Federal Reserve Bulletin, 1981-01

VOLUME 67 • NUMBER 1 • JANUARY 1981 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 Naomi P. Salus, Coordinator 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. The artwork is provided by the Graphic Communications Section under the direction of Peter G. Thomas. 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 L THE ECONOMY IN 1980 Actions taken to facilitate quarterly reporting by small depository institutions. Economic activity was about unchanged over 1980, but the year was characterized Adoption of revised schedule of operating by turbulence against a backdrop of high in- hours for the dispatch of funds over the flation. System's wire network. Amendments to Regulation E to permit 13 STAFF STUDIES creditors to debit their customers' accounts "Performance and Characteristics of Edge automatically for repayment of pre- Corporations" reviews the operations of authorized overdraft credit. Edge corporations, including their types of customers, activities, financial performance, and effects on local markets. 27 RECORD OF POLICY ACTIONS OF THE FEDERAL OPEN MARKET COMMITTEE 15 INDUSTRIAL PRODUCTION At its meeting on November 18, 1980, the Committee agreed that open market opera- Output increased about 1.0 percent in Detions in the period until the next meeting cember. should be directed toward expansion of reserve aggregates consistent with growth of 17 STATEMENT TO CONGRESS M-1A, M-1B, and M-2 over the September- Paul A. Volcker, Chairman, Board of Gov- to-December period at annual rates of ernors, discusses recent monetary policy about 2LH percent, 5 percent, and VU perand economic developments and outlines cent respectively, or somewhat less, prosome of the key issues relating to monetary vided that in the period before the next regpolicy for 1981 and beyond, before the Sen- ular meeting the weekly average federal ate Committee on Banking, Housing, and funds rate remained within a range of 13 to Urban Affairs, January 7, 1981. 17 percent. While some shortfall from the specified rates of monetary growth would 23 ANNOUNCEMENTS be accepted, it was also understood that operations would not be directed toward plac- Setting of schedules of fees for certain Feding substantial additional pressures on bank eral Reserve services. reserve positions unless growth of the mon- Proposals to amend Regulations D and Q to etary aggregates and the associated depermit the establishment in the United mands for reserves proved to be significant- States of international banking facilities. ly greater than anticipated. Gross earnings of the Federal Reserve Banks amounted to almost $13 billion in 35 LEGAL DEVELOPMENTS 1980. Amendments to Regulations C, D, H, K, Creation of Thrift Institutions Advisory and Y and to regulations of the Depository Group. Institutions Deregulation Committee; vari- New members and meeting of Consumer ous rules and bank holding company and Advisory Council. bank merger orders; and pending cases. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A l FINANCIAL AND B USIN ESS S TA TISTICS A74 FEDERAL OPEN MARKET COMMITTEE AND STAFF; ADVISORY COUNCILS A3 Domestic Financial Statistics A44 Domestic Nonfinancial Statistics A75 FEDERAL RESERVE BANKS, BRANCHES, A52 International Statistics AND OFFICES A67 Special Tables A71 GUIDE TO TABULAR PRESENTATION, A76 FEDERAL RESERVE BOARD STATISTICAL RELEASES, AND SPECIAL PUBLICATIONS TABLES AH BOARD OF GOVERNORS AND STAFF A78 /jVDEA- TO STATISTICAL TABLES A80 MAP OF FEDERAL RESER VE S YSTEM Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Economy in 1980 Mark A. Wasserman and Shirley N. Watt of the 1980 (chart 3). Higher prices directly increased National Income Section of the Board's Division the prices of refined petroleum products and inof Research and Statistics prepared this article. directly boosted the prices of numerous other goods and services. Inflationary pressures also