and payment is received before issuance of still another should result in more uniform treatment of all classes statement, the balance is 35 days delinquent technical­ of insured banks and in more consistent statistical data ly; however, current practice is to define accounts being developed from bank examination reports. with 2 zero billings as 30 days delinquent. The general classification policy recognizes that evaluating the quality of a consumer credit portfolio on Statutory Bad Debts. Section 5204, USRS (12 a loan-by-loan basis is inefficient and unnecessary. For U.S.C. 56), contains the definition for Federal Reserve this reason, examiners are expected to adhere closely System member banks of what constitutes bad debts. to the policy in their analysis of consumer credit. Nev­ Accordingly, loans delinquent seven monthly pay­ ertheless, it is recognized that there are instances, par­ ments, or seven billing cycles, are considered 180 ticularly when significant amounts are involved, that days, or six months, past due and will be considered may warrant exceptions to the formula in order to rec­ statutory bad debts, unless they are well secured and ognize individual situations when the bank being ex­ in the process of collection. amined can clearly demonstrate that repayment will occur irrespective of delinquency status. Examples of Partial Payments. A payment equivalent to 90 per­ such situations might include the following: loans well cent or more of the contractual payment may be con­ secured by collateral and in the process of collection; sidered a full payment in computing delinquency. loans when the claims have been filed against solvent estates; and loans supported by valid guarantees or in­ surance. Consumer Installment Loan Examination Scope General Classification Policy The general classification policy provides that per­ Examiners will adhere to the following general classifi­ formance is the principal criterion in application of the cation policy during examinations of commercial uniform policy during examinations of banks. In addi­ banks. tion to loan classification, examination emphasis 1. Closed-end consumer installment credit delin­ should focus on the bank’s written consumer lending quent 120 days or more (5 monthly payments) will be policy, adherence to stated policy, and a review of op­ classified loss. Loans delinquent 90 to 119 days (4 erating procedures. It is expected that a bank will have monthly payments) will be classified substandard. written policies suitable for its specific objectives and 2. Open-end consumer installment credit delinquent that they are consistent with prudent banking prac­ 180 days or more (7 zero billing cycles) will be classi­ tices. Procedures for supervising delinquent accounts, fied loss. Loans delinquent 90 to 179 days (4 to 6 zero including the procedure for renewing and extending billing cycles) will be classified substandard. past-due loans, and automatic charge-off policy should be fully described. Internal controls should be in place to assure that the bank’s written policy is being fol­ Definitions lowed. Banks lacking written policies or failing to im­ plement or follow established policies effectively The following definitions are intended to provide should be criticized by examiners in reports of exami­ guidance in application of the general classification nation. policy. Consumer Installment Loans. Includes open- and Regulation Z. Delay in closed-end credit extended to individuals for house­ hold, family, and other personal expenditures as de­ Revocation of Amendment fined in the instructions for preparation of call reports. Refer to such instructions for information on any loan The Federal Reserve Board on February 29, when there is doubt as to whether it is covered by the 1980, announced a delay in the effective date of general classification policy. an action revoking an amendment to its Regula­ tion Z (Truth in Lending) that would have al­ Delinquency. Closed-end installment credit is con­ sidered delinquent when the borrower is in arrears two lowed an exception to the “cooling off” period monthly payments. Loans in arrears two monthly pay­ for consumers who pledge their homes as secu­ ments are considered thirty days delinquent. rity in open-end credit arrangements. Banks generally treat open-end credit differently The revocation of the amendment will take ef­ from closed-end credit in computing delinquency. A fect May 31, 1980, rather than March 31, 1980. bank credit-card customer generally has 25 days in which to pay billings before the loan is considered de­ The Board said it was delaying the effective linquent. If no payment is made between 2 billing cy­ date because of pending congressional action Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

230 Federal Reserve Bulletin □ March 1980 that would permit the type of credit plans devel­ governs credit extensions by securities brokers oped under the amendment and in order to pre­ and dealers. vent hardship to creditors and consumers that The action becomes effective June 2, but the would occur if creditors were compelled by the Board said it would accept comment until April approaching effective date to make substantial 30. The changes involve the following: modifications in their open-end credit plans. 1. Increasing the time for making a margin de­ During the two-month extension, creditors will posit from five to seven business days. be prohibited from offering new plans or ex­ 2. Allowing a self-regulatory organization panding existing ones. (SRO) to approve extension of time requests for margin accounts received from creditors that are not members of the SRO. International Conference on 3. Increasing from $100 to $500 the amount Banking and Payments S ystems that a broker-dealer may disregard prior to taking action to achieve compliance with the regulation, An international conference to discuss the suc­ such as calling for additional cash or collateral or cesses and failures of industrial nations in the liquidating the account. evolution of their payments systems will be held 4. Permitting the postmark date to serve as April 2-4 in Atlanta, Georgia. The conference is evidence of timely filing of a request for an exten­ sponsored by the Federal Reserve System and sion of time by certain broker-dealers. the major trade associations of the U.S. banking industry. The International Conference on Banking and S ystem Membership: Payments Systems will feature discussions of re­ Admission of State Banks cent and prospective innovations in payment practices and technology. Topics will include in­ The following banks were admitted to member­ come payments to individuals, bill payments by ship in the Federal Reserve System during the individuals, automatic teller machines, payments period February 11 through March 10, 1980: at point of sale, electronic fund transfer services, credit-card and Eurocheck transactions, inter­ Colorado corporate payments, and the pricing of money Colorado Springs . . . . Bank at Broadmoor payment services. Florida Madeira Beach . Gulf Coast Bank of Pinellas St. Petersburg . . . . United Bank of Pinellas Regulation T: Changes Oklahoma Clayton................................Clayton State Bank The Federal Reserve Board on March 6, 1980, Oregon approved several technical changes in its Regula­ Portland.........................Columbia Pacific Bank tion T (Credit by Brokers and Dealers), which & Trust Company Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

231 Record of Policy Actions of the Federal Open Market Committee Meeting Held on Commerce in late October and No­ January 8-9, 1980 vember suggested that spending for plant and equipment would be 14.7 Domestic Policy Directive percent greater in 1979 than in 1978. The information reviewed at this The survey also indicated that in­ meeting suggested that, contrary to vestment outlays would increase at the estimates presented at the time an annual rate of 12.8 percent over of the November 20 meeting, real the first half of 1980. output of goods and services ex­ Producer prices of finished goods panded somewhat further in the and consumer prices continued to fourth quarter of 1979 after its rise rapidly in November, reflecting rebound in the third quarter. Aver­ in part the continuing diffusion of age prices, as measured by the fixed- earlier increases in energy costs. Ad­ weight price index for gross domes­ vances in prices of food contributed tic business product, appeared to importantly to the November rise in have risen at a pace close to the an­ producer prices, while further sharp nual rate of about 10 percent experi­ increases in the costs of homeownerenced during the first three quarters ship were a major factor in sustain­ of the year. ing the upward pressure on con­ Total retail sales strengthened in sumer prices. November and recovered the sizable The index of average hourly earn­ decline in October, although sales of ings of private nonfarm production new automobiles remained at a re­ workers rose at an annual rate of 972 duced level. In December, auto sales percent in November and at a rate of improved considerably. about 8 percent over the first 11 The index of industrial production months of 1979, close to the rate of fell 0.5 percent in November, and on increase in 1978. Labor cost pres­ balance the level of production was sures in the nonfarm business sector little changed from that in December intensified during 1979, as large in­ 1978. Nonfarm payroll employment creases in total hourly compensation rose considerably in October and were associated with a decline in November, following three months productivity. of slower expansion, and the rate of In foreign exchange markets the unemployment edged down in No­ trade-weighted value of the dollar vember from 6.0 to 5.8 percent. against major foreign currencies had Private housing starts declined depreciated about 3 percent since somewhat in October and fell sharp­ mid-November, reflecting in large ly further in November to an annual part developments relating to Iran rate of 1.5 million units. Building and Afghanistan and a firming of permits for new units declined sub­ monetary conditions in a number of stantially in both October and No­ foreign countries. The U.S. trade vember, and combined sales of new deficit in October and November av­ and existing single-family homes ap­ eraged slightly below the rate for the peared to be lower in both months. third quarter. In November a decline The latest survey of business in the value of oil imports contrib­ plans taken by the Department of uted to the improvement, as a sharp Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

232 Federal Reserve Bulletin □ March 1980 drop in the physical volume of oil desired monetary growth. In the more than offset a further rise in its three weeks remaining before this price. meeting, member bank borrowings At its meeting on November 20, declined to a daily average of about 1979, the Committee had reaffirmed $1.1 billion. Despite the decline in the broad objectives for monetary borrowings, the federal funds rate growth adopted at its meeting on Oc­ edged up to an average of about 14 tober 6 and had decided that over the percent in late December and early remainder of 1979 the Manager for January, at least in part because of Domestic Operations should contin­ exceptionally large demands for ex­ ue to restrain expansion of bank re­ cess reserves around the year-end serves in pursuit of the Committee’s holidays. objective of decelerating growth of Expansion in the major monetary M-l, M-2, and M-3 over the fourth aggregates remained at a reduced quarter to rates that would hold ex­ pace in November and December, pansion of these monetary aggre­ after having slowed markedly in Oc­ gates from the fourth quarter of 1978 tober. Over the two-month period, to the fourth quarter of 1979 within M-l, M-2, and M-3 grew at annual the Committee’s ranges for that peri­ rates of about VI4 percent, 6 per­ od; it was understood at the meeting cent, and 53/4 percent respectively.1 that persistence of recent relation­ Over the three months from Septem­ ships might result in growth of M-2 ber to December, M-l grew at a rate at about the upper limit of its range. of about 3 percent and M-2 and M-3 Specifically, the Committee instruct­ at rates of about 7 percent and 6V4 ed the Manager to restrain the ex­ percent respectively. pansion of bank reserves to a pace The reduced growth in the mone­ thought to be consistent with growth tary aggregates over the fourth quar­ at average annual rates of about 5 ter was associated with a slowing of percent for M-l and 8V2 percent for expansion in interest-bearing depos­ M-2 in November and December, its as the quarter progressed. At provided that in the period before commercial banks, net flows into the next regular meeting the weekly money market certificates and largeaverage federal funds rate remained denomination time deposits account­ generally within a range of IIV2 to ed for all of the growth in interest- 15V2 percent. bearing deposits during the quarter. Over the first four weeks after the Among nonbank thrift institutions, November meeting, both total and mutual savings banks and credit nonborrowed reserves grew at about unions experienced particularly the rates projected at the time of the weak net inflows. meeting. Member bank borrowings Growth in total loans and invest­ averaged about $13A billion, com­ ments at commercial banks slowed pared with an average of slightly less than $2 billion in the preceding three 1. M-l comprises private demand deposits weeks, and the federal funds rate and currency in circulation. M-2 comprises continued to average around 13V2 M-l and commercial bank time and savings deposits other than large-denomination cer­ percent. Toward the end of the fourtificates of deposit. M-3 is M-2 plus deposits week period, however, the demand at nonbank thrift institutions (savings and for reserves appeared to be easing loan associations, mutual savings banks, and relative to the path consistent with credit unions). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 233 sharply in the fourth quarter. Slower for example, overall activity had been expansion was especially pro­ unexpectedly strong and the widely nounced in business loans. Growth anticipated recession had not devel­ in real estate loans remained close to oped, although automobile produc­ the pace in the first three quarters of tion and housing starts had declined. the year. In the judgment of a number of mem­ Since the November meeting of bers, a downturn now seemed to be the Committee, interest rates had getting under way, but there was fluctuated over a relatively wide also recognition that it could be de­ range, although they had been some­ layed for another quarter or two. what less volatile than in the pre­ Consumption expenditures in par­ vious intermeeting period. On bal­ ticular were stronger in late 1979 ance, most interest rates had than had been anticipated, and the declined. Most banks had reduced saving rate fell to an exceptionally their loan rate to prime business bor­ low level. To the extent that the re­ rowers from 153A to 15V4 percent, duced saving rate was attributable to and a few banks had cut the rate to buying in anticipation of rapid in­ 15 percent. Mortgage rates had creases in prices, strength in con­ edged higher in the primary market, sumer buying could persist for a and available information suggested time. On the other hand, to the ex­ continued weakness in mortgage tent that the reduced rate reflected commitments and lending activity at pressure on consumer budgets aris­ nonbank thrift institutions. ing from past inflation and from the Staff projections suggested that onset of the heating season with growth of nominal gross national sharply higher prices for energy, the product would slow considerably in strength in consumer buying could the current quarter and then pick up give way rather promptly to sub­ gradually over the remainder of stantial weakness. 1980. The projections suggested, The outlook for domestic econom­ however, that a contraction in real ic activity continued to be clouded GNP would develop in the current by political developments abroad. quarter and would continue later in The problem of the U.S. hostages the year, although at a diminishing held in Iran was unresolved, and in pace in the second half, and that the recent days international tensions rate of unemployment would in­ had been heightened by the Soviet crease substantially. The rise in av­ Union’s invasion of Afghanistan. In­ erage prices was projected to accel­ creased defense spending could have erate slightly during the early part of an impact on economic activity, al­ 1980, mainly because of increases in though current information sug­ energy costs, but to subside later. gested that increases would be of In the Committee’s consideration limited proportions. of the economic outlook, several Inflation remained a major con­ members stressed the elements of cern. In part because of earlier in­ uncertainty in the current situation. creases in oil prices and in mortgage The observation was made that the interest rates, the consumer price in­ relationships of the past appeared to dexes to be published in the next few provide less guidance than usual in months probably would continue to appraising the current situation and show exceptionally large advances. outlook. In the latter part of 1979, At its meeting on July 11, 1979, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

234 Federal Reserve Bulletin □ March 1980 the Committee had reaffirmed the within the framework of the Full following ranges for monetary Employment and Balanced Growth growth from the fourth quarter of (Humphrey-Hawkins) Act of 1978. 1978 to the fourth quarter of 1979 In the discussion of policy for the that it had established in February: near term, the members in general M-l, IV2 to 4V2 percent; M-2, 5 to 8 considered rates of monetary growth percent; and M-3, 6 to 9 percent. for the three months from December Having established the range for M-l to March within the framework of in February on the assumption that some reduction in ranges for growth expansion of automatic transfer over the whole of 1980 from those service (ATS) and negotiable order for 1979 in pursuit of the Com­ of withdrawal (NOW) accounts mittee’s objective of reducing the would dampen growth by about 3 rate of inflation. The Committee also percentage points over the year, the took note of a staff analysis in­ Committee also agreed that actual dicating that the demand for money growth of M-l might vary in relation could be relatively weak in the first to its range to the extent of any de­ quarter of 1980, if growth of nominal viation from that estimate. Later in GNP did in fact slow sharply, and the year, expansion of such accounts could strengthen as the year pro­ appeared to be reducing measured gressed. growth of M-l over the year by A number of members favored about IV2 percentage points, and af­ pursuit of somewhat slower mone­ ter allowance for the deviation from tary growth in the early months of the earlier assumption, the equiva­ the year than they might accept for lent range was 3 to 6 percent. Over the whole year, and some indicated a the year ending in the fourth quarter willingness to tolerate relatively of 1979, M-l grew about 5V2 per­ slow monetary growth if significant cent, M-2 about 8V4 percent, and declines in interest rates developed M-3 about 8 percent.2 in the weeks immediately ahead. At the July meeting the Com­ These views were consistent with mittee also anticipated that growth the possibility that the demand for of the monetary and credit aggre­ money would be relatively weak gates over the year ending in the early in the year and that pressures fourth quarter of 1980 might be with­ for monetary growth were likely to in the ranges established for 1979. At increase later in the year if growth of this meeting the Committee began a nominal GNP picked up. Moreover, review of the ranges for 1980. It was concern was expressed that any sub­ understood that at its meeting sched­ stantial declines in interest rates uled for early February the Com­ might be interpreted as a significant mittee would complete its review easing of monetary policy and thus and would establish ranges for 1980 could have adverse consequences for inflationary expectations and for 2. These growth rates are based on revised the foreign exchange value of the data for the monetary aggregates, reflecting dollar. Other members of the Com­ new benchmarks for deposits at nonmember mittee, however, expressed skepti­ banks that were published on January 10, cism about the feasibility of fine tun­ 1980. On the basis of unrevised figures, the ing policy in an effort to provide for growth rates were slightly lower for M-l and M-2—about 5 percent and 8 percent respec­ rather small, intrayear variations in tively. the rate of monetary growth. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 235 Differences in views concerning further in the final quarter of 1979 and the particular rates of monetary that prices on the average continued to rise rapidly. In November retail sales growth to be specified for the period strengthened and nonfarm payroll em­ from December to March were not ployment rose considerably further, but great. Preferences were expressed industrial production declined somewhat for growth indexed by expansion in and private housing starts fell. The M-l at an annual rate of 4 percent, a unemployment rate edged down from 6.0 to 5.8 percent. Producer prices of fin­ rate of 5 percent, and something be­ ished goods and consumer prices contin­ tween the two. ued to rise rapidly, in part because of the With respect to the acceptable spreading effects of earlier increases in range of fluctuation for the federal energy costs. Over recent months the rise in the index of average hourly earn­ funds rate, almost all members pre­ ings has remained close to the rapid pace ferred to retain the range of IIV2 to during 1978. 1572 percent originally adopted at The trade-weighted value of the dollar the meeting on October 6, 1979, and against major foreign currencies has de­ continued at the meeting on Novem­ preciated about 3 percent since mid-November, reflecting in large part the ber 20. One member suggested rais­ Middle East situation as well as a firming ing the range slightly, to 12 to 16 per­ of monetary conditions in a number of cent. foreign countries. The U.S. foreign trade At the conclusion of the dis­ deficit in October and November on the average was slightly below the rate for cussion, the Committee agreed that the third quarter. open market operations in the period Growth of the major monetary aggre­ until the next meeting should be di­ gates, which had slowed in October, re­ rected toward expansion of reserve mained at reduced rates in the final months of 1979. From the fourth quarter aggregates consistent with growth of 1978 to the fourth quarter of 1979 M-l over the first quarter of 1980 at an grew 5V2 percent, M-2 about 874 per­ annual rate between 4 and 5 percent cent, and M-3 about 8 percent. Most for M-l and on the order of 7 percent market interest rates have declined for M-2, provided that the weekly somewhat on balance since the Com­ mittee’s meeting in late November. average federal funds rate remained Taking account of past and prospec­ within a range of 1172 to 1572 per­ tive developments in employment, un­ cent. If it appeared during the period employment, production, investment, before the next regular meeting that real income, productivity, international the constraint on the federal funds trade and payments, and prices, the Fed­ eral Open Market Committee seeks to rate was inconsistent with the objec­ foster monetary and financial conditions tive for the expansion of reserves, that will resist inflationary pressures the Manager for Domestic Opera­ while encouraging moderate economic tions was promptly to notify the expansion and contributing to a sustain­ able pattern of international transac­ Chairman who would then decide tions. At its meeting on July 11, 1979, the whether the situation called for sup­ Committee agreed that these objectives plementary instructions from the would be furthered by growth of M-l, Committee. M-2, and M-3 from the fourth quarter of The following domestic policy di­ 1978 to the fourth quarter of 1979 within rective was issued to the Federal Re­ ranges of IV2 to 472 percent, 5 to 8 per­ cent, and 6 to 9 percent respectively. It serve Bank of New York: appeared that expansion of ATS and NOW accounts would dampen growth of The information reviewed at this M-l by about 172 percentage points over meeting suggests that real output of the year, half as much as assumed early goods and services expanded somewhat in the year; thus after allowance for the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

236 Federal Reserve Bulletin □ March 1980 deviation from the earlier estimate, the riod before the next regular meeting the equivalent range for M-1 was 3 to 6 per­ weekly average federal funds rate re­ cent. The associated range for bank mains within a range of 1IV2 to 15 V2 per­ credit was llh to IOV2 percent. The cent. Committee anticipated that for the peri­ If it appears during the period before od from the fourth quarter of 1979 to the next meeting that the constraint on the fourth quarter of 1980, growth may the federal funds rate is inconsistent with be within the same ranges, depending the objective for the expansion of re­ upon emerging economic conditions and serves, the Manager for Domestic Oper­ appropriate adjustments that may be re­ ations is promptly to notify the Chairman quired by legislation or judicial develop­ who will then decide whether the situa­ ments affecting interest-bearing transac­ tion calls for supplementary instructions tions accounts. Ranges for 1980 will be from the Committee. reconsidered at the meeting of the Com­ mittee scheduled for early February. Votes for this action: Messrs. Volck- In the short run, the Committee seeks er, Balles, Black, Coldwell, Kimbrel, expansion of reserve aggregates consis­ Mayo, Partee, Rice, Schultz, Mrs. tent with growth over the first quarter of Teeters, Messrs. Wallich, and Tim- 1980 at an annual rate between 4 and 5 len. Votes against this action: None. percent for M-l and on the order of 7 (Mr. Timlen voted as an alternate percent for M-2, provided that in the pe­ member.) 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 Bulle­ tin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

237 Legal Developments Amendments to Regulation Q Revised Interpretation of Regulation Y The Board of Governors of the Federal Reserve Sys­ The Board of Governors has revised an interpretation tem has amended Regulation Q to establish a maxi­ issued in January, 1978 (12 CFR 225.139), in order to mum interest rate ceiling of \ VU per cent on the new amplify its views regarding the nature of indebtedness 2V2 year variable ceiling time deposit. that gives rise to the presumption of continued control Effective February 27, 1980, the Board amends Reg­ established by § 2(g)(3) of the Bank Holding Company ulation Q (12 C.F.R. Part 217) as follows: Act. Effective February 7, 1980, interpretation 225.139 is revised as follows: Section 217.7—Maximum Rates of Interest 1. Footnote 4 is deleted, and footnotes 5, 6, and 7 Payable by Member Banks on Time and Savings are renumbered 4, 5, and 6, respectively. Deposits 2. A new paragraph (c)(4) is added to read as fol­ lows: (4) The term “indebtedness” giving rise to the pre­ sumption of continued control under section 2(g)(3) of the Act is not limited to debt incurred in connection with the transfer; it includes any debt outstanding at (g) Time deposits of less than $100,000 with matu­ the time of transfer from the transferee to the transfer­ rities of2lh years or more. Except as provided in para­ or or its subsidiaries. However, the Board believes graphs (a), (b), (d), and (e), a member bank may pay that not every kind of indebtedness was within the interest on any nonnegotiable time deposit with a contemplation of the Congress when section 2(g)(3) maturity of 2xh years or more that is issued on or after was adopted. Routine business credit of limited the first day of each month at a rate not to exceed the amounts and loans for personal or household purposes lower of three quarters of one per cent below the aver­ are generally not the kinds of indebtedness that, stand­ age 2V2 year yield for United States Treasury secu­ ing alone, support a presumption that the creditor is rities as determined and announced by the United able to control the debtor. Accordingly, the Board States Department of the Treasury three business days does not regard the presumption of section 2(g)(3) as prior to the first day of such month, or ll3/4 per cent. applicable to the following categories of credit, pro­ The average 2xh year yield will be rounded by the vided the extensions of credit are not secured by the United States Department of the Treasury to the near­ transferred property and are made in the ordinary est 5 basis points. A member bank may offer this cate­ course of business of the transferor (or its subsidiary) gory of time deposit to all depositors. However, a that is regularly engaged in the business of extending member bank may pay interest on any nonnegotiable credit: (i) consumer credit extended for personal or time deposit with a maturity of 2lh years or more household use to an individual transferee; (ii) student which consists of funds deposited to the credit of, or in loans made for the education of the individual transfer­ which the entire beneficial interest is held by: ee or a spouse or child of the transferee; (iii) a home (1) the United States, any State of the United mortgage loan made to an individual transferee for the States, or any county, municipality or political sub­ purchase of a residence for the individual’s personal division thereof, the District of Columbia, the Com­ use and secured by the residence; and (iv) loans made monwealth of Puerto Rico, the Virgin Islands, Ameri­ to companies (as defined in section 2(b) of the Act) in can Samoa, Guam, or political subdivision thereof; or an aggregate amount not exceeding ten per cent of the (2) an individual pursuant to an Individual Retire­ total purchase price (or if not sold, the fair market val­ ment Account agreement or Keogh (H.R. 10) Plan es­ ue) of the transferred property. The amounts and tablished pursuant to 26 U.S.C. (I.R.C. 1954) §§ 408, terms of the preceding categories of credit should not 401, at a rate not to exceed the ceiling rate payable to differ substantially from similar credit extended in the same category of deposit by any Federally-insured comparable circumstances to others who are not trans­ savings and loan association or mutual savings bank. ferees. It should be understood that, while the statu­ Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

238 Federal Reserve Bulletin □ March 1980 tory presumption in situations involving these cate­ Notice has been given of these applications, as re­ gories of credit may not apply, the Board is not quired by section 3(b) of the BHC Act, by the Merger precluded in any case from examining the facts of a Act, and by the Board’s Rules of Procedure (12 C.F.R. particular transfer and finding that the divestiture of § 262.3(b)), affording interested persons the opportu­ control was ineffective based on the facts of record. nity to submit comments and views. As required by the Merger Act, reports on competitive effects of the mergers were requested from the United States At­ torney General, the Comptroller of the Currency, and Bank Holding Company and Bank Merger the Federal Deposit Insurance Corporation, and a re­ Orders Issued by the Board of Governors port was received from the Attorney General. The Board has also received comments from three Cleve­ Orders Under Section 3 land community organizations: Buckeye-Woodland of Bank Holding Company Act Community Congress (“BWCC”), Citizens to Bring Broadway Back, and Union-Miles Coalition (collec­ tively “Protestants”). Protestants’ comments on all AmeriTrust Corporation, Cleveland, Ohio the applications relate to AmeriTrust’s record under the Community Reinvestment Act of 1977 (“CRA,” 12 U.S.C. §§ 2901-05). Because the issues raised by Pro­ Cincinnati Trust Company, testants are the same in each case, the applications Cincinnati, Ohio have been consolidated before the Board. The Board has considered the applications and all comments and AmeriTrust Company, reports received in the light of the factors set forth for Cleveland, Ohio the respective applications in section 3(c) of the BHC Act, section 9 of the Federal Reserve Act, the Merger Order Approving Acquisition of Bank, Merger of Act, and the CRA. Banks, Establishment of Branches, and Membership Competitive considerations are consistent with ap­ in the Federal Reserve System proval of these applications. Corporation, the largest banking organization in Ohio, controls ten banks, in­ AmeriTrust Corporation (“Corporation”), Cleveland, cluding AmeriTrust, Franklin Bank, Lake Bank, and Ohio, a bank holding company within the meaning of Lorain Bank, with aggregate deposits of approximate­ the Bank Holding Company Act (“BHC Act”), has ly $3.7 billion, representing 9.8 percent of total com­ applied for the Board’s approval under section 3(a)(3) mercial bank deposits in the state.1 Since Cincinnati of the BHC Act (12 U.S.C. § 1842(a)(3)) to acquire all Bank is a proposed new bank, its acquisition by Cor­ of the voting shares of Cincinnati Trust Company poration would have no immediate effect on the con­ (“Cincinnati Bank”), Cincinnati, Ohio, a proposed centration of banking resources in Ohio. Cincinnati new bank. Cincinnati Bank has applied to the Board Bank is to be located in the Cincinnati banking mar­ under section 9 of the Federal Reserve Act (12 U.S.C. ket,2 nearly 100 miles from Franklin Bank, Corpora­ §321) to become a member of the Federal Reserve tion’s closest existing bank subsidiary. Corporation is System. not represented in the market, and the acquisition of In addition, AmeriTrust Company (“AmeriTrust”), Cincinnati Bank will not eliminate existing com­ Cleveland, Ohio, a subsidiary of Corporation, has ap­ petition or have any adverse effects on potential com­ plied for the Board’s approval under the Bank Merger petition. AmeriTrust, Franklin Bank, Lake Bank, and Act (“Merger Act,” 12 U.S.C. §1828(c)) to merge with Lorain Bank are all existing subsidiaries of Corpora­ AmeriTrust Company of Franklin County (“Franklin tion. Their merger into AmeriTrust would be a corpo­ Bank”), Columbus, Ohio, Ameritrust Company of rate reorganization and would not affect the concentra­ Lake County (“Lake Bank”), Painesville, Ohio, and tion of banking resources or existing or potential AmeriTrust Company of Lorain County (“Lorain competition in any market in the state. Bank”), Lorain, Ohio, under the charter and title of The financial and managerial resources of Corpora­ AmeriTrust. Incident to the proposed merger, the tion, Cincinnati Bank, AmeriTrust, Franklin Bank, existing offices of Franklin Bank, Lake Bank, and Lo­ Lake Bank, Lorain Bank, and Corporation’s other rain Bank would become branch offices of Ameri- Trust. AmeriTrust has also applied for the Board’s 1. All banking data are as of September 30, 1978, except as other­ approval under section 9 of the Federal Reserve Act to wise noted. establish branches at 2351 East 22nd Street, Cleve­ 2. The Cincinnati Banking market includes Hamilton, Clermont, and portions of Warren and Butler Counties in Ohio; Boone, Camp­ land, Ohio, and at the corner of Cedar and Richmond bell, and Kenton Counties in Kentucky; and Dearborn County, In­ Roads, Beachwood, Ohio. diana. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 239 subsidiaries are regarded as satisfactory. Cincinnati staff, to discuss matters raised by the protest. Botl Bank has no financial or operating history; however, parties expressed reluctance to meet and no mutually its future prospects as a subsidiary of Corporation ap­ agreeable format for a meeting was found. As part of pear favorable, and other banking factors specified in its investigation, staff of the Federal Reserve Bank of the Board’s Regulation H (12 C.F.R. § 208.5(a)) are Cleveland attended a meeting of BWCC at which consistent with approval of its application for member­ BWCC made an oral presentation of materials which it ship. Therefore, the Board regards banking factors as had prepared. Those materials, including affidavits consistent with approval of these applications. In addi­ from several of BWCC’s members regarding Ameri­ tion, the corporate powers of Cincinnati Bank are con­ Trust’s handling of their loan applications, were for­ sistent with the purposes of the Federal Reserve Act. warded to AmeriTrust for comment and made part of In considering the effect of these applications on the the record. convenience and needs of the communities to be Following completion of the Reserve Bank’s investi­ served, the Board notes that Cincinnati Bank would gation, a preliminary report of Federal Reserve Sys­ provide an additional source for a full range of banking tem findings was prepared and made available to the services in the Cincinnati market and would offer a parties. System staff then held a public meeting in Braille checking account that is not presently offered Cleveland on December 12, 1979, to permit both par­ in Cincinnati. The two proposed branches of Ameri- ties to comment on the report. BWCC submitted ex­ Trust would provide convenient new banking loca­ tensive additional comments covering all aspects of tions in its community. AmeriTrust’s performance under Regulation BB. With In considering convenience and needs, the Board the exception of brief comments regarding BWCC’s has also considered the CRA records of Corporation’s initial submission, Applicants have not responded di­ existing and proposed subsidiaries. The CRA requires rectly to BWCC’s allegations. Finally, following initial the Board to assess the records of those subsidiaries of Board consideration of the applications, Board staff meeting the credit needs of their entire communities, wrote to Applicants and offered them the opportunity including low and moderate income neighborhoods, to make commitments to improve their performance in consistent with their safe and sound operation, and to areas of Board concern. The applicants responded by take those records into account in its evaluation of making commitments and submitting additional mate­ these applications. The Board has reviewed the CRA rial for the record, and BWCC commented on the com­ records of Corporation’s existing subsidiaries other mitments and the submission. The Board believes that than AmeriTrust and finds that they are consistent these procedures have accomplished the purposes for with approval. which BWCC requested a hearing.3 With regard to AmeriTrust’s CRA record, the Board AmeriTrust has delineated its community for CRA has considered extensive comments from the Protes­ purposes to be Cuyahoga County, Ohio. This delinea­ tants. Initially, BWCC submitted comments raising tion appears reasonable and is defined on a basis per­ several questions about AmeriTrust’s performance un­ mitted by Regulation BB. AmeriTrust has adopted a der the Board’s CRA regulation (Regulation BB, 12 CRA Statement, posted required notices in its C.F.R. § 228). BWCC also initially requested that the branches, and established comment files; and its Board hold a public hearing in connection with the ap­ branch personnel are generally familiar with the re­ plications in order that it be fully apprised of Ameri­ quirements of the CRA. BWCC has complained that Trust’s position and have an opportunity to respond in material it submitted for AmeriTrust’s CRA public the presence of responsible representatives of Ameri- comment file had not been placed in the file. Board Trust, and because of difficulties it encountered in pre­ examiners confirmed that two BWCC documents paring written evidence promptly. The other Protes­ which should have been placed in the file were tants submitted brief statements of support for BWCC’s challenge. 3. BWCC’s request does not clearly contemplate a formal adjudica­ Upon receiving BWCC’s initial submission critical tory hearing on any aspect of the applications, nor has it shown that one is necessary. Section 3(b) of the BHC Act requires the Board to of AmeriTrust’s record, the Board conducted an ex­ hold such a hearing on an application to acquire a state-chartered bank tensive investigation of AmeriTrust’s record, includ­ upon the request of the state bank supervisory authority. No such ing a full consumer compliance examination of Ameri- request has been received with respect to Corporation’s application, and no other statute requires the Board to hold a formal hearing with Trust, and gathered considerable additional data respect to any of these applications. BWCC has been given numerous regarding real estate transactions and real estate lend­ opportunities to place materials in the record and to comment on AmeriTrust’s submissions and on the preliminary findings of the Fed­ ing in the Cleveland Standard Metropolitan Statistical eral Reserve System, and has been given the opportunity it requested Area. In addition, the Federal Reserve Bank of Cleve­ for community participation in the application process. Moreover, the land attempted to arrange a meeting between BWCC material facts regarding AmeriTrust’s CRA record are generally not in dispute or are of a character that would not permit a hearing to further and representatives of Corporation and AmeriTrust clarify them, and the Board believes that no purpose would be served (“Applicants”), together with Federal Reserve System by holding a formal hearing. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

240 Federal Reserve Bulletin □ March 1980 retained by AmeriTrust but not placed in the file. Trust for 1977 and 1978 were in low and moderate in­ However, comments from other organizations were come areas, although its rejection rate for home im­ properly placed in AmeriTrust’s comment files, and provement loan applications was higher (32 percent the Board believes that failure to include BWCC’s compared to 19 percent) in the low and moderate in­ documents in its file was an isolated error in a general­ come areas. AmeriTrust was somewhat more active in ly good record of technical compliance and is not a supplying home improvement credit in largely black material adverse reflection on AmeriTrust’s CRA rec­ areas than in largely white areas. AmeriTrust was ord. about 1.6 times as active in supplying consumer in­ BWCC contends that AmeriTrust’s record of real stalment credit in higher income areas as it was in low estate and home improvement lending to low and mod­ and moderate income areas. erate income neighborhoods, and to areas with a sig­ AmeriTrust is the leading provider of Small Busi­ nificant black population is poor. BWCC’s analysis is ness Administration guaranteed loans in Cleveland, based on comparisons of data supplied by AmeriTrust with $3 million of such loans outstanding as of Decem­ pursuant to the Home Mortgage Disclosure Act ber 31, 1978, and an additional $2.1 million in com­ (“HMDA,” 12 U.S.C. § 2803) with real estate transfer mitments, mostly in low and moderate income areas. data and with deposit data for AmeriTrust branches AmeriTrust has also recently participated in three located in or near the Buckeye-Woodland area. The large housing projects for the elderly which were spon­ Board has analyzed the former comparisons thorough­ sored by the United States Department of Housing and ly. However, as it indicated in its CRA information Urban Development. However, AmeriTrust no longer statement, issued on January 3, 1980, the Board does makes FHA or VA insured real estate loans, which not believe that comparisons of deposits to loan totals may be partly responsible for the level of its mortgage can be prima facie evidence of discrimination. More­ lending in low and moderate income areas. over, a comparison of total deposits to mortgage loans AmeriTrust has been instrumental in the estab­ is of little use in considering the record of a com­ lishment of two community development organiza­ mercial bank with a diversified portfolio.4 tions and has made loans to several others. It has Approximately 23 percent of the population of approximately $1.2 million in loans outstanding to Cuyahoga County lives in low and moderate income these organizations of which over two-thirds is to or­ census tracts.5 Analysis of AmeriTrust’s HMDA data ganizations operating outside of the city of Cleveland. for 1977 and 1978 shows that AmeriTrust made 18 AmeriTrust holds $113 million of state, county, and times as many mortgage loans in higher income tracts municipal bonds, many of which finance school, mass as it did in low and moderate income tracts. However, transit, public works and hospital programs, although on a comparative basis, AmeriTrust originated a great­ none were used to finance housing. er percentage of its mortgages in low and moderate in­ In addition to comments on AmeriTrust’s lending come areas than any other commercial bank in Cleve­ record, BWCC has made a variety of specific com­ land. When the number of deed transfers in each ments on other areas of AmeriTrust’s performance, in­ census tract for 1977 is used as a proxy for demand, it cluding efforts to ascertain credit needs, marketing, appears that AmeriTrust was about 1.6 times as active board of directors participation, and branches. The in providing mortgages in higher income areas as in Board finds that AmeriTrust relies largely on its low and moderate income areas, and a variety of other branch network to ascertain credit needs. In addition, factors such as usury ceilings and the institutional early in 1979 AmeriTrust instituted a program of meet­ structure of the market may have had an effect on this ing with organizations in its community and has met result. By the same measure, AmeriTrust was about with approximately 25 organizations thus far. It has twice as active in providing mortgages in suburban not conducted surveys or other forms of market re­ Cuyahoga County as in the City of Cleveland, and search. twice as active in largely white areas as in largely black AmeriTrust markets its services in a wide variety of areas with similar income characteristics. media including television, radio, newspapers, and In regard to home improvement lending, more than lobby advertising. BWCC’s allegation that Ameri­ 19 percent of loans purchased or originated by Ameri- Trust’s lobby advertising emphasizes different serv­ ices in inner city branches than in suburban ones ap­ 4. As of July 2, 1979, AmeriTrust had a loan portfolio of $2.6 bil­ pears to be unfounded. AmeriTrust advertises in the lion. Its portfolio consisted of 45.6 percent commercial loans, 13.3 percent residential real estate loans, 14.7 percent other real estate Call and Post, a black newspaper, and on Cleveland’s loans, 6.3 percent consumer instalment loans, 5.0 percent outstanding two black radio stations, although few of these adver­ credit card balances, and 15.1 percent other types of loans. 5. Population data are from the 1970 United States Census. Low tisements have mentioned mortgage lending. Ameriand moderate income census tracts are those where the median family Trust has rejected BWCC’s suggestion that it advertise income is less than 80 percent of median family income for the Cleve­ in community newsletters, and its program of contacts land Standard Metropolitan Statistical Area. Higher income tracts are all other tracts. with local realtors appears largely ineffective. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 241 AmeriTrust’s board of directors has considered and not appear to have been handled differently in any re­ adopted AmeriTrust’s CRA Statement as required by spect from those approved, and there was no evidence Regulation BB. It appears to have delegated all further to suggest that race or any other prohibited basis had CRA responsibility to management. AmeriTrust has been considered in acting upon the applications. All branches throughout Cuyahoga County, including low denials sampled were made for reasons consistent with and moderate income areas. In the past four years, it sound lending criteria. has closed four outmoded facilities in low and moder­ Finally, BWCC alleges that AmeriTrust has engaged ate income areas and opened two modern ones. Of the in a pattern or practice of pre-screening loan appli­ 17 AmeriTrust branches offering Saturday hours, only cants in violation of the Board’s Regulation B (12 two are located in low and moderate income areas. C.F.R. § 202). In support of its allegation, BWCC of­ On the basis of AmeriTrust’s CRA record, the fers the affidavits of three individuals. Two of these Board concludes that AmeriTrust has offered a full individuals made applications for loans to AmeriTrust range of services throughout its community and has and apparently were informed orally that their appli­ not arbitrarily excluded any area. AmeriTrust has cations were denied; however, Board examiners could taken few steps aimed specifically to help meet the find no record of the applications in AmeriTrust’s files. credit needs of low and moderate income areas, but The third individual was refused the opportunity to while its record leaves room for improvement it apply for a loan. AmeriTrust has not contradicted would, absent other considerations, be consistent with BWCC’s allegations with respect to these individuals, approval of these applications.6 and the Board concludes that the cases do involve vio­ BWCC has also charged that AmeriTrust engages in lations of Regulation B. a pattern or practice of racial discrimination in grant­ In addition, the Board’s consumer compliance ex­ ing credit. It bases its charges on a comparison of amination of AmeriTrust revealed other violations of HMDA data with deed transfer data, such as that ana­ Regulation B. Pre-screening practices were found in lyzed above, for the Buckeye-Woodland neighbor­ the mortgage departments of AmeriTrust’s main office hood, and on affidavits from three creditworthy indi­ and of three out of 17 branch offices sampled by exam­ viduals from predominantly black areas of Buckeye- iners. The examiners were unable to determine the ex­ Woodland who were denied credit. The Board does tent of the practices and there was no evidence that the not believe that these facts establish a pattern of racial practices were selectively applied. However, the three discrimination. The Board staff’s analysis of data for branches were located in low and moderate income Buckeye-Woodland indicates that AmeriTrust’s rec­ neighborhoods. Examiners also found instances in ord in that neighborhood shows no significant disparity which AmeriTrust failed to give proper adverse action between largely white and largely black areas when notices to persons denied credit, and failed to record compared to deed transfer data for 1977. The Board discrimination monitoring information properly. does not believe that analysis of lending in this small The Board views these violations as extremely seri­ area, or in AmeriTrust’s community as a whole, dem­ ous. They make it impossible to conclude with cer­ onstrates a pattern of discrimination. tainty that AmeriTrust has not engaged in dis­ As for the three cases, there is no showing that the couragement of applications from low and moderate individuals were denied credit on the basis of their income areas. Because of the seriousness of the viola­ race or the character of the area where they reside. In tions, the Board communicated its concern to Amerithe course of their investigation, Board examiners re­ Trust, offering it the opportunity to adopt steps to viewed a sample of denied and approved credit appli­ eliminate prescreening practices and the effects of dis­ cations for mortgage, home improvement, and con­ couraging applications and to improve other areas of sumer instalment credit. The denied applications did its performance. AmeriTrust made five commitments in response to this suggestion. It will: 6. The CRA requires the Board to assess each institution’s record (1) improve its training programs for lending per­ of meeting the credit needs of its community and then to “take such sonnel to prevent future violations, record into account in its evaluation of an application for a deposit facility by such institution.” 12 U.S.C. § 2902(2). The Board believes (2) offer credit counselling to applicants or refer that the CRA commits to the Board’s discretion the evaluation of an them to independent credit counselling organizations, institution’s CRA record and the weight that record is given in the (3) make public its real estate appraisal standards, context of other statutory considerations. Accordingly, the Board may consider, among other things, the convenience to the commu­ (4) study the feasibility of making public its lending nities served afforded by the expansion of well managed financial insti­ policies, and tutions, the efficiencies inherent in permitting an institution’s manage­ ment to determine its most appropriate corporate structure, and the (5) Make the public aware of commitments two, procompetitive effects of de novo expansion in determining whether three, and four. an institution’s CRA record is consistent with approval in the context The Board believes that these actions will help to im­ of particular proposals. The Board has considered these and similar factors in making its determination in this case. prove AmeriTrust’s CRA record, and it expects Ameri- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

242 Federal Reserve Bulletin □ March 1980 Trust to formulate detailed plans for satisfying its applications, we would approve the applications with­ commitments and to report quarterly to the Federal out that requirement. Reserve Bank of Cleveland on its progress in imple­ We are concerned, as is the majority of the Board, menting those plans. The first report should include with AmeriTrust’s violations of Regulation B. How­ the results of the study mentioned in item four. ever, we believe the remedy the Board has chosen to The Board does not believe that the steps offered by impose is an excessive response to the deficiency it AmeriTrust are sufficient to resolve its concerns with has identified. These violations were not found to be AmeriTrust’s prescreening practices, however. Ac­ pervasive throughout the organization. They represent cordingly, the Board requires, as a condition of its ap­ acts by several employees not only in violation of law proval of these applications, that AmeriTrust promptly but in clear violation of AmeriTrust’s policy. The begin to maintain for a period of one year, or longer if shortcoming that gave rise to the violations was the Board deems necessary, a register of all inquiries AmeriTrust’s failure to communicate to and train its and applications for mortgage and home improvement employees effectively and to monitor their perform­ loans made in person at offices of AmeriTrust in ance. Appropriately, AmeriTrust has committed, in Cuyahoga County in a form and a manner acceptable connection with these applications, to improve its to the Director of the Board’s Division of Consumer training programs to prevent future violations. The and Community Affairs. With this condition, and con­ Federal Reserve Bank of Cleveland will monitor Ameri­ sidering AmeriTrust’s commitments and other facts of Trust’s compliance with that commitment and help record, it is the Board’s judgment that convenience ensure that the program is effective. This commitment and needs considerations associated with these pro­ is designed to correct the deficiencies that have been posals are consistent with approval, that consum­ identified and we do not believe that the register will mation of Applicants’ proposals and entry of Cincin­ be substantially more effective in preventing future vi­ nati Bank into membership in the Federal Reserve olations. System would be in the public interest, and that the In any event, the requirement represents an unwar­ applications should be approved. ranted burden. Implementation of the register will in­ On the basis of the record, the applications are ap­ volve soliciting detailed information of a personal proved for the reasons and subject to the conditions nature from all applicants and inquirers for loans. In summarized above. The acquisition of Cincinnati addition to the inconvenience and possible embarrass­ Bank and the merger transactions shall not be made ment to AmeriTrust’s customers, staff estimates of the before the thirtieth calendar day following the ef­ cost to AmeriTrust of complying with the requirement fective date of this Order. None of the transactions for one year range from $250 thousand to $300 thou­ shall be made later than May 21, 1980, and Cincinnati sand. We are aware that similar requirements are im­ Bank shall be opened for business not later than Au­ posed by other regulatory agencies either generally or gust 21, 1980, unless these times are extended for good under particular circumstances. However, the Federal cause by the Board or the Federal Reserve Bank of Reserve’s examination of AmeriTrust found no evi­ Cleveland acting under delegated authority. dence that prescreening was used for a prohibited pur­ By order of the Board of Governors, effective Feb­ pose, and AmeriTrust has tendered an affirmative ruary 21, 1980. undertaking to prevent future violations. Under these circumstances we do not believe that such a sub­ Voting for this action: Chairman Volcker and Governors stantial supervisory burden is justified. Schultz, Partee, Teeters, and Rice. Concurring: Governors Based on the foregoing, we believe the applications Wallich and Coldwell. should be approved without the imposition of special conditions. (Signed) G riffith L. Garwood, [seal] Deputy Secretary of the Board. February 21, 1980 Concurring Statement of Governors Wallich and Coldwell Detroitbank Corporation Detroit, Michigan We do not believe that requiring AmeriTrust to maintain a register of loan inquiries, as the Board has Order Denying done in its Order, is warranted by the facts of these Acquisition of Bank Holding Company cases or that it will be of sufficient supervisory value to and Acquisition of Reinsurance Company the Board to justify the costs to AmeriTrust associated with it. Accordingly, although we concur with the ma­ DETROITBANK Corporation, Detroit, Michigan, a jority of the Board in its other findings regarding these bank holding company within the meaning of the Bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 243 Holding Company Act (the “Act”), has applied for the state, and its share of commercial bank deposits in Board’s approval under section 3 of the Act (12 U.S.C. Michigan would increase to 9.7 percent. As discussed § 1842) to acquire 100 percent of the voting shares of more fully below, viewed in the context of the devel­ the successor by merger to Second National Corpora­ oping banking structure in Michigan, this increase in tion (“Second National”), Saginaw, Michigan, a bank concentration of banking resources is of some concern holding company that controls Second National Bank to the Board. of Saginaw, Saginaw, Michigan, and Second National Second National controls the largest of 12 banking Bank of Bay City, Bay City, Michigan (collectively organizations competing in the Bay City-Saginaw referred to as “Banks”). The company into which banking market,3 holding 25.8 percent of deposits in Second National is to be merged has no significance that market. Second National also controls the small­ except as a means to facilitate the acquisition of the est of 12 banking organizations in the Tuscola banking voting shares of Second National. Accordingly, the market,4 holding 1.4 percent of market deposits. None proposed acquisition of shares of the successor organi­ of Applicant’s subsidiary banks has an office in either zation is treated herein as the proposed acquisition of of these banking markets, or within 75 miles of any shares of Second National. office of Banks. Thus, no significant existing com­ Applicant has also applied under section 4(c)(8) of petition would be eliminated upon consummation of the Act (12 U.S.C. § 1843(c)(8)) and section 225.4(b)(2) the proposal. With regard to potential competition, of the Board’s Regulation Y (12 C.F.R. § 225.4(b)(2)) however, the Board has previously expressed its con­ for permission to acquire indirectly, as an incident to cern about the adverse competitive effects resulting its acquisition of Second National, shares of Century from the entry into smaller metropolitan areas by one Life Insurance Company of Michigan (“Century of the largest banking organizations in a state through Life”), Phoenix, Arizona, an existing nonbank subsid­ acquisition of one of the larger independent organiza­ iary of Second National. Century Life is a reinsurance tions in these areas.5 These adverse effects are ex­ company engaged in insuring credit life and credit acerbated when the bank to be acquired is located in a health insurance written by Union Security Life Insur­ highly concentrated market.6 ance Company in connection with extensions of credit Because of the small share of deposits held by by Banks. This activity has been previously deter­ Second National in the Tuscola banking market, no mined by the Board to be closely related to banking (12 substantial amount of potential competition would be C.F.R. § 225.4(a)(10)). eliminated as a result of consummation of the pro­ Notice of the applications, affording opportunity for posal. With respect to the Bay City-Saginaw market, interested persons to submit comments and views, has however, the Board considers Applicant to be one of been given in accordance with sections 3 and 4 of the the most likely of a small number of banking organiza­ Act, and the time for filing views and comments has tions to enter this market de novo.7 The Board has re­ expired. The Board has considered the applications cently determined that the portion of the Bay Cityand all comments received, including those of Mr. Saginaw market comprised of Midland and Saginaw Harrison Plum and Ms. Judith P. Schwartz,1 in light of Counties is attractive for de novo entry,8 and nothing the factors and considerations set forth in sections 3(c) in the record of these applications alters that judg­ and 4(c)(8) of the Act. ment. In view of the attractiveness for de novo entry Applicant, the third largest banking organization in of the portion of the market that Applicant seeks to Michigan, controls eight banks with aggregate deposits enter, and in view of Applicant’s financial and manage­ of approximately $3.40 billion, representing 8.7 per­ rial resources, Applicant particularly appears to be a cent of total deposits in commercial banks in the probable entrant into this market. Acquisition of state.2 Second National, the 18th largest banking or­ ganization in Michigan, controls two banks with aggre­ 3 The Bay City-Saginaw banking market is approximated by Bay, gate deposits of $383.9 million, representing 1.0 per­ Midland, and Gladwin Counties plus the northern three-quarters of cent of statewide deposits in commercial banks. Upon Saginaw County. 4. The Tuscola banking market is approximated by all of Tuscola consummation of the proposal, Applicant would re­ County, except Arbela, Millington, and Watertown Townships. main the third largest banking organization in the 5. E.g., First International Bancshares, 60 Federal Reserve Bulletin 43, 44 (1974). 6. First City Bancorporation of Texas, Inc., 65 Federal Reserve Bulletin 862, 864 (1979). 1. Mr. Plum, a shareholder of Second National, urged denial of the 7. Applicant states that its primary objective is to establish a bank­ proposal on competitive grounds. Ms. Schwartz, an interested mem­ ing presence in the city of Saginaw. Although there are possible foot­ ber of the public, urged approval on convenience and needs consid­ hold entry vehicles in the Bay City-Saginaw market, none is located in erations. the city of Saginaw, and none would be permitted, under state law, to 2. Banking data are as of December 31, 1978. Applicant has re­ branch into the city. Therefore, Applicant states that foothold entry is ceived the approvals of the Board and the Comptroller of the Cur­ not attractive to it. rency to establish de novo a ninth bank, Detroit Bank-Novi, N.A. 8. Old Kent Financial Corporation, 65 Federal Reserve Bulle­ This bank has not commenced business. tin 1010, 1012 (1979). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

244 Federal Reserve Bulletin □ March 1980 Second National by Applicant would eliminate the The Board has, in the recent past, approved acquisi­ probability that these two organizations will come into tions in Michigan and Texas with facts somewhat simi­ direct competition and the Board would view this com­ lar to those involved in this proposal.11 The facts sup­ petition as desirable in view of the present structure of porting these decisions are distinguishable from the the market. facts in this proposal, however. In First National, the In this regard, the Board finds that the structure of applicant was a significantly smaller banking organiza­ the Bay City-Saginaw market is highly concentrated, tion than Applicant, and therefore, consummation of with the four largest organizations in the market con­ that proposal was expected to enable First National to trolling 79.3 percent of total market deposits. Approv­ compete more effectively with the larger Detroit-based al of the proposal would do nothing to reduce the banking organizations, such as Applicant, on a state­ concentration of banking resources in the Bay City- wide basis.12 The 1977 DETROITBANK decision in­ Saginaw market. On the other hand, denial of the pro­ volved an acquisition in a market that was not attrac­ posal preserves the distinct probability that Applicant tive for de novo entry. and Second National will be confronting each other in Applicant suggests that the competitive effects of its this highly concentrated market. Competition would proposal are particularly similar to those discussed in be enhanced, and ultimately, consumers of banking First City Bancorporation. The Board, however, con­ services would benefit from such an eventuality. In siders the competitive effects of this proposal to be view of the facts of record, including the financial and more serious. The organization to be acquired in First managerial resources of Applicant, the large share of City Bancorporation held fewer deposits, and a small­ deposits in the Bay City-Saginaw banking market held er share of deposits, within its local market than by Second National, the level of concentration, the at­ Second National holds in the Bay City-Saginaw mar­ tractiveness of the market for de novo entry, and other ket, and operated in a significantly less concentrated characteristics of that market, the Board concludes banking market than the Bay City-Saginaw market. In that consummation of this proposal would have sub­ addition, deposits are less concentrated in Texas than stantially adverse effects on potential competition in in Michigan, and the organization to be acquired in the Bay City-Saginaw market. The Board regards First City Bancorporation controlled a smaller share of these effects on potential competition as being suf­ the total deposits in commercial banks in the state than ficient to warrant denial of the proposal. Second National. Accordingly the Board is satisfied The competitive effects associated with this pro­ that facts in this proposal indicate that the adverse posal must also be considered in light of the Board’s effects on potential competition and statewide concen­ concerns about the concentration of banking resources tration of banking resources are significantly more se­ within the state. The Board recently expressed partic­ rious than those associated with the cited cases so as ular concern about the rapid increase in the level of to warrant denial of this proposal, unless such sub­ concentration of banking resources in Michigan.9 The stantially adverse effects are outweighed by factors re­ proportion of statewide deposits held by Michigan’s lated to the convenience and needs of the communities five largest banking organizations increased from 45.0 to be served. percent on December 31, 1976, to 48.1 percent on The financial and managerial resources and future December 31, 1978. Consummation of this proposal prospects of Applicant, Second National, and their would increase this proportion of deposits to approxi­ subsidiary banks are satisfactory and consistent with mately 49.5 percent.10 The Board believes that such a approval of the application. Although Applicant pro­ rapid increase in the concentration of statewide bank­ poses to improve certain banking services offered by ing resources is an appropriate area for concern, and Second National, Second National has sufficient re­ the Board does not view its responsibilities under the sources to serve its community adequately and to ex­ Bank Holding Company Act as requiring it to await the pand the services it currently provides. Furthermore, culmination of a trend toward an undue concentration Applicant could provide these services through de among bank holding companies in Michigan before it novo or foothold entry into the Bay City-Saginaw and intervenes. Indeed, the underlying purpose of the Tuscola banking markets. Thus, the Board finds that Clayton Act, as incorporated in the Bank Holding convenience and needs considerations, including Company Act, is to brake the force of a trend toward Community Reinvestment Act factors, do not out­ undue concentration before it gathers momentum. See weigh the substantially adverse effects on either poten­ Brown Shoe Co. v. United States, 370 U.S. 294, 317- 18 (1962). 11. E.g., First National Financial Corporation, 64 Federal Reserve Bulletin 119 (1978) (“First National")-, DETROITBANK Corporation (Lake Shore Financial Corporation), 63 Federal 9. Old Kent Financial Corporation, supra note 7, at 1011. Reserve Bulletin 926 (1977); First City Bancorporation of Texas, 10. This figure reflects bank holding company acquisitions as of Inc., supra note 6. January 31, 1980. 12. First National at 120. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 245 tial competition or statewide concentration of re­ Bay City-Saginaw market,1 I believe that the anti­ sources described above. competitive effects in Old Kent were more serious. With respect to the application to acquire Century There was stronger evidence in Old Kent to demon­ Life, the Board determined that the balance of public strate that the applicant would be a probable entrant interest factors prescribed by section 4(c)(8) of the Act into the Bay City-Saginaw banking market, since it favored approval of Second National’s acquisition of had attempted to acquire another bank in that market Century Life (41 Federal Register 44897 (1976); 62 in 1974 and had entered another market de novo after Federal Reserve B ulletin 968 (1976)). Nothing in the Board denied its application to acquire an existing the record suggests that Applicant’s acquisition of bank. In addition, in Old Kent, the banking organiza­ Second National would alter that balance. There is no tion to be acquired, although second largest in the Bay evidence that Applicant’s acquisition of Century Life City-Saginaw market, had a greater share of statewide alone would result in undue concentration of re­ commercial bank deposits, and was more capable of sources, decreased or unfair competition, conflicts of and likely to expand into the applicant’s markets than interest, unsound banking practices, or other adverse Second National. Furthermore, despite the majority’s effects on the public interest. In the context of this pro­ finding concerning the attractiveness for de novo entry posal, however, Applicant could not consummate this of the portion of the Bay City-Saginaw market that Ap­ acquisition without acquiring control of Banks. Ac­ plicant proposes to enter, I would accord some weight cordingly, the Board concludes that this application to the fact that Applicant has never entered de novo a must also be denied. market outside the Detroit metropolitan area, and to It is the Board’s judgment that consummation of the its statement that it would not consider such entry. I proposal would not be in the public interest and should also note that Second National’s share of deposits in be denied. On the basis of the record, the applications the Bay City-Saginaw market is not substantially are denied for the reasons summarized above. greater than the share of the second largest banking By order of the Board of Governors, effective Feb­ organization in the market. Thus, approval would not ruary 26, 1980. automatically place Applicant in a dominant position in the market. In view of these facts, I do not believe Voting for this action: Chairman Volcker and Governors this case meets the strong evidentiary requirements Schultz, Wallich, Partee, Teeters, and Rice. Voting against imposed by the courts in analyzing previous probable this action: Governor Coldwell. Governors Schultz and Wal­ future competition cases.2 lich abstained with respect to the application to acquire Cen­ Second, I share some of the majority’s concern tury Life. about the recent increase in the concentration of state­ wide deposits held by the five largest banking organi­ (Signed) G riffith L. Garwood, zations in Michigan, which was one basis for denial in [seal] Deputy Secretary of the Board. Old Kent.3 However, I note that the banking organiza­ tion to be acquired in that application had a larger Dissenting Statement of Governor Coldwell share of statewide deposits than Second National. I do not consider the effects on statewide concentration of I do not find that consummation of the applications banking resources resulting from consummation of of DETROITBANK Corporation to acquire Second this proposal as being so serious as to warrant denial, National Corporation and its nonbank subsidiary, either alone or in conjunction with effects on probable Century Life Insurance Company of Michigan, would future competition in the Bay City-Saginaw banking have such serious adverse effects on competition as to market. warrant denial. Accordingly, I would approve the The majority finds that convenience and need con­ applications for the following reasons. siderations do not outweigh the adverse effects on ei­ First, while consummation of the proposal would ther potential competition or statewide concentration eliminate some potential competition, I do not view of resources. Applicant proposes to furnish Second the effects of this proposal on such competition in the National’s bank subsidiaries with an agricultural lend­ Bay City-Saginaw banking market to be so significant ing specialist. With respect to commercial and residen­ as to warrant denial. The majority, in denying these tial mortgage loans, Applicant proposes to make these applications, found that consummation of this pro­ banks’ rates more competitive and to provide a broad­ posal would eliminate substantial probable future com­ er array of services. Applicant also proposes to assist petition in this banking market. Although I recently voted with the majority to deny an application by Old 1. Old Kent Financial Corporation, 65 Federal Reserve Bulle­ Kent Financial Corporation to acquire a banking or­ tin 1010 (1979). 2. See United States v. Marine Bancorporation, 418 U.S. 602, 625 ganization because of the substantially adverse effects (1974). of the elimination of probable future competition in the 3. Old Kent Financial Corporation, supra note 1, at 1011. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

246 Federal Reserve Bulletin □ March 1980 Second National in expanding trust and commercial relevant banking market. In addition, one of these in­ lending services, and in initiating corporate and inter­ dividuals serves as chairman of the board and the oth­ national services. I believe that the introduction of er serves as a director of Brazosport Bank. Brazosport these services to Second National’s customers would Bank (deposits of $34.8 million) controls 10.9 percent constitute a substantial benefit to the communities to of total market deposits and is the third largest bank in be served that would outweigh any adverse com­ the relevant banking market. petitive effects that would result from consummation Under section 3(c) of the Bank Holding Company of this proposal. Act, the Board is precluded from approving any pro­ Based on the foregoing, I believe that the appli­ posed acquisition of a bank that, in any part of the cations should be approved. country, (1) would result in a monopoly, or would be in furtherance of any combination or conspiracy to monopolize or attempt to monopolize the business of Lake Jackson Bancshares, Inc., banking; or that (2) may substantially lessen com­ Lake Jackson, Texas petition or tend to create a monopoly or be in restraint of trade in any banking market, unless the Board finds that such anticompetitive effects are clearly out­ Order Denying Formation of a Bank Holding weighed by the convenience and needs of the commu­ Company nity to be served. As part of its analysis of the competitive effects of a Lake Jackson Bancshares, Inc., Lake Jackson, Texas, proposal involving the restructuring of a bank’s own­ has applied for the Board’s approval under section ership into corporate form, the Board takes into con­ 3(a)(1) of the Bank Holding Company Act (12 U.S.C. sideration the competitive effects of the transaction § 1842(a)(1)) of formation of a bank holding company by whereby common share ownership and/or interlocking acquiring 80 percent or more of the voting shares of director/officer relationships were established between The Lake Jackson Bank of Lake Jackson, Texas the subject bank and one or more of the other banks in (“Bank”), Lake Jackson, Texas. the same market.3 In this case, the Board has consid­ Notice of the application, affording opportunity for ered the competitive effects of the purchase, in interested persons to submit comments and views, has November 1976, of Bank’s shares by Applicant’s princi­ been given in accordance with section 3(b) of the Act. pals. At that time, Applicant’s principals also held the The time for filing comments and views has expired, above-described interest in Brazosport Bank and and the Board has considered the application and all served as officers and/or directors of Brazosport Bank. comments received in light of the factors set forth in Together, Bank and Brazosport Bank controlled, as of section 3(c) of the Act. December, 1976, total deposits of $60.5 million, repre­ Applicant, a nonoperating corporation with no sub­ senting approximately 26.6 percent of total deposits in sidiaries, was organized for the purpose of becoming a the market. The Board finds that the effect of Bank’s bank holding company by acquiring Bank. Upon ac­ acquisition by Applicant’s principals was to eliminate quisition of Bank, Applicant would control the 242nd significant competition that existed at that time be­ largest commercial bank in Texas, with 0.1 percent of tween Bank and Brazosport Bank, increase the con­ the total deposits in commercial banks in the state.1 centration of banking resources within the Brazoria Bank holds deposits of $36.2 million, representing banking market, and eliminate an independent banking approximately 11.4 percent of the total deposits in competitor in the market. commercial banks in the market and is the second larg­ In the Board’s view, the subject proposal involves est of thirteen banks in the relevant banking market.2 the use of the holding company form to further an anti­ This proposal involves a restructuring of Bank’s own­ competitive arrangement. On the basis of all the facts ership from individuals to a corporation owned by of record, including the sizes of the organizations in­ those same individuals. The facts of record indicate volved, and their collective position in the relevant that two of Applicant’s principals also hold 34.43 per­ market, (together the two banks hold 22.3 percent of cent each of Brazosport Bank of Texas (“Brazosport the total deposits in commercial banks in the market) Bank”), Freeport, Texas, which is also located in the the Board concludes that this proposal should be de­ nied since approval of this application would serve to perpetuate a substantially adverse competitive situa­ tion. 1. Unless otherwise indicated, all banking data are as of December 31, 1978, and reflect bank holding company formations and acquisi­ tions approved as of October 31, 1979. 3. See, Mahaska Investment Company, 63 Federal Reserve 2. The relevant banking market is approximated by Brazoria Coun­ Bulletin 579 (1977), and Citizens Bancorp, Inc., 63 Federal ty, excluding the communities of Alvin and Pearland, Texas. Reserve Bulletin 1083 (1977). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 247 The financial and managerial resources of Appli­ ceived, including those of the Michigan Committee on cant, which are dependent upon those of Bank, are Law and Housing (“Protestant”), in light of the fac­ considered to be generally satisfactory, and their fu­ tors set forth in section 3(c) of the Act (12 U.S.C. ture prospects appear favorable. While Applicant will § 1842(c)).1 incur debt in connection with the proposal, it appears Applicant, the second largest commercial banking that Applicant will be able to service the debt without organization in Michigan, controls 19 banks with ag­ adversely affecting the financial condition of Bank. gregate deposits of approximately $4.1 billion, repre­ Accordingly, financial and managerial factors are con­ senting 10.9 percent of the deposits in commercial sistent with approval of the application. banks in the state.2 Applicant’s proposals to acquire No significant changes in Bank’s operations or in the the four de novo banks listed above would not immedi­ services offered to its customers are anticipated to fol­ ately increase Applicant’s share of deposits in com­ low from consummation of the proposed acquisition. mercial banks in Michigan, nor would it increase the Consequently, convenience and needs factors lend no concentration of banking resources in that state. Ac­ weight toward approval of this application. quisition of Litchfield Bank, which is the 169th largest On the basis of all the facts of record, and in light of commercial bank in Michigan, with deposits of $33.4 the factors set forth in section 3(c) of the Act, it is the million, representing approximately 0.09 percent of Board’s judgment that consummation of the proposal statewide deposits, would not alter Applicant’s state­ to form a bank holding company would not be in the wide rank or significantly increase its share of deposits public interest and that the application should be and is in the state. Accordingly, consummation of these pro­ hereby denied for the reasons summarized above. posals would not have an appreciable effect on the By order of the Board of Governors, effective Feb­ concentration of banking resources in Michigan. ruary 1, 1980. Brighton Bank and Lincoln Park Bank are to be lo­ cated in the Detroit banking market,3 Midland Bank is Voting for this action: Vice Chairman Schultz and Gover­ to be located in the Saginaw-Bay City banking mar­ nors Wallich, Coldwell, Partee, Teeters, and Rice. Absent ket,4 and Petoskey Bank is to be located in the Pe­ and not voting: Chairman Volcker. toskey banking market.5 Although Applicant is pres­ ently represented in both the Detroit and Saginaw-Bay (Signed) G riffith L. Garwood, City banking markets, its market share will not change [seal] Deputy Secretary of the Board. as a result of consummation since de novo banks are involved, and similarly, no existing competition will be eliminated. Acquisition of Petoskey Bank will have no Michigan National Corporation, adverse effect on potential competition, and the record Bloomfield Hills, Michigan of these applications indicates that upon consum­ mation, each of these three markets will continue to be Order Approving Acquisition of Banks capable of supporting further de novo entry. Litchfield Bank has offices in two distinct banking Michigan National Corporation, Bloomfield Hills, markets. It is the third largest of five banks in the Hills­ Michigan (“Applicant”), a bank holding company dale County banking market,6 holding 15.6 percent of within the meaning of the Bank Holding Company market deposits, and is the fifth largest of 8 banks in Act, has applied for the Board’s approval under sec­ the Jackson County banking market, holding 2.0 per­ tion 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to ac­ cent of market deposits.7 None of Applicant’s subsidi­ quire all of the voting shares (less directors’ qualifying shares of Litchfield State Savings Bank, Litchfield, 1. Protestant filed objections to the applications and requested a Michigan (“Litchfield Bank”); Michigan Bank-Living- hearing regarding its objections. The Board also received a letter from the North Central Seven Community Organization in support of Pro­ ston, Brighton, Michigan (“Brighton Bank”); Michi­ testant’s hearing request. gan Bank-Midland, Midland, Michigan (“Midland 2. All banking data are as of June 30,1978, and reflect bank holding company formations and acquisitions approved as of August 31,1979. Bank”); Michigan Bank-Northwest, Petoskey, Michi­ 3. The Detroit banking market is approximated by Macomb, Oak­ gan (“Petoskey Bank”); and Michigan Bank-South land, and Wayne Counties plus 33 cities and townships in adjacent Metro, Lincoln Park, Michigan (“Lincoln Park counties. 4. The Midland banking market is approximated by Bay, Midland, Bank”). With the exception of Litchfield Bank, each and Gladwin Counties and the northern three-quarters of Saginaw of these banks is a proposed new bank. County. 5. The Petoskey banking market is approximated by Charlevoix Notice of the applications, affording opportunity for and Emmet Counties and the western fourth of Cheboygan County interested persons to submit comments, has been giv­ excluding Makinaw City. en in accordance with section 3(b) of the Act. The time 6. The Hillsdale County banking market is approximated by Hills­ dale County. for filing comments has expired, and the Board has 7. The Jackson County banking market is approximated by Jackson considered the applications and all comments re­ County and the eastern one-third of Calhoun County. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

248 Federal Reserve Bulletin □ March 1980 ary banks has offices located in either of these banking tween the number of mortgage loans extended by Ap­ markets, and the closest offices of Applicant’s banking plicant in low- and moderate-income areas and the subsidiaries and Litchfield Bank are some 25 miles number of such loans made in all other areas. apart. Applicant has the resources to enter each of 4. Applicant’s lending patterns indicate that Appli­ Litchfield Bank’s markets de novo and become an ef­ cant engages in racial discrimination in the Detroit fective competitor therein. However, in view of the area. All white neighborhoods in this area received sig­ size of Litchfield Bank and the nature of these mar­ nificantly more housing related loans than did racially kets, it appears that the competitive effects of Appli­ mixed neighborhoods with similar income levels. cant’s acquisition of Litchfield Bank would be only Protestant’s initial submissions to the record con­ slightly adverse.8 Thus, the Board concludes that con­ tained detailed information regarding each of these al­ summation of each of applicant’s four de novo pro­ legations. Applicant responded to these allegations posals would have no adverse effects on competition and thereafter, at the suggestion of the Board’s staff, in any relevant area, while acquisition of Litchfield Applicant and Protestant met on three occasions to Bank would have slightly adverse competitive effects. discuss the issues involved. The third such meeting The financial and managerial resources and future was conducted by staff members of the Federal Re­ prospects of Applicant, its subsidiaries, and the five serve Bank of Chicago and resulted in certain under­ banks to be acquired are regarded as generally satis­ takings by Applicant, discussed in greater detail be­ factory. Accordingly, banking factors are consistent low, designed to resolve some of the issues raised by with approval of each proposal. Protestant. Thereafter, the Board’s staff afforded Pro­ The Board has considered the applications in light of testant an opportunity to supplement the record regard­ the Community Reinvestment Act (12 U.S.C. §2901) ing its request for a hearing, and Protestant submitted (“CRA”), which requires that the Board assess an in­ additional information to support its position. stitution’s record of meeting the credit needs of its en­ The Board has examined the submissions of Protes­ tire community, including low- and moderate-income tant and Applicant regarding the issues raised by Pro­ neighborhoods, consistent with the safe and sound op­ testant. It has also considered the results of an exami­ eration of the institution; and take that record into ac­ nation of each of Applicant’s banking subsidiaries by count in its evaluation of an application (12 U.S.C. the Office of the Comptroller of the Currency that in­ § 2903). Protestant, a citizen’s organization, raises four cluded an assessment of each bank’s CRA record and principal objections to Applicant’s proposed acquisi­ compliance with HMDA. On the basis of the entire tions. These objections may be summarized as fol­ record, the Board makes the following findings. lows: It appears that several of Applicant’s banking sub­ 1. Applicant has not complied with the technical re­ sidiaries have failed to comply with the procedural re­ quirements of CRA or the Home Mortgage Disclosure quirements of CRA and HMDA. These requirements Act of 1975 (“HMDA”) (12 U.S.C. § 2803). A signifi­ are designed to acquaint the community with each cant number of Applicant’s banking offices had not bank’s lending policies and to permit members of the posted the required CRA notices when Protestant sur­ community to comment on those policies. The Board veyed those offices, and Protestant experienced con­ views this noncompliance as a serious matter, and siderable difficulty in obtaining the CRA statements expects Applicant to take steps to insure full and and HMDA data that banks must provide. continuing compliance with these requirements before 2. Applicant’s subsidiary bank located in the De­ consummation of these proposals. troit suburb of Southfield, Michigan (Michigan Nation­ With regard to the lending area of Michigan National al Bank-Oakland), has “gerrymandered” the local Bank-Oakland, Applicant’s delineation of that area ap­ lending area delineated in its CRA Statement to ex­ pears reasonable when viewed in the context of that clude nearby low- and moderate-income areas, such as bank’s total lending pattern as opposed to its distribu­ those located in Pontiac, Michigan. Approximately tion of housing-related loans only. Although the city of three-fifths of the dollar volume of residential mort­ Pontiac was excluded from the lending area of this gage and home improvement loans made by this bank bank several nearby high income areas were also ex­ involved loans on property outside of its CRA lending cluded. Moreover, Pontiac is encompassed by the area. lending area of another of Applicant’s subsidiary 3. Applicant has not met the housing related credit banks, Michigan National Bank-North Metro. needs of the low- and moderate-income neighborhoods With respect to Applicant’s performance in meeting of the Detroit area. There is a significant disparity be­ the credit needs of low-and moderate-income neigh­ borhoods, several aspects of Applicant’s record of ex­ tending credit to the Detroit area appear favorable. 8. Although a principal of Bank is an officer of another bank located Applicant’s largest Detroit banking subsidiary partici­ in the Jackson County banking market, Applicant has agreed to sever this relationship upon consummation. pates in the Small Business Administration lending Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 249 program and the FHA home improvement loan pro­ low- and moderate-income areas, participate in addi­ gram. It participates in several programs designed to tional special lending programs, further train its em­ provide credit in low- and moderate-income areas such ployees regarding compliance with the procedural re­ as Neighborhood Housing Services, Inc. This banking quirements of CRA, and designate CRA officers to subsidiary also holds over $4 million in notes and meet with the public regarding Applicant’s CRA per­ bonds issued by the Michigan State Housing Develop­ formance. Applicant has also indicated that it will in­ ment Authority. However, as Protestant alleges, Ap­ vestigate further Protestant’s claims of racial discrimi­ plicant extends far less housing related credit in low- nation. The Board regards this latter commitment as and moderate-income areas than in the rest of the an undertaking by Applicant to prevent the occurrence Detroit area. Applicant’s largest Detroit banking sub­ of any such discrimination. sidiary made an average of seven mortgages per 100,000 The Board expects depository institutions to take an units of housing in low- and moderate-income areas active role in providing the credit needed to promote during the 1976-1978 period as compared to 101 mort­ the vitality of urban neighborhoods in their commu­ gages per 100,000 units in all other areas in the Detroit nities consistent with sound lending practices, and be­ SMSA.9 lieves that Applicant’s commitments will help improve The percentage of Applicant’s mortgage lending to its record of lending in the low- and moderate-income low- and moderate-income areas is somewhat better areas of Detroit. The Board expects prompt com­ than the average for other large Detroit lending institu­ pliance with each of these commitments, and will tions. Moreover, the disparity between the amount of closely monitor Applicant’s efforts to effect such com­ funds committed by Applicant to housing-related cred­ pliance.10 Based on these commitments, and other as­ it in low- and moderate-income areas and all other pects of Applicant’s overall record in serving its com­ areas may be partially the result of factors that affect munity, the Board believes that approval of the the demand for such credit. For instance, the percent­ application is consistent with the purposes of CRA. age of housing units that are owner occupied in these With respect to other convenience and needs con­ low- and moderate-income areas is approximately one siderations, consummation of Applicant’s proposal to half the percentage of other areas, and Applicant’s pat­ acquire the four de novo banks will add additional full tern of lending appears to reflect the pattern of appli­ service banking competitors to the relevant markets. cations it receives. Nevertheless, Applicant’s failure Applicant will extend banking hours at Litchfield to determine systematically the credit needs of the Bank, reduce the minimum balance on certificates of Detroit area and the fact that its advertising has been deposit, and assist that bank in offering trust services. deposit rather than credit oriented also may have con­ On balance, these factors are sufficient to outweigh the tributed to this disparity. Based on the present record, slightly adverse competitive effects associated with it appears to the Board that Applicant should broaden Applicant’s proposal to acquire Litchfield Bank, even its efforts to make credit worthy loans in low- and considering the deficiencies in Applicant’s CRA per­ moderate-income areas in its community. formance. The statistics presented by Protestant indicate a dis­ With regard to Protestant’s hearing request, neither parity in lending between largely white and largely section 3 of the Bank Holding Company Act nor the black areas. However, this disparity, in light of other provisions of CRA require the Board to hold a hearing information in the record, does not permit a con­ on an application filed under section 3. Even though clusion that racial discrimination has occurred, and the Board is not required to hold a hearing, it could do there is no evidence of such discrimination against par­ so if the Board deemed such a proceeding appropriate ticular applicants. under the circumstances. It appears, however, that the Applicant has made several commitments to the material facts regarding Applicant’s CRA performance Board designed to remedy the deficiencies in its CRA are not in dispute, since Applicant has generally ac­ performance mentioned above. Specifically, Applicant cepted the facts cited by Protestant. Rather, it is the will increase its credit oriented marketing efforts in conclusions to be drawn from these facts that are dis­ puted. Since material facts are not in dispute and Pro­ testant has been afforded the opportunity both to make 9. Applicant asserts that its lending performance before November extensive submissions to the record and to meet infor­ 6, 1978, the effective date of CRA, may not be considered by the mally with Applicant and staff from the Federal Re­ Board. Applicant cites no authority for this assertion and the Board finds it to be without merit. In any event, the Board has previously serve Bank of Chicago, the Board concludes that a indicated its belief that the “convenience and needs” standard con­ tained in section 3 of the Bank Holding Company Act since 1956 re­ quires consideration of an Applicant’s record in meeting the credit 10. Protestant has suggested that Applicant should make a com­ needs of its community. Commerce Bancshares, Inc., 64 Federal mitment to achieve specified levels of housing-related lending. The Reserve Bulletin 576, 579 (1978), aff d per curiam, Manchester- Board does not regard the imposition of such requirements as appro­ lower Grove Community Organization/ACORN v. Board of Gover­ priate, and does not believe that CRA requires this type of com­ nors, No. 78-1898 (D.C. Cir. October 29, 1979). mitment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

250 Federal Reserve Bulletin □ March 1980 hearing regarding Protestant’s allegations would serve strongly suggests that Applicant does not take these no useful purpose. Accordingly, Protestant’s hearing responsibilities seriously. request is hereby denied. Until Applicant demonstrates that it has complied It is the Board’s judgment that approval of these ap­ fully with its obligations under the law, I do not believe plications would be in the public interest and that the the Board should approve these applications. applications should be approved. On the basis of the record, the applications are approved for the reasons November 30, 1979 summarized above. These transactions shall not be made (a) before the thirtieth calendar day following the effective date of this Order or (b) later than three Yellowstone Holding Company, months after that date, and (c) the four de novo banks Columbus, Montana shall be opened for business not later than six months after the effective date of this Order. Each of the peri­ Order Approving ods described in (b) and (c) may be extended for good Formation of a Bank Holding Company cause by the Board, or by the Federal Reserve Bank of Chicago pursuant to delegated authority. Yellowstone Holding Company, Columbus, Mon­ By order of the Board of Governors, effective tana, has applied for the Board’s approval under sec­ November 30, 1979. tion 3(a)(1) of the Bank Holding Company Act (12 U.S.C. § 1842(a)(1)) of formation of a bank holding Voting for this action: Chairman Volcker and Governors company by acquiring 100 percent of the voting shares Schultz, Wallich, Coldwell, Partee, and Teeters. Voting of The Yellowstone Bank, Laurel, Montana (“Laurel against this action: Governor Rice. Bank”), The Yellowstone Bank, Absarokee, Montana (“Absarokee Bank”) and The Yellowstone Bank, Co­ (Signed) G riffith L. Garwood, lumbus, Montana (“Columbus Bank”), (collectively [seal] Deputy Secretary of the Board. referred to as “Banks”). Notice of the application, affording opportunity for interested persons to submit comments and views, has Dissenting Statement of Governor Rice been given in accordance with section 3(b) of the Act. The time for filing comments and views has expired, It seems clear that Applicant has persistently failed and the Board has considered the application and all to comply with certain basic requirements of CRA reg­ comments received in light of the factors set forth in ulations and I would therefore deny these applications. section 3(c) of the Act (12 U.S.C. § 1842(c)). It is not necessary to reach the issue of the adequacy Applicant is a nonoperating corporation formed for of Applicant’s record of extending credit in low- and the purpose of becoming a bank holding company moderate-income areas to conclude that denial of through the acquisition of Banks. Upon acquisition of these applications is warranted. The cornerstone of Laurel Bank, Columbus Bank and Absarokee Bank, the regulations adopted by the financial regulatory with deposits of $23.8 million, $15.0 million and $6.5 agencies to implement CRA is the requirement that a million, respectively, Applicant would become the depository institution take certain specified steps to ninth largest banking organization in Montana, holding apprise the members of its community of the institu­ 1.20 percent of the total deposits in commercial banks tion’s obligations under CRA, the manner in which the in the state.1 Laurel Bank, Columbus Bank, and Absa­ institution proposes to meet the credit needs of its rokee Bank, which control in the aggregate 72.8 per­ community, and the procedure for commenting on the cent of total deposits in commercial banks in the rele­ institution’s performance in this area. It is undisputed vant market,2 are, respectively, the first, second and that some of the offices of Applicant’s subsidiary fourth largest of the six banking organizations oper­ banks have not complied with these fundamental re­ ating in the market. Columbus Bank, Laurel Bank, and quirements. Absarokee Bank, each were commenced de novo in The regulations setting forth these requirements 1907, 1926, and 1963, respectively, and have been were published more than one year ago. Applicant has owned and managed by members of the same family been advised on more than one occasion since the ef­ since their inception. Thus, initial control of each of fective date of those regulations that it was not com­ these Banks did not eliminate any existing competition plying with the regulations and also was not in com­ pliance with the similar requirements of the Home Mortgage Disclosure Act, which has been in effect 1. All banking data are as of September 30, 1978. 2. All three banks operate in the Stillwater County banking market, since 1975. The failure of Applicant’s management to which is approximated by the western edge of Yellowstone County, take prompt steps to remedy this noncompliance and the northern third of Carbon County, Montana. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 251 nor increase market concentration. Applicant’s pro­ Orders Under Section 2 posal represents a transfer of ownership of Banks from of Bank Holding Company Act individuals to a corporation owned by the same indi­ viduals. In light of the long-established history of com­ Maryland National Corporation, mon control of the Banks, it appears that little, if any, Baltimore, Maryland competition exists among them. Moreover, there do not appear to be any prospects for disaffiliation of any Order Granting Determination of the Banks. Therefore, it appears that consummation Under the Bank Holding Company Act of the proposal would not eliminate competition or in­ crease the concentration of banking resources in any Maryland National Corporation, Baltimore, Mary­ relevant area. Accordingly competitive factors are land (“MNC”), a bank holding company within the considered consistent with approval of the application. meaning of section 2(a) of the Bank Holding Company The financial and managerial resources and future Act of 1956, as amended (12 U.S.C. § 1841 et seq.) (the prospects of Applicant and Banks are considered satis­ “Act”), has requested a determination, pursuant to factory, and their prospects appear favorable, particu­ section 2(g)(3) of the Act, that with respect to the sale larly in light of Applicant’s commitment to comply of all of the assets of Maryland National Optimation promptly with any new policy adopted by the Board Services, Inc., Baltimore, Maryland (“MANOSI”), to concerning the disposition of income from the sale of American Management Systems, Inc., Arlington, Vir­ credit life, health or accident insurance in connection ginia (“AMSI”), MNC is not in fact capable of con­ with loans made by Banks. Although Applicant will trolling AMSI notwithstanding the fact that AMSI is incur some debt in connection with the acquisition of indebted to MNC in connection with its purchase of Banks, it appears that Applicant will have sufficient the MANOSI assets. financial flexibility to meet its debt-servicing require­ Under the provisions of section 2(g)(3) of the Act, ments while maintaining adequate capital in Banks. shares transferred after January 1, 1966, by any bank Thus considerations relating to banking factors are holding company to a transferee that is indebted to the consistent with approval of the application. Although transferor are deemed to be indirectly owned or con­ consummation of the proposal would effect no imme­ trolled by the transferor unless the Board, after oppor­ diate change in the services offered by Banks, Appli­ tunity for hearing, determines that the transferor is not cant has indicated that it has purchased expanded in fact capable of controlling the transferee. computer services to meet anticipated EFT demand in The time provided for requesting a hearing has ex­ the future. Accordingly, considerations relating to the pired. No such request has been received by the convenience and needs of the community lend some Board. MNC has submitted evidence to the Board to weight towards approval. Based upon the foregoing show that it is not in fact capable of controlling MA­ and other facts of record, the Board has determined NOSI and AMSI and the Board has received no con­ that consummation of the transaction would be in the tradictory evidence. It is hereby determined that MNC public interest and that the application should be ap­ is not in fact capable of controlling either AMSI or proved. MANOSI. This determination is based upon the evi­ On the basis of the record, the application is ap­ dence of record in this matter that reflects the follow­ proved for the reasons summarized above. The trans­ ing: action shall not be consummated before the thirtieth The sale of MANOSI’s assets by MNC was the re­ calendar day following the effective date of this Order sult of arm’s length negotiations. There is no evidence or later than three months after the effective date of to indicate that the sale was motivated by an intent to this Order, unless such period is extended for good evade the requirements of the Act. The terms govern­ cause by the Board or by the Federal Reserve Bank of ing the debt relationship between MNC and AMSI re­ Minneapolis pursuant to delegated authority. lating to the financing of the purchase of MANOSI’s By order of the Board of Governors, effective Feb­ assets are limited to those reasonably required to pro­ ruary 21, 1980. tect MNC’s extension of credit. The amount of this indebtedness is not significant in relation to the total Voting for this action: Governors Coldwell, Partee, and purchase price, and AMSI’s financial resources are Teeters. Present and abstaining: Vice Chairman Schultz and sufficient to support the conclusion that MNC is not in Governor Rice. Absent and not voting: Chairman Volcker fact capable of controlling AMSI by reason of this in­ and Governor Wallich. debtedness. In addition, there are no officer or director interlocks between MNC or any of its subsidiaries, on the one hand, and AMSI or any of its subsidiaries on (Signed) G riffith L. Garwood, the other hand. MNC has submitted a resolution of its [seal] Deputy Secretary of the Board. board of directors stating that it is not in fact capable Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

252 Federal Reserve Bulletin □ March 1980 of controlling AMSI and that it will not attempt to con­ closely held Kansas corporation of which the two trol AMSI in the future. In addition, AMSI has sub­ Sapp brothers are the sole shareholders. Agency di­ mitted a resolution to the effect that it is not and will vested its interest in Bank by distributing the Bank not be controlled by MNC. shares held by it over pro rata basis to the Sapp broth­ Accordingly, it is ordered that the request of MNC ers, its sole shareholders. Thus, Agency currently for a determination pursuant to section 2(g)(3) is grant­ holds no interest in Bank. The Sapp brothers, together ed. This determination is based upon the representa­ with their family now hold a total of 85 percent of tions made to the Board by MNC and AMSI. In the Bank. Inasmuch as the Sapp brothers are the sole event the Board should hereafter determine that facts shareholders of agency, the divestiture of Bank does material to this determination are otherwise than as not appear to have been a means for perpetuating represented, or that MNC or AMSI have failed to Agency’s control over Bank. On the basis of the above disclose to the Board other material facts, this deter­ and other facts of record, it is concluded that control mination may be revoked, and any change in the of Agency resides with the Sapp brothers as individ­ circumstances relied upon in making this determination uals and that Agency does not control and is not in fact could result in the Board’s reconsideration of this capable of controlling the Sapp brothers in their capac­ determination. ity as transferees of Agency’s stock or otherwise. By order of the Board of Governors, acting through Accordingly, it is ordered that the request of Agency its General Counsel, pursuant to delegated authority for a determination pursuant to section 2(g)(3) be and (12 C.F.R. § 265.2(b)(1)), effective February 7, 1980. is hereby granted. This determination is based upon the representation made to the Board by Agency and (Signed) Theodore E. A llison, the Sapp brothers. In the event the Board should here­ [seal] Secretary of the Board. after determine that facts material to this determina­ tion are otherwise than as represented, or that Agency or the Sapp brothers have failed to disclose to the Sapp Insurance Agency, Inc., Board other material facts, this determination may be Ebson, Kansas revoked, and any change in the facts or circumstances relied upon by the Board in making this determination Order Granting Determination could result in the Board reconsidering the determina­ Under the Bank Holding Company Act tion made herein. By order of the Board of Governors, acting through Sapp Insurance Agency, Inc., Esbon, Kansas its General Counsel, pursuant to delegated authority (“Agency”), a bank holding company within the (12 C.F.R. § 265.2(1)), effective February 11, 1980. meaning of section 2(a) of the Bank Holding Company Act of 1956, as amended (12 U.S.C. § 1841(a)), by vir­ (Signed) G riffith L. Garwood, tue of its indirect control of Esbon State Bank, Esbon, [seal] Deputy Secretary of the Board. Kansas (“Bank”), has requested a determination, pur­ suant to the provisions of section 2(g)(3) of the Bank Holding Company Act of 1956 (12 U.S.C. § 1841(g)(3) Schroders Limited, (the “Act”), that Agency is not in fact capable of con­ London, England trolling Earl E. Sapp or Carl L. Sapp (“Sapp broth­ ers”), individuals to whom it transferred its interest in Order Granting Determination Bank, notwithstanding the fact that these individuals Under the Bank Holding Company Act are officers and directors of Agency and Bank. Under the provisions of section 2(g)(3) of the Act, Schroders Limited (“Schroders”), London, Eng­ shares transferred after January 1, 1966, by any bank land, a bank holding company within the meaning of holding company to a transferee that is indebted to the the Bank Holding Company Act, has requested a de­ transferor or has one or more directors, trustees, or termination under section 2(g)(3) of the Act (12 U.S.C. beneficiaries in common with or subject to control by § 1841(g)(3)), that it is not in fact capable of con­ the transferor, are deemed to be indirectly owned or trolling, directly or indirectly, Lend Lease Inc. controlled by the transferor unless the Board, after op­ (formerly Vestus Inc. and referred to herein as “Vesportunity for hearing, determines that the transferor is tus”), a corporation organized under the laws of the not in fact capable of controlling the transferee. state of Delaware, or its parent Lend Lease Corpora­ It is hereby determined that Agency is not, in fact, tion Limited (“Lend Lease Corp.”), Sydney, Austra­ capable of controlling the Sapp brothers. This determi­ lia, notwithstanding the indebtedness incurred by nation is based on the evidence of record in this mat­ Vestus and Lend Lease Corp. to a subsidiary of ter, including the following facts. Agency is a small Schroders in connection with the transfer of shares Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 253 of Vestus by a subsidiary of Schroders to a subsidiary cision is based could result in reconsideration of the of Lend Lease Corp. determination made herein. Under section 2(g)(3) of the Act, shares transferred By order of the Board of Governors, acting through after January 1, 1966, by any bank holding company to its General Counsel, pursuant to delegated authority, a transferee that is indebted to the transferor are (12 C.F.R. § 265.2(b)(1)), effective February 5, 1980. deemed to be owned or controlled by the transferor unless the Board, after opportunity for hearing, deter­ (Signed) Theodore E. A llison, mines that the transferor is not in fact capable of con­ [seal] Secretary of the Board. trolling the transferee. It is hereby determined that Schroders is not in fact capable of controlling Vestus or Lend Lease Corp. This determination is based upon Certifications Pursuant the evidence of record in this matter, including the fol­ to the Bank Holding Company lowing facts. Tax Act of 1976 Prior to the transfer, Schroders and Lend Lease Corp. each owned indirectly through subsidiaries a 50 Heights Finance Corporation, percent interest in Vestus. Pursuant to the agreement Peoria, Illinois by which Schroders transferred its interest in Vestus to Lend Lease Corp., Schroders loaned Vestus $5 mil­ Prior Certification Pursuant to the lion, evidenced by a note, to enable it to repay loans Bank Holding Company Tax Act of 1976 for which Schroders was the guarantor. The loan to Vestus, payment of which is due in 1982, is unsecured [Docket TCR 76-199] and payment is guaranteed by Lend Lease Corp. Based on the facts of record, it appears that Vestus has Heights Finance Corporation (“Heights Finance”) adequate resources to repay the loan, and there is no Peoria, Illinois, has requested a prior certification pur­ evidence to indicate that the note will not be repaid in suant to section 6158(a) of the Internal Revenue Code accordance with its terms.* In addition, Lend Lease (“Code”), as amended by section 3(a) of the Bank Corp. has sufficient resources to honor its guarantee of Holding Company Tax Act of 1976 (“Tax Act”), that Vestus’ obligation to Schroders if it is called upon to its proposed sale of all 590 shares of common stock do so. Moreover, inasmuch as the loan is not secured (the “Heights Ban Shares”) of Heights Ban Corpora­ by the transferred property, there is little likelihood tion1 (“Heights Ban”), Peoria, Illinois, currently held that Schroders would reacquire the property as a re­ by Heights Finance, is necessary or appropriate to ef­ sult of Vestus’ indebtedness to it. Finally, Schroders’ fectuate the policies of the Bank Holding Company Board of Directors adopted a resolution to the effect Act, 12 U.S.C. § 1841 et seq, (“BHC Act”). that Schroders does not, and will not attempt to, exer­ In connection with this request, the following infor­ cise a controlling influence directly or indirectly over mation is deemed relevant, for purposes of issuing the Vestus or Lend Lease Corp. requested certification:2 Based on these and other facts of record, it is hereby 1. Heights Finance a corporation organized on Octo­ determined that Schroders is not, in fact, capable of ber 17, 1963, under the laws of the state of Delaware. controlling Vestus or Lend Lease Corp., and that the Heights Ban is a corporation organized on December request of Schroders for a determination pursuant to 17, 1968, under the laws of the state of Delaware. section 2(g)(3) should be and hereby is granted. This 2. On December 17, 1968, Heights Finance acquired determination is based on representations made to the interest, ownership and control of 2,919 shares, repre­ Board by Schroders. In the event that the Board senting 77.8 percent of the outstanding voting shares should hereafter determine that facts material to this of First Security Bank (“Bank”), Mackinaw, Illinois. determination are otherwise than as represented, or On October 17, 1972, Heights Finance indirectly ac­ that Schroders has failed to disclose any material quired another 600 shares of Bank common stock. facts, this determination may be revoked; and, any 3. Heights Finance became a bank holding company material change in the facts or circumstances relied on December 31, 1970, as a result of the 1970 Amend­ upon in making this determination or any material ments to the BHC Act, by virtue of its ownership and breach of any of the commitments upon which the de­ 1. Prior to July 24, 1971, Heights Ban Corporation was known as Commerce Ban Corporation. 2. This information derives from correspondence between Heights * Shortly after its acquisition by Lend Lease Corp., Vestus was Financial and the Board concerning its request for this certification, merged with several other subsidiaries of Lend Lease Corp., and con­ the Registration Statements of Heights Financial and Heights Ban sequently has greater assets and resources than it did when the loan filed with the Board pursuant to the BHC Act, and other records of the was made. Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

254 Federal Reserve Bulletin □ March 1980 control, through Heights Ban, of more than 25 percent This certification is based upon the representations of the outstanding voting shares of Bank, and it regis­ and commitments made to the Board by Heights Fi­ tered as such with the Board of December 28, 1971.3 nancial and upon the facts set forth above. In the event Heights Finance would have been a bank holding com­ the Board should determine that facts material to this pany on July 7, 1970, if the BHC Act Amendments of certification are otherwise than as represented by 1970 had been in effect on such date, by virtue of its Heights Financial, or that Heights Financial has failed direct and indirect ownership and control on that date to disclose to the Board other material facts or to fulfill of more than 25 percent of the outstanding voting any commitments made to the Board in connection shares of Heights Ban and Bank, respectively. Heights herewith, it may revoke this certification. Finance presently owns and controls 100 percent of By order of the Board of Governors, acting through the outstanding voting shares of Heights Ban. its General Counsel, pursuant to delegated authority 4. Heights Financial holds property acquired by it (12 C.F.R. § 265.2(b)(3)), effective February 5, 1980. on or before July 7, 1970, the disposition of which would be necessary or appropriate to effectuate sec­ (Signed) G riffith L. Garwood, tion 4 of the BHC Act if Heights Financial were to [seal] Deputy Secretary of the Board. remain a bank holding company beyond December 31, 1980, and which property is “prohibited property” within the meaning of section 1103(c) of the Code. Sapp Insurance Agency, 5. On February 26, 1973, Height Finance made an Esbon, Kansas irrevocable commitment to the Board that it would di­ vest its indirect ownership interest in Bank by Decem­ Final Certification Pursuant to the ber 31, 1980. Accordingly, Heights Financial must Bank Holding Company Tax Act of 1976 divest its shares of Heights Ban, and indirectly its shares of Bank by December 31, 1980. In addition, [Docket No. TCR 76-154] Heights Financial and Heights Ban have committed to the Board that no person holding an office or position Sapp Insurance Agency, Esbon, Kansas (“Agen­ (including an advisory or honorary position) with cy”), has requested a final certification pursuant to Heights Financial or any of its subsidiaries as a direc­ section 1101(e) of the Internal Revenue Code tor, policy-making employee or consultant, or who (“Code”), as amended by section 2(a) of the Bank performs (directly or through an agent, representative Holding Company Tax Act of 1976, that it has (before or nominee) functions comparable to those normally the expiration of the period prohibited property is per­ associated with such office or position, will perform mitted under the Bank Holding Company Act (12 any such function with Heights Ban or any of its sub­ U.S.C. § 1841 et. seq.) (“BHC Act”) to be held by a sidiaries. Heights Financial and Heights Ban have fur­ bank holding company) ceased to be a bank holding ther committed that all such interlocking relationships company. presently existing between Heights Financial and In connection with this request, the following infor­ Heights Ban and their respective subsidiaries will be mation is deemed relevant for purposes of issuing the terminated. requested certification:1 On the basis of the foregoing information, it is here­ 1. Effective December 11, 1978, the Board issued a by certified that: prior certification pursuant to section 1101(b) of the (A) Heights Financial is a qualified bank holding cor­ Code with respect to the proposed divestiture of all of poration within the meaning of subsection (b) of sec­ the 375 voting shares of Esbon State Bank, Esbon, tion 1103 of the Code, and satisfies the requirements of Kansas (“Bank”), held by Agency, through the pro that subsection; rata distribution of such shares to the two shareholders (B) Heights Ban Shares that Heights Financial pro­ of Agency. poses to sell are part of the property by reason of The Board’s Order certified that: which Heights Financial controls, within the meaning A. Agency is a qualified bank holding corporation of section 2(a) of the BHC Act, a bank or a bank hold­ within the meaning of section 1103(b) of the Code, and ing company; and satisfies the requirements of that section; (C) The sale of such shares is necessary or appropri­ B. the 375 shares of Bank that Agency proposes to ate to effectuate the policies of the BHC Act. distribute are all or part of the property by reason of 3. Heights Ban similarly became a bank holding company on De­ cember 31, 1970, as a result of the 1970 Amendments to the BHC Act, 1. This information derives from agency’s communications with the by virtue of its direct ownership and control of more than 25 percent of Board concerning its request for this certification, Agency’s Registra­ the outstanding voting shares of Bank, and is registered as such with tion Statement filed with the Board pursuant to the BHC Act, and Board on October 12, 1971. other records of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 255 which Agency controls (within the meaning of section of the Act, it determines that such action is necessary 2(a) of the BHC Act) a bank or a bank holding compa­ to prevent an undue concentration of resources, de­ ny; and creased or unfair competition, conflicts of interest, or C. the distribution of such shares is necessary or ap­ unsound banking practices. propriate to effectuate the policies of the BHC Act. Notice of the Board’s proposed review of grand­ 2. On March 22, 1979, Agency distributed the 375 father privileges of Schroders Limited (“Schroders”), shares of Bank to the two shareholders of Agency. London, England, and an opportunity for interested On the basis of the foregoing information it is hereby persons to submit comments or views or request a certified that Agency has (before the expiration of the hearing, has been given (37 Federal Register 22414 and period prohibited property is permitted under the BHC 25204). The time for filing comments, views, and Act to be held by a bank holding company) ceased to requests has expired, and all those received have been be a bank holding company. considered by the Board in light of the factors set forth This certification is based upon the representations in section 4(a) (2) of the Act. made to the Board by Agency and upon the facts set On the evidence before it, the Board makes the fol­ forth above. In the event the Board should hereafter lowing findings. Schroders became a bank holding determine that facts material to this certification are company on December 31, 1970, as a result of the 1970 otherwise than as represented by Agency, or that Amendments to the Act, by virtue of Schroders’ in­ agency has failed to disclose to the Board other materi­ direct ownership of all of the voting shares (less direc­ al facts, it may revoke this certification. tors’ qualifying shares) of Schroder Trust Company By order of the Board of Governors, acting through (“Bank”), New York, New York (assets of $116.0 mil­ its General Counsel pursuant to delegated authority lion as of December 31, 1970).1 Bank, control of which (12 C.F.R. § 265.2(b)(3)), effective February 11, 1980. was first acquired by Schroders in 1929, was renamed J. Henry Schroder Bank and Trust Company upon its (Signed) G riffith L. Garwood, merger with J. Henry Schroder Banking Corporation, [seal] Deputy Secretary of the Board. Schroders’ New York Investment Company, on Janu­ ary 1, 1978. Bank, which engages principally in a wholesale banking business, is the 22nd largest bank in Determination the state of New York, controlling domestic deposits Regarding “Grandfather Privileges” of $425 million.2 Schroders, with total assets of $3.15 Under Bank Holding Company Act billion as of December 31, 1978, is a large international banking organization. Its United States activities (total Schroders Limited, domestic assets of $1.5 billion as of June 30, 1978) rep­ London, England resent one-third of its worldwide operations.3 From the record, it appears that Schroders’ financial Determination Regarding “Grandfather Privileges" strength is not dependent upon the resources of Bank, Under the Bank Holding Company Act and the Board has found no evidence of any unsound banking practices. Section 4 of the Bank Holding Company Act (12 U.S.C. § 1843) provides certain privileges (“grand­ father privileges”) with respect to nonbanking activi­ 1. While Schroders has held since 1959 shares of J. Henry Schroder ties of a company that, by virtue of the 1970 Banking Corporation, a corporation organized under Article XII of the New York Banking Law §§ 507-19 (McKinney) (“New York Invest­ Amendments to the Act, became subject to the Act. ment Company”), the Board has determined that such a company Pursuant to section 4(a)(2) of the Act, a “company held by a foreign banking organization, and engaged primarily in inter­ covered in 1970” may continue to engage, either di­ national financing activities, should not be regarded as a bank. Euro­ pean-American Bancorp, 63 Federal Reserve Bulletin 595, 597rectly or through a subsidiary, in nonbanking activities 98 (1977). that such a company was lawfully engaged in on June 2. Domestic deposit data are as of June 30, 1978. Bank’s rank in the state is based on domestic deposits only; however, Bank controlled 30, 1968 (or on a date subsequent to June 30, 1968, in total deposits of $1.1 billion as of December 31, 1978. the case of activities carried on as a result of the acqui­ 3. On January 29, 1969, and on December 31, 1973, Schroders es­ sition by such company or subsidiary, pursuant to a tablished wholly-owned subsidiaries to hold Schroders’ operations in the United States. Section 4(c)(ll) of the Act, in effect, exempts the binding written contract entered into on or before June creation of de novo companies engaged in indefinitely grandfathered 30, 1968, of another company engaged in such activi­ activities from the prohibitions of section 4 of the Act. Moreover, in ties at the time of the acquisition), and has been con­ C.I.T. Financial Corporation, 63 Federal Reserve Bulletin 79, 80 n.3 (1977), the Board determined that section 4(c)(ll) should be inter­ tinuously engaged in since June 30, 1968 (or such preted to apply the exemption of that section to de novo companies subsequent date). Section 4(a)(2) of the Act provides, established prior to December 31, 1970 (the date of enactment of the 1970 Amendments to the Act containing this exemption), and that no inter alia, that the Board may terminate such grand­ useful purpose would be served by requiring an application for reten­ father privileges if, having due regard for the purpose tion of such companies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

256 Federal Reserve Bulletin □ March 1980 Schroders engages, through its subsidiary J. Henry erally permissible for a bank holding company.7 More­ Schroder Banking Corporation (“Schrobanco”), in over, shareholdings of more than 5 percent of the certain international financing activities authorized for shares of any company (but less than 25 percent of the New York Investment Companies. In particular, outstanding voting shares) that have been held contin­ Schrobanco issues letters of credit, receives credit bal­ uously since June 30, 1968, are eligible for grandfather ances in connection with international trade, deals in benefits and may be retained. This determination, foreign exchange, purchases and discounts accept­ however, does not authorize the increase of any grand­ ances, and engages in commercial lending activities of fathered interest or investments in other companies, the type permitted pursuant to section 225.4(a)(1) of unless the shareholding in each additional company the Board’s Regulation Y (12 C.F.R. § 225.4(a)(1)). amounts to not more than 5 percent of the outstanding Schroders was engaged through Schrobanco in these voting shares of such company. activities on June 30, 1968, and has engaged in these Several subsidiaries of Schroders, including Schro­ activities continuously thereafter.4 Accordingly, these banco, have made equity and debt investments in vari­ activities appear to be eligible for retention on the ous real estate ventures, either directly by buying, basis of grandfather privileges. Schroders asserts that holding, and developing real estate, or indirectly by the Board should view the ownership and operation of investing in limited partnerships. The Board has not a New York Investment Company as an “activity” eli­ regarded the making of isolated investments in real es­ gible for grandfather privileges. In a number of pre­ tate as an activity eligible for permanent grandfather vious instances the Board has considered the specific privileges, but, rather, has viewed each real estate in­ activities actually performed by a nonbank subsidiary vestment as a separate activity.8 It appears that Schro­ rather than the corporate powers of such subsidiary. ders has not been engaged in the continuous and active For example, the Board determined, in adopting sec­ planning, purchasing, development, and selling of real tion 225.4(a)(4) of Regulation Y (12 C.F.R. § estate investments that would characterize a company 225.4(a)(4)), that a bank holding company or its subsid­ actually engaged in general real estate activities. Ac­ iary may engage in some, but not all, of the activities cordingly, Schroders may retain indefinitely interests authorized by federal or state law for a trust company. in those projects that have been held continuously Furthermore, the Board has previously indicated that since June 30, 1968. Schroders may also continue to it would consider separately the particular activities engage in providing consulting and financial advisory conducted by a New York Investment Company for services related to real estate development and in act­ the purposes of section 4 of the Act.5 The Board re­ ing as a real estate broker, to the extent that these ac­ gards Schroders’ assertion that its ownership of a New tivities were engaged in by subsidiaries on June 30, York Investment Company should be grandfathered as 1968.9 With respect to investments in real estate made particularly inappropriate in this case and as inconsis­ between June 30, 1968 and December 31, 1970, Schro­ tent with the purposes of the grandfather proviso of ders has until December 31 1980, to reduce its interest section 4(a)(2) of the Act, since it would allow Schro­ to 5 percent or less. In several instances, investments ders to conduct nonbanking activities not actually en­ in real estate ventures were acquired after December gaged in by Schrobanco on June 30, 1968. 31, 1970, the date of the 1970 Amendments to the Schroders, through its subsidiaries, including Schro­ Act.10 On the basis of the prohibitions of section 4 of banco, invests in equity securities of nonbanking firms. The Board, however, does not regard the mak­ ing of venture capital investments as an activity, and 7. Section 4(c)(6) of the Act permits a bank holding company to ac­ quire and hold, without the Board’s approval, “shares of any compa­ instead views each investment as an independent ac­ ny which do not include more than 5 percent of the outstanding voting tivity for the purpose of according grandfather privi­ shares of such company.” leges.6 To the extent that shareholdings in any one 8. The Republic National Bank of Dallas, supra note 6. 9. Schroders must cease to engage in providing impermissible prop­ company do not exceed 5 percent of the outstanding erty management activities not later than December 31, 1980, in­ voting shares of that company, they appear to be gen- asmuch as these activities were performed by a company that was not a subsidiary of Schroders on or before June 30, 1968. Permissible property management activities are defined in a 1972 Board release (58 Federal Reserve Bulletin 652 (1972)). 4. While Schrobanco was merged with Bank on January 1, 1979, 10. Schroders (Bermuda) Limited (“SchroBermuda”), a whollysimultaneously with the merger certain of the assets and business of owned indirect subsidiary of Schroders, has direct and indirect hold­ Schrobanco were transferred to a newly-formed New York Invest­ ings of unimproved real estate in the United States that were acquired ment Company. Inasmuch as section 4(c)(ll) of the Act permits such after December 31, 1970. The real estate was previously owned by reorganization of grandfathered activities, the Board does not regard Vestus Inc., a subsidiary of Property Holdings International (“PHI”), the transaction as a break in the continuity of Schrobanco’s grand­ a Bermuda corporation, Schroders owned 50 percent of the voting fathered nonbanking activities for the purposes of section 4(a)(2) of shares of PHI until its liquidation as a part of the dissolution and wind­ the Act. ing up the affairs of PHI. See Schroders Limited, 66 Federal Re­ 5. Europe an-American Bancorp, supra note 1. serve Bulletin 252 (Order of February 5, 1980, determining 6. The Republic National Bank of Dallas, 59 Federal Reserve pursuant to section 2(g)(3) of the Act that Schroders is not capable of Bulletin 768, 770-71 (1973). controlling Lend Lease Inc. (formerly Vestus Inc.)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 251 the Act, such investments were impermissible unless will be cause for a reevaluation by the Board of Schro­ Schroders had grandfather privileges for such invest­ ders’ activities under the provisions of section 4(a)(2) ments.11 Accordingly, Schroders should reduce its in­ of the Act; that is, whenever the alteration or change is terest in joint ventures or real estate acquired after such that the Board finds that a termination of the December 31, 1970, to 5 percent or less at the earliest grandfather privileges is necessary to prevent an un­ practicable date, but in any event no later than Decem­ due concentration of resources or any of the other ad­ ber 31, 1982. verse consequences at which the Act is directed. No Schroders engages through its registered broker/ merger, consolidation, acquisition of assets other than dealer subsidiary, J. Henry Schroder Corporation, in in the ordinary course of business, or acquisition of certain investment banking activities, including assist­ any interest in a going concern, to which Schroders or ing clients in the private placement of debt and equity any nonbank subsidiary thereof is a party, may be con­ securities, but not in retail brokerage or distributing or summated without prior approval of the Board. Fur­ underwriting securities. In addition, through several ther, the provision of any credit, property, or service subsidiaries, Schroders provides corporate financial by Schroders or any subsidiary thereof shall not be advisory services with respect to mergers, acquisi­ subject to any condition which, if imposed by a bank, tions, corporate reorganizations, financial planning would constitute an unlawful tie-in arrangement under and project finance, and engages in the activities of as­ section 106 of the Bank Holding Company Act sisting clients in the private placement of securities, Amendments of 1970. and of preparing economic studies. Another subsidiary The determination herein does not preclude a later provides similar financial advisory services, special­ review by the Board of Schroders’ nonbank activities izing in acquisitions of, and investments in, oil, gas, and a future determination by the Board in favor of and other energy-related companies. It appears that termination of grandfather benefits of Schroders. The Schroders was engaged in the above investment and determination herein is subject to the Board’s author­ corporate advisory services on June 30, 1968, and con­ ity to require modification or termination of the activi­ tinuously thereafter. Accordingly, these activities ap­ ties of Schroders or any of its nonbanking subsidiaries pear to be eligible for retention on the basis of as the Board finds necessary to assure compliance grandfather privileges. with the provisions and purposes of the Act and the On the basis of the foregoing and all the facts before Board’s regulations and orders issued thereunder, or the Board, it appears that the volume, scope and na­ to prevent evasion thereof. ture of the activities of Schroders described herein do By order of the Board of Governors, effective Feb­ not demonstrate an undue concentration of resources, ruary 25, 1980. decreased or unfair competition, conflicts of interest or unsound banking practices. Thus, there appears to Voting for this action: Chairman Volcker and Governors be no reason to require Schroders to terminate its Schultz, Wallich, Coldwell, Partee, Teeters, and Rice. grandfathered interests. It is the Board’s judgment that, at this time, termination of the grandfather privi­ (Signed) G riffith L. Garwood, leges of Schroders described herein is not necessary in [seal] Deputy Secretary of the Board. order to prevent an undue concentration of resources, decreased or unfair competition, conflicts of interest, or unsound banking practices. This determination does not authorize the entry into any new activity or product extension that was not engaged in on June 30, 1968, and continuously therafter, or any activity that is not the subject of this determination. A significant alteration in the nature or extent of Schroders’ activities or a change in location thereof 11. Although these investments placed Schroders in technical vio­ lation of the Act, the acquisitions were made prior to the Board’s deci­ sion in The Republic National Bank of Dallas, supra note 6, to treat each real estate investment as a separate activitiy, and Schroders had a reasonable belief that the acquisitions were permissible. After the Republic decision, Schroders took action to prevent further expansion of its real estate activities. In light of these factors, the Board does not view the violations as so serious as to warrant immediate divestiture. In this regard it is noted that since these acquisitions were not made between June 30, 1968, and December 31, 1970, the deadline for di­ vestiture specified in section 4(a)(2) of the Act (December 31, 1980) does not apply. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

258 Federal Reserve Bulletin □ March 1980 Orders Approved Under Bank Holding Company Act By the Board of Governors During February 1980 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) Lindsay State Company, Lindsay, Bank of Lindsay, Lindsay, Nebraska February 20, 1980 Nebraska Marshall & Ilsley Corporation Milwaukee, Merchants Bank & Trust, Rhinelander, February 11,1980 Wisconsin Wisconsin Mercantile Bankshares Corporation, First National Bank of St. Mary’s at February 22,1980 Baltimore, Maryland Leonardtown, Leonardtown, Maryland Northern National Bancshares, Inc., The Northern National Bank of Bemidji, February 1, 1980 Bemidji, Minnesota Bemidji, Minnesota S and S Holding Company, Meridian, Idaho Farmers and Merchants State Bank, February 20,1980 Meridian, Idaho Sections 3 and 4 Effective Applicant Bank(s) date Empire Holdings Limited, Road Town, Redwood Bancorp, San Francisco, February 1, 1980 Tortola, British Virgin Islands California Empire Holdings, Inc., San Francisco, California Section 4 Nonbanking company Effective Applicant (or activity) date Fidelcor, Inc., Rosemont, Pennsylvania Fidelity Credit Corporation, Rosemont, February 1, 1980 Pennsylvania Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 259 By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies of the orders are available upon request to the Reserve Banks. Section 3 Reserve Effective Applicant Bank(s) Bank date American Bancshares, Inc., Monroe, American Bank and Trust Dallas February 1, 1980 Louisiana Company in Monroe, Monroe, Louisiana BGM Bancorporation Gays Mills, Bank of Gays Mills, Gays Mills, Chicago February 25,1980 Wisconsin Wisconsin Bank of Virginia Company, Richmond, The Southwest Bank of Richmond February 5, 1980 Virginia Virginia, St. Paul, Virginia Banks of Iowa, Inc., Cedar Rapids, Cedar Falls Trust & Savings Chicago February 20,1980 Iowa Bank, Cedar Falls, Iowa Cary/Grove Bancorp, Inc., Cary, Suburban Bank of Cary-Grove, Chicago February 15,1980 Illinois Cary, Illinois Chrisman Bancshares, Inc., Chrisman, State Bank of Chrisman, Chicago February 25, 1980 Illinois Chrisman, Illinois Citizens Capital Corporation, Mount Mount Olive Bank Mount Atlanta February 12,1980 Olive, Mississippi Olive, Mississippi Commerce BancShares of Wyoming, Security Bank of Buffalo, Kansas City February 20,1980 Inc., Sheridan, Wyoming Buffalo, Wyoming Dublin Bancshares, Inc., Dublin, The Morris State Bank, Dublin, Atlanta February 21,1980 Georgia Georgia Elk Grove Bancorp, Inc., Elk Grove Suburban National Bank of Elk Chicago February 15,1980 Village, Illinois Grove Village, Elk Grove Village, Illinois FNB BanShares, Inc., West Union, The First National Bank of West Chicago February 11, 1980 Iowa Union, West Union, Iowa Farmers and Merchants Financial The Farmers and Merchants Kansas City February 22, 1980 Corp., Argonia, Kansas State Bank of Argonia, Argonia, Kansas Ferryville Bancshares, Inc., Ferryville, Ferryville State Bank, Chicago January 31,1980 Wisconsin Ferryville, Wisconsin Fidelity Southern Corporation, Fidelity National Bank, Atlanta February 12,1980 Decatur, Georgia Decatur, Georgia First Citizens Bancorp., Cleveland, First Citizens Bank, Cleveland, Atlanta February 6, 1980 Tennessee Tennessee First Citizens Financial Corporation of Citizens Bank & Trust Dallas February 8, 1980 Vivian, Inc., Vivian, Louisiana Company of Vivian, Louisiana, Vivian, Louisiana First National Hayes Center Corp., The First National Bank of Kansas City February 8, 1980 Hayes Center, Nebraska Hayes Center, Hayes Center, Nebraska First Ohio Bancshares, Inc., Toledo, First National Bank of Toledo, Cleveland February 20, 1980 Ohio Toledo, Ohio First State Financial Corporation East First State Bank of East Chicago February 15,1980 Detroit, Michigan Detroit, East Detroit, Michigan First Virginia Banks, Inc., Falls Banks of Frederick County, Richmond February 25, 1980 Church, Virginia Stephens City, Virginia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

260 Federal Reserve Bulletin □ March 1980 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Forestwood Financial Corporation, Forestwood National Bank of Dallas February 15,1980 Dallas, Texas Dallas, Dallas, Texas GAB Company, Dallas, Texas Grand Avenue Bank, Dallas, Dallas January 31,1980 Texas Georgia Bancshares, Inc., Macon, First National Bank of Houston Atlanta February 29, 1980 Georgia County, Perry, Georgia Glidden First National Holding Co., The First National Bank in Chicago February 14,1980 Glidden, Iowa Glidden, Glidden, Iowa Hi-Bancorp, Inc., Highwood, Illinois Bank of Highwood, Highwood, Chicago February 27,1980 Illinois Hoffman Bancorp, Inc., Hoffman Suburban Bank of Hoffman- Chicago February 15,1980 Estates, Illinois Schaumburg, Schaumburg, Illinois Horizon Bancorp, Morristown, New The Marine National Bank of New York February 8, 1980 Jersey Wildwood, Wildwood, New Jersey The Howells Bank, Howells, Nebraska The Howells Bank, Howells, Kansas City February 8, 1980 Nebraska Ida Holding Company, Ida Grove, First State Bank, Ida Grove, Chicago February 15,1980 Iowa Iowa Indiana Bancorp, Inc., Fort Wayne, Indiana Bank and Trust Chicago February 14, 1980 Indiana Company of Fort Wayne, Fort Wayne, Indiana J. R. Montgomery Bancorporation, City National Bank and Trust Kansas City February 5, 1980 Lawton, Oklahoma Co. of Lawton, Lawton, Oklahoma KGB Bancorporation, Inc., Wesley, Exchange State Bank, Wesley, Chicago February 25, 1980 Iowa Iowa Laurens Bancorp, Ltd., Laurens, Iowa Laurens State Bank, Laurens, Chicago February 20, 1980 Iowa Monticello Bancshares, Inc., Wright County State Bank, Minneapolis February 22,1980 Monticello, Minnesota Monticello, Minnesota Navigation Bancshares, Inc., Houston, Navigation Bank, Houston, Dallas February 7, 1980 Texas Texas Oakley Holding Company, Buffalo, The Oakley National Bank of Minneapolis February 4, 1980 Minnesota Buffalo, Buffalo, Minnesota O’Hare Banc Corp., Chicago, Illinois O’Hare International Bank, Chicago February 20, 1980 N.A., Chicago, Illinois Peoples Equity Corporation, Wells, Peoples State Bank of Wells, Minneapolis February 20, 1980 Minnesota Wells, Minnesota Sheldon Security Bancorporation, Security State Bank, Sheldon, Chicago February 5, 1980 Inc., Sheldon, Iowa Iowa Subpal Bancorp, Inc., Palatine, Illinois Suburban National Bank of Chicago February 15, 1980 Palatine, Palatine, Illinois Sullivan County Bancshares, Inc., The Citizens Bank of Winigan, Kansas City February 8, 1980 Winigan, Missouri Missouri, Winigan, Missouri Town & Country Bancorporation, Inc., Town & Country State Bank, Minneapolis February 14, 1980 Newport, Minnesota Newport, Minnesota Treasure Valley Bancorp, Inc., Treasure Valley State Bank, San Francisco January 28,1980 Fruitland, Idaho Fruitland, Idaho Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 261 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Tulsa Bancshares, Inc., Tulsa, Guaranty Bancorporation, Kansas City January 30,1980 Oklahoma Tulsa, Oklahoma Vienna Bancorp, Inc., Vienna, Illinois Drovers State Bank, Vienna, St. Louis February 19, 1980 Illinois Van Buren Bancorporation, Farmers State Bank, Chicago February 20, 1980 Keosauqua, Iowa Keosauqua, Iowa Western Michigan Corporation, Niles, Pacesetter Financial Chicago February 6, 1980 Michigan Corporation, Grand Rapids, Michigan Woodfield Bancorp, Inc., Schaumburg, Suburban National Bank of Chicago February 15,1980 Illinois Woodfield, Schaumburg, Illinois American National Corporation, ANB Bank, N.A., Omaha, Kansas City February 22, 1980 Omaha, Nebraska Nebraska Kearney Commercial Bank, Kearney, Kearney Commercial Bank, Kansas City February 22,1980 Missouri Kearney, Missouri First Chico Bancshares, Inc., Chico, The First State Bank of Chico, Dallas February 28,1980 Texas Chico, Texas Arvada Bancshares, Ltd., Arvada, Arvada State Bank, Arvada, Kansas City February 27,1980 Colorado Colorado Bank of New Hampshire Corporation, Bank of New Hampshire, Boston February 28,1980 Manchester, New Hampshire N.A., Manchester, New Hampshire CoushattaBancshares, Inc., Bank of Coushatta, Coushatta, Dallas February 29, 1980 Coushatta, Louisiana Louisiana Highland Park Bancshares, Inc., Bank of Highland Park, Chicago February 29,1980 Chicago, Illinois Highland Park, Illinois Hugoton Bancshares, Inc., Hugoton, The Citizens State Bank, Kansas City February 27, 1980 Kansas Hugoton, Kansas River Valley Bancshares, St. Louis February 29,1980 Incorporated, Lewiston, Missouri Lewiston State Bank, Lewiston, Missouri Sections 3 and 4 Nonbanking company Reserve Effective Applicant Bank(s) (or activity) Bank date First Financial First Bank & Trust, Bryan, To engage in Dallas February 13,1980 Bancorporation, Inc. Texas leasing certain Waco, Texas Sabine Bank, Port Arthur, personal Texas property through acquisition of an existing company Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

262 Federal Reserve Bulletin □ March 1980 Section 4 Nonbanking company Reserve Effective Applicant (or activity) Bank date Affiliated Bankshares of Colorado, Underwriting life and disability Kansas City February 5, 1980 Inc., Boulder, Colorado insurance The Bank of New York The Bank of New York Life New York February 14,1980 Company, Inc., New York, Insurance Company, New York Phoenix, Arizona First State Agency of Lake Lillian, Operating a general insurance Minneapolis February 6, 1980 Inc., Lake Lillian, Minnesota agency in a town of less than 5,000 population Jan-Mar Corp., Coleraine, Minnesota Operating a general insurance Minneapolis February 27,1980 agency in a town of less than 5,000 population Liberty National Corporation, To engage de novo in Kansas City February 15,1980 Oklahoma City, Oklahoma underwriting credit life and credit accident and health insurance in connection with extensions of consumer credit MPS Investment Company, Appleton, Operating a general insurance Minneapolis February 27,1980 Minnesota agency in a town of less than 5,000 population Pan American Bancshares, Inc., Atico Mortgage Corporation, Atlanta February 11,1980 Miami, Florida Miami, Florida American Fletcher Corporation, To continue to engage in February 29,1980 Chicago Indianapolis, Indiana underwriting activities Orders Approved Under Bank Merger Act Reserve Effective Applicant Bank(s) Bank date Barclays Bank of New York, New Bankers Trust Company, New New York February 1, 1980 York, New York York, New York Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 263 Pending Cases Involving the Board of Governors Does not include suits against the Federal Reserve Ella Jackson et al., v. Board of Governors, filed May Banks in which the Board of Governors is not named a 1979, U.S.C.A. for the Fifth Circuit. party. Memphis Trust Company v. Board of Governors, filed May 1979, U.S.C.A. for the Sixth Circuit. Albert A. Rapoport v. Board of Governors and Manu­ Independent Insurance Agents of America, et al., v. facturers Hanover Trust Co., filed February 1980, Board of Governors, filed May 1979, U.S.C.A. for U.S.D.C. for the District of Columbia. the District of Columbia. American Trust Co. of Hawaii, et al., v. Board of Gov­ Independent Insurance Agents of America, et al., v. ernors, filed January 1980, U.S.D.C. for the District Board of Governors, filed April 1979, U.S.C.A. for of Columbia. the District of Columbia. Boggs, et al. v. Board of Governors, filed October Independent Insurance Agents of America, et al., v. 1979, U.S.C.A. for the Eighth Circuit. Board of Governors, filed March 1979, U.S.C. A. for Independent Bank Corporation v. Board of Gover­ the District of Columbia. nors, filed October 1979, U.S.C.A. for the Sixth Cir­ Credit and Commerce American Investment, et al., v. cuit. Board of Governors, filed March 1979 U.S.C. A. for Wiley v. United States, et al., filed September 1979, the District of Columbia. U.S.D.C. for the District of Columbia. Consumers Union of the United States, v. G. William County National Bancorporation and TGB Co. v. Miller, et al., filed December 1978, U.S.D.C. for the Board of Governors, filed September 1979, District of Columbia. U.S.C.A. for the Eighth Circuit. Manchester-Tower Grove Community Organization/ State of Indiana v. The United States of America, et ACORN v. Board of Governors, filed September al., filed September 1979, U.S.D.C. for the District 1978, U.S.C.A. for the District of Columbia. of Columbia. Independent Bankers Association of Texas v. First Edwin F. Gordon v. Board of Governors, et al., filed National Bank in Dallas, et al., filed July 1978, August 1979, U.S.D.C. for the Northern District of U.S.D.C. for the Northern District of Texas. Georgia. Mid-Nebraska Bancshares, Inc. v. Board of Gover­ Edwin F. Gordon v. Board of Governors, et al., filed nors, filed July 1978, U.S.C.A. for the District of August 1979, U.S.C.A. for the Fifth Circuit. Columbia. American Bankers Association v. Board of Governors, Security Bancorp and Security National Bank v. et al., filed August 1979, U.S.D.C. for the District of Board of Governors, filed March 1978, U.S.C.A. for Columbia. the Ninth Circuit. Gregory v. Board of Governors, filed July 1979, Vickars-Henry Corp. v. Board of Governors, filed De­ U.S.D.C. for the District of Columbia. cember 1977, U.S.C.A. for the Ninth Circuit. Donald W. Riegel, Jr. v. Federal Open Market Com­ Investment Company Institute v. Board of Governors, mittee, filed July 1979, U.S.D.C. for the District of filed September 1977, U.S.D.C. for the District of Columbia. Columbia. Connecticut Bankers Association, et al., v. Board of Robert Farms, Inc. v. Comptroller of the Currency, et Governors, filed May 1979, U.S.C.A. for the Dis­ al., filed November 1975, U.S.D.C. for the Southern trict of Columbia. District of California. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

264 Membership of the Board of Governors of the Federal Reserve System, 1913-80 Appointive Members1 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. Chester C. 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.................. . .San Francisco .. . .Feb. 18, 1952 Reappointed in 1958. Resigned Feb. 28, 1965. J. L. Robertson ............. . .Kansas City ... ...........do .......... Reappointed in 1964. Resigned Apr. 30, 1973. C. Canby Balderston .. . .Philadelphia .. . Aug. 12, 1954 Served through Feb. 28, 1966. Paul E. Miller ............... . .Minneapolis ... Aug. 13, 1954 Died Oct. 21, 1954. For notes, see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

265 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 .. .San Francisco ... .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. 1, 1970. Resigned Mar. 31, 1978. John E. Sheehan ___ .St. Louis ...............Jan. 4, 1972 Resigned June 1, 1975. Jeffrey M. Bucher ... .San Francisco ... .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. Coldwell ... .Dallas ......................Oct. 29, 1974 Served through Feb. 29, 1980. 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 ... .San Francisco___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 Members1 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 the Treasury and the Comptroller of the Currency should continue to Federal Reserve Board was composed of seven members, including serve as members until Feb. 1, 1936; that the appointive members five appointive members, the Secretary of the Treasury, who was in the office on the date of that act should continue to serve until Feb. ex-officio chairman of the Board, and the Comptroller of the Cur­ 1, 1936, or until their successors were appointed and had qualified; rency. The original term of office was ten years, and the five orig­ and that thereafter the terms of members should be 14 years and inal appointive members had terms of two, four, six, eight, and ten that the designation of Chairman and Vice Chairman of the Board years respectively. In 1922 the number of appointive members was should be for a term of four years. increased to six, and in 1933 the term of office was increased to 12 2. Date after words “Resigned” and “Retired” denotes final day years. The Banking Act of 1935, approved Aug. 23, 1935, changed of service. the 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 should 4. Chairman and Vice Chairman were designated Governor and be composed of seven appointive members; that the Secretary of the Vice Governor before Aug. 23, 1935. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

266 Directors of Federal Reserve Banks and Branches Following is a list of the directorates of the Federal each group elects one Class A and one Class B direc­ Reserve Banks and Branches as presently consti­ tor. Class C directors are selected to represent the tuted. The list shows, in addition to the name of each public with due but not exclusive consideration to the director, the principal business affiliation, the class of interests of agriculture, commerce, industry, services, directorship, and the date when the term expires. Each labor, and consumers, and may not be officers, direc­ Federal Reserve Bank has nine directors: three Class tors, employees, or stockholders of any bank. One A and three Class B directors, who are elected by the Class C director is designated by the Board of Gover­ stockholding member banks, and three Class C direc­ nors as Chairman of the Board of Directors and Feder­ tors, who are appointed by the Board of Governors of al Reserve Agent and another is appointed Deputy the Federal Reserve System. All Federal Reserve Chairman. Federal Reserve Branches have either five Bank directors are chosen without discrimination on or seven directors, of whom a majority are appointed the basis of race, creed, color, sex, or national origin. by the Board of Directors of the parent Federal Re­ Class A directors are representative of the stock­ serve Bank; the others are appointed by the Board of holding member banks. Class B directors represent the Governors of the Federal Reserve System. One of the public and are elected with due but not exclusive con­ directors appointed by the Board of Governors at each sideration to the interests of agriculture, commerce, Branch is designated annually as Chairman of the industry, services, labor, and consumers, and may not Board in such a manner as the Federal Reserve Bank be officers, directors, or employees of any bank. may prescribe. For the purpose of electing Class A and Class B di­ In this list of the directorates, names followed by rectors, the member banks of each Federal Reserve footnote reference 1 (*) are Chairmen, those by foot­ District are classified by the Board of Governors of the note reference 2 (2) are Deputy Chairmen, and those Federal Reserve System into three groups, each of by footnote reference 3 (3) indicate new appointments. which consists of banks of similar capitalization, and Terms expire on December 31 of the year shown. D istrict I —B oston Term expires Class A Richard D. Hill Chairman of the Board, First National Boston Corporation, Boston, Mass. 1980 Fred A. White President, Dartmouth National Bank of Hanover, Hanover, N.H. 1981 H. Alan Timm3 President, Bank of Maine, N.A., Augusta, Maine 1982 Class B Weston P. Figgins Chairman of the Board, Wm. Filene’s Sons Company, Bos­ ton, Mass. 1980 Robert D. Kilpatrick President and Chief Executive Officer, Connecticut General Life Insurance Company, Hartford, Conn. 1981 Carol R. Goldberg Senior Vice President, The Stop & Shop Companies, Inc., Boston, Mass. 1982 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

267 Term Class C expires Robert M. Solow1 Institute Professor, Massachusetts Institute of Technology, Cambridge, Mass. 1980 Robert P. Henderson2 President & Chief Executive Officer, Itek Corporation, Lex­ ington, Mass. 1981 Thomas I. Atkins3 Partner, Atkins and Brown, Boston, Mass. 1982 District 2—N ew York Class A Raymond W. Bauer Chairman and President, United Counties Trust Company, Elizabeth, N.J. 1980 James Whelden President, Ballston Spa National Bank, Ballston Spa, N.Y. 1981 Gordon T. Wallis3 Chairman of the Board, Irving Trust Company, New York, N.Y. 1982 Class B William S. Sneath Chairman of the Board, Union Carbide Corporation, New York, N.Y. 1980 Vacancy 1981 Vacancy 1982 Class C Robert H. Knight, Esq.1 Partner, Shearman and Sterling, Attorneys, New York, N.Y. 1980 Gertrude G. Michelson Senior Vice President, Macy’s New York, New York, N.Y. 1981 Boris Yavitz2 Dean, Graduate School of Business, Columbia University, New York, N.Y. 1982 -Buffalo Branch Appointed by Federal Reserve Bank William S. Gavitt President, The Lyons National Bank, Lyons, N.Y. 1980 Robert J. Donough President, Liberty National Bank and Trust Company, Buf­ falo, N.Y. 1981 M. Jane Dickman Partner, Touche Ross & Co., Buffalo, N.Y. 1982 Arthur M. Richardson3 President and Chief Executive Officer, Security Trust Com­ pany, Rochester, N.Y. 1982 Appointed by Board of Governors John R. Burwell President, Rollins Container Corporation, Rochester, N.Y. 1980 George L. Wessel President, Buffalo AFL-CIO Council, Buffalo, N.Y. 1981 Frederick D. Berkeley, III1 Chairman of the Board and President, Graham Manufactur­ ing Company, Inc., Batavia, N.Y. 1982 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

268 Federal Reserve Bulletin □ March 1980 District 3—Philadelphia Term expires Class A John R. Biechler President and Chief Executive Officer, The Commonwealth National Bank, Harrisburg, Pa. 1980 Robert H. Deacon President, The Bank of Mid-Jersey, Bordentown, N.J. 1981 Donald J. Seebold President, The First National Bank of Danville, Danville, Pa. 1982 Class B Harry A. Jensen3 President and Chief Executive Officer, Armstrong Cork Company, Lancaster, Pa. 1980 Richard P. Hauser Chairman and Chief Executive Officer, John Wanamaker, Philadelphia, Pa. 1981 Eberhard Faber3 Chairman of the Board and Chief Executive Officer, Eber­ hard Faber, Inc., Wilkes-Barre, Pa. 1982 Class C Werner C. Brown2 Chairman, Hercules Incorporated, Wilmington, Del. 1980 John W. Eckman1 Chairman and President, Rorer Group, Inc., Fort Washing­ ton, Pa. 1981 Jean A. Crockett Chairman, Department of Finance, Wharton School, Uni­ versity of Pennsylvania, Philadelphia, Pa. 1982 D istrict 4 —C levelan d Class A John A. Gelbach Chairman of the Board, Central National Bank, Cleveland, Ohio 1980 Everett L. Maffett President and Chief Executive Officer, Eaton National Bank & Trust Co., Eaton, Ohio 1981 John W. Alford Chairman of the Board and Chief Executive Officer, The Park National Bank, Newark, Ohio 1982 Class B Hays T. Watkins Chairman and President, Chessie System, Cleveland, Ohio 1980 Vacancy 1981 John W. Kessler3 President, John W. Kessler Company, Columbus, Ohio 1982 Class C Lloyd M. McBride3 President, United Steelworkers of America, Pittsburgh, Pa. 1980 J. L. Jackson2 President, Falcon Coal Company Inc., Lexington, Ky. 1981 Robert E. Kirby1 Chairman and Chief Executive Officer, Westinghouse Elec­ tric Corporation, Pittsburgh, Pa. 1982 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 269 Term —Cincinnati Branch expires Appointed by Federal Reserve Bank Walter W. Hillenmeyer, Jr. Chairman and Chief Executive Officer, First Security Na­ tional Bank and Trust Company, Lexington, Ky. 1980 Lawrence C. Hawkins Senior Vice President, University of Cincinnati, Cincinnati, Ohio 1981 Elden Houts President, The Citizens Commercial Bank and Trust Compa­ ny, Celina, Ohio 1981 Oliver W. Birckhead3 President and Chief Executive Officer, The Central Trust Co., N.A., Cincinnati, Ohio 1982 Appointed by Board of Governors Lawrence H. Rogers, II1 President and Chief Executive Officer, Omega Communica­ tions, Inc., Cincinnati, Ohio 1980 Martin B. Friedman President, Formica Corporation, Cincinnati, Ohio 1981 Sister Grace Marie Hiltz3 President, Sisters of Charity Health Care Systems, Inc., Cin­ cinnati, Ohio 1982 —Pittsburgh Branch Appointed by Federal Reserve Bank Vacancy 1980 Thomas V. Mansell3 President and Chief Executive Officer, First National Bank of Lawrence County, New Castle, Pa. 1981 R. Burt Gookin Director, H. J. Heinz Co., Pittsburgh, Pa. 1981 William D. McKain3 President, Wheeling National Bank, Wheeling, W. Va. 1982 Appointed by Board of Governors Milton G. Hulme, Jr President and Chief Executive Officer, Mine Safety Appli­ ances Company, Pittsburgh, Pa. 1980 William H. Knoell1 President, Cyclops Corporation, Pittsburgh, Pa. 1981 Robert S. Kaplan3 Dean, Graduate School of Industrial Administration, Carnegie-Mellon University, Pittsburgh, Pa. 1982 District 5 —Richmond Class A Frederic H. Phillips Senior Vice President, Virginia National Bank, Roanoke, Va. 1980 Vincent C. Burke, Jr. Chairman of the Board and Chief Executive Officer, The Riggs National Bank of Washington, D.C., Washington, D.C. 1981 William M. Dickson3 President and Senior Trust Officer, First National Bank in Ronceverte, Ronceverte, W. Va. 1982 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

270 Federal Reserve Bulletin □ March 1980 Term Class B expires Thomas A. Jordan Investor, Asheboro, N.C. 1980 Paul G. Miller Chairman of the Board and Chief Executive Officer, Com­ mercial Credit Company, Baltimore, Md. 1981 James A. Chapman, Jr.3 Chairman of the Board and Chief Executive Officer, Inman Mills, Inman, S.C. 1982 Class C Steven Muller2 President, The Johns Hopkins University and Hospital, Bal­ timore, Md. 1980 Maceo A. Sloan1 Executive Vice President and Chief Operating Officer, North Carolina Mutual Life Insurance Company, Durham, N.C. 1981 Paul E. Reichardt Chairman of the Board and Chief Executive Officer, Wash­ ington Gas Light Company, Washington, D.C. 1982 —Baltim ore Branch Appointed by Federal Reserve Bank Joseph M. Gough, Jr. President, The First National Bank of St. Mary’s, Leon­ ardtown, Md. 1980 Pearl C. Brackett Assistant/Deputy Manager, Baltimore Regional Chapter of American Red Cross, Baltimore, Md. 1981 Hugh D. Shires3 President and Chief Executive Officer, The First National Bank and Trust Company of Western Maryland, Cumber­ land, Md. 1982 A. R. Reppert President, The Union National Bank of Clarksburg, Clarks­ burg, W. Va. 1982 Appointed by Board of Governors Catherine Byrne Doehler1 Director of Development, Baltimore Regional Chapter of American Red Cross, Baltimore, Md. 1980 Joseph H. McLain President, Washington College, Chestertown, Md. 1981 Edward H. Co veil3 Vice President, Country Pride Foods Limited, General Man­ ager, Delmarva Division, Easton, Md. 1982 —Charlotte Branch Appointed by Federal Reserve Bank John T. Fielder President, J. B. Ivey and Company, Charlotte, N.C. 1980 Hugh M. Chapman Chairman of the Board, The Citizens & Southern National Bank of South Carolina, Columbia, S.C. 1981 J. Banks Scarborough3 Chairman and President, Pee Dee State Bank, Tim­ mons ville, S.C. 1982 W. B. Apple, Jr. President, First National Bank of Reidsville, Reidsville, N.C. 1982 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 271 Term Appointed by Board of Governors expires Robert E. Elberson1 President, Chief Executive Officer, and Director, Hanes Corporation, Winston-Salem, N.C. 1980 Henry Ponder Office of the President, Benedict College, Columbia, S.C. 1981 Naomi G. Albanese Dean, School of Home Economics, University of North Car­ olina at Greensboro, Greensboro, N.C. 1982 District 6 —A tlanta Class A Hugh M. Willson President, Citizens National Bank, Athens, Tenn. 1980 Guy W. Botts Chairman of the Board, Barnett Banks of Florida, Inc., Jack­ sonville, Fla. 1981 Dan B. Andrews3 President, First National Bank of Dickson, Dickson, Tenn. 1982 Class B Ulysses V. Goodwyn Executive Vice President, Southern Natural Resources, Inc., Birmingham, Ala. 1980 Floyd W. Lewis Chairman of the Board and Chief Executive Officer, Middle South Utilities, Inc., New Orleans, La. 1981 Jean McArthur Davis President, McArthur Dairy, Inc., Miami, Fla. 1982 Class C William A. Fickling, Jr.1 President and Chairman, Charter Medical Corporation, Ma­ con, Ga. 1980 Fred Adams, Jr. President, Cal-Maine Foods, Inc., Jackson, Miss. 1981 John H. Weitnauer, Jr.2,3 Chairman and Chief Executive Officer, Richway, Atlanta, Ga. 1982 —Birmingham B ranch Appointed by Federal Reserve Bank George S. Shirley President, The First National Bank of Tuscaloosa, Tusca­ loosa, Ala. 1980 Guy H. Caffey, Jr. Chairman and Chief Executive Officer, Southern Bancorpo­ ration of Alabama and Birmingham Trust National Bank, Birmingham, Ala. 1981 C. Gordon Jones3 President and Chief Executive Officer, First National Bank of Decatur, Decatur, Ala. 1982 Martha A. Mclnnis3 Executive Vice President, Alabama Environmental Quality Association, Montgomery, Ala. 1982 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

272 Federal Reserve Bulletin □ March 1980 Term Appointed by Board of Governors expires Harold B. Blach, Jr.1 President, Blach’s, Inc., Birmingham, Ala. 1980 Louis J. Willie Executive Vice President, Booker T. Washington Insurance Co., Birmingham, Ala. 1981 William H. Martin, III President and Chief Executive Officer, Martin Industries, Inc., Florence, Ala. 1982 —Jacksonville Branch Appointed by Federal Reserve Bank DuBose Ausley President and Chief Executive Officer, Capital City First Na­ tional Bank, Tallahassee, Fla. 1980 Robert E. Warfield, Jr. Chairman and President, The First National Bank and Trust Company, Eustis, Fla. 1981 W. M. Palmer, Jr.3 Chairman, Florida Crushed Stone Company, Ocala, Fla. 1982 Billy J. Walker3 President, Atlantic Bancorporation, Jacksonville, Fla. 1982 Appointed by Board of Governors Joan W. Stein1 Partner, Regency Square Shopping Center, Jacksonville, Fla. 1980 Jerome P. Keuper President, Florida Institute of Technology, Melbourne, Fla. 1981 Copeland D. Newbern Chairman of the Board, Newbem Groves, Inc., Tampa, Fla. 1982 —Miami Branch Appointed by Federal Reserve Bank Tully F. Dunlap Chairman, Florida National Bank, Miami, Fla. 1980 Jane C. Cousins President, Cousins Associates, Inc., Miami, Fla. 1981 Alfred W. Roepstorff President, National Bank of Collier County, Marco Island, Fla. 1981 M. G. Sanchez3 President and Chief Executive Officer, First Bankers Corpo­ ration of Florida, Pompano Beach, Fla. 1982 Appointed by Board of Governors David G. Robinson1 President, Edison Community College, Fort Myers, Fla. 1980 Roy W. Vandegrift, Jr. President, Vandegrift-Williams Farms, Inc., Pahokee, Fla. 1981 David H. Rush3 President, ACR Electronics, Inc., Hollywood, Fla. 1982 —Nashville Branch Appointed by Federal Reserve Bank James R. Austin Chairman and Chief Executive Officer, Peoples National Bank, Shelbyville, Tenn. 1980 Ruth W. Ellis President, Mountain Empire Bank, Johnson City, Tenn. 1981 Charles J. Kane3 Chairman and Chief Executive Officer, Third National Bank in Nashville, Nashville, Tenn. 1982 John R. King3 President, The Mason and Dixon Lines, Inc., Kingsport, Tenn. 1982 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 273 Term Appointed by Board of Governors expires Robert C. H. Mathews, Jr.1 President, R. C. Mathews, Contractor, Inc., Nashville, Tenn. 1980 John C. Bolinger, Jr. Management Consultant, Knoxville, Tenn. 1981 Cecelia Adkins Executive Director, Sunday School Publishing Board, Nash­ ville, Tenn. 1982 —New Orleans Branch Appointed by Federal Reserve Bank William E. Howard, Jr. Chairman of the Board, Commercial National Bank and Trust Company of Laurel, Laurel, Miss. 1980 Robert H. Bolton President, Rapides Bank and Trust Company in Alexandria, Alexandria, La. 1981 Patrick A. Delaney3 President, Whitney National Bank of New Orleans, New Or­ leans, La. 1982 Ben M. Radcliff3 President, Ben M. Radcliff Contractor, Inc., Mobile, Ala. 1982 Appointed by Board of Governors George C. Cortright, Jr.1 Partner, George C. Cortright Company, Rolling Fork, Miss. 1980 Horatio C. Thompson President, Horatio Thompson Investment, Inc., Baton Rouge, La. 1981 Levere C. Montgomery President, Time Saver Stores, Inc., New Orleans, La. 1982 D istrict 7—Chicago Class A John F. Spies President, Iowa Trust and Savings Bank, Emmetsburgh, Iowa 1980 A. Robert Abboud Chairman of the Board, The First National Bank of Chicago, Chicago, 111. 1981 Patrick E. McNarny3 President, First National Bank of Logansport, Logansport, Ind. 1982 Class B Arthur J. Decio Chairman of the Board and Chief Executive Officer, Skyline Corporation, Elkhart, Ind. 1980 Dennis W. Hunt President, Hunt Truck Lines, Inc., Rockwell City, Iowa 1981 Mary Garst Manager of Cattle Division, Garst Company, Coon Rapids, Iowa 1982 Class C John Sagan1 Vice President-Treasurer, Ford Motor Company, Dearborn, Mich. 1980 Edward F. Brabec Business Manager, Chicago Journeymen Plumbers, Chi­ cago, 111. 1981 Stanton R. Cook2,3 President, Tribune Company, Chicago, 111. 1982 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

274 Federal Reserve Bulletin □ March 1980 Term —D etroit Branch expires Appointed by Federal Reserve Bank Lawrence A. Johns President, Isabella Bank and Trust, Mount Pleasant, Mich. 1980 Charles R. Montgomery President, Michigan Consolidated Gas Company, Detroit, Mich. 1981 James H. Duncan Chairman and Chief Executive Officer, First American Bank Corporation, Kalamazoo, Mich. 1981 Dean E. Richardson3 Chairman, Manufacturers National Bank of Detroit, Detroit, Mich. 1982 Appointed by Board of Governors Howard F. Sims1 President, Sims-Varner Associates, Inc., Detroit, Mich. 1980 Herbert H. Dow Director and Secretary, The Dow Chemical Company, Mid­ land, Mich. 1981 Russell G. Mawby3 President and Trustee, W. K. Kellogg Foundation, Battle Creek, Mich. 1982 District 8—St. Louis Class A Donald N. Brandin Chairman of the Board and Chief Executive Officer, The Boatmen’s National Bank of St. Louis, St. Louis, Mo. 1980 George M. Ryrie President, First National Bank & Trust Co., Alton, 111. 1981 Donald L. Hunt3 President, First National Bank of Marissa, Marissa, 111. 1982 Class B Ralph C. Bain Vice President, Wabash Plastics, Inc., Evansville, Ind. 1980 Tom K. Smith, Jr. St. Louis, Mo. 1981 Mary P. Holt3 President, Clothes Horse, Little Rock, Ark. 1982 Class C William H. Stroube Associate Dean of Faculty Programs, Western Kentucky University, Bowling Green, Ky. 1980 William B. Walton2 Vice Chairman of the Board, Holiday Inns, Inc., Memphis, Tenn. 1981 Armand C. Stalnaker1 Chairman of the Board, General American Life Insurance Co., St. Louis, Mo. 1982 — L ittle Rock Branch Appointed by Federal Reserve Bank Thomas E. Hays, Jr. President and Chief Executive Officer, The First National Bank of Hope, Hope, Ark. 1980 Gordon E. Parker President and Chief Executive Officer, The First National Bank of El Dorado, El Dorado, Ark. 1981 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 275 Term expires Shirley J. Pine Speech Communication, University of Arkansas at Little Rock, Little Rock, Ark. 1981 William H. Bowen3 President and Chief Executive Officer, The Commercial Na­ tional Bank of Little Rock, Little Rock, Ark. 1982 Appointed by Board of Governors Ronald W. Bailey Executive Vice President and General Manager, Producers Rice Mill, Inc., Stuttgart, Ark. 1980 G. Larry Kelley President, Pickens-Bond Construction Co., Little Rock, Ark. 1981 E. Ray Kemp, Jr.1 Vice Chairman of the Board and Chief Administrative Offi­ cer, Dillard Department Stores, Inc., Little Rock, Ark. 1982 —Louisville Branch Appointed by Federal Reserve Bank J. David Grissom Chairman and Chief Executive Officer, Citizens Fidelity Bank and Trust Company, Louisville, Ky. 1980 Fred B. Oney President, The First National Bank of Carrollton, Carroll­ ton, Ky. 1981 Sister Eileen M. Egan, S.C.N. President, Spalding College, Louisville, Ky. 1981 Howard Brenner Vice Chairman of the Board, Tell City National Bank, Tell City, Ind. 1982 Appointed by Board of Governors Richard O. Donegan1 Senior Vice President and Group Executive, General Elec­ tric Company, Louisville, Ky. 1980 Wendell G. Rayburn Dean of University College, University of Louisville, Louis­ ville, Ky. 1981 James F. Thompson Professor of Economics, Murray State University, Murray, Ky. 1982 —Memphis Branch Appointed by Federal Reserve Bank Charles S. Youngblood President and Chief Executive Officer, First Columbus Na­ tional Bank, Columbus, Miss. 1980 Stallings Lipford President, First-Citizens National Bank of Dyersburg, Dyersburg, Tenn. 1981 Bruce E. Campbell, Jr. Chairman and President, National Bank of Commerce, Memphis, Tenn. 1981 Earl L. McCarroll President, The Farmers Bank & Trust Co., Blytheville, Ark. 1982 Appointed by Board of Governors Frank A. Jones, Jr. President, Dietz Forge Company, Memphis, Tenn. 1980 Benjamin P. Pierce President, Tyrone Hydraulics, Inc., Corinth, Miss. 1981 Walter L. Walker President, LeMoyne-Owen College, Memphis, Tenn. 1982 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

276 Federal Reserve Bulletin □ March 1980 District 9—Minneapolis Term expires Class A James H. Smaby President, Commercial National Bank and Trust Company, Iron Mountain, Mich. 1980 Zane G. Murfitt President, Flint Creek Valley Bank, Philipsburg, Mont. 1981 Henry N. Ness3 Senior Vice President, The Fargo National Bank and Trust Company, Fargo, N. Dak. 1982 Class B Donald P. Helgeson Secretary and Vice President, Jack Frost, Inc., St. Cloud, Minn. 1980 Russell G. Cleary Chairman and President, G. Heileman Brewing Company, LaCrosse, Wis. 1981 Joe F. Kirby3 Chairman, Western Surety Company, Sioux Falls, S. Dak. 1982 Class C Stephen F. Keating1 Vice Chairman of the Board, Honeywell, Inc., Minneapolis, Minn. 1980 William G. Phillips2 Chairman and Chief Executive Officer, International Multi­ foods, Minneapolis, Minn. 1981 Sister Generose Gervais Administrator, St. Mary’s Hospital, Rochester, Minn. 1982 —Helena Branch Appointed by Federal Reserve Bank Harry W. Newlon3 President, First National Bank, Bozeman, Mont. 1980 Jase O. Norsworthy President, The N.R.G. Company, Billings, Mont. 1980 Lynn D. Grobel President, First National Bank of Glasgow, Glasgow, Mont. 1981 Appointed by Board of Governors Patricia P. Douglas1 Vice President—Fiscal Affairs, University of Montana, Missoula, Mont. 1980 Norris E. Hanford2 Fort Benton, Mont. 1981 District 10—Kansas City Class A Wayne D. Angell President, Council Grove National Bank, Ottawa, Kans. 1980 John D. Woods Chairman and Chief Executive Officer, The Omaha National Bank, Omaha, Nebr. 1981 Howard K. Loomis President, The Peoples Bank, Pratt, Kans. 1982 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 277 Term Class B expires James G. Harlow, Jr. President and Chief Executive Officer, Oklahoma Gas and Electric Co., Oklahoma City, Okla. 1980 Alan R. Sleeper Alden, Kans. 1981 Charles C. Gates3 President and Chairman of the Board, Gates Rubber Compa­ ny, Denver, Colo. 1982 Class C Joseph H. Williams1 Chairman and Chief Executive Officer, The Williams Com­ panies, Tulsa, Okla. 1980 Doris M. Drury3 Professor of Economics, University of Denver, Denver, Colo. 1981 Paul H. Henson2 Chairman, United Telecommunications, Inc., Kansas City, Mo. 1982 —Denver Branch Appointed by Federal Reserve Bank William H. Vernon Director, and Former Chairman and Chief Executive Offi­ cer, Santa Fe National Bank, Santa Fe, N. Mex. 1980 Delano E. Scott President and Chairman, The Routt County National Bank of Steamboat Springs, Steamboat Springs, Colo. 1980 Kenneth C. Naramore3 President, Stockmen’s Bank & Trust Company, Gillette, Wyo. 1981 Appointed by Board of Governors Alvin F. Grospiron3 Denver, Colo. 1980 Caleb B. Hurtt1,3 Vice President and General Manager, Martin Marietta Aero­ space Corporation, Denver, Colo. 1981 —Oklahoma City Branch Appointed by Federal Reserve Bank W. L. Stephenson, Jr. Chairman and Chief Executive Officer, Central National Bank & Trust Co. of Enid, Enid, Okla. 1980 V. M. Thompson, Jr. Chairman and Chief Executive Officer, Utica National Bank and Trust Co., Tulsa, Okla. 1980 J. A. Maurer Chairman, Security National Bank & Trust Co., Duncan, Okla. 1981 Appointed by Board of Governors Samuel R. Noble Chairman of the Board, Noble Affiliates, Inc., Ardmore, Okla. 1980 Christine H. Anthony1 Oklahoma City, Okla. 1981 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

278 Federal Reserve Bulletin □ March 1980 Term —Omaha Branch expires Appointed by Federal Reserve Bank F. Phillips Giltner President, First National Bank of Omaha, Omaha, Neb. 1980 W. W. Cook, Jr.3 President, Beatrice National Bank and Trust Company, Bea­ trice, Nebr. 1981 Joe J. Huckfeldt President, Gering National Bank and Trust Company, Gering, Nebr. 1981 Appointed by Board of Governors Robert G. Lueder1 President, Lueder Construction Company, Omaha, Nebr. 1980 Gretchen S. Pullen3 Chairman of the Board, Swanson Enterprises, Inc., Omaha, Nebr. 1981 D istrict 11 —D a lla s Class A Frank Junell Chairman of the Board, The Central National Bank of San Angelo, San Angelo, Tex. 1980 Lewis H. Bond Chairman of the Board and Chief Executive Officer, Texas American Bancshares Inc., Ft. Worth, Tex. 1981 John P. Gilliam3 President and Chief Executive Officer, First National Bank in Valley Mills, Valley Mills, Tex. 1982 Class B Kent Gilbreath Professor of Economics, Department of Economics and Fi­ nance, Baylor University, Waco, Tex. 1980 J. Wayland Bennett Charles C. Thompson Professor of Agricultural Finance and Associate Dean, College of Agricultural Sciences, Texas Tech University, Lubbock, Tex. 1981 Robert D. Rogers3 President, Texas Industries, Inc., Dallas, Tex. 1982 Class C Irving A. Mathews1 Chairman of the Board and Chief Executive Officer, Frost Bros., Inc., San Antonio, Tex. 1980 Gerald D. Hines2 Owner, Gerald D. Hines Interests, Houston, Tex. 1981 Margaret S. Wilson Chairman of the Board and Chief Executive Officer, Scarbroughs Stores, Austin, Tex. 1982 —El Paso Branch Appointed by Federal Reserve Bank Claude E. Leyendecker President, Mimbres Valley Bank, Deming, N. Mex. 1980 Arnold B. Peinado, Jr. Partner, AVC Development, El Paso, Tex. 1981 Vacancy 1981 Arthur L. Gonzales President, First City National Bank of El Paso, El Paso, Tex. 1982 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 279 Term expires Appointed by Board of Governors Chester J. Kesey1 C. J. Kesey Enterprises, Pecos, Tex. 1980 Josefina A. Salas-Porras Executive Director, BI Language Services, El Paso, Tex. 1981 A. J. Losee Shareholder, Losee, Carson, & Dickerson, P.A., Artesia, N. Mex. 1982 —Houston Branch Appointed by Federal Reserve Bank Raymond L. Britton Labor Arbitrator and Professor of Law, University of Hous­ ton, Houston, Tex. 1980 John T. Cater President, Bank of the Southwest National Association, Houston, Tex. 1981 Ralph E. David President, First Freeport National Bank, Freeport, Tex. 1981 Will E. Wilson3 President and Chief Executive Officer, First Security Bank of Beaumont, N.A., Beaumont, Tex. 1982 Appointed by Board of Governors Gene M. Woodfin1 Chairman of the Board and Chief Executive Officer, Mara­ thon Manufacturing Company, Houston, Tex. 1980 George V. Smith3 President and Owner, Smith Pipe and Supply, Inc., Hous­ ton, Tex. 1981 Jerome L. Howard Chairman of the Board and Chief Executive Officer, Mort­ gage & Trust, Inc., Houston, Tex. 1982 —San Antonio Branch Appointed by Federal Reserve Bank John H. Garner President and Chief Executive Officer, Corpus Christi Na­ tional Bank, Corpus Christi, Tex. 1980 John H. Holcomb Owner-Manager, Progreso Haciendas Company, Progreso, Tex. 1981 Charles E. Cheever, Jr. President, Broadway National Bank, San Antonio, Tex. 1981 George Brannies3 Chairman of the Board and President, Mason National Bank, Mason, Tex. 1982 Appointed by Board of Governors Lawrence L. Crum3 Professor of Banking and Finance, The University of Texas at Austin, Austin, Tex. 1980 Carlos A. Zuniga1 Zuniga Freight Services, Inc., Laredo, Tex. 1981 Pat Legan Owner, Legan Properties, San Antonio, Tex. 1982 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

280 Federal Reserve Bulletin □ March 1980 D istrict 12—San Francisco Term expires Class A Ole R. Mettler President and Chairman, Farmers & Merchants Bank of Central California, Lodi, Calif. 1980 Robert A. Young Chairman and President, Northwest National Bank, Van­ couver, Wash. 1981 Frederick G. Larkin, Jr. Chairman of the Executive Committee, Security Pacific Na­ tional Bank, Los Angeles, Calif. 1982 Class B J. R. Vaughan Chairmen and Chief Executive, Knudsen Corporation, Los Angeles, Calif. 1980 Malcolm T. Stamper President, The Boeing Company, Seattle, Wash. 1981 Clair L. Peck, Jr. Chairman of the Board, C. L. Peck Contractor, Los Ange­ les, Calif. 1982 Class C Cornell C. Maier Chairman, President and Chief Executive Officer, Kaiser Aluminum & Chemical Corp., Oakland, Calif. 1980 Alan C. Furth3 President, Southern Pacific Company, San Francisco, Calif. 1981 Caroline L. Ahmanson2’3 Chairman of the Board, Caroline Leonetti, Ltd., Beverly Hills, Calif. 1982 —Los Angeles Branch Appointed by Federal Reserve Bank James D. McMahon President, Santa Clarita National Bank, Newhall, Calif. 1980 Harvey J. Mitchell President, First National Bank of San Diego County, Escon­ dido, Calif. 1981 Bram Goldsmith3 Chairman of the Board, City National Bank, Beverly Hills, Calif. 1982 Fred W. Andrew3 President and Chief Operating Officer, Superior Farming Company, Bakersfield, Calif. 1982 Appointed by Board of Governors Lola M. McAlpin-Grant3 Assistant Dean, Loyola Law School, Los Angeles, Calif. 1980 Harvey A. Proctor1 Chairman of the Board, Southern California Gas Company, Los Angeles, Calif. 1981 Togo W. Tanaka President, Gramercy Enterprises, Los Angeles, Calif. 1982 —Portland Branch Appointed by Federal Reserve Bank Kenneth Smith General Manager, The Confederated Tribes of Warm Springs, Warm Springs, Oreg. 1980 Jack W. Gustavel President and Chief Executive Officer, First National Bank of North Idaho, Coeur d’Alene, Idaho 1981 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Directors of Federal Reserve Banks and Branches 281 Term expires Robert F. Wallace Chairman of the Board, First National Bank of Oregon, Port­ land, Oreg. 1981 Merle G. Bryan President, Forest Grove National Bank, Forest Grove, Oreg. 1982 Appointed by Board of Governors Loran L. Stewart1 Director, Bohemia, Inc., Eugene, Oreg. 1980 Jean Mater Vice President, Mater Engineering, Ltd., Corvallis, Oreg. 1981 Phillip W. Schneider Northwest Regional Executive, National Wildlife Federa­ tion, Portland, Oreg. 1982 —Salt Lake City Branch Appointed by Federal Reserve Bank Mary S. Knox Chairman, Idaho State Bank, Glenns Ferry, Idaho 1980 Robert E. Bryans Chairman of the Board, Walker Bank & Trust Company, Salt Lake City, Utah 1981 David P. Gardner President, University of Utah, Salt Lake City, Utah 1981 Fred H. Stringham President, Valley Bank and Trust Company, South Salt Lake, Utah 1982 Appointed by Board of Governors J. L. Terteling President, The Terteling Company, Inc., Boise, Idaho 1980 Wendell J. Ashton1 Publisher, Deseret News Publishing Company, Salt Lake City, Utah 1981 Robert A. Erkins Geothermal Agri/Aquaculturist, White Arrow Ranch, Bliss, Idaho 1982 — Seattle Branch Appointed by Federal Reserve Bank Rufus C. Smith Chairman, The First National Bank of Enumclaw, Enumclaw, Wash. 1980 Douglas S. Gamble President and Chief Executive Officer, Pacific Gamble Rob­ inson Co., Seattle, Wash. 1981 C. M. Berry President, Seattle-First National Bank, Seattle, Wash. 1981 Donald L. Mellish Chairman of the Board, National Bank of Alaska, Anchor­ age, Alaska 1982 Appointed by Board of Governors Virginia L. Parks Vice President for Finance and Treasurer, Seattle Universi­ ty, Seattle, Wash. 1980 Lloyd E. Cooney1 President and General Manager, KIRO Radio & Television, Seattle, Wash. 1981 Merle D. Adlum President, Maritime Trades Department, Puget Sound Dis­ trict, AFL/CIO, Seattle, Wash. 1982 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Al Financial and Business Statistics Contents Domestic Financial Statistics Weekly Reporting Commercial Banks A3 Monetary aggregates and interest rates Assets and liabilities A4 Factors affecting member bank reserves A20 All reporting banks A5 Reserves and borrowings of member banks A21 Banks with assets of $ 1 billion or more A6 Federal funds transactions of money market A22 Banks in New York City banks A23 Balance sheet memoranda A24 Commercial and industrial loans Policy Instruments A24 Major nondeposit funds of commercial banks A25 Gross demand deposits of individuals, A8 Federal Reserve Bank interest rates partnerships, and corporations A9 Member bank reserve requirements A10 Maximum interest r^tes payable on time and savings deposits at federally insured institutions Financial Markets All Federal Reserve open market transactions A25 Commercial paper and bankers dollar acceptances outstanding Federal Reserve Banks A26 Prime rate charged by banks on short-term business loans A12 Condition and Federal Reserve note statements A26 Terms of lending at commercial banks A13 Maturity distribution of loan and security A27 Interest rates in money and capital markets holdings A28 Stock market—Selected statistics A29 Savings institutions—Selected assets and Monetary and Credit Aggregates liabilities A13 Bank debits and deposit turnover A14 Money stock measures and components Federal Finance A15 Aggregate reserves and deposits of member banks A30 Federal fiscal and financing operations A15 Loans and investments of all commercial banks A31 U.S. budget receipts and outlays A32 Federal debt subject to statutory limitation A32 Gross public debt of U.S. Treasury—Types and Commercial Bank Assets and Liabilities ownership A33 U.S. government marketable securities— A16 Last-Wednesday-of-month series Ownership, by maturity A17 Call-date series A34 U.S. government securities dealers— A18 Detailed balance sheet, September 30, 1978 Transactions, positions, and financing A3 5 Federal and federally sponsored credit agencies—Debt outstanding Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A2 Federal Reserve Bulletin □ March 1980 Securities Markets and International Statistics Corporate Finance A54 U.S. international transactions—Summary A36 New security issues—State and local A55 U.S. foreign trade governments and corporations A55 U.S. reserve assets A37 Open-end investment companies—Net sales and A56 Foreign branches of U.S. banks—Balance sheet asset position data A37 Corporate profits and their distribution A58 Selected U.S. liabilities to foreign official A38 Nonfinancial corporations—Assets and liabilities institutions A38 Business expenditures on new plant and equipment A39 Domestic finance companies—Assets and Reported by Banks in the United States liabilities; business credit A58 Liabilities to and claims on foreigners A59 Liabilities to foreigners Real Estate A61 Banks’ own claims on foreigners A62 Banks’ own and domestic customers’ claims on A40 Mortgage markets foreigners A41 Mortgage debt outstanding A62 Banks’ own claims on unaffiliated foreigners A63 Claims on foreign countries—Combined domestic offices and foreign branches Consumer Installment Credit A42 Total outstanding and net change Securities Holdings and Transactions A43 Extensions and liquidations A64 Marketable U.S. Treasury bonds and notes— Foreign holdings and transactions Flow of Funds A64 Foreign official assets held at Federal Reserve Banks A44 Funds raised in U.S. credit markets A65 Foreign transactions in securities A45 Direct and indirect sources of funds to credit markets Reported by Nonbanking Business Enterprises in the United States Domestic Nonfinancial Statistics A66 Liabilities to unaffiliated foreigners A46 Nonfinancial business activity—Selected A67 Claims on unaffiliated foreigners measures A46 Output, capacity, and capacity utilization A47 Labor force, employment, and unemployment Interest and Exchange Rates A48 Industrial production—Indexes and gross value A50 Housing and construction A68 Discount rates of foreign central banks A51 Consumer and producer prices A68 Foreign short-term interest rates A52 Gross national product and income A68 Foreign exchange rates A53 Personal income and saving Special Tables A69 Survey of Time and Savings Deposits at Commercial Banks, October 31, 1979 A73 Guide to Tabular Presentation and Statistical Releases Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Statistics A3 1.10 MONETARY AGGREGATES AND INTEREST RATES 1979 1979 1980 Item Q1 Q2 Q3 Q4 Sept. Oct. Nov. Dec. Jan. Monetary and credit aggregates (annual rates of change, seasonally adjusted in percent)1 Member bank reserves 1 Total ....................................................................................... -2.3 -3.6 5.1 12.4 11.1 17.4 6.3 16.9 2.0 2 Required ................................................................................ - 2.2 -3.5 4.8 11.6 12.0 15.4 6.9 12.6 3.4 3 Nonborrowed ....................................................................... - 2.8 -7.5 7.0 6.8 3.8 -2.3 9.9 30.6 4 Monetary base2 .................................................................. 5.9 4.8 9.3 9.5 12.2 10.2 5.4 7.8 Concepts of money and liquid assets3 5 M-1A ..................................................................................... 0.2 7.8 4.7 6.9 1.6 5.2 6.2 3.6 6 M-1B ..................................................................................... 4.8 10.7 10.1 5.3 7.9 2.2 4.4 7.5 4.3 7 M-2 ........................................................................................ 6.3 10.2 10.3 7.2 8.2 6.0 5.8 7.4 7.0 8 M-3 ........................................................................................ 7.9 8.8 10.3 9.9r 13.2 9.4 7.4' 7.31 7.9 9 L .............................................................................................. 10.3 13.1 11.7 9.2 16.4 6.9 5.0' 8.2r n.a. Time and savings deposits Commercial banks 10 Total .................................................................................. 7.7c 1.8C 9.H 12.5c 16.3c 13.7 ^ 11.7' 0.5c 8.0 11 Savings4 ............................................................................. -15.9C -7.4C -0.4C -15.1^ -9.3C -16.4C -29.1c -9.1c -11.7 12 Small denomination time5 ......................................... 21.3C 22.5c 21.5c 28.5c 19.3c 21.6C 44.5C 17.4C 26.2 13 Large-denomination time6 ......................................... 20.6c -1.9C 6.0c 22.6C 37.7C 28.0f 15.2C -7.8f 5.7 14 Thrift institutions7 .............................................................. 8.3 7.4 7.4 6.7 7.0 6.6 6.2 6.1' -0.9 15 Total loans and investments at commercial banks8 13.3 11.9 15.8 3.4 21.7 6.6 -.5 4.1 12.8 1980 01 Q2 03 04 Feb. Interest rates (levels, percent per annum) Short-term rates 16 Federal funds9 ............................................... 10.07 10.18 10.94 13.58 13.77 13.18 13.78 13.82 14.13 17 Federal Reserve discount10 ...................... 9.50 9.50 10.21 11.92 11.77 12.00 12.00 12.00 12.52 18 Treasury bills (3-month market yield)11 9.38 9.38 9.67 11.84 11.70 11.79 12.04 12.00 12.86 19 Commercial paper (3-month)111* .......... 10.04 9.85 19.64 13.35 13.23 13.57 13.24 13.04 13.78 Long-term rates Bonds 20 U.S. government13 .................................. 9.03 9.08 9.03 10.18 9.99 10.37 10.18 10.65 12.21 21 State and local government14 ............. 6.37 6.22 6.28 7.20 7.08 7.30 7.22 7.35 8.16 22 Aaa utility (new issue)15 ...................... 9.58 9.66 9.64 11.21 10.97 11.42 11.25 11.73 13.57 23 Conventional mortgages16 ........................ 10.33 10.35 11.13 12.38 12.15 12.50 12.50 12.80 14.10 1. Unless otherwise noted, rates of change are calculated from average amounts 4. Savings deposits exclude NOW and ATS accounts at commercial banks. outstanding in preceding month or quarter. Growth rates for member bank reserves 5. Small time deposits are those issued in amounts of less than $100,000. are adjusted for discontinuities in series that result from changes in Regulations 6. Large time deposits are those issued in amounts of $100,000 or more. D and M. 7. Savings and loan associations, mutual savings banks, and credit unions. 2. Includes total reserves (member bank reserve balances in the current week 8. Quarterly changes calculated from figures shown in table 1.23. Elus vault cash held two weeks earlier); currency outside the U.S. Treasury, Federal 9. Seven-day averages of daily effective rates (average of the rates on a given Leserve Banks and the vaults of commercial banks; and vault cash of nonmember date weighted by the volume of transactions at those rates). banks. 10. Rate for the Federal Reserve Bank of New York. 3. M-1A: Averages of daily figures for (1) demand deposits at all commercial 11. Quoted on a bank-discount basis. banks other than those due to domestic banks, the U.S. government, and foreign 12. Beginning Nov. 1977, unweighted average of offerintg rates quoted by at banks and official institutions less cash items in the process of collection and least five dealers. Previously, most representative rate quoted by these dealers. Federal Reserve float; and (2) currency outside the Treasury, Federal Reserve Before Nov. 1979, data shown are for 90- to 119-day maturity. banks, and the vaults of commercial banks. 13. Market yields adjusted to a 20-year maturity by the U.S. Treasury. M-1B: M-1A plus NOW and ATS accounts at banks and thrift institutions, 14. Bond Buyer series for 20 issues of mixed quality. credit union share draft accounts, and demand deposits at mutual savings banks. 15. Weighted averages of new publicly offered bonds rates Aaa, Aa and A by M-2: M-1B plus savings and small denomination time deposits at all depositary Moody’s Investors Service and adjusted to an Aaa basis. Federal Reserve com­ institutions, overnight RPs at commercial banks, overnight Eurodollars held by pilations. U.S. residents other than banks at Caribbean branches of member banks, and 16. Average rates on new commitments for conventional first mortgages on new money market mutual fund shares. homes in primary markets, unweighted and rounded to nearest 5 basis points, from M-3: M-2 plus large denomination time deposits at all depositary institutions Dept, of Housing and Urban Development. and term RPs at commercial banks and savings and loan associations. L: M-3 plus other liquid assets such as term Eurodollars held by U.S. residents other than banks, bankers acceptances, commercial paper, Treasury bills and other liquid Treasury securities and U.S. savings bonds. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A4 Domestic Financial Statistics □ March 1980 1.11 FACTORS AFFECTING MEMBER BANK RESERVES Millions of dollars Monthly averages of daily figures Weekly averages of daily figures for week-ending Factors 1979 1980 1980 Dec.P Jan .p Feb .p Jan. 16 p Jan. 23p Jan. 30p Feb. 6p Feb. 13P Feb. 20p Feb. 21 p Supplying Reserve Funds 1 Reserve Bank credit outstanding .................................. 140,008 138,855 135,490 139,613 138,118 135,746 134,968 134,450 137,490 135,545 2 U.S. government securities1 ...................................... 117,821 117,855 115,028 118.713 117,695 116,328 115.570 114,574 116,924 113.242 3 Bought outright .......................................................... 117,195 117,493 114,842 118.713 117,323 115,644 115.570 114,431 116,383 113.242 4 Held under repurchase agreements ................... 626 362 186 0 372 684 0 143 541 0 5 Federal agency securities ............................................ 8,455 8,383 8,299 8,216 8,481 8,457 8,216 8,303 8,468 8,216 6 Bought outright .......................................................... 8,218 8,216 8,216 8,216 8,216 8,216 8,216 8,216 8,216 8,216 7 Held under repurchase agreements ................... 237 167 83 0 265 241 0 87 252 0 8 Acceptances ........................................................................... 353 104 67 0 61 143 0 40 207 0 9 Loans ................................................................................. 1,454 1,264 1,660 1,226 1,197 1,821 759 1,236 2,194 2,057 10 Float ................................................................................... 6,499 5,825 5.617 6,135 5,327 3,587 5,062 4,969 5,306 7,707 11 Other Federal Reserve assets ...................................... 5,426 5,424 4.818 5,324 5,357 5,409 5,362 5,328 4,390 4,323 12 Gold stock ............................................................................. 11,112 11,156 11.172 11,172 11,172 11,172 11,172 11,172 11,172 11,172 13 Special drawing rights certificate account ................ 1,800 2,064 2,968 1,800 1,800 2,801 2,968 2,968 2,968 2,968 14 Treasury currency outstanding ...................................... 12,917 12,983 13,052 12,973 12,989 12,998 13,040 13,036 13,066 13,076 Absorbing Reserve Funds 15 Currency in circulation .................................................... 123,840 122,939 121,585 123.368 122,060 121,000 121,094 121,714 121,962 121,533 16 Treasury cash holdings ..................................................... 428 442 476 437 444 453 467 475 482 503 Deposits, other than member bank reserves, with Federal Reserve Banks 17 Treasury ........................................................................... 2,963 3,110 3,379 3.281 3,073 3,039 2,976 3,727 3,369 3,682 18 Foreign .............................................................................. 318 331 322 283 320 313 322 363 335 277 19 Other ................................................................................. 355 434 324 321 346 313 367 286 291 349 20 Other Federal Reserve liabilities and capital .......... 5,349 5,080 4.713 5,006 5,166 5,357 5,056 4,641 4,756 4,564 21 Reserve accounts2 .............................................................. 32,585 32,724 31,883 32.862 32,671 32,242 31,868 30,421 33,502 31,853 End-of-month figures Wednesday figures 1979 1980 1980 Dec.P Jan.P Feb.P Jan. 16? Jan. 23p Jan. 30p Feb. 6p Feb. 13P Feb. 20p Feb. 21 p Supplying Reserve Funds 22 Reserve bank credit outstanding ................................... 140,705 135,202 134,555 136,420 140,386 131,672 131,648 140,739 140,706 134,002 23 U.S. government securities1 ...................................... 117,458 116.311 115,171 114.774 118,610 112.478 111.849 117.659 118.416 112.301 24 Bought outright .............................................................. 116,291 116.311 114,550 114.774 116,950 112.478 111.849 116.660 116,182 112.301 25 Held under repurchase agreements ................... 1,167 0 621 0 1,660 0 0 999 2.234 0 26 Federal agency securities ............................................ 8,709 8,216 8,247 8.216 9,123 8.216 8,216 8,823 8,924 8,216 27 Bought outright .......................................................... 8,216 8,216 8,216 8.216 8,216 8.216 8,216 8,216 8,216 8,216 28 Held under repurchase agreements ................... 493 0 31 0 907 0 0 607 708 0 29 Acceptances ........................................................................... 704 0 205 0 327 0 0 281 825 0 30 Loans ................................................................................. 1,454 828 3,364 1.740 1,116 924 343 3,324 1,101 4,318 31 Float ................................................................................... 6,767 4,610 3,154 6,393 5,831 4.468 5,889 5,202 7,084 4,734 32 Other Federal Reserve assets ................................... 5,613 5,237 4,414 5,297 5,379 5.586 5,351 5,450 4.356 4,433 33 Gold stock ............................................................................. 11,112 11,172 11,172 11,172 11,172 11.172 11,172 11,172 11.172 11,172 34 Special drawing rights certificate account ................ 1,800 2,968 2,968 1,800 1,800 2.968 2,968 2,968 2,968 2,968 35 Treasury currency outstanding ...................................... 13,083 13,169 13,076 12,979 12,989 13.006 13,035 13,044 13,066 13,076 Absorbing Reserve Funds 36 Currency in circulation .................................................... 125,600 121,157 121,288 122.959 121,781 121,182 121,642 122,198 122,170 121,722 37 Treasury cash holdings ..................................................... 494 472 490 438 448 457 471 482 483 513 Deposits, other than member bank reserves, with Feaeral Reserve Banks 38 Treasury ........................................................................... 4,075 2,931 2,417 3.468 3,309 3,051 3,733 3,395 2,461 4,478 39 Foreign ........................................................................ 429 440 450 250 242 249 362 343 294 245 40 Other ................................................................................. 1,412 339 350 307 357 261 275 281 332 330 41 Other Federal Reserve liabilities and capital .......... 4,957 5,682 4,668 4,986 5,345 5,349 4,512 4,687 4,771 4,438 42 Reserve accounts2 .............................................................. 29,792 31,492 32,108 29,963 34,865 28,269 27,828 36,537 37,401 29,492 1. Includes securities loaned—fully guaranteed by U.S. government securities 2. Includes reserves of member banks. Edge Act corporations and U.S. agencies pledged with Federal Reserve Banks—and excludes (if any) securities sold and and branches of foreign banks. scheduled to be bought back under matched sale-purchase transactions. Note: For amounts of currency and coin held as reserves, see table 1.12 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Member Banks A5 1.12 RESERVES AND BORROWINGS Member Banks Millions of Dollars Monthly averages of daily figures Reserve classification 1978 1979 1980 Dec. June July Aug. Sept. Oct .p Nov./7 Dec .p Jan .p Feb./* All member banks Reserves 1 At Federal Reserve Banks ............................... 31,158 29,822 30,191 30,006 29,986 31,599 32,098 32,585 32,724 31,883 2 Currency and coin ............................................... 10,330 10,154 10,552 10,523 10,726 10,681 10.740 11,323 12,318 11,098 3 Total held1 .............................................................. 41,572 40,105 40.900 40,687 40,868 42,423 42,979 44,063 45,217 43,196 4 Required .............................................................. 41,447 39,884 40,710 40,494 40,863 42,002 42,770 43,560 44,902 43,026 5 Excess1 ................................................................. 125 221 190 193 5 421 209 503 315 170 Borrowings at Reserve Banks2 6 Total .......................................................................... 874 1,396 1,179 1,097 1,344 2,022 1,908 1,454 1,264 1,660 7 Seasonal .................................................................... 134 188 168 177 169 161 141 81 74 95 Large banks in New York City 8 Reserves held ............................................................ 7,120 6,346 6,605 6,408 6,437 6,655 6,695 7,206 7,781 6,980 9 Required .................................................................. 7,243 6,415 6,586 6,427 6,378 6,851 6,932 7,329 7,758 7,209 10 Excess ....................................................................... -123 -69 19 -19 59 -196 -237 -123 23 -229 11 Borrowings2 ................................................................. 99 78 97 79 87 183 139 63 32 124 Large banks in Chicago 12 Reserves held ............................................................ 1,907 1,726 1,709 1,694 1,654 1,790 1,869 1,990 2,021 1,949 13 Required .................................................................. 1,900 1,697 1,713 1,706 1,760 1,859 1,950 2,001 2,059 1,941 14 Excess ....................................................................... 7 29 -4 -12 -106 -69 -81 -11 -38 8 15 Borrowings2 ................................................................. 10 64 45 6 80 136 118 79 76 100 Other large banks 16 Reserves held ............................................................ 16,446 15,989 16,374 16,370 16,426 16,519 16,663 17,336 17,719 17,014 17 Required .................................................................. 16,342 15,877 16,339 16,321 16,491 16,796 17,000 17,369 17,967 17,281 18 Excess ....................................................................... 104 112 35 49 -65 -277 -337 -33 -248 -267 19 Borrowings2 ................................................................. 276 586 517 484 600 856 804 697 642 729 All other banks 20 Reserves held ............................................................ 16,099 16,044 16,212 16,215 16,351 16,495 16,496 16,621 16,843 16,328 21 Required .................................................................. 15,962 15,895 16,072 16,040 16,234 16,424 16,420 16,539 16,779 16,267 22 Excess ....................................................................... 137 149 140 175 117 71 76 82 64 61 23 Borrowings2 ................................................................. 489 668 520 528 577 847 847 615 514 707 Edge corporations 24 Reserves held ............................................................. n.a. n.a. n.a. n.a. n.a. 90 308 333 336 330 25 Required .................................................................. n.a. n.a. n.a. n.a. n.a. 72 287 302 314 304 26 Excess ....................................................................... n.a. n.a. n.a. n.a. n.a. 18 21 31 22 26 U.S. agencies and branches 27 Reserves held ............................................................ n.a. n.a. n.a. n.a. n.a. n.a. 185 26 29 32 28 Required .................................................................. n.a. n.a. n.a. n.a. n.a. n.a. 181 20 25 24 29 Excess ....................................................................... n.a. n.a. n.a. n.a. n.a. n.a. 4 6 4 8 Weekly averages of daily figures for week (in 1979 and 1980) ending Dec. 26p Jan. 2p Jan. 9p Jan. 16 p Jan. 23p Jan. 30p Feb. 6p Feb. 13P Feb. 20P Feb. IIP All member banks Reserves 30 At Federal Reserve Banks ............................... 32,908 33,177 33,264 32,862 32,671 32,242 31,868 30,421 33,502 31,853 31 Currency and coin ............................................... 10,984 11,429 11,359 13,506 12,482 12,251 11,831 11,724 10,283 10,720 32 Total held1 .............................................................. 44,056 44,767 44,807 46,539 45,325 44,665 43,914 42,360 44,002 42,787 33 Required .............................................................. 43,560 44,217 44,568 45,988 45,082 44,386 43,358 42,531 43,402 43,015 34 Excess1 ................................................................. 496 550 239 551 243 279 556 -171 600 -228 Borrowings at Reserve Banks2 35 Total .......................................................................... 1,224 1,431 732 1,226 1,197 1,821 759 1,236 2,194 2,057 36 Seasonal .................................................................... 80 64 61 74 78 87 73 91 100 109 Large banks in New York City 37 Reserves held ............................................................. 7,056 7,547 7,383 8,346 7,693 7,546 7,440 6,609 7,422 6,673 38 Required .................................................................. 7,138 7,464 7,752 8,329 7,651 7,469 7,175 7,053 7,427 7,242 39 Excess ....................................................................... -82 83 -369 17 42 77 265 -444 -5 -569 40 Borrowings2 ................................................................. 90 129 33 46 0 0 0 81 226 207 Large banks in Chicago 41 Reserves held ............................................................. 1,953 2,131 1,967 2,143 2,002 2,093 1,919 1,919 2,025 1,805 42 Required .................................................................. 2,015 2,066 2,089 2,102 2,045 2,009 1,986 1,903 2,004 1,891 43 Excess ....................................................................... -62 65 -122 41 -43 84 -67 16 21 -86 44 Borrowings2 ................................................................. 21 111 0 0 0 236 0 125 148 47 Other large banks 45 Reserves held ............................................................. 17,630 17,365 17,497 18,202 17,881 17,723 17,270 16,542 17,517 16,689 46 Required .................................................................. 17,414 17,603 17,769 18,298 18,134 17,849 17,409 17,165 17,401 17,235 47 Excess ....................................................................... 216 -238 -272 -96 -253 -126 -139 -623 116 -546 48 Borrowings2 ................................................................. 464 663 318 756 650 883 266 558 985 908 All other banks 49 Reserves held ............................................................. 16,834 16,873 16,619 17,003 16,883 16,851 16,509 16,122 16,451 16,306 50 Required .................................................................. 16,676 16,739 16,598 16,866 16,936 16,774 16,457 16,070 16,253 16,322 51 Excess ....................................................................... 158 134 21 137 -53 77 52 52 198 -16 52 Borrowings2 ................................................................. 649 528 381 424 547 702 493 472 835 895 Edge corporations 53 Reserves held ............................................................ 336 347 338 376 315 338 330 345 306 315 54 Required .................................................................. 307 315 329 367 281 277 317 310 296 301 55 Excess ....................................................................... 29 32 9 9 34 61 13 35 10 14 U.S. agencies and branches 56 Reserves held ............................................................ 14 14 28 28 37 31 22 46 29 30 57 Required .................................................................. 10 30 31 26 35 8 14 30 21 24 58 Excess ....................................................................... 4 -16 -3 2 2 23 8 16 8 6 1. Adjusted to include waivers of penalties for reserve deficiencies in accordance Reserve System. For weeks for which figures are preliminary, figures by class of with Board policy, effective Nov. 19, 1975, of permitting transitional relief on a bank do not add to total because adjusted data by class are not available, graduated basis over a 24-month period when a nonmember bank merged into an 2. Based on closing figures, Digitized foerx FistRinAg SmEeRm ber bank, or when a nonmember bank joins the Federal http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Financial Statistics □ March 1980 1.13 FEDERAL FUNDS TRANSACTIONS Money Market Banks Millions of dollars, except as noted 1980, week ending Wednesday 1980, week ending Wednesday Type Jan. 2 Jan. 9 Jan. 16 Jan. 23 Jan. 30 Feb. 6 Feb. 13 Feb. 20 Feb. 27 Total, 46 banks Basic reserve position 1 Excess reserves1 ............................................... 324 -15 26 75 63 319 -60 293 -91 Less: 2 Borrowings at Federal Reserve Banks .... 404 130 289 181 624 50 432 596 473 3 Net interbank federal funds transactions . 22,206 24,759 25,712 24,209 22,754 25,358 26,951 26,445 25,603 Equals: Net surplus, or deficit (-) 4 Amount ................................................................ -22,285 -24,904 -25,975 -24,314 -23,315 -25,089 -27,443 -26,747 -26,168 5 Percent of average required reserves ....... 116.2 126.6 126.4 124.4 121.8 134.8 150.0 141.9 141.9 Interbank federal funds transactions Gross transactions 6 Purchases ........................................................ 31,238 32,300 32,694 31,086 29,442 32,445 34,096 33,991 32,331 7 Sales ................................................................. 9,032 7,541 6,982 6,878 6,688 7,088 7,144 7,546 6,728 8 Two-way transactions2 .................................... 7,672 6,941 6,782 5,960 6,300 6,750 6,607 7,293 6,488 Net transactions 9 Purchases of net buying banks ................ 23,567 25,359 25,912 25,127 23,142 25,695 27,489 26,698 25,843 10 Sales of net selling banks ......................... 1,360 559 200 918 388 338 538 254 239 Related transactions with U.S. government securities dealers 11 Loans to dealers3 .............................................. 2,563 2,247 2,562 2,324 1,998 2,628 2,377 2,420 2,692 12 Borrowings from dealers4 .............................. 2,744 1,372 1,754 1,811 2,261 1,578 1,861 1,764 1,751 13 Net loans ............................................................. -181 875 807 513 -263 1,050 516 657 941 8 banks in New York City Basic reserve position 14 Excess reserves1 ............................................... 123 -43 53 46 15 248 -6 140 -55 Less: 15 Borrowings at Federal Reserve Banks .... 129 33 36 0 0 0 68 226 186 16 Net interbank federal funds transactions . 5,592 6,460 6,846 6,855 5,516 6,269 7,254 6,733 5,968 Equals: Net surplus, or deficit (-) 17 Amount ................................................................ -5,958 -6,536 -6,829 -6,809 -5,501 -6,021 -7,328 -6,819 -6,209 18 Percent of average required reserves ....... 88.6 93.2 90.6 98.3 81.7 93.2 115.0 102.1 95.7 Interbank federal funds transactions Gross transactions 19 Purchases ........................................................ 8,018 8,215 8,322 8,071 7,181 8,408 9,187 8,992 8,147 20 Sales ................................................................. 2,066 1,754 1,476 1,216 1,665 2,139 1,933 2,259 2,179 21 Two-way transactions2 .................................... 2,066 1,754 1,476 1,216 1,666 2,139 1,690 2,222 2,179 Net transactions 22 Purchases of net buying banks ................ 5,952 6,461 6,846 6,855 5,516 6,269 7,497 6,770 5,968 23 Sales of net selling banks ......................... 0 0 0 0 0 0 243 37 0 Related transactions with U.S. government securities dealers 24 Loans to dealers3 .............................................. 1,765 1,446 1,785 1,583 1,401 1,956 1,485 1,636 1,713 25 Borrowings from dealers4 .............................. 514 502 760 674 985 887 962 917 898 26 Net loans ............................................................. 1,251 944 1,025 909 415 1,069 523 720 815 38 banks outside New York City Basic reserve position 27 Excess reserves1 ............................................... 201 28 -27 29 47 71 -54 153 -36 Less: 28 Borrowings at Federal Reserve Banks .... 275 97 254 181 624 50 364 370 287 29 Net interbank federal funds transactions . 16,254 18,299 18,866 17,353 17,238 19,088 19,698 19,711 19,635 Equals: Net surplus, or deficit (-) 30 Amount ................................................................ -16,328 -18,368 -19,146 -17,505 -17,815 -19,068 -20,116 -19,928 -19,959 31 Percent of average required reserves ....... 131.1 145.2 147.2 138.6 143.5 156.9 168.7 163.9 166.9 Interbank federal funds transactions Gross transactions 32 Purchases ........................................................ 23,220 24,085 24,372 23,015 22,261 24,037 24,909 24,999 24,184 33 Sales ................................................................. 6,966 5,786 5,506 5,662 5,023 4,949 5,211 5,288 4,549 34 Two-way transactions2 .................................... 5,606 5,187 5,306 4,743 4,635 4,612 4,916 5,071 4,309 Net transactions 35 Purchases of net buying banks................ 17,615 18,899 19.066 18,272 17,626 19,426 19,992 19,928 19,875 36 Sales of net selling banks ......................... 1,360 599 200 918 388 338 295 217 239 Related transactions with U.S. government securities dealers 37 Loans to dealers3 .............................................. 798 801 111 741 597 671 892 784 979 38 Borrowings from dealers4 .............................. 2,230 870 994 1,136 1,276 691 899 847 852 39 Net loans ............................................................. -1,432 -69 -217 -396 -678 -20 -7 -63 127 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Funds Al 1.13 Continued Millions of dollars, except as noted 1980, week ending Wednesday 1980, week ending Wednesday Type Jan. 2 Jan. 9 Jan. 16 Jan. 23 Jan. 30 Feb. 6 Feb. 13 Feb. 20 Feb. 27 5 banks in City of Chicago Basic reserve position 40 Excess reserves1 ............................................... 90 4 -18 0 15 -3 1 21 0 Less: 41 Borrowings at Federal Reserve Banks .... 100 0 0 0 236 0 100 114 9 42 Net interbank federal funds transactions . 8,114 7,798 8,121 7,824 7,906 7,949 9,118 8,559 8,152 Equals: Net surplus, or deficit (-) 43 Amount ............................................................... -8,125 -7,795 -8,138 -7,824 -8,127 -7,952 -9,217 -8,653 -8,160 44 Percent of average required reserves ....... 418.5 397.1 408.6 407.4 431.2 426.3 517.5 459.3 460.7 Interbank federal funds transactions Gross transactions 45 Purchases ........................................................ 9.356 15,028 9,521 9,108 9,102 9,273 10,283 10,078 9,391 46 Sales ................................................................. 1,242 4,528 1,400 1,284 1,196 1,324 1,165 1,518 1,239 47 Two-way transactions2 ................................... 1,242 3,928 1,400 1,284 1,196 1,324 1,165 1,518 1,239 Net transactions 48 Purchases of net buying banks................ 8,114 11,100 8,121 7,824 7,906 7,949 9,118 8,559 8,152 49 Sales of net selling banks ......................... 0 599 0 0 0 0 0 0 0 Related transactions with U.S. government securities dealers 50 Loans to dealers3 ............................................. 123 678 136 138 110 165 203 139 131 51 Borrowings from dealers4 ............................. 221 840 51 56 77 8 3 53 23 52 Net loans ............................................................ -98 -162 85 82 32 157 200 86 108 33 other banks Basic reserve position 53 Excess reserves1 ............................................... 111 25 -9 29 32 73 -55 132 -36 Less: 54 Borrowings at Federal Reserve Banks .... 175 97 254 181 389 50 264 256 279 55 Net interbank federal funds transactions . 8,140 10,501 10,745 9,529 9,332 11,139 10,579 11,152 11,484 Equals: Net surplus, or deficit (-) 56 Amount ............................................................... -8,203 -10,574 -11,008 -9,681 -9,688 -11,116 -10,899 -11,276 -11,798 57 Percent of average required reserves ....... 78.0 98.9 100.0 90.4 92.0 108.8 107.5 109.7 115.8 Interbank federal funds transactions Gross transactions 58 Purchases ........................................................ 13,864 9,097 14,851 13,907 13,159 14,765 14,625 14,921 14,793 59 Sales ................................................................. 5,725 1,259 4,106 4,378 3,826 2,626 4,046 3,769 3,309 60 Two-way transactions2 ................................... 4,364 1,259 3,906 3,459 3,439 3,288 3,751 3,552 3,070 Net transactions 61 Purchases of net buying banks ................ 9,500 7,798 10,945 10,448 9,720 11,477 10,874 11,369 11,723 62 Sales of net selling banks ......................... 1,360 0 200 918 388 338 295 217 239 Related transactions with U.S. government securities dealers 63 Loans to dealers3 .............................................. 675 123 641 603 488 507 689 645 848 64 Borrowings from dealers4 .............................. 2,009 31 944 1,081 1,198 683 869 794 830 65 Net loans ............................................................. -1,334 92 -303 -474 -711 -176 -207 -149 19 1. Based on reserve balances, including adjustments to include waivers of pen­ 4. Federal funds borrowed, net funds acquired from each dealer by clearing alties for reserve deficiencies in accordance with changes in policy of the Board banks, reverse repurchase agreements (sales of securities to dealers subject to of Governors effective Nov. 19, 1975. repurchase), resale agreements, and borrowings secured by U.S. government or 2. Derived from averages for individual banks for entire week. Figure for each other securities. bank indicates extent to which the bank’s average purchases and sales are offset­ ting. Note. Weekly averages of daily figures. For description of series, see August 3. Federal funds loaned, net funds supplied to each dealer by clearing banks, 1964 Bulletin, pp. 944-53. Back data for 46 banks appear in the Board’s Annual repurchase agreements (purchase from dealers subject to resale), or other lending Statistical Digest, 1971-1975, table 3. arrangements. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Financial Statistics □ March 1980 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per annum Current and previous levels Loans to member banks Under sec. 10(b)1 und L e o r a n se s c t . o 1 a 3 l , l l o a t s h t e p r a s r.2 Federal Reserve Under secs. 13 and 13a3 Bank Regular rate Special rate4 Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous 1/31/80 date rate 1/31/80 date rate 1/31/80 date rate 1/31/80 date rate Boston ...................... 13 2/19/80 12 13 Vi 2/19/80 12VS 14 2/19/80 13 16 2/19/80 15 New York ............... 13 2/15/80 12 im 2/15/80 YlVl 14 2/15/80 13 16 2/15/80 15 Philadelphia ............ 13 2/19/80 12 nvi 2/19/80 nvi 14 2/19/80 13 16 2/19/80 15 Cleveland ................ 13 2/15/80 12 13Vi 2/15/80 nvi 14 2/15/80 13 16 2/15/80 15 Richmond ............... 13 2/15/80 12 13Vz 2/15/80 12 Vi 14 2/15/80 13 16 2/15/80 15 Atlanta .................... 13 2/15/80 12 13 Vi 2/15/80 nvi 14 2/15/80 13 16 2715/80 15 Chicago ................... 13 2/15/80 12 13 Vi 2/15/80 12 Vi 14 2/15/80 13 16 2/15/80 15 St. Louis .................. 13 2/15/80 12 13^2 2/15/80 \2Vi 14 2/15/80 13 16 2/15/80 15 Minneapolis ............ 13 2/15/80 12 13 VS 2/15/80 12 Vi 14 2/15/80 13 16 2/15/80 15 Kansas City ............ 13 2/19/80 12 13 Vi 2/19/80 12 Vi 14 2/19/80 13 16 2/19/80 15 Dallas ........................ 13 2/15/80 12 13 Vi 2/15/80 12 Vi 14 2/15/80 13 16 2/15/80 15 San Francisco ........ 13 2/15/80 12 ttVl 2/15/80 12^2 14 2/15/80 13 16 2/15/80 15 Range of rates in recent years5 Range F.R. Range F.R. Range F.R. (or Bank (or Bank (or Bank Effective date level)— of Effective date level)— of Effective date level)— of All F.R. N.Y. All F.R. N.Y. All F.R. N.Y. Banks Banks Banks In effect Dec. 31, 1970 ................ 5h 5h 1973— July 2 ................... 7 7 1977— Sept. 2 ................... 5^4 5^4 Aug. 14 ................... 1-1 Vi lYi Oct. 26 ................... 6 6 1971— Jan. 8 ............................... 5Va-5V2 5V4 23 ................... iVi lYi 15 ............................... 51/4 51/4 1978— Jan. 9 ................... 6-6 Vi 6 Vi 19 ............................... 5-5V4 5V* 1974— Apr. 25 ................... 7^-8 8 20 ................... 6V1 6V1 22 ............................... 5-5 Va 5 30 ................... 8 8 May 11 ................... bYir-1 1 29 ............................... 5 5 Dec. 9 ................... 7^4-8 73/4 12 ................... 1 1 Feb. 13 ............................... 43A-5 5 16 ................... 73/4 73/4 July 3 ................... 1-1 Va IVa 19 ............................... 4^4 43/4 10 ................... IVa-IVa IVa July 16 ............................... 43A-5 5 1975— Jan. 6 ................... 7V4 7V4 Aug. 21 .................... 1?A Wa 23 ............................... 5 5 10 ................... 7V4 IVa Sept. 22 ................... 8 8 Nov. 11 ............................... 43/4-5 5 24 ................... 7^4 7V4 Oct. 16 ................... 8-8 Vz 8^ 19 ............................... 43/4 43/4 Feb. 5 ................... 63A-7!/4 6^4 20 ................... m 8V!2 Dec. 13 ............................... 43/4 7 ................... 63/4 63/4 Nov. 1 ................... SV2-9V2 9 Vi 17 ............................... 4W43A 4V5 Mar. 10 ................... 6V4-63/4 6V4 3 ................... 9V2 9Vi 24 ............................... 4te 4 Yi 14 ................... 6V4 6V4 May 16 ................... 6-6V4 6 1979— July 20 ................... 10 10 1973— Jan. 15 ............................... 5 5 Aug. 17 ................... lO-lOVi 10V!z Feb. 26 ............................... 5-5 V2 5Yi 20 ................... 10 V2 10 Vi Mar. 2 ............................... 5 Vi 5 Yi 1976— Jan. 19 ................... 5^-6 5V2 Sept. 19 ................... 10Vi-li 11 Apr. 23 ............................... 5V2-5^a 5 Vi 23 ................... 5h 5h 21 ................... 11 11 May 4 .... 5^4 53/4 Nov. 22 ................... 5V4-5V2 5V4 Oct. 8 .................. 11-12 12 11 ............................... 53/4-6 6 26 ................... 5Va 5V4 10 ................... 12 12 18 ............................... 6 6 June 11 ............................... 6-6^2 6V2 1977—Aug. 30 ................... 5V4-53/4 5V4 1980— Feb. 15 ................... 12-13 13 15 ............................... 6 Vi 6 Vi 31 ................... 5W53/4 53/4 19 ................... 13 13 In effect Feb. 29, 1980 13 13 1. Advances secured to the satisfaction of the Federal Reserve Bank. Advances U.S. government obligations or any other obligations eligible for Federal Reserve secured by mortgages on 1- to 4-family residential property are made at the section Bank purchase. 13 rate. 4. Applicable to special advances described in section 201.2(e)(2) of Regulation 2. Advances to individuals, partnerships, or corporations other than member A. banks secured by direct obligations of, or obligations fully guaranteed as to prin­ 5. Rates under secs. 13 and 13a (as described above). For description and earlier cipal and interest by, the U.S. government or any agency thereof. data, see the following publications of the Board of Governors: Banking and 3. Discounts or eligible paper and advances secured by such paper or by Monetarx Statistics, 1914-1941 and 1941-1970; Annual 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 REQUIREMENTS' Percent of deposits Requirements in effect Previous requirements Type of deposit, and deposit interval February 29, 1980 in millions of dollars Percent Effective date Percent Effective date Net demand2 0-2 ........................................................................................................................................ 7 12/30/76 7>/2 2/13/75 2-10 ..................................................................................................................................... 9Vi 12/30/76 10 2/13/75 10-100 ................................................................................................................................ 11^4 12/30/76 12 2/13/75 100-400 ............................................................................................................................. 123/4 12/30/76 13 2/13/75 Over 400 ............................................................................................................................ 16^4 12/30/76 I6V2 2/13/75 Time and savings2 3 4 Savings ............................................................................................................................... 3 3/16/67 3‘/2 3/2/67 Time5 0-5, by maturity 30-179 days ............................................................................................................. 3 3/16/67 3>/2 3/2/67 180 days to 4 years ................................................................................................ 2Vz 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 s 10/1/70 180 days to 4 years ................................................................................................ 2Vi 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 Annual (d) Effective with the reserve computation period beginning Nov. 16, 1978, Statistical Digest, 1971-1975 and for prior changes, see Board’s Annual Report for domestic deposits of Edge corporations are subject to the same reserve require­ 1976, table 13. ments as deposits of member banks. 2. (a) Requirement schedules are graduated, and each deposit interval applies 3. Negotiable order of withdrawal (NOW) accounts and time deposits such as to that part of the deposits of each bank. Demand deposits subject to reserve Christmas and vacation club accounts are subject to the same requirements as requirements are gross demand deposits minus cash items in process of collection savings deposits. and demand balances due from domestic banks. 4. The average reserve requirement on savings and other time deposits must be (b) The Federal Reserve Act specifies different ranges of requirements for at least 3 percent, the minimum specified by law. reserve city banks and for other banks. Reserve cities are designated under a 5. Effective Nov. 2, 1978, a supplementary reserve requirement of 2 percent criterion adopted effective Nov. 9, 1972, by which a bank having net demand was imposed on large time deposits of $100,000 or more, obligations of affiliates, deposits of more than $400 million is considered to have the character of business and ineligible acceptances. of a reserve city bank. The presence of the head office of such a bank constitutes Effective with the reserve maintenance period beginning Oct. 25, 1979, a mar­ designation of that place as a reserve city. Cities in which there are Federal Reserve ginal reserve requirement of 8 percent was added to managed liabilities in excess Banks or branches are also reserve cities. Any banks having net demand deposits of a base amount. Managed liabilities are defined as large time deposits, Eurodollar of $400 million or less are considered to have the character of business of banks borrowings, repurchase agreements against U.S. government and federal agency outside of reserve cities and are permitted to maintain reserves at ratios set for securities, federal funds borrowings from nonmember institutions, and certain banks not in reserve cities. For details, see the Board’s Regulation D. other obligations. In general, the base for the marginal reserve requirement is (c) Effective Aug. 24, 1978, the Regulation M reserve requirements on net $100 million or the average amount of the managed liabilities held by a member balances due from domestic banks to their foreign branches and on deposits that bank. Edge corporation, or family of U.S. branches and agencies of a foreign bank foreign branches lend to U.S residents were reduced to zero from 4 percent and for the two statement weeks ending Sept. 26, 1979. 1 percent, respectively. The Regulation D reserve requirement on borrowings from unrelated banks abroad was also reduced to zero from 4 percent. Note. Required reserves must be held in the form of deposits with Federal Reserve banks or vault cash. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Financial Statistics □ March 1980 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 Feb. 29, 1980 Previous maximum In effect Feb. 29, 1980 Previous maximum Effective Percent Effective Percent Effective Percent Effective date date date date 1 Savings .......................................................................................... 5V4 7/1/79 7/1/73 5V2 7/1/79 5V4 0) 2 Negotiable order of withdrawal accounts 2 ...................... 5 1/1/74 (3) 5 1/1/74 (3) Time accounts 4 Fixed ceiling rates by maturity & 3 30-89 days ................................................................................ 5Va 9/1/79 5 7/1/73 (3) . 4 90 days to 1 year .................................................................. 5 Vi 7/1/73 55h (5) 0) 55V^4a 1/21/70 5 6 2 1 t t o o 2 2 Y y i e a y r e s a r ° s . 6 . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7/1/73 53/4 1 1/ / 2 2 1 1 / / 7 7 0 0 6Vi (') 6 1 1 / / 2 2 1 1 / / 7 7 0 0 7 2Vi to 4 years 6 ..................................................................... 6Yi 7/1/73 53/4 1/21/70 63/4 0) 6 1/21/70 8 4 to 6 years 7 .......................................................................... IVa 11/1/73 (8) IVi 11/1/73 (8)_ 9 6 to 8 years 7 .......................................................................... IVi 12/23/74 7IVa 11/1/73 73/4 12/23/74 IVi ii/i/73 10 8 years or more 7 ................................................................... 73/4 6/1/78 (3*)) , 6/1/78 (3) 11 Issued to governmental units (all maturities) ............. 6/1/78 73/4 12/23/74 ’ 6/1/78 73/4 '12/23/74' 12 Individual retirement accounts and Keogh (H.R. 10) plans (3 years or more)9 ............................................ 6/1/78 73/4 7/6/77 6/1/78 73/4 7/6/77 Special variable ceiling rates by maturity 1 13 4 6 2 V m i o y n ea th rs s m or o n m e o y r e m a .. r .. k ... e . t .. .. t . i .. m ... e .. .. d ... e .. p .. o ... s .. i . t . s .. 1 ... 0 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (t(u\1b)2) (IU 1. July 1, 1973, for mutual savings bank; July 6, 1973 for savings and loan 11. Commercial banks, savings and loan associations, and mutual savings banks associations. were authorized to offer money market time deposits effective June 1, 1978. The 2. For authorized states only. Federally insured commercial banks, savings and ceiling rate for commercial banks is the discount rate on most recently issued 6loan associations, cooperative banks, and mutual savings banks in Massachusetts month U.S. Treasury bills. Until Mar. 15, 1979, the ceiling rate for savings and and New Hampshire were first permitted to offer negotiable order of withdrawal loan associations and mutual savings banks was Va percentage point higher than (NOW) accounts on Jan. 1, 1974. Authorization to issue NOW accounts was the rate for commercial banks. Beginning Mar. 15, 1979, the Va percentage point extended to similar institutions throughout New England on Feb. 27, 1976, and interest differential is removed when the 6-month Treasury bill rate is 9 percent in New York State on Nov. 10, 1978. or more. The full differential is in effect when the 6-month bill rate is 8^4 percent 3. No separate account category. or less. Thrift institutions may pay a maximum 9 percent when the 6-month bill 4. For exceptions with respect to certain foreign time deposits see the Federal rate is between 83/4 and 9 percent. Also effective March 15, 1979 interest com­ Reserve Bulletin for October 1962 (p. 1279), August 1965 (p. 1084), and Feb­ pounding was prohibited on 6-month money market time deposits at all offering ruary 1968 (p. 167). institutions. For both commercial banks and thrift institutions, the maximum al­ 5. Multiple maturity. July 20, 1966; single maturity: September 26, 1966. lowable rates in January and February were as follows: Jan. 3, 11.880; Jan. 10, 6. No minimum denomination. Until July 1, 1979, a minimum of $1,000 was 11.858; Jan. 17, 11.783; Jan. 24, 11.886; Jan. 31, 11.846; Feb. 7, 11.985; Feb. 14, required for savings and loan associations, except in areas where mutual savings 12.256; Feb. 21, 13.013; Feb. 28, 13.629. banks permitted lower minimum denominations. This restriction was removed for 12. Effective Jan. 1, 1980, commercial banks, savings and loan associations, and deposits maturing in less than 1 year, effective Nov. 1, 1973. mutual savings banks are authorized to offer variable ceiling accounts with no J. No minimum denomination. Until July 1, 1979, minimum denomination was required minimum denomination and with maturities of 2Vi years or more. The $1,000 except for deposits representing funds contributed to an Individual Retire­ maximum rate for commercial banks is 3/4 percentage points below the yield on ment Account (IRA) or a keogh (H.R. 10) Plan established pursuant to the 2Vi year U.S. Treasury securities; the ceiling rate for thrift institutions is Va per­ Internal Revenue Code. The $1,000 minimum requirementwas removed for such centage point higher than that for commercial banks. In February, the ceiling at accounts in December 1975 and November 1976, respectively. commercial banks was 10.40 percent, and the ceiling at thrift institutions was 10.65 8. Between July 1, 1973, and Oct. 31, 1973, there was no ceiling for certificates percent. Effective March 1, a temporary ceiling of IV/a percent was placed on maturing in 4 years or more with minimum denominations of $1,000; however, these accounts at commercial banks; the temporary ceiling is 12 percent at savings the amount of such certificates that an institution could issue was limited to 5 and loan associations and mutual savings banks. percent of its total time and savings deposits. Sales in excess of that amount, as 13. Between July 1, 1979, and Dec. 31, 1979, commercial banks, savings and well as certificates of less than $1,000, were limited to the 6V2 percent ceiling on loan associations, and mutual savings banks were authorized to offer variable time deposits maturing in 2Vi years or more. ceiling accounts with no required minimum denomination and with maturities of Effective Nov. 1, 1973, ceilings were reimposed on certificates maturing in 4 4 years or more. The maximum rate for commercial banks was IV4 percentage years or more with minimum denomination of $1,000. There is no limitation on points below the yield on 4-year U.S. Treasury securities; the ceiling rate for thrift the amount of these certificates that banks can issue. institutions was Va percentage point higher than that for commercial banks. 9. Accounts maturing in less than 3 years subject to fixed rate ceilings. Note: Maximum rates that can be paid by federally insured commercial banks, 10. Must have a maturity of exactly 26 weeks and a minimum denomination of mutual savings banks, and savings and loan associations are established by the $10,000, and must be nonnegotiable. Board of Governors of the Federal Reserve System, the Board of Directors of the Federal Deposit Insurance Corporation, and the Federal Home Loan Bank Board under the provisions of 12 CFR 217, 329, and 526, respectively. The maximum rates on time deposits in denominations of $100,000 or more with maturities of 30-89 days were suspended in June 1970; such deposits maturing in 90 days or more were suspended in May 1973. For information regarding previous interest rate ceilings on all types of accounts, see earlier issues of the interest rate ceilings on all types of accounts, see earlier issues of the 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 1979 1980 Type of transaction 1977 1978 1979 July Aug. Sept. Oct. Nov. Dec. Jan. U.S. Government Securities Outright transactions (excluding matched salepurchase transactions) Treasury bills 1 Gross purchases ................................................................. 13,738 16,628 17,930 i 2,252 2,351 1,692 1,528 1 2,752 2,464 0 2 Gross sales ........................................................................... 7,241 13,725 7,480 0 380 353 780 154 378 1,722 3 Redemptions ........................................................................ 2,136 2,033 4,208 1 0 0 200 968 1 300 0 790 Others within 1 year2 4 Gross purchases ................................................................. 3,017 1,184 3,203 218 57 120 28 0 90 0 5 Gross sales ........................................................................... 0 0 0 0 0 0 0 0 0 0 6 Exchange, or maturity shift ........................................... 4,499 -5,170 7,499 33 1,526 876 -116 -937 -155 -21 7 Redemptions ........................................................................ 2,500 0 3,908 1 0 0 0 668 1 0 0 0 1 to 5 years 8 Gross purchases ................................................................. 2,833 4,188 3,456 1 237 699 354 703 1 0 398 0 9 Gross sales ........................................................................... 0 0 0 0 0 0 0 0 0 0 10 Exchange, or maturity shift ........................................... -6,649 -178 -6,653 -33 -1,591 -876 116 222 155 21 5 to 10 years 11 Gross purchases ................................................................ 758 1,526 523 96 140 73 0 0 81 0 12 Gross sales ........................................................................... 0 0 0 0 0 0 0 0 0 0 13 Exchange, or maturity shift ........................................... 584 2,803 -2,465 0 -240 0 0 400 0 0 Over 10 years 14 Gross purchases ................................................................. 553 1,063 454 142 81 87 0 0 51 0 15 Gross sales ........................................................................... 0 0 0 0 0 0 0 0 0 0 16 Exchange, or maturity shift ........................................... 1,565 2,545 1,619 0 305 0 0 314 0 0 All maturities2 17 Gross purchases ................................................................ 20,898 24,591 25,5651 2,945 3,327 2,326 2,259' 2,752 3,084 0 18 Gross sales ........................................................................... 7,241 13,725 7,480 0 380 353 780 154 378 1,722 19 Redemptions ........................................................................ 4,636 2,033 8,116' 0 0 200 1,636’ 300 0 790 Matched sale-purchase transactions 20 Gross sales ....................................................................... 425,214 511,126 626,403 40,310 35,159 41,395 58,656 45,204 53,681 53,025 21 Gross purchases ............................................................. 423,841 510,854 623,245 40,300 35,480 41,583 58,671 45,979 49,738 55,557 Repurchase agreements 22 Gross purchases ............................................................. 178,683 151,618 107,374 18,464 10,539 10,850 10,599 4,303 7,251 5,704 23 Gross sales ....................................................................... 180,535 152,436 107,291 19,690 12,226 10,380 11,336 3,869 6,643 6,872 24 Net change in U.S. government securities ............... 5,798 7,743 6,896 1,708 1,582 2,431 -878 3,507 -629 -1,148 Federal Agency Obligations Outright transactions 25 Gross purchases ............................................................. 1,433 301 853 482 0 0 0 0 0 0 26 Gross sales ....................................................................... 0 173 399 0 0 0 0 0 0 0 27 Redemptions .................................................................... 223 235 134 0 18 3 * 5 0 Repurchase agreements 28 Gross purchases ............................................................. 13,811 40,567 37,321 7,247 4,057 5,016 5,146 1,992 2,383 3,049 29 Gross sales ............................................................................. 13,638 40,885 36,960 7,434 4,544 4,069 6,188 1,075 2,863 3,543 30 Net change in federal agency obligations .................. 1,383 -426 681 295 -487 928 -1,045 917 -485 -494 Bankers Acceptances 31 Outright transactions, net ............................................... -196 0 0 0 0 0 0 0 0 0 32 Repurchase agreements, net ......................................... 159 -366 116 -241 -684 578 -735 -48 434 -704 33 Net change in bankers acceptances ............................. -37 -366 116 -241 -684 578 -735 -48 434 -704 34 Total net change in System Open Market Account ......................................................................... 7,143 6,951 7,693 1,761 412 3,937 -2,658 4,376 -679 -2,345 1. In April 1979, the System acquired $640 million of 2-day cash management 2. Both gross purchases and redemptions include special certificates created bills in exchange for maturing 2-year notes. New 2-year notes were later obtained when the Treasury borrows directly from the Federal Reserve, as follows (millions in exchange for the maturing bills. In Oct. 1979, $668 million of maturing 2- and of dollars): Sept. 1977, 2,500; Mar. 1979, 2,600. 4- year notes were exchanged for a like amount of short-term bills, later exchanged for new 2- and 4-year notes. Each of these transactions is treated in the table as Note. Sales, redemptions, and negative figures reduce holdings of the System both a purchase and a redemption. Open Market Account; all other figures increase such holdings. Details may not add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Financial Statistics □ March 1980 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements Millions of dollars Wednesday End of month Account 1980 1979 1980 Jan. 30p Feb. 6p Feb. 13p Feb. 20p Feb. Up Dec.P Jan .p Feb.P Consolidated condition statement Assets 1 Gold certificate account ........................................................... 11,172 11,172 11,172 11,172 11,172 11,112 11,172 11,172 2 Special drawing rights certificate account ......................... 2,968 2,968 2.968 2,968 2,968 1,800 2,968 2,968 3 Coin .................................................................................................. 462 469 472 464 456 403 469 468 Loans 4 Member bank borrowings .................................................... 924 343 3.324 1,101 4,318 1,454 828 3,364 5 Other .......................................................................................... 0 0 0 0 0 0 0 0 Acceptances 6 Bought outright ....................................................................... 0 0 0 0 0 0 0 0 7 Held under repurchase agreements ................................ 0 0 281 825 0 704 0 205 Federal agency obligations 8 Bought outright ....................................................................... 8,216 8,216 8.216 8,216 8,216 8,216 8,216 8,216 9 Held under repurchase agreements ................................ 0 0 607 708 0 493 0 31 U.S. government securities Bought outright 10 Bills ......................................................................................... 41,431 40,802 45,613 45,135 41,254 45,244 45,264 43,503 11 Certificates—Special .......................................................... 0 0 0 0 0 0 0 0 12 Notes ...................................................................................... 56,494 56,494 56,494 56,411 56,411 56.494 56,494 56,411 13 Bonds ...................................................................................... 14,553 14,553 14,553 14,636 14,636 14,553 14,553 14,636 14 Total1 ........................................................... 122,478 111.849 116,660 116,182 112,301 116,291 116,311 114,550 15 Held under repurchase agreements ................................ 0 0 999 2,234 0 1,167 0 621 16 Total U.S. government securities ......................................... 112,478 111,849 117,659 118,416 112,301 117.458 116,311 115,171 17 Total loans and securities .......................................................... 121,618 120,408 130,087 129,266 124,835 128,325 125,355 126,987 18 Cash items in process of collection ...................................... 10,905 12,320 11,107 16,342 11,114 13,571 10,050 8,906 19 Bank premises ............................................................................. 410 412 411 411 411 408 411 411 20 Denominated in foreign currencies2 ................................ 2,376 2,188 2.163 2,106 2,112 2,483 2,192 2,075 21 All other .................................................................................... 2,800 2,751 2,876 1,839 1,910 2,722 2,634 1,928 22 Total assets .................................................................................... 152,711 152,688 161,256 164,568 154,978 160,824 155,251 154,915 Liabilities 23 Federal Reserve notes .............................................................. 109,095 109,547 ■ 110,108 110,051 109,615 113,355 108,927 109,170 Deposits Reserve accounts 24 Member banks .................................................................... 27,864 27,452 36,018 37,032 29,129 29,520 31.232 31,725 25 Edge Act Corporations .................................................... 355 358 474 344 335 265 244 328 26 U.S. agencies and branches of foreign banks ......... 50 18 45 25 28 7 16 55 27 Total ....................................................................................... 28,269 27,828 36.537 37,401 29,492 29,792 31,492 32,108 28 U.S. Treasury—General account ..................................... 3,051 3,733 3,395 2,461 4,478 4,075 2,931 2,417 29 Foreign—Official accounts .................................................. 249 362 343 294 245 429 440 450 30 Other ...................................................................................... 261 275 281 332 330 1.412 339 350 31 Total deposits ............................................... 31,830 32,198 40,556 40,488 34,545 35,708 35,202 35,325 32 Deferred availability cash items ............................................ 6.437 6,431 5,905 9.258 6,380 6.804 5,440 5,752 33 Other liabilities and accrued dividends3 ............................ 2,147 2,028 2.188 2,231 1,948 2.667 2,425 2,106 34 Total liabilities ............................................... 149,509 150,204 158,757 162,028 152,488 158,534 151,994 152,353 Capital Accounts 35 Capital paid in ............................................................................. 1,153 1,149 1,152 1,152 1,155 1,145 1,153 1,153 36 Surplus ......................................................................................... 1,145 1,145 1,145 1.145 1.145 1.145 1,145 1,145 37 Other capital accounts .............................................................. 904 190 202 243 190 0 959 264 38 Total liabilities and capital accounts ..................................... 152,711 152,688 161,256 164,568 154,978 160,824 155,251 154,915 39 Memo: Marketable U.S. government securities held in custody for foreign and international account ......... 80,799 80,707 80,007 81,260 80,247 80,828 81,039 80,625 Federal Reserve note statement 40 Federal Reserve notes outstanding (issued to Bank) .... 125,698 126,093 126,474 126,673 127,049 125,301 125,707 127.046 Collateral held against notes outstanding 41 Gold certificate account ........................................................... 11,172 11,172 11,172 11,172 11,172 11,112 11,172 11,172 42 Special Drawing Rights certificate account ...................... 2,968 2,968 2,968 2,968 2.968 1,800 2,968 2,968 43 Eligible paper .............................................................................. 583 241 1,598 638 1,576 894 635 1,473 44 U S government and agency securities ............................ 110,975 111,712 110,736 111,895 111,333 111,495 110,932 111,433 45 Total collateral .............................................................. 125,698 126,093 126,474 126,673 127,049 125,301 125,707 127,046 1. Includes securities loaned—fully guaranteed by U.S. government securities 2. Beginning December 29, 1978, such assets are revalued monthly at market pledged with Federal Reserve Banks—and excludes (if any) securities sold and exchange rates. scheduled to be bought back under matched sale-purchase transactions. 3. Includes exchange-translation account reflecting, beginning December 29, 1978, the monthly revaluation at market exchange rates of foreign-exchange com­ mitments. 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 1980 1979 1980 Jan. 30 Feb. 6 Feb. 13 Feb. 20 Feb. 27 Dec. 31 Jan. 31 Feb. 29 1 Loans .............................................................................................. 924 343 3,324 1,101 4,318 1,453 828 3,364 2 Within 15 days ........................................................................ 873 300 3,277 1,083 4,292 1,441 813 3,324 3 16 days to 90 days.................................................................. 51 43 47 18 26 12 15 40 4 91 days to 1 year .................................................................... 0 0 0 0 0 0 0 0 5 Acceptances .................................................................................. 0 0 281 825 0 704 0 205 6 Within 15 days ........................................................................ 0 0 281 825 0 704 0 205 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 ..................................................... 112,478 111,849 117,659 118,416 112,301 117.458 116,311 115,171 10 Within 15 days’ ....................................................................... 4,397 5,488 6,562 7,033 4,841 3.133 3,878 3,086 11 16 days to 90 days .................................................................. 20,336 17,841 22,496 26,374 23,352 23.708 22,815 27,708 12 91 days to 1 year .................................................................... 34,359 35,113 35,194 31,249 30,348 37.231 36,211 30,615 13 Over 1 year to 5 years ......................................................... 27,864 27,885 27,885 28,886 28,886 27,864 27,885 28,888 14 Over 5 years to 10 years ..................................................... 12,774 12,774 12,774 11,860 11,860 12,774 12,774 11,860 15 Over 10 years .......................................................................... 12,748 12,748 12,748 13.014 13.014 12.748 12,748 13,014 16 Federal agency obligations ..................................................... 8,216 8,216 8,823 8.924 8,216 8.709 8,216 8,247 17 Within 15 days1 ....................................................................... 79 0 756 965 188 644 79 219 18 16 days to 90 days .................................................................. 546 594 445 337 268 457 546 268 19 91 days to 1 year .................................................................... 1,277 1,308 1,308 1,308 1,480 1,307 1,277 1,480 20 Over 1 year to 5 years ......................................................... 4,238 4,238 4,238 4,238 4,242 4,234 4,238 4,242 21 Over 5 years to 10 years ..................................................... 1,356 1,356 1,356 1,356 1,318 1,325 1,356 1,318 22 Over 10 years ......................................................................... 720 720 720 720 720 742 720 720 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 o f g c r u ou st p o , m o e r r type 1976 1977 1978 Aug/ Sept/ Oct/ Nov/ Dec. Debits to demand deposits1 (seasonally adjusted) 1 All commercial banks ............................................................... 29,180.4 34,322.8 40,297.8 ' 52,590.7 54,395.3 53.475.3 51.930.2 54.029.8 2 Major New York City banks .................................................. 11.467.2 13,860.6 15,008.7 20.360.3 21,118.5 19.681.9 19.222.7 20,497.1 3 Other banks ................................................................................... 17.713.2 20,462.2 25,289.1r 32.230.4 33,276.8 33.793.3 32.707.5 33.532.8 Debits to savings deposits2 (not seasonally adjusted) 4 All customers ................................................................................ 174.0 417.7' 752.2 655.0 819.2 750.2 726.4 5 Business3 ......................................................................................... 21.7 56.7 81.9 77.9 94.9 86.0 88 1 6 Others ............ .............................................. 152.3 361.0r 643.3 577.0 724.3 664.2 638.3 Demand deposit turnover1 (seasonally adjusted) 7 All commercial banks ............................................................... 116.8 129.2 139.4 171.5 173.3 170.3 166.1 172.6 8 Major New York City banks .................................................. 411.6 503.0 541.9 708.9 711.5 639.1 643.0 683.9 9 Other banks .................................................................... ............ 79.8 85.9 96.8r 116.0 117.1 119.3 115.6 118.5 Savings deposit turnover2(not seasonally adjusted) 10 All customers .......................................................................... 1.6 1.9 3.4 3.1 3.9 3.7 3.6 11 Business3 ......................................................................................... 4.1 5.1 7.3 6.9 8.4 7.8 8 4 12 Others .......................................................................... 1.5 1.7 3.2 2.9 3.7 3.5 3.4 1. Represents accounts of individuals, partnerships, and corporations, and of Note. Historical data—estimated for the period 1970 through June 1977, partly states and political subdivisions. on the basis of the debits series for 233 SMSAs, which were available through June 2. Excludes negotiable order of withdrawal (NOW) accounts and special club 1977—are available from Publications Services, Board of Governors of the Federal accounts, such as Christmas and vacation clubs. Reserve System, Washington, D.C. 20551. Debits and turnover data for savings 3. Represents corporations and other profit-seeking organizations (excluding deposits are not available prior to July 1977. commercial banks but including savings and loan associations, mutual savings banks, credit unions, the Export-Import Bank, and federally sponsored lending agencies). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Financial Statistics □ March 1980 1.21 MONEY STOCK MEASURES AND COMPONENTS Billions of dollars, averages of daily figures 1979 1976 1977 1978 1979 Dec. Dec. Dec. Dec. Item Aug. Sept. Oct. Nov. Dec. Seasonally adjusted Measures1 1 M-1A ...................................... 305.0 328.4 351.6 371.5 365.4 367.5 368.0 369.6 371.5 372.6 2 M-1B ........................................ 307.7 332.5 359.9 387.7 380.7 383.2 383.9 385.3 387.7 389.1 3 M-2 ........................................... 1.166.7 1,294.1 1,400.8 1.523.8' 1,489.5 1,499.7 1,507.2 1,514.5 1,523.8' 1,532.7 4 M-3 ........................................... 1.299.7 1,460.3 1,622.2 1.773.3' 1,719.3 1.738.2 1,751.8 1,762.6' 1,773.3r 1,785.0 5 L2 ............................................. 1,523.5 1,715.5 1,926.3 2,138.7 2,074.9 2.103.3 2,115.4 2,124.2' 2,138.7 n.a. Components 6 Currency ................................ 80.7 88.7 97.6 106.1 103.7 104.8 105.4 105.9 106.1 107.3 7 Demand deposits ............... 224.4 239.7 253.9 265.4 261.7 262.7 262.7' 263.7 265.4 265.3 8 Savings deposits ................. 447.7 486.5 476.0 417.7' 450.3 445.3 435.9 422.2 417.7' 413.1 9 Small time deposits3 ......... 396.6 454.9 533.8 653.4 604.6 614.2 627.5 645.8 653.4 659.3 10 Large time deposits4 ......... 118.0 145.2 194.7 219.11 200.4 207.4 213.6 218.3 219.1' 222.0 Not seasonally adjusted Measures1 11 M-1A ................................................................ 313.5 337.2 360.9 381.1 363.2 367.0 369.7 372.2 381.1 377.4 12 M-1B ................................................................. 316.1 341.3 369.3 397.3 378.6 382.7 385.5 387.8' 397.3 393.9 13 M-2 .................................................................... 1,169.1 1,295.9 1,402.9 1,525.9' 1,486.8 1,498.2 1,507.1 1,509.9 1,525.9' 1,539.0 14 M-3 .................................................................... 1,303.8 1,464.5 1,627.8 1,778.9' 1,716.3 1,736.1 1,752.4 1,759.1 1,778.9' 1,793.2 15 L2 ....................................................................... 1,527.1 1,718.5 1,929.8 2,122.7 2,071.0 2,094.6 2,113.6 2,122.7' 2,122.7' 2,141.5 Components 16 Currency .......................................................... 82.1 90.3 99.4 108.0 103.9 104.5 105.2 106.6 108.0 106.5 17 Demand deposits .......................................... 231.3 247.0 261.5 273.1 ' 259.3 262.4' 264.5' 265.6 273.1' 270.9 18 Other checkable deposits5 ........................ 2.7 4.1 8.3 16.2 15.3 15.7 15.8 15.7 16.2 16.5 19 Overnight RPs and Eurodollars6 ............ 13.6 18.6 23.3 24.1' 25.2 26.1 25.6 23.5 24.1' 24.9 20 Money market mutual funds ................... 3.4 3.8 10.3 43.6 31.2 33.7 36.9 40.4 43.6 49.1 21 Savings deposits ........................................... 444.9 483.2 472.8 414.8' 451.1 445.6 434.6 420.0 414.8' 410.5 22 Small time deposits3 .................................... 393.5 451.3 529.8 648.7 603.3 612.7 627.3 640.8 648.7 663.3 23 Large time deposits4 .................................... 119.7 147.7 198.2 221.5 200.0 206.8 214.2 219.5 222.6' 223.9 1. Composition of the money stock measures is as follows: 2. L: M-3 plus other liquid assets such as term Eurodollars held by U.S. residents M-l A: Averages of daily figures for (1) demand deposits at all commercial banks other than banks, bankers acceptances, commercial paper, Treasury bills and other other than those due to domestic banks, the U.S. government, and foreign banks liquid Treasury securities, and U.S. savings bonds. and official institutions less cash items in the process of collection and Federal 3. Small time deposits are those issued in amounts of less than $100,000. Reserve float; and (2) currency outside the Treasury, Federal Reserve banks, and 4. Large time deposits are those issued in amounts of $100,000 or more and are the vaults of commercial banks. net of the holdings of domestic banks, thrift institutions, the U.S. government, M-1B: M-1A plus NOW and ATS accounts at banks and thrift institutions, credit money market mutual funds, and foreign banks and official institutions. union share draft accounts, and demand deposits at mutual savings banks. 5. Includes ATS and NOW balances at all institutions, credit union share draft M-2: M-1B plus savings and small-denomination time deposits at all depositary balances, and demand deposits at mutual savings banks. institutions, overnight RPs at commercial banks, overnight Eurodollars held by 6. Overnight (and continuing contract) RPs are those issued by commercial U.S. residents other than banks at Caribbean branches of member banks, and banks to the nonbank public, and overnight Eurodollars are those issued by Car­ money market mutual fund shares. ibbean branches of member banks to U.S. nonbank customers. M-3: M-2 plus large-denomination time deposits at all depositary institutions Note. Latest monthly and weekly figures are available from the Board’s and term RPs at commercial banks and savings and loan associations. H.6(508) release. Back data are available from the Banking Section, Division of Research and Statistics. NOTES TO TABLE 1.23: 1. Includes domestic chartered banks, U.S. branches, agencies, and New York 7. As of Dec. 1, 1979, loans sold to offiliates were reduced $800 million and investment company subsidiaries of foreign banks; and Edge Act corporations. commercial and industrial loans sold were reduced $700 million due to corrections 2. Excludes loans to commercial banks in the United States. of two banks in New York City. 3. As of Dec. 31, 1978, total loans and investments were reduced by $0.1 billion. 8. As of Dec. 31, 1978, nonbank financial loans were reduced $0.1 billion as “Other securities” were increased by $1.5 billion and total loans were reduced by the result of reclassifications. $1.6 billion largely as the result of reclassifications of certain tax-exempt obliga­ 9. Loans sold are those sold outright to a bank’s own foreign branches, non­ tions. Most of the loan reduction was in “all other loans.” consolidated nonbank affiliates of the bank, the bank’s holding company (if not 4. As of Jan. 3,1979, as the result of reclassifications, total loans and investments a bank), and nonconsolidated nonbank subsidiaries of the holding company. and total loans were increased by $0.6 billion. Business loans were increased by 10. As of Dec. 31, 1978, commercial and industrial loans sold outright were $0.4 billion and real estate loans by $0.5 billion. Nonbank financial loans were increased $0.7 billion as the result of reclassifications, but $0.1 billion of this reduced by $0.3 billion. amount was offset by a balance sheet reduction of $0.1 billion as noted above. 5. As of Dec. 31, 1977, as the result of loan reclassifications, business loans 11. United States includes the 50 states and the District of Columbia. were reduced by $0.2 billion and nonbank financial loans by $0.1 billion; real estate loans were increased by $0.3 billion. Note. Data are prorated averages of Wednesday data for domestic chartered 6. As of Dec. 31, 1978, commercial and industrial loans were reduced $0.1 banks, and averages of current and previous montn-end data for foreign-related billion as a result of reclassifications. institutions. 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 1979 1980 Item D 19 e 7 c 7 / D 19 e 7 c 8 / D 19 e 7 c 9 . June' July' Aug/ Sept/ Oct/ Nov/ Dec. Jan. Seasonally adjusted 1 Reserves1 ......................................................................................... 36.00 41.16 43.51 40.53 40.78 41.11 41.43 42.19 43.07 43.51 43.51 2 Nonborrowed .......................................................................................... 35.43 40.29 42.03 39.11 39.61 40.03 40.09 40.17 41.16 42.03 42.27 3 Required ................................................................................................... 35.81 40.93 43.11 40.31 40.57 40.89 41.24 41.92 42.83 43.11 43.16 4 Monetary base2 ..................................................................................... 127.6 142.2 153.6 145.9 147.1 148.6 150.0 151.5 152.8 153.6 154.9 5 Deposits subject to reserve requirements3 ................................. 567.6 616.1 644.7 614.7 619.4 625.4 631.5 638.2 642.0 644.7 643.6 6 Time and savings ................................................................................... 385.6 428.8 451.0 427.6 430.6 436.3 441.7 446.7 450.0 451.0 451.7 Demand 7 Private ................................................................................................... 178.5 185.1 191.9 185.0 186.9 187.0 188.1 189.8 190.0 191.9 189.6 8 U.S. government .............................................................................. 3.5 2.2 1.8 2.1 1.8 2.1 1.7 1.7 1.9 1.8 2.4 Not seasonally adjusted 9 Monetary base2 ...................................................................................... 129.8 144.6 156.2 145.6 147.9 148.4 149.4 151.3 153.5 156.2 156.1 10 Deposits subject to reserve requirements3 ................................. 575.3 624.0 652.9 613.9 619.2 620.4 629.0 637.8 642.2 652.9 652.0 11 Time and savings ................................................................................... 386.4 429.6 452.0 427.2 429.8 434.1 439.4 445.8 449.1 452.0 454.4 Demand 12 Private ................................................................................................... 185.1 191.9 199.0 183.9 187.8 184.5 187.5 190.5 191.4 199.0 195.5 13 U.S. government .............................................................................. 3.8 2.5 1.9 2.8 1.6 1.7 2.1 1.6 1.7 1.9 2.2 1. Series reflects actual reserve requirement percentages with no adjustment to 3. Includes total time and savings deposits and net demand deposits as defined eliminate the effect of changes in Regulations D and M. There are breaks in series by Regulation D. Private demand deposits include all demand deposits except because of changes in reserve requirements effective Jan. 8 and Dec. 30, 1976; those due to the U.S. government, less cash items in process of collection and and Nov. 2, 1978. In addition, effective Jan. 1, 1976, statewide branching in New demand balances due from domestic commercial banks. York was instituted. The subsequent merger of a number of banks raised required reserves because of higher reserve requirements on aggregate deposits at these Note. Back data and estimates of the impact on required reserves and changes banks. in reserve requirements are shown in table 14 of the Board's Annual Statistical 2. Includes total reserves (member bank reserve balances in the current week Digest, 1971-1975. glus vault cash held two weeks earlier); currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of commercial banks; and vault cash of nonmember banks. 1.23 LOANS AND INVESTMENTS All Commercial Banks’ Billions of dollars; averages of Wednesday figures 1977 1978 1979 1980 1977 1978 1979 1980P Category Dec. Dec. Dec. Dec. Nov.p Dec.P Jan./7 Nov.p Dec.P Jan.P Seasonally adjusted Not seasonally adjusted 1 Total loans and securities2 ............................ 891.1 1,014.3 3 1,128.64 1,132.5 1,144.8 899.1 1,023.83 1,130.74 1,143.0 1,144.6 2 U.S. Treasury securities ................................... 99.5 93.4 94.3 93.8 93.2 100.7 94.6 93.3 95.0 94.1 3 Other securities .................................................... 159.6 173.13 190.5 4 191.5 193.1 160.2 173.93 190.7 192.3 192.7 4 Total loans and leases2 ..................................... 632.1 747.83 843.84 847.2 858.5 638.3 755.43 846.7 4 855.7 857.9 5 Commercial and industrial loans ............... 211.25 246.5 6 288.3 4 290.4 295.5 212.6 s 248.2 6 288.3 4 292.4 294.6 6 Real estate loans ............................................ 175.25 210.5 239.7 4 242.4 245.0 175.55 210.9 240.9 4 242.9 245.0 7 Loans to individuals ....................................... 138.2 164.9 182.34 182.7 183.7 139.0 165.9 183.7 183.8 183.7 8 Security loans .................................................. 20.6 19.4 18.4 18.3 18.0 22.0 20.7 18.8 19.6 18.3 9 Loans to nonbank financial institutions .. 25.8 5 27.18 30.9 4 30.03 30.07 26.35 27.68 31.04 30.8 30.4 10 Agricultural loans ........................................... 25.8 28.2 30.4 31.0 31.3 25.7 28.1 30.5 30.8 31.0 11 Lease financing receivables ......................... 5.8 7.4 9.1 9.4 9.8 5.8 7.4 9.1 9.4 9.8 12 All other loans ................................................. 29.5 43.6 3 44.7 42.6 44.4 31.5 46.63 44.4 45.9 45.1 Memo: 13 Total loans and investments plus loans sold2-9’7 ..................................................... 895.9 1,018.13 1,132.24 1,135.3 1,147.4 903.9 1,027.63 1,134.34 1,145.7 1,147.3 14 Total loans plus loans sold2 7........................... 636.9 751.63 847.4 4 849.9 861.1 643.0 759.23 850.3 4 858.4 860.5 15 Total loans sold to affiliates7-9........................ 4.8 3.8 3.6 2.8 2.7 4.8 3.8 3.6 2.8 2.7 16 Commercial and industrial loans plus loans sold7-9 .................................................. 213.95 248.5 10 290.9 4 292.2 297.3 215.3 s 250.1 10 290.9 4 294.2 296.4 17 Commercial and industrial loans sold7-9 . 2.7 1.9 w 2.5 1.8 1.7 2.7 1.9 «o 2.5 1.8 1.7 18 Acceptances held ............................................. 7.5 6.8 7.9 8.5 8.3 8.6 7.5 8.2 9.4 8.8 19 Other commercial and industrial loans ... 203.75 239.7 280.4 282.0 287.2 203.9 5 240.9 280.1 283.0 1 285.8 20 To U.S. addressees11 ................................. 193.85 226.6 261.2 263.2 267.3 193.7 -s 226.5 260.7 263.2 265.4 21 To non-U.S. addressees ........................... 9.9 5 13.1 19.3 18.8 19.9 10.35 14.4 19.4 19.8 20.4 22 Loans to foreign banks ..................................... 13.5 21.2 19.6 18.7 18.8 14.6 23.0 19.1 20.1 19.7 23 Loans to commercial banks in the United States ........................................... 54.1 57.3 75.1 77.8 78.2 56.9 60.3 76.5 81.9 81.1 For notes see bottom of opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics □ March 1980 1.24 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series Billions of dollars except for number of banks 1979 1980 Account Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Domestically Chartered Commercial Banks1 1 Loans and investments .................................. 1,048.3 1,059.4 1,071.3 1,081.8 1,094.3 1,112.1 1,118.4 1,118.0 1,143.3 1,133.4 1,143.7 2 Loans, gross ....................................................... 773.9 785.3 797.9 807.6 819.4 833.8 839.0 836.7 860.1 849.7 857.1 3 Interbank ........................................................ 44.4 45.9 46.3 48.1 50.3 53.6 54.0 52.6 62.9 57.2 58.0 4 Commercial and industrial ..................... 233.0 236.4 240.5 242.0 244.1 249.4 249.8 248.0 253.4 252.6 256.2 5 Other ................................................................ 496.5 503.0 511.2 517.4 525.0 530.9 535.3 536.1 543.7 540.0 542.9 6 U.S. Treasury securities ............................... 94.2 93.2 91.6 92.1 90.6 91.9 91.5 92.1 92.5 92.4 93.6 7 Other securities ................................................ 180.2 181.0 181.7 182.1 184.3 186.4 187.8 189.3 190.7 191.2 192.9 8 Cash assets, total ............................................. 139.9 158.8 146.3 140.2 145.7 148.5 160.7 158.1 146.4 148.4 149.9 9 Currency and coin ..................................... 15.6 16.0 16.3 16.1 16.8 16.7 16.6 18.2 17.9 17.3 17.1 10 Reserves with Federal Reserve Banks 33.9 32.8 32.6 29.6 33.7 31.6 34.1 34.7 28.4 28.3 30.7 11 Balances with depositary institutions 39.0 44.6 40.8 41.2 41.1 40.7 45.5 43.7 37.7 43.7 43.4 12 Cash items in process of collection ... 51.4 65.4 56.5 53.4 54.1 59.5 64.6 61.5 62.4 59.0 58.7 13 Other assets ........................................................ 55.8 52.7 55.1 53.9 53.8 57.5 57.8 59.3 61.2 63.1 65.1 14 Total assets/total liabilities and capital .. 1,244.0 1,270.9 1,272.7 1,275.9 1,293.8 1,318.2 1,336.9 1,335.4 1,351.0 1,344.9 1,358.7 15 Deposits ........................................................... 964.4 975.5 971.3 975.2 982.9 996.6 1,023.6 1,017.6 1,030.6 1,022.5 1,029.1 16 Demand ........................................................... 348.0 357.8 352.4 352.6 352.4 358.7 376.6 365.1 377.6 362.4 358.7 17 Savings ............................................................. 215.9 215.5 216.4 218.3 216.6 213.4 207.6 205.0 203.4 200.6 200.0 18 Time .................................................................. 400.5 402.3 402.5 404.2 413.8 424.5 439.4 447.4 449.7 459.6 470.4 19 Borrowings .......................................................... 123.5 132.0 137.1 137.2 140.1 147.0 137.4 135.6 140.5 143.1 145.1 20 Other liabilities ................................................ 60.8 65.4 65.5 64.9 69.7 71.2 74.0 78.5 74.1 77.5 81.6 21 Residual (assets less liabilities) ................ 95.3 98.1 98.9 98.7 101.1 103.3 101.9 103.7 105.8 101.8 102.9 Memo: 22 U.S. Treasury note balances included in borrowing ................................................... 5.9 4.9 12.9 11.9 8.6 17.8 8.4 5.0 12.8 15.0 8.1 23 Number of banks ......................................... 14,610 14,616 14,620 14,584 14,607 14,616 14,605 14,608 14,610 14,594 14,609 ii All Commercial Banking Institutions2 24 Loans and investments ............................... 1,114.8 1,131.2 1,146.9 1,153.1 1,169.8 1,197.7 1,200.3 1,200.9 1,229.8 1,217.7 25 Loans, gross .................................................. 837.7 854.2 870.7 876.2 892.1 915.9 917.6 916.2 943.1 930.7 26 Interbank .................................................... 57.3 61.8 60.4 60.6 63.8 69.2 71.6 71.8 80.5 75.4 27 Commercial and industrial ................... 264.7 268.8 274.6 276.9 280.5 288.1 288.3 287.9 295.0 295.1 28 Other ........................................................... 515.6 523.6 535.7 538.6 547.8 558.6 557.7 556.6 567.6 560.1 29 U.S. Treasury securities ............................ 95.6 94.6 93.1 93.5 91.9 93.5 93.1 93.7 94.5 94.3 30 Other securities ............................................ 181.5 182.3 183.1 183.5 185.8 188.3 189.5 190.9 192.2 192.7 31 Cash assets, total ............................................. 156.6 176.5 167.8 160.4 166.0 172.2 179.9 176.7 169.5 166.5 32 Currency and coin .................................. 15.6 16.1 16.3 16.1 16.8 16.7 16.6 18.2 17.9 17.3 33 Reserves with Federal Reserve Banks 34.6 33.5 33.4 30.4 34.5 32.5 34.9 35.6 29.0 28.9 34 Balances with depositary institutions 53.9 60.3 60.3 59.3 59.3 62.4 62.5 60.0 59.0 59.8 35 Cash items in process of collection ... 52.5 66.6 57.7 54.7 55.3 60.6 65.9 62.9 63.7 60.4 36 Other assets .................................................... 70.8 67.7 71.4 69.7 70.9 76.7 76.5 78.5 81.0 83.7 37 Total assets/total liabilities and capital .. 1,342.1 1,375.5 1,386.1 1,383.2 1,406.7 1,446.5 1,456.7 1,456.1 1,480.3 1,468.0 n.a. 38 Deposits ........................................................... 997.4 1,013.2 1,015.6 1,012.3 1.020.9 1,043.6 1,062.6 1,058.5 1,076.3 1,063.1 39 Demand ........................................................... 362.0 375.8 376.4 369.7 369.1 383.2 394.2 384.9 400.5 380.5 40 Savings ........................................................ 216.9 216.7 217.2 219.1 217.6 214.2 208.3 205.9 204.3 201.3 41 Time .................................................................. 418.5 420.7 422.0 432.5 434.2 446.2 460.1 467.7 471.5 481.3 42 Borrowings ..................................................... 150.5 159.5 165.4 165.8 169.5 182.1 171.6 169.5 180.5 179.5 43 Other liabilities ............................................. 97.1 102.8 104.2 104.4 113.1 115.2 118.5 122.2 115.4 121.1 44 Residual (assets less liabilities) ............... 97.2 100.0 100.9 100.8 103.2 105.6 104.0 105.8 108.1 104.2 Memo: 45 U.S. Treasury note balances included in borrowing ............................................... 5.9 4.9 12.9 11.9 8.6 17.8 8.4 5.0 12.8 8.1 46 Number of banks .......................................... 14,946 14,954 14,968 14,933 14,960 14,972 14,963 14,969 14,975 14,962 }r 1. Domestically chartered commercial banks include all commercial banks in the Note. Figures are partly estimated. They include all bank-premises subsidiaries United States except branches of foreign banks; included are member and non­ and other significant majority-owned domestic subsidiaries. Data for domestically member banks, stock savings banks, and nondeposit trust companies. chartered commercial banks are for the last Wednesday of the month; data for 2. Commercial banking institutions include domestically chartered commercial other banking institutions are for last Wednesday except at end of quarter, when banks, branches and agencies of foreign banks. Edge Act and Agreement cor­ they are for the last day of the month. porations, and New York state foreign investment corporations. 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 Gross ............................................................................................... 578,734 601,122 657,509 695,443 340,691 351,311 384,722 403,812 3 Net .................................................................................................... 560,077 581,143 636,318 672,207 329,971 339,955 372,702 390,630 Investments 4 U.S. Treasury securities ........................................................... 101,461 100*568 99,333 97,001 55,727 53,345 52,244 50,519 5 Other ............................................................................................... 147,500 153,042 157,936 163,986 80,191 80,583 86,033 87,886 6 Cash assets ..................................................................................... 129,562 130,726 159,264 157,393 76,072 74,641 92,050 90,728 7 Total assets/total liabilities1 ................................................ 1,003,970 1,040,945 1,129,712 1,172,772 583,304 599,743 651,360 671,166 8 Deposits ........................................................................................... 825,003 847,372 922,657 945,874 469,377 476,381 520,167 526,932 9 U.S. government ......................................................................... 3,022 2,817 7,310 7,956 1,676 1,632 4,172 4,483 10 Interbank ........................................................................................ 44,064 44,965 49,843 47,203 23,149 22,876 25,646 22,416 11 Other ............................................................................................... 285,200 284,544 319,873 312,707 163,346 161,358 181,821 176,025 Time and savings 12 Interbank ........................................................................................ 8,248 7,721 8,731 8,987 4,907 4,599 5,730 5,791 13 Other ............................................................................................... 484,467 507,324 536,899 569,020 276,296 285,915 302,795 318,215 14 Borrowings ..................................................................................... 75,291 81,137 89,339 98,351 54,421 57,283 63,218 68,948 15 Total capital accounts ................................................................ 75,061 75,502 79,082 83,074 41,319 43,142 44,994 47,019 16 Memo: Number of banks ......................................................... 14,397 14,425 14,397 14,381 4,735 4,701 4,654 4,616 State member (all insured) Insured nonmember 17 Loans and investments, gross ................................................. 144,000 144,597 152,514 157,464 207,085 221,896 239,265 256,749 Loans 18 Gross ............................................................................................... 102,277 102,117 110,243 115,736 135,766 147,694 162,543 175,894 19 Net .................................................................................................... 99,474 99,173 107,205 112,470 130,630 142,015 156,411 169,106 Investments 20 U.S. Treasury securities ........................................................... 18,849 19,296 18,179 16,886 26,884 27,926 28,909 29,595 21 Other ............................................................................................... 22,874 23,183 24,091 24,841 44,434 46,275 47,812 51,259 22 Cash assets ..................................................................................... 32,859 35,918 42,305 43,057 20,631 20,166 24,908 23,606 23 Total assets/total liabilities1 ................................................ 189,579 195,452 210,442 217,384 231,086 245,748 267,910 284,221 24 Deposits ........................................................................................... 149,491 152,472 163,436 167,403 206,134 218,519 239,053 251,539 Demand 25 U.S. government ......................................................................... 429 371 1,241 1,158 917 813 1,896 2,315 26 Interbank ........................................................................................ 19,295 20,568 22,346 23,117 1,619 1,520 1,849 1,669 27 Other ............................................................................................... 52,204 52,570 57,605 55,550 69,648 70,615 80,445 81,131 Time and savings 28 Interbank ........................................................................................ 2,384 2,134 2,026 2,275 956 988 973 920 29 Other ............................................................................................... 75,178 76,827 80,216 85,301 132,993 144,581 153,887 165,502 30 Borrowings ..................................................................................... 17,310 19,697 21,736 23,167 3,559 4,155 4,384 6,235 31 Total capital accounts ................................................................ 13,199 13,441 14,182 14,670 17,542 18,919 19,905 21,384 32 Memo: Number of banks ........................................................ 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 Gross ............................................................................................... 16,336 20,865 22,686 26,747 152,103 168,559 185,230 202,641 35 Net .................................................................................................... 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 Other ............................................................................................... 1,428 1,081 849 1,082 45,863 47,357 48,662 52,341 38 Cash assets ..................................................................................... 6,496 8,330 9,458 9,360 27,127 28,497 34,367 32,967 39 Total assets/total liabilities1 ................................................ 26,790 33,390 36,433 42,279 257,877 279,139 304,343 326,501 40 Deposits ........................................................................................... 13,325 14,658 16,844 19,924 219,460 233,177 255,898 271,463 Demand 41 U.S. government ......................................................................... 4 8 10 8 921 822 1,907 2,323 42 Interbank ........................................................................................ 1,277 1,504 1,868 2,067 2,896 3,025 3,718 3,736 43 Other ............................................................................................... 3,236 3,588 4,073 4,814 72,884 74,203 84,518 85,946 Time and savings 44 Interbank ........................................................................................ 1,041 1,164 1,089 1,203 1,997 2,152 2,063 2,123 45 Other ............................................................................................... 7,766 8,392 9,802 11,831 140,760 152,974 163,690 177,334 46 Borrowings ..................................................................................... 4,842 7,056 6,908 8,413 8,401 11,212 11,293 14,649 47 Total capital accounts ................................................................ 818 893 917 962 18,360 19,812 20,823 22,346 48 Memo: Number of banks ........................................................ 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 □ March 1980 1.26 COMMERCIAL BANK ASSETS AND LIABILITIES Detailed Balance Sheet, September 30, 1978 Millions of dollars, except for number of banks Member banks1 Insured Non­ Asset account commercial Large banks member banks Total All other banks1 New York City of Other City Chicago large 1 Cash bank balances, items in process ....................................................... 158,380 134,955 43,758 5,298 47,914 37,986 23,482 2 Currency and coin ....................................................................................... 12,135 8,866 867 180 2,918 4,901 3,268 3 Reserves with Federal Reserve Banks ................................................. 28,043 28,041 3,621 1,152 12,200 11,067 3 4 Demand balances with banks in United States ................................ 41,104 25,982 12,821 543 3,672 8,945 15,177 5 Other balances with banks in United States ...................................... 4,648 2,582 601 15 648 1,319 2,066 6 Balances with banks in foreign countries ............................................ 3,295 2,832 331 288 1,507 705 463 7 Cash items in process of collection ........................................................ 69,156 66,652 25,516 3,119 26,969 11,049 2,504 8 Total securities held—Book value .............................................................. 262,199 179,877 20,808 7,918 58,271 92,881 82,336 9 U.S. Treasury ................................................................................................ 95,068 65,764 9,524 2,690 22,051 31,499 29,315 10 Other U.S. government agencies ........................................................... 40,078 25,457 1,828 1,284 7,730 14,616 14,622 11 States and political subdivisions .............................................................. 121,260 85,125 9,166 3,705 27,423 44,831 36,136 12 All other securities ....................................................................................... 5,698 3,465 291 240 1,048 1,887 2,234 94 66 19 47 28 14 Trading-account securities ........................................................................ 6,833 6,681 3,238 708 2,446 290 151 15 U.S. Treasury ............................................................................................ 4,125 4,103 2,407 408 1,210 78 23 16 Other U.S. government agencies ....................................................... 825 816 401 82 278 55 9 17 States and political subdivisions ......................................................... 1,395 1,381 363 117 794 107 14 18 All other trading account securities .................................................. 394 316 67 101 145 3 78 94 66 19 47 28 20 Bank investment portfolios ....................................................................... 255,366 173,196 17,570 7,210 55,825 92,591 82,185 21 U.S. Treasury ............................................................................................ 90,943 61,661 7,117 2,282 20,840 31,422 29,293 22 Other U.S. government agencies ...................................................... 39,253 24,641 1,426 1,201 7,452 14,561 14,613 23 States and political subdivisions .......................................................... 119,865 83,745 8,803 3,588 26,629 44,724 36,123 24 All other portfolio securities ............................................................... 5,305 3,149 224 138 903 1,884 2,156 25 Federal Reserve stock and corporate stock ............................................ 1,656 1.403 311 111 507 475 253 26 Federal funds sold and securities resale agreement ............................. 41,258 31,999 3,290 1,784 16,498 10,427 9,365 27 Commercial banks ....................................................................................... 34,256 25,272 1,987 1,294 12,274 9,717 9,090 28 Brokers and dealers .................................................................................... 4,259 4,119 821 396 2,361 541 140 29 Others ............................................................................................................... 2,743 2,608 482 94 1,863 169 135 30 Other loans, gross ............................................................................................. 675,915 500,802 79,996 26,172 190,565 204,069 175,113 31 Less: Unearned income on loans ............................................................... 17,019 11,355 675 107 3,765 6,809 5,664 32 Reserves for loan loss ........................................................................ 7,431 5,894 1,347 341 2,256 1,949 1,537 33 Other loans, net ................................................................................................ 651,465 483,553 77,974 25,724 184,544 195,311 167,912 Other loans, gross, by category 34 Real estate loans ............................................................................................... 203.386 138,730 10,241 2,938 52,687 72,863 64,656 35 Construction and land development ..................................................... 25,621 19,100 2,598 685 9,236 6,581 6,521 36 Secured by farmland ................................................................................... 8,418 3,655 23 34 453 3,146 4,763 37 Secured by residential properties ........................................................... 117.176 81,370 5,362 1.559 31,212 43,236 35,806 38 1- to 4-family residences ........................................................................ 111,674 77,422 4,617 1,460 29,774 41,570 34,252 39 FHA-insured or VA-guaranteed .................................................... 7,503 6,500 508 44 3,446 2,502 1,003 40 Conventional ......................................................................................... 104,171 70,922 4,109 1,417 26,328 39,068 33,249 41 Multifamily residences ........................................................................... 5,502 3.948 746 99 1,438 1,665 1,554 42 FHA-insured ......................................................................................... 399 340 132 27 88 92 59 43 Conventional ......................................................................................... 5,103 3,609 613 72 1,350 1,573 1,495 44 Secured by other properties ..................................................................... 52,171 34.605 2,258 660 11,786 19,901 17,566 45 Loans to financial institutions ....................................................................... 37,072 34,843 12,434 4,342 15.137 2,930 2,228 46 REITs and mortgage companies ............................................................ 8,574 8.162 2,066 801 4,616 680 412 47 Domestic commercial banks ..................................................................... 3,362 2.618 966 165 1,206 281 744 48 Banks in foreign countries ........................................................................ 7,359 7.187 3,464 268 2,820 635 171 49 Other depositary institutions .................................................................... 1,579 1.411 290 76 785 261 167 50 Other financial institutions ....................................................................... 16,198 15,465 5,649 3,033 5.710 1,073 733 51 Loans to security brokers and dealers ...................................................... 11,042 10,834 6,465 1,324 2,846 199 207 52 Other loans to purchase or carry securities ............................................ 4,280 3,532 410 276 1,860 985 747 53 Loans to farmers except real estate ........................................................... 28,054 15,296 168 150 3,781 11,196 12,758 54 Commercial and industrial loans ................................................................. 213, 123 171,815 39,633 13,290 67,833 51.059 41,309 55 Loans to individuals ......................................................................................... 161,599 110,974 7,100 2.562 40,320 60.993 50,624 56 Installment loans .......................................................................................... 131,571 90,568 5,405 1,711 33,640 49,811 41,003 57 Passenger automobiles ........................................................................... 58,908 37.494 1,077 209 11,626 24,582 21,414 58 Residential repair and modernization .............................................. 8,526 5.543 331 60 2,088 3,064 2,983 59 Credit cards and related plans ............................................................. 21,938 19,333 2,268 1,267 9,736 6,062 2,605 60 Charge-account credit cards ............................................................. 17,900 16,037 1,573 1,219 8.192 5,053 1,863 61 Check and revolving credit plans .................................................. 4,038 3,296 695 47 1,545 1,009 742 62 Other retail consumer goods ................................................................ 19,689 13,296 427 57 5,242 7,570 6,393 63 Mobile homes ....................................................................................... 9,642 6.667 179 19 2,563 3,905 2,976 64 Other .............................................. ....................................................... 10,047 6,629 249 38 2,678 3,664 3,417 65 Other installment loans .......................................................................... 22,510 14,902 1,302 119 4,948 8,533 7,608 66 Single-payment loans to individuals ....................................................... 30,027 20,406 1,694 851 6,680 11,182 9,621 67 All other loans ................................................................................................... 17,360 14,778 3,545 1,290 6,100 3,844 2,582 68 Total loans and securities, net ................................................................ 956,579 6%,833 102,383 35,536 259,820 299,094 259,867 69 Direct lease financing ...................................................................................... 6,717 6,212 1,145 96 3,931 1,041 505 70 Fixed assets—Buildings, furniture, real estate ...................................... 22,448 16,529 2,332 795 6,268 7,133 5,926 71 Investment in unconsolidated subsidiaries ............................................... 3,255 3,209 1,642 188 1,282 96 46 72 Customer acceptances outstanding ............................................................. 16,557 16,036 8,315 1,258 6,054 409 521 73 Other assets ......................................................................................................... 34,559 30,408 11,323 1,000 12,810 5,275 4,249 74 Total assets ................................................................................................ 1,198,495 904,182 170,899 44,170 338,079 351,034 294,595 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A19 1.26 Continued Member banks1 Insured Non­ Liability or capital account commerical Large banks member banks Total All other banks1 New York City of Other City Chicago large 75 Demand deposits ..................................................................................... 369,030 282,450 66,035 10,690 100,737 104,988 86,591 76 Mutual savings banks ......................................................................... 1.282 1,089 527 1 256 305 194 77 Other individuals, partnerships, and corporations ........................ 279,651 205,591 31,422 7,864 79,429 86,876 74,061 78 U.S. government ................................................................................. 7.942 5,720 569 188 1,987 2,977 2,222 79 States and political subdivisions ........................................................ 17.122 11,577 764 252 3,446 7,116 5,545 80 Foreign governments, central banks, etc ........................................ 1,805 1,728 1,436 19 211 62 77 81 Commercial banks in United States ................................................. 39,596 38,213 21,414 1,807 10,803 4,189 1,393 82 Banks in foreign countries ................................................................. 7,379 7,217 5,461 207 1,251 298 162 83 Certified and officers' checks, etc .................................................... 14,253 11,315 4,443 352 3,354 3,166 2,937 84 Time deposits .......................................................................................... 368,562 266,496 38,086 15,954 98,525 113,931 102,066 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 Banks in foreign countries ................................................................. 1,381 1,161 829 103 219 9 220 93 Savings deposits ....................................................................................... 223,326 152,249 10,632 2,604 54,825 84,188 71,077 94 Individuals and nonprofit organizations .......................................... 207,701 141,803 9,878 2,448 51,161 78,316 65,897 95 Corporations and other profit organizations .................................. 11,216 7,672 519 148 3,195 3,809 3,544 % 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 All other ................................................................................................ 30 27 18 * 8 2 3 99 Total deposits ............................................................................................ 960,918 701,195 114,753 29,248 254,087 303,107 259,733 100 Federal funds purchased and securities sold under agreements to repurchase .................................................................................... 91,981 85,582 21,149 8,777 41,799 13,857 6,398 101 Commercial banks ............................................................................... 42,174 39,607 6,991 5,235 21,609 5,773 2,566 102 Brokers and dealers ............................................................................ 12,787 11,849 2,130 1,616 6,381 1,722 939 103 Others .................................................................................................... 37,020 34,126 12,028 1,926 13,809 6,362 2,894 104 Other liabilities for borrowed money .................................................. 8,738 8,352 3,631 306 3,191 1,225 386 105 Mortgage indebtedness .......................................................................... 1,767 1,455 234 27 701 491 316 106 Bank acceptances outstanding .............................................................. 16,661 16,140 8,398 1,260 6,070 412 521 107 Other liabilities ........................................................................................ 27,124 23,883 , 8,600 1,525 9,020 4,477 3,494 108 Total liabilities ......................................................................................... 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 9,217 114 Undivided profits ................................................................................. 33,517 26,013 5,554 921 8,680 10,858 7,509 115 Other capital reserves ......................................................................... 1,719 1,182 132 52 337 661 538 116 Total liabilities and equity capital ......................................................... 1,198,495 904,182 170,899 44,170 338,079 351,034 294,595 Memo: 117 Demand deposits adjusted2 .................................................................... 252,337 171,864 18,537 5,576 60,978 86,774 80,472 Average for last 15 or 30 days 118 Cash and due from bank ........................................................................ 146,283 124,916 36,862 6,030 45,731 36,293 21,379 119 Federal funds sold and securities purchased under agreements to resell ................................................................................................... 43,873 33,682 4,272 1,887 16,007 11,517 10,307 120 Total loans ................................................................................................ 651,874 483,316 76,750 25,722 184,790 196,054 168,558 121 Time deposits of $100,000 or more ..................................................... 183,614 150,160 32,196 13,216 65,776 38,972 33,454 122 Total deposits ........................................................................................... 944,593 687,543 107,028 28,922 250,804 300,789 257,062 123 Federal funds purchased and securities sold under 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 1,067 390 125 Standby letters of credit outstanding .................................................... 18,820 17,658 10,063 1,477 4,820 1,297 1,162 126 Time deposits of $100,000 or more ..................................................... 186,837 152,553 32,654 13,486 66,684 39,728 34,284 127 Certificates of deposit ......................................................................... 160,227 129,667 27,950 11,590 56,383 33,743 30,560 128 Other time deposits ............................................................................. 26,610 22,886 4,704 1,896 10,301 5,985 3,724 129 Number of banks ..................................................................................... 14,390 5,593 12 9 153 5,419 8,810 1. Member banks exclude and nonmember banks include 13 noninsured trust Note. Data include consolidated reports, including figures for all bank-premises companies that are members of the Federal Reserve System. subsidiaries and other significant majority-owned domestic subsidiaries. Securities 2. Demand deposits adjusted are demand deposits other than domestic com­ are reported on a gross basis before deductions of valuation reserves. Back data mercial interbank and U.S. government, less cash items reported as in process of in lesser detail were shown in previous issues of the Bulletin. collection. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Financial Statistics □ March 1980 1.27 ALL LARGE WEEKLY REPORTING COMMERCIAL BANKS with Domestic Assets of $750 Million or More on December 31, 1977, Assets and Liabilities Millions of Dollars, Wednesday figures Account Jan. 2 Jan. 9 Jan. 16 Jan. 23 Jan. 30p Feb. 6p Feb. 13p Feb. 20p Feb. 27p 1 Cash items in process of collection ............................ 59,707 51.467 57,368 51,817 48,944 51,510 55,550 60,049 48,556 2 Demand deposits due from banks in the United States ........................................................................ 17,917 16,547 16.736 17,568 18,161 17,092 20,651 18,209 18,936 3 All other cash and due from depositary institutions 36,163 33.391 31.364 35,192 28,544 28,814 36,657 37,331 29,773 4 Total loans and securities ............................................. 529,849 520,247 518,302 511,954 516,124 517,988 516,536 520,429 517,020 Securities 5U.S. Treasury securities ............................................... 36,089 35,956 35.905 35,527 35,690 35,375 35,353 35,394 35,458 6 Trading account ......................................................... 4,876 5,109 5,415 5,188 5,245 5,344 5,105 5,169 5,124 7 Investment account, by maturity ............................ 31,214 30,847 30,490 30,339 30,446 30,032 30,248 30,225 30,334 8 One year or less ..................................................... 8,017 7,551 7,242 7,383 7,425 7,246 7,319 7,345 7,476 9 Over one through five years ................................ 18,596 18.715 18,629 18,328 18,323 18,134 18,172 18,224 18,203 10 Over five years ....................................................... 4,600 4,581 4,619 4,628 4,698 4,652 4,758 4,656 4,656 11 Other securities ............................................................. 72,025 72,646 72,604 72,680 72,692 73,212 72,784 72,804 72,872 12 Trading account ......................................................... 3,532 3,669 3,553 3,476 3,399 3,775 3,267 3,248 3,257 13 Investment account .................................................... 68,493 68.977 69,051 69,204 69,293 69,437 69,517 69,556 69,615 14 U.S. government agencies .................................... 15,851 15.813 15,855 15,869 15,857 15,890 15,901 15,912 15,848 15 States and political subdivision, by maturity .... 49,991 50.509 50,533 50,679 50,760 50,866 50,917 50,966 51,097 16 One year or less ................................................. 6,246 6,349 6,240 6,242 6,347 6,325 6,298 6,375 6,275 17 Over one year .................................................... 43,744 44,160 44,294 44,437 44,413 44,541 44,618 44,591 44,821 18 Other bonds, corporate stocks and securities ... 2,651 2,656 2,663 2,656 2,677 2,681 2,699 2,678 2,670 Loans 19 Federal funds sold1 ....................................................... 34,194 28,447 27,615 24,896 27,894 28,182 25,912 25,921 24,443 20 To commercial banks ................................................ 27,939 21,737 20,321 19,190 20,178 20,195 20,127 20,411 18,164 21 To nonbank brokers and dealers in securities ..... 4,698 4,928 5,157 4,276 5,286 5,504 4,310 4,037 4,265 22 To others ..................................................................... 1,557 1.781 2,136 1,430 2,430 2,482 1,475 1,473 2,014 23 Other loans, gross ......................................................... 399,827 395.575 394,556 391,285 392,327 393,709 395,030 398,912 396,867 24 Commercial and industrial ....................................... 159,321 157.832 157,189 156,815 157,001 158,091 159,317 159,803 158,912 25 Bankers’ acceptances and commercial paper .... 5,193 4.753 4.578 4,192 4,302 4,499 4,768 5,174 4,741 26 All other ................................................................. 154,128 153,078 152,612 152,623 152,699 153,592 154,549 154,629 154,171 27 U.S. addresses .................................................... 147,516 146,487 146,066 146,135 146,239 147,252 148,208 148,237 147,804 28 Non-U.S. addresses ........................................... 6,611 6,591 6,546 6,488 6,460 6,340 6,341 6,392 6,367 29 Real estate ....................................................................... 99,959 100,289 100.497 101,038 101,314 101,323 101,566 101,875 102,190 30 To individuals for personal expenditures ............... 73,215 73.494 73.171 73,342 73,481 73,338 73,244 73,199 73,308 To financial institutions 31 Commercial banks in the United States ............ 3,772 3,691 3.443 2,876 2,812 3,260 2,982 3,375 3,431 32 Banks in foreign countries ................................... 7,563 7,008 7,286 6,146 6,526 6,493 6,761 6,980 6,706 33 Sales finance, personal finance companies, etc . 9,452 8,788 8,991 8,572 8,628 8,639 8,718 9,574 9,587 34 Other financial institutions ................................... 17,107 16,854 16,582 16,230 16,135 16,128 16,210 16,250 16,017 35 To nonbank brokers and dealers in securities ..... 7,741 7,344 7,307 6,359 6,238 6,143 6,054 7,169 6,627 36 To others for purchasing and carrying securities2 . 2,534 2,507 2,525 2,507 2,499 2,481 2,479 2,504 2,461 37 To finance agricultural production ......................... 5,045 5,000 4,959 4,921 4,957 4,947 4,921 4,909 4,928 38 All other ..................................................................... 14,117 12,770 12,606 12,479 12,735 12,864 12,778 13,274 12,698 39 Less: Unearned income ................................................ 7,102 7,171 7.167 7,210 7,231 7,162 7,202 7,233 7,247 40 Loan loss reserve ............................................... 5,183 5.205 5,210 5,224 5,248 5,329 5,340 5,368 5,374 41 Other loans, net ............................................................. 387,541 383,198 382.179 378,850 379,848 381,218 382,487 386,310 384,246 42 Lease financing receivables ......................................... 7,967 8,079 8.082 8,104 8,102 8,136 8,148 8,252 8,192 43 All other assets ............................................................... 65,508 61,746 61.863 62,269 64,598 64,503 64,667 65,418 65,717 44 Total assets ..................................................................... 717,111 691,478 693,716 686,904 684,475 688,043 702,211 709,688 688,194 Deposits 45 Demand deposits ........................................................... 219,155 195,986 202.274 190,738 189,480 193,541 201,108 202,691 185,448 46 Mutual savings banks ................................................ 916 744 769 622 619 640 627 659 549 47 Individuals, partnerships, and corporations ......... 155,734 140,099 142,426 133,722 131,838 132,623 137,569 140,545 128,236 48 States and political subdivisions ............................. 5,942 5,105 5,025 4,941 5,280 5,182 4,714 5,052 4,662 49 U.S. government ........................................................ 863 963 1,270 964 774 1,101 1,383 1,324 1,809 50 Commercial banks in the United States ................ 35,975 30,429 32,800 32,356 31,655 34,361 38,153 36,330 32,060 51 Banks in foreign countries ....................................... 8,337 7,828 8,590 6,894 8,237 8,059 8,185 8,176 8,304 52 Foreign governments and official institutions ....... 1,777 1,937 2,175 2,115 2,211 1,944 1,919 1,890 1,779 53 Certified and officers’ checks ................................... 9,610 8,880 9.217 9,124 8,866 9,630 8,559 8,716 8,050 54 Time and savings deposits ............................................ 267,415 270,030 269,082 269,050 269,746 270,769 270,944 270,688 271,764 55 Savings ......................................................................... 74,604 74,733 73.845 73,478 72,866 73,307 72,952 72,822 72,318 56 Individuals and nonprofit organizations ............ 70,048 70,151 69,404 69,002 68,416 68,866 68,475 68,447 67,986 57 Partnerships and corporations operated for profit ................................................................ 3,773 3,784 3.702 3,726 3,724 3,693 3,693 3,649 3,632 58 Domestic governmental units ............................. 759 774 718 731 704 727 766 707 684 59 All other ................................................................. 24 23 21 18 22 20 18 18 15 60 Time ............................................................................. 192,812 195,297 195.237 195,572 196,880 197,463 197,992 197,866 199,446 61 Individuals, partnerships, and corporations ..... 159,958 161,959 162,253 162,526 163,861 164,136 164,617 164,730 166,125 62 States and political subdivisions ......................... 21,374 21,692 21,949 22,119 22,306 22,558 22,647 22,446 22,614 63 U.S. government .................................................... 468 477 446 426 423 425 428 410 409 64 Commercial banks in the United States ............ 5,163 5,295 5,354 5,506 5,429 5,480 5,441 5,435 5,538 65 Foreign governments, official institutions and banks ................................................................ 5,849 5,873 5,234 4,995 4,862 4,865 4,860 4,845 4,760 66 Federal funds purchased3 ............................................. 100,898 101,828 95,974 96,102 90,601 95,364 97,875 103,216 93,507 Other liabilities for borrowed money 67 Borrowings from Federal Reserve Banks ............. 1,545 842 1,290 445 299 21 2,831 476 3,064 68 Treasury tax-and-loan notes .................................... 6,926 1,670 4,381 8,213 9,916 5,136 5,166 5,898 4,918 69 All other liabilities for borrowed money ............... 14,678 14,300 13,822 14,175 15,131 15,409 15,999 15,978 16,244 70 Other liabilities and subordinated note and debentures ............................................................... 60,634 60,739 60,787 61,652 63,009 60,979 61,797 64,312 66,879 71 Total liabilities ................................................................ 671,252 645,395 647,610 640,376 638,183 641,220 655,721 663,260 641,824 72 Residual (total assets minus total liabilities)4 ........... 45,859 46,083 46,106 46,528 46,291 46,822 46,490 46,428 46,370 1. Includes securities purchased under agreements to resell. 4. This is not a measure of equity capital for use in capital adequacy analysis 2. Other than financial institutions and brokers and dealers. 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 $1 Billion or More on December 31, 1977 Assets and Liabilities Millions of dollars, Wednesday figures Account Jan. 2 Jan. 9 Jan. 16 Jan. 23 Jan. 30p Feb. 6p Feb. 13p Feb. 20p Feb. 27p 1 Cash items in process of collection .............................................. 56,419 49,126 54,585 49,508 46,840 49,355 53,312 57,075 46,248 2 Demand deposits due from banks in the United States .......... 17,018 15,731 15,901 16,774 17,350 16,297 19,810 17,269 18,248 3 All other cash and due from depositary institutions ................. 33,928 31,496 29,469 32,952 26,476 27,095 34,241 35,003 27,955 4 Total loans and securities ................................................................ 495,082 485,412 483,332 477,446 481,597 483,235 481,944 486,062 482,412 Securities 5 U.S. Treasury securities ................................................................. 33,628 33,477 33,423 33,049 33,216 32,883 32,841 32,860 32,910 6 Trading account ............................................................................ 4,846 5,061 5,380 5,140 5,206 5,296 5,050 5,110 5,053 7 Investment account, by maturity .............................................. 28,782 28,416 28,043 27,909 28,010 27,586 27,791 27,750 27,857 8 One year or less ...................................................................... 7,507 7,037 6,728 6,869 6,917 6,738 6,801 6,822 6,953 9 Over one through five years ................................................. 17,070 17,193 17,096 16,807 16,805 16,610 16,656 16,693 16,673 10 Over five years ......................................................................... 4,205 4,186 4,218 4,232 4,288 4,238 4,334 4,235 4,232 11 Other securities ................................................................................ 66,312 66,948 66,909 66,938 66,928 67,468 67,039 67,038 67,099 12 Trading account ............................................................................ 3,415 3,570 3,449 3,383 3,285 3,683 3,187 3,143 3,158 13 Investment account ..................................................................... 62,898 63,378 63,460 63,556 63,643 63,785 63,852 63,895 63,941 14 U.S.government agencies ...................................................... 14,786 14,738 14,780 14,783 14,777 14.796 14,797 14.809 14,738 15 States and political subdivision, by maturity ...................... 45,618 46,141 46,175 46,276 46,348 46,466 46,514 46,566 46,693 16 One year or less .................................................................. 5,659 5,771 5,683 5,679 5,784 5,766 5,743 5,816 5,718 17 Over one year ...................................................................... 39,960 40,370 40,492 40,596 40,564 40,701 40,771 40,750 40,974 18 Other bonds, corporate stocks and securities .................... 2,493 2,498 2,504 2,497 2,518 2,522 2,540 2.519 2,510 Loans 19 Federal funds sold1 ......................................................................... 31,401 25,498 24,551 22,297 25,320 25,349 23,370 23,613 21,885 20 To commercial banks ................................................................. 25,562 19,261 17,856 17,206 18,213 18.090 18,195 18,555 16,057 21 To nonbank brokers and dealers in securities ........................ 4,339 4,515 4,615 3,717 4,726 4.833 3,756 3,631 3,860 22 To others ...................................................................................... 1,500 1,723 2,079 1,374 2,381 2.426 1,419 1,428 1,968 23 Other loans, gross ............................................................................ 375,110 370,944 369,901 366,663 367,679 369,094 370,299 374,213 372,202 24 Commercial and industrial ......................................................... 151,403 149,934 149,260 148,883 149,060 150,104 151,326 151,766 150,856 25 Bankers’ acceptances and commercial paper ..................... 5,115 4,674 4,497 4,106 4,211 4,406 4,676 5,075 4,649 26 All other .................................................................................... 146,288 145,260 144,762 144,777 144,849 145,698 146,650 146.691 146,207 27 U.S. addressees .................................................................... 139,721 138,715 138,262 138,336 138,435 139,403 140,362 140,348 139,888 28 Non-U.S. addressees .......................................................... 6,567 6,544 6,500 6,442 6.414 6,295 6,288 6,343 6,319 29 Real estate ................................................................................... 93,761 94,120 94,310 94,835 95,073 95,113 95,350 95,676 96,001 30 To individuals for personal expenditures ................................ 64,656 64,912 64,588 64.772 64,868 64,730 64,663 64,619 64,740 To financial institutions 31 Commercial banks in the United States ............................. 3,694 3,618 3,371 2.781 2,742 3,186 2,879 3,295 3,355 32 Banks in foreign countries ..................................................... 7,485 6,928 7,206 6,072 6,443 6,427 6,686 6,910 6,640 33 Sales finance, personal finance companies, etc ................. 9,259 8,601 8,801 8,387 8,461 8,464 8,541 9,391 9,401 34 Other financial institutions .................................................... 16,652 16,392 16,142 15,797 15,692 15.691 15,756 15.808 15,585 35 To nonbank brokers and dealers in securities ........................ 7,609 7,217 7,209 6,282 6,159 6.074 5,974 7,096 6,533 36 To others for purchasing and carrying securities2 ................. 2,301 2,276 2,295 2,281 2,270 2,257 2,254 2,288 2,247 37 To finance agricultural production .......................................... 4,882 4,835 4,792 4,759 4,796 4.790 4.764 4,753 4,772 38 All other ........................................................................................ 13,407 12,111 11,928 11,812 12.113 12.257 12,105 12,610 12,071 39 Less: Unearned income ................................................................. 6,487 6,553 6,545 6,580 6,604 6,539 6,574 6,605 6,620 40 Loan loss reserve ................................................................. 4,883 4,903 4,907 4,921 4,943 5,020 5,032 5,058 5,065 41 Other loans, net .............................................................................. 363,740 359,488 358,449 355,162 356,132 357.535 358,693 362,550 360,517 42 Lease financing receivables ............................................................ 7,757 7,867 7,872 7,889 7,887 7.920 7,932 8,034 7,974 43 All other assets ................................................................................ 63,747 60,035 60,127 60,526 62.765 62,591 62,736 63,557 63,785 44 Total assets ........................................................................................ 673,952 649,668 651,287 645,095 642,914 646,493 659,974 667,000 646,622 Deposits 45 Demand deposits ............................................................................. 205,365 183,775 189.629 178,943 178,015 182,115 189,285 190,501 173,913 46 Mutual savings banks ................................................................. 884 713 736 599 592 613 600 636 527 47 Individuals, partnerships, and corporations ............................ 144,815 130,347 132,467 124,457 122.774 123.564 128,222 130,922 119,170 48 States and political subdivisions ................................................ 5,225 4,536 4,383 4,226 4.638 4.660 4,071 4,520 3,953 49 U.S. government ......................................................................... 784 841 1,077 734 688 982 1.256 1,183 1,652 50 Commercial banks in the United States ................................. 34,375 29,072 31,384 31,126 30.367 33.025 36,844 34.810 30,836 51 Banks in foreign countries ......................................................... 8,268 7,760 8,539 6,834 8.182 7.996 8,106 8.118 8,226 52 Foreign governments and official institutions ........................ 1,776 1.936 2,175 2,114 2.211 1.943 1,918 1.886 1,772 53 Certified and officer’s checks .................................................... 9,238 8,569 8,866 8,852 8.564 9,333 8,268 8.425 7,776 54 Time and savings deposits ............................................................. 248,577 250,967 249,863 249,777 250.454 251.365 251,555 251,325 252,422 55 Savings .......................................................................................... 69,020 69,131 68,282 67,964 67.406 67,822 67,474 67,348 66,883 56 Individuals and nonprofit organization ................................ 64,796 64,896 64,177 63.826 63.295 63,721 63,348 63.315 62,881 57 Partnerships and corporations operated for profit .................................................................................. 3,492 3,501 3,427 3,450 3,445 3,415 3.418 3,379 3,364 58 Domestic governmental units ................................................ 709 710 657 670 644 666 691 637 623 59 All other .................................................................................... 24 23 21 18 21 20 18 18 15 60 Time .............................................................................................. 179,556 181,836 181,581 181,813 183,048 183.543 184.081 183.977 185,539 61 Individuals, partnerships, and corporations ........................ 148,942 150,774 150,887 151,065 152,341 152,549 153.020 153.135 154,498 62 States and political subdivisions ............................................ 19,430 19,712 19,952 20,113 20.281 20,508 20,628 20.446 20,619 63 U.S. government ..................................................................... 458 469 438 418 415 417 410 393 396 64 Commercial banks in the United States ............................. 4,881 5,012 5,074 5,226 5.159 5,204 5,163 5,158 5,266 65 Foreign governments, official institutions, and banks ................................................................................. 5,845 5,869 5,230 4,991 4.852 4,865 4,860 4,845 4,760 66 Federal funds purchased3 .............................................................. 95,692 96,221 90,552 90,729 85,508 89,930 92,327 97,559 88,216 Other liabilities for borrowed money 67 Borrowings from Federal Reserve Banks .............................. 1,487 756 1,196 417 286 21 2,651 345 2,840 68 Treasury tax-and-loan notes ...................................................... 6,398 1,538 4,046 7,633 9,189 4.796 4,793 5,469 4,548 69 All other liabilities for borrowed money ................................ 14,349 13,948 13,471 13,748 14,583 14.938 15,517 15.647 15,915 70 Other liabilities and subordinated note and debentures ............................................................................. 59,285 59,447 59,489 60,401 61,648 59,594 60,447 62,922 65,490 71 Total liabilities ................................................................................. 631,153 606,653 608,245 601,648 599,685 602,759 616,575 623,768 603,345 72 Residual (total assets minus total liabilities)4 ............................ 42,798 43,015 43,041 43,447 43,230 43,733 43,399 43,231 43,277 1. Includes securities purchased under agreements to resell. 4. This is not a measure of equity capital for use in capital adequacy analysis 2. Other than financial institutions and brokers and dealers. 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

A22 Domestic Financial Statistics □ March 1980 1.29 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1980 Account Jan. 2 Jan. 9 Jan. 16 Jan. 23 Jan. 3Op Feb. 6p Feb. 13p Feb. 20P Feb. Up 1 Cash items in process of collection .............................................. 19,333 18,931 21,372 20,354 19,002 19,249 22,831 19,693 17,180 2 Demand deposits due from banks in the United States ........... 11,359 10,524 11,021 12,160 12,022 11,402 14,699 11,745 13,401 3 All other cash and due from depositary institutions................. 10,296 7,895 6,985 8,693 5,653 7,209 10,084 11,143 6,692 4 Total loans and securities1 ............................................................. 117,132 112,809 112,951 108,416 112,296 111,503 111,307 113,733 112,243 Securities 6 7 Investment account, by maturity .............................................. 6,255 5,951 5,881 5,695 5,775 5,804 5,880 5,857 5,805 8 One year or less ...................................................................... 1,259 1,019 1,014 1,032 1,034 1,194 1,225 1,288 1,227 9 Over one through five years ................................................. 4,385 4,319 4,211 4,004 4,051 3,935 3,980 3,904 3,913 10 Over five years ......................................................................... 611 613 656 659 690 674 674 664 664 11 P 13 Investment account ..................................................................... 12,347 12,347 12,308 12,245 12,243 12,294 12,324 12,321 12,387 14 U.S. government agencies ..................................................... 2,532 2,518 2,479 2,426 2,425 2,417 2,412 2,416 2,409 15 States and political subdivision, by maturity....................... 9,222 9,226 9,224 9,213 9,213 9,269 9,303 9,2% 9,376 16 One year or less .................................................................. 1,498 1,477 1,450 1,454 1,505 1,542 1,544 1,588 1,492 17 Over one year ...................................................................... 7,725 7,750 7,774 7,759 7,708 7,727 7,759 7,707 7,883 18 Other bonds, corporate stocks and securities .................... 592 603 605 606 605 608 608 610 603 Loans 19 Federal funds sold3 ......................................................................... 9,199 7,296 7,644 6,072 9,266 7,755 7,033 7,526 7,551 20 To commercial banks ................................................................. 7,470 5,446 5,490 4,521 6,552 5,360 5,381 5,821 5,481 21 To nonbank brokers and dealers in securities ........................ 1,233 1,237 1,480 1,148 1,338 1,402 1,231 1,201 1,193 22 To others ...................................................................................... 496 612 673 402 1,375 993 421 503 877 23 Other loans, gross ............................................................................ 91,915 89,813 89,724 87,008 87,634 88,291 88,727 90,712 89,176 24 Commercial and industrial ......................................................... 47,977 47,505 47,264 46,886 46,996 47,779 48,371 48,239 47,306 25 Bankers’ acceptances and commercial paper ..................... 1,897 1,885 1,716 1,364 1,520 1,759 2,016 1,814 1,626 26 All other .................................................................................... 46,080 45,621 45,547 45,522 45,476 46,020 46,355 46,424 45,680 27 U.S. addressees .................................................................... 43,854 43,385 43,337 43,325 43,260 43,830 44,195 44,246 43,516 28 Non-U.S. addressees .......................................................... 2,226 2,235 2,210 2,197 2,216 2,190 2,160 2,179 2,164 29 Real estate .................................................................................... 12,321 12,298 12,343 12,386 12,450 12,380 12,345 12,452 12,515 30 To individuals for personal expenditures ................................ 8,496 8,554 8.562 8,559 8,565 8,577 8,575 8,617 8,644 To financial institutions 31 Commercial banks in the United States ............................. 1,465 1,463 1.443 1,070 974 1,184 950 1,019 1,203 32 Banks in foreign countries ..................................................... 3,590 3,304 3.511 2,618 2,820 2,842 3,241 3,317 3,131 33 Sales finance, personal finance companies, etc................... 3,920 3,528 3.682 3,456 3,411 3,426 3,458 3,925 3,980 34 Other financial institutions .................................................... 5,331 5,186 5,052 4,972 5,026 4,886 4,900 5,038 5,011 35 To nonbank brokers and dealers in securities........................ 4,626 4,300 4,220 3,566 3,451 3,226 3,128 3,978 3,658 36 To others for purchasing and carrying securities4 ................. 422 425 432 438 440 449 455 474 471 37 To finance agricultural production .......................................... 282 262 267 250 268 280 291 307 312 38 All other ....................................................................................... 3,485 2,987 2,947 2.807 3,231 3,261 3,014 3,346 2,946 39 Less: Unearned income ................................................................. 975 996 1,002 999 1,007 1,000 1,011 1,027 1,020 40 Loan loss reserve ................................................................. 1,609 1,601 1,603 1,605 1,616 1,641 1,646 1,656 1,657 41 Other loans, net .............................................................................. 89,331 87,216 87,118 84,404 85,012 85,650 86,070 88,029 86,500 42 Lease financing receivables ............................................................ 1,549 1,565 1,570 1,573 1,555 1,564 1,562 1,577 1,580 43 All other assets5 .............................................................................. 30,546 27,919 27,512 28,019 29,629 30,024 30,116 30,113 29,494 44 Total assets ....................................................................................... 190,215 179,642 181,411 179,215 180,157 180,952 190,600 188,005 180,590 Deposits 45 Demand deposits ............................................................................. 69,403 61,648 66,198 63,836 63,045 63,238 71,828 66,204 61,063 46 Mutual savings banks ................................................................. 519 393 409 322 280 312 337 314 249 47 Individuals, partnerships, and corporations ............................ 37,201 32,721 34,152 32,139 31,491 31,499 34,538 33,686 29,544 48 States and political subdivisions ............................................... 483 605 557 460 494 545 462 530 510 49 U.S. government ......................................................................... 96 164 242 110 90 155 464 189 416 50 Commercial banks in the United States ................................. 19,500 16,619 18,436 19,437 18,512 18,520 24,794 19,883 19,236 51 Banks in foreign countries ......................................................... 6,321 5,953 6.662 5,154 6,389 6,129 6,241 6,143 6,268 52 Foreign governments and official institutions ........................ 932 1,085 1,304 1,331 1,414 1,144 1,122 1,066 1,004 53 Certified and officers’ checks ................................................... 4,351 4,108 4,436 4,885 4,374 4,934 3,871 4,394 3,836 54 Time and savings deposits ............................................................. 44,891 45,371 44,962 44,788 45,280 45,382 45,490 45,289 45,466 55 Savings .......................................................................................... 9,623 9,682 9,589 9,472 9,380 9,448 9,410 9,389 9,301 56 Individuals and nonprofit organizations .............................. 9,121 9,182 9,104 8,990 8,902 8,971 8,930 8,927 8,843 57 Partnerships and corporations operated for profit ............ 334 336 329 327 324 326 324 324 319 58 Domestic governmental units ................................................ 156 150 144 145 141 140 148 129 133 59 12 13 11 10 ' 13 12 9 9 6 60 35,269 35,689 35,373 35,316 35,899 35,934 36,080 35,900 36,164 61 Individuals, partnerships, and corporations ........................ 28,816 29,234 29,455 29,466 30,104 30,035 30,125 29,939 30,265 62 States and political subdivisions ............................................ 1,439 1,456 1,501 1,492 1,536 1,588 1,636 1,665 1,682 63 U.S. government ..................................................................... 45 54 53 51 58 57 58 60 60 64 Commercial banks in the United States ............................. 1,250 1,249 1,263 1,393 1,407 1,434 1,425 1,433 1,440 65 Foreign governments, official institutions, and banks ....... 3,718 3,697 3,100 2,914 2,794 2,820 2,836 2,802 2,718 66 Federal funds purchased6 .............................................................. 32,043 29,878 26,074 25,564 25,182 26,392 26,702 28,548 25,385 Other liabilities for borrowed money 67 Borrowings from Federal Reserve Banks ............ 229 250 570 1,201 68 Treasury tax-and-loan notes ...................................................... 1,602 330 912 1,913 2,216 1,293 1,020 1,294 1,145 69 All other liabilities for borrowed money ................................ 6,408 6,346 6,094 6,452 7,138 7,513 8,080 8,259 8,026 70 Other liabilities and subordinated note and debentures.......... 21,908 21,868 22,847 22,592 23,123 22,932 22,760 24,279 24,153 71 Total liabilities ................................................................................. 176,255 165,671 167,338 165,146 165,984 166,750 176,451 173,873 166,439 72 Residual (total assets minus total liabilities)7 ........................... 13,960 13,972 14,073 14,069 14,172 14,202 14,149 14,132 14,152 1. Excludes trading account securities. 5. Includes trading account securities. 2. Not available due to confidentiality. 6. Includes securities sold under agreements to repurchase. 3. Includes securities purchased under agreements to resell. 7. This is not a measure of equity capital for use in capital adequacy analysis 4. Other than financial institutions and brokers and dealers. 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 Category Jan. 2 Jan. 9 Jan. 16 Jan. 23 Jan. 30 Feb. 6p Feb. 13p Feb. 20P Feb. TIP Banks with Assets of $750 Million or More 1 Total loans (gross) and investments adjusted1 .............................. 510,424 507,196 506,916 502,322 505,614 507,023 505,971 509,244 508,046 2 Total loans (gross) adjusted1 ................................................................ 402,310 398,594 398,407 394,116 397,231 398,435 397,833 401,046 399,715 3 Demand deposits adjusted 2 ................................................................. 122,610 113,127 110,836 105,601 108,107 106,568 106,022 104,989 103,022 4 Time deposits in accounts of $100,000 or more ............................ 128,367 129,628 129,406 129,076 130,097 130,290 130,400 129,911 131,149 5 Negotiable CDs .................................................................................... 91,498 92,266 92,448 91,864 92,639 92,743 92,534 92,000 92,976 6 Other time deposits ............................................................................. 36,869 37,363 36,958 37,211 37,458 37,546 37,866 37,911 38,172 7 Loans sold outright to affiliates3 ........................................................ 2,749 2,646 2,662 2,612 2,656 2,656 2,508 2,539 2,634 8 Commercial and industrial ................................................................ 1,819 1,711 1,728 1,705 1,750 1,805 1,651 1,668 1,706 9 Other ........................................................................................................ 930 934 934 907 906 851 857 871 928 Banks with Assets of $1 Billion or More 10 Total loans (gross) and investments adjusted1 ............................. 477,196 473,989 473,557 468,961 472,188 473,518 472,475 475,874 474,685 11 Total loans (gross) adjusted1 ................................................................ 377,255 373,564 373,224 368,974 372,044 373,167 372,595 375,976 374,676 12 Demand deposits adjusted2 ................................................................... 113,786 104,736 102,582 97,576 100,121 98,753 97,873 97,433 95,177 13 Time deposits in accounts of $100,000 or more ............................ 120,267 121,416 121,032 120,650 121,609 121,745 121,870 121,483 122,678 14 Negotiable CDs .................................................................................... 85,403 86,078 86,134 85,502 86,231 86,273 86,108 85,673 86,596 15 Other time deposits ............................................................................. 34,864 35,338 34,898 35,148 35,377 35,472 35,762 35,810 36,081 16 Loans sold outright to affiliates3 ........................................................ 2,696 2,597 2,614 2,562 2,606 2,607 2,464 2,495 2,589 17 Commercial and industrial ................................................................ 1,796 1,687 1,704 1,674 1,719 1,774 1,625 1,642 1,679 18 Other ........................................................................................................ 901 910 909 888 887 833 839 853 910 Banks in New York City 19 Total loans (gross) and investments adjusted1-4 ........................... 110,781 108,497 108,623 105,429 107,391 107,600 107,633 109,576 108,236 20 Total loans (gross) adjusted1 ................................................................ 92,179 90,200 90,434 87,489 89,373 89,502 89,430 91,397 90,044 21 Demand deposits adjusted2 ................................................................... 30,474 25,933 26,148 23,936 25,441 25,315 23,739 26,439 24,231 22 Time deposits in accounts of $100,000 or more ............................ 28,046 28,435 28,009 27,918 28,444 28,394 28,435 28,193 28,410 23 Negotiable CDs ..................................................................................... 19,576 19,838 20,051 19,864 20,316 20,243 20,216 19,885 20,072 24 Other time deposits ............................................................................. 8,470 8,598 7,958 8,054 8,128 8,151 8,219 8,308 8,338 1. Exclusive of loans and federal funds transactions with domestic commercial 3. Loans sold are those sold outright to a bank’s own foreign branches, non­ banks. consolidated nonbank affiliates of the bank, the bank’s holding company (if not 2. All demand deposits except U.S. government and domestic banks less cash a bank) and nonconsolidated nonbank subsidiaries of the holding company. items in process of collection. 4. Excludes trading account securities. NOTES TO TABLE 1.311. 1. Commercial banks are those in the 50 states and the District of Columbia and averages of current and previous month-end data for foreign-related institu­ with national or state charters plus U.S. branches, agencies, and New York in­ tions. vestment company subsidiaries of foreign banks and Edge Act corporations. 4. Loans initially booked by the bank and later sold to affiliates that are still 2. Includes seasonally adjusted federal funds, RPs, and other borrowings from held by affiliates. Averages of Wednesday data. nonbanks and not seasonally adjusted net Eurodollars and loans to affiliates. 5. As of Dec. 1, 1979, loans sold to affiliates were reduced $800 million due to Includes averages of Wednesday data for domestic chartered banks and averages corrections of two New York City banks. of current and previous month-end data for foreign-related institutions. 6. Includes averages of daily figures for member banks and quarterly call report 3. Other borrowings are borrowings on any instrument, such as a promissory figures for nonmember banks. note or due bill, given for the purpose of borrowing money for the banking business. 7. Includes averages of current and previous month-end data. This includes borrowings from Federal Reserve Banks and from foreign banks, 8. Based on daily average data reported by 46 large banks. term federal funds, overdrawn due from bank balances, loan RPs, and partici­ 9. Includes U.S. Treasury demand deposits and Treasury tax and loan notes at pations in pooled loans. Includes averages of daily figures for member banks commercial banks. Averages of daily data. 10. Averages of Wednesday figures. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Financial Statistics □ March 1980 1.31 LARGE WEEKLY REPORTING COMMERCIAL BANKS Domestic Classified Commercial and Industrial Loans Millions of Dollars Outstanding Net change during Adjust­ Industry classification 1979 1980 1979 1980 ment bank2 Oct. 31 Nov. 28 Dec. 26 Jan. 30 Feb. 27 Q3 Q4 Dec. Jan. Feb. 1 Durable goods manufacturing ............... 23,472 22,856 23,593 23,692 24,195 2,689 1 737 ii 503 ii 2 Nondurable goods manufacturing ......... 19,121 18,379 19,205 19,097 19,201 1,503 298 826 104 3 Food, liquor, and tobacco ................. 5,024 4,968 5,220 4,938 4,882 535 314 252 -56 4 Textiles, apparel, and leather ............ 4,849 4,608 4,342 4,137 4,331 328 -686 -266 194 5 Petroleum refining ............................... 2,182 1,873 2,677 3,174 3,027 6 705 805 -147 6 Chemicals and rubber ......................... 3,810 3,749 3,836 3,701 3,712 179 209 87 11 7 Other nondurable goods .................... 3,255 3,182 3,129 3,147 3,249 456 -243 -53 102 8 Mining (including crude petroleum and natural gas) ............................... 11,697 11,502 11,998 12,311 12,448 673 317 495 137 9 Trade ......................................................... 25,410 25,077 24,885 24,398 25,156 685 230 -192 n.a. 758 ni.a. 10 Commodity dealers ............................. 2,191 1,861 2,134 2,136 2,172 -58 275 273 37 11 Other wholesale ................................... 12,170 11,902 11,992 11,692 11,923 199 52 90 231 12 Retail ..................................................... 11,049 11,314 10,759 10,570 11,061 544 -96 -555 491 13 Transportation, communication, and other public utilities ................ 16.885 17,212 17,830 18,013 17,869 1,434 1,070 618 -143 14 Transportation ..................................... 7,065 7,075 7,133 7,170 7,229 380 300 58 59 15 Communication .................................... 2,404 2,475 2,522 2,612 2,627 274 197 47 15 16 Other public utilities ........................... 7,416 7,662 8,176 8,232 8,014 779 574 513 -218 17 Construction ............................................. 5,687 5,703 5,759 5,742 5,726 309 -133 56 -16 18 Services ..................................................... 18,782 18,924 19,399 19,806 19,909 1,108 1,040 475 103 19 All other1 ................................................... 14,494 14,505 14,873r 15,377 15,384 -1,335 348r 368' 6 1r 20 Total domestic loans ................................ 135,547 134,158 137,542' 138,436 139,888 7,066 3,169' 3,384' 632 1,452 262 21 Memo: Term loans (original maturity more than 1 year) included in do­ mestic loans) ..................................... 69,010 69,731 72,439' 74,738 74,631 3,826 4,066r 2,708' n.a. -107 n.a. 1. Includes commercial and industrial loans at a few banks with assets of $1 Note. New series. The 134 large weekly reporting commercial banks with dobillion or more that do not classify their loans. mestic assets of $1 billion or more as of December 31, 1977 are included in this 2. Data for adjustment bank for individual categories are not yet available. series. The revised series is on a last-Wednesday-of-the-month basis. Previously published data are incorrect. Revised data will be published when available. 1.311 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS1 Monthly averages, billions of dollars December outstanding Outstanding in 1979 and 1980 Source 1976 1977 1978 June July Aug. Sept. Oct. Nov. Dec. Jan. Total nondeposit funds 1 Seasonally adjusted2 .................................................................... 54.7' 61.8 85.4' 115.3 118.8 129.7 131.0 129.8 125.6 119.9 123.0 2 Not seasonally adjusted ............................................................. 53.3 60.4 84.4' 115.1 121.5 131.3 131.2 130.5 128.4 118.5 121.6 Federal funds, RPs, and other borrowings from nonbanks3 3 Seasonally adjusted3 .................................................................... 47.1 58.4 74.8 84.5 86.6 92.9 91.3 91.9 85.9 87.9 92.0 4 Not seasonally adjusted ............................................................. 45.8 57.0 73.8 84.3 89.3 94.5 91.5 92.6 88.6 86.5 90.6 5 Net Eurodollar borrowings, not seasonally adjusted ................ 3.7 -1.3 6.8 27.1 28.4 33.1 35.9 34.3 36.2 29.2 28.4 6 Loans sold to affiliates, not seasonally adjusted4-5 .................... 3.8 4.8 3.8 3.8 3.7 3.7 3.7 3.6 3.6 2.8 2.7 Memo 7 Domestic chartered banks net positions with own foreign branches, not seasonally adjusted6 ...................................... -6.0 -12.5 -10.2 5.4 5.6 8.2 10.5 9.1 11.4 6.4 5.9 8 Gross due from balances ............................................................ 12.8 21.1 24.9 20.1 20.3 19.5 21.7 22.1 21.7 22.9 23.0 9 Gross due to balances ................................................................. 6.8 8.6 14.7 25.5 26.0 27.7 32.2 31.2 33.0 29.3 28.9 10 Foreign-related institutions net positions with directly related institutions, not seasonally adjusted7 ................................... 9.7 11.1 17.0 21.7 22.8 24.9 25.4 25.3 24.8 22.8 22.5 11 Gross due from balances ............................................................ 8.3 10.3 14.2 17.6 17.6 16.2 18.1 20.5 21.9 24.2 26.1 12 Gross due to balances................................................................. 18.1 21.4 31.2 39.3 40.4 41.0 43.5 45.7 46.8 47.0 48.6 13 Security RP borrowings, seasonally adjusted8 ............................ 27.9 36.3 43.8 47.3 45.1 43.0 45.0 46.9 41.8 46.7 48.4 14 Not seasonally adjusted ............................................................. 27.0 35.1 42.4 46.7 44.7 44.7 46.8 46.4 43.9 45.2 45.2 15 U.S. Treasury demand balances, seasonally adjusted9 ............. 3.9 4.4 8.6 9.2 15.3 12.4 11.1 12.9 5.7 7.9 12.5 16 Not seasonally adjusted ............................................................. 4.4 5.1 10.2 10.8 13.2 9.8 12.4 11.7 5.5 9.5 12.4 17 Time deposits, $100,000 or more, seasonally adjusted105 ' .... 137.7 162.0 213.0 210.2 213.0 216.4 223.2 228.4 231.3 229.7 230.9 18 Not seasonally adjusted' ............................................................ 140.0 165.4 217.9 208.3 209.3 214.2 221.2 227.9 232.6 235.0 234.8 For notes see bottom of page A23. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Deposits and Commercial Paper A25 1.32 GROSS DEMAND DEPOSITS of Individuals, Partnerships, and Corporations' Billions of dollars, estimated daily-average balances Commercial banks Type of holder 1978 19792 1975 1976 1977 Dec. Dec. Dec. June Sept. Dec. Mar. June Sept. Dec. 1 AH holders—Individuals, partnerships, and corporations .......................................................... 236.9 250.1 274.4 271.2 278.8 294.6 270.4 285.6 292.4 302.2 2 Financial business ........................................................ 20.1 22.3 25.0 25.7 25.9 27.8 24.4 25.4 26.7 27.1 3 Nonfinancial business ................................................. 125.1 130.2 142.9 137.7 142.5 152.7 135.9 145.1 148.8 157.7 4 Consumer ...................................................................... 78.0 82.6 91.0 92.9 95.0 97.4 93.9 98.6 99.2 99.2 5 Foreign .......................................................................... 2.4 2.7 2.5 2.4 2.5 2.7 2.7 2.8 2.8 3.1f 6 Other ............................................................................. 11.3 12.4 12.9 12.4 13.1 14.1 13.5 13.7 14.9 15.1 Weekly reporting banks 1978 19793 1975 1976 1977 Dec. Dec. Dec. Oct. Nov. Dec. Mar. June Sept. Dec. 7 All holders—Individuals, partnerships, and corporations .......................................................... 124.4 128.5 139.1 141.3 142.7 147.0 121.9 128.8 132.7 139.3 8 Financial business ........................................................ 15.6 17.5 18.5 19.1 19.3 19.8 16.9 18.4 19.7 20.1 9 Nonfinancial business ................................................. 69.9 69.7 76.3 75.0 75.7 79.0 64.6 68.1 69.1 74.1 10 Consumer ...................................................................... 29.9 31.7 34.6 37.5 37.7 38.2 31.1 33.0 33.7 34.3 11 Foreign .......................................................................... 2.3 2.6 2.4 2.5 2.5 2.5 2.6 2.7 2.8 3.0 12 Other ............................................................................. 6.6 7.1 7.4 7.2 7.5 7.5 6.7 6.6 7.4 7.8 1. Figures include cash items in process of collection. Estimates of gross deposits 3. After the end of 1978 the large weekly reporting bank panel was changed to are based on reports supplied by a sample of commercial banks. Types of depositors 170 large commercial banks, each of which had total assets in domestic offices in each category are described in the June 1971 Bulletin, p. 466. exceeding $750 million as of Dec. 31, 1977. See “Announcements,” p. 408 in the 2. Beginning with the March 1979 survey, the demand deposit ownership survey May 1978 Bulletin. Beginning in March 1979, demand deposit ownership esti­ sample was reduced to 232 banks from 349 banks, and the estimation procedure mates for these large banks are constructed quarterly on the basis of 97 sample was modified slightly. To aid in comparing estimates based on the old and new banks and are not comparable with earlier data. The following estimates in billions reporting sample, the following estimates in billions of dollars for December 1978 of dollars for December 1978 have been constructed for the new large-bank panel; have been constructed using the new smaller sample; financial business, 27.0: financial business, 18.2; nonfinancial business. 67.2; consumer. 32.8; foreign, 2.5; nonfinancial business, 146.9; consumer, 98.3; foreign, 2.8; and other, 15.1 other, 6.8. 1.33 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period 1979' 1980 Instrument 1976 1977 1978 Dec/ Dec/ Dec/ July Aug. Sept. Oct.1 Nov. Dec. Jan. Commercial paper (seasonally adjusted) 1 All issuers ..................................................................... 53,010 65.036 83,420 102,300 104,424 107,249 107,116 109,395 112,803 116,718 Financial companies2 Dealer-placed, paper3 2 Total .......................................................................... 7,263 8,888 12,300 16,964 17,330 18,209 16.133 16,765 17,579 17,768 3 Bank-related ............................................................. 1,900 2,132 3,521 3,951 4,062 4,485 3,052 2,958 2,784 3,034 Directly placed paper4 4 Total .......................................................................... 32,622 40,612 51,755 60,450 60,955 61,505 63,338 64,640 64,931 66,342 5 Bank-related ............................................................. 5,959 7,102 12,314 14,722 15,817 15,930 18,024 18,339 17,598 19,221 6 Nonfinancial companies5 ............................................ 13,125 15,536 19,365 24,886 26,139 27,535 27,645 27,990 30,293 32,608 Bankers dollar acceptances (not seasonably adjusted) 7 Total .............................................................................. 22,523 25,450 33,700 39,040 42,354 42,147 43,486 43,599 45,321 47,780 Holder 8 Accepting banks .......................................................... 10,442 10,434 8,579 8,288 7,994 8,119 7,785 8,297 9,865' 8,578 9 Own bills .................................................................. 8,769 8,915 7,653 7,243 7,138 7,288 7,121 7,514 8,327' 7,692 10 Bills bought .............................................................. 1,673 1,519 927 1,045 856 831 664 782 1,538 886 Federal Reserve Banks 11 Own account ............................................................. 991 954 1 1,159 475 1,053 317 269 704 0 12 Foreign correspondents ................................................... 375 362 664 952 957 1,470 1,498 1,465 1,382 1,431 13 Others ........................................................................................... 10,715 13,700 24,456 28,641 32,928 31,505 33,886 33,569 33,368 37,771 Basis 14. Imports into United States ........................................ 4,992 6,378 8,574 9,499 9,847 9,724 10,129 10,354 10,270 11,217 15 Exports from United States ...................................... 4,818 5,863 7,586 8,784 9,578 9,354 9,519 9,271 9,640 10,248 16 All other ...................................................................................... 12,713 13,209 17,540 20,756 22,929 23,069 23,838 23,974 25,411 26,315 1. A change in reporting instructions results in offsetting shifts in the dealer- 3. Includes all financial company paper sold by dealers in the open market. placed and directly placed financial company paper in October. 4. As reported by financial companies that place their paper directly with inves­ 2. Institutions engaged primarily in activities such as, but not limited to, com­ tors. mercial, savings, and mortgage banking; sales, personal and mortgage financing; 5. Includes public utilities and firms engaged primarily in activities, such as factoring, finance leasing, and other business lending; insurance underwriting; and communications, construction, manufacturing, mining, wholesale and retail trade, Digitized foort hFeRr iAnvSesEtmRe nt activities. transportation and reserves. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Financial Statistics □ March 1980 1.34 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans Percent per annum Effective date Rate Effective Date Rate Month Average Month Average rate rate 1979—Aug. 16 ..................... 12 1979—Nov. 1 ................. \5Va 1979—Jan .......................... 11.75 1979---JUly 11.54 28 ..................... 12 Va 9 ..................... 15 Vi Feb........................... 11.75 A„ uub6................................ 11.91 Sept. 7 ..................... 123/4 16 ..................... 153/4 Mar........................... 11.75 Sept 12.90 14 ..................... 13 30 ..................... \5Vi Apr........................... 11.75 Oct ....... 14.39 21 ..................... 13V4 Dec. 7 ..................... \5Va May ........................ 11.75 Nov........................... 15.55 28 ..................... l3Vi Feb. 19 ..................... 153/4 June ........................ 11.65 Dec........................... 15.30 Oct. 9 ..................... \4V2 22 ..................... 16V4-16^2 1980—Jan............................ 15.25 23 ..................... 15 29 ..................... 163/4 Feb............................ 15.63 1.35 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, November 5-10, 1979 Size of loan (in thousands of dollars) All sizes 1,000 1-24 25-49 50-99 100-499 50-999 and over Short-Term Commercial and Industrial Loans 1 Amount of loans (thousands of dollars) ..................... 8,107,372 696,629 369,217 431,935 1,724,393 685,208 4,199,992 2 Number of loans .............................................................. 128,317 97,398 11,174 6,984 10,369 1,062 1,330 3 Weighted average maturity (months) .......................... 3.0 3.6 3.3 3.3 3.5 3.9 2.5 4 Weighted average interest rate (percent per annum) 15.81 14.77 14.92 15.93 15.40 16.01 16.19 5 Interquartile range1 ..................................................... 15.25-16.82 12.68-16.99 13.21-16.83 14.58-17.48 13.65-16.91 15.25-16.86 15.31-16.70 Percentage of amount of loans 6 With floating rate ............................................................ 52.6 17.1 21.7 44.7 36.4 66.6 66.3 7 Made under commitment .............................................. 49.4 19.6 26.1 38.4 43.6 61.1 58.0 Long-Term Commercial and Industrial Loans 8 Amount of loans (thousands of dollars) ..................... 1,646,325 325,742 204,389 137,391 978,803 9 Number of loans ............................................................... 28,827 27,356 1.020 206 244 10 Weighted average maturity (months) .......................... 48.5 35.1 39.0 35.7 56.7 11 Weighted average interest rate (percent per annum) 15.55 14.76 15.66 15.43 15.81 12 Interquartile range1 ..................................................... 15.25-16.50 13.00-16.14 15.00-17.23 15.25-17.00 15.25-16.25 Percentage of amount of loans 13 With floating rate ............................................................ 71.7 27.8 66.4 74.1 87.0 14 Made under commitment .............................................. 63.3 33.1 60.3 62.0 74.1 Construction and Land Development Loans 15 Amount of loans (thousands of dollars) ..................... 1,056,988 205.277 195,753 145,500 276,070 234,388 16 Number of loans .............................................................. 34,676 25.307 5,348 2,274 1,568 178 17 Weighted average maturity (months) ........................... 9.7 7.9 18.5 6.3 7.4 9.1 18 Weighted average interest rate (percent per annum) 15.51 14.20 15.73 15.72 15.83 15.% 19 Interquartile range1 ..................................................... 14.49-17.25 11.77-16.31 14.58-17.18 13.75-16.99 14.50-17.60 15.50-17.50 Percentage of amount of loans 20 With floating rate ............................................................ 40.2 16.2 12.8 29.6 58.2 69.7 21 Secured by real estate ..................................................... 76.9 70.2 65.8 61.1 90.9 85.3 22 Made under commitment .............................................. 40.4 31.3 26.4 31.2 53.0 50.9 Type of construction 23 1- to 4-family .................................................................... 38.7 58.5 49.4 20.4 44.2 17.3 24 Multifamily ........................................................................ 7.4 1.3 1.5 4.7 10.9 15.1 25 Nonresidential .................................................................. 53.9 40.2 49.1 74.8 45.0 67.5 All 250 sizes 1-9 10-24 25—49 50-99 100-249 and over Loans to Farmers 26 Amount of loans (thousands of dollars) ..................... 1,196,869 160,264 184.426 181,529 234,651 248,311 187,688 27 Number of loans .............................................................. 65,936 42,480 12,830 4,933 3,610 1,674 409 28 Weighted average maturity (months) ........................... 6.9 7.3 7.1 6.9 7.3 5.8 7.3 29 Weighted average interest rate (percent per annum) 13.63 12.88 13.20 13.32 13.11 13.86 15.35 30 Interquartile range1 ..................................................... 12.42-14.49 11.83-13.80 11.72-14.42 12.00-14.41 12.00-14.00 13.42-13.80 13.42-17.55 By purpose of loan 31 Feeder livestock .............................................................. 13.51 12.03 13.20 12.87 13.44 13.45 14.64 32 Other livestock ........................................................ 12.92 12.17 12.55 14.19 11.57 (2) (2) 33 Other current operating expenses ................................ 13.64 13.03 13.28 13.81 12.96 15.45 15.24 24 Farm machinery and equipment ................................... 13.16 13.03 13.75 13.53 12.09 (2) (2) 35 Other ................................................................................. 14.55 13.39 12.94 13.30 14.16 14.22 16.77 1. Interest rate range that covers the middle 50 percent of the total dollar amount Note. For more detail, see the Board’s E.2(416) statistical release, of loans made. 2. Fewer than 10 sample loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Markets A ll .36 INTEREST RATES Money and Capital Markets Averages, percent per annum 1979 1980 1980, week ending Instrument 1977 1978 1979 Nov. Dec. Jan. Feb. Feb. 2 Feb. 9 Feb. 16 Feb. 23 Mar. 1 Money market rates 11.20 1 Federal funds1 ............................................... 13.78 14.13 Commercial paper2 -* 2 1-month ..................................................... 5.42 7.76 10.86 13.34 13.35 13.07 13.62 13.02 13.01 13.10 14.01 14.46 3 3-month ..................................................... 5.54 7.94 10.97 13.57 13.24 13.04 13.78 13.06 13.08 13.17 14.21 14.77 4 6-month ..................................................... 5.60 7.99 10.91 13.26 12.80 12.66 13.60 12.80 12.79 12.96 14.11 14.68 Finance paper, directly placed2- 5 1-month ..................................................... 5.38 7.73 10.78 13.25 13.27 13.01 13.58 12.96 12.99 13.03 13.93 14.45 6 3-month ..................................................... 5.49 7.80 10.47 12.52 11.74 11.96 13.05 12.03 12.65 12.72 12.96 13.93 7 8 Pri 6 m -m e o b n a th n ke .. r . s .. .. a .. c .. c .. e .. p .. t . a .. n .. c .. e .. s . . . ... 9 .. 0 .. - . d ... a . v ... 3 . 4 .. ... . . . . . . . . . 5 5 . . 5 5 0 9 78..1718 1 1 0 1 . . 2 0 5 4 1 1 2 3. . 5 0 3 0 1 13 1 . . 3 6 1 8 1 13 1 . . 1 7 5 9 1 14 2 . . 0 3 1 9 1 13 1 . . 1 8 1 3 1 13 1 . . 1 8 3 4 1 13 1 . . 3 9 3 7 1 1 2 4 . . 5 6 5 5 1 1 3 5 . . 2 1 7 0 Certificates of deposit, secondary market5 1 9 0 3 1 - m m o o n n t t h h . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 5. . 6 4 4 8 87..2828 1 1 1 1 . .0 2 3 2 1 13 3 . . 9 6 0 0 1 1 3 3 . .4 3 3 6 1 1 3 3 . . 2 3 6 9 1 1 3 4 . . 9 3 3 0 1 1 3 3 . . 1 3 6 6 1 1 3 3. . 4 2 3 2 1 1 3 3. . 5 2 9 8 1 1 4 4 . .9 4 3 7 1 15 4 . . 4 8 5 8 11 6-month ..................................................... 5.92 8.61 11.44 13.97 13.42 13.48 14.58 13.59 13.73 13.91 15.16 15.74 12 Eurodollar deposits, 3-month6 .................. 6.05 8.74 11.96 15.00 14.51 14.33 15.33 14.41 14.29 14.46 15.26 16.46 U.S. Treasury bills3 7 13 Se 3 c - o m nd o a n r t y h m .. a .. r . k .. e .. t ........................................ 5.27 7.19 10.07 11.79 12.04 12.00 1 1 2 2 . . 8 8 6 6 12.15 12.05 12.36 13.38 13.78 14 6-month ................................................. S. 5 3 7.58 10.06 11.82 11.84 11.84 11.96 12.03 12.46 13.34 13.82 15 1-year ..................................................... 5.71 7.74 9.75 11.22 10.92 10.96 12.46 11.23 11.51 11.91 13.12 13.53 Auction average8 16 3-month .................................................. 5.265 7.221 10.041 11.868 12.071 12.036 12.814 12.038 12.086 12.307 13.162 13.700 17 6-month ................................................. 5.510 7.572 10.017 11.856 11.847 11.851 12.721 11.846 11.985 12.256 13.013 13.629 Capital market rates U.S. Treasury Notes and Bonds Constant maturities9 18 1-year ................................................................ 6.09 8.34 10.67 12.39 11.98 12.06 13.92 12.36 12.80 13.22 14.71 15.24 19 2-year ................................................................ 6.45 8.34 10.12 11.81 11.39 11.50 13.42 11.86 12.31 12.71 14.26 14.70 20 2Vt’-year1,) ............................... 10.90 11.15 14.00 21 3-year ................................................................ 6.69 8.29 9.71 11.18 10.71 10.88 12.84 11.24 11.83 12.12 13.65 14.07 22 4-year1H 10.85 23 5-year ................................................................ 6.99 8.32 9.52 10.93 10.42 10.74 12.60 11.15 11.68 11.99 13.22 13.76 24 7-year ................................................................ 7.23 8.36 9.48 10.80 10.42 10.77 12.53 11.17 11.73 12.02 13.16 13.50 25 10-year .............................................................. 7.42 8.41 9.44 10.65 10.39 10.80 12.41 11.19 11.71 12.01 12.99 13.20 26 20-year .............................................................. 7.67 8.48 9.33 10.37 10.18 10.65 12.21 11.19 11.72 12.00 12.79 12.59 27 30-year .............................................................. 8.49 9.29 10.30 10.12 10.60 12.13 11.12 11.63 11.94 12.63 12.57 Composite11 28 3 to 5 years ...................................................... 6.85 8.30 9.58 10.98 10.45 10.76 12 52 11.13 11.66 11.90 13.21 13.57 29 Over 10 years (long-term) ............................ 7.06 7.89 8.74 9.80 9.59 10.03 11.55 10.48 10.96 11.25 12.14 12.10 State and Local Notes and Bonds Moody's series12 30 Aaa ........................................................................ 5.20 5.52 5.92 6.49 6.50 6.58 7.28 6.80 7.00 7.00 7.60 8.00 31 Baa ........................................................................ 6.12 6.27 6.73 7.66 7.42 7.60 8.12 7.60 7.60 7.90 8.50 9.00 32 Bond Buver series13 ........................................... 5.68 6.03 6.52 7.30 7.22 7.35 8.16 7.52 7.71 7.75 8.46 8.72 Corporate Bonds 33 Seasoned issues, all industries14 ....................... 8.43 9.07 10.12 11.37 11.35 11.74 12.92 12.06 12.43 12.74 13.18 13.54 By rating groups 34 Aaa .................................................................... 8.02 8.73 9.63 10.76 10.74 11.09 12.38 11.49 11.95 12.19 12.74 12.88 35 Aa ...................................................................... 8.24 8.92 9.94 11.22 11.15 11.56 12.73 11.87 12.17 12.51 12.99 13.45 36 A ........................................................................ 8.49 9.12 10.20 11.50 11.46 11.88 12.99 12.20 12.48 12.83 13.16 13.66 37 Baa .................................................................... 8.97 9.45 10.69 11.99 12.06 12.42 13.57 12.69 13.11 13.41 13.82 14.16 Aaa utility bonds15 38 New issue .......................................................... 8.19 8.96 10.03 11.42 11.25 11.73 13.57 12.96 13.27 13.92 14.11 39 Recently offered issues ................................. 8.19 8.97 10.02 11.36 11.33 11.77 13.35 12.35 12.80 13.17 14.11 13.83 Memo: Dividend/price ratio16 40 Preferred stocks ............................................. 7.60 8.25 9.07r 9.95r 10.06r 10.14 10.55 10.30r 10.37 10.44 10.54 10.83 41 Common stocks ............................................... 4.56 5.28 5.46r 5.71 5.53 5.40 5.24 5.21' 5.23 5.12 5.21 5.41 1. Weekly figures are 7-day averages of daily effective rates for the week ending 10. Each figure is an average of only five business days near the end of the Wednesday; the daily effective rate is an average of the rates on a given day month. The rate for each month is used to determine the maximum interest rate weighted by the volume of transactions at these rates. payable in the following month on small saver certificates. (See table 1.16). 2. Beginning November 1977, unweighted average of offering rates quoted by 11. Unweighted averages for all outstanding notes and bonds in maturity ranges at least five dealers (in the case of commercial paper), or finance companies (in shown, based on daily closing bid prices. “Long-term” includes all bonds neither the case of finance paper). Previously, most representative rate quoted by those due nor callable in less than 10 years, including several very low yielding “flower” dealers and finance companies. Before Nov. 1979, maturities for data shown are bonds. 30-59 days. 90-119 days, and 120-179 days for commercial paper; and 30-59 days, 12. General obligations only, based on figures for Thursday, from Moody's 90-119 days, and 150-179 days for finance paper. Investors Service. 3. Yields are quoted on a bank-discount basis. 13. Twenty issues of mixed quality. 4. Average of the midpoint of the range of daily dealer closing rates offered for 14. Averages of daily figures from Moody's Investors Service. domestic issues. 15. Compilation of the Board of Governors of the Federal Reserve System. 5. Five-day average of rates quoted by five dealers (3-month series was previously Issues included are long-term (20 years or more). New-issue yields are based a 7-day average). on quotations on date of offering; those on recently offered issues (included only 6. Averages of daily quotations for the week ending Wednesday. for first 4 weeks after termination of underwriter price restrictions), on Friday 7. Except for auction averages, yields are computed from daily closing bid prices. close-of-business quotations. 8. Rates are recorded in the week in which bills are issued. 16. Standard and Poor’s corporate series. Preferred stock ratio based on a sample 9. Yield on the more actively traded issues adjusted to constant maturities by of ten issues: four public utilities, four industrials, one financial, and one trans­ the U.S. Treasury, based on daily closing bid prices. portation. Common stock ratios on the 500 stocks in the price index. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Financial Statistics □ March 1980 1.37 STOCK MARKET Selected Statistics Indicator 1978 1979 Aug. Sept. Oct. Nov. Dec Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31, 1965 = 50) 53.67 53.76 55.67 61.19 61.89 59.27 59.02 61.75 63.74 66.05 2 Industrial ....................................................................... 57.84 58.30 61.82 67.71 69.17 66.68 66.45 69.82 72.67 76.42 3 Transportation ............................................................. 41.07 43.25 45.20 52.48 52.21 48.07 47.61 50.59 52.61 57.92 4 Utility ............................................................................. 40.91 39.23 36.46 39.26 38.39 36.58 36.55 37.29 37.08 36.22 5 Finance ........................................................................... 55.23 56.74 58.65 68.40 67.21 61.64 60.64 63.21 64.22 61.84 6 Standard & Poor’s Corporation (1941-43 = 10)' .. 98.18 96.11 98.34 107.36 108.60 104.47 103.66 107.78 110.87 115.34 7 American Stock Exchange (Aug. 31, 1973 = 100) .. 116.18 144.56 186.56 208.29 223.00 212.33 216.58 238.83 259.54 288.99 Volume of trading (thousands of shares) 8 New York Stock Exchange ........................................ 20,936 28,591 32,233 35,870 37,576 37,301 31,126 35,510 52,647 47,827 9 American Stock Exchange ......................................... 2,514 3,622 4,182 4,503 5,405 5,446 3,938 5,389 9,363 6,903 Customer financing (end-of-period balances.in millions of dollars) 10 Regulated margin credit at brokers/dealers2 ............ 9,993 11,035 11,615 12,236 12,178 11,483 11,083 11,615 11,982 ii 11 Margin stock3 ................................................................ 9,740 10,830 11,450 12,060 12,000 11,310 10,920 11,450 11,820 12 Convertible bonds ........................................................ 250 205 164 176 177 173 161 164 161 13 Subscription issues ....................................................... 3 1 1 * 1 * 2 1 1 n.a. Free credit balances at brokers4 14 Margin-account ............................................................ 640 835 1,050 910 960 950 955 1,050 1,180 15 Cash-account ................................................................ 2,060 2,510 4,060 2,995 3,325 3,490 3,435 4,060 4,680 Margin-account debt at brokers (percentage distributions, end of period) 16 Total ............................................................................... 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 1\ By equity class (in percent)5 1 17 Under 40 ........................................................................ 18.0 33.0 16.0 14.0 16.0 27.0 17.0 16.0 13.0 18 40-49 ............................................................................... 36.0 28.0 28.0 26.0 26.0 31.0 31.0 31.0 29.0 n.a. 2 1 0 9 6 5 0 0- - 5 6 9 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1 3 1 . . 0 0 1 1 8 0 . . 0 0 2 1 4 4 . . 0 0 3 1 1 4 . . 0 0 3 1 0 4 . . 0 0 2 1 0 0 . . 0 0 2 1 5 3 . . 0 0 2 1 4 4 . . 0 0 2 1 5 6 . . 0 0 1| 1 21 70-79 ............................................................................... 6.0 6.0 8.0 8.0 8.0 6.0 7.0 8.0 9.0 22 80 or more .................................................................... 5.0 5.0 7.0 7.0 6.0 6.0 7.0 7.0 8.0 Special miscellaneous-account balances at brokers (end of period) 23 Total balances (million dollars)6 ................................ 9,910 13,092 16,290 14,130 14,460 14,800 14,995 16,290 16,550 I \ 1 Distribution by equity status (percent) 24 Net credit status ........................................................... 43.4 41.3 48.5 44.1 45.3 44.5 46.5 48.5 45.0 n.a. Debt status, equity of 25 60 percent or more .................................................. 44.9 45.1 43.6 47.8 46.4 45.5 45.0 43.6 47.7 26 Less than 60 percent ............................................... 11.7 13.6 7.9 8.1 8.3 10.0 8.5 7.9 7.3 Margin requirements (percent of market value and effective date)7 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 insurance 5. Each customer’s equity in his collateral (market value of collateral less net companies. With this change the index includes 400 industrial stocks (formerly debit balance) is expressed as a percentage of current collateral values. 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and 40 6. Balances that may be used by customers as the margin deposit required for financial. additional purchases. Balances may arise as transfers based on loan values of other 2. Margin credit includes all credit extended to purchase or carry stocks or collateral in the customer’s margin account or deposits of cash (usually sales pro­ related equity instruments and secured at least in part by stock. Credit extended ceeds) occur. is end-of-month data for member firms of the New York Stock Exchange. 7. Regulations G, T, and U of the Federal Reserve Board of Governors, pre­ In addition to assigning a current loan value to margin stock generally, Regu­ scribed in accordance with the Securities Exchange Act of 1934, limit the amount lations T and U permit special loan values for convertible bonds and stock acquired of credit to purchase and carry margin stocks that may be extended on securities through exercise of subscription rights. as collateral by prescribing a maximum loan value, which is a specified percentage 3. A distribution of this total by equity class is shown on lines 17—22. of the market value of the collateral at the time the credit is extended. Margin 4. Free credit balances are in accounts with no unfulfilled commitments to the requirements are the difference between the market value (100 percent) and the brokers and are subject to withdrawal by customers on demand. 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 1979 1980 Account 1977 1978 Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.1 Jan .p Savings and loan associations 1 Assets ............................................ 459,241 523,542 539,582 543,320 549,031 555,409 561,037 566,493 570,479 576,251 578,922 579,307 581,9% 2 Mortgages .................................... 381,163 432,808 441,358 445,638 450,978 456,544 460,620 464,609 468,307 472,198 474,678 475,797 476,391 3 Cash and investment securities1 39,150 44,884 50,153 48,698 48,280 48,253 49,496 50,007 49,3013 49,220 48,180 46,541 48,334 4 Other ............................................ 38,928 45,850 48,071 48,984 49,773 50,612 50,721 51,877 52,871 54,833 56,064 56,%9 57,271 5 Liabilities and net worth ........... 459,241 523,542 539,582 543,320 549,031 555,409 561,037 570,479 566,493 576,251 578,922 579,307 581,9% 6 Savings capital ............................ 386,800 430,953 446,898 445,751 447,788 454,642 456,657 457,856 462,626 464,489 465,646 470,171 472,126 7 Borrowed money ...................... 27,840 42,907 41,538 43,710 44,324 46,993 48,437 50,437 52,738 54,268 54,433 55,375 55,197 8 FHLBB .................................... 19,945 31,990 31,123 32,389 33,003 34,266 35,286 36,009 37,620 39,223 39,638 40,441 40,3% 9 Other ........................................ 7,895 10,917 10,415 11,321 11,321 12,727 13,151 14,428 15,118 15,045 14,795 14,934 14,801 10 Loans in process ........................ 9,911 10,721 10,331 10,690 11,118 11,260 11,309 11,047 10,909 10,766 10,159 9,511 8,705 11 Other ............................................ 9,506 9,904 10,905 12,950 15,259 11,681 13,503 15,712 12,497 14,673 16,324 11,684 13,226 12 Net worth2 .................................. 25,184 29,057 29,910 30,219 30,542 30,833 31,131 31,441 31,709 32,055 32,360 32,566 32,742 13 Memo: Mortgage loan com­ mitments outstanding3 ....... 19,875 18,911 21,082 22,915 23,560 22,770 22,360 22,282 22,397 20,930 18,029 16,007 15,456 Mutual savings banks4 14 Assets ............................................ 14,287 158,174 161,866 161,231 161,380 161,814 162,598 163,388 163,431 163,133 163,205 16,366 Loans 15 Mortgage ................................. 88,195 95,157 96,136 95,900 %,239 %,743 97,238 97,637 97,973 98,304 98,610 98,924 16 Other ........................................ 6,210 7,195 9,421 9,290 9,444 9,577 10,282 10,430 9,982 9,510 9,449 9,259 Securities 17 U.S. government5 ................... 5,895 4,959 4,814 8,193 8,148 8,029 7,992 7,921 7,891 7,750 7,754 7,630 18 State and local government .. 2,828 3,333 3,126 3,326 3,264 3,175 3,154 3,149 3,150 3,100 3,003 2,929 19 Corporate and other6 ............ 37,918 39,732 40,658 37,211 37,304 37,281 37,171 37,125 37,076 37,210 37,036 37,119 20 Cash ............................................. 2,401 3,665 3,410 3,072 2,785 2,764 2,,540 2,866 3,020 2,909 3,010 3,198 n.a. 21 Other assets ................................ 3,839 4,131 4,300 4,239 4,198 4,245 4,220 4,260 4,339 4,351 4,343 4,308 22 Liabilities ..................................... 147,287 158,174 161,866 161,231 161,380 161,814 162,598 163,388 163,431 163,133 163,205 163,366 23 Deposits ...................................... 134,017 142,701 145,650 145,0% 145,056 146,057 145,757 145,713 146,252 145,0% 144,828 145,855 24 Regular7 .................................. 132,744 141,170 144,042 143,210 143,271 144,161 143,843 143,731 144,258 143,263 143,064 143,903 25 Ordinary savings ................ 78,005 71,816 68,829 67,758 67,577 68,104 67,537 66,733 65,676 62,672 61,156 61,078 26 Time and other ................... 54,739 69,354 75,213 75,452 75,694 76,057 76,306 76,998 78,572 80,591 81,908 82,824 27 Other ........................................ 1,272 1,531 1,608 1,886 1,784 1,8% 1,914 1,982 2,003 1,834 1,764 1,952 28 Other liabilities ........................... 3,292 4,565 5,048 5,050 5,172 4,545 5,578 6,350 5,790 6,600 6,872 5,989 29 General reserve accounts ......... 9,978 10,907 11,167 11,085 11,153 11,212 11,264 11,324 11,388 11,437 11,504 11,522 30 Memo: Mortgage loan com­ mitments outstanding8 ....... 4,066 4,400 4,482 4,449 4,352 4,469 4,214 4,071 4,123 3,749 3,619 3,182 Life insurance companies 31 Assets ............................................ 351,722 389,924 399,579 402,963 405,627 409,853 414,120 418,350 421,660 423,760 427,496 iI ti Securities 32 Government ............................ 19,553 20,009 20,463 20,510 20,381 20,397 20,468 20,472 20,379 20,429 20,486 33 United States9 .................... 5,315 4,822 5,234 5,272 5,149 5,178 5,228 5,229 5,067 5,075 5,122 34 State and local .................... , 6,051 6,402 6,259 6,268 6,272 6,,241 6,243 6,258 6,295 6,339 6,354 35 Foreign10 ............................. '8,187 8,785 8,970 8,970 8,960 8,978 8,997 8,985 9,017 9,015 9,010 na. n.a. 36 Business ................................... 175,654 198,105 204,895 206,160 207,775 209,804 212,876 215,252 216,500 216,183 217,856 37 Bonds ................................... 141,891 162,587 168,622 169,817 171,762 173,130 175,854 176,920 177,698 178,633 179,158 38 Stocks ................................... 33,763 35,518 36,273 36,343 36,013 36,674 37,022 38,332 38,802 37,550 38,698 39 Mortgages .................................... 96,848 106,167 108,417 109,198 110,023 111,123 112,120 113,102 114,368 115,991 117,253 40 Real estate ................................... 11,060 11,764 11,484 12,086 12,101 12,199 12,351 12,738 12,740 12,816 12,906 41 Policy loans ................................. 27,556 30,146 31,160 31,512 31,832 32,131 32,390 32,713 33,046 33,574 34,220 42 Other assets ................................ 21,051 23,733 23,160 23,497 23,515 24,199 23,915 24,073 24,627 24,767 24,775 Credit unions 43 Total assets/liabilities and capital ................................... 53,755 62,348 63,671 63,030 64,158 65,435 68,840 65,547 66,280 65,063 65,419 65,854 64,506 44 Federal .................................... 29,564 34,760 35,406 34,758 35,379 36,146 35,413 35,724 36,151 35,537 35,670 35,934 35,228 45 State ......................................... 24,191 27,588 28,265 28,272 28,779 29,289 29,427 29,823 30,129 29,526 29,749 29,920 29,278 46 Loans outstanding ..................... 41,845 50,269 50,828 50,846 51,351 52,028 52,083 52,970 53,545 53,533 56,267 53,125 52,089 47 Federal .................................... 22,634 27,687 27,961 27,869 28,103 28,487 28,379 28,848 29,129 29,020 30,613 28,698 28,053 48 State ......................................... 19,211 22,582 22,867 27,977 23,248 23,541 23,704 24,122 24,416 24,513 25,654 24,426 24,036 49 Savings ......................................... 46,516 53,517 54,713 54,199 55,107 56,437 56,393 56,583 57,255 55,739 55,797 56,232 55,447 50 Feaeral (shares) ..................... 25,576 29,802 30,212 29,796 30,222 31,048 30,732 30,761 31,097 30,366 30,399 35,530 30,040 51 State (shares and deposits) ... 20,940 23,715 24,501 24,403 24,885 25,839 25,661 25,822 26,158 25,373 25,398 25,702 25,407 For notes see bottom of page A30. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Financial Statistics □ March 1980 1.39 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year Fiscal Fiscal Type of account or operation year year year 1978 1979 1979 1980 1977 1978 1979 H2 HI H2 Nov. Dec. Jan. U.S. budget 1 Receipts' ........................................................ 357,762 401,997 465,940 206,275 246,574 233,952 38,320 42,617 43,429 2 Outlays1 ......................................................... 402,725 450,836 493,673 238,186 245,616 263,044 46,841 44,010 47,988 3 Surplus, or deficit(-) ................................. -44,963 -48,839 -27,733 -31,912 958 -29,093 -8,522 -1,393 -4,559 4 Trust funds ................................................ 9,497 12,693 18,335 11,754 4,041 9,679 8,108 565 -5,090 5 Federal funds2 ........................................... -54,460 -61,532 -46,069 -43,666 - 4,999 -38,773 -16,630 -1,959 531 Off-budget entities surplus, or deficit (-) 6 Federal Financing Bank outlays ................ -8,415 -10,661 -13,261 -5,082 -7,712 -5,909 -538 -735 -714 7 Other3 ............................................................ -269 334 832 1,843 -447 805 118 131 103 U.S. budget plus off-budget, including Federal Financing Bank 8 Surplus, or deficit (-) ................................ -53,647 -59,166 -40,162 -35,151 -7,201 -34,197 -8,942 -1,997 -5,170 Source or financing 9 Borrowing from the public .................... 53,516 59,106 33,641 30,314 6,039 31,320 5,548 11,207 -555 10 Cash and monetary assets (decrease, or increase (-))4 ................................... -2,247 -3,023 -408 3,381 - 8V878 3,059 4,533 -10,378 6,403 11 Other5 ........................................................ 2,378 3,083 6,929 1,456 10,040 -182 -1,139 -1,168 -678 Memo: 12 Treasury operating balance (level, end of period) ................................................... 19,104 22,444 24,176 16,291 17,485 15,924 5,591 15,924 16,602 13 Federal Reserve Banks ........................... 15,740 16,647 6,489 4,196 3,290 4,075 2,590 4,075 2,931 14 Tax and loan accounts ............................ 3,364 5,797 17,687 12,095 14,195 11,849 3,001 11,849 13,671 1. Effective June 1978, earned income credit payments in excess of an indi­ 5. Includes accrued interest payable to the public; deposit funds; miscellaneous vidual’s tax liability, formerly treated as income tax refunds, are classified as liability (including checks outstanding) and asset accounts; seignorage; increment outlays retroactive to January 1976. on gold; net gain/loss for U.S. currency valuation adjustment; net gain/loss for IMF 2. Half-year figures calculated as a residual (total surplus/deficit less trust fund valuation adjustment; and profit on the sale of gold. surplus/deficit). 3. Includes Pension Benefit Guaranty Corp.; Postal Service Fund; Rural Elec­ Source. “Monthly Treasury Statement of Receipts and Outlays of the U.S. trification and Telephone Revolving Fund; and Rural Telephone Bank. Government,” Treasury Bulletin, and the Budget of the United States Government, 4. Includes U.S. Treasury operating cash accounts; special drawing rights; gold Fiscal Year 1981. tranche drawing rights; loans to International Monetary Fund; and other cash and monetary assets. NOTES TO TABLE 1.38 1. Holdings of stock of the Federal Home Loan Banks are included in “other 10. Issues of foreign governments and their subdivisions and bonds of the In­ assets.” ternational Bank for Reconstruction and Development. 2. Includes net undistributed income, which is accrued by most, but not all, associations. Note. Savings and loan associations: Estimates by the FHLBB for all associa­ 3. Excludes figures for loans in process, which are shown as a liability. tions in the United States. Data are based on monthly reports of federally insured 4. The NAMSB reports that, effective April 1979, balance sheet data are not associations and annual reports of other associations. Even when revised, data for strictly comparable with previous months. Beginning April 1979, data are reported current and preceding year are subject to further revision. on a net-of-valuation-reserves basis. Prior to that date, data were reported on a Mutual savings banks: Estimates of National Association of Mutual Savings gross-of-valuation-reserves basis. Banks for all savings banks in the United States. 5. Begining April 1979, includes obligations of U.S. government agencies. Prior Life insurance companies: Estimates of the American Council of Life Insurance to that date, this item was included in “Corporate and other.” for all life insurance companies in the United States. Annual figures are annual- 6. Includes securities of foreign governments and international organizations statement asset values, with bonds carried on an amortized basis and stocks at and, prior to April 1979, nonguaranteed issues of U.S. government agencies. year-end market value. Adjustments for interest due and accrued and for differ­ 7. Excludes cnecking, club, and school accounts. ences between market and book values are not made on each item separately but 8. Commitments outstanding (including loans in process) of banks in New York are included, in total, in “other assets.” State as reported to the Savings Banks Association of the state of New York. Credit unions: Estimates by the National Credit Union Administration for a 9. Direct and guaranteed obligations. Excludes federal agency issues not guar­ group of federal and state-chartered credit unions that account for about 30 percent anteed, which are shown in the table under “business” securities. of credit union assets. Figures are preliminary and revised annually to incorporate recent benchmark data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A31 1.40 U.S. BUDGET RECEIPTS AND OUTLAYS Millions of dollars Calendar year Fiscal Fiscal Fiscal Source or type year year year 1978 1979 1979 1980 1977 1978 1979 H2 HI H2 Nov. Dec. Jan. Receipts 1 All sources1 .................................................... 357,762 401,997 465,940 206,275 246,574 233,952 38,320 42,617 43,429 2 Individual income taxes, net ..................... 157,626 180,988 217,841 98,854 111,603 115,488 18,972 20,192 26,856 3 Withheld ................................................... 144,820 165,215 195,295 90,148 98,683 105,764 18,725 19,402 17,821 4 Presidential Election Campaign Fund ...................................................... 37 39 36 3 32 3 0 0 0 5 Nonwithheld ............................................. 42,062 47,804 56,215 10,777 44,116 12,355 589 952 9,061 6 Refunds1 .................................................... 29,293 32,070 33,705 2,075 31,228 2,634 342 163 26 Corporation income taxes 7 Gross receipts .......................................... 60,057 65,380 71,448 28,536 42,427 29,169 1,684 10,667 2,702 8 Refunds ..................................................... 5,164 5,428 5,771 2,757 2,889 3,306 523 460 465 9 Social insurance taxes and contributions. net .......................................................... 108,683 123,410 141,591 61,064 75,609 71,031 14,433 8,675 10,775 10 Payroll employment taxes and contributions2 .................................... 88,196 99,626 115,041 51,052 59,298 60,562 12,259 7,963 9,085 11 Self-employment taxes and contributions3 ................................ 4,014 4,267 5,034 369 4,616 417 0 0 441 12 Unemployment insurance ...................... 11,312 13,850 15,387 6,727 8,623 6,899 1,650 204 675 13 Other net receipts4 .................................. 5,162 5,668 6,130 2,917 3,072 3,149 524 507 574 14 Excise taxes .................................................. 17,548 18,376 18,745 9,879 8,984 9,675 1,653 1,658 1,448 15 Customs deposits ......................................... 5,150 6,573 7,439 3,748 3,682 3,741 605 595 611 16 Estate and gift taxes .................................... 7,327 5,285 5,411 2,691 2,657 2,900 518 425 509 17 Miscellaneous receipts5 ............................... 6,536 7,413 9,237 4,260 4,501 5,254 977 866 992 Outlays 18 AH types1 ...................................................... 402,725 450,836 493,673 238,186 245,616 263,044 46,841 44,010 47,988 19 National defense ........................................... 97,501 105,186 117,681 55,124 57,643 62,002 10,734 10,566 11,195 20 International affairs ..................................... 4,813 5,922 6,091 2,060 3,538 4,617 1.190 899 859 21 General science, space, and technology .. 4,677 4„742 5,041 2,383 2,461 3,299 515 432 528 22 Energy ............................................................ 4,172 5,861 6,856 4,279 4,417 3,281 643 625 439 23 Natural resources and environment ......... 10,000 10,925 12,091 6,020 5,672 7,350 538 1,597 1,167 24 Agriculture .................................................... 5,532 7,731 6,238 4,967 3,020 1,709 769 1,150 1,432 25 Commerce and housing credit ................... -44 3,324 2,565 3,292 60 3 ,,002 222 516 676 26 Transportation ............................................. 14,636 15,445 17,459 8,740 7,688 10,298 1,670 1,862 1,914 27 Community and regional development .... 6,348 11,039 9,482 5,844 4,499 4,855 973 614 1,304 28 Education, training, employment, social services .................................................. 20,985 26,463 29,685 14,247 14,467 14,579 2,330 2,461 3,088 29 Health ............................................................ 38,785 43,676 49,614 23,830 24,860 26,492 4,449 4,532 4,980 30 Income security1 ........................................... 137,915 146,212 160,198 73,127 81,173 86,007 15,370 14,286 15,150 31 Veterans benefits and services ................... 18,038 18,974 19,928 9,532 10,127 10,113 2,701 1,778 803 32 Administration of justice ............................ 3,600 3,802 4,153 1,989 2,096 2,174 350 350 400 33 General government .................................... 3,312 3,737 4,153 2,304 2,291 2,103 342 422 384 34 General-purpose fiscal assistance ............. 9,499 9,601 8,372 4,610 3,890 4,286 378 102 1,798 35 Interest6 ......................................................... 38,009 43,966 52,556 24,036 26,934 29,045 4,719 8,695 3,037 36 Undistributed offsetting receipts6-7 ........... -15,053 -15,772 -18,489 -8,199 -8,999 -12,164 -1,052 -6,879 -1,166 1. Effective June 1978, earned income credit payments in excess of an indi­ 6. Effective September 1976, “Interest” and “Undistributed Offsetting Re­ vidual’s tax liability, formerly treated as income tax refunds, are classified as ceipts” reflect the accounting conversion for the interest on special issues for U.S. outlays retroactive to January 1976. government accounts from an accrual basis to a cash basis. 2. Old-age, disability, and hospital insurance, and railroad retirement accounts. 7. Consists of interest received by trust funds, rents and royalties on the Outer 3. Old-age, disability, and hospital insurance. Continental Shelf, and U.S. government contributions for employee retirement. 4. Supplementary medical insurance premiums, federal employee retirement contributions, and Civil Service retirement and disability fund. Source. “Monthly Treasury Statement of Receipts and Outlays of the U.S. 5. Deposits of earnings by Federal Reserve Banks and other miscellaneous re­ Government” and the Budget of the U.S. Government, Fiscal Year 1981. ceipts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Financial Statistics □ March 1980 1.41 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1977 1978 1979 Item June 30 Sept. 30 Dec. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 1 Federal debt outstanding .................................................... 685.2 709.1 729.2 758.8 780.4 797.7 804.6 812.2 833.8 2 Public debt securities ........................................................... 674.4 698.8 718.9 749.0 771.5 789.2 796.8 804.9 826.5 3 Held by public ................................................................. 523.2 543.4 564.1 587.9 603.6 619.2 630.5 626.4 638.8 4 Held by agencies ............................................................. 151.2 155.5 154.8 161.1 168.0 170.0 166.3 178.5 187.7 5 Agency securities ................................................................. 10.8 10.3 10.2 9.8 8.9 8.5 7.8 7.3 7.2 6 Held by public ................................................................. 9.0 8.5 8.4 8.0 7.4 7.0 6.3 5.9 5.8 7 Held by agencies ............................................................. 1.8 1.8 1.8 1.8 1.5 1.5 1.5 1.5 1.5 8 Debt subject to statutory limit ........................................... 675.6 700.0 720.1 750.2 772.7 790.3 797.9 806.0 827.6 9 Public debt securities ........................................................... 673.8 698.2 718.3 748.4 770.9 788.6 796.2 804.3 825.9 10 Other debt1 ........................................................................... 1.7 1.7 1.7 1.8 1.8 1.7 1.7 1.7 1.7 11 Memo. Statutory debt limit ............................................... 700.0 700.0 752.0 752.0 798.0 798.0 798.0 830.0 830.0 1. Includes guaranteed debt of government agencies, specified participation cer- Note. Data from Treasury Bulletin (U.S. Treasury Department), tificates, notes to international lending organizations, and District of Columbia stadium bonds. 1.42 GROSS PUBLIC DEBT OF U.S. TREASURY Types and Ownership Billions of dollars, end of period 1979 1980 Type and holder 1975 1976 1977 1978 Oct. Nov. Dec. Jan. Feb. 1 Total gross public debt ........................................................ 576.6 653.5 718.9 789.2 826.8 833.8 845.1 847.7 854.6 By type 2 Interest-bearing debt ........................................................... 575.7 652.5 715.2 782.4 825.7 832.7 844.0 846.5 853.4 3 Marketable ............................................................................ 363.2 421.3 459.9 487.5 515.0 519.6 530.7 535.7 540.6 4 Bills .................................................................................... 157.5 164.0 161.1 161.7 161.7 165.1 172.6 175.5 177.4 5 Notes ................................................................................. 167.1 216.7 251.8 265.8 280.8 279.7 283.4 284.0 286.8 6 Bonds ................................................................................. 38.6 40.6 47.0 60.0 72.5 74.8 74.7 76.1 76.4 7 Nonmarketable1 ................................................................... 212.5 231.2 255.3 294.8 310.7 313.2 313.2 310.9 312.7 8 Convertible bonds2 ........................................................... 2.3 2.3 2.2 2.2 2.2 2.2 2.2 2.2 2.2 9 State and local government series ................................ 1.2 4.5 13.9 24.3 24.4 24.5 24.6 24.8 24.5 10 Foreign issues3 .................................................................. 21.6 22.3 22.2 29.6 28.0 29.2 28.8 30.0 29.6 11 Government .................................................................. 21.6 22.3 22.2 28.0 23.9 23.9 23.6 23.6 23.2 12 Public ............................................................................. 0 0 0 1.6 4.2 5.3 5.3 6.4 6.4 13 Savings bonds and notes ................................................ 67.9 72.3 77.0 80.9 80.5 80.0 79.9 78.6 77.7 14 Government account series4 ........................................... 119.4 129.7 139.8 157.5 175.3 177.0 177.5 174.9 178.4 15 Non-interest-bearing debt ................................................... 1.0 1.1 3.7 6.8 1.1 1.1 1.2 1.2 1.2 By holder5 16 U.S. government agencies and trust funds ..................... 139.1 147.1 154.8 170.0 185.7 187.1 187.1 ii ik 17 Federal Reserve Banks ....................................................... 89.8 97.0 102.5 109.6 114.6 118.1 117.5 18 Private investors ................................................................... 349.4 409.5 461.3 508.6 526.5 528.6 540.5 19 Commercial banks ............................................................... 85.1 103.8 101.4 93.4 93.5 95.0 97.0 20 Mutual savings banks ......................................................... 4.5 5.9 5.9 5.2 4.5 4.3 4.2 21 Insurance companies ........................................................... 9.5 12.7 15.1 15.0 14.8 14.4 14.4 22 Other companies ................................................................. 20.2 27.7 22.7 20.6 24.1 24.0 23.9 n.a. n.a. 23 State and local governments ............................................. 34.2 41.6 55.2 68.6 69.7 68.2 68.2 Individuals 24 Savings bonds ................................................................... 67.3 72.0 76.7 80.7 80.5 80.1 79.9 25 Other securities ................................................................ 24.0 28.8 28.6 30.0 32.9 33.7 34.2 26 Foreign and international6 ................................................. 66.5 78.1 109.6 137.8 124.4 120.6 123.8 27 Other miscellaneous investors7 ......................................... 38.0 38.9 46.1 57.4 82.0 88.3 94.8 1. Includes (not shown separately): Securities issued to the Rural Electrification 6. Consists of the investments of foreign balances and international accounts in Administration, depositary bonds, retirement plan bonds, and individual retire­ the United States. Beginning with July 1974, the figures exclude non-interestment bonds. bearing notes issued to the International Monetary Fund. 2. These nonmarketable bonds, also known as Investment Series B Bonds, may 7. Includes savings and loan associations, nonprofit institutions, corporate pen­ be exchanged (or converted) at the owner’s option for \Yi percent, 5-year mar­ sion trust funds, dealers and brokers, certain government deposit accounts, and ketable Treasury notes. Convertible bonds that have been so exchanged are re­ government sponsored agencies. moved from this category and recorded in the notes category above. Note. Gross public debt excludes guaranteed agency securities and, beginning 3. Nonmarketable dollar-denominated and foreign currency denominated series in July 1974, includes Federal Financing Bank security issues. held by foreigners. Data by type of security from Monthly Statement of the Public Debt of the United 4. Held almost entirely by U.S. government agencies and trust funds. States (U.S. Treasury Department); data by holder from Treasury Bulletin. 5. Data for Federal Reserve Banks and U.S. government agencies and trust funds are actual holdings; data for other groups are Treasury estimates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A33 1.43 U.S. GOVERNMENT MARKETABLE SECURITIES Ownership, by maturity Par value; millions of dollars, end of period 1979 1979 Type of holder 1977 1978 1977 1978 Nov. Dec. Nov. Dec. All maturities 1 to 5years 1 All holders ............................................................................................. 459,927 487,546 520,573 530,731 151,264 162,886 164,395 164,198 2 U.S. government agencies and trust funds ..................................... 14,420 12,695 11,047 11,047 4,788 3,310 2,560 2,555 3 Federal Reserve Banks ...................................................................... 101,191 109,616 108,087 117,458 27,012 31,283 27,554 28,469 4 Private investors .................................................................................. 344,315 365,235 401,439 402,226 119,464 128,293 134,281 133,173 5 Commercial banks .......................................................................... 75,363 68,890 67,771 69,076 38,691 38,390 37,734 38,346 6 Mutual savings banks ..................................................................... 4,379 3,499 3,280 3,204 2,112 1,918 1,700 1,668 7 Insurance companies ...................................................................... 12,378 11,635 11,645 11,496 4,729 4,664 4,573 4,518 8 Nonfinancial corporations .............................................................. 9,474 8,272 8,918 8,433 3,183 3,635 3,238 2,844 9 Savings and loan associations ........................................................ 4,817 3,835 3,370 3,209 2,368 2,255 1,944 1,763 10 State and local governments ......................................................... 15,495 18,815 15,999 15,735 3,875 3,997 3,613 3,487 1 All others .......................................................................................... 222,409 250,288 290,457 291,072 64,505 73,433 81,478 80,546 Total, within 1 year 5 to 10 years 12 AH holders ............................................................................................. 230,691 228,516 247,397 255,252 45,328 50,400 47,904 50,440 13 U.S. government agencies and trust funds ..................................... 1,906 1,488 1,624 1,629 2,129 1,989 871 871 14 Federal Reserve Banks ...................................................................... 56,702 52,801 55,101 63,219 10,404 14,809 12,714 12,977 15 Private investors .................................................................................. 172,084 174,227 190,671 190,403 32,795 33,601 34,319 36,592 16 Commercial banks .......................................................................... 29,477 20,608 20,357 20,171 6,162 7,490 7,064 8,086 17 Mutual savings banks ..................................................................... 1,400 817 870 836 584 496 461 459 18 Insurance companies ...................................................................... 2,398 1,838 2,068 2,016 3,204 2,899 2,736 2,815 19 Nonfinancial corporations .............................................................. 5,770 4,048 4,977 4,933 307 369 259 308 20 Savings and loan associations ....................................................... 2,236 1,414 1,285 1,301 143 89 64 69 21 State and local governments ......................................................... 7,917 8,194 5,795 5,607 1,283 1,588 1,509 1,540 22 All others .......................................................................................... 122,885 137,309 155,319 155,539 21,112 20,671 22,225 23,314 Bills, within 1 year 10 to 20 years 23 AH holders ............................................................................................. 161,081 161,747 165,100 172,644 12,906 19,800 27,624 27,588 24 U.S. government agencies and trust funds ..................................... 32 2 0 0 3,102 3,876 4,520 4,520 25 Federal Reserve Banks ...................................................................... 42,004 42,397 37,310 45,337 1,510 2.088 3,239 3,272 26 Private investors .................................................................................. 119,035 119,348 127,790 127,306 8,295 13,836 19,866 19,796 27 Commercial banks .......................................................................... 11,996 5,707 5,863 5,938 456 956 1,017 993 28 Mutual savings banks ..................................................................... 484 150 282 262 137 143 134 127 29 Insurance companies ...................................................................... 1,187 753 466 473 1,245 1,460 1 394 1 305 30 Nonfinancial corporations .............................................................. 4,329 1,792 2,632 2,793 133 86 230 218 31 Savings and loan associations ....................................................... 806 262 217 219 54 60 58 58 32 State and local governments ......................................................... 6„092 5,524 3,091 3,100 890 1,420 1,769 1,762 33 All others .......................................................................................... 94,152 105,161 115,240 114,522 5,380 9,711 15,263 15,332 Other, within 1 year Over 20 years 34 AH holders ............................................................................................. 69,610 66,769 82,297 82,608 19,738 25,944 33,253 33,254 35 U.S. government agencies and trust funds ..................................... 1,874 1.487 1,624 1,629 2,495 2,031 1,472 1,472 36 Federal Reserve Banks ...................................................................... 14,698 10,404 17,791 17,882 5,564 8,635 9,479 9,520 37 Private investors .................................................................................. 53,039 54,879 62,881 63,097 11,679 15,278 22.302 22,262 38 Commercial banks .......................................................................... 15,482 14,901 14,494 14,233 578 1,446 1,599 1,470 39 Mutual savings banks ..................................................................... 916 667 589 574 146 126 113 113 40 Insurance companies ...................................................................... 1,211 1,084 1,603 1,543 802 774 873 842 41 Nonfinancial corporations .............................................................. 1,441 2,256 2,345 2,140 81 135 213 130 42 Savings and loan associations ....................................................... 1,430 1,152 1,068 1,081 16 17 19 19 43 State and local governments ......................................................... 1,825 2,670 2,704 2,508 1,530 3,616 3,314 3,339 44 All others .......................................................................................... 28,733 32,149 40,078 41,017 8,526 9,164 16,172 16,340 Note. Direct public issues only. Based on Treasury Survey of Ownership from 460 mutual savings banks, and 723 insurance companies, each about 80 percent; Treasury Bulletin (U.S. Treasury Department). (2) 419 nonfinancial corporations and 483 savings and loan associations, each about Data complete for U.S. government agencies and trust funds and Federal Re­ 50 percent; and (3) 491 state and local governments, about 40 percent. serve Banks, but data for other groups include only holdings of those institutions “All others," a residual, includes holdings of all those not reporting in the that report. The following figures show, for each category, the number and pro­ Treasury Survey, including investor groups not listed separately. portion reporting as of Dec. 31, 1979: (1) 5,394 commercial banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A34 Domestic Financial Statistics □ March 1980 1.44 U.S. GOVERNMENT SECURITIES DEALERS Transactions Par value; averages of daily figures, in millions of dollars 1979 1980 1979, week ending Wednesday Item 1976 1977 1978 Nov. Dec. Jan.P Nov. 7 Nov. 14 Nov. 21 Nov. 28 Dec. 5 Dec. 12 1 U.S. government securities ......... 10,449 10,838 10,285 16,677 15,629 16,059 15,252 17,237 14,692 19,016 16,973 17,851 By maturity 2 Bills .......'........................................ 6,676 6,746 6,173 9,787 10,232 10.460 8,293 9,908 9,640 10,260 10,703 11,275 3 Other within 1 year ..................... 210 237 392 607 560 484 299 663 634 692 864 561 4 1-5 years ........................................ 2,317 2,320 1,889 3.119 2,520 2.662 2,722 3,348 2,166 4,648 2,553 3,033 5 5-10 years ..................................... 1.019 1,148 965 1.592 1,292 976 1,650 1,683 1,057 1,986 1,720 1,684 6 Over 10 years ............................... 229 388 866 1,572 1.026 1.481 2,288 1,635 1,194 1,430 1,134 1,297 By type of customer 7 U.S. government securities dealers .................................... 1,360 1,267 1,135 1,973 1.719 1.800 1,966 2,198 1,710 1,923 2,000 1,701 8 U.S. government securities brokers ................................... 3,407 3,709 3,838 6,439 6.296 6.524 5,532 7,207 5,448 7,681 6,524 7,252 9 Commercial banks ....................... 2,426 2,295 1,804 2,259 2.033 2.015 2,160 2,407 1,840 2,691 2,105 2,344 10 All others1 ..................................... 3,257 3,568 3,508 6,005 6.596 5.708 5,594 5,425 5,694 6,720 6,344 6,554 11 Federal agency securities ............ 1,548 1,729 1,894 3,324 3,225 2,750 2,921 3,533 3,382 3,447 3,055 3,223 1. Includes, among others, all other dealers and brokers in commodities and Transactions are market purchases and sales of U.S. government securities deal­ securities, foreign banking agencies, and the Federal Reserve System. ers reporting to the Federal Reserve Bank of New York. The figures exclude allotments of, and exchanges for, new U.S. government securities, redemptions Note. Averages for transactions are based on number of trading days in the of called or matured securities, or purchases or sales of securities under repurchase, period. 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 1980 1979, week ending Wednesday Item 1976 Nov. Dec.P Jan.? Oct. 17 Oct. 24 Oct. 31 Nov. 7 Nov. 14 Nov. 21 Positions1 1 U.S. government securities 7,592 5,172 2,656 3,931 3,900 3,332 1,157 671 1,180 2,280 4,752 3,285 4 2 3 B O 1i t 5 l h l s e y r e . a . w . r . s . i . t . h . . . i . . n . . . . . . . . 1 . . . . . . . y . . . . . e . . . a . . . r . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,2 5 1 9 1 8 0 5 8 4,77 6 9 2 0 9 2, - 4 2 9 5 6 2 2 0 4 - - 1 8 ,4 9 9 4 7 6 6 -1 5 - . 6 , 5 7 8 4 6 1 8 0 -1 4 . . 1 2 3 0 8 1 5 7 5 2 - -6 8 ,7 4 2 7 1 8 1 2 - - 7 7 ,3 3 8 9 5 8 9 2 -7 ,0 23 7 25 5 2 2 -8 ,1 3 6 3 8 5 9 2 5 - - 6 3 ,0 8 0 0 2 0 9 4- -5 8,28 3 28 0 2 5 5-10 years .......................... 402 92 40 347 385 129 59 -7 -105 356 332 213 6 Over 10 years .................... 198 149 -4 231 57 326 -206 - 199 -278 266 393 267 7 Federal agency securities . 729 693 606 1,534 1,308 995 1,824 1,567 1,737 1,690 1,544 1,497 Financing2 8 All sources ..................................... 8,715 9,877 10,204 19,122 21,391 16,275 16,628 16,744 15,153 16,878 18,328 19,981 Commercial banks 9 New York City ......................... 1,896 1,313 599 1,778 1,729 859 1,463 1,220 674 1,315 2,107 2,194 10 Outside New York City ......... 1,660 1,987 2,174 3,386 3,778 3,844 3,637 3,227 2,713 2,937 3,238 3,657 11 Corporations3 ................................ 1,479 2,423 2,370 4,102 4,832 3,654 3,123 3,312 3,009 3,526 3,469 4,119 12 All others ....................................... 3,681 4,155 5,052 9,857 11,054 7,917 8,403 8,985 8,757 9,100 9,514 10,011 1. New amounts (in terms of par values) of securities owned by nonbank dealer agency securities (through both collateral loans and sales under agreements to firms and dealer department of commercial banks on a commitment, that is, trade- repurchase), plus internal funds used by bank dealer departments to finance po­ date basis, including any such securities that have been sold under agreements to sitions in such securities. Borrowings against securities held under agreeement to repurchase. The maturities of some repurchase agreements are sufficiently long, resell are excluded where the borrowing contract and the agreement to resell are however, to suggest that the securities involved are not available for trading pur­ equal in amount and maturity, that is, a matched agreement. poses. Securities owned, and hence dealer positions, do not include securities 3. All business corporations except commercial banks and insurance companies. purchased under agreement to resell. 2. Total amounts outstanding of funds borrowed by nonbank dealer firms and Note. Averages for positions are based on number of trading days in the period; dealer departments of commercial banks against U.S. government and federal those for financing, on the number of calendar days in the 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 1979 Agency 1976 1977 1978 June July Aug. Sept. Oct. Nov. 1 Federal and federally sponsored agencies1 ...................... 103,848 112,472 137,063 149,612 152,653 153,788 154,753 158,298' 161,653 2 Federal agencies .................................................................. 22,419 22,760 23,488 24,170 24,274 24,415 24,341 24,151' 24,224 3 Defense Department2 ..................................................... 1,113 983 968 796 787 777 767 757' 748 4 Export-Import Bank3 4 .................................................... 8,574 8,671 8,711 8,806 8,783 8,781 8,886 8,881 8,812 5 Federal Housing Administration5 ................................. 575 581 588 562 559 552 551 547 545 6 Government National Mortgage Association participation certificates6 ........................................ 4,120 3,743 3,141 3,039 3,004 3,004 3,004 3,004 3,004 7 Postal Service7 ................................................................. 2,998 2,431 2,364 2,202 2,202 2,202 1,837 1,837 1,837 8 Tennessee Valley Authority .......................................... 4,935 6,015 7,460 8,335 8,495 8,655 8,850 8,670 8,825 9 United States Railway Association7 ............................. 104 336 356 430 444 444 446 455 453 10 Federally sponsored agencies1 .......................................... 81,429 89,712 113,575 125,442 128,379 129,373 130,412 134,147 137,429 11 Federal Home Loan Banks ............................................ 16,811 18,345 27,563 28,758 29,600 29,994 30,303 31,874 33,296 12 Federal Home Loan Mortgage Corporation .............. 1,690 1,686 2,262 2,522 2,522 2,720 2,622 2,621 2,621 13 Federal National Mortgage Association ..................... 30,565 31,890 41,080 45,775 46,341 46,108 46,378 46,861 47,278 14 Federal Land Banks ........................................................ 17,127 19,118 20,360 18,389 17,075 17,075 17,075 16,006 16,006 15 Federal Intermediate Credit Banks ............................. 10,494 11,174 11,469 5,122 4,269 3,427 2.676 2,676 2,676 16 Banks for Cooperatives .................................................. 4,330 4,434 4,843 785 785 785 785 584 584 17 Farm Credit Banks1 ........................................................ 2,548 5,081 22,949 26,606 28,033 29,297 32,189 33,547 18 Student Loan Marketing Association8 ......................... 410 515 915 1,140 1,180 1,230 1,275 1,335 1,420 19 Other ................................................................................. 2 2 2 2 1 1 1 1 1 Memo: 20 Federal Financing Bank debt7 9 ......................................... 28,711 38,580 51,298 60,816 61,798 62,880 64,211 65,583 66,281 Lending to federal and federally sponsored agencies 21 Export-Import Bank4 .......................................................... 5,208 5,834 6,898 7,846 7,846 7,846 7,953 7,953 7,953 22 Postal Service7 ..................................................................... 2,748 2,181 2,114 1,952 1,952 1,952 1,587 1,587 1,587 23 Student Loan Marketing Association8 ............................. 410 515 915 1,140 1,180. 1,230 1,275 1,335 1,420 24 Tennessee Valley Authority .............................................. 3,110 4,190 5,635 6,610 6,770 6,930 7,125 6,945 7,100 25 United States Railway Association7 ................................. 104 336 356 430 444 444 446 455 453 Other Lending10 26 Farmers Home Administration ......................................... 10,750 16,095 23,825 29,200 29,765 30,445 31,080 31.670 31,950 27 Rural Electrification Administration ................................ 1,415 2,647 4,604 5,497 5,639 5,754 5,926 6,157 6,272 28 Other ..................................................................................... 4,966 6,782 6,951 8,141 8,202 8,279 8,819 9.481 9,546 1. In September 1977 the Farm Credit Banks issued their first consolidated of Housing and Urban Development; Small Business Administration; and the bonds, and in January 1979 they began issuing these bonds on a regular basis to Veterans Administration. replace the financing activities of the Federal Land Banks, the Federal Interme­ 7. Off-budget. diate Credit Banks, and the Banks for Cooperatives. Line 17 represents those 8. Unlike other federally sponsored agencies, the Student Loan Marketing As­ consolidated bonds outstanding, as well as any discount notes that have been sociation may borrow from the Federal Financing Bank (FFB) since its obligations issued. Lines 1 and 10 reflect the addition of this item. are guaranteed by the Department of Health, Education, and Welfare. 2. Consists of mortgages assumed by the Defense Department between 1957 9. The FFB, which began operations in 1974, is authorized to purchase or sell and 1963 under family housing and homeowners assistance programs. obligations issued, sold, or guaranteed by other federal agencies. Since FFB incurs 3. Includes participation certificates reclassified as debt beginning Oct. 1, 1976. debt solely for the purpose of lending to other agencies, its debt is not included 4. Off-budget Aug. 17, 1974, through Sept. 30, 1976; on-budget thereafter. in the main portion of the table in order to avoid double counting. 5. Consists of debentures issued in payment of Federal Housing Administration 10. Includes FFB purchases of agency assets and guaranteed loans; the latter insurance claims. Once issued, these securities may be sold privately on the se­ contain loans guaranteed by numerous agencies with the guarantees of any par­ curities market. ticular agency being generally small. The Farmers Home Administration item 6. Certificates of participation issued prior to fiscal 1969 by the Government consists exclusively of agency assets, while the Rural Electrification Administration National Mortgage Association acting as trustee for the Farmers Home Admin­ entry contains both agency assets and guaranteed loans. istration; Department of Health, Education, and Welfare; Department Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Financial Statistics □ March 1980 1.47 NEW SECURITY ISSUES of State and Local Governments Millions of dollars 1979 Type of issue or issuer, or use 1977 1978 1979 July Aug. Sept. Oct.' Nov.' Dec. 1 All issues, new and refunding1 ....................................................... 46,769 48,607 43,490 3,399 4,266' 2,479 4,229 4,172 3,583 Type of issue 2 General obligation ........................................................................... 18.042 17.854 12.109 779' 743 699 1,037 805 855 3 Revenue ............................................................................................ 28.655 30.658 31.256 2.617' 3.513' 1,773 3,180 3,355 2,712 4 Housing Assistance Administration2 ............................................ 5 U.S. government loans ................................................................... 72 95 125 3 10 7 12 12 16 Type of issuer 6 State ................................................................................................... 6.354 6,632 4.314 234 200 113 294 274 569 7 Special district and statutory authority ........................................ 21.717 24,156 23.434 1,598' 2,558' 1,404' 2,749 2,697 2,102 8 Municipalities, counties, townships, school districts ................. 18.623 17.718 15.617 1,564' 1,498' 955' 1,174 1,189 896 9 Issues for new capital, total ............................................................ 36,189 37,629 41,505 2,902 4,202' 2,436 4,171 3,702 3,186 Use of proceeds 10 Education ........................................................................................... 5.076 5.003 5.130 383 556 218 311 298 408 11 Transportation .................................................................................................. 2.951 3.460 2.441 149 151 38 562 97 214 12 Utilities and conservation ............................................................................ 8,119 9.026 8.594 608 817 336 1,426 515 409 13 Social welfare ................................................................................... 8,274 10.494 15.968 1.166 1,749 1,082 1,191 2,042 1,724 14 Industrial aid .................................................................................... 4.676 3.526 3.836 328 422' 382 427 369 157 15 Other purposes ................................................................................ 7,093 6.120 5.536 268 507 380 254 381 274 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 contri­ butions to tne local authority. 1.48 NEW SECURITY ISSUES of Corporations Millions of dollars 1979 Type of issue or issuer, 1976 1977 1978 or use June July Aug. Sept. Oct. Nov. 1 All issues1 ........................................................................................... 53,488 53,792 47,230 6,247 4,095 4,083 4,308 4,561 3,834 2 Bonds ................................................................................................. 42,380 42,015 36,872 5,356 3,114 2,859 3,021 3,532 2,589 Type of offering 3 Public .................................................................................................. 26,453 24,072 19.815 4.171 2.247 1,973 2,167 2,669 1,583 4 Private placement ............................................................................ 15.927 17,943 17.057 1.185 867 886 854 863 1,006 Industry group 5 Manufacturing ................................................................................... 13,264 12,204 9.572 1,146 968 806 1,095 1.334 322 6 Commercial and miscellaneous ..................................................... 4,372 6,234 5.246 573 241 413 361 214 207 7 Transportation .................................................................................. 4,387 1,996 2.007 423 380 171 175 296 257 8 Public utility ..................................................................................... 8,297 8,262 7.092 1,125 174 137 620 1,107 663 9 Communication ................................................................................ 2,787 3,063 3.373 379 26 336 418 433 854 10 Real estate and financial ................................................................ 9,274 10,258 9.586 1.710 1,325 996 353 147 287 11 Stocks ................................................................................................. 11,108 11,777 10,358 891 981 1,224 1,287 1,029 1,245 Type 12 Preferred ........................................................................................... 2,803 3,916 2.832 278 392 401 698 195 465 13 Common ............................................................................................ 8,305 7,861 7.526 613 589 823 589 834 780 Industry group 14 Manufacturing ................................................................................... 2,237 1,189 1.241 47 38 360 394 151 158 15 Commercial and miscellaneous ..................................................... 1,183 1,834 1.816 363 173 266 218 98 286 16 Transportation ............................................................................. 24 456 263 3 142 4 2 17 Public utility ..................................................................................... 6,121 5,865 5.140 248 598 366 527 662 607 18 Communication ............................................................................. 776 1,379 264 30 68 83 47 2 19 Real estate and financial ................................................................ 771 1,049 1.631 200 103 91 61 70 190 1. Figures, which represent gross proceeds of issues maturing in more than one 1933. employee stock plans, investment companies other than closed-end, intra­ year, sold for cash in the United States, are principal amount or number of units corporate transactions, and sales to foreigners, multiplied by offering price. Excludes offerings of less than $100,000, secondary offerings, undefined or exempted issues as defined in the Securities Act of Source. Securities and Exchange Commission. 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 1979 1980 Item 1978 1979 July Aug. Sept. Oct. Nov. Dec. Jan. Investment Companies1 1 Sales of own shares2 ............................................................ 6,645 7,495 744 675 580 617 690 748 958 2 Redemptions of own shares3 ............................................. 7,231 8,393 706 832 784 805 579 743 774 3 Net sales ................................................................................ -586 -898 38 -157 -204 -188 111 5 184 4 Assets4 ................................................................................... 44,980 49,493 48,771 50,802 50,147 46,271 48,613 49,277' 51,314 5 Cash position5 .................................................................. 4,507 4,983 5,052 4,924 5,016 4,521 4,984 4,983 5,713 6 Other ................................................................................. 40,473 44,510 43,719 45,878 45,131 41,750 43,629 44,294' 45,601 1. Excluding money market funds. 5. Also includes all U.S. government securities and other short-term debt se­ 2. Includes reinvestment of investment income dividends. Excludes reinvest­ curities. ment 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 members, which 3. Excludes share redemption resulting from conversions from one fund to an­ comprise substantially all open-end investment companies registered with the Se­ other in the same group. curities and Exchange Commission. Data reflect newly formed companies after 4. Market value at end of period, less current liabilities. their initial offering of securities. 1.50 CORPORATE PROFITS AND THEIR DISTRIBUTION Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1978 1979 Account 1976 1977 1978 Q1 Q2 03 04 Q1 02 03 1 Profits before tax ......................................................... 156.0 177.1 206.0 177.5 207.2 212.0 227.4 233.3 227.9 242.3 2 Profits tax liability ....................................................... 63.8 72.6 84.5 70.8 84.7 87.5 95.1 91.3 88.7 94.0 3 Profits after tax ............................................................ 92.2 104.5 121.5 106.7 122.4 124.5 132.3 142.0 139.3 148.3 4 Dividends ................................................................... 37.5 42.1 47.2 45.1 46.0 47.8 49.7 51.5 52.3 52.8 5 Undistributed profits ............................................... 54.7 62.4 74.3 61.6 76.4 76.8 82.6 90.5 87.0 95.5 6 Capita] consumption allowances ............................... 97.1 109.3 119.8 116.5 119.1 120.6 123.1 125.5 130.4 132.8 7 Net cash flow ................................................................ 151.8 171.7 194.1 178.1 195.5 197.3 205.7 216.0 217.3 228.3 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 □ March 1980 1.51 NONFINANCIAL CORPORATIONS Current Assets and Liabilities Billions of dollars, except for ratio 1978 1979 Account 1975 1976 1977 01 Q2 03 04 01 02 03 1 Current assets ............................................................... 759.0 826.3 900.9 925.0 954.2 992.6 1,028.1 1,078.6 1,110.6 1,169.6 2 Cash ................................................................................ 82.1 87.3 94.3 88.8 91.3 91.7 103.7 102.4 100.1 103.6 3 U.S. government securities ........................................ 19.0 23.6 18.7 18.6 17.3 16.1 17.8 19.2 20.8 17.8 4 Notes and accounts receivable ................................... 272.1 293.3 325.0 337.4 356.0 376.4 381.9 405.3 419.0 448.9 5 Inventories .................................................................... 315.9 342.9 375.6 390.5 399.3 415.5 428.3 452.6 469.2 492.7 6 Other ............................................................................. 69.9 79.2 87.3 89.7 90.3 92.9 96.3 99.1 101.5 106.7 7 Current liabilities ......................................................... 451.6 492.7 546.8 574.3 593.5 626.0 661.9 701.6 723.9 773.7 8 Notes and accounts payable ....................................... 264.2 282.0 313.7 325.2 338.0 356.2 375.1 392.6 410.8 443.1 9 Other ............................................................................. 187.4 210.6 233.1 249.0 255.6 269.7 286.8 309.0 313.2 330.6 10 Net working capital ..................................................... 307.4 333.6 354.1 350.7 360.6 366.6 366.2 377.0 386.7 395.9 11 Memo: Current ratio 1 ................................................ 1.681 1.677 1.648 1.611 1.608 1.586 1.553 1.537 1.534 1.512 1. Ratio of total current assets to total current liabilities. All data in this table reflect the most current benchmarks. Complete data are available upon request from the Flow of Funds Section, Division of Research and Note: For a description of this series, see “Working Capital of Nonfinancial Statistics. 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. 1978 1979 1980 Industry 1978 1979 03 04 01 Q2 03 Q42 Ql2 022 1 All industries ................................................................ 153.82 177.09 155.41 163.96 165.94 173.48 179.33 186.95 189.49 193.83 Manufacturing 2 Durable goods industries ............................................ 31.66 38.23 32.25 33.99 34.00 36.86 39.72 41.30 42.60 44.63 3 Nondurable goods industries ..................................... 35.96 40.69 35.50 39.26 37.56 39.56 40.50 43.88 43.21 44.38 Nonmanufacturing 4 Mining ............................................................................ 4.78 5.56 4.99 4.98 5.46 5.31 5.42 6.06 6.49 5.97 Transportation 5 Railroad ..................................................................... 3.32 3.93 3.38 3.49 4.02 3.66 4.03 4.20 4.08 4.08 6 Air ............................................................................... 2.30 3.24 2.20 2.39 3.35 3.26 3.10 3.39 4.50 3.86 7 Other ......................................................................... 2.43 2.95 2.47 2.55 2.71 2.79 3.16 3.15 3.42 3.64 Public utilities 8 Electric ....................................................................... 29.48 32.56 24.92 26.95 27.70 28.06 28.32 26.02 27.94 27.96 9 Gas and other ........................................................... 4.70 5.07 4.70 4.78 4.66 5.18 5.01 5.50 5.28 5.61 1 1 1 0 C Co om m m m e u r n c i i c a a l ti a o n n d . o .. t . h ... e .. r . 1 . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1 5 8 . . 7 1 1 6 2 2 0 9 . . 5 3 6 5 2 1 6 8 , . 0 90 9 2 1 7 8 . . 1 4 2 6 2 1 7 8 . . 7 7 3 5 2 28 0 . . 5 2 1 9 2 2 0 9 . . 4 6 1 6 2 3 2 0 . . 7 7 1 2 51.97 53.71 1. Includes trade, service, construction, finance, and insurance. agriculture; real estate operators; medical, legal, educational, and cultural service: 2. Anticipated by business. 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 1979 Account 1973 1974 1975 1976 1977 1978 Q1 Q2 Q3 Q4 Assets Accounts receivable, gross 1 Consumer .............................................................................. 35.4 36.1 36.0 38.6 44.0 52.6 54.9 58.7 62.3 65.7 2 Business ................................................................................. 32.3 37.2 39.3 44.7 55.2 63.3 66.7 70.1 68.1 70.3 3 Total ................................................................................... 67.7 73.3 75.3 83.4 99.2 116.0 121.6 128.8 130.4 136.0 4 Less: Reserves for unearned income and losses .... 8.4 9.0 9.4 10.5 12.7 15.6 16.5 17.7 18.7 20.0 5 Accounts receivable, net ................................................. 59.3 64.2 65.9 72.9 86.5 100.4 105.1 111.1 111.7 116.0 6 Cash and bank deposits .................................................. 2.6 3.0 2.9 2.6 2.6 3.5 ) 7 Securities .............................................................................. .8 .4 1.0 1.1 .9 1.3 V 23.81 24.6 25.8 24.9 8 All other ................................................................................ 10.6 12.0 11.8 12.6 14.3 17.3 9 Total assets .................................................................... 73.2 79.6 81.6 89.2 104.3 122.4 128.9 135.8 137.4 140.9 Liabilities 10 Bank loans ........................................................................... 7.2 9.7 8.0 6.3 5.9 6.5 6.5 7.3 7.8 8.5 11 Commercial paper ............................................................. 19.7 20.7 22.2 23.7 29.6 34.5 38.1 41.0 39.2 43.3 Debt 12 Short-term, n.e.c.............................................................. 4.6 4.9 4.5 5.4 6.2 8.1 6.7 8.8 9.1 8.2 13 Long-term n.e.c................................................................ 24.6 26.5 27.6 32.3 36.0 43.6 44.5 46.0 47.5 46.7 14 Other ................................................................................. 5.6 5.5 6.8 8.1 11.5 12.6 15.1 14.4 15.4 14.2 15 Capital, surplus, and undivided profits ...................... 11.5 12.4 12.5 13.4 15.1 17.2 18.0 18.2 18.4 19.9 16 Total liabilities and capital ......................................... 73.2 79.6 81.6 89.2 104.3 122.4 128.9 135.8 137.4 140.9 1. Beginning Q1 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 Dec. 31, 1979 1979 1979 19791 Oct. Nov. Dec. Oct. Nov. Dec. Oct. Nov. Dec. 1 Total ...................................................................... 70,305 399 242 -561 16,354 16,505 16,443 15,955 16,263 17,004 2 Retail automotive (commercial vehicles) ........ 15,286 -16 -41 -83 1,151 1,135 1,096 1,167 1,176 1,179 3 Wholesale automotive ........................................ 13,788 -408 -319 -763 6,079 5,082 5,028 6,487 5,401 5,791 4 Retail paper on business, industrial and farm equipment ............................................ 18,868 369 261 264 1,300 1,252 1,398 931 991 1,134 5 6 L Fa o c a t n o s r e o d n c c o o m m m m e e r r c c ia ia l l a a c c c c o o u u n n ts ts r r e e c c e e iv iv a a b b le le 2 2 .. . . . . . . . 7,092 168 304 285 5,200 6,635 6,806 5,032 6,331 6,521 7 All other business credit .................................... 15,271 286 37 -264 2,624 2,401 2,115 2,338 2,364 2,379 1. Not seasonally adjusted. 2. Beginning January 1979 the categories “Loans on commercial accounts re­ ceivable” and “Factored commercial accounts receivable” are combined. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Financial Statistics □ March 1980 1.55 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1979 1980 Item 1976 1977 1978 Sept. Oct. Nov. Dec. Jan.' Feb.P Terms and yields in primary and secondary markets Primary Markets Conventional mortgages on new homes Terms1 1 Purchase price (thousands of dollars) ........................ 48.4 54.3 62.6 75.5 76.4 77.1c 79.4' 76.9 78.1 2 Amount of loan (thousands of dollars) ..................... 35.9 40.5 45.9 53.9 54.9 55.4C 56.0r 54.4 55.4 3 Loan/price ratio (percent) ............................................ 74.2 76.3 75.3 73.4 73.7 73.8 72.9' 73.0 72.4 4 Maturity (years) ............................................................. 27.2 27.9 28.0 28.6 28.5 28.5 -28.8' 28.1 28.7 5 Fees and charges (percent of loan amount)2 ............ 1.44 1.33 1.39 1.67 1.70 1.82 1.85' 2.11 1.78 6 Contract rate (percent per annum) ............................ 8.76 8.80 9.30 10.72 10.91 11.04 11.30' 11.48 11.61 Yield (percent per annum) 1 FHLBB series3 .............................................................. 8.99 9.01 9.54 11.02 11.21 11.37 11.64' 11.87 11.93 8 HUD series4 .................................................................. 8.99 8.95 9.68 11.35 12.15 12.50 12.50 12.80 n.a. Secondary Markets Yield (percent per annum) 9 FHA mortgages (HUD series)5 .................................. 8.82 8.68 9.70 11.37 n.a. 12.41 12.24 12.60 n.a. 10 GNMA securities6 ......................................................... 8.17 8.04 8.98 10.31 11.25 11.57 11.35' 11.94 13.16 FNMA auctions7 11 Government-underwritten loans ............................. 8.99 8.73 9.77 11.08 12.52 12.75 12.48 12.90 14.48 12 Conventional loans .................................................... 9.11 8.98 10.01 11.75 12.85 13.66 12.98 13.20 14.12 Activity in secondary markets Federal National Mortgage Association Mortgage holdings (end of period) 13 Total ................................................................................. 32,904 34,370 43,311 49,173 49,744 50,350 51,091 52,106 n.a. 14 FHA-insured .............................................................. 18,916 18,457 21,243 23,535 23,899 24,178 24,489 24,906 n.a. 15 VA-guaranteed .......................................................... 9,212 9,315 10,544 10,345 10,327 10,374 10,496 10,653 n.a. 16 Conventional .............................................................. 4,776 6,597 11,524 15,203 15,517 15,797 16,106 16,546 n.a. Mortgage transactions (during period) 17 Purchases ........................................................................ 3,606 4,780 12,303 545 859 872 893 1,163 n.a. 18 Sales ................................................................................. 86 67 5 0 0 0 0 0 n.a. Mortgage commitments8 19 Contracted (during period) ...................................... 6,247 9,729 18,960 1,407 2,369 496 402 n.a. n.a. 20 Outstanding (end of period) ........................................ 3,398 4,698 9,201 6,352 7,472 6,974 6,409 5.671 n.a. Auction of 4-month commitments to buy Government-underwritten loans 21 Offered9 ...................................................................... 4,929.8 7,974.1 12,978 1,421.1 2,943.4 558.4 649.2 516.0 1,169.4 22 Accepted ..................................................................... 2,787.2 4,846.2 6,747.2 599.9 1,130.4 264.6 249.3 213.8 563.7 Conventional loans 23 Offered9 ...................................................................... 2,595.7 5.675.2 9.933.0 527.3 1,049.9 366.1 413.2 443.1 412.1 24 Accepted ..................................................................... 1,879.2 3,917.8 5.110.9 325.6 431.2 190.2 152.4 247.2 147.8 Federal Home Loan Mortgage Corporation Mortgage holdings (end of period)10 25 Total ................................................................................. 4,269 3,276 3,064 3,729 3,726 3,990 4,035 4,124 n.a. 26 FHA/VA ..................................................................... 1,618 1,395 1,243 1,132 1,120 1,112 1,102 1,098 n.a. 27 Conventional .............................................................. 2,651 1,881 1,822 2,597 2,606 2,879 2,933 3,026 n.a. Mortgage transactions (during period) 28 Purchases ....................................................................... 1,175 3,900 6,524 537 552 458 403 280 n.a. 29 Sales ................................................................................. 1,396 4,131 6,211 347 530 186 361 180 n.a. Mortgage commitments11 30 Contracted (during period) ......................................... 1,477 5,546 7,451 437 504 221 199 296 n.a. 31 Outstanding (end of period) ........................................ 333 1,063 1,410 1,400 1,312 1,036 797 779 n.a. 1. Weighted averages based on sample surveys of mortgages originated by major securities, assuming prepayment in 12 years on pools of 30-year FHA/VA mort­ institutional lender groups. Compiled by the Federal Home Loan Bank Board in gages carrying the prevailing ceiling rate. Monthly figures are unweighted averages cooperation with the Federal Deposit Insurance Corporation. of Monday quotations for the month. 2. Includes all fees, commissions, discounts, and “points” paid (by the borrower 7. Average gross yields (before deduction of 38 basis points for mortgage or the seller) in order to obtain a loan. servicing) on accepted bids in Federal National Mortgage Association's auctions 3. Average effective interest rates on loans closed, assuming prepayment at the of 4-month commitments to purchase home mortgages, assuming prepayment in end of 10 years. 12 years for 30-year mortgages. No adjustments are made for FNMA commitment 4. Average contract rates on new commitments for conventional first mortgages, fees or stock related requirements. Monthly figures are unweighted averages for rounded to the nearest 5 basis points; from Department of Housing and Urban auctions conducted within the month. Development. 8. Includes some multifamily and nonprofit hospital loan commitments in ad­ 5. Average gross yields on 30-year, minimum-downpayment, Federal Housing dition to 1- to 4-family loan commitments accepted in FNMA’s free market auction Administration insured first mortgages for immediate delivery in the private sec­ system, and through the FNMA-GNMA tandem plans. ondary market. Any gaps in data are due to periods of adjustment to changes in 9. Mortgage amounts offered by bidders are total bids received. maximum permissible contract rates. 10. Includes participation as well as whole loans. 6. Average net yields to investors on Government National Mortgage Associ­ 11. Includes conventional and government-underwritten loans. ation 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 1977 1978 1979 04 01 02 03 04 1All holders ............................................................................. 1,023,505 1,172,754' 1,335,023 1,172,754' 1,206,213' 1,252,426' 1,295,644' 1,335,023 2 1- to 4-family ........................................................................ 656,566 761,843 ' 872,192 761,843' 784.546' 816.940' 846,115' 872,192 3 Multifamily ............................................................................ 111,841 121,972' 130,734 121,972' 123,965' 125.916' 128,256' 130,734 4Commercial .......................................................................... 189,274 212,746' 239,026 212,746' 217.495' 224,499' 232,120' 239,026 5Farm ...................................................................................... 65,824 76,193 ' 93,071 76.193' 80.207 85.071 89,153' 93,071 6 Major financial institutions ................................................ 745,011 848,095 940,679 848,095' 865,974' 894.385' 919,967' 940,679 7 Commercial banks1 ......................................................... 178,979 213,963 246,763 213.963 220.063 229,564 239,363 246,763 8 1- to 4-family ................................................................ 105,115 126,966 146,077 126.966 130.585 136.223 142,038 146,077 9 Multifamily .................................................................... 9,215 10,912 12,585 10.912 11,223 11,708 12,208 12,585 10 Commercial .................................................................. 56,898 67,056 77,737 67.056 68,968 71.945 75,016 77,737 11 Farm .............................................................................. 7,751 9,029 10,364 9.029 9.287 9.688 10,101 10,364 12 Mutual savings banks ..................................................... 88,104 95,157 98,924 95.157 96.136 97.155 97,929 98,924 13 1- to 4-family ................................................................ 57,637 62,252 64,717 62.252 62.892 63.559 64,065 64,717 14 Multifamily .................................................................... 15,304 16,529 17,183 16.529 16.699 16.876 17,010 17,183 15 Commercial .................................................................. 15,110 16,319 16.965 16.319 16,488 16.662 16,795 16,965 16 Farm .............................................................................. 53 57 59 57 57 58 59 59 17 Savings and loan associations ........................................ 381,163 432,808' 475,797 432,808' 441,358' 456,543' 468,307' 475,797 18 1- to 4-family ................................................................ 310,686 356,114' 394,436 356.114' 363.723' 377.516' 387,992' 394,436 19 Multifamily .................................................................... 32,513 36,053' 37,588 36.053' 36,677' 37.071 ' 37,277' 37,588 20 Commmercial .............................................................. 37,964 40,641' 43,773 40,641 ' 40.958' 41.956' 43.038' 43,773 21 Life insurance companies .............................................. 96,765 106,167' 119.195 106,167 108.417 111,123 114,368 119,195 22 1- to 4-family ................................................................ 14,727 14,436' 16,187 14,436 14,507 14.489 14,884 16,187 23 Multifamily .................................................................... 18,807 19.000' 19,250 19,000 19.080 19,102 19,107 19,250 24 Commercial .................................................................. 54,388 62,232' 71,076 62,232 63.908 66.055 68,513 71,076 25 Farm .............................................................................. 8,843 10,499' 12,682 10.499 10.922 11.477 11,864 12,682 26 Federal and related agencies ............................................. 70,006 81,853 97.293 81.853 86.689 90,095 93,143 97,293 27 Government National Mortgage Assn ......................... 3,660 3,509 3,852 3,509 3,448 3,425 3,382 3,852 28 1- to 4-family ................................................................ 1,548 877 763 877 821 800 780 763 29 Multifamily .................................................................... 2,112 2,632 3,089 2.632 2,627 2.625 2,602 3,089 30 Farmers Home Administration ..................................... 1,353 926 1,274 926 956 1.200 1,383 1,274 31 1- to 4-family ................................................................ 626 288 417 288 302 363 163 417 32 Multifamily .................................................................... 275 320 71 320 180 75 299 71 33 Commercial .................................................................. 149 101 174 101 283 278 262 174 34 Farm .............................................................................. 303 217 612 217 191 484 659 612 35 Federal Housing and Veterans Admin ........................ 5,212 5,419 5,764 5.419 5,522 5,597 5,672 5,764 36 1- to 4-family ................................................................ 1,627 1,641 1.863 1.641 1,693 1.744 1,795 1,863 37 Multifamily .................................................................... 3,585 3,778 3.901 3,778 3.829 3,853 3,877 3,901 38 Federal National Mortgage Association ..................... 34,369 43,311 51,091 43,311 46,410 48.206 49,173 51,091 39 1- to 4-family ................................................................ 28,504 37,579 45,488 37.579 40.702 42,543 43,534 45,488 40 Multifamily .................................................................... 5,865 5,732 5,603 5,732 5,708 5.663 5,639 5,603 41 Federal Land Banks ........................................................ 22,136 25,624 31,277 25.624 26,893 28.459 29,804 31,277 42 1- to 4-family ................................................................ 670 927 1,552 927 1.042 1,198 1,374 1,552 43 Farm .............................................................................. 21,466 24,697 29,725 24,697 25,851 27.261 28.430 29.725 44 Federal Home Loan Mortgage Corp .......................... 3,276 3,064 4,035 3,064 3,460 3.208 3.729 4,035 45 1- to 4-family ................................................................ 2,738 2,407 3,059 2.407 2.685 2.489 2.850 3.059 46 Mutlifamily .................................................................... 538 657 976 657 775 719 879 976 47 Mortgage pools or trusts2 .................................................. 70,289 88.633 119,278 88,633 94,551 102.259 110,648 119,278 48 Government National Mortgage Assn ......................... 44,896 54,347 76,401 54,347 57.955 63,000 69,357 76,401 49 1- to 4-family ................................................................ 43,555 52,732 74,546 52.732 56,269 61,246 67,535 74,546 50 Multifamily .................................................................... 1,341 1,615 1,855 1,615 1,686 1,754 1,822 1,855 51 Federal Home Loan Mortgage Corp .......................... 6,610 11,892 15,180 11,892 12.467 13.708 14,421 15,180 52 1- to 4-family ................................................................ 5,621 9,657 12,149 9,657 10,088 11.096 11.568 12,149 53 Multifamily .................................................................... 989 2,235 3,031 2,235 2,379 2.612 2.853 3,031 54 Farmers Home Administration ..................................... 18,783 22,394 27,697 22,394 24.129 25.551 26,870 27,697 55 1- to 4-family ................................................................ 11,397 13,400 14,884 13,400 13.883 14.329 14,972 14,884 56 Multifamily .................................................................... 759 1,116 2,163 1,116 1,465 1.764 1,763 2,163 57 Commercial .................................................................. 2,945 3,560 4,328 3,560 3,660 3,833 4,054 4,328 58 Farm .............................................................................. 3,682 4,318 6,322 4,318 5.121 5.625 6,081 6,322 59 Individual and others3 ........................................................ 138,199 154,173' 177,773 154,173' 158,999' 165,687' 171,886' 177,773 60 1- to 4-family .................................................................... 72,115 82,567' 96,054 82,567' 85,354' 89,345' 92,565' 96,054 61 Multifamily ........................................................................ 20,538 21,393' 23,439 21,393' 21,637' 22,094 22,920' 23,439 62 Commerical ...................................................................... 21,820 22,837' 24,973 22,837' 23,230' 23,770 24,442' 24,973 63 Farm .................................................................................. 23,726 27,376' 33,307 27,376' 28,778' 30.478 31,959' 33,307 1. Includes loans held by nondeposit trust companies but not bank trust de­ Note. Based on data from various institutional and government sources, with partments. some quarters estimated in part by the Federal Reserve in conjunction with the 2. Outstanding principal balances of mortgages backing securities insured or Federal Home Loan Bank Board and the Department of Commerce. Separation guaranteed by the agency indicated. of nonfarm mortgage debt by type of property, if not reported directly, and in­ 3. Other holders include mortgage companies, real estate investment trusts, terpolations and extrapolations when required, are estimated mainly by the Federal state and local credit agencies, state and local retirement funds, noninsured pension Reserve. Multifamily debt refers to loans on structures of five or more units. funds, credit unions, and U.S. agencies for which 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 □ March 1980 1.57 CONSUMER INSTALLMENT CREDIT1 Total Outstanding, and Net Change Millions of dollars 1979 Holder, and type of credit 1978 July Aug. Sept. Nov. Dec. Jan. Amounts outstanding (end of period) 1 Total .......................................................... 230,829 275,629 311,122 295,052 299,813 303,902 305,217 307,641 311,122 308,984 By major holder 2 Commercial banks ................................... 112,373 136,189 149,604 145,169 147,312 148,657 149,152 149,057 149,604 148,868 3 Finance companies ................................... 44,868 54,298 68,318 62,463 63,362 64,822 65,692 67,164 68,318 68,724 4 Credit unions ............................................ 37,605 45,939 48,186 47,772 48,631 49,214 48,770 48,673 48,186 47,270 5 Retailers2 .................................................. 23,490 24,876 27,916 23,713 24,114 24,446 24,860 25,732 27,916 26,985 6 Savings and loans .................................... 7,354 8,394 10,361 9,425 9,760 9,972 10,073 10,241 10,361 10,320 7 Gasoline companies ................................ 2,963 3,240 4,316 3,872 4,048 4,244 4,174 4,281 4,316 4,433 8 Mutual savings banks ............................. 2,176 2,693 2,421 2,638 2,586 2,547 2,496 2,493 2,421 2,384 By major type of credit 9 Automobile .............................................. 82,911 102,468 115,022 111,952 113,351 114,765 114,876 115,121 115,022 114,761 10 Commercial banks ............................... 49,577 60,564 65,229 64,826 65,389 65,813 65,973 65,646 65,229 64,824 11 Indirect paper ................................... 27,379 33,850 37,209 36,475 36,887 37,267 37,469 37,334 37,209 37,020 12 Direct loans ....................................... 22,198 26,714 28,020 28,351 28,502 28,546 28,504 28,312 28,020 27,804 13 Credit unions ........................................ 18,099 21,967 23,042 22,844 23,255 23,534 23,322 23,275 23,042 22,604 14 Finance companies ............................... 15,235 19,937 26,751 24,282 24,707 25,418 25,581 26,200 26,751 27,333 15 Revolving .................................................. 39,274 47,051 55,330 47,894 49,270 50,422 50,883 52,060 55,330 54,420 16 Commercial banks ............................... 18,374 24,434 28,954 25,927 26,782 27,446 27,600 27,827 28,954 28,841 17 Retailers ................................................ 17,937 19,377 22,060 18,095 18,440 18,732 19,109 19,952 22,060 21,146 18 Gasoline companies ............................ 2,963 3,240 4,316 3,872 4,048 4,244 4,174 4,281 4,316 4,433 19 Mobile home ............................................ 15,141 16,042 17,409 16,719 16,972 17,105 17,244 17,349 17,409 17,387 20 Commercial banks ............................... 9,124 9,553 9,991 9,801 9,912 9,940 10,013 10,036 9,991 9,968 21 Finance companies ............................... 3,077 3,152 3,390 3,212 3,231 3,258 3,295 3,321 3,390 3,415 22 Savings and loans ................................ 2,538 2,848 3,516 3,198 3,312 3,384 3,418 3,475 3,516 3,502 23 Credit unions ........................................ 402 489 512 508 517 523 518 517 512 502 24 Other ......................................................... 93,503 110,068 123,361 118,487 120,220 121,610 122,214 123,111 123,361 122,416 25 Commercial banks ............................... 35,298 41,638 45,430 44,615 45,229 45,458 45,566 45,548 45,430 45,235 26 Finance companies ............................... 26,556 31,209 38,177 34,969 35,424 36,146 36,816 37,643 38,177 37,976 27 Credit unions ........................................ 19,104 23,483 24,632 24,420 24,859 25,157 24,930 24,881 24,632 24,164 28 Retailers ................................................ 5,553 5,499 5,856 5,618 5,674 5,714 5,751 5,780 5,856 5,839 29 Savings and loans ................................ 4,816 5,546 6,845 6,227 6,448 6,588 6,655 6,766 6,845 6,818 30 Mutual savings banks ......................... 2,176 2,693 2,421 2,638 2,586 2,547 2,496 2,493 2,421 2,384 Net change (during period)3 31 Total .......................................................... 35,278 44,810 35,491 2,443 2,446 4,446 2,186 2,407 1,349 1,372 By major holder 32 Commercial banks ................................... 18,645 23,813 13,414 662 866 1,521 771 283 218 433 33 Finance companies ................................... 5,948 9,430 14,020 1,185 549 1,773 1,076 1,340 1,087 1,096 34 Credit unions ............................................ 6,436 8,334 2,247 342 391 411 -152 -44 -455 -324 35 Retailers2 .................................................. 2,654 1,386 3,040 180 332 443 335 477 282 120 36 Savings and loans .................................... 1,111 1,041 1,967 120 253 207 76 143 165 7 37 Gasoline companies ................................ 132 276 1,076 2 116 127 122 218 115 50 38 Mutual savings banks ............................. 352 530 -273 -48 -61 -36 -42 -10 -63 -10 By major type of credit 39 Automobile .............................................. 15,204 19,557 12,554 616 594 1,823 487 533 682 972 40 Commercial banks ............................... 9,956 10,987 4,665 72 172 762 203 -76 122 83 41 Indirect paper ................................... 5,307 6,471 3,359 51 188 542 237 40 260 72 42 Direct loans ...................................... 4,649 4,516 1,306 21 -16 220 -34 -116 -138 11 43 Credit unions ........................................ 2,861 3,868 1,075 183 177 218 -79 -24 -213 -134 44 Finance companies ............................... 2,387 4,702 6,814 361 245 843 363 633 773 1,023 45 Revolving .................................................. 6,248 7,776 8,279 429 787 1,057 664 799 432 289 46 Commercial banks ............................... 4,015 6,060 4,520 303 365 546 253 136 24 109 47 Retailers ................................................ 2,101 1,440 2,683 124 306 384 289 445 293 130 48 Gasoline companies ............................ 132 276 1,076 2 116 127 122 218 115 50 49 Mobile home ............................................ 565 897 1,366 72 182 89 150 103 108 120 50 Commercial banks .............................. 387 426 437 17 59 10 105 33 -22 68 51 Finance companies ............................... -189 74 238 11 13 17 27 19 84 48 52 Savings and loans ................................ 297 310 668 41 106 57 21 52 51 10 53 Credit unions ........................................ 70 87 23 3 4 5 -3 -1 -5 -6 54 Other ......................................................... 13,261 16,580 13,292 1,326 883 1,477 885 972 127 -9 55 Commercial banks ............................... 4,287 6,340 3,792 270 270 203 210 190 94 173 56 Finance companies .............................. 3,750 4,654 6,968 813 291 913 686 688 230 25 57 Credit unions ........................................ 3,505 4,379 1,149 156 210 188 -70 -19 -237 -184 58 Retailers ................................................ 553 -54 357 56 26 59 46 32 -11 -10 59 Savings and loans ................................ 814 731 1,299 79 147 150 55 91 114 -3 60 Mutual savings banks ......................... 352 530 -273 -48 -61 -36 -42 -10 -63 -10 1. The Board’s series cover most short- and intermediate-term credit extended Note. Total consumer noninstallment credit outstanding—credit scheduled to to individuals through regular business channels, usually to finance the purchase be repaid in a lump sum, including single-payment loans, charge accounts, and of consumer goods and services or to refinance debts incurred for such purposes, service credit—amounted to $71.1 billion at the end of 1979, $64.6 billion at the and scheduled to be repaid (or with the option of repayment) in two or more end of 1978, $58.6 billion at the end of 1977, and $55.3 billion at the end of 1976. installments. 2. Includes auto dealers and excludes 30-day charge credit held by travel and entertainment companies. 3. Net change equals extensions minus liquidations (repayments, charge-offs, and other crecfit); figures for all months are seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Consumer Debt A43 1.58 CONSUMER INSTALLMENT CREDIT Extensions and Liquidations Millions of dollars 1979 1980 Holder, and type of credit 1977 1978 1979 June July Aug. Sept. Oct. Nov. Dec. Jan. Extensions1 1 Total ........................................................... 254,071 298,351 322,558 26,139 26,848 27,583 28,634 27,695 26,464 25,671 26,702 By major holder 2 Commercial banks ................................... 117,896 142,720 149,599 12,278 12,292 12,700 13,172 12,718 11,738 11,370 12,126 3 Finance companies ................................... 41,989 50,505 61,518 4,641 5,353 5,133 5,489 5,642 5,105 5,249 5,540 4 Credit unions ............................................ 34,028 40,023 36,778 2,986 3,282 3,361 3,363 2,942 2,808 2,396 2,527 5 Retailers2 ................................................... 39,133 41,619 46,092 3,853 3,687 3,921 4,082 3,930 4,161 4,054 4,010 6 Savings and loans .................................... 4,485 5,050 7,333 682 592 728 678 571 606 632 485 7 Gasoline companies ................................ 14,617 16,125 19,607 1,589 1,525 1,640 1,734 1,773 1,913 1,895 1,889 8 Mutual savings banks ............................. 1,923 2,309 1,631 110 117 100 116 119 133 75 125 By major type of credit 9 Automobile ............................................... 75,641 88,987 91,847 7,178 7,447 7,667 8,430 7,676 7,066 7,131 7,780 10 Commercial banks ............................... 46,363 53,028 50,596 3,952 3,936 4,085 4,544 4,185 3,640 3,808 4,026 11 Indirect paper ................................... 25,149 29,336 28,183 2,146 2,151 2,276 2,569 2,376 2,009 2,181 2,154 12 Direct loans ....................................... 21,214 23,692 22,413 1,806 1,785 1,809 1,975 1,809 1,631 1,627 1,872 13 Credit unions ........................................ 16,616 19,486 18,301 1,485 1,611 1,661 1,655 1,434 1,399 1,223 1,348 14 Finance companies ............................... 12,662 16,473 22,950 1,741 1,900 1,921 2,231 2,057 2,027 2,100 2,406 15 Revolving ................................................... 86,756 104,587 120,728 10,136 9,856 10,371 10,699 10,424 10,613 10,196 10,475 16 Commercial banks ............................... 38,256 51,531 60,406 5,166 5,078 5,280 5,398 5,165 5,014 4,683 5,030 17 Retailers ................................................ 33,883 36,931 40,715 3,381 3,253 3,451 3,567 3,486 3,686 3,618 3,556 18 Gasoline companies ............................ 4,617 16,125 19,607 1,589 1,525 1,640 1,734 1,773 1,913 1,895 1,889 19 Mobile home ............................................ 5,425 6,067 6,395 547 519 655 531 582 515 490 558 20 Commercial banks ............................... 3,466 3,704 3,720 304 297 362 294 374 294 245 351 21 Finance companies ............................... 643 886 797 59 71 67 69 83 69 97 87 22 Savings and loans ................................ 1,120 1,239 1,687 167 133 206 148 114 139 140 112 23 Credit unions ........................................ 196 238 191 17 18 20 20 11 13 8 8 24 Other ......................................................... 86,249 98,710 103,588 8,278 9,026 8,890 8,974 9,013 8,270 7,854 7,889 25 Commercial banks ............................... 29,811 34,457 34,877 2,856 2,981 2,973 2,936 2,994 2,790 2,634 2,719 26 Finance companies ............................... 28,684 33,146 37,771 2,841 3,382 3,145 3,189 3,502 3,009 3,052 3,047 27 Credit unions ........................................ 17,216 20,299 18,286 1,484 1,653 1,680 1,688 1,497 1,396 1,165 1,171 28 Retailers ................................................ 5,250 4,688 5,377 472 434 470 515 444 475 436 454 29 Savings and loans ................................ 3,365 3,811 5,646 515 459 522 530 457 467 492 373 30 Mutual savings banks ......................... 1,923 2,309 1,631 110 117 100 116 119 133 75 125 Liquidations1 31 Total ........................................................... 218,793 253,541 287,067 23,581 24,405 25,137 24,188 25,509 24,057 24,322 25,330 By major holder 32 Commercial banks ................................... 99,251 118,907 136,185 11,294 11,630 11,834 11,651 11,947 11,455 11,152 11,693 33 Finance companies ................................... 36,041 41,075 47,498 3,728 4,168 4,584 3,716 4,566 3,765 4,162 4,444 34 Credit unions ............................................ 27,592 31,689 34,531 2,842 2,940 2,970 2,952 3,094 2,852 2,851 2,851 35 Retailers2 ................................................... 36,479 40,233 43,052 3,565 3,507 3,589 3,639 3,595 3,684 3,772 3,890 36 Savings and loans .................................... 3,374 4,009 5,366 442 472 475 471 495 463 467 478 37 Gasoline companies ................................ 14,485 15,849 18,531 1,550 1,523 1,524 1,607 1,651 1,695 1,780 1,839 38 Mutual savings banks ............................. 1,571 1,779 1,904 160 165 161 152 161 143 138 135 By major type of credit 39 Automobile ............................................... 60,437 69,430 79,293 6,488 6,831 7,073 6,607 7,189 6,533 6,449 6,808 40 Commercial banks ............................... 36,407 42,041 45,931 3,829 3,864 3,913 3,782 3,982 3,716 3,686 3,943 41 Indirect paper ................................... 19,842 22,865 24,824 2,059 2,100 2,088 2,027 2,139 1,969 1,921 2,082 42 Direct loans ....................................... 16,565 19,176 21,107 1,770 1,764 1,825 1,755 1,843 1,747 1,765 1,861 43 Credit unions ........................................ 13,755 15,618 17,226 1,440 1,428 1,484 1,437 1,513 1,423 1,436 1,482 44 Finance companies ............................... 10,275 11,771 16,136 1,219 1,539 1,676 1,388 1,694 1,394 1,327 1,383 45 Revolving ................................................... 80,508 96,811 112,449 9,340 9,427 9,584 9,642 9,760 9,814 9,764 10,186 46 Commercial banks ............................... 34,241 45,471 55,886 4,672 4,775 4,915 4,852 4,912 4,878 4,659 4,921 47 Retailers ................................................ 31,782 35,491 38,032 3,118 3,129 3,145 3,183 3,197 3,241 3,325 3,426 48 Gasoline companies ............................ 14,485 15,849 18,531 1,550 1,523 1,524 1,607 1,651 1,695 1,780 1,839 49 Mobile home ............................................ 4,860 5,170 5,029 445 447 473 442 432 412 382 438 50 Commercial banks ............................... 3,079 3,278 3,283 292 280 303 284 269 261 267 283 51 Finance companies ............................... 832 812 559 45 60 54 52 56 50 13 39 52 Savings and loans ................................ 823 929 1,019 93 92 100 91 93 87 89 102 53 Credit unions ........................................ 126 151 168 15 15 16 15 14 14 13 14 54 Other .......................................................... 72,988 82,130 90,296 7,308 7,700 8,007 7,497 8,128 7,298 7,727 7,898 55 Commercial banks ............................... 25,524 28,117 31,085 2,501 2,711 2,703 2,733 2,784 2,600 2,540 2,546 56 Finance companies ............................... 24,934 28,492 30,803 2,464 2,569 2,854 2,276 2,816 2,321 2,822 3,022 57 Credit unions ........................................ 13,711 15,920 17,137 1,387 1,497 1,470 1,500 1,567 1,415 1,402 1,355 58 Retailers ................................................ 4,697 4,742 5,020 447 378 444 456 398 443 447 464 59 Savings and loans ................................ 2,551 3,080 4,347 349 380 375 380 402 376 378 376 60 Mutual savings banks ......................... 1,571 1,779 1,904 160 165 161 152 161 143 138 135 1. Monthly figures are seasonally adjusted. 2. Includes auto dealers and excludes 30-day charge credit held by travel and entertainment companies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic Financial Statistics □ March 1980 1.59 FUNDS RAISED IN U.S. CREDIT MARKETS Billions of dollars; quarterly data are at seasonally adjusted annual rates. Transaction category, sector 1973 1975 1977 HI H2 Nonfinancial sectors 1 Total funds raised .................................... 203.1 191.3 210.8 271.9 338.5 400.3 274.9 298.1 378.9 384.5 416.1 384.3 2 Excluding equities .................................... 195.4 187.4 200.7 261.1 335.4 398.2 266.8 296.9 373.8 387.1 409.3 381.6 By sector and instrument 3 U.S. government .................................... 8.3 11.8 85.4 69.0 56.8 53.7 61.4 46.1 67.4 61.4 46.0 27.3 4 Treasury securities ............................. 7.9 12.0 85.8 69.1 57.6 55.1 61.8 46.7 68.6 62.3 47.9 29.6 5 Agency issues and mortgages ............ .4 _ 2 -.4 -.1 -.9 -1.4 -.3 -.6 -1.2 -.9 -1.9 -2.3 6 7 Al C l o o r th p e o r r a n te o n e fi q n u a i n ti c e i s a l . s .. e .. c .. t . o .. r . s .. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 7 4 . . 7 9 179 3 * .8 5 12 10 5 . . 1 4 20 1 2 0. .9 8 281 3. . 1 8 3462..16 213 8. . 1 4 252 1 . . 0 2 311 5. . 1 5 3 - 2 2 3 . . 6 1 370 6 . . 2 8 357 2 . . 0 7 8 Debt instruments ................................ 187.2 175.6 115.3 192.0 278.6 344.5 205.4 250.8 306.4 325.7 363.4 354.3 1 9 0 Pri C v o at r e p o d r o a m te e s e t q ic u i n ti o e n s fin .. a .. n .. c .. i . a .. l .. . s .. e .. c .. t . o .. r .. s 18 7 8 . . 9 8 16 4 4. . 1 1 112 9 . . 1 9 18 1 2 0 . .5 0 267 2 . .7 9 3142..64 19 7 2. . 3 7 241. . 5 5 294 4 . . 2 9 3 - 0 1 2 . . 8 5 326 7 . . 3 0 340 2 . . 2 8 11 Debt instruments ............................ 180.9 160.0 102.1 171.5 265.1 311.8 184.6 241.0 289.3 304.3 319.2 337.4 12 Debt capital instruments ........... 105.1 98.0 98.4 123.5 175.6 196.6 126.5 158.7 192.5 188.0 205.1 202.6 13 State and local obligations .... 14.7 16.5 16.1 15.7 23.7 28.3 10.9 22.3 25.0 27.8 28.7 17.4 14 Corporate bonds ..................... 9.2 19.7 27.2 22.8 21.0 20.1 22.9 16.6 25.4 20.6 19.6 23.3 Mortgages 1 1 5 6 M Ho u m lti e f am ... i . l . y .. .. r .. e . s .. i . d .. e .. n .. t .. i . a .. l . ... . . . . . . . . . . . . . . . . . . . . . 4 1 6 0 . . 4 4 3 6 4 . . 9 8 3 1 9 1 . . 5 0 63 1 . . 7 8 96 7 . . 4 4 10 1 4 0 . . 5 2 7 3 0 . . 1 0 8 6 9. . 7 4 10 8 3. . 1 4 99 9 . . 8 3 10 11 9 . .2 2 11 8 1 . . 1 0 1 17 8 F C a o r m m m e .. r . c .. i . a .. l . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 5 8 . . 5 9 1 5 5 . .1 0 4.6 1 6 3 . . 1 4 1 8 8 . . 8 4 2 1 3 0. .3 2 1 7 2 . . 3 5 1 9 4 . . 0 8 21 8. .9 7 2 9 1 . . 3 2 2 1 5 1. . 1 4 2 1 5 7. . 1 7 19 Other debt instruments ............. 75.8 62.0 3.8 48.0 89.5 115.2 58.0 82.3 96.7 116.3 114.1 134.8 20 Consumer credit ..................... 26.0 9.9 9.7 25.6 40.6 50.6 27.6 36.6 44.5 50.1 51.0 48.2 21 Bank loans n.e.c....................... 37.1 31.7 - 12.3 4.0 27.0 37.3 10.8 27.3 26.7 43.1 31.4 46.9 22 Open market paper ................ 2.5 6.6 -2.6 4.0 2.9 5.2 2.3 3.4 2.4 5.3 5.1 10.8 23 Other ........................................ 10.3 13.7 9.0 14.4 19.0 22.2 17.4 14.9 23.2 17.8 26.5 28.9 24 By borrowing sector ....................... 188.8 164.1 112.1 182.0 267.9 314.4 192.3 241.5 294.2 302.5 326.3 340.2 25 State and local governments .... 13.2 15.5 13.7 15.2 20.4 23.6 11.7 15.7 25.0 21.0 26.1 14.4 26 Households .................................. 80.1 51.2 49.5 90.7 139.9 162.6 98.8 129.4 150.4 156.1 169.1 167.5 27 Farm ............................................. 9.6 8.0 8.8 10.9 14.7 18.1 11.9 15.7 13.8 15.3 20.8 23.6 28 Nonfarm noncorporate ............. 13.0 7.7 2.0 5.4 12.5 15.7 5.8 13.4 12.5 16.3 14.5 15.1 29 Corporate ..................................... 73.0 81.7 38.1 59.8 80.3 94.5 64.1 67.3 92.4 93.7 95.8 119.4 6.1 30 Foreign ................................................. 15.4 13.32 20.8 13.9 32.3 21.1 10.5 17.32 20.6 43.9 16.9 31 Corporate equities ......................... .3 .4 -.5 .3 .6 -.8 -.2 -.1 32 Debt instruments ............................ 15.7 13.2 20.5 13.5 32.8 20.8 9.9 17.1 21.4 44.1 16.9 33 Bonds ............................................ 2.1 6.2 8.6 5.1 4.0 9.7 4.4 5.7 5.0 3.0 3.5 34 Bank loans n.e.c........................... 4.7 3.9 6.8 3.1 168..63 5.1 -.4 6.5 9.3 27.3 4.3 35 Open market paper .................... 7.3 .3 1.9 2.4 2.4 2.7 2.2 3.6 9.6 6.1 36 U.S. government loans ............. 1.6 2.8 3.3 3.0 3.9 3.6 3.1 2.9 3.6 4.2 3.1 Financial sectors 37 Total funds raised .............................. 44.8 39.2 12.7 24.1 54.0 81.4 28.5 47.7 60.3 80.7 82.1 87.8 By instrument 38 U.S. government related .................. 19.9 23.1 13.5 18.6 26.3 41.4 20.7 22.6 29.9 38.5 44.3 45.9 39 Sponsored credit agency securities 16.3 16.6 2.3 3.3 7.0 23.1 4.3 7.1 6.8 21.9 24.3 21.7 40 Mortgage pool securities ............... 3.6 5.8 10.3 15.7 20.5 18.3 17.2 17.9 23.1 16.6 20.1 24.2 41 Loans from U.S. government ...... 0 .7 .9 -.4 - 1.2 0 -.7 -2.3 0 0 0 0 42 Private financial sectors .................... 24.9 16.2 -.8 5.5 27.7 40.0 7.8 25.1 30.4 42.2 37.8 41.9 43 Corporate equities ......................... 1.5 .3 .6 1.0 .9 1.7 2.3 .9 .8 2.2 1.1 2.5 44 Debt instruments ............................ 23.4 15.9 - 1.4 4.4 26.9 38.3 5.6 24.2 29.6 40.0 36.7 39.3 45 Corporate bonds ......................... 3.5 2.1 2.9 5.8 10.1 7.5 5.1 10.2 10.1 8.5 6.4 8.9 . 46 Mortgages .................................... - 1.2 - 1.3 2.3 2.1 3.1 .9 2.8 3.1 3.0 2.1 -.3 -.4 47 Bank loans n.e.c........................... 9.0 4.6 -3.7 -3.7 -.3 2.8 -5.3 - 1.8 1.2 2.5 3.1 -1.3 48 Open market paper and RPs .... 4.9 3.8 1.1 2.2 9.6 14.6 5.0 9.8 9.5 13.5 15.7 24.5 49 Loans from FHLBs .................... 7.2 6.7 -4.0 -2.0 4.3 12.5 -2.0 2.9 5.8 13.2 11.8 7.7 By sector 50 Sponsored credit agencies ................. 16.3 17.3 3.2 2.6 5.8 23.1 3.5 4.7 6.8 21.9 24.3 21.7 51 Mortgage pools .................................. 3.6 5.8 10.3 15.7 20.5 18.3 17.2 17.9 23.1 16.6 20.1 24.2 52 Private financial sectors .................... 24.9 16.2 -.8 5.5 27.7 40.0 7.8 25.1 30.4 42.2 37.8 41.9 53 Commercial banks ......................... 1.2 1.2 1.2 2.3 1.1 1.3 2.1 .8 1.5 1.5 1.1 1.1 54 Bank affiliates ................................. 2.2 3.5 .3 -.8 1.3 6.7 -.3 1.3 1.2 5.8 7.6 6.2 55 Savings and loan associations ....... 6.0 4.8 -2.3 .1 9.9 14.3 .3 8.3 11.5 16.4 12.2 9.8 56 Other insurance companies ........... .5 .9 1.0 .9 .9 1.1 .9 .9 1.0 1.0 1.1 1.0 57 Finance companies ......................... 9.5 6.0 .5 6.4 17.6 18.6 7.2 16.7 18.5 18.9 18.2 24.4 58 REITs .............................................. 6.5 .6 -1.4 -2.4 - 2.2 - 1.0 -2.7 -2.4 -2.0 - 1.0 - 1.0 -.5 59 Open-end investment companies .. - 1.2 -.7 -.1 - 1.0 - .9 - 1.0 .4 -.6 -1.3 -.5 -1.5 -.3 All sectors 60 Total funds raised, by instrument 248.0 230.5 223.5 296.0 392.5 481.7 303.4 345.8 439.2 465.2 498.3 472.1 61 Investment company shares ....... - 1.2 -.7 -.1 - 1.0 -.9 - 1.0 .4 -.6 -1.3 -.5 -1.5 _ 3 62 Other corporate equities ............ 10.4 4.8 10.8 12.9 4.9 4.7 9.9 2.6 7.2 .1 9.4 5.5 63 Debt instruments ......................... 238.8 226.4 212.8 284.1 388.5 478.0 293.1 343.8 433.3 465.5 490.4 466.9 64 U.S. government securities .... 28.3 34.3 98.2 88.1 84.3 95.2 82.9 71.2 97.4 100.0 90.4 73.4 65 State and local obligations ...... 14.7 16.5 16.1 15.7 23.7 28.3 10.9 22.3 25.0 27.8 28.7 17.4 66 Corporate and foreign bonds . 13.6 23.9 36.4 37.2 36.1 31.6 37.7 31.2 41.1 34.2 29.1 35.7 67 Mortgages ................................. 79.9 60.5 57.2 87.1 134.0 149.0 95.5 122.9 145.1 141.6 156.4 161.4 68 Consumer credit ....................... 26.0 9.9 9.7 25.6 40.6 50.6 27.6 36.6 44.5 50.1 51.0 48.2 69 Bank loans n.e.c........................ 48.8 41.0 - 12.2 7.0 29.8 58.4 10.6 25.1 34.4 54.9 61.8 49.8 70 Open market paper and RPs .. 8.3 17.7 - 1.2 8.1 15.0 26.4 9.6 15.9 14.0 22.4 30.4 41.3 71 Other loans ................................ 19.1 22.7 8.7 15.3 25.2 38.6 18.23 18.5 31.8 34.6 42.5 39.8 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 1979 Transaction category, or sector 1973 1974 1975 1976 1977 1978 H2 HI H2 HI H2 HI 1 Total funds advanced in credit markets to nonfinancial sectors ............................................................................ 195.4 187.4 200.7 261.1 355.4 398.2 266.8 296.9 373.8 387.1 409.3 381.6 By public agencies and foreign 2 Total net advances .............................................................. 31.8 53.7 44.6 54.3 85.1 109.7 60.3 66.1 104.2 102.8 116.6 45.1 3 U.S. government securities ............................................ 9.5 11.9 22.5 26.8 40.2 43.9 30.2 27.1 53.3 43.7 44.0 -27.6 4 Residential mortgages ..................................................... 8.2 14.7 16.2 12.8 20.4 26.5 14.7 18.9 22.0 22.2 30.7 33.7 5 FHLB advances to S&Ls ................................................ 7.2 6.7 -4.0 -2.0 4.3 12.5 -2.0 2.9 5.8 13.2 11.8 7.7 6 Other loans and securities ............................................. 6.9 20.5 9.8 16.6 20.2 26.9 17.4 17.2 23.1 23.7 30.1 31.2 Total advanced, by sector 7 U.S. government ................................................................. 2.8 9.8 15.1 8.9 11.8 20.4 11.9 5.9 17.8 19.4 21.4 24.3 8 Sponsored credit agencies .................................................. 19.1 26.5 14.8 20.3 26.8 44.6 22.2 21.6 32.0 39.4 49.8 50.6 9 Monetary authorities .......................................................... 9.2 6.2 8.5 9.8 7.1 7.0 6.2 10.2 4.0 13.4 .5 -.8 10 Foreign .................................................................................. .6 11.2 6.1 15.2 39.4 37.7 20.0 28.3 50.4 30.6 44.9 -28.9 11 Agency borrowing not included in line 1 ........................ 19.9 23.1 13.5 18.6 26.3 41.4 20.7 22.6 29.9 38.5 44.3 45.9 Private domestic funds advanced 12 Total net advances .............................................................. 183.6 156.8 169.7 225.4 276.5 330.0 227.2 253.5 299.6 322.8 337.1 382.4 13 U.S. government securities ............................................ 18.8 22.4 75.7 61.3 44.1 51.3 52.7 44.1 44.1 56.3 46.4 100.9 14 State and local obligations ............................................. 14.7 16.5 16.1 15.7 23.7 28.3 10.9 22.3 25.0 27.8 28.7 17.4 15 Corporate and foreign bonds ........................................ 10.0 20.9 32.8 30.5 22.5 22.5 31.8 18.0 27.0 24.1 20.9 26.9 16 Residential mortgages ..................................................... 48.4 26.9 23.2 52.7 83.3 88.2 58.2 77.1 89.4 86.7 89.6 85.3 17 Other mortgages and loans ............................................ 98.8 76.8 17.9 63.3 107.3 152.2 71.6 94.9 119.7 141.1 163.3 159.7 18 Less: FHLB advances .................................................... 7.2 6.7 -4.0 -2.0 4.3 12.5 -2.0 2.9 5.8 13.2 11.8 7.7 Private financial intermediation 19 Credit market funds advanced by private financial institutions ..................................................................... 161.3 125.5 122.5 190.3 255.9 296.9 202.2 249.1 265.0 301.7 292.0 320.6 20 Commercial banking ...................................................... 84.6 66.6 29.4 59.6 87.6 128.7 68.3 84.6 90.7 132.5 125.0 130.3 21 Savings institutions .......................................................... 35.1 24.2 53.5 70.8 82.0 75.9 70.4 81.4 82.6 75.8 75.9 57.8 22 Insurance and pension funds ......................................... 23.7 29.8 40.6 49.9 67.9 73.5 47.9 65.2 70.6 76.9 70.2 79.9 23 Other finance .................................................................... 17.9 4.8 -1.0 10.0 18.4 18.7 15.5 18.0 21.2 16.6 20.8 52.6 24 Source of funds .................................................................... 161.3 125.5 122.5 190.3 255.9 296.9 202.2 249.1 265.0 301.7 292.0 320.6 25 Private domestic deposits .............................................. 97.3 67.5 92.0 124.6 141.2 142.5 132.4 138.6 143.8 138.3 146.7 118.1 26 Credit market borrowing ................................................ 23.4 15.9 -1.4 4.4 26.9 38.3 5.6 24.2 29.6 40.0 36.7 39.3 27 Other sources .................................................................. 40.6 42.1 32.0 61.3 87.8 116.0 64.2 86.2 91.7 123.5 108.6 163.2 28 Foreign funds ................................................................ 3.0 10.3 -8.7 -4.6 1.2 6.3 -2.8 1.6 .8 5.7 6.9 53.1 29 Treasury balances ........................................................ -1.0 -5.1 -1.7 -.1 4.3 6.8 -3.9 .1 8.5 1.9 11.6 5.5 30 Insurance and pension reserves ................................ 18.4 26.2 29.7 34.5 49.4 62.7 33.2 45.3 53.4 66.2 59.2 60.4 31 Other, net ..................................................................... 20.2 10.6 12.7 31.4 32.9 40.3 37.8 39.3 29.0 49.6 31.0 44.2 Private domestic nonfinancial investors 32 Direct lending in credit markets ...................................... 45.7 47.2 45.8 39.5 47.5 71.4 30.6 28.6 64.1 61.1 81.7 101.1 33 U.S. government securities ............................................ 18.8 18.9 24.1 16.1 23.0 33.2 11.0 11.9 34.2 32.1 34.4 64.3 34 State and local obligations ............................................. 5.4 9.3 8.4 3.8 2.6 4.5 -1.5 -.5 5.7 7.0 2.0 -.8 35 Corporate and foreign bonds ........................................ 2.0 5.1 8.4 5.8 -3.3 - 1.4 6.0 -.1 -6.5 -3.7 1.0 2.2 36 Commercial paper .......................................................... 9.8 5.8 -1.3 1.9 9.5 16.3 1.6 8.2 10.8 8.2 24.4 10.4 37 Other ................................................................................. 9.7 8.0 6.2 11.8 15.7 18.7 13.5 9.2 19.9 17.5 20.0 25.1 38 Deposits and currency ........................................................ 101.2 73.8 98.1 131.9 149.5 151.8 141.0 144.5 154.5 148.7 154.8 128.1 39 Security RPs ..................................................................... 11.0 -2.2 .2 2.3 2.2 7.5 3.2 4.3 .2 9.8 5.1 18.5 40 Money market fund shares ............................................ 2.4 1.3 .2 6.9 .5 -.5 .9 6.1 7.7 30.2 41 Time and savings accounts ............................................. 75.7 65.4 84.0 113.5 121.0 115.2 122.9 115.3 126.7 110.7 119.8 73.7 42 Large negotiable CDS ................................................ 17.8 18.4 - 14.3 - 13.6 9.0 10.8 -7.8 -4.5 22.6 10.1 11.4 -40.6 43 Other at commercial banks ........................................ 29.5 25.3 38.8 57.9 43.0 43.3 61.5 47.5 38.4 42.1 44.5 58.7 44 At savings institutions ................................................. 28.5 21.8 59.4 69.1 69.0 61.1 69.3 72.3 65.7 58.5 63.8 55.5 45 Money ............................................................................... 14.5 8.2 12.6 16.1 26.1 22.2 14.3 25.4 26.8 22.1 22.3 5.7 46 Demand deposits ......................................................... 10.6 1.9 6.4 8.8 17.8 12.9 5.8 19.6 16.1 11.6 14.2 -4.2 47 Currency ........................................................................ 3.9 6.3 6.2 7.3 8.3 9.3 8.6 5.8 10.8 10.5 8.1 10.0 48 Total of credit market instrument, deposits and currency ......................................................................... 146.9 121.0 143.9 171.4 197.0 223.2 171.6 173.1 218.6 209.8 236.6 229.2 49 Public support rate (in percent) .................................... 16.3 28.7 22.2 20.8 25.4 27.5 22.6 22.2 27.9 26.5 28.5 11.8 50 Private financial intermediation (in percent) ............. 87.9 80.0 72.2 84.4 92.5 90.0 89.0 98.2 88.5 93.5 86.6 83.9 51 Total foreign funds ......................................................... 3.6 21.5 -2.6 10.6 40.5 44.0 17.3 29.9 51.2 36.3 51.8 24.2 Memo: Corporate equities not included above 52 Total net issues ..................................................................... 9.2 4.1 10.7 11.9 4.0 3.7 10.3 2.1 5.9 -.4 7.9 5.2 53 Mutual fund shares ......................................................... -1.2 -.7 -.1 -1.0 -.9 -1.0 .4 -.6 -1.3 -.5 -1.5 -.3 54 Other equities .................................................................. 10.4 4.8 10.8 12.9 4.9 4.7 9.9 2.6 7.2 .1 9.4 5.5 55 Acquisitions by financial institutions ................................ 13.1 5.8 9.6 12.3 7.4 7.6 11.8 6.8 8.1 .4 14.7 14.5 56 Other net purchases ............................................................ -3.9 -1.7 11 -.4 -3.4 -3.8 -1.5 -4.7 -2.2 -.8 -6.8 -9.3 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, and net 33-37. Lines 13-17 less amounts acquired by private finance. Line 37 includes issues of federally related mortgage pool securities. Included below in lines mortgages. 3, 13, 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. Also sum 46. Lines 32 plus 38, or line 12 less line 27 plus 45. 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 line 18. 50. 52. Includes issues by financial institutions. 28. Foreign deposits at commercial banks, bank borrowings from foreign branches, Note. Full statements for sectors and transaction types quarterly, and annually and liabilities of foreign banking agencies to foreign affiliates. for flows and for amounts outstanding, may be obtained from Flow of Funds Section, Division of Research and Statistics, Board 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 □ March 1980 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures 1967 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1979 1980 Measure 1977 1978 1979 July Aug. Sept. Oct. Nov.' Dec.' Jan.' Feb. 1 Industrial production1 .......................................................... 138.2 146.1 152.2 152.8 151.6 152.4 152.2 152.1 152.2 152.7 153.0 Market groupings 2 Products, total ........................................................................ 137.9 144.8 149.7 149.7 148.7 149.9' 149.6 149.4 149.7 149.8 150.4 3 Final, total ......................................................................... 135.9 142.2 147.0 147.1 145.6 147.2' 146.8 146.6 146.9 146.9 147.9 4 Consumer goods ............................................................ 145.3 149.1 150.5 150.8 148.2 149.7' 149.7 148.9 148.3 147.8 149.2 5 Equipment ..................................................................... 123.0 132.8 142.2 142.1 141.8 143.9' 142.9 143.6 145.1 145.8 146.1 6 Intermediate ...................................................................... 145.1 154.1 160.0 159.4 160.6 159.8' 159.8 159.8 159.7 160.3 159.9 7 Materials ................................................................................. 138.6 148.3 156.0 157.6 156.0 156.3' 156.3 156.4 156.1 157.2 157.1 Industry groupings 8 Manufacturing ........................................................................ 138.4 146.8 153.2 154.1 152.4 153.5' 153.2 153.0 152.6 153.1 153.4 Capacity utilization (percent)12 9 Manufacturing ........................................................................ 81.9 84.4 85.7 86.1 84.9 85.3 84.9 84.6 84.2 84.2 84.2 10 Industrial materials industries ............................................ 82.7 85.6 85.6 87.9 86.8 86.7 86.6 86.4 86.0 86.3 86.1 11 Construction contracts3 ........................................................ 160.5 174.3 165.0 164.0 185.0 171.0 156.0 183.0 190.0 n.a. 12 Nonagricultural employment, total4 .................................. 125.3 131.4 136.0 136.3 136.4 136.5 136.8 136.9 137.2 137.7 137.9 13 Goods-producing, total .................................................... 104.5 109.8 114.0 114.7 114.1 114.1 114.0 113.8 114.4 114.9 114.9 14 Manufacturing, total ..................................................... 101.2 105.3 107.9 108.4 107.8 107.7 107.5 107.1 107.4 107.4 107.5 15 Manufacturing, production-worker ............................ 98.8 102.8 104.9 105.5 104.5 104.5 104.1 103.6 103.9 103.6 103.9 16 Service-producing ............................................................. 136.7 143.2 148.1 148.2 148.7' 148.8' 149.3 149.6 149.7 150.2 150.6 17 Personal income, total5 ........................................................ 244.4 274.1 306.9 308.5 310.6' 312.8' 316.2' 319.8 323.0 324.9 n.a. 18 Wages and salary disbursements .................................... 230.2 258.1 287.1 287.7 289.2 291.9' 294.1 297.4 301.5 n.a. 19 Manufacturing ................................................................ 198.3 222.4 246.8 247.6 246.3 248.7' 250.6 251.7 254.7 256.3 n.a. 20 Disposable personal income ................................................ 194.8 217.7 242.4 244.8 251.0 n.a. n.a. 21 Retail sales6 ............................................................................ 229.8 253.8 280.9 276.5 285.8 293.9 288.9 292.0 294.8 303.9 301.8 Prices1 22 Consumer ............................................................................... 181.5 195.4 218.9 221.1 223.4 225.4 227.5 229.9 233.2 n.a. 23 Producer finished goods ...................................................... 180.6 194.6 216.2 217.3 220.7' 224.2' 225.9 227.8 232.1 n.a. 1. The industrial production and capacity utilization series have been revised. 6. Based on Bureau of Census data published in Survey of Current Business For a description of the changes see the August 1979 Bulletin, pp. 603-07. (U.S. Department of Commerce). 2. Ratios of indexes of production to indexes of capacity. Based on data from 7. Data without seasonal adjustment, as published in Monthly Labor Review Federal Reserve, McGraw-Hill Economics Department, and Department of Com­ (U.S. Department of Labor). Seasonally adjusted data for changes in the price merce. indexes may be obtained from the Bureau of Labor Statistics, U.S. Department 3. Index of dollar value of total construction contracts, including residential, of Labor. nonresidential, and heavy engineering, from McGraw-Hill Information Systems Company, F. W. Dodge Division. Note: Basic data (not index numbers) for series mentioned in notes 4, 5, and 4. Based on data in Employment and Earnings (U.S. Department of Labor). 6, and indexes for series mentioned in notes 3 and 7 may also be found in the Series covers employees only, excluding personnel in the Armed Forces. Survey of Current Business (U.S. Department of Commerce). 5. Based on data in Survey of Current Business (U.S. Department of Commerce). Figures for industrial production for the last two months are preliminary and Series for disposable income is quarterly. estimated, respectively. 2.11 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1979 1979 1979 Series Q1 Q2 Q3' Q4 Q1 02 03 Q4 Q1 Q2 Q3' 04 Output (167 = 100) Capacity (percent of 1967 output) Utilization rate (percent) 1 Manufacturing ...................................................... 153.4 153.1 152.9 152.9' 176.9 178.2 179.5 180.8 86.7 85.9 84.6 84.6 2 Primary processing .............................................. 162.1 161.9 161.8 161.9 182.7 184.2 185.7 187.2 88.7 87.9 86.5 86.5 3 Advanced processing ........................................... 148.7 148.5 148.1 148.2 173.8 175.0 176.2 177.4 85.6 84.8 83.5 83.5 4 Materials ................................................................ 155.5 155.6 156.3 156.2 176.7 178.1 179.5 181.0 88.0 87.3 86.3 86.3 5 Durable goods ..................................................... 158.4 157.7 156.1 156.2 181.5 183.0 184.5 186.0 87.3 86.2 83.9 84.0 6 Metal materials ................................................ 124.7 124.3 119.5 119.6 139.8 140.3 140.7 141.1 89.2 88.5 84.7 84.8 7 Nondurable goods ................................................ 172.2 173.4 178.2 177.8 191.7 193.5 195.3 197.3 89.8 89.6 90.3 90.1 8 Textile, paper, and chemical ......................... 179.1 181.3 187.0 186.4 199.4 201.3 203.2 205.3 89.8 90.0 91.1 90.8 9 Textile ............................................................ 118.2 119.6 123.7 123.6 136.9 137.3 137.7 138.1 86.3 87.1 89.6 89.5 10 Paper ............................................................. 136.9 140.7 148.4 148.1 148.6 149.6 150.6 151.6 92.1 94.0 97.9 97.6 11 Chemical ........................................................ 222.7 224.8 230.4 229.5 247.2 250.3 253.3 256.3 90.1 89.8 89.9 89.5 12 Energy .................................................................... 127.9 128.1 129.9 129.4 146.7 147.5 148.3 149.2 87.1 86.9 86.8 86.7 1. The capacity utilization series has been revised. For a description of the changes, see the August 1979 Bulletin, pp. 606-07. 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 1980 Category 1977 1978 1979 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Household Survey Data 1 Noninstitutional population1 ....................... 158,559 161,058 163,620 163,891 164,106 164,468 164,682 164,898 165,101 165,298 2 Labor force (including Armed Forces)1 ... 99,534 102,537 104,996 105,218 105,586 105,688 105,744 106,088 106,310 106,346 3 Civilian labor force ..................................... 97,401 100,420 102,908 103,128 103,494 103,595 103,652 103,999 104,229 104,260 Employment 4 Nonagricultural industries2 .................. 87,302 91,031 93,648 93,689 94,140 94,180 94,223 94,553 94,534 94,626 5 Agriculture ............................................ 3,244 3,342 3,297 3,315 3,364 3,294 3,385 3,359 3,270 3,326 Unemployment 6 Number .................................................. 6,855 6,047 5,963 6,124 5,990 6,121 6,044 6,087 6,425 6,307 7 Rate (percent of civilian labor force) 7.0 6.0 5.8 5.9 5.8 5.9 5.8 5.9 6.2 6.0 8 Not in labor force ........................................ 59,025 58,521 58,623 58,673 58,519 58,780 59,937 58,810 58,791 58,951 Establishment Survey Data 9 Nonagricultural payroll employment3 ....... 82,423 86,446 89,497 89,762 89,803 89,982 90,100' 90,241' 90,590' 90,731 10 Manufacturing .................................................... 19,682 20.476 20,979 20,957 20,949 20,899 20,836' 20,881' 20,882' 20,900 11 Mining ................................................................... 813 851 958 968 973 979 983' 991' 1,003' 1,010 12 Contract construction .................................. 3,851 4,271 4,642 4,674 4,671 4,694 4,714' 4,783' 4,893' 4,861 13 Transportation and public utilities ............ 4,713 4,927 5,154 5,194 5,180 5,218 5,229' 5,223' 5,206' 5,198 14 Trade .................................................................... 18,516 19,499 20,140 20,126 20,169 20,243 20,308' 20,254' 20,396' 20,505 15 Finance .................................................................. 4,467 4,727 4,964 5,003 4,997 5,018 5,039' 5,056' 5,083' 5,087 16 Service ............................................................ 15,303 16,220 17,047 17,141 17,191 17,257 17,298' 17,357' 17,415' 17,474 17 Government ....................................................... 15,079 15.476 15,613 15,699 15,673 15,674 15,693' 15,696' 15,712' 15,696 1. Persons 16 years of age and over. Monthly figures, which are based on sample 3. Data include all full- and part-time employees who worked during, or data, relate to the calendar week that contains the 12th day; annual data are received pay for, the pay period that includes the 12th day of the month, and averages of monthly figures. By definition, seasonality does not exist in population exclude proprietors, self-employed persons, domestic servants, unpaid family figures. Based on data from Employment and Earnings (U.S. Dept, of Labor). workers, and members of the Armed Forces. Data are adjusted to the February 2. Includes self-employed, unpaid family, and domestic service workers. 1977 benchmark. Based on data from Employment and Earnings (U.S. Dept, of Labor). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics □ March 1980 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value' Monthly data are seasonally adjusted. 1967 1979 1978 1979 1980 pro­ Grouping por­ A a v g e e r­ tion Dec. Jan. Feb. June July Aug. Sept. Oct. Nov/ Dec. Jan.P Feb/ Index (1967 - 100) Major Market 1 Total index .................................................... 100.00 152.2 151.8 151.5 152.0 152.6 152.8 151.6 152.4 152.2 152.1 152.2 152.7 153.0 2 Products ......................................................... 60.71 149.7 149.0 149.2 149.9 150.2 149.7 148.7 149.9 149.6 149.4 149.7 149.8 150.4 3 Final products ........................................... 47.82 147.0 146.1 146.1 146.8 147.6 147.1 145.6 147.2 146.8 146.6 146.9 146.9 147.9 4 Consumer goods ................................... 27.68 150.5 151.5 150.6 151.5 151.8 150.8 148.2 149.7 149.7 148.9 148.3 147.8 149.2 5 Equipment ............................................ 20.14 142.2 138.6 139.9 140.4 141.9 142.1 141.8 143.9 142.9 143.6 145.1 145.8 146.1 6 Intermediate products ............................. 12.89 160.0 159.9 160.8 161.4 159.5 159.4 160.6 159.8 159.8 159.8 159.7 160.3 159.9 7 Materials ........................................................ 39.29 156.0 156.2 155.0 155.2 156.5 157.6 156.0 156.3 156.3 156.4 156.1 157.2 157.1 Consumer goods 8 Durable consumer goods ............................ 7.89 155.5 161.8 160.4 161.1 158.6 157.2 147.5 151.8 152.6 149.2 146.7 142.4 146.6 9 Automotive products .............................. 2.83 167.8 186.9 181.4 179.3 175.9 170.3 147.3 157.6 159.2 150.6 142.2 132.8 146.1 10 Auos and utility vehicles .................. 2.03 154.3 179.2 173.2 170.3 167.4 155.6 125.1 139.7 142.4 131.0 121.4 108.9 127.2 11 Autos ................................................. 1.90 136.7 151.9 145.8 144.9 148.0 141.8 118.5 128.0 129.0 118.3 110.2 98.0 116.8 12 Auto parts and allied goods .............. 80 201.7 206.5 202.2 202.2 197.5 207.8 203.7 203.0 202.1 200.3 195.1 193.5 194.0 13 Home goods ............................................. 5.06 148.7 147.7 148.6 150.9 148.8 149.8 147.7 148.5 148.8 148.4 149.1 147.8 146.9 14 Appliances, A/C, and TV .................. 1.40 127.5 129.8 124.0 129.8 129.3 129.7 121.2 129.6 128.0 129.7 134.3 128.7 124.4 15 Appliances and TV ......................... 1.33 129.3 130.6 124.8 131.4 131.2 131.6 124.1 132.2 130.2 132.4 136.5 130.3 16 Carpeting and furniture ..................... 1.07 170.6 164.3 170.7 171.8 170.6 171.9 171.7 169.7 169.2 169.1 168.8 170.0 17 Miscellaneous home goods ................ 2.59 151.2 150.6 152.8 153.7 150.5 151.6 152.1 150.0 151.7 150.0 149.1 148.9 149.8 18 Nondurable consumer goods ..................... 19.79 148.4 147.3 146.7 147.7 149.1 148.2 148.5 148.9 148.6 148.7 149.0 149.9 150.2 19 Clothing ..................................................... 4.29 129.1 132.2 130.1 130.7 130.7 126.9 128.0 129.0 127.7 129.1 129.1 15.50 153.8 151.5 151.3 152.4 154.2 154.1 154.2 154.3 154.3 154.2 154.5 155.7 156.2 21 Consumer foods and tobacco ............ 8.33 145.4 143.2 141.8 142.4 146.2 147.0 145.3 146.5 146.7 145.9 146.2 146.9 22 Nonfood staples .................................... 7.17 163.6 161.2 162.4 164.0 163.5 162.4 164.6 163.5 163.2 163.8 164.2 165.9 166.8 23 Consumer chemical products ......... 2.63 205.5 196.5 200.3 203.1 205.9 206.1 209.2 207.2 206.4 207.9 207.6 209.1 24 Consumer paper products ............... 1.92 120.8 118.0 119.2 122.7 121.1 119.9 121.2 121.1 121.6 119.3 121.0 122.7 25 Consumer energy products ............ 2.62 153.0 157.6 156.0 155.2 152.0 149.8 151.6 150.8 150.5 152.2 152.3 154.3 26 Residential utilities ..................... 1.45 162.5 166.2 167.7 162.3 158.5 163.5 162.2 164.2 166.7 Equipment 27 Business ......................................................... 12.63 171.3 166.8 168.1 169.0 169.0 171.4 171.5 173.6 172.0 172.5 174.2 175.2 175.7 28 Industrial .................................................. 6.77 152.1 148.4 151.4 152.5 152.0 151.3 151.7 153.5 151.2 153.3 153.3 157.9 158.2 29 Building and mining ............................ 1.44 206.1 206.3 208.8 207.9 205.3 207.4 210.6 212.0 200.6 204.4 204.4 223.4 226.7 30 Manufacturing ....................................... 3.85 130.3 124.5 127.4 129.1 130.1 130.3 131.1 130.4 130.8 132.5 132.4 132.6 132.0 31 Power ..................................................... 1.47 156.3 154.2 157.8 159.1 156.8 151.0 147.7 156.3 156.3 157.6 157.8 159.7 159.4 32 Commercial transit, farm ...................... 5.86 193.4 188.0 187.4 188.1 194.0 194.6 194.4 196.8 195.9 194.6 198.3 195.3 195.9 33 Commerical ........................................... 3.26 227.8 218.7 220.8 221.2 226.4 227.0 230.5 231.4 234.2 232.2 236.9 238.0 237.8 34 Transit .................................................... 1.93 152.2 151.0 146.8 146.6 155.3 155.2 149.4 156.3 154.9 150.3 153.3 143.5 145.9 35 Farm ...................................................... 67 144.8 144.6 142.0 146.9 148.1 151.0 148.3 145.3 128.0 139.5 139.8 136.5 36 Defense and space ....................................... 7.51 93.2 91.4 92.4 92.4 92.3 92.8 92.0 94.0 94.0 95.0 96.2 96.3 96.4 Intermediate products 37 Construction supplies ................................. 6.42 156.9 158.3 159.1 159.3 156.3 156.4 157.3 156.3 156.8 156.7 155.7 156.7 155.5 38 Business supplies ......................................... 6.47 163.0 161.5 162.5 163.6 162.6 162.4 163.8 163.2 162.7 162.9 163.6 163.9 39 Commercial energy products ................. 1.14 172.2 173.0 173.6 173.7 169.4 167.8 170.7 169.8 172.2 174.4 175.0 174.5 Materials 40 Durable goods materials ............................ 20.35 157.7 159.5 158.1 158.0 159.5 160.7 157.7 157.6 157.2 156.0 155.1 156.5 156.9 41 Durable consumer parts ......................... 4.58 137.0 148.6 148.5 146.0 141.8 138.5 129.7 132.2 132.0 126.8 122.8 122.5 126.9 42 Equipment parts ....................................... 5.44 189.9 179.2 182.2 184.4 191.0 192.1 190.7 192.0 192.7 195.1 196.6 200.9 199.9 43 Durable materials n.e.c............................ 10.34 150.0 154.0 149.7 149.4 150.8 154.0 152.7 150.7 149.6 148.3 147.6 148.1 147.6 44 Basin metal materials ......................... 5.57 124.0 132.0 124.4 124.1 126.1 130.5 127.7 124.8 121.4 119.9 117.7 118.0 45 Nondurable goods materials ....................... 10.47 174.9 171.9 171.0 172.4 173.4 174.6 175.8 176.7 177.2 178.3 179.2 180.0 179.2 46 Textile, paper, and chemical materials . 7.62 182.9 178.9 177.5 179.6 181.7 182.8 184.3 185.9 186.1 186.7 188.1 188.0 187.3 47 Textile materials ................................... 1.85 121.0 120.1 118.3 117.4 122.9 122.2 120.6 124.4 124.3 123.2 123.7 122.9 48 Paper materials .................................... 1.62 143.2 139.1 133.3 137.4 141.1 146.2 146.7 148.1 148.6 148.4 148.2 146.4 49 Chemical materials ............................... 4.15 226.1 220.8 221.2 223.9 223.9 224.1 227.5 228.2 228.4 230.2 232.5 233.4 50 Containers, nondurable ........................... 1.70 164.4 164.8 167.8 165.8 159.2 163.1 162.9 161.8 166.1 168.1 166.8 171.9 51 Nondurable materials n.e.c...................... 1.14 136.7 135.7 132.5 134.1 139.0 137.5 138.2 136.9 134.4 137.4 138.5 138.5 52 Energy materials ......................................... 8.48 128.5 128.8 127.8 127.1 128.3 129.1 127.7 128.1 128.5 130.1 130.0 130.8 130.3 53 Primary energy ......................................... 4.65 113.1 116.1 111.9 110.6 112.4 112.8 112.0 113.6 114.6 114.9 114.5 115.2 54 Converted fuel materials ........................ 3.82 147.3 144.4 147.0 147.2 147.6 148.8 146.9 145.7 145.3 148.7 148.8 149.7 Supplementary groups 55 Home goods and clothing........................... 9.35 139.7 140.6 140.1 141.6 140.5 139.3 138.6 139.5 139.1 139.5 139.9 139.2 138.5 56 Energy total .......................................... 12.23 137.8 139.1 138.1 137.5 137.2 137.1 136.8 136.8 137.2 139.0 139.0 139.9 139.7 57 Products ..................................................... 3.76 158.8 162.2 161.4 160.8 157.3 155.2 157.4 156.5 157.1 159.0 159.2 160.5 58 Materials ......................................... 8.48 128.5 128.8 127.8 127.1 128.3 129.1 127.7 128.1 128.5 130.1 130.0 130.8 130.3 1 For notes see opposite page. 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Output A49 2.13 Continued 1967 1978 1979 1980 Grouping pro­ 1979 SIC por­ Aver­ code tion age Dec. Jan. Feb. June July Aug. Sept. Oct. Nov/ Dec. Jan .p Feb/ Index (1967 = 100) Major Industry 12.05 144.6 145.0 143.9 143.0 143.0 143.7 144.9 144.5 146.0 147.7 148.8 149.4 149.4 6.36 125.3 127.4 P3.8 120.9 123.9 124.7 126.4 125.8 128.1 130.0 131.8 133.1 132.4 5.69 166.1 164.7 166.2 167.7 164.2 164.8 165.5 165.3 166.1 167.4 167.7 167.6 168.4 3.88 186.7 188.4 189.9 182.4 182.2 183.6 184.1 184.3 185.7 87.95 153.2 152.9 152.5 153.3 153.9 154.1 152.4 153.5 153.2 153.0 152.6 153.1 153.4 35.97 163.2 161.7 160.7 162.0 163.0 164.1 164.3 164.6 164.0 164.5 164.5 165.4 165.5 51.98 146.3 146.8 146.8 147.2 147.6 147.2 144.2 145.9 145.7 145.0 144.4 144.6 145.1 Mining 8 Metal ............................................. 10 .51 126.7 123.8 124.2 125.3 123.2 128.6 126.5 122.1 124.1 132.0 136.2 136.7 9 Coal ................................................ 11,12 .69 133.6 144.7 115.9 104.5 137.5 137.1 144.1 142.6 144.7 141.9 146.3 146.0 140.3 10 Oil and gas extraction ................. 13 4.40 121.7 123.8 123.0 120.4 119.6 120.4 121.6 121.6 124.2 126.0 127.5 129.0 128.9 11 Stone and earth minerals ............ 14 .75 137.6 134.8 135.9 135.7 137.3 136.4 138.3 137.5 138.2 141.2 141.0 142.9 Nondurable manufacturers 12 Foods ............................................. 20 8.75 147.8 144.7 143.9 145.5 149.5 149.4 148.1 148.8 148.6 148.3 148.3 149.5 13 Tobacco products ......................... 21 .67 117.0 119.1 120.6 116.2 118.3 118.9 107.5 115.6 115.6 113.0 115.6 14 Textile mill products .................. 22 2.68 143.8 141.7 141.6 139.9 114.6 143.0 144.1 146.9 146.0 147.9 147.1 148.2 15 Apparel products ......................... 23 3.31 130.7 136.5 130.3 133.5 132.0 129.7 130.1 131.2 128.5 128.8 128.3 16 Paper and products ..................... 26 3.21 150.8 148.5 144.6 146.6 148.0 154.0 153.9 155.3 154.1 153.3 154.7 155.1 153.5 17 Printing and publishing .............. 27 4.72 136.9 134.4 135.6 138.2 136.9 135.6 137.7 137.1 137.2 136.2 137.8 138.4 139.2 18 Chemicals and products ............. 28 7.74 210.4 207.2 206.5 208.6 207.8 210.5 213.1 212.0 211.4 215.1 216.0 216.8 19 Petroleum products ..................... 29 1.79 143.7 151.3 147.0 146.0 143.9 143.9 143.0 143.1 141.1 142.1 142.8 145.3 146.2 20 Rubber ana plastic products . . 30 2.24 269.9 263.3 267.4 267.5 270.0 278.0 275.7 272.9 274.5 271.3 262.1 265.3 21 Leather and products ................. 31 .86 71.3 73.8 74.8 73.4 70.1 69.7 69.7 70.8 70.1 70.4 71.2 72.7 Durable manufactures 22 Ordnance, private and government .......................... 19,91 3.64 75.5 74.6 74.9 75.8 75.1 74.6 74.9 75.3 75.3 77.0 77.0 76.8 76.6 23 Lumber and products ................. 24 1.64 136.9 144.0 137.3 137.2 136.8 135.2 138.0 138.6 138.7 136.1 131.7 130.7 24 Furniture and fixtures ................. 25 1.37 161.4 157.6 161.7 163.1 159.6 159.5 161.7 162.0 163.3 162.9 161.0 160.4 25 Clay, glass, stone products ......... 32 2.74 163.2 164.0 167.4 166.9 162.7 163.3 161.4 160.6 162.3 162.8 164.0 164.6 26 Primary metals ............................. 33 6.57 121.2 132.1 123.4 120.4 124.3 127.1 121.0 121.7 118.0 117.2 115.4 116.2 114.6 27 Iron and steel .......................... 331,2 4.21 113.2 125.3 113.3 110.8 118.1 119.0 112.0 115.0 108.2 108.0 106.6 107.6 28 Fabricated metal products ......... 34 5.93 148.5 147.1 149.1 150.8 149.3 149.3 147.6 146.5 147.5 146.9 146.0 146.0 146.2 29 Nonelectrical machinery ............. 35 9.15 163.6 158.1 161.2 162.9 164.5 165.3 166.2 165.1 162.3 162.8 162.9 165.9 165.0 30 Electrical machinery .................... 36 8.05 175.0 167.7 170.9 173.2 175.1 174.4 171.7 176.7 177.3 179.5 181.2 182.7 182.1 31 Transportation equipment ......... 37 9.27 135.2 142.9 141.2 139.9 139.4 135.5 124.7 131.7 133.7 128.2 125.6 122.2 127.9 32 Motor vehicles and parts ........ 371 4.50 159.9 182.1 177.9 173.1 169.6 160.2 138.5 150.6 150.6 139.9 134.6 127.8 139.0 33 Aerospace and miscellaneous transportation equipment ... 372-9 4.77 112.0 106.0 106.6 108.6 111.0 112.2 111.8 113.9 117.7 117.1 117.2 116.9 117.4 34 Instruments .................................. 38 2.11 174.9 173.1 175.2 176.0 175.9 174.0 173.9 172.9 175.0 173.3 175.0 176.7 177.0 35 Miscellaneous manufactures ...... 39 1.51 153.8 151.7 152.0 154.0 152.7 155.7 155.7 153.6 154.5 155.3 154.2 151.2 151.9 Gross value (billions of 1972 dollars, annual rates) Major Market 36 Products, total .............................. 507.4 623.9 631.1 626.8 627.3 628.7 622.7 613.0 622.6 621.6 617.8 617.0 615.5 620.5 37 Final .............................................. 390.92 479.8 486.6 481.7 482.0 485.1 479.6 468.8 478.8 477.6 474.4 473.5 471.3 477.1 38 Consumer goods ...................... 277.52 326.2 334.1 328.9 329.4 329.8 326.0 319.2 323.6 324.6 321.9 320.5 318.5 323.3 39 Equipment ................................ 113.4 2 153.6 152.4 152.9 152.6 155.4 153.6 149.6 155.2 153.0 152.5 152.9 152.8 153.8 40 Intermediate ................................. 116.6 2 144.2 144.5 145.1 145.3 143.6 143.2 144.2 143.8 144.0 143.4 143.5 144.2 143.3 1. The industrial prodcution series has been revised. For a description of the Note. Published groupings include some series and subtotals not shown sepachanges, see “Revision of Industrial Production Index" in the August 1979 Bul rately. For description and historical data, see Industrial Production—1976 Revision letin, pp. 603-05. (Board of Governors of the Federal Reserve Svstem: Washington. D.C.). Decem- 2. 1972 dollars. ber 1977. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 Domestic Nonfinancial Statistics □ March 1980 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates except as noted. 1979 1980 Item 1977 1978 1979 July Aug. Sept. Oct. Nov. Dec. Jan. Private residential real estate activity (thousand of units) New Units 1 Permits authorized ................................... 1,677 1,801 1,539 1,528 1,654 1,775 1,542 1,263 1,244 1,272 2 1-family .................................................. 1,125 1,183 971 1,001 1,030 1,015 927 751 780 769 3 2-or-more-family ................................... 551 618 568 527 624 760 615 512 464 503 4 Started ........................................................ 1,987 2,020 1,744 1,764 1,788 1,874 1,710 1,522 1,517 1,420 5 1-family .................................................. 1,451 1,433 1,193 1,222 1,237 1,237 1,139 980 1,036 998 6 2-or-more-family ................................... 536 587 550 542 551 637 571 542 481 422 7 Under construction, end of period1 ..... 1,208 1,310 1,148 1,237 1,232 1,226 1,217 1,194 1,178 n.a. 8 1-family ................................................. 730 765 644 715 714 717 707 688 675 n.a. 9 2-or-more-family ................................... 478 546 504 522 518 508 510 506 503 n.a. 10 Completed .................................................. 1,656 1,868 1,868 1,745 1,739 1,943 1,824 1,831 1,871 n.a. 11 1-family ................................................. 1,258 1,369 1,299 1,192 1,199 1,197 1,260 1,211 1,356 n.a. 12 2-or-more-family ................................... 399 498 569 553 540 746 564 620 515 n.a. 13 Mobile homes shipped ............................ 277 276 277 295 281 270 287 251 241 n.a. Merchant builder activity in 1-family units 14 Number sold .............................................. 820 818 706 768 738 716 674 594 570 594 15 Number for sale, end of period1 ........... 408 419 405 416 414 412 407 401 401 400 Price (thousand of dollars)2 Median 16 Units sold ............................................... 49.0 55.8 62.6 63.8 64.0 65.0 62.3 63.2 61.7 64.4 17 Units for sale ........................................ 48.2 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Average 18 Units sold ............................................... 54.4 62.7 72.0 71.9 74.0 76.8 71.5 74.1 73.0 73.6 Existing Units (1-family) 19 Number sold ............................................. 3,572 3,905 3,742 3,750 3,790 3,900 3,870 3,450 3,350 3,210 Price of units sold (thous. of dollars)2 20 Median ....................................................... 42.8 48.7 55.5 57.9 57.7 57.3 56.3 55.6 56.5 57.9 21 Average ..................................................... 47.1 55.1 64.0 66.7 66.3 66.1 65.2 64.6 65.2 68.2 Value of new construction3 (millions of dollars) Construction 22 Total put in place .......................... 173,998 206,223 226,937 231,068 230,303 232,559 242,208 246,072 23 Private ............................................ 135,824 160,403 178,219 180,103 180,635 181,626 185,566 185,525 190,144 189,083 24 Residential ................................ 80,957 93,425 97,201 97,022 97,537 98,996 99,240 99,099 100,331 99,274 25 Nonresidential, total ................ 54,867 66,978 81,018 83,081 83,098 82,630 86,326 86,426 89,813 89,809 Buildings 26 Industrial ........................... 7,713 10,993 14,424 15,547 13,751 13,698 15,019 15,022 15,249 14,652 27 Commercial ....................... 14,789 18,568 24,234 24,785 25,818 25,693 26,663 26,923 28,857 30,488 28 Other ................................. 6,200 6,739 7,352 7,427 7,532 7,331 7,851 7,722 8,194 9,084 29 Public utilities and other .... 26,165 30,678 35,008 35,322 35,997 35,908 36,793 36,759 37,513 35,585 30 Public ............................................. 38,172 45,821 48,719 50,965 49,669 50,932 52,880 51,826 52,063 56,988 31 Military ..................................... 1,428 1,498 1.627 1.500 1,859 1,658 1,855 1,660 1,702 1,860 32 Highway .................................... 8,984 10,286 11,127 11,166 11,507 12,345 14,518 11,900 11,891 n.a. 33 Conservation and development 3,862 4,436 4,732 5,255 5,036 4,900 4,296 4.960 5,124 n.a. 34 Other4 ........................................ 23,898 29,601 31,233 33,044 31,267 32,029 32,211 33,306 33,346 n.a. 1. Not at annual rates. Note. Census Bureau estimates for all series except (a) mobile homes, which 2. Not seasonally adjusted. are private, domestic shipments as reported by the Manufactured Housing Institute 3. Value of new construction data in recent periods may not be strictly com­ and seasonally adjusted by the Census Bureau, and (b) sales and prices of existing parable with data in prior periods due to changes by the Bureau of the Census in units, which are published by the National Association of Realtors. All back and its estimating techniques. For a description of these changes see Construction current figures are available from originating agency. Permit authorizations are Reports (C-30-76-5), issued by the Bureau in July 1976. those reported to the Census Bureau from 14,000 jurisdictions through 1977, and 4. Beginning January 1977 Highway imputations are included in Other. 16,000 jurisdictions beginning with 1978. 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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 1979 1980 1979 1979 1980 J 1 a 9 n 80 . Jan. Jan. (1967 = 100)1 Mar/ June' Sept/ Dec/ Sept/ Oct/ Nov/ Dec/ Jan. Consumer Prices2 1 All items ........................................................ 9.3 13.9 13.0 12.8 13.8 13.7 1.2 1.0 1.0 1.2 1.4 233.2 2 Commodities ................................................ 9.3 13.6 13.6 12.7 13.3 12.5 1.2 .8 1.0 1.1 1.4 222.4 3 Food .......................................................... 12.4 8.9 16.0 6.4 6.5 12.1 1.0 .8 .7 1.4 0.0 243.8 4 Commodities less food ............................ 7.9 15.7 12.7 15.6 16.4 12.7 1.3 .8 1.1 1.1 2.0 210.4 5 Durable ................................................. 9.2 10.6 9.3 9.4 9.1 13.2 .6 .8 1.4 1.0 1.1 201.3 6 Nondurable .......................................... 6.2 22.3 16.0 24.7 25.2 12.8 1.7 .8 .8 1.4 3.2 220.5 7 Services ......................................................... 9.5 14.5 11.8 13.2 14.3 15.8 1.2 1.2 1.1 1.4 1.4 253.1 8 Rent ............................................................ 7.2 8.1 4.3 8.2 10.2 9.0 .8 1.3 .4 .4 .7 184.1 9 Services less rent ..................................... 9.8 15.5 13.0 13.9 14.9 16.9 1.2 1.2 1.2 1.5 1.5 266.1 Other groupings 10 All items less food ...................................... 8.7 15.1 12.2 14.4 15.4 14.2 1.2 1.1 1.1 1.2 1.8 229.9 11 All items less food and energy ................. 8.6 12.0 10.2 10.1 10.9 13.9 .9 1.0 1.1 1.2 1.3 220.6 12 Homeownership ........................................... 12.4 21.1 16.5 17.8 19.5 25.6 1.5 1.9 2.0 1.8 1.9 292.5 Producer Prices 13 Finished goods ............................................. 9.8 13.0 13.9 7.9 16.1 12.9 1.5 .9 1.3 .9 1.6 232.1 14 Consumer .................................................. 10.5 14.5 15.3 7.1 20.7 14.0 1.8 .9 1.4 1.0 1.6 233.2 15 Foods ..................................................... 12.9 5.1 18.0 -9.2 15.3 8.3 1.4 -.1 2.0 .2 -.8 231.4 16 Excluding foods .................................... 9.0 19.9 13.6 17.2 23.4 17.3 1.9 1.5 1.1 1.4 2.8 231.8 17 Capital equipment ................................... 8.4 9.5 10.5 9.4 5.9 9.4 .7 .7 .8 .8 1.6 229.1 18 Materials ........................................................ 10.9 16.9 16.7 12.9 19.8 15.5 1.6 1.5 .9 1.2 2.0 271.7 19 Intermediate3 ............................................ 8.8 18.4 14.2 15.4 19.4 16.5 1.5 1.7 1.0 1.2 3.0 268.1 Crude: 20 Nonfood ................................................ 16.3 28.1 28.3 23.1 25.1 30.0 3.2 2.3 1.7 2.7 2.8 399.0 21 Food ...................................................... 20.1 4.3 29.8 -4.5 16.4 5.7 1.4 0.0 1.1 .3 -3.8 243.0 1. Not seasonally adjusted 3. Excludes intermediate materials for food manufacturing and manufactured 2. Figures for consumer prices are those for all urban consumers. animal feeds. Source. Bureau of Labor Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 Domestic Nonfinancial Statistics □ March 1980 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 1977 1978 1979P Q3 Q4 Q1 Q2 Q3 Q4r Gross National Product 1 Total .................................................................................. 1,899.5 2,127.6 2,369.4 2,159.6 2,235.2 2,292.1 2,329.8 2,396.5 2,459.4 By source 2 Personal consumption expenditures ............................. 1,210.0 1,350.8 1,510.0 1,369.3 1,415.4 1,454.2 1,475.9 1,528.6 1,581.2 3 Durable goods ............................................................. 178.8 200.3 213.1 203.5 212.1 213.8 208.7 213.4 216.5 4 Nondurable goods ........................................................ 481.3 530.6 596.9 536.7 558.1 571.1 581.2 604.7 630.6 5 Services ......................................................................... 549.8 619.8 700.0 629.1 645.1 669.3 686.0 710.6 734.1 6 Gross private domestic investment ............................... 303.3 351.5 387.2 356.2 370.5 373.8 395.4 392.3 387.5 7 Fixed investment ......................................................... 281.3 329.1 368.8 336.1 349.8 354.6 361.9 377.8 380.8 8 Nonresidential ........................................................... 189.4 221.1 254.6 225.9 236.1 243.4 249.1 261.8 264.2 9 Structures ............................................................... 62.6 76.5 92.7 79.7 84.4 84.9 90.5 95.0 100.4 10 Producer’s durable equipment ........................... 126.8 144.6 161.9 146.3 151.8 158.5 158.6 166.7 163.9 11 Residential structures ............................................. 91.9 108.0 114.2 110.2 113.7 111.2 112.9 116.0 116.6 12 Nonfarm ................................................................ 88.8 104.4 110.3 106.4 110.0 107.8 109.1 112.0 112.1 13 Change in business inventories ................................. 21.9 22.3 18.5 20.0 20.6 19.1 33.4 14.5 6.7 14 Nonfarm .................................................................... 20.7 21.3 16.8 18.5 19.3 18.8 32.6 12.6 3.2 15 Net exports of goods and services ................................ -9.9 -10.3 -4.2 -6.8 -4.5 4.0 -8.1 -2.3 -10.5 16 Exports ........................................................................... 175.9 207.2 257.8 213.8 224.9 238.5 243.7 267.3 281.8 17 Imports ........................................................................... 185.8 217.5 262.0 220.6 229.4 234.4 251.9 269.5 292.3 18 Government purchases of goods and services ............ 396.2 435.6 476.4 440.9 453.8 460.1 466.6 477.8 501.2 19 Federal ........................................................................... 144.4 152.6 166.6 152.3 159.0 163.6 161.7 162.9 178.4 20 State and local ............................................................. 251.8 283.0 309.8 288.6 294.8 296.5 304.9 314.9 322.8 By major type of product 21 Final sales, total ............................................................... 1,877.6 2,105.2 2,351.0 2,139.5 2,214.5 2,272.9 2,296.4 2.381.9 2,452.7 22 Goods ............................................................................ 842.2 930.0 1,031.1 940.9 983.8 1,011.8 1,018.1 1,036.0 1,058.5 23 Durable ..................................................................... 345.9 380.4 423.4 382.6 402.3 425.5 422.4 424.4 421.4 24 Nondurable ............................................................... 496.3 549.6 607.7 558.3 581.6 586.2 595.7 611.6 637.2 25 Services ......................................................................... 866.4 969.3 1,085.0 981.7 1,005.3 1,041.4 1,064.2 1,100.6 1,133.8 26 Structures ....................................................................... 190.9 228.2 253.3 237.0 246.0 238.9 247.5 259.8 267.0 27 Change in business inventories ..................................... 21.9 22.3 18.5 20.0 20.6 19.1 33.4 14.5 6.7 28 Durable goods ............................................................. 11.9 13.9 13.4 10.3 13.4 18.4 24.3 7.3 3.4 29 Nondurable goods ........................................................ 10.0 8.4 5.1 9.7 7.2 .7 9.1 7.2 3.3 30 Memo: Total GNP in 1972 dollars ................................ 1,340.5 1,399.2 1,431.7 1,407.3 1,426.6 1,430.6 1,422.3 1,433.3 1,440.7 National Income 31 Total ................................................................................... 1,525.8 1,724.3 1,925.1 1,752.5 1,820.0 1,869.0 1,897.9 1,941.9 n.a. 32 Compensation of employees ......................................... 1,156.9 1,304.5 1,459.2 1,321.1 1,364.8 1,411.2 1,439.7 1,472.9 1,513.1 33 Wages and salaries ....................................................... 984.0 1,103.5 1,227.4 1,117.4 1,154.7 1,189.4 1,211.5 1,238.0 1,270.6 34 Government and government enterprises ........... 201.3 218.0 233.5 219.2 225.1 228.1 231.2 234.4 240.2 35 Other ......................................................................... 782.7 885.5 993.9 898.1 929.6 961.3 980.3 1,003.6 1,030.4 36 Supplement to wages and salaries ............................ 172.9 201.0 231.8 203.7 210.1 221.8 228.2 234.8 242.5 37 Employer contributions for social insurance ....... 81.2 94.6 109.1 95.5 98.2 105.8 107.9 109.9 113.0 38 Other labor income ................................................. 91.8 106.5 122.7 108.2 111.9 116.0 120.3 124.9 129.6 39 Proprietors’ income1 ........................................................ 100.2 116.8 130.8 117.4 125.7 129.0 129.3 130.3 134.6 40 Business and professional1 ......................................... 80.5 89.1 98.0 91.3 94.4 94.8 95.5 99.4 102.0 41 Farm1 ............................................................................. 19.6 27.7 32.8 26.1 31.3 34.2 33.7 30.9 32.6 42 Rental income of persons2 ............................................. 24.7 25.9 26.9 26.8 27.1 27.3 26.8 26.6 27.0 43 Corporate profits1 ............................................................ 150.0 167.7 178.7 175.2 184.8 178.9 176.6 180.8 n.a. 44 Profits before tax3 ........................................................ 177.1 206.0 237.3 212.0 227.4 233.3 227.9 242.3 n.a. 45 Inventory valuation adjustment ................................ -15.2 -25.2 -41.9 -23.0 -28.8 -39.9 -36.6 -44.0 -46.9 46 Capital consumption adjustment ............................... -12.0 -13.1 -16.7 -13.8 -13.8 -14.5 -14.7 -17.6 -20.1 47 Net interest ....................................................................... 94.0 109.5 129.5 111.9 117.6 122.6 125.6 131.5 138.4 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 (Department 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 Account 1977 1978 1979P Q3 Q4 Q1 Q2 Q3 Q4 Personal Income and Saving 1 Total personal income .................................................... 1.531.6 1,717.4 1,923.7 1.742.5 1.803.1 1.852.6 1,892.5 1.946.6 2.003.1 2 Wage and salary disbursements .................................. 984.0 1.103.3 1.227.6 1,116.8 1.154.3 1,189.3 1.212.4 1,238.1 1.270.4 3 Commodity-producing industries ............................. 343.1 387.4 435.2 393.7 408.6 423.0 431.7 438.3 447.7 4 Manufacturing ......................................................... 266.0 298.3 330.9 300.8 312.7 324.8 328.5 331.9 338.3 5 Distributive industries ................................................ 239.1 269.4 300.8 272.5 281.6 291.1 295.8 304.0 312.4 6 Service industries ....................................................... 200.5 228.7 257.8 231.9 239.4 247.2 252.8 261.3 270.2 7 Government and government enterprises ............. 201.3 217.8 233.7 218.7 224.7 228.0 232.1 234.5 240.1 8 Other labor income ....................................................... 91.8 106.5 122.7 108.2 111.9 116.0 120.3 124.9 129.6 9 Proprietors’ income1 ...................................................... 100.2 116.8 130.8 117.4 125.7 129.0 129.3 130.3 134.6 10 Business and professional1 ....................................... 80.5 89.1 98.0 91.3 94.4 94.8 95.5 99.4 102.0 11 Farm1 ........................................................................... 19.6 27.7 32.8 26.1 31.3 34.2 33.7 30.9 32.6 12 Rental income of persons2 ........................................... 24.7 25.9 26.9 26.8 27.1 27.3 26.8 26.6 27.0 13 Dividends ......................................................................... 42.1 47.2 52.7 47.8 49.7 51.5 52.3 52.8 54.4 14 Personal interest income .............................................. 141.7 163.3 191.7 167.2 174.3 181.0 187.6 194.4 203.7 15 Transfer payments ......................................................... 208.4 224.1 252.0 228.3 231.8 237.3 243.6 260.8 266.4 16 Old-age survivors, disability, and health insurance benefits ................................................................. 105.0 116.3 132.4 119.8 121.5 123.8 127.1 138.7 140.0 17 Less: Personal contributions for social insurance . 61.3 69.6 80.7 70.2 71.8 78.7 79.8 81.2 82.9 18 Equals: Personal income ............................................ 1.531.6 1.717.4 1.923.7 1.742.5 1.803.1 1.852.6 1.892.5 1.946.6 2.003.1 19 Less: Personal tax and nontax payments .............. 226.4 259.0 300.0 266.0 278.2 280.4 290.7 306.6 322.1 20 Equals: Disposable personal income ........................ 1.305.1 1.458.4 1.623.7 1.476.5 1,524.8 1,572.2 1.601.7 1,640.0 1,681.0 21 Less: Personal outlays .............................................. 1.240.2 1.386.4 1,550.5 1.405.6 1.453.4 1,493.0 1.515.8 1.569.7 1.623.5 22 Equals: Personal saving .............................................. 65.0 72.0 73.2 70.9 71.5 79.2 85.9 70.3 57.5 Memo: Per capita (1972 dollars) 23 Gross national product ............................................. 6,181 6,402 6,494 6,433 6,506 6,514 6,459 6,494 6,510 24 Personal consumption expenditures ........................ 3,974 4,121 4,194 4,138 4,197 4,197 4,155 4,195 4,229 25 Disposable personal income ..................................... 4,285 4,449 4,511 4,462 4,522 4,536 4,510 4,501 4,496 26 Saving rate (percent) ..................................................... 5.0 4.9 4.5 4.8 4.7 5.0 5.4 4.3 3.4 Gross Saving 27 Gross private saving ...................................................... 360.5 352.1 28 Personal saving .............................................................. 65.0 72.0 73.2 70.9 71.5 79.2 85.9 70.3 57.5 29 Undistributed corporate profits1 ................................. 35.2 36.0 33.2 40.0 40.1 36.1 35.6 34.0 n.a. 30 Corporate inventory valuation adjustment ................ -15.2 -25.2 -41.9 -23.0 -28.8 -39.9 -36.6 -44.0 -46.9 Capital consumption allowances 31 Corporate ......................................................................... 121.3 132.9 147.7 134.3 136.8 139.9 145.1 150.4 155.3 32 Noncorporate .................................................................. 74.1 84.0 95.3 85.2 87.7 89.9 93.9 97.5 99.8 33 Wage accruals less disbursements .............................. 34 Government surplus, or deficit (-), national income and produce accounts ............................................ -19.5 -.3 -1113..08 -2.3 10.8 15.8 12.7 14.0 35 Federal ......................................................................... -46.3 -27.7 -20.4 -16.3 -11.7 -7.0 -11.3 n.a. 36 State and local ............................................................ 26.8 27.4 24.8 22.7 27.1 27.6 19.7 25.3 n.a. 37 Capital grants received by the United States, net .... 38 Investment ...................................................................... 283.6 327.9 368.3 336.5 351.0 362.8 373.1 375.6 361.9 39 Gross private domestic ............................................. 303.3 351.5 387.2 356.2 370.5 -31713..08 395.4 392.3 387.5 40 Net foreign .................................................................. -19.6 -23.5 -18.9 -19.6 -19.4 -22.3 -16.7 -25.6 41 Statistical discrepancy .................................................... 4.0 3.9 1. With inventory valuation and capital consumption adjustments. Source. Survey of Current Business (Department of Commerce). 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics □ March 1980 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 Q3 Q4 Q1 Q2 Q3 1 Balance on current account .............................................................. 4,605 -14,092 -13,478 -3,164 85 415 -1,056 762 2 Not seasonally adjusted ................................................................. -5,892 1,120 1,731 -182 -3,080 3 Merchandise trade balance2 .......................................................... -9,306 -30,873 -33,770 -7,949 -5,971 -6,115 -7,716 -7,282 4 Merchandise exports .................................................................. 114,745 120,816 142,052 36,532 39,412 41,348 42,792 47,337 5 Merchandise imports .................................................................. -124,051 -151,689 -175,822 -44,481 -45,383 -47,463 -50,508 -54,619 6 Military transactions, net ................................................................ 674 1,679 492 247 -239 34 -217 -384 7 Investment income, net3 ................................................................ 15,975 17,989 21,645 4,952 6,599 6,864 7,465 8,794 8 Other service transactions, net ..................................................... 2,260 1,783 3,241 819 1,010 954 775 1,008 9 Memo: Balance on goods and services3-4.................................... 9,603 -9,423 -8,392 -1,931 1,399 1,737 307 2,136 10 Remittances, pensions, and other transfers ................................ -1,851 -1,895 -1,934 -463 -524 -517 -466 -504 11 U.S. government grants (excluding military) ............................. -3,146 -2,775 -3,152 -770 -790 -805 -897 -870 12 Change in U.S. government assets, other than official reserve assets, net (increase, -) ............................................................ -4,214 -3,693 -4,656 -1,390 -994 -1,094 -1,001 -756 13 Change in U.S. official reserve assets (increase, -) .................... -2,558 -375 732 115 182 -3,585 343 2,779 14 Gold .................................................................................................. 0 -118 -65 0 -65 0 0 0 15 Special drawing rights (SDR) ........................................................ -78 -121 1,249 -43 1,412 -1,142 6 0 16 Reserve position in International Monetary Fund .................... -2,212 -294 4,231 195 3,275 -86 -78 -52 17 Foreign currencies .......................................................................... -268 158 -4,683 -37 -4,440 -2,357 415 2,831 18 Change in U.S. private assets aboard (increase, -)3 ................... -44,498 -31,725 -57,033 -8,774 -29,442 -2,958 -15,507 -25,348 19 Bank-reported claims ..................................................................... -21,368 -11,427 -33,023 -5,488 -21,980 6,572 -8,266 -15,956 20 Nonbank-reported claims .............................................................. -2,296 -1,940 -3,853 -29 -1,898 -2,719 668 n.a. 21 U.S. purchase of foreign securities, net ...................................... -8,885 -5,460 -3,487 -475 -918 -1,056 -629 -2,111 22 U.S. direct investments abroad, net3 .......................................... -11,949 -12,898 -16,670 -2,782 -4,646 -5,755 -7,280 -7,281 23 Change in foreign official assets in the United States (increase, + ) ................................................................................ 17,573 36,656 33,758 4,641 18,764 -9,391 -10,043 5,562 24 U.S. Treasury securities ................................................................. 9,319 30,230 23,542 3,029 13,422 -8,872 -12,859 5,030 25 Other U.S. government obligations ............................................. 573 2,308 656 443 -115 -5 94 335 26 Other U.S. government liabilities5 .............................................. 4,507 1,240 2,754 122 2,045 -164 257 191 27 Other U.S. liabilities reported by U.S. banks ............................ 969 773 5,411 963 3,156 -563 2,321 -100 28 Other foreign official assets6 ......................................................... 2,205 2,105 1,395 84 256 213 145 106 29 Change in foreign private assets in the United States (increase, + )3 .............................................................................. 18,826 14,167 29,956 10,717 10,475 10,868 16,100 17,497 30 U.S. bank-reported liabilities ........................................................ 10,990 6,719 16,975 7,958 7,556 7,157 12,067 13,009 31 U.S. nonbank-reported liabilities ................................................. -578 473 1,640 1,004 -177 -651 1,086 n.a. 32 Foreign private purchases of U.S. Treasury securities, net ..... 2,783 534 2,180 -1,053 1,549 2,583 -239 1,579 33 Foreign purchases of other U.S. securities, net ......................... 1,284 2,713 2,867 528 540 790 1,161 591 34 Foreign direct investments in the United States, net3.............. 4,347 3,728 6,294 2,280 1,008 989 2,025 2,317 35 Allocation of SDRs ............................................................................. 0 0 0 0 0 1,139 0 0 36 Discrepancy .......................................................................................... 10,265 -937 10,722 -2,145 930 4,606 11,163 -495 37 Owing to seasonal adjustments ..................................................... -2,716 1,301 985 737 -3,756 38 Statistical discrepancy in recorded data before seasonal adjustment ................................................................................ 10,265 -937 10,722 571 -371 3,621 10,426 3,261 Memo: Changes in offical assets 39 U.S. official reserve assets (increase, -) .................................. -2,558 -375 732 115 182 -3,585 343 2,779 40 Foreign offical assets in the United States (increase, + ) ........ 13,066 35,416 31,004 4,519 16,719 -9,227 -10,299 5,371 41 Change in Organization of Petroleum Exporting Countries offical assets in the United States (part of line 25 above) ... 9,581 6,351 -727 -1,794 1,803 -1,916 151 1,488 42 Transfers under military grant programs (excluded from lines 4, 6, and 11 above) ..................................................................... 373 204 259 69 63 31 48 85 1. Seasonal factors are no longer calculated for lines 13 through 42. various adjustments to merchandise trade and service transactions. 2. Data are on an international accounts (IA) basis. Differs from the census 5. Primarily associated with military sales contracts and other transactions ar­ basis primarily because the IA basis includes imports into the U.S. Virgin Islands, ranged with or through foreign official agencies. and it excludes military exports, which are part of line 6. 6. Consists of investments in U.S. corporate stocks and in debt securities of 3. Includes reinvested earnings of incorporated affiliates. private corporations and state and local governments. 4. Differs from the definition of “net exports of goods and services” in the national income and product (GNP) account. The GNP definition makes Note. Data are from Bureau of Economic Analysis, Survey of Current Business (U.S. Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Trade and Reserve Assets A55 3.11 U.S. FOREIGN TRADE Millions of dollars; monthly data are seasonally adjusted. 1979' 1980 Item 1977 1978 1979 July Aug. Sept. Oct. Nov. Dec. Jan. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments ........................................... 121,150 143,578 181,637 15,691 15,713 15,822 16,680 16.928 16,742 17,348 2 GENERAL IMPORTS including mer­ chandise for immediate consump­ tion plus entries into bonded warehouses ........................................ 147,685 171,978 206,326 16,806 18,277 18,407 19.037 18.548 19,665 20,945 3 Trade balance .......................................... -26,535 -23,400 -24,690 -1,115 -2,564 -2,585 -2,357 -1,620 -2,923 -3,597 Note. Bureau of Census data reported on a free-alongside-ship (f.a.s.) value On the import side, the largest single adjustment is the addition of imports into basis. Effective January 1978, major changes were made in coverage, reporting, the Virgin Islands (largely oil for a refinery on St. Croix), which are not included and compiling procedures. The international-accounts-basis data adjust the Census in Census statistics. basis data for reasons of coverage and timing. On the export side, the largest adjustments are: (a) the addition of exports to Canada not covered in Census Source. FT 900 "Summary of U.S. Export and Import Merchandise Trade” statistics, and (b) the exclusion of military exports (which are combined with other (U.S. Department of Commerce. Bureau of the Census). military transactions and are reported separately in the “service account”). 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 1979 1980 Type 1977 1978 1979 Aug. Sept. Oct. Nov. Dec. Jan. Feb. 1 Total* ......................................................... 19,312 18,650 18,928 20,023 18,534 17,994 19,261 18,928 20,962 20,840 2 Gold stock, including exchange Stabili­ zation Fund1 ..................................... 11,719 11,671 11,172 11,259 11,228 11.194 11.112 11.172 11,172 11.172 3 Special drawing rights2-3 ......................... 2,629 1,558 2,724 2,689 2,725 2,659 2.705 2.724 3.871 3,836 4 Reserve position in International Mone­ tary Fund2 ......................................... 4,946 1,047 1,253 1,277 1,280 1.238 1.322 1.253 1,251 1,287 5 Foreign Currencies4 ................................ 18 4,374 3,779 4,798 3.301 2,903 4,122 3.779 4,668 4,545 1. Gold held under earmark at Federal Reserve Banks for foreign and inter­ 3. Includes allocations by the International Monetary Fund of SDRs as follows: national accounts is not included in the gold stock of the United States; see table $867 million on Jan. 1, 1970; $717 million on Jan. 1, 1971; $710 million on Jan. 3.22 1, 1972; and $1,139 million on Jan. 1. 1979; plus net transactions in SDRs. 2. Beginning July 1974, the IMF adopted a technique for valuing the SDR based 4. Beginning November 1978. valued at current market exchange rates. on a weighed average of exchange rates for the currencies of 16 member countries. The U.S. SDR holdings and reserve position in the IMF also are valued on this basis beginning July 1974. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A56 International Statistics □ March 1980 3.13 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data Millions of dollars, end of period 1979 Asset account 1976 1977 1978' June July Aug. Sept. Oct. Nov. Dec.P All foreign countries 1 Total, all currencies ................................. 219,420 258,897 306,795 327,012 326,545 350,441 360,817r 358,320 365,587 364,237 2 Claims on United States ......................... 7,889 11,623 17,340 29,293 26,605 41,917 37,758' 34,880 37,606 32,309 3 Parent bank .......................................... 4,323 7,806 12,811 22,641 19,734 35,203 30,004' 28,046 31,133 25,938 4 Other ..................................................... 3,566 3,817 4,529 6,652 6,871 6,714 7,754 6,834 6,473 6,371 5 Claims on foreigners .............................. 204,486 238,848 278,135 284,595 286,590 295,011 309,004 309,652 313,409 317,170 6 Other branches of parent bank ......... 45,955 55,772 70,338 69,608 70,124 74,749 80,106 80,126 79,076 79,824 7 Banks ..................................................... 83,765 91,883 103,111 107,673 107,957 111,190 117,994 119,253 122,004 123,213 8 Public borrowers2 ................................ 10,613 14,634 23,737 24,835 24,580 25,132 25,777 25,288 25,568 26,057 9 Nonbank foreigners ............................. 64,153 76,560 80,949 82,479 83,929 83,940 85,127 84,985 86,761 88,076 10 Other assets .............................................. 7,045 8,425 11,320 13,124 13,350 13,513 14,055' 13,788 14,572 14,758 11 Total payable in U.S. dollars ................. 167,695 193,764 224,940 238,298 234,445 259,035 263,630' 263,094 266,544 267,646 12 Claims on United States ......................... 7,595 11,049 16,382 28.223 25,536 40,799 36,527' 33,638 36,362 31,178 13 Parent bank .......................................... 4,264 7,692 12,625 22,387 19,478 34,939 29,773' 27,674 30,652 25,641 14 Other ..................................................... 3,332 3,357 3,757 5,836 6,058 5,860 6,754 5,964 5,710 5,537 15 Claims on foreigners .............................. 156,896 178,896 203,498 203,729 202,426 211,663 220,665 222,543 223,201 229,044 16 Other branches of parent bank ......... 37,909 44,256 55,408 53,136 53,629 58,255 62,058 61,918 60,397 61,618 17 Banks ..................................................... 66,331 70,786 78,686 81.392 79,951 83,466 88,882 90,911 92,730 96,061 18 Public borrowers2 ................................ 9,022 12,632 19,567 20,553 20,188 20,988 21,439 20,909 21,160 21,615 19 Nonbank foreigners ............................. 43,634 51,222 49,837 48,648 48,658 48,954 48,286 48,805 48,914 49,750 20 Other assets .............................................. 3,204 3,820 5,060 6,346 6,483 6,573 6,438 6,913 6,981 7,424 United Kingdom 21 Total, all currencies ................................. 81,466 90,933 106,593 112,881 115,217 120,703 126,091' 127,949 131,959 130,873 22 Claims on United States ......................... 3,354 4,341 5.370 7,492 8,408 10,559 10,687' 11,653 11,841 11,114 23 Parent bank .......................................... 2,376 3,518 4,448 5,495 6,177 8,520 8,395' 9,643 9,892 9,335 24 Other ..................................................... 978 823 922 1,997 2,231 2,039 2,292 2,010 1,949 1,779 25 Claims on foreigners .............................. 75,859 84.016 98,137 101,693 103,033 106,394 111,598 112,450 115,656 115,121 26 Other branches of parent bank ......... 19,753 23.017 27,830 29,158 28,376 31,800 32,998 32,464 33,487 34,294 27 Banks ..................................................... 38,089 39,899 45,013 44,800 46,291 46,625 49,938 51,466 52,580 51,343 28 Public borrowers2 ................................ 1,274 2,206 4,522 4,872 4,489 4,639 4,882 4,646 4,868 4,919 29 Nonbank foreigners ............................. 16,743 19,895 20,772 22,863 23,877 23,330 23,780 23,874 24,721 24,565 30 Other assets .............................................. 2,253 2,576 3,086 3,696 3,776 3,750 3,806 3,846 4,462 4,638 31 Total payable in U.S. dollars ................. 61,587 66,635 75,860 78,155 79,211 85,380 89,032' 91,485 93,502 94,287 32 Claims on United States ......................... 3,375 4,100 5,113 7,033 7,956 10,146 10,169' 11,164 11,352 10,743 33 Parent bank .......................................... 2,374 3,431 4,386 5,386 6,060 8,443 8,343' 9,485 9,697 9,294 34 Other ..................................................... 902 669 727 1,647 1,896 1,703 1,826 1,679 1,655 1,449 35 Claims on foreigners .............................. 57,488 61,408 69,416 69,451 69,496 73,503 77,145 78,428 80,127 81,292 36 Other branches of parent bank ......... 17,249 18,947 22,838 23,999 23,481 26,983 27,631' 27,092 27,993 28,931 37 Banks ..................................................... 28,983 28,530 31,482 29,803 30,626 31,318 34,276 36,183 36,604 36,760 38 Public borrowers2 ................................ 846 1,669 3,317 3,396 3,166 3,210 3,336 3,206 3,311 3,319 39 Nonbank foreigners ............................. 10,410 12,263 11,779 12,253 12,223 11,992 11,902 11,947 12,219 12,282 40 Other assets .............................................. 824 1,126 1.331 1,671 1,759 1,731 1,718 1,893 2,023 2,252 Bahamas and Caymans 41 Total, all currencies ................................. 66,774 79,052 91,735 103,387 98,839 113,512 109,925 106,484 108,872 108,911 42 Claims on United States ......................... 3,508 5,782 9,635 20,001 16,613 29,021 24,731 21,394 23,856 19,134 43 Parent block ......................................... 1,141 3,051 6,429 15,956 12,566 24,929 19,919 17,131 19,868 15,195 44 Other ..................................................... 2,367 2,731 3,206 4,045 4,047 4,092 4,812 4,263 3,988 3,939 45 Claims on foreigners .............................. 62,048 71,671 79,774 80,579 79,476 81,370 82,296 82,086 81,959 86,648 46 Other branches of parent bank ......... 8,144 11,120 12,904 11,295 11,760 10,745 10,834 10,514 8,854 9,779 47 Banks ..................................................... 25,354 27,939 33,677 36,542 35,053 37,261 38,425 38,820 40,050 42,989 48 Public borrowers2 ................................ 7,105 9,109 11,514 12,445 12,301 12,619 12,757 12,355 12,658 12,890 49 Nonbank foreigners ............................. 21,445 23,503 21,679 20,297 20,362 20,745 20,280 20,379 20,397 20,990 50 Other assets .............................................. 1,217 1,599 2,326 2,807 2,750 3,121 2,898 3,022 3,057 3,129 51 Total payable in U.S. dollars ................. 62,705 73,987 85,417 96,995 92,216 106,767 103,034 99,715 101,932 102,303 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Overseas Branches A57 3.13 Continued 1979 Liability account 1976 1977 19781 June July Aug. Sept. Oct. Nov. Dec.P All foreign countries 52 Total, all currencies ................................. 219,420 258,897 306,795 327,012 326,545 350,441 360,817' 358,320 365,587 364,237 53 To United States ..................................... 32,719 44,154 57,948 61,064 60,097 67,744 67,609r 65,998r 62,197 66,441 54 Parent bank .......................................... 19,773 24,542 28,464 19,355 20,256 20,242 21,411' 21,317r 19,292 24,317 5 5 5 6 O No th n e b r a n b k a s n k . s . .. i . n .. .. U ... n .. i .. t . e .. d .. .. S .. t . a .. t . e .. s .. .. . . . . . . . . . . . . . . . . . . . . . . . j 12,946 19,613 1 12 7 , , 3 14 3 6 8 2 1 6 5 , , 7 0 0 0 1 8 2 1 7 2 , , 4 4 0 3 5 6 2 1 9 7 , , 7 78 1 5 7 2 18 7 , , 6 5 1 8 7 1 ' 2 1 9 4 , , 9 7 6 1 8 3 ' ' 2 1 9 3 , , 0 8 0 9 8 7 2 1 6 5 , , 8 2 8 4 0 4 57 To foreigners ............................................ 179,954 206,579 238,912 254,050 253,785 270,328 280,287 ' 279,338' 289,537 283,524 58 Other branches of parent bank ......... 44,370 53,244 67,496 66,631 67,961 72,977 78,345 78,103' 77,170 77,629 59 Banks ..................................................... 83,880 94,140 97,711 109,295 105,296 117,794 117,817' 116,058' 128,024 122,827 60 Official institutions .............................. 25,829 28,110 31,936 34,303 35,363 33,511 36,196' 35,921 ' 34,958 35,675 61 Nonbank foreigners ............................. 25,877 31,085 41,769 43,821 45,165 46,046 47.929 49,256' 49,385 47,393 62 Other liabilities ........................................ 6,747 8,163 9,935 11,898 12,663 12,369 12,921 12,984' 13,853 14,272 63 Total payable in U.S. dollars ................. 173,071 198,572 230,810 243,521 240,452 264,339 269,811' 268,769 272,166 273,753 64 To United States ..................................... 31,932 42,881 55,811 58,524 57,455 65,126 64,972' 63,408' 59,889 64,315 65 Parent bank .......................................... 19,599 24,213 27,393 18,333 19,218 19,192 20,245' 20,089' 18,089 23,220 6 6 7 6 N O o th n e b r a n b k a s n k . s . .. i . n .. .. U ... n .. i .. t . e .. d .. .. S .. t . a .. t . e .. s .. .. . . . . . . . . . . . . . . . . . . . . . . . J 12,373 18,669 1 1 2 6 , , 0 3 8 3 4 4 2 1 5 4 , , 4 71 8 1 0 2 1 6 2 , , 1 1 0 3 7 0 2 1 8 7 , , 5 34 8 5 9 2 1 6 8, , 1 5 6 6 2 5 ' 2 1 8 4 , , 9 3 4 7 4 5 ' ' 2 1 8 3 , , 1 6 0 9 2 8 2 1 6 5 , , 0 05 4 1 4 68 To foreigners ............................................ 137,612 151,363 169,927 178,631 176,613 192,481 197,903 ' 198,327' 204,654 201,629 69 Other branches of parent bank ......... 37,098 43,268 53,396 51,101 52,048 56,840 60,588 60,511' 59,429 60,513 70 Banks ..... ............................................. 60,619 64,872 63,000 71,041 65,945 78,006 76,010' 74,852' 83,605 80,672 71 Official institutions .............................. 22,878 23,972 26,404 28,117 29,497 27,468 29,932' 29,653 28,521 29,048 72 Nonbank foreigners ............................. 17,017 19,251 27,127 28,372 29,123 30,167 31,373 33,311' 33,099 31,396 73 Other liabilities ........................................ 3,527 4,328 5,072 6,366 6,384 6,732 6,936' 7,034 7,623 7,809 United Kingdom 74 Total, all currencies ................................. 81,466 90,933 106,593 112,881 115,217 120,703 126,091 ' 127,949 131,959 130,873 75 To United States ..................................... 5,997 7,753 9,730 12,779 13,626 17,174 18,502' 19,730' 19,612 20,986 76 Parent bank .......................................... 1,198 1,451 1,887 1,505 1,706 2,669 2,070' 2,258 2,516 3,104 7 7 7 8 O No th n e b r a n b k a s n k . s . .. i . n .. .. U ... n .. i . t .. e .. d .. .. S .. t . a .. t . e .. s .. .. . . . . . . . . . . . . . . . . . . . . . . . } 4,798 6,302 4 3, , 6 2 1 3 1 2 4 7 , , 2 0 4 2 5 9 4 7 , ,0 8 9 22 8 6 8 , , 1 3 5 5 5 0 7 8 , , 7 6 9 4 0 2 ' 8 9, , 4 0 6 0 8 4 ' ' 9 7 , , 7 38 1 1 5 9 8 , , 0 8 4 3 8 4 79 To foreigners ............................................ 73,228 80,736 93,202 95,385 96,258 98,557 102,533' 103,093' 106,766 104,032 80 Other branches of parent bank ......... 7,092 9,376 12,786 11,353 11,193 11,507 13,045 13,139 12,463 12,567 81 Banks ..................................................... 36,259 37,893 39,917 42,297 41,336 46,256 44,913' 44,440' 49,299 47,620 82 Official institutions .............................. 17,273 18,318 20,963 23,140 24,017 21,825 24,461' 24,438' 23,060 24,202 83 Nonbank foreigners ............................. 12,605 15,149 19,536 18,595 19,712 18,969 20,114 21,076' 21.944 19,643 84 Other liabilities ........................................ 2,241 2,445 3,661 4,717 5,333 4,972 5,056' 5,126 5,581 5,855 85 Total payable in U.S. dollars ................. 63,174 67,573 77,030 79,256 80,398 86,642 90,682' 92,817 94,983 95,449 86 To United States ..................................... 5,849 7,480 9,328 12,199 13,077 16,572 17,868' 19,187' 19,138 20,552 87 Parent bank .......................................... 1,182 1,416 1,836 1,460 1,637 2,613 1,966' 2,196 2,467 3,054 8 8 8 9 N O o th n e b r a n b k a s n k . s . .. i . n .. .. U ... n .. i .. t . e .. d .. .. S .. t . a .. t . e .. s .. .. . . . . . . . . . . . . . . . . . . . . . . . } 4,667 6,064 4 3 , , 1 34 4 8 4 4 6 , ,5 1 6 7 5 4 4 6, , 6 7 8 5 3 7 6 7, , 8 0 9 6 1 8 7 8 , , 7 1 1 8 5 7 ' 9 7 , , 0 9 5 4 1 0 ' ' 9 7 , , 3 3 3 3 3 8 8 8 , . 7 7 0 92 6 90 To foreigners ............................................ 56,372 58,977 66,216 65,081 65,403 68,035 70,730' 71,561' 73,542 72,397 91 Other branches of parent bank ......... 5,874 7,505 9,635 7,711 7,377 7,720 8,663 8,955 8,337 8,446 92 Banks ..................................................... 25,527 25,608 25,287 25,436 23,893 28,698 26,851 ' 26,132' 29,424 29,424 93 Official institutions .............................. 15,423 15,482 17,091 19.093 20,288 18,119 20,703' 20,457 19,139 20,192 94 Nonbank foreigners ............................. 9,547 10,382 14,203 12,841 13,845 13,498 14,513 16,017' 16,642 14,335 95 Other liabilities ........................................ 953 1,116 1,486 1,976 1,918 2,035 2,084' 2,069 2,303 2,500 Bahamas and Caymans 96 Total, all currencies ................................. 66,774 79,052 91,735 103,387 98,839 113,512 109,925 106,484 108,872 108,911 97 To United States ..................................... 22,721 32,176 39,431 40,023 37,939 41,734 40,582 38,294 35,013 37,546 98 Parent bank .......................................... 16,161 20,956 20,356 12,276 12,232 11,117 13,525 12,864 10,955 15,126 1 9 0 9 0 N O o th n e b r a n b k a s n k . s . .. i . n .. .. U ... n .. i .. t . e .. d .. .. S .. t . a .. t . e .. s .. .. . . . . . . . . . . . . . . . . . . . . . . . | 6,560 11,220 1 6 2 , , 1 8 9 7 9 6 1 8 8 , , 9 7 7 7 3 4 1 6 9 , , 3 3 4 65 2 2 1 0 0 , , 4 1 2 9 5 2 1 8 8 , , 9 1 4 1 7 0 1 5 9 , , 7 6 5 7 7 3 1 5 8 , , 5 5 4 1 5 3 1 5 7 , , 3 0 4 7 3 7 101 To foreigners ............................................ 42,899 45,292 50,447 61,216 58,724 69,373 67,017 65,920 71,241 68,709 102 Other branches of parent bank ......... 13,801 12,816 16,094 17,104 18,223 20,246 20,730 19,304 21,060 20,833 103 Banks ..................................................... 21,760 24,717 23,104 31,662 28,204 35,121 32,799 32,266 36,498 33,612 104 Official institutions .............................. 3,573 3,000 4,208 4,074 4,375 4,751 4,418 4,712 5,176 4,866 105 Nonbank foreigners ............................. 3,765 4,759 7,041 8,376 7,922 9,255 9,070 9,638 8,507 9,398 106 Other liabilities ........................................ 1,154 1,584 1,857 2,148 2,176 2,405 2,326 2,270 2,618 2,656 107 Total payable in U.S. dollars ................. 63,417 74,463 87,014 97,993 93,470 107,623 104,113 100,820 103,339 103,394 1. In May 1978 the exemption level for branches required to report was in- rowers, including corporations that are majority owned by foreign governments, creased, which reduced the number of reporting branches. replaced the previous, more narrowly defined claims on foreign official institutions. 2. In May 1978 a broader category of claims on foreign public bor- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics □ March 1980 3.14 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1979 1980 Item 1977 1978 1979 July Aug. Sept. Oct. Nov. Dec.P Jan. p 1 Total1 ............................................................................. 131,097 162,567 149,307 148,017 148,726 149,780 146,728 141,306 149,307 145,614 By type 2 Liabilities reported by banks in the United States2 18,003 23,274 30,331 25,809 25,398 25,619 24,951 26,643 30,331 24,536 3 U.S. Treasury bills and certificates3 ........................ 47,820 67,671 47,666 49,425 50,146 50,842 49,411 43,921 47,666 48,762 U.S. Treasury bonds and notes 4 Marketable ................................................................ 32,164 35,912 37,672 37,490 38,005 38,106 38,162 37,125 37,672 38,153 5 Nonmarketable4 ...................................................... 20,443 20,970 17,387 19,797 19,547 19,547 18,497 17,837 17,387 17,434 6 U.S. securities other than U.S. Treasury securities5 12,667 14,740 16,251 15,496 15,630 15,666 15,707 15,780 16,251 16,729 By area 7 Western Europe1 ......................................................... 70,748 92,989 85,502 86,668 86,485 87,117 85,467 80,838 85,502 82,446 8 Canada .......................................................................... 2,334 2,506 1,898 2,116 2,185 2,412 1,954 1,971 1,898 1,922 9 Latin America and Caribbean .................................. 4,649 5,045 6,371 5,397 4,497 4,890 4,559 4,579 6,371 4,777 10 Asia ................................................................................ 50,693 58,858 52,639 50,537 51,928 52,414 51,782 51,151 52,639 53,243 11 Africa ............................................................................. 1,742 2,423 2,412 2,613 3,219 2,513 2,583 2,215 2,412 2,493 12 Other countries6 .......................................................... 931 746 485 686 412 434 383 552 485 733 1. Includes the Bank for International Settlements. 5. Debt securities of U.S. government corporations and federally sponsored 2. Principally demand deposits, time deposits, bankers acceptances, commercial agencies, and U.S. corporate stocks and bonds. paper, negotiable time certificates of deposit, and borrowings under repurchase 6. Includes countries in Oceania and Eastern Europe. agreements. 3. Includes nonmarketable certificates of indebtedness (including those payable Note: Based on Treasury Department data and on data reported to the Treasury in foreign currencies through 1974) and Treasury bills issued to official institutions Department by banks (including Federal Reserve Banks) and securities dealers of foreign countries. 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 1976 1977 Dec. Mar. June Sept. Dec.P 1 Banks’ own liabilities .................................................................................. 781 925 2,235 1,781 1,963 7,323 1,855 2 Banks’ own claims1 ..................................................................................... 1,834 2,356 3,504 2,602 2,519 z.,607 2,435 3 Deposits ..................................................................................................... 1,103 941 1,633 1,121 1,324 1,220' 1,013 4 Other claims ............................................................................................. 731 1,415 1,871 1,481 1,1% 1,386' 1,422 5 Claims of banks’ domestic customers2 ..................................................... 367 476 520 612 592 1. Includes claims of banks’ domestic customers through March 1978. Note: Data on claims exclude foreign currencies held by U.S. monetary au- 2. Assets owned by customers of the reporting bank located in the United States thorities. 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 1979 1980 Holder and type of liability 1978 July Aug. Sept. Oct. Nov. Dec.P Jan.P 1 All foreigners ..................................................... 110,657 126,168 166,997 168,992 191,719 185,695 180,656 184,251 187,491 185,627 2 Banks’ own liabilities ........................................ 78,904 97,262 117,880 111,716 107,873 117,068 117,300 115,610 3 Demand deposits .......................................... 16,803 18,996 19.201 19,084 18,910 20,163 17,898 23,338 23,347 20,727 4 Time deposits1 .............................................. 11,347 11,521 12,473 12,577 12,747 13,048 12,260 12,554 13,697 12,462 5 Other2 ............................................................. 9,702 12,967 12,627 12,694 12,774 12,609 16,198 12,627 6 Own foreign offices3 ..................................... 37,563 52,635 73,595 65,811 64,941 68,567 64,057 68,697 7 Banks’ custody liabilities4 ................................ 88,093 71,730 73,839 73,978 72,783 67,184 70,191 71,113 8 U.S. Treasury bills and certificates5 ......... 40,744 48,906 68.202 51,467 52,258 52,429 50,452 45,005 48,573 49,851 9 Other negotiable and readily transferable instruments6 ............................................ 17,396 18,047 19,297 19,312 20,141 19,802 19,274 18,759 10 Other .............................................................. 2,495 2,216 2,284 2,237 2,190 2,376 2,344 2,502 11 Nonmonetary international and regional organizations7 ............................................. 5,714 2,607 3,437 3,479 2,909 2,389 2,717 2,441 1,195 12 Banks’ own liabilities ........................................ 906 844 603 491 566 753 710 434 13 Demand deposits .......................................... 290 231 330 216 154 161 143 214 260 164 14 Time deposits1 .............................................. 205 139 84 69 77 82 82 80 152 79 15 Other2 ............................................................. 492 559 372 248 342 459 298 191 16 Banks’ custody liabilities4 ................................ 1,701 2,593 2,876 2,418 1,823 1,964 1,732 761 17 U.S. Treasury bills and certificates ............ 2,701 706 201 1,345 1,442 912 327 258 102 102 18 Other negotiable and readily transferable 19 Othe i r n st . r .. u .. m ... e .. n .. t .. s . 6 .. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,4991 1,247 1 1,433 1 1,505 1 1,494 2 1,6 1 0 0 5 1 1,627 2 659 20 Official institutions8 .......................................... 54,956 65,822 90,650 75,235 75,545 76,460 74,362 70,565 77,997 73,298 21 Banks’ own liabilities ........................................ 12,073 14,382 12,945 13,488 11,981 14,176 18,229 12,293 22 Demand deposits .......................................... 3,394 3,528 3,390 2,850 2,397 3,139 2,372 5,652 4,723 3,686 23 Time deposits1 .............................................. 2,321 1,797 2,531 2,575 2,392 2,320 1,859 1,859 3,086 2,289 24 Other2 ............................................................. 6,152 8,957 8,155 8,029 7,749 6,666 10,420 6,319 25 Banks’ custody liabilities4 ................................ 78,577 60,853 62,600 62,972 62,381 56,388 59,768 61,005 26 U.S. Treasury bills and certificates5 ......... 37,725 47,820 67,415 49,425 50,146 50,842 49,411 43,921 47,666 48,762 27 Other negotiable and readily transferable instruments6 ............................................ 10,992 11,377 12,402 12,080 12,913 12,411 12,050 12,208 28 Other .............................................................. 170 50 52 51 57 56 52 35 29 Banks9 ................................................................. 37,174 42,335 57,720 73,085 95,469 88,947 86,155 92,716 88,547 92,451 30 Banks’ own liabilities ........................................ 52,935 68,134 90,448 83,800 81,055 87,511 83,439 88,129 31 Unaffiliated foreign banks .......................... 15,372 15,499 16,853 17,989 16,114 18,944 19,382 18,336 32 Demand deposits ...................................... 9,104 10,933 11.239 11,357 11,757 12,425 10,603 12,879 13,252 11,799 33 Time deposits1 .......................................... 2,297 2,040 1,468 1,197 1,525 1,752 1,551 1,624 1,697 1,259 34 Other2 ......................................................... 2,664 2,945 3,571 3,813 3,960 4,441 4,432 5,278 35 Own foreign offices3 ..................................... 37,563 52,635 73,595 65,811 64,941 68,567 64,057 68,697 36 Banks’ custody liabilities4 ................................ 4,785 4,951 5,020 5,147 5,100 5,205 5,108 5,418 37 U.S. Treasury and certificates .................... 300 347 384 406 400 451 422 533 38 Other negotiable and readily transferable instruments6 ............................................ 2.425 ' 2,556 2,509 2,625 2,684 2.611 2,518 2,616 39 Other .............................................................. 2,060 2,048 2,127 2,116 2,017 2,143 2,168 2,269 40 Other foreigners ................................................ 12,814 14,736 16,020 17,235 17,227 17,379 17,750 18,254 18,506 18,683 41 Banks’ own liabilities ........................................ 12,990 13,901 13,884 13,937 14,271 14,627 14,923 14,754 42 Demand deposits .......................................... 4,015 4,304 4,242 4,661 4,602 4,439 4,779 4,594 5,112 5,078 43 Time deposits ................................................ 6,524 7,546 8,353 8,735 8,753 8,894 8,769 8,991 8,762 8,837 44 Other2 ............................................................. 394 505 529 604 724 1,043 1,048 840 45 Banks’ custody liabilities4 ................................ 3,030 3,333 3,343 3,442 3,479 3,626 3,583 3,929 46 U.S. Treasury bills and certificates ............ 285 350 285 269 315 375 382 454 47 Other negotiable and readily transferable instruments6 ............................................ 2,481 2,867 2,953 3,103 3,050 3,175 3,079 3,276 48 Other .............................................................. 264 117 105 70 114 76 123 199 49 Memo: Negotiable time certificates of deposit in custody for foreigners ......................... 11,007 10,732 11,099 11,264 11,346 10.821 10,898 10,461 1. Excludes negotiable time certificates of deposit, which are included in “Other 5. Includes nonmarketable certificates of indebtedness (including those payable negotiable and readily transferable instruments.” Data for time deposits prior to in foreign currencies through 1974) and Treasury bills issued to official institutions April 1978 represent short-term only. of foreign countries. 2. Includes borrowing under repurchase agreements. 6. Principally bankers acceptances, commercial paper, and negotiable time cer­ 3. U.S. banks: includes amounts due to own foreign branches and foreign sub­ tificates of deposit. sidiaries consolidated in “Consolidated Report of Condition” filed with bank reg­ 7. Principally the International Bank for Reconstruction and Development, and ulatory agencies. Agencies, branches, and majority-owned subsidiaries of foreign the Inter-American and Asian Development Banks. banks: principally amounts due to head office or parent foreign bank, and foreign 8. Foreign central banks and foreign central governments and the Bank for branches, agencies or wholly owned subsidiaries of head office or parent foreign International Settlements. 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 International Statistics □ March 1980 3.16 LIABILITIES TO FOREIGNERS Continued 1979 1980 Area and country 1976 1977 1978 July Aug. Sept. Oct. Nov. Dec .p Jan.P 1 Total .............................................................................. 110,657 126,168 166,997 168,992 191,719 185,695 180,656 184,251 187,491 185,627 2 Foreign countries ......................................................... 104,943 122,893 164,390 165,555 188,241 182,786 178,267 181,534 185,505 184,432 3 Europe .......................................................................... 47,076 60,295 85,382 81,497 86,112 88,584 88,008 87,488 91,311 87,117 4 Austria ...................................................................... 346 318 513 444 446 444 426 404 413 374 5 Belgium-Luxembourg ............................................. 2,187 2,531 2,552 2,493 2,714 2,920 2,710 2,786 2,364 2,118 6 Denmark ................................................................... 356 770 1,946 1,560 1,412 1,100 1,001 1,166 1,092 955 7 Finland ...................................................................... 416 323 346 466 508 415 334 390 398 454 8 France ....................................................................... 4,876 5,269 9,208 9,616 9,985 10,499 9,340 10,301 10,389 10,524 9 Germany .................................................................... 6,241 7,239 17,286 10,724 10,434 13,129 13,154 10,801 12,935 10,385 10 Greece ....................................................................... 403 603 826 760 695 691 632 792 635 831 11 Italy ........................................................................... 3,182 6,857 7,674 8,460 9,678 8,551 8,481 8,345 7,782 7,793 12 Netherlands .............................................................. 3,003 2,869 2,402 2,355 2,627 2,281 2,174 2,165 2,327 2,529 13 Norway ...................................................................... 782 944. 1,271 1,263 1,320 1,402 1,393 1,407 1,267 1,229 14 Portugal ..................................................................... 239 273 330 303 411 554 620 595 557 549 15 Spain .......................................................................... 559 619 870 1,107 1,060 1,133 1,103 1,184 1,259 1,193 16 Sweden ...................................................................... 1,692 2,712 3,121 2,227 2,368 2,062 2,165 2,064 2,005 1,848 17 Switzerland ................................................................ 9,460 12,343 18,560 16,687 15,717 16,642 16,643 17,206 18,501 17,270 18 Turkey ........................................................................ 166 130 157 193 160 135 150 145 119 232 19 United Kingdom ...................................................... 10,018 14,125 14,265 18,745 22,579 22,622 24,138 24,043 24,668 25,008 20 Yugoslavia ................................................................ 189 232 254 159 149 142 147 147 266 157 21 Other Western Europe1 ......................................... 2,673 1,804 3,693 3,610 3,504 3,493 3,087 3,248 3,981 3,406 22 U.S.S.R....................................................................... 51 98 82 63 80 52 53 39 52 46 23 Other Eastern Europe2 .......................................... 236 236 325 260 265 317 259 261 302 217 24 Canada .......................................................................... 4,659 4,607 6,966 7,610 8,376 8,319 8,644 7,280 7,357 9,538 25 Latin America and Caribbean .................................. 19,132 23,670 31,606 41,242 56,889 49,408 47,097 51,624 49,347 50,391 26 Argentina .................................................................. 1,534 1,416 1,484 1,697 1,761 1,935 1,693 1,573 1,582 1,633 27 Bahamas .................................................................... 2,770 3,596 6,752 13,107 24,085 18,372 15,377 18,540 15,300 16,264 28 Bermuda .................................................................... 218 321 428 339 415 392 399 404 435 442 29 Brazil ......................................................................... 1,438 1,396 1,125 1,294 1,040 1,198 994 1,051 1,005 1,3% 30 British West Indies ................................................. 1,877 3,998 5,991 7,840 13,367 11,202 11,372 12,534 10,842 11,884 31 Chile .......................................................................... 337 360 399 465 459 420 425 356 469 396 32 Colombia .................................................................. 1,021 1,221 1,756 2,292 2,378 2,188 2,243 2.377 2,617 2,882 33 Cuba .......................................................................... 6 6 13 7 6 9 7 12 13 10 34 Ecuador ..................................................................... 320 330 322 443 449 364 482 476 425 386 35 Guatemala3 .............................................................. 416 319 320 335 361 374 413 394 36 Jamaica3 .................................................................... 52 104 67 175 113 74 76 95 37 Mexico ...................................................................... 2,870 2,876 3,417 3,632 3,658 3,549 3,528 3,666 4,094 3,980 38 Netherlands Antilles ................................................ 158 196 308 422 366 359 609 460 499 346 39 Panama ...................................................................... 1,167 2,331 2,968 3,070 3,049 3,336 3.926 4,290 4,483 4,724 40 Peru ............................................................................ 257 287 363 425 391 477 388 417 383 375 41 Uruguay ..................................................................... 245 243 231 231 222 217 217 185 202 215 42 Venezuela ................................................................. 3,118 2,929 3,821 3,920 3,180 2,903 3,168 3,014 4,192 3,081 43 Other Latin America and Carribbean ................. 1,797 2,167 1,760 1,636 1,675 1,977 1,795 1,822 2,315 1,887 44 29,766 30,488 36,473 30,818 32,219 32,505 30,615 31,058 32,899 32,940 China 45 Mainland ................................................................ 48 53 67 42 41 45 49 45 49 46 46 Taiwan .................................................................. 990 1,013 502 769 1,027 1,231 1,339 1,413 1,393 1,386 47 Hong Kong ................................................................ 894 1,094 1,256 1,452 1,571 1,634 1,542 1,624 1.672 1,693 48 India .......................................................................... 638 961 790 873 704 674 496 580 527 545 49 Indonesia .................................................................. 340 410 449 509 317 463 555 478 504 748 50 Israel .......................................................................... 392 559 674 624 627 626 621 574 663 503 51 Japan ......................................................................... 14,363 14,616 21,927 13,104 13,094 13,292 10,885 7,867 8,930 10,350 52 Korea ......................................................................... 438 602 795 816 825 938 950 951 995 960 53 Philippines ................................................................ 628 687 644 640 603 632 598 671 800 729 54 Thailand .................................................................... 277 264 427 307 330 421 304 415 281 408 55 Middle-Eastoil-exporting countries4 .................... 9,360 8,979 7,529 9,853 11,306 10,688 11,313 14,564 15,212 14,068 56 Other Asia ................................................................ 1,398 1,250 1,414 1,830 1,773 1,862 1,963 1,876 1,871 1,506 57 Africa ............................................................................. 2,298 2,535 2,886 3,226 3,818 3,194 3,141 3,105 3,232 3,343 58 Egypt ......................................................................... 333 404 404 378 302 245 294 380 475 449 59 Morocco .................................................................... 87 66 32 35 40 40 30 36 32 50 60 South Africa ............................................................. 141 174 168 196 174 235 194 213 184 269 61 Zaire .......................................................................... 36 39 43 37 49 73 112 104 110 128 62 Oil-exporting countries5 ......................................... 1,116 1,155 1,525 1,699 2,441 1,832 1,711 1,513 1,627 1,516 63 Other Africa ............................................................. 585 698 715 881 811 768 800 859 804 932 64 Other countries ............................................................ 2,012 1,297 1,076 1,162 826 776 762 980 904 1,103 65 Australia ................................................................... 1,905 1,140 838 806 621 549 528 714 684 853 66 All other ................................................................... 107 158 239 355 205 227 234 266 221 251 67 Nonmonetary international and regional # organizations ........................................................ 5,714 3,274 2,607 3,437 3,479 2,909 2,389 2,717 2,441 1,195 68 International ............................................................. 5,157 2,752 1,485 2,257 2,427 1,810 1,343 1,504 1,321 813 69 Latin American regional ........................................ 267 278 808 917 793 824 755 790 813 90 70 Other regional6 ........................................................ 290 245 314 263 258 275 291 423 308 292 1. Includes the Bank for International Settlements. Beginning April 1978, also 4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and includes Eastern European countries not listed in line 23. United Arab Emirates (Trucial States). 2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German Dem­ 5. Comprises Algeria, Gabon, Libya, and Nigeria. ocratic Republic, Hungary, Poland, and Romania. 6. Asian, African, Middle Eastern, and European regional organizations, except 3. Included in “Other Latin America and Caribbean” through March 1978. the Bank for International Settlement, which is included in “Other Western Europe.” 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 1979 1980 Area and country 1976 1977 1978 July Aug. Sept. Oct. Nov. Dec./’ Jan .p 1 Total .............................................................................. 79,301 90,206 115,307 113,502 125,633 127,247 121,086 124,427 133,486 127,158 2 Foreign countries ......................................................... 79,261 90,163 115,251 113,455 125,582 127,196 121,049 124,383 133,454 127,122 3 Europe .......................................................................... 14,776 18,114 24,230 24,138 25,774 28,380 26,178 25,890 28,337 25,857 4 Austria ...................................................................... 63 65 140 188 223 191 190 168 285 257 5 Belgium-Luxembourg ............................................. 482 561 1,200 1,669 1,483 1,737 1,559 1,402 1,327 1,386 6 Denmark .................................................................... 133 173 254 137 141 166 116 149 147 127 7 Finland ...................................................................... 199 172 305 220 247 227 230 182 202 264 8 France ........................................................................ 1,549 2,082 3,742 3,237 3,260 3,766 2,736 3,305 3,303 3,046 9 Germany .................................................................... 509 644 895 939 883 1,840 1,309 1,396 1,168 955 10 Greece ........................................................................ 279 206 164 130 267 194 282 171 154 136 11 Italy ............................................................................ 993 1,334 1,508 1,196 1,474 1,566 1,424 1,259 1,587 1,344 12 Netherlands .............................................................. 315 338 675 792 559 631 618 603 514 469 13 Norway ...................................................................... 136 162 299 181 227 238 236 257 276 178 14 Portugal ..................................................................... 88 175 171 235 297 325 349 352 330 282 15 Spain .......................................................................... 745 722 1,110 999 969 1,126 1,117 1,050 1,051 902 16 Sweden ...................................................................... 206 218 537 401 482 459 603 548 542 733 17 Switzerland ................................................................ 379 564 1,283 1,027 714 1,179 1,171 1,232 1,162 935 18 Turkey ........................................................................ 249 360 283 118 148 119 141 151 149 128 19 United Kingdom ...................................................... 7,033 8,964 10,156 10,693 12,347 12,394 11,839 11,426 13,788 11,376 20 Yugoslavia ................................................................ 234 311 363 541 571 584 578 582 611 569 21 Other Western Europe1 ......................................... 85 86 122 199 216 247 154 185 175 204 22 U.S.S.R........................................................................ 485 413 366 282 292 326 349 311 290 263 23 Other Eastern Europe2 .......................................... 613 566 657 955 974 1,064 1,175 1,160 1,277 1,206 24 Canada .......................................................................... 3,319 3,355 5,152 5,063 5,017 4,787 4,335 4,368 4,346 4,229 25 Latin America and Caribbean ................................... 38,879 45,850 57,166 53,941 62,932 62,465 59,225 62,286 67,510 64,203 26 Argentina .................................................................. 1,192 1,478 2,281 3,341 3,259 3,285 3,653 4,157 4,407 4,658 27 Bahamas .................................................................... 15,464 19,858 21,515 16,769 19,931 19,146 17,393 16,046 18,684 19,674 28 Bermuda .................................................................... 150 232 184 179 167 172 485 462 467 432 29 Brazil ......................................................................... 4,901 4,629 6,251 6,168 6,548 7,286 7,567 7,497 7,768 7,487 30 British West Indies ................................................. 5,082 6,481 9,391 6,244 10,723 9,176 6,742 9,131 9,716 7,784 31 Chile .......................................................................... 597 675 972 1,120 1,173 1,323 1,396 1,349 1,438 1,374 32 Colombia .................................................................. 675 671 1,012 1,196 1,220 1,259 1,451 1,523 1,611 1,654 33 Cuba .......................................................................... 13 10 * 4 6 4 4 4 4 4 34 Ecuador ..................................................................... 375 517 705 916 921 943 1,000 1,007 1,025 1,000 35 Guatemala3 ............................................................... 94 98 100 103 110 115 134 114 36 Jamaica3 . .................... 40 47 30 32 29 34 47 51 37 Mexico ...................................................................... 4,822 4,909 5,423 7,172 7,699 8,430 8,416 8,336 8,954 8,808 38 Netherlands Antilles ................................................ 140 224 273 392 342 301 230 227 247 324 39 Panama ...................................................................... 1,372 1,410 3,094 4,212 4,400 4,523 4,268 5,774 5,986 4,418 40 Peru ............................................................................ 933 962 918 727 730 716 607 604 652 569 41 Uruguay ..................................................................... 42 80 52 56 66 60 72 71 105 100 42 Venezuela ................................................................. 1,828 2,318 3,474 3,817 4,040 4,176 4,349 4,392 4,668 4,236 43 Other Latin America and Caribbean ................... 1,293 1,394 1,487 1,483 1,577 1,531 1,455 1,557 1,595 1,516 44 Asia ................................................................................ 19,204 19,236 25,494 27,217 28,963 28,546 28,457 29,057 30,624 31,087 China 45 Mainland ................................................................ 3 10 4 35 29 25 55 31 36 28 46 Taiwan ................................................................... 1,344 1,719 1,499 1,876 1,970 1,935 1,930 1,805 1,821 1,705 47 Hong Kong ................................................................ 316 543 1,579 1,978 1,788 1,859 1,737 1,794 1,804 1,810 48 India ........................................................................... 69 53 54 43 75 74 68 69 92 133 49 Indonesia ................................................................... 218 232 143 131 156 140 147 135 131 117 50 Israel ........................................................................... 755 584 870 865 857 882 891 842 990 822 51 Japan ......................................................................... 11,040 9,839 12,686 13,950 15,050 14,656 14,983 16,155 16,923 17,905 52 Korea ......................................................................... 1,978 2,336 2,282 3,469 3,612 3,750 3,839 3,732 3,795 4,100 53 Philippines ................................................................ 719 594 680 743 793 638 724 642 737 640 54 Thailand .................................................................... 442 633 758 925 919 1,036 956 972 935 974 55 Middle East oil-exporting countries4 .................... 1,459 1,746 3,135 1,807 1,689 1,914 1,190 1,107 1,544 1,394 56 Other Asia ................................................................ 863 947 1,804 1,395 2,026 1,637 1,939 1,776 1,815 1,460 57 Africa ............................................................................. 2,311 2,518 2,221 2,082 1,969 2,101 1,926 1,865 1,785 1,865 58 Egypt ......................................................................... 126 119 107 115 126 120 122 91 112 116 59 Morocco .................................................................... 27 43 82 34 31 23 66 73 103 103 60 South Africa ............................................................. 957 1,066 860 745 730 704 602 565 445 417 61 Zaire .......................................................................... 112 98 164 189 151 149 135 135 142 146 62 Oil-Exporting Countries5 ........................................ 524 510 452 491 398 563 435 442 391 486 63 Other ......................................................................... 565 682 556 508 533 542 566 559 592 598 64 Other Countries ........................................................... 772 1,090 988 1,013 926 916 928 916 853 976 65 Australia .................................................................... 597 905 877 765 756 744 748 741 673 801 66 All other .................................................................... 175 186 111 248 170 172 180 176 180 175 67 Nonmonetary international and regional organizations6 ....................................................... 40 43 56 47 51 50 36 44 32 35 1. Includes the Bank for International Settlements. Beginning April 1978, also 5. Comprises Algeria, Gabon, Libya, and Nigeria. includes Eastern European countries not listed in line 23. 6. Excludes the Bank for International Settlements, which is included in “Other 2. Beginning April 1978 comprises Bulgaria, Czechoslovakia, the German Dem­ Western Europe.” ocratic Republic, Hungary, Poland, and Romania. 3. Included in “Other Latin America and Caribbean” through March 1978. Note. Data for period prior to April 1978 include claims of banks’ domestic 4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and customers on foreigners. United Arab Emirates (Trucial States). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 International Statistics □ March 1980 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 1979 1980 Type of claim July Aug. Sept. Oct. Nov Dec. 1 Total ........................................................................... 79,301 90,206 126,485 145,975 153,434 2 Banks' own claims on foreigners ........................... 115,307 113,502 125,633 127,247 121,086 124,427 133,486 127,158 3 Foreign public borrowers ....................................... 10,130 11,891 12,510 13,808 14,103 13,657 15,234 14,582 4 Own foreign offices1 ................................................. 41,471 36,213 40,237 39,493 38,164 43,628 46,983 46,254 5 Unaffiliated foreign banks ...................................... 40,420 38,793 45,048 46,010 39,799 37,860 40,730 35,806 6 Deposits ................................................................. 5,458 6,973 7,549 7,394 6,745 5,680 6,271 4,957 7 Other ...................................................................... 34,962 31,820 37,498 38,616 33,054 32,180 34,459 30,849 8 All other foreigners .................................................. 23,286 26,605 27,838 27,935 29,021 29,282 30,539 30,515 9 Claims of banks’ domestic customers2 ................. 11,178 18,729 19,948 10 Deposits ..................................................................... 480 975 955 11 Negotiable and readily transferable instruments3 5,344 11,580 12,974 12 Outstanding collections and other claims4........... 5,756 6,176 5,353 6,174 6,019 13 Memo: Customer liability on acceptances........... 14,919 19,733 21,173 Dollar deposits in banks abroad, reported by non­ banking business enterprises in the United States5 .................................................................... 12,804 20,537 20,808 21,615 20,060 18,723 1. U.S. banks: includes amounts due from own foreign branches and foreign 4. Data for March 1978 and for period prior to that are outstanding collections subsidiaries consolidated in “Consolidated Report of Condition” filed with bank only. regulatory agencies. Agencies, branches, and majority-owned subsidiaries of foreign 5. Includes demand and time deposits and negotiable and nonnegotiable certif­ banks: principally amounts due from head office or parent foreign bank, and icates of deposit denominated in U.S. dollars issued by banks abroad. For de­ foreign branches, agencies, or wholly owned subsidiaries of head office or parent scription of changes in data reported by nonbanks, see July 1979 Bulletin, p. 550. foreign bank. 2. Assets owned by customers of the reporting bank located in the United States Note: Beginning April 1978, data for banks’ own claims are given on a monthly that represent claims on foreigners held by reporting banks for the account of their basis, but the data for claims of banks’ own domestic customers are available on domestic customers. a quarterly basis only. 3. Principally negotiable time certificates of deposit and bankers acceptances. 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. Dec. Mar. June Sept.r Dec.P 1 Total .................................................................................................................................. 60,096 73,632 71,528 77,662 87,471 86,170 By borrower 2 Maturity of 1 year or less1 ............................................................................................. 47,230 58,363 55,363 60,014 68,119 65,042 3 Foreign public borrowers .......................................................................................... 3,709 4,589 4,643 4,594 6,051 6,894 4 All other foreigners ..................................................................................................... 43,521 53,774 50,720 55,420 62,068 58,148 5 Maturity of over 1 year1 ................................................................................................. 12,866 15,269 16,165 17,648 19,352 21,128 6 Foreign public borrowers .......................................................................................... 4,230 5,343 5,944 6,427 7,635 8,074 7 All other foreigners ..................................................................................................... 8,635 9,926 10,221 11,221 11,718 13,054 By area Maturity of 1 year or less1 8 Europe .......................................................................................................................... 10,513 15,126 12,376 14,019 16,782 15,203 9 Canada .......................................................................................................................... 1,953 2,670 2,512 2,703 2,466 1,843 10 Latin American and Caribbean ................................................................................ 18,624 20,927 21,651 23,090 25,584 24,774 11 Asia ............................................................................................................................... 14,014 17,575 16,993 18,199 21,365 21,657 12 Africa ............................................................................................................................. 1,535 1,496 1,290 1,438 1,399 1,072 13 All other2 ...................................................................................................................... 591 569 541 565 523 493 Maturity of over 1 year1 14 Europe .......................................................................................................................... 3,102 3,142 3,103 3,484 3,665 4,142 15 Canada .......................................................................................................................... 794 1,426 1,456 1,221 1,371 1,453 16 Latin America and Caribbean .................................................................................. 6,877 8,452 9,325 10,265 11,773 12,792 17 Asia ............................................................................................................................... 1,303 1,399 1,471 1,881 1,732 1,920 18 Africa ............................................................................................................................. 580 636 629 614 623 652 19 All other2 ...................................................................................................................... 211 214 180 183 189 169 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 1978 1979 Area or Country 1975 1976 1977 Mar. June2 Sept. Dec. Mar. June Sept. Dec. 1 167.1 206.8 241.4 244.7 247.1 247.6 266.1 263.8 275.3 293.7 304.3 2 G-10 countries and Switzerland ....................................................... 88.0 100.3 116.4 116.9 112.8 113.7 124.9 119.1 125.3 135.8 139.2 3 Belgium-Luxembourg ..................................................................... 5.3 6.1 8.4 8.3 8.3 8.4 9.0 9.4 9.7 10.7 11.1 4 France ............................................................................................... 8.5 10.0 11.0 11.4 11.4 11.7 12.2 11.7 12.7 12.0 11.6 5 Germany ........................................................................................... 7.7 ■ 8.7 9.6 9.1 9.7 11.4 10.5 10.8 12.9 12.0 6 Italy ................................................................................................... 5.2 5.8 6.5 6.4 6.1 6.6 5.7 6.1 6.1 6.3 7 Netherlands ...................................................................................... 2.8 2.8 3.5 3.4 3.5 4.4 3.9 4.0 4.7 4.8 8 Sweden .............................................................................................. 1.0 1.2 1.9 2.1 2.2 2.1 2.0 2.0 2.3 2.4 9 Switzerland ....................................................................................... 2.4 3.0 3.6 4.1 4.3 5.4 4.5 4.8 5.0 4.8 10 United Kingdom .............................................................................. 36.3 41.7 46.5 46.7 45.0 44.4 47.3 46.5 50.4 53.8 55.9 11 Canada .............................................................................................. 3.8 5.1 6.4 5.1 5.0 6.0 5.9 5.5 6.0 7.7 12 Japan ................................................................................................ 14.9 15.9 18.8 19^1 17.9 18.6 20.6 19.0 19.4 22.3 22.4 13Other developed countries ................................................................. 10.8 15.0 18.6 19.7 19.4 18.6 19.4 18.2 18.2 19.7 19.9 14 Austria .............................................................................................. .7 1.2 1.3 1.5 1.5 1.5 1.7 1.7 1.8 2.0 2.0 15 Denmark ........................................................................................... .6 1.0 1.6 1.7 1.9 2.0 2.0 1.9 2.0 2.2 16 Finland .............................................................................................. .9 1.1 1.2 1.1 1.0 1.2 1.2 1.1 1.2 1.2 17 Greece ............................................................................................... 1.4 1.7 2.2 2.2 2.3 2.3 2.2 2.3 2.4 18 Norway .............................................................................................. 1.4 1.5 1.9 2.1 2.1 2.1 2.1 2.1 2.3 2.3 19 Portugal ............................................................................................ .3 .4 .6 .5 .6 .6 .5 .7 .7 20 Spain .................................................................................................. 1.9 2.8 3.6 3.6 3.5 3.4 3.0 3.0 3.3 3.5 21 Turkey ............................................................................................... .6 1.3 1.5 1.4 1.5 1.5 1.4 1.4 1.4 1.4 22 Other Western Europe .................................................................. .6 .7 .9 1.5 .9 1.3 1.1 1.0 1.5 1.4 23 South Africa .................................................................................... 1.2 2.2 2.4 2.2 2.0 1.7 1.8 1.7 1.3 24 Australia ........................................................................................... 1.3 1.2 1.4 L5 1.3 1.4 1.3 1.4 1.3 1.3 25 Oil-exporting countries3 ..................................................................... 6.9 12.6 17.6 19.2 19.2 20.4 22.7 22.6 22.7 23.4 22.8 26 Ecuador ............................................................................................ .4 .7 1.1 1.3 1.4 1.6 1.6 1.5 1.6 1.6 1.7 27 Venezuela ........................................................................................ 2.3 4.1 5.5 5.5 5.6 6.2 7.2 7.2 7.6 7.9 8.7 28 Indonesia .......................................................................................... 1.6 2.2 2.2 2.1 1.9 1.9 2.0 1.9 1.9 1.9 1.9 29 Middle East countries ..................................................................... 1.6 4.2 6.9 8.3 8.4 8.7 9.5 9.4 9.0 9.2 8.0 30 African countries ............................................................................. 1.0 1.4 1.9 2.0 1.9 2.0 2.5 2.6 2.6 2.8 2.6 31 Non-oil developing countries ............................................................. 34.1 44.2 48.7 49.7 49.1 49.6 52.5 53.8 56.2 59.1 63.2 Latin America 32 Argentina .......................................................................................... 1.7 1.9 2.9 3.0 3.0 2.9 3.0 3.1 3.5 4.1 5.1 33 Brazil ................................................................................................ 8.0 11.1 12.7 13.0 13.3 14.0 14.9 14.9 15.1 15.1 15.3 34 Chile .................................................................................................. .5 .8 .9 1.1 1.3 1.3 1.6 1.7 1.8 2.2 2.5 35 Colombia .......................................................................................... 1.2 1.3 1.3 1.2 1.3 1.3 1.4 1.5 1.5 1.7 2.2 36 Mexico .............................................................................................. 9.0 11.7 11.9 11.2 11.0 10.7 10.8 10.9 11.0 11.7 12.3 37 Peru ................................................................................................... 1.4 1.8 1.9 1.7 1.8 1.8 1.7 1.6 1.4 1.4 1.5 38 Other Latin America ...................................................................... 2.5 2.8 2.6 3.4 3.3 3.4 3.6 3.5 3.3 3.6 3.7 Asia China 39 Mainland ....................................................................................... .0 .0 .0 .0 .0 .0 .0 .1 .1 .1 .1 40 Taiwan .......................................................................................... 1.7 2.4 3.1 3.1 2.5 2.4 2.9 3.1 3.3 41 India .................................................................................................. .2 .2 .3 .3 .2 .3 .2 .2 .2 42 Israel .................................................................................................. .9 1.0 .9 .8 .7 .7 1.0 1.0 .9 1.3 43 Korea (South) .................................................................................. 2.4 3.1 3.9 3.6 3.6 3.5 3.9 4.2 5.0 5.3 44 Malaysia4 .......................................................................................... .3 .5 .7 .7 .6 .6 .6 .6 .7 45 Philippines ....................................................................................... 1.7 2.2 2.5 2.6 2.7 2.8 2.8 3.2 3.7 3.7 4.3 46 Thailand ........................................................................................... .7 .7 1.1 1.1 1.1 1.1 1.2 1.2 1.4 47 Other Asia ....................................................................................... .5 .5 .4 .4 .3 .3 .2 .3 .4 Africa 48 Egypt ................................................................................................ .4 .4 .3 .3 .3 .4 .4 .5 .7 .6 .6 49 Morocco ........................................................................................... .1 .3 .5 .4 .5 .5 .6 .6 .5 .5 .6 50 Zaire .................................................................................................. .3 .2 .3 .3 .2 .2 .2 .2 .2 .2 .2 51 Other Africa4 ................................................................................... .8 1.2 .7 1.4 1.2 1.3 1.4 1.4 1.5 1.6 1.7 52 Eastern Europe ................................................................................... 3.7 5.2 6.3 6.3 6.4 6.6 6.9 6.7 6.7 7.2 7.8 53 U.S.S.R............................................................................................... 1.0 1.5 1.6 1.4 1.4 1.4 1.3 1.1 .9 .9 1.0 54 Yugoslavia ....................................................................................... .6 .8 1.1 1.2 1.3 1.3 1.5 1.6 1.7 1.8 1.8 55 Other ................................................................................................ 2.1 2.9 3.7 3.7 3.7 3.9 4.1 4.0 4.1 4.6 5.0 56 Offshore banking centers .................................................................. 18.9 24.7 26.1 28.8 32.2 30.0 30.6 33.5 36.4 37.9 39.7 57 Bahamas ........................................................................................... 7.3 10.1 9.8 11.3 12.4 11.7 10.4 12.4 14.5 13.0 13.5 58 Bermuda ........................................................................................... .5 .5 .6 .6 .7 .7 .7 .6 .7 .7 .7 59 Cayman Islands and other British West Indies ......................... 2.5 3.8 3.8 4.6 6.7 6.4 6.9 6.8 7.0 9.2 9.5 60 Netherlands Antilles ....................................................................... .6 .6 .7 .7 .6 .6 .8 .8 1.0 1.1 1.2 61 Panama .............................................................................................. 2.6 3.0 3.1 3.1 3.3 3.1 3.0 3.4 3.5 3.0 3.8 62 Lebanon ........................................................................................... .2 .1 .2 .2 .1 .1 .1 .1 .1 .2 .2 63 Hong Kong ....................................................................................... 1.6 2.2 3.7 4.1 4.1 4.0 4.3 4.8 4.9 5.5 6.0 64 Singapore .......................................................................................... 3.6 4.4 3.7 3.9 3.8 2.9 3.9 4.2 4.2 4.9 4.5 65 Others6 .............................................................................................. .1 .0 .5 .3 .5 .5 .5 .4 .4 .4 .4 66 Miscellaneous and unallocated7 ....................................................... 4.7 5.0 5.3 5.9 8.1 8.6 9.1 9.5 9.9 10.6 11.8 1. The banking offices covered by these data are the U.S. offices and foreign in this table include only banks' own claims payable in dollars. For earlier dates branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks. the claims of the U.S. offices also include customer claims and foreign currency Offices not covered include (1) U.S. agencies and branches of foreign banks, and claims (amounting in June 1978 to $10 billion). (2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are 3. Includes Algeria, Bahrain, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Oman, adjusted to exclude the claims on foreign branches held by a U.S. office or another Qatar, Saudi Arabia, and United Arab Emirates in addition to countries shown foreign branch of the same banking institution. The data in this table combine individually. foreign branch claims in table 3.13 (the sum of lines 7 through 10) with the claims 4. Foreign branch claims only through December 1976. of U.S. offices in table 3.17 (excluding those held by agencies and branches of 5. Excludes Liberia. foreign banks and those constituting claims on own foreign branches). However, 6. Foreign branch claims only. see also footnote 2. 7. Includes New Zealand, Liberia, and international and regional organizations. 2. For June 1978 and subsequent dates, the claims of the U.S. offices Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 International Statistics □ March 1980 3.21 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Holdings and Transactions Millions of dollars Country or area 1978 1979 July Aug Sept. Nov. Dec. Holdings (end of period)1 1 Estimated total2 ......................................... 44,938 50,306 48,991 49,575 50,257 50,888 49,779 50,306 51,660 2 Foreign countries2 ..................................... 39,817 44,875 44,544 44,979 45,060 45,206 44,276 44,875 45,609 3 Europe2 ....................................................... 17,072 23,705 22,213 22,558 22,599 22,692 21,910 23,705 24,183 4 Belgium-Luxembourg ........................... 19 60 24 24 65 65 60 60 60 5 Germany2 ................................................ 8,705 12,937 10,781 10,952 10,953 11,082 11,337 12,937 12,913 6 Netherlands ............................................ 1,358 1.466 1,655 1,577 1,667 1,660 1,490 1,466 1,407 7 Sweden .................................................... 285 647 481 525 588 600 593 647 640 8 Switzerland ............................................. 977 1,868 1,843 2,048 2,496 2,427 1,961 1,868 1,894 9 United Kingdom .................................... 5,373 6,236 6,938 6,895 6,193 6,191 5,955 6,236 6,755 10 Other Western Europe ........................ 354 491 491 538 637 666 513 491 514 11 Eastern Europe ..................................... 12 Canada ........................................................ 152 "”232" 232 233 '"'233" ""235" 234 232 '"'231" 13 Latin America and Caribbean ................ 416 546 537 539 539 541 539 546 546 14 Venezuela ............................................... 144 183 183 183 183 183 183 183 183 15 Other Latin American and Caribbean 110 200 192 192 192 194 192 200 200 16 Netherlands Antilles ............................. 162 163 162 165 165 164 164 163 163 17 Asia ............................................................. 21,488 19,804 20.874 20,960 21,000 21,050 21,005 19,804 20,061 18 Japan ...................................................... 11,528 11,175 13,090 12,818 12,789 12,591 12,502 11,175 10,844 19 Africa .......................................................... 691 591 691 691 691 691 591 591 591 20 All other ..................................................... -3 -3 -3 -3 -3 -3 -3 -3 -3 21 Nonmonetary international and regional organizations ..................................... 5,121 5,431 5,197 5,682 5,503 5,431 6,051 22 International .............................................. 5,089 5,3 4,400 4,551 5,150 5,636 5,463 5,388 6,016 23 Latin American regional ......................... 33 40 48 46 46 46 40 35 Transactions (net purchases, or sales (-), during period) 24 Total2 ............................................................................. 6,297 5,368 1,357 1,497 584 681 632 -1,110 527 1,357 25 Foreign countries2 ........................................................ 5,921 5,058 734 1,090 435 81 146 -930 600 734 26 Official institutions ................................................... 3,727 1,781 481 1,033 515 101 56 -1,037 547 481 27 Other foreign2 ........................................................... 2,195 3,277 253 57 -81 -20 89 108 53 253 28 Nonmonetary international and regional organizations ........................................................ 375 311 624 407 149 600 487 -180 -73 624 Memo: Oil-exporting countries 29 Middle East3 ................................................................. -1,785 -1,015 550 -193 394 72 299 64 168 550 30 Africa4 ............................................................................ 329 -100 -100 1. Estimated official and private holdings of marketable U.S. Treasury securities 2. Beginning December 1978, includes U.S. Treasury notes publicly issued to with an original maturity of more than 1 year. Data are based on a benchmark private foreign residents. survey of holdings as of Jan. 31, 1971, and monthly transactions reports. Excludes 3. Comprises Bahrain. Iran, Iraq, Kuwait. Oman, Qatar, Saudi Arabia, and nonmarketable U.S. Treasury bonds and notes held by official institutions of for­ United Arab Emirates (Trucial States). eign countries. 4. Comprises Algeria. Gabon. Libya, and Nigeria. 3.22 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS Millions of dollars, end of period 1979 1980 Assets 1977 1978 1979 Aug. Sept. Oct. Nov. Dec. Jan. Feb./7 1 Deposits ......................................................................... 424 367 429 325 347 351 490 429 439 450 Assets held in custody 2 U.S. Treasury securities1 ............................................ 91,962 117,126 95.075 98,794 100,383 97,965 90,874 95.075 97,116 96,200 3 Earmarked gold2 ......................................................... 15,988 15,463 15.169 15,296 15,294 15,253 15,230 15,169 15,138 15,109 1. Marketable U.S. Treasury bills, notes, and bonds; and nonmarketable U.S. Notl. Excludes deposits and U.S. Treasury securities held for international and Treasury securities payable in dollars and in foreign currencies. regional organizations. Earmarked gold is gold held for foreign and international 2. The value of earmarked gold increased because of the changes in par value accounts and is not included in the gold stock of the United States, of the U.S. dollar in May 1972 and in October 1973. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Investment Transactions A65 3.23 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1980 1979 1980 Transactions, and area or country 1978 1979 Jan. July Aug. Sept. Oct. Nov. Dec. Jan.P U.S. corporate securities Stocks 1 Foreign purchases ........................................................ 20,142 22,593 3,100 1,768 2,382 2,074 2,385 1,876 2,359 3,100 2 Foreign sales ................................................................. 17,723 20,974 2,415 1,775 2,224 2,023 2,372 1,687 2,182 2,415 3 Net purchases, or sales (-)......................................... 2,420 1,619 685 -7 158 51 13 189 177 685 4 Foreign countries ......................................................... 2,466 1,604 683 -7 156 58 13 192 173 683 5 Europe .......................................................................... 1,283 216 506 -42 -48 -107 -34 77 75 506 6 France ....................................................................... 47 122 71 18 19 -20 -48 -18 8 71 7 Germany ................................................................... 620 -221 35 -19 -30 -37 -32 -18 -10 35 8 Netherlands .............................................................. -22 -71 8 8 -3 * 38 12 -25 8 9 Switzerland ................................................................ -585 -519 153 -52 -87 -64 -68 -148 -68 153 10 United Kingdom ...................................................... 1,230 964 215 -12 97 19 83 278 155 215 11 Canada .......................................................................... 74 550 39 30 78 145 67 14 47 39 12 Latin America and Caribbean .................................. 151 -18 92 -17 45 -8 -93 -7 40 92 13 Middle East1 ................................................................. 781 656 15 -7 44 41 59 133 32 15 14 Other Asia .................................................................... 187 207 29 32 34 -12 18 -29 -21 29 15 Africa ............................................................................. -13 -14 * -3 -4 -2 -1 1 -3 * 16 Other countries ............................................................ 3 7 2 1 7 1 -3 2 2 2 17 Nonmonetary international and regional organizations ......................................................... -46 15 1 * 2 -7 * -3 4 1 Bonds2 18 Foreign purchases ........................................................ 7,975 8,790 1,149 869 729 398 827 732 964 1,149 19 Foreign sales ................................................................. 5,517 7,544 494 648 673 288 639 913 550 494 20 Net purchases, or sales (-)......................................... 2,458 1,246 655 221 56 110 188 -181 414 655 21 Foreign countries ......................................................... 2,049 1,348 523 222 71 23 48 -118 429 523 22 Europe .......................................................................... 908 675 205 159 -5 19 88 -205 33 205 23 France ........................................................................ 30 11 8 -34 -3 -1 1 11 1 8 24 Germany .................................................................... 68 83 -5 -11 -10 -1 -7 2 2 -5 25 Netherlands .............................................................. 12 -202 -3 -9 -19 -2 -7 -15 -20 -3 26 Switzerland ................................................................ -100 -61 6 -4 -8 4 * -53 7 6 27 United Kingdom ...................................................... 930 816 195 232 24 23 103 -124 36 195 28 Canada .......................................................................... 102 90 25 8 9 17 8 -1 -16 25 29 Latin America and Caribbean .................................. 98 112 14 11 10 -4 6 12 15 14 30 Middle East1 ................................................................. 810 374 280 40 50 -7 -39 71 406 280 31 Other Asia .................................................................... 131 94 * 5 7 -4 -16 5 -10 * 32 Africa ............................................................................. -1 1 * * * 1 * * * * 33 Other countries ............................................................ 1 1 * * * * 1 * * * 34 Nonmonetary international and regional organizations ......................................................... 409 -102 132 -1 -14 87 140 -63 -14 132 Foreign securities 35 Stocks, net purchases, or sales (-) ......................... 527 -993 -229 -132 -117 -338 -198 -84 -130 -229 36 Foreign purchases .................................................... 3,666 4,512 623 327 377 420 466 365 406 623 37 Foreign sales ............................................................. 3,139 5,504 853 459 494 758 663 449 536 853 38 Bonds, net purchases, or sales (-) ......................... -4,052 -3,927 -42 -373 -543 -725 -75 -335 -233 -42 39 Foreign purchases .................................................... 11,043 12,374 1,279 984 1,575 829 1.081 1.080 1,124 1,279 40 Foreign sales ............................................................. 15,094 16,301 1,321 1,357 2,118 1,554 1,156 1.415 1,356 1,321 41 Net purchases, or sales (-) of stocks and bonds..... -3,525 -4,919 -271 -505 -660 -1,063 -273 -420 -363 -271 42 Foreign countries ......................................................... -3,338 -4,149 -349 -529 -577 -914 -277 -301 -500 -349 43 Europe .......................................................................... -64 -1,734 176 -397 -290 -120 -38 -119 -282 176 44 Canada .......................................................................... -3,238 -2,614 -297 -178 -128 -891 -358 -97 -80 -297 45 Latin America and Caribbean ................................... 201 389 5 30 12 * 11 29 -14 5 46 Asia ................................................................................ 350 -212 -228 16 -172 92 112 -118 -128 -228 47 Africa ............................................................................. -441 -14 -2 -2 -1 * -6 1 2 -2 48 Other countries ............................................................ -146 ' 25 -4 2 2 5 2 3 3 -4 49 Nonmonetary international and regional organizations ......................................................... -187 -760 78 24 -83 -150 4 -118 138 78 1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, 2. Includes state and local government securities, and securities of U.S. gov- Oman, Qatar, Saudi Arabia, and United Arab Emirates (Trucial States). ernment agencies and corporations. Also includes issues of new debt 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 □ March 1980 3.24 LIABILITIES TO UN AFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States1 Millions of dollars, end of period 1978 Type, and area or country 1978' June Sept. Mar/ June Sept. 1 Total ............................................................. 10,099 11,085 14,676 11,870 12,786 15,164 15,372 2 Payable in dollars ....................................... 9,390 10,284 11,400 11,044 11,955 11,369 12,415 12,477 3 Payable in foreign currencies2 ................. 709 801 3,276 825 831 2,896 2,749 2,895 By type 4 Financial liabilities ..................................... 6,145 5,894 5,781 5,881 5 Payable in dollars ................................... 3,745 3,705 3,735 3.738 6 Payable in foreign currencies .............. 2,400 2,190 2,046 2,143 7 Commercial liabilities ................................ 8,531 8,371 9,384 9,491 8 Trade payables ........................................ 3,984 3,484 4,244 4,015 9 Advance receipts and other liabilities . 4,547 4,886 5,140 5,476 10 Payable in dollars ....................................... 7,655 7,664 8,680 8.739 11 Payable in foreign currencies .............. 876 707 703 753 By area or country Financial liabilities 12 Europe ..................................................... 3,834 3,570 3,394 3,426 13 Belgium-Luxembourg ........................ 287 264 313 276 14 France .................................................. 162 138 134 125 15 Germany .............................................. 366 305 271 370 16 Netherlands ......................................... 389 422 378 407 17 Switzerland .......................................... 248 239 231 185 18 United Kingdom ................................. 2,054 1,992 1,852 1,866 19 Canada ..................................................... 242 258 292 311 20 Latin America and Caribbean ............. 1,283 1,279 1,325 1,381 21 Bahamas .............................................. 426 411 442 345 22 Bermuda .............................................. 56 41 37 37 23 Brazil ................................................... 10 13 19 14 24 British West Indies ........................... 127 136 127 139 25 Mexico ................................................ 102 101 131 121 26 Venezuela ........................................... 49 55 65 68 27 Asia ......................................................... 775 778 759 752 28 Japan ................................................... 714 714 706 700 29 Middle East oil-exporting countries3 27 23 19 19 30 Africa ....................................................... 5 5 6 5 31 Oil-exporting countries4 ................... 2 1 2 1 32 All other5 ................................................ Commercial liabilities 33 Europe .................................................... 2,972 2,941 3,255 3,343 34 Belgium-Luxembourg ....................... 75 70 81 103 35 France ................................................. 317 339 339 379 36 Germany .............................................. 536 402 481 553 37 Netherlands ........................................ 208 194 202 178 38 Switzerland ......................................... 302 329 439 348 39 United Kingdom ................................ 798 843 979 992 40 Canada .................................................... 667 614 651 715 41 Latin America ........................................ 995 1,161 1,319 1,384 42 Bahamas ............................................. 25 16 65 89 43 Bermuda .............................................. 95 40 80 45 44 Brazil ................................................... 74 61 165 186 45 British West Indies ........................... 53 89 121 21 46 Mexico ................................................ 106 236 203 256 47 Venezuela ........................................... 303 356 323 359 48 Asia ......................................................... 2,950 2,636 3,021 2,985 49 Japan ................................................... 438 411 499 516 50 Middle East oil-exporting countries3 1,535 1,113 1,216 1,039 51 Africa ....................................................... 743 779 891 775 52 Oil-exporting countries4 ................... 312 343 410 385 53 All other5 ................................................ 204 239 246 290 1. For a description of the changes in the International Statistics tables, see July 3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and 1979 Bulletin, p. 550. United Arab Emirates (Trucial States). 2. Before December 1978, foreign currency data include only liabilities denom­ 4. Comprises Algeria, Gabon, Libya, and Nigeria. inated in foreign currencies with an original maturity of less than one year. 5. Includes nonmonetary international and regional organizations. 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 States1 Millions of dollars, end of period Type, and area or country June Sept. Sept. 1 Total ............................................................. 19,350 21,298 27,626 23,229 23,260 30,071 29,398' 29,808 2 Payable in dollars ...................................... 18,300 19,880 24,604 21,665 21,292 27,241 26,495' 27,109 3 Payable in foreign currencies 2 ................ 1,050 1,418 3,022 1,564 1,968 2,829 2,904 2,699 By type 4 Financial claims ......................................... 16,276 19,328 18,382' 18,034 5 Deposits ................................................... 10,815 13,895 12,807 12,661 6 Payable in dollars ............................. 9,753 12,975 11,871 11,759 7 Payable in foreign currencies .......... 1,062 920 936 901 8 Other financial claims ........................... 5,461 5,433 5,575' 5,373 9 Payable in dollars .............................. 3,872 3,893 4,012' 3,984 10 Payable in foreign countries ............. 1,589 1,540 1,563 1,389 11 Commercial claims ..................................... 11,351 10,743 11,016 11,774 12 Trade receivables .................................... 10,712 9,996 10,311 10.965 13 Advance payments and other claims .. 639 747 705 809 14 Payable in dollars ................................. 10,979 10,373 10,612 11,366 15 Payable in foreign currencies ............. 371 370 404 408 By area or country Financial claims 16 Europe ..................................................... 5,035 5,164 5,458 6,387 17 Belgium-Luxembourg ....................... 48 63 54 33 18 France .................................................. 178 171 183 191 19 Germany .............................................. 510 266 361 391 20 Netherlands ......................................... 103 85 62 51 21 Switzerland .......................................... 98 96 81 85 22 United Kingdom ................................. 3,848 4,253 4,478 5,357 23 Canada ..................................................... 4,521 5,196 5,066 4,538 24 Latin America and Carribbean ............ 5,563 7,883 6,772' 5,943 25 Bahamas .............................................. 2,871 4,111 3,173 2,773 26 Bermuda .............................................. 80 63 57 61 27 Brazil .................................................... 151 137 122 114 28 British West Indies ............................ 1,280 2,443 2,278 1,711 29 Mexico ................................................. 162 160 158 155 30 Venezuela ............................................ 150 142 148 137 31 Asia .......................................................... 922 829 818 32 Japan .................................................... 307 207 216 222 33 Middle East oil-exporting countries3 18 16 17 21 34 Africa ........................................................ 181 204 227 278 35 Oil-exporting countries4 .................... 10 26 23 41 36 AH other5 ................................................. 55 69 Commercial claims 37 Europe ..................................................... 3,990 3,837 3,842 4,170 38 Belgium-Luxembourg ........................ 148 177 174 184 39 France .................................................. 613 494 473 549 40 Germany .............................................. 416 514 435 467 41 Netherlands ......................................... 262 274 306 262 42 Switzerland .......................................... 198 230 232 224 43 United Kingdom ................................. 817 691 724 815 44 Canada ...................................................... 1,110 1,121 1,127 1,174 45 Latin America and Caribbean ............. 2,544 2,391 2,403 2,562 46 Bahamas ............................................... 109 117 98 16 47 Bermuda ............................................... 215 241 118 152 4 4 8 9 B Br r i a t z is il h . W .... e .. s . t . ... I . n .. d .. i . e .. s .. .. . .. . . . . . . . . . . .. .. . . . . . . . . . . .. .. . . . . . . . . . . .. .. . . . . . . . . . . . 626 9 49 1 1 0 49 2 9 5 56 1 5 3 50 Mexico ................................................. 506 489 584 647 51 Venezuela ............................................ 292 274 296 345 52 Asia .......................................................... 3,081 2,756 2,969 3,106 53 Japan .................................................... 979 896 1,003 1,129 54 Middle East oil-exporting countries3 712 672 685 661 55 Africa ........................................................ 447 443 487 548 56 Oil-exporting countries4 .................... 136 131 139 139 57 All other5 ................................................. 195 189 213 1. For a description of the changes in the International Statistics tables, see July 3. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and 1979, Bulletin, p. 550. United Arab Emirates (Trucial States). 2. Prior to December 1978, foreign currency data include only liabilities de­ 4. Comprises Algeria, Gabon, Libya, and Nigeria. nominated in foreign currencies with an original maturity of less than one year. 5. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 International Statistics □ March 1980 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Percent per annum Rate on Feb. 29, 1980 Rate on Feb. 29, 1980 Rate on Feb. 29, 1980 Country Country Country Per­ Month Per­ Month Per­ Month cent effective cent effective cent effective Argentina .......................... 18.0 Feb. 1972 France ............................... 9.5 Aug. 1977 Norway .............................. 9.0 Nov. 1979 Austria .............................. 5.25 Jan. 1980 Germany, Fed. Rep. of .. 7.0 Feb. 1980 Sweden .............................. 10.0 Jan. 1980 Belgium ............................. 12.0 Feb. 1980 Italy ................................... 15.0 Dec. 1979 Switzerland ........................ 3.0 Feb. 1980 Brazil ................................. 33.0 Nov. 1978 Japan ................................ 7.25 Feb. 1980 United Kingdom .............. 17.0 Nov. 1979 Canada .............................. 14.0 Oct. 1979 Mexico .............................. 4.5 June 1942 Venezuela ......................... 8.5 May 1979 Denmark ............................ 13.0 Feb. 1980 Netherlands ...................... 9.5 Nov. 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 governments 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 1980 Country, or type 1977 1978 1979 Sept. Oct. Nov. Dec. Jan. Feb. 1 Eurodollars .................................................................... 6.03 8.74 11.96 12.61 14.59 15.(X) 14.51 14.33 15.33 2 United Kingdom ........................................................... 8.07 9.18 13.60 14.11 14.12 16.09 16.71 17.30 17.72 3 Canada ............................................................................ 7.47 8.52 11.91 11.89 13.34 14.19 14.02 13.93 13.96 4 Germany ........................................................................ 4.30 3.67 6.64 7.82 8.84 9.57 9.54 8.79 8.94 5 Switzerland ..................................................................... 2.56 0.74 2.04 1.94 2.57 3.97 5.67 5.45 5.19 6 Netherlands ................................................................... 4.73 6.53 9.33 9.82 10.09 11.86 14.56 11.85 11.99 7 France .............................................................................. 9.20 8.10 9.44 11.67 12.14 12.72 12.55 12.31 12.63 8 Italy .................................................................................. 14.26 11.40 11.85 11.51 12.71 13.12 16.01 17.00 17.88 9 Belgium .......................................................................... 6.95 7.14 10.48 11.88 12.99 14.17 14.49 14.38 14.45 10 Japan ............................................................................... 6.22 4.75 6.10 7.00 7.01 8.13 8.42 8.44 9.10 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 1980 Country/currency 1977 1978 1979 Sept. Oct. Nov. Dec. Jan. Feb. 1 Australia/dollar .......................... 110.82 114.41 111.77 112.63 111.31 109.34 110.30 110.97 110.41 2 Austria/schilling ......................... 6.0494 6.8958 7.4799 7.7211 7.7570 7.8345 8.0039 8.0689 7.9815 3 Belgium/franc ............................. 2.7911 3.1809 3.4098 3.4684 3.4656 3.4822 3.5423 3.5688 3.5221 4 Canada/dollar ............................. 94.112 87.729 85.386 85.814 85.084 84.771 85.471 85.912 86.546 5 Denmark/krone .......................... 16.658 18.156 19.010 19.279 19.110 19.034 18.618 18.568 18.326 6 Finland/markka .......................... 24.913 24.337 27.732 26.242 26.483 26.428 26.830 27.082 26.912 7 France/franc ................................ 20.344 22.218 23.504 23.826 23.809 24.065 24.614 24.750 24.413 8 Germany/deutsche mark .......... 43.079 49.867 54.561 55.758 55.884 56.470 57.671 57.986 57.203 9 India/rupee .................................. 11.406 12.207 12.265 12.289 12.159 12.209 12.350 12.519 12.529 10 Ireland/pound ............................. 174.49 191.84 204.65 209.18 208.28 208.70 212.76 214.31 211.59 11 Italy/lira ....................................... .11328 .11782 .12035 .12326 .12112 .12112 .12329 .12427 .12346 12 Japan/yen ..................................... .37342 .47981 .45834 .44963 .43405 .40834 .41613 .42041 .40934 13 Malaysia/ringgit .......................... 40.620 43.210 45.720 46.382 46.074 45.661 45.931 45.868 45.896 14 Mexico/peso ................................ 4.4239 4.3896 4.3826 4.3858 4.3825 4.3726 4.3768 4.3780 4.3789 15 Netherlands/guilder .................... 40.752 46.284 49.843 50.635 50.379 50.686 52.092 52.527 51.886 16 New Zealand/dollar .................. 96.893 103.64 102.23 100.28 98.564 96.813 98.100 98.690 97.960 17 Norway/krone ............................. 18.789 19.079 19.747 20.080 20.143 19.928 20.092 20.373 20.483 18 Portugal/escudo .......................... 2.6234 2.2782 2.0437 2.0297 1.9992 1.9852 2.0036 2.0051 2.0634 19 South Africa/rand ...................... 114.99 115.01 118.72 119.91 120.79 120.32 120.79 121.64 122.90 20 Spain/peseta ............................... 1.3287 1.3073 1.4896 1.5135 1.5117 1.5051 1.5039 1.5124 1.5006 21 Sri Lanka/rupee ......................... 11.964 6.3834 6.4226 6.4126 6.4000 6.4053 6.4300 6.4323 6.4350 22 Sweden/krona ............................. 22.383 22.139 23.323 23.860 23.747 23.677 23.935 24.112 23.974 23 Switzerland/franc ........................ 41.714 56.283 60.121 62.087 61.350 60.870 62.542 62.693 60.966 24 United Kingdom/pound ............ 174.49 191.84 212.24 219.66 214.38 213.52 220.07 226.41 228.91 Memo: 25 United States/dollar1 ................. 103.31 92.39 88.09 86.73 87.67 88.12 86.32 85.52 86.37 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 page rencies of other G-10 countries plus Switzerland. March 1973 = 100. 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 deposits, denomination, Millions of dollars Percentage change and original maturity Apr. 25, July 25, Oct. 31, Apr. 25, July 25, Oct. 31, Apr. 25- July 25- 1979 1979 1979 1979 1979 1979 July 25 Oct. 31 Total time and savings deposits ............................................... 14,285 14,206 14,375 615,427 625,123 650,160 1.6 4.0 Savings ......................................................................................... 14,285 14,206 14,375 216,901 217,522 207,983 0.3 -4.4 Holder Individuals and nonprofit organizations ............................ 14,285 14,206 14,375 202,133 202,465 194,249 0.2 -4.1 Partnerships and corporations operated for profit (other than commercial banks) ................................... 9,684 10,065 10,055 10,255 10,736 9,758 4.7 -9.1 Domestic government units ................................................. 8,039 8,096 8,462 4,386 4,035 3,600 -8.0 -10.8 All other ................................................................................. 1,474 1,605 1,594 126 285 377 125.6 32.1 Interest-bearing time deposits, less than $100,000 ............... 14,191 14,113 14,276 201,067 211,633 233,219 5.3 10.2 Holder Domestic governmental units* ............................................ 10,506 10,269 10,156 2,928 2,679 2,506 -8.5 -6.5 30 up to 90 days................................................................. 5,220 5,028 4,556 595 551 403 -7.5 -26.8 90 up to 180 days ............................................................... 7,750 7,168 6,210 890 844 925 -5.2 9.6 180 days up to 1 year ........................................................ 4,749 3,665 3,736 537 398 372 -25.8 -6.6 1 year and over ................................................................... 8,424 7,969 8,177 906 886 806 -2.1 -9.1 Other than domestic governmental units1 ........................ 14,110 14,032 14,189 145,433 140,313 134,012 -3.5 -4.5 30 up to 90 days ................................................................. 5,187 4,692 4,605 3,144 2,762 2,664 -12.1 -3.6 90 up to 180 days ............................................................... 11,065 10,771 10,670 25,156 23,487 21,442 -6.6 -8.7 180 days up to 1 year ........................................................ 8,447 8,357 7,943 3,476 2,763 2,808 -20.5 1.6 1 up to 2Vi years ................................................................ 13,840 13,762 13,907 25,257 23,532 20,838 -6.8 -11.4 2Yi up to 4 years ................................................................ 12,892 12,819 12,869 15,626 14,668 14,106 -6.1 -3.8 4 up to 6 years.................................................................... 13,467 13,482 13,629 46,367 46,010 44,842 -0.8 -2.5 6 up to 8 years .................................................................... 11,693 11,599 11,534 23,406 23,922 23,652 2.2 -1.1 8 years and over ................................................................ 8,569 8,635 8,265 3,002 3,169 3,661 5.6 15.5 IRA and Keogh Plan time deposits, 3 years or more. ... 10,209 10,433 10,232 4,159 4,486 4,642 7.9 3.5 Money market certificates, $10,000 or more. exactly 6 months ............................................................ 12,395 12,868 13,109 48,547 64,155 92,059 32.2 43.5 Interest-bearing time deposits, $100,000 or more ............... 11,973 11,654 12,863 191,664 189,323 203,187 -1.2 7.3 Non-interest-bearing time deposits ........................................ 1,489 1,263 1,464 4,248 4,487 4,566 5.6 1.8 Less than $100,000 ................................................................ 1,163 944 1,175 826 916 965 10.9 5.3 $100,000 or more ................................................................... 663 663 606 3,422 3,570 3,601 4.3 0.9 Club accounts (Christmas savings, vacation, and the like) ............................................................................... 9,334 9,407 8,551 1,548 2,158 1,206 39.4 -44.1 1. Excludes all money market certificates, IRAs, and Keogh Plan accounts. However, small amounts of deposits held at banks that had discontinued issuing certain types of deposits are included in the amounts outstanding. Note. All banks that had either discontinued offering or never offered certain Details may not add to totals because of rounding, types of deposits as of the survey date are not counted as issuing banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables □ March 1980 4.11 SMALL-DENOMINATION TIME AND SAVINGS DEPOSITS Held by Insured Commercial Banks on Oct. 31, 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 All banks (total deposits in millions of dollars) All banks (total deposits in millions of dollars) Deposit group, original maturity, and distribu­ tion of deposits by Less than 100/ 100 and over Less than 100 100 and over most common rate Oct. 31. July 25, Oct. 31, July 25. Oct. 31. July 25. Oct. 31. July 25, Oct. 31, July 25, Oct. 31, July 25, 1979 1979 1979 1979 1979 1979 1979 1979 1979 1979 1979 1979 Number of banks, or percentage distribution Amount of deposits (in millions of dollars) or percentage distribution Savings deposits Individuals and nonprofit organizations Issuing banks ....................................... 14.375 14,206 13,127 13.055 1.248 1.151 194,249 202,465 70,631 74,439 123,617 128,026 Distribution, total ......................... 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less ..................................... 4.7 5.0 4.6 4.8 6.7 7.6 5.0 5.8 3.5 4.2 5.9 6.7 4.51-5.00 ......................................... 11.8 22.6 12.3 23.2 6.4 15.8 7.8 17.5 9.4 18.8 7.0 16.8 5.01-5.25 ......................................... 83.4 72.4 83.1 72.0 87.0 76.6 87.1 76.7 87.1 77.0 87.2 76.5 Memo: Paying ceiling rate1 ............. 83.4 72.4 83.1 72.0 87.0 76.6 87.1 76.7 87.1 77.0 87.2 76.5 Partnerships and corporations Issuing banks ....................................... 10,055 10,055 8,858 8.949 1.197 1.106 9,758 10,701 2,575 3,425 7,183 7,276 Distribution, total ............................. 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less ..................................... .8 1.2 .7 1.1 2.0 2.4 1.2 2.9 .3 1.0 1.5 3.8 4.51-5.00 ......................................... 8.8 21.1 8.7 21.7 8.9 16.1 8.8 18.2 5.2 19.3 10.1 17.7 5.01-5.25 ......................................... 90.4 77.7 90.6 77.2 89.1 81.5 90.0 78.9 94.5 79.7 88.4 78.5 Memo: Paying ceiling rate1 ............. 90.4 77.7 90.6 77.2 89.1 81.5 90.0 78.9 94.5 79.7 88.4 78.5 Domestic governmental units Issuing banks ....................................... 8,419 8.095 7,535 7,259 884 835 3,599 4,035 1,824 2,209 1,775 1,826 Distribution, total .............................. 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less ...................................... 3.6 4.0 3.9 4.3 1.5 1.9 1.5 2.1 2.5 2.8 .5 1.3 4.51-5.00 .......................................... 7.7 20.1 7.5 20.4 9.0 17.4 10.2 17.8 8.1 14.7 12.3 21.7 5.01-5.25 .......................................... 88.7 75.9 88.6 75.3 89.5 80.7 88.3 80.1 89.4 82.5 87.2 77.1 Memo: Paying ceiling rates1 ............ 88.3 75.9 88.2 75.3 89.5 80.7 87.8 80.1 88.3 82.5 87.2 77.1 All other Issuing banks ....................................... 1,585 1,602 1,368 1,425 217 176 360 277 159 106 200 171 Distribution, total ............................. 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less ...................................... 3.1 9.4 2.4 10.1 7.4 4.0 3.3 1.2 (2) 1.0 6.0 1.3 4.51-5.00 ......................................... 4.6 17.1 4.2 17.4 7.5 14.5 10.3 23.5 13.3 38.0 8.0 14.6 5.01-5.25 ......................................... 92.3 73.5 93.4 72.5 85.1 81.5 86.3 75.3 86.7 61.0 86.0 84.1 Memo: Paying ceiling rate1 ............. 92.3 73.5 93.4 72.5 85.1 81.5 86.3 75.3 86.7 61.0 86.0 84.1 Time deposits less than $100,000 Domestic governmental units 30 up to 90 days Issuing banks ................................... 4,485 5.028 3,826 4,346 659 682 383 551 227 373 156 177 Distribution, total .......................... 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less ................................. 41.2 51.3 42.0 49.6 36.8 61.9 24.3 36.9 27.5 36.9 19.5 36.8 5.01-5.50 ..................................... 27.9 22.7 27.1 24.2 32.8 12.7 26.6 23.3 26.6 29.9 26.6 9.3 5.51-8.00 ..................................... 30.9 26.1 30.9 26.2 30.4 25.4 49.1 39.8 45.9 33.2 53.9 53.9 Memo: Paying ceiling rate1 ............. 22.3 17.6 21.4 17.2 27.6 20.6 42.2 27.8 36.5 20.0 50.5 44.3 90 up to 180 days Issuing banks ................................... 6,205 7,168 5,418 6,383 787 785 925 844 655 555 270 289 Distribution, total ......................... 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less ................................. 3.7 8.5 3.8 9.2 3.0 3.4 1.3 3.3 1.7 4.7 .3 .7 5.01-5.50 ..................................... 76.8 72.5 77.0 72.3 75.3 74.2 83.6 80.9 83.8 80.0 83.1 82.7 5.51-8.00 ..................................... 19.5 18.9 19.2 18.5 21.7 22.3 15.1 15.7 14.6 15.3 16.6 16.6 Memo: Paying ceiling rate1 ............. 14.5 14.6 13.6 14.2 20.5 17.4 10.9 10.8 8.7 8.4 16.4 15.4 180 days up to 1 year Issuing banks ................................... 3,731 3,665 3,157 3,040 574 624 372 398 221 241 151 158 Distribution, total ......................... 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less ................................. 4.3 1.3 5.1 1.1 .4 2.4 .6 .8 .7 .1 .3 2.0 5.01-5.50 ..................................... 60.2 72.5 58.7 73.7 68.4 66.5 65.7 67.9 63.6 62.4 68.7 76.3 5.51-8.00 ..................................... 35.5 26.2 36.2 25.1 31.2 31.2 33.8 31.3 35.6 37.5 31.0 21.8 Memo: Paying ceiling rate1 ............. 15.8 12.7 14.0 10.7 25.9 22.3 21.9 22.7 17.4 24.5 28.5 19.8 1 year and over Issuing banks ................................... 8,134 7,934 7,321 7,156 812 778 800 883 621 762 179 121 Distribution, total ......................... 100 100 100 100 100 100 100 100 100 100 100 100 5.50 or less ................................. 3.4 3.3 3.1 3.2 5.6 4.7 16.3 7.3 9.9 7.5 38.7 6.0 5.51-6.00 ..................................... 60.5 60.0 60.2 59.6 63.1 63.6 57.0 53.7 64.2 53.9 32.0 52.4 6.01-8.00 ..................................... 36.1 36.7 36.7 37.2 31.3 31.8 26.6 39.0 25.9 38.6 29.3 41.5 Memo: Paying ceiling rate1 ............. 7.0 4.8 6.5 17.8 11.8 9.0 9.3 5.2 7.1 22.3 23.5 61 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 All banks (total deposits in millions of dollars) All banks (total deposits in millions of dollars) Deposit group, original maturity, and distribu­ tion of deposits by Less than 100 100 and over Less than 100 100 and over most common rate Oct. 31, July 25, Oct. 31, July 25, Oct. 31. July 25, Oct. 31, July 25. Oct. 31. July 25. Oct. 31. July 25, 1979 1979 1979 1979 1979 1979 1979 1979 1979 1979 1979 1979 Number of banks, or percentage distribution Amount of deposits (in millions of dollars), or percentage distribution Time deposits less than $100,000 (cont.) Other than domestic governmental units 30 up to 90 days Issuing banks ................................... 4,600 4,688 3,657 3.786 943 903 2,664 2.753 392 534 2.272 2,219 Distribution, total ......................... 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less ................................. 73.7 100 79.5 100 51.4 100 47.6 100 87.2 100 40.8 100 5.01-5.25 ..................................... 26.3 (2) 20.5 (2) 48.6 (2) 52.4 (2) 12.8 (2) 59.2 (2) Memo: Paying ceiling rate1 ............. 26.3 98.4 20.5 98.4 48.6 98.5 52.4 98.4 12.8 100 59.2 98.5 90 up to 180 days Issuing banks ................................... 10,670 10.771 9,431 9.631 1.239 1.140 21.442 23.487 7.732 9.203 13.710 14,284 Distribution, total ......................... 100 100 100 100 100 100 100 100 100 100 100 100 ♦ 5.00 or less ................................. 2.1 6.3 2.3 7.0 .3 .8 .4 2.7 .4 1.4 .5 3.6 5.01-5.50 ..................................... 97.9 93.7 97.7 93.0 99.7 99.2 99.6 97.3 99.6 98.6 99.5 96.4 Memo: Paying ceiling rate1 ............. 93.2 91.9 92.6 91.1 97.6 98.3 92.1 95.6 85.7 98.1 95.7 94.1 180 days up to 1 year Issuing banks ................................... 7,768 8,291 6,814 7.394 954 897 2.798 2.755 1.253 1.532 1.545 1.224 Distribution, total ......................... 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less ................................. 4.9 5.0 5.4 5.3 1.5 3.2 1.6 1.2 3.5 1.7 .1 .5 5.01-5.50 ..................................... 95.1 95.0 94.6 94.7 98.5 96.8 98.4 98.8 96.5 98.3 99.9 99.5 Memo: Paying ceiling rate1 ............. 94.3 95.0 93.9 94.7 97.4 96.8 97.4 98.8 94.8 98.3 99.5 99.5 1 up to 2Vi years Issuing banks ................................... 13,907 13,762 12,674 12,616 1.233 1.146 20.838 23.532 13.407 15.207 7.431 8.326 Distribution, total ......................... 100 100 100 100 100 100 100 100 100 100 100 100 5.50 or less ................................. 2.1 1.0 2.1 1.0 2.1 1.1 1.8 .9 1.9 .3 1.7 2.0 5.51-6.00 ..................................... 97.9 99.0 97.9 99.0 97.9 98.9 98.2 99.1 98.1 99.7 98.3 98.0 Memo: Paying ceiling rate1 ............. 97.6 98.6 97.7 98.8 97.0 97.2 97.7 98.6 98.0 99.7 97.0 96.7 2Vi up to 4 years Issuing banks ................................... 12,866 12,757 11,637 11,626 1.229 1.132 14.104 14.628 8.305 8.535 5,799 6,094 Distribution, total ......................... 100 100 100 100 100 100 100 100 100 100 100 100 6.00 or less ................................. 2.9 2.0 3.0 2.0 2.4 1.3 3.5 3.0 5.2 4.9 1.1 .4 6.01-6.50 ..................................... 97.1 98.0 97.0 98.0 97.6 98.7 96.5 97.0 94.8 95.1 98.9 99.6 Memo: Paying ceiling rate1 ............. 97.0 97.3 97.0 97.3 96.7 97.6 96.1 96.1 94.8 94.0 98.0 99.0 4 up to 6 years Issuing banks ................................... 12,409 13,482 11,346 12,359 1.062 1.123 38.096 46.010 21.697 25.748 16,399 20.262 Distribution, total ......................... 100 100 100 100 100 100 100 100 100 100 100 100 7.00 or less ................................. 6.6 7.5 6.6 7.7 7.0 5.9 5.6 5.1 5.9 5.5 5.2 4.8 7.01-7.25 ..................................... 92.1 88.0 92.6 88.3 87.6 84.7 91.2 86.3 92.5 89.0 89.6 82.9 7.26-7.60 ..................................... 1.2 4.5 .9 4.1 5.4 9.4 3.2 8.5 1.6 5.6 5.2 12.3 Memo: Paying ceiling rate1 ............. .6 3.4 .3 2.9 3.6 8.4 2.1 7.1 .9 3.9 3.8 11.2 6 up to 8 years Issuing banks ..... ........................... 11,172 11,521 10.024 10.437 1,148 1.084 22.391 23.881 9.952 10.462 12,439 13,419 Distribution, total ......................... 100 100 100 100 100 100 100 100 100 100 100 100 7.25 or less ................................. 3.8 2.8 3.8 2.6 3.5 3.9 2.5 1.7 1.8 .3 3.0 2.9 7.25-7.50 ..................................... 96.1 95.0 96.2 95.2 94.7 92.9 96.5 94.2 98.2 98.6 95.2 90.7 7.51-7.60 ..................................... .2 2.3 (2) 2 2 1.8 3.2 1.0 4.1 (2) 1.1 1.8 6.4 Memo: Paying ceiling rate1 ............. .2 2.3 (2) 22 1.8 3.2 1.0 4.1 (2) 1.1 1.8 6.4 8 years and over Issuing banks ................................... 8,018 8,631 6,982 7,641 1,035 991 3.158 3.169 1.376 1.165 1,782 2,004 Distribution, total ......................... 100 100 100 100 100 100 100 100 100 100 100 100 7.50 or less ................................. 3.6 2.5 3.1 1.9 6.7 7.7 13.1 12.0 _2 .3 23.0 18.8 7.51-7.75 ..................................... 96.4 97.5 96.9 98.1 93.3 92.3 86.9 88.0 99^8 99.7 77.0 81.2 Memo: Paying ceiling rate1 ............. 95.3 97.4 95.7 98.1 92.4 91.4 85.7 87.0 99.8 99.7 74.9 79.6 IRA and Keogh Plan time deposits, 3 years or more Issuing banks ....................................... 10,227 10,433 9,081 9,377 1,146 1,056 4.636 4.486 1.705 1.711 2,931 2,776 Distribution, total ............................. 100 100 100 100 100 100 100 100 100 100 100 100 6.00 or less ..................................... 5.0 2.6 5.4 2.8 1.7 1.6 2.0 .6 1.9 .9 2.1 .4 6.01-7.00 ......................................... 5.7 5.6 6.0 5.9 3.3 2.8 2.1 1.5 1.5 1.6 2.4 1.4 7.01-7.50 .........................:.............. 22.1 23.4 23.5 24.5 11.1 13.7 10.4 12.5 16.8 17.0 6.7 .9.7 7.51-8.00 ......................................... 67.2 68.4 65.1 66.9 83.9 81.9 85.5 85.4 79.8 80.4 88.8 88.5 Memo: Paying ceiling rate1 ............. 57.4 53.9 55.7 52.2 70.9 68.7 76.0 73.5 72.3 66.6 78.1 77.8 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Special Tables □ March 1980 4.11 SMALL-DENOMINATION TIME AND SAVINGS DEPOSITS Continued Size of bank Size of bank All banks (total deposits in millions of dollars) All banks (total deposits in millions of dollars) Less than 100 100 and over Less than 100 100 and over Deposit group, original maturity, and distribu­ tion of deposits by Oct. 31, July 25, Oct. 31, July 25. Oct. 31 July 25, Oct. 31, July 25, Oct. 31 July 25, Oct. 31, July 25, most common rate 1979 1979 1979 1979 1979 1979 1979 1979 1979 1979 1979 1979 Number of banks, or percentage distribution Amount of deposits (in millions of dollars), or percentage distribution Time deposits less than $100,000 (cont.) Money market certificates, 10,000 or more, 6 months Issuing banks ...................................... 13,109 12,868 11,867 11,722 1,242 1,146 92,059 64,155 40,806 28,856 51,252 35,299 Distribution, total ............................. 100 100 100 100 100 100 100 100 100 100 100 100 11.99 or less .................................... 13.6 100 14.5 100 4.9 100 6.0 100 9.3 100 3.4 100 1 1 2 2. .0 2 0 5- -1 12 2 . . 6 2 5 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3 3 . . 2 2 82 3. . 1 4 9 3 1. . 3 8 f (2 t ) 9 2 1 . . 2 8 § 8 2 8 . . 5 2 i2] 9 2 4 . . 0 6 Memo: paying ceiling rate1 ............. 82.3 75.8 81.5 76.1 90.2 72.4 87.7 72.0 87.3 83.3 88.1 63.2 Club accounts Issuing banks ...................................... 8,551 9,407 7,768 8,600 783 808 1,175 2,104 418 894 757 1,210 Distribution, total ............................. 100 100 100 100 100 100 100 100 100 100 100 100 0.00 .................................................. 40.8 41.3 42.7 43.0 22.6 22.9 17.2 19.5 25.7 28.1 12.5 13.2 0.01-4.00 ......................................... 15.2 18.1 15.0 18.3 17.2 15.5 10.6 18.1 16.4 24.9 7.4 13.0 4.01-4.50 ......................................... 5.7 6.8 5.6 6.8 7.1 6.9 5.9 13.2 3.1 13.2 7.4 13.2 4.51-5.50 ......................................... 38.2 33.8 36.7 31.9 53.1 54.6 66.4 49.2 54.8 33.8 72.8 60.5 1. See table 1.16, page A10, for the ceiling rates that existed at the time of each issuing deposits are not included in the amounts outstanding. Therefore, the deposit survey. amounts shown 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 largest dollar volume of Note. All banks that either had discontinued offering or had never offered deposit inflows during the 2-week period immediately preceding the survey date. particular types of deposits as of the survey date are not counted as issuing banks. Details may not add to totals because of rounding. Moreover, the small amounts of deposits held at banks that had discontinued 4.12 AVERAGE OF MOST COMMON INTEREST RATES PAID on Various Categories of Time and Savings Deposits at Insured Commercial Banks, Oct. 31, 1979 Bank size (total deposits in millions of dollars) 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 ............................................. 7.20 7.15 7.50 7.31 7.25 6.94 7.01 Savings, total ...................................................................................................... 5.18 5.15 5.24 5.15 5.20 5.08 5.18 Individuals and nonprofit organizations ................................................... 5.18 5.15 5.24 5.15 5.20 5.08 5.18 Partnerships and corporations ..................................................................... 5.20 5.25 5.24 5.22 5.23 4.95 5 22 Domestic governmental units ..................................................................... 5.20 5.14 5.20 5.25 5.23 5.17 5.20 All other ........................................................................................................ 4.88 5.25 5.25 5.07 4.37 5.01 5.21 Other time deposits in denominations of less than $100,000 total .......... 6.70 6.50 6.78 6.83 6.74 6.67 6.63 Domestic governmental units, total .......................................................... 6.05 5.98 5.97 6.37 5.79 6.19 6.83 30 up to 90 days......................................................................................... 6.17 6.39 5.92 6.12 5.35 6.57 7.00 90 up to 180 days ...................................................................................... 5.83 6.01 5.66 6.07 5.64 6.85 6.65 180 days up to 1 year ............................................................................... 6.12 5.64 6.58 6.91 5.98 6.70 6.85 1 year and over .......................................................................................... 6.21 5.97 6.37 6.62 6.42 5.83 6.72 Other than domestic government units, total .......................................... 6.71 6.52 6.80 6.83 6.75 6.68 6.63 30 up to 90 days......................................................................................... 5.12 5.07 5.11 5.01 5.18 5.09 5.14 90 up to 180 days ...................................................................................... 5.48 5.50 5.41 5.50 5.50 5.50 5.48 180 days up to 1 year ............................................................................... 5.48 5.45 5.50 5.46 5.49 5.50 5.48 1 up to 2 Vi years ....................................................................................... 5.99 5.99 5.98 6.00 5.99 5.96 5.99 2Vi up to 4 years ....................................................................................... 6.48 6.44 6.48 6.50 6.49 6.46 6.50 4 up to 6 years........................................................................................... 7.38 7.17 7.37 7.47 7.39 7.47 7.45 6 up to 8 years........................................................................................... 7.50 7.24 7.46 7.54 7.52 7.52 7.55 Over 8 years .............................................................................................. 7.76 7.75 7.75 7.81 7.73 7.77 7.76 IRA and Keogh Plan time deposits, 3 years or more ................................ 7.82 7.79 7.80 7.80 7.84 7.71 7.87 Money market certificates, exactly 6 months .............................................. 12.50 12.25 12.41 12.56 12.58 12.50 12.57 Club accounts1 ................................................................................................... 4.02 2.76 4.04 3.60 3.85 4.18 4.72 1. Club accounts are excluded from all of the other categories. type of deposit outstanding. All banks that had either discontinued offering or never offered particular types of deposit as of the survey date were excluded from Note. The average rates were calculated by weighting the most common rate the calculations for those specific types of deposits, reported on each type of deposit at each bank by the amount of that Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 73 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 heading IPCs Individuals, partnerships, and corporations when more than half of figures in that column REITs Real estate investment trusts are changed.) RPs Repurchase agreements Amounts insignificant in terms of the last decimal SMSAs Standard metropolitan statistical areas place shown in the table (for example, less than Cell not applicable 500,000 when the smallest unit given is mil­ lions) General Information Minus signs are used to indicate (1) a decrease, (2) a negative gations of the Treasury. “State and local government” also figure, or (3) an outflow. includes municipalities, special districts, and other political “U.S. government securities” may include guaranteed is­ subdivisions. sues of U.S. government agencies (the flow of funds figures In some of the tables details do not add to totals because of also include not fully guaranteed issues) as well as direct obli­ rounding. Statistical Releases List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for individual releases ............................. December 1979 A-76 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. Wallich Frederick H. Schultz, Vice Chairman J. Charles Partee Office of Board Members Office of Staff Director for Monetary and Financial Policy Joseph R. Coyne, Assistant to the Board Jay Paul Brenneman, Special Assistant to the Board Stephen H. Axilrod, Staff Director Frank O’Brien, Jr., Special Assistant to the Board Edward C. Ettin, Deputy Staff Director Joseph S. Sims, Special Assistant to the Board Murray Altmann, Assistant to the Board Donald J. Winn, Special Assistant to the Board Peter M. Keir, Assistant to the Board Stanley J. Sigel, Assistant to the Board Normand R. V. Bernard, Special Assistant to the Board Legal Division Neal L. Petersen, General Counsel DIVISION OF RESEARCH AND STATISTICS Robert E. Mannion, Deputy General Counsel Charles R. M cNeill, Assistant to the General Counsel James L. Kichline, Director J. Virgil M attingly, Assistant General Counsel Joseph S. Zeisel, Deputy Director Gilbert T. Schwartz, Assistant General Counsel John H. Kalchbrenner, Associate Director Michael J. Prell, Associate Director Robert A. Eisenbeis, Senior Deputy Associate Director OFFICE OF THE Secretary tJoHN J. Mingo, Senior Deputy Associate Director Eleanor J. Stockwell, Senior Deputy Associate Director Theodore E. Allison, Secretary James M. Brundy, Deputy Associate Director Griffith L. Garwood, Deputy Secretary Jared J. Enzler, Deputy Associate Director Barbara R. Lowrey, Assistant Secretary J. Cortland G. Peret, Deputy Associate Director * William N. McDonough, Assistant Secretary Helmut F. W endel, Deputy Associate Director tRiCHARD H. Puckett, Assistant Secretary Robert M. Fisher, Assistant Director Frederick M. Struble, Assistant Director Stephen P. Taylor, Assistant Director Division of Consumer Levon H. Garabedian, Assistant Director (Administration) and Community Affairs Janet O. Hart, Director Division of International Finance Nathaniel E. Butler, Associate Director Jerauld C. Kluckman, Associate Director Edwin M. Truman, Director Robert F. Gemmill, Associate Director George B. Henry, Associate Director Division of Banking Charles J. Siegman, Associate Director Supervision and Regulation Samuel Pizer, Staff Adviser Jeffrey R. Shafer, Deputy Associate Director John E. Ryan, Director Dale W. Henderson, Assistant Director Frederick R. Dahl, Associate Director Larry J. Promisel, Assistant Director William Taylor, Associate Director Ralph W. Smith, Jr., Assistant Director William W. Wiles, Associate Director Jack M. Egertson, Assistant Director Robert A. Jacobsen, Assistant Director Don E. Kline, Assistant Director Robert S. Plotkin, Assistant Director Thomas A. Sidman, Assistant Director Samuel H . Talley, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 75 and Official Staff Nancy H. Teeters Emmett J. Rice Office of OFFICE OF STAFF DIRECTOR FOR Staff Director for Management Federal Reserve Bank A ctivities John M. Denkler, Staff Director William H. W allace, Staff Director Edward T. Mulrenin, Assistant Staff Director Harry A. Guinter, Assistant Director for Contingency Joseph W. Daniels, Sr., Director of Equal Employment Op­ Planning portunity Division of Federal Reserve Division of Data Processing Bank Operations Charles L. Hampton, Director James R. Kudlinski, Director Bruce M. Beardsley, Associate Director Clyde H. Farnsworth, Jr., Deputy Director Uyless D. Black, Assistant Director W alter Althausen, Assistant Director Glenn L. Cummins, Assistant Director Charles W. Bennett, Assistant Director Robert J. Zemel, Assistant Director Lorin S. Meeder, Assistant Director P. D. Ring, Assistant Director Raymond L. Teed, Assistant Director Division of Personnel David L. Shannon, Director John R. Weis, Assistant Director Charles W. Wood, Assistant Director Office of the Controller John Kakalec, Controller George E. Livingston, Assistant Controller Division of Support Services Donald E. Anderson, Director W alter W. Kreimann, Associate Director *On loan from the Federal Reserve Bank of Boston. +On leave of absence. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 76 Federal Reserve Bulletin □ March 1980 FOMC and Advisory Councils Federal Open Market Committee Paul A. Volcker, Chairman John Balles Robert Mayo Frederick H. Schultz Robert Black J. Charles Partee Nancy H. Teeters Monroe Kimbrel Emmett J. Rice Henry C. Wallich Murray Altmann, Secretary Richard G. Davis, Associate Economist Normand R. V. Bernard, Assistant Secretary Thomas Davis, Associate Economist Neal L. Petersen, General Counsel Robert Eisenmenger, Associate Economist James H. Oltman, Deputy General Counsel Edward C. Ettin, Associate Economist Robert E. Mannion, Assistant General Counsel George B. Henry, Associate Economist Stephen H. Axilrod, Economist Peter M. Keir, Associate Economist Alan R. Holmes, Adviser for Market Operations James L. Kichline, Associate Economist Anatol Balbach, Associate Economist Edwin M. Truman, Associate Economist John Davis, Associate Economist Joseph S. Zeisel, Associate Economist Peter D. Sternlight, Manager for Domestic Operations, System Open Market Account Scott E. Pardee, Manager for Foreign Operations, System Open Market Account Federal Advisory Council Henry S. Woodbridge, Jr., First District Roger E. Anderson, Seventh District Donald C. Platten, Second District Clarence C. Barksdale, Eighth District William B. Eagleson, Jr., Third District Clarence G. Frame, Ninth District Merle E. Gilliand, Fourth District Gordon E. W ells, Tenth District J. Owen Cole, Fifth District James D. Berry, Eleventh District Robert Strickland, Sixth District Chauncey E. Schmidt, Twelfth District Herbert V. Prochnow, Secretary W illiam J. Korsvik, Associate Secretary Consumer Advisory Council W illiam D. Warren, Los Angeles, California, Chairman Marcia A. Hakala, Omaha, Nebraska, Vice Chairman Julia H. Boyd, Washington, D.C. Harvey M. Kuhnley, Minneapolis, Minnesota Roland E. Brandel, San Francisco, California The Rev. Robert J. McEwen, S.J., Boston, Massachusetts Ellen Broadman, Washington, D.C. R. C. Morgan, El Paso, Texas James L. Brown, Milwaukee, Wisconsin Margaret Reilly-Petrone, Upper Montclair, New Jersey Mark E. Budnitz, Atlanta, Georgia Rene Reixach, Rochester, New York Robert V. Bullock, Frankfort, Kentucky Florence M. Rice, New York, New York Richard S. D’Agostino, Philadelphia, Pennsylvania Ralph J. Rohner, Washington D.C. Joanne Faulkner, New Haven, Connecticut Henry B. Schechter, Washington, D.C. Vernard W. Henley, Richmond, Virginia Peter D. Schellie, Washington, D.C. Juan Jesus Hinojosa, McAllen, Texas E. G. Schuhart, II, Amarillo, Texas Shirley T. Hosoi, Los Angeles, California Charlotte H. Scott, Charlottesville, Virginia F. Thomas Juster, Ann Arbor, Michigan Richard A. Van Winkle, Salt Lake City, Utah Richard F. Kerr, Cincinnati, Ohio Richard D. Wagner, Simsbury, Connecticut Robert J. Klein, New York, New York 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* .................... 02016 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 J. L. Jackson Walter H. MacDonald Cincinnati.....................45201 Lawrence H. Rogers, II Robert E. Showaiter Pittsburgh.....................15230 William H. Knoell Robert D. Duggan RICHMOND* ................23261 Maceo A. Sloan Robert P. Black Steven Muller George C. Rankin Baltimore......................21203 Catherine Byrne Doehler Jimmie R. Monhollon Charlotte ......................28230 Robert E. Elberson Stuart P. Fishburne Culpeper Communications and Records Center 22701 Albert D. Tinkelenberg ATLANTA .................... .30303 William A. Fickling, Jr. Monroe Kimbrel John H. Weitnauer, Jr. Robert P. Forrestal Birmingham ............... 35202 Harold B. Blach, Jr. Hiram J. Honea Jacksonville ............... 32203 Joan W. Stein Charles D. East Miami ...........................33152 David G. Robinson F. J. Craven, Jr. Nashville .................... .37203 Robert C. H. Matthews, Jr. Jeffrey J. Wells New Orleans............... 70161 George C. Cortright, Jr. Pierre M.Viguerie CHICAGO*.................... .60690 John Sagan Robert P. Mayo Stanton R. Cook Daniel M. Doyle Detroit.......................... 48231 Howard F. Sims William C. Conrad ST. LOUIS .................... 63166 Armand C. Stalnaker Lawrence K. Roos William B. Walton Donald W. Moriarty, Jr. Little Rock................. 72203 E. Ray Kemp, Jr. John F. Breen Louisville.................... 40232 Richard O. Donegan Donald L. Henry Memphis .................... 38101 Frank A. Jones, Jr. Vacancy MINNEAPOLIS............ 55480 Stephen F. Keating Mark H. Willes William G. Phillips Thomas E. Gainor Helena.......................... 59601 Patricia P. Douglas Betty J. Lindstrom KANSAS CITY ............ 64198 Joseph H. Williams Roger Guffey Paul H. Henson Henry R. Czerwinski Denver.......................... 80217 Caleb B. Hurtt Wayne W. Martin Oklahoma City............ 73125 Christine H. Anthony William G. Evans Omaha.......................... 68102 Robert G. Lueder Robert D. Hamilton DALLAS ....................... 75222 Irving A. Mathews Ernest T. Baughman Gerald D. Hines Robert H. Boykin El Paso.......................... 79999 Chester J. Kesey Joel L. Koonce Jr. Houston....................... 77001 Gene M. Woodfin J. Z. Rowe San Antonio ............... 78295 Carlos A. Zuniga Carl H. Moore SAN FRANCISCO 94120 Cornell C. Maier John J. Balles Caroline Ahmanson John B. Williams Los Angeles .............. 90051 Harvey A. Proctor 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 Copies are available from PUBLICATIONS SERVICES. request and be made payable to the order of the Board of ROOM MP-510, BOARD OF GOVERNORS OF THE FED­ Governors of the Federal Reserve System. Remittance from ERAL RESERVE SYSTEM, WASHINGTON, D.C. 20551. foreign residents should be drawn on a U.S. bank. Stamps When a charge is indicated, remittance should accompany and coupons are not accepted. The Federal Reserve System—Purposes and Func­ Bank Credit-Card and Check-Credit Plans. 1968. 102 tions. 1974. 125 pp. pp. $1.00 each; 10 or more to one address, $.85 each. Annual Report. Survey of Changes in Family Finances. 1968. 321 pp. Federal Reserve Bulletin. Monthly. $20.00 per year or $1.00 each; 10 or more to one address, $.85 each. $2.00 each in the United States, its possessions, Canada, Report of the Joint Treasury-Federal Reserve Study and Mexico; 10 or more of same issue to one address, of the U.S. Government Securities Market. 1969. $18.00 per. year or $1.75 each. Elsewhere, $24.00 per 48 pp. $.25 each; 10 or more to one address, $.20 each. year or $2.50 each. Joint Treasury-Federal Reserve Study of the Gov­ Banking and Monetary Statistics, 1914-1941. (Reprint ernment Securities Market: Staff Studies—Part of Part I only) 1976. 682 pp. $5.00. 1. 1970. 86 pp. $.50 each; 10 or more to one address, $.40 Banking and Monetary Statistics, 1941-1970. 1976. each. Part 2, 1971. 153 pp. and Part 3. 1973. 131 pp. Each 1,168 pp. $15.00. volume $1.00; 10 or more to one address, $.85 each. Annual Statistical Digest Open Market Policies and Operating Procedures— 1971-75. 1976. 339 pp. $4.00 per copy for each paid sub­ Staff Studies. 1971. 218 pp. $2.00 each; 10 or more to scription to Federal Reserve Bulletin; all others $5.00 one address, $1.75 each. each. Reappraisal of the Federal Reserve Discount Mecha­ 1972-76. 1977. 377 pp. $10.00 per copy. nism. Vol. 1. 1971. 276 pp. Vol. 2. 1971. 173 pp. Vol. 3. 1973-77. 1978. 361 pp. $12.00 per copy. 1972. 220 pp. Each volume $3.00; 10 or more to one ad­ 1974-78. 1980. 305 pp. $10.00 per copy. dress, $2.50 each. Federal Reserve Chart Book. Issued four times a year in The Econometrics of Price Determination Confer­ February, May, August, and November. Subscription ence, October 30-31, 1970, Washington, D.C. 1972. 397 includes one issue of Historical Chart Book. $7.00 per pp. Cloth ed. $5.00 each; 10 or more to one address, year or $2.00 each in the United States, its possessions, $4.50 each. Paper ed. $4.00 each; 10 or more to one ad­ Canada, and Mexico. Elsewhere, $10.00 per year or dress, $3.60 each. $3.00 each. Federal Reserve Staff Study: Ways to Moderate Historical Chart Book. Issued annually in Sept. Subscrip­ Fluctuations in Housing Construction. 1972. 487 tion to Federal Reserve Chart Book includes one issue. pp. $4.00 each; 10 or more to one address, $3.60 each. $1.25 each in the United States, its possessions, Canada, Lending Functions of the Federal Reserve Banks. and Mexico; 10 or more to one address, $1.00 each. Else­ 1973. 271 pp. $3.50 each; 10 or more to one address, where, $1.50 each. $3.00 each. Capital Market Developments. Weekly. $15.00 per year Improving the Monetary Aggregates: Report of the or $.40 each in the United States, its possessions, Cana­ Advisory Committee on M onetary Statistics. da, and Mexico; 10 or more of same issue to one address, 1976. 43 pp. $1.00 each; 10 or more to one address, $.85 $13.50 per year or $.35 each. Elsewhere, $20.00 per year each. or $.50 each. Annual Percentage Rate Tables (Truth in Lending— Regulation Z) Vol. I (Regular Transactions). 1969. 100 Selected Interest and Exchange Rates—Weekly Se­ pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each ries of Charts. Weekly. $15.00 per year or $.40 each in volume $1.00; 10 or more of same volume to one ad­ the United States, its possessions, Canada, and Mexico; dress, $.85 each. 10 or more of same issue to one address, $13.50 per year or $.35 each. Elsewhere, $20.00 per year or $.50 each. Federal Reserve Measures of Capacity and Capacity Utilization. 1978. 40 pp. $1.75 each; 10 or more to one The Federal Reserve Act, as amended through December address, $1.50. each. 1976, with an appendix containing provisions of certain The Bank Holding Company Movement to 1978: A other statutes affecting the Federal Reserve System. 307 Compendium. 1978. 289 pp. $2.50 each; 10 or more to pp. $2.50. one address, $2.25 each. Regulations of the Board of Governors of the Fed­ Improving the Monetary Aggregates: Staff Papers. eral Reserve System 1978. 170 pp. $4.00 each; 10 or more to one address, Published Interpretations of the Board of Gover­ $3.75 each. nors, as of Dec. 31, 1979. $7.50. 1977 Consumer Credit Survey. 1978. 119 pp. $2.00 each. Industrial Production: 1976 Edition. 1977. 304 pp. $4.50 Flow of Funds Accounts. 1949-1978. 1979. 171 pp. each; 10 or more to one address, $4.00 each. $1.75 each; 10 or more to one address, $1.50 each. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A79 Consumer Education Pamphlets Short pamphlets suitable for classroom use. Multiple Innovations in Bank Loan Contracting: Recent Evi­ copies available without charge. dence by Paul W. Boltz and Tim S. Campbell. May 1979. 40 pp. The Board of Governors of the Federal Reserve System Measurement of Capacity Utilization: Problems and Consumer Handbook To Credit Protection Laws Tasks, by Frank de Leeuw, Lawrence R. Forest, Jr., The Equal Credit Opportunity Act and . . . Age Richard D. Raddock, and Zoltan E. Kenessey. July 1979. The Equal Credit Opportunity Act and . . . Credit Rights in 264 pp. Housing The Market for Federal Funds and Repurchase The Equal Credit Opportunity Act and . . . Doctors, Agreements, by Thomas D. Simpson. July 1979. 106 pp. Lawyers, Small Retailers, and Others Who May Provide Impact of Bank Holding Companies on Competition Incidental Credit and Performance in Banking Markets, by Stephen The Equal Credit Opportunity Act and . . . Women A. Rhoades and Roger D. Rutz. Aug. 1979. 30 pp. Fair Credit Billing The GNMA-Guaranteed Passthrough Security: Mar­ The Federal Open Market Committee ket Development and Implications for the Growth Federal Reserve Bank Board of Directors and Stability of Home Mortgage Lending, by Federal Reserve Banks David F. Seiders. Dec. 1979. 65 pp. Federal Reserve Glossary How to File A Consumer Credit Complaint Printed in Full in the Bulletin If You Borrow To Buy Stock An Assessment of Bank H olding Companies, by If You Use A Credit Card Robert J. Lawrence and Samuel H. Talley. January 1976. Truth in Leasing U.S. Currency What Truth in Lending Means to You Reprints Except for Staff Studies, and some leading articles, most of the articles reprinted do not exceed 12 pages. Staff Studies Measures of Security Credit. 12/70. Studies and papers on economic and financial subjects that Revision of Bank Credit Series. 12/71. are of general interest. Assets and Liabilities of Foreign Branches of U.S. Banks. 2/72. Summaries Only Printed in the Bulletin Bank Debits, Deposits, and Deposit Turnover—Revised Requests to obtain single copies of the full text or to be Series. 7/72. added to the mailing list for the series may be sent to Pub­ Yields on Newly Issued Corporate Bonds. 9/72. lications Services. Yields on Recently Offered Corporate Bonds. 5/73. Rates on Consumer Instalment Loans. 9/73. Interest Rate Ceilings and Disintermediation, by Ed­ New Series for Large Manufacturing Corporations. 10/73. ward F. McKelvey. Sept. 1978. 105 pp. The Structure of Margin Credit. 4/75. The Relationship Between Reserve Ratios and the Industrial Electric Power Use. 1/76. Monetary Aggregates Under Reserves and Fed­ Revision of Money Stock Measures. 2/76. eral Funds Rate Operating Targets, by Kenneth J. Revised Series for Member Bank Deposits and Aggregate Re­ Kopecky. Dec. 1978. 58 pp. serves. 4/76. Tie-ins Between the Granting of Credit and Sales of Industrial Production— 1976 Revision. 6/76. Insurance by Bank Holding Companies and Other Federal Reserve Operations in Payment Mechanisms: A Lenders, by Robert A. Eisenbeis and Paul R. Schweitzer. Summary. 6/76. Feb. 1979. 75 pp. New Estimates of Capacity Utilization: Manufacturing and Geographic Expansion of Banks and Changes in Bank­ Materials. 11/76. ing Structure, by Stephen A. Rhoades. Mar. 1979. 40 The Commercial Paper Market. 6/77. pp. The Federal Budget in the 1970’s. 9/78. Impact of the D ollar Depreciation on the U.S. Price Redefining the Monetary Aggregates. 1/79. Level: An Analytical Survey of Empirical Esti­ U.S. International Transactions in 1978. 4/79. mates, by Peter Hooper and Barbara R. Lowrey. Apr. Implementation of the International Banking Act. 10/79. 1979. 53 pp. Changes in Bank Lending Practices, 1977-79. 10/79. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A80 Index to Statistical Tables References are to pages A-3 through A-72 although the prefix “A” is omitted in this index ACCEPTANCES, bankers, 11, 25,27 Deposits (See also specific types) Agricultural loans, commercial banks, 18,20-22,26 Banks, by classes, 3, 16, 17, 19, 20-23, 29, 69-72 Assets and liabilities (See also Foreigners) Federal Reserve Banks, 4,12 Banks, by classes, 16, 17, 18, 20-23, 29 Subject to reserve requirements, 15 Domestic finance companies, 39 Turnover, 13 Federal Reserve Banks, 12 Discount rates at Reserve Banks (See Interest rates) Nonfinancial corporations, current, 38 Discounts and advances by Reserve Banks (See Loans) Automobiles Dividends, corporate, 37 Consumer installment credit, 42,43 Production, 48, 49 EMPLOYMENT, 46, 47 Eurodollars, 27 BANKERS balances, 16, 18, 20, 21, 22 (See also Foreigners) Banks for Cooperatives, 35 FARM mortgage loans, 41 Bonds (See also U.S. government securities) Farmers Home Administration, 41 New issues, 36 Federal agency obligations, 4, 11, 12, 13, 34 Yields, 3 Federal and federally sponsored credit agencies, 35 Branch banks Federal finance Assets and liabilities of foreign branches of U.S. banks, 56 Debt subject to statutory limitation and types and Liabilities of U.S. banks to their foreign branches, 23 ownership of gross debt, 32 Business activity, 46 Receipts and outlays, 30, 31 Business expenditures on new plant and equipment, 38 Treasury operating balance, 30 Business loans (See Commercial and industrial loans) Federal Financing Bank, 30, 35 Federal funds, 3,6, 18, 20, 21, 22,27, 30 CAPACITY utilization, 46 Federal Home Loan Banks, 35 Capital accounts Federal Home Loan Mortgage Corporation, 35,40,41 Banks, by classes, 16, 17, 19, 20 Federal Housing Administration, 35,40,41 Federal Reserve Banks, 12 Federal Intermediate Credit Banks, 35 Central banks, 68 Federal Land Banks, 35,41 Certificates of deposit, 23, 27 Federal National Mortgage Association, 35, 40, 41 Commercial and industrial loans Federal Reserve Banks Commercial banks, 15, 18,26 Condition statement, 12 Weekly reporting banks, 20, 21, 22, 23, 24 Discount rates (See Interest rates) Commercial banks U.S. government securities held, 4, 12, 13, 32, 33 Assets and liabilities, 3, 15-19, 20-23, 69-72 Federal Reserve credit, 4, 5, 12, 13 Business loans, 26 Federal Reserve notes, 12 Commercial and industrial loans, 24,26 Federally sponsored credit agencies, 35 Consumer loans held, by type, 42,43 Finance companies Loans sold outright, 23 Assets and liabilities, 39 Number, by classes, 16, 17, 19 Business credit, 39 Real estate mortgages held, by type of holder and Loans, 20, 21, 22, 42, 43 property, 41 Paper, 25, 27 Commercial paper, 3, 25, 27, 39 Financial institutions, loans to, 18, 20-22 Condition statements (See Assets and liabilities) Float, 4 Construction, 46, 50 Flow of funds, 44,45 Consumer installment credit, 42, 43 Foreign Consumer prices, 46, 51 Currency operations, 12 Consumption expenditures, 52, 53 Deposits in U.S. banks, 4, 12,19,20,21, 22 Corporations Exchange rates, 68 Profits, taxes, and dividends, 37 Trade,55 Security issues, 36,65 Foreigners Cost of living (See Consumer prices) Claims on, 56, 58,61, 62, 63,67 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 ma;ket, 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 Demand deposits Adjusted, commercial banks, 13,15, 19 HOUSING, new and existing units, 50 Banks, by classes, 16, 17, 19,20-23 Ownership by individuals, partnerships, and INCOME, personal and national, 46, 52, 53 corporations, 25 Industrial production, 46,48 Subject to reserve requirements, 15 Installment loans, 42,43 Turnover, 13 Insurance companies, 29, 32,33,41 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A81 Insured commercial banks, 17, 18, 19, 69-72 Real estate loans—continued Interbank loans and deposits, 16, 17 Life insurance companies, 29 Interest rates Mortgage terms, yields, and activity, 3, 40 Bonds, 3 Type of holder and property mortgaged, 41 Business loans of banks, 26 Reserve position, basic, member banks, 6 Federal Reserve Banks, 3, 8 Reserve requirements, member banks, 9 Foreign countries, 68 Reserves Money and capital markets, 3, 27 Commercial banks, 16, 18, 20,21,22 Mortgages, 3,40 Federal Reserve Banks, 12 Prime rate, commercial banks, 26 Member banks, 3, 4, 5, 15, 16, 18 Time and savings deposits, 10, 72 U.S. reserve assets, 55 International capital transactions of the United States, 56-67 Residential mortgage loans, 40 International organizations, 56-61,64-67 Retail credit and retail sales, 42,43,46 Inventories, 52 Investment companies, issues and assets, 37 SAVING Investments (See also specific types) Flow of funds, 44, 45 Banks, by classes, 16, 17, 18,20,21,22,29 National income accounts, 53 Commercial banks, 3, 15, 16,17,18 Savings and loan assns., 3, 10, 29, 33,41,44 Federal Reserve Banks, 12,13 Savings deposits (See Time deposits) Life insurance companies, 29 Savings institutions, selected assets, 29 Savings and loan associations, 29 Securities (See also U.S. government securities) Federal and federally sponsored agencies, 35 LABOR force, 47 Foreign transactions, 65 Life insurance companies (See Insurance companies) New issues, 36 Loans (See also specific types) Prices, 28 Banks, by classes, 16, 17, 18, 20-23, 29 Special drawing rights, 4, 12, 54, 55 Commercial banks, 3, 15-18, 20-23, 24, 26 State and local governments Federal Reserve Banks, 3,4,5,8,12, 13 Deposits, 19,20, 21, 22 Insurance companies, 29,41 Holdings of U.S. government securities, 32, 33 Insured or guaranteed by United States, 40,41 New security issues, 36 Savings and loan associations, 29 Ownership of securities of, 18, 20,21,22, 29 Yields of securities, 3 MANUFACTURING State member banks, 17 Capacity utilization, 46 Stock market, 28 Production, 46,49 Stocks (See also Securities) Margin requirements, 28 New issues, 36 Member banks Prices, 28 Assets and liabilities, by classes, 16, 17, 18 Borrowings at Federal Reserve Banks, 5, 12 TAX receipts, federal, 31 Number, by classes, 16, 17, 19 Time deposits, 3, 10, 13, 15, 16, 17, 19, 20, 21, 22, 23, 69-72 Reserve position, basic, 6 Trade, foreign, 55 Reserve requirements, 9 Treasury currency, Treasury cash, 4 Reserves and related items, 3,4, 5, 15 Treasury deposits, 4, 12, 30 Mining production, 49 Treasury operating balance, 30 Mobile home shipments, 50 Monetary aggregates, 3, 15 UNEMPLOYMENT, 47 Money and capital market rates (See Interest rates) U.S. balance of payments, 54 Money stock measures and components, 3, 14 U.S. government balances Mortgages (See Real estate loans) Commercial bank holdings, 19, 20, 21, 22 Mutual funds (See Investment companies) Member bank holdings, 15 Mutual savings banks, 3, 10, 20-22, 29, 32, 33, 41 Treasury deposits at Reserve Banks, 4, 12, 30 U.S. government securities NATIONAL banks, 17 Bank holdings, 16, 17, 18,20,21,22,29, 32,33 National defense outlays, 31 Dealer transactions, positions, and financing, 34 National income, 52 Federal Reserve Bank holdings, 4, 12, 13, 32, 33 Nonmember banks, 17, 18, 19 Foreign and international holdings and transactions, 12, 32, 64 OPEN market transactions, 11 Open market transactions, 11 Outstanding, by type and ownership, 32, 33 PERSONAL income, 53 Rates, 3,27 Prices Utilities, production, 49 Consumer and producer, 46, 51 Stock market, 28 VETERANS Administration, 40,41 Prime rate, commercial banks, 26 Production, 46,48 WEEKLY reporting banks, 20-24 Profits, corporate, 37 Wholesale prices, 46, 51 REAL estate loans YIELDS (See Interest rates) Banks, by classes, 18, 20-22, 29,41 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A 82 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories Helena Minneapolis Detroit Chicago jSalt Lake City 'anFry>cisco Kansas City 't. L V o §> u i . s Louisville ffashvill* ,iitt/e Rock Birminghai\ A ® tla nt > a Dallas® II Paso' Houston \an Antonio January 1978 ALASKA Legend Boundaries of Federal Reserve Districts ® Federal Reserve Bank Cities Boundaries of Federal Reserve Branch • Federal Reserve Branch Cities Territories * Federal Reserve Bank Facility © Board of Governors of the Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis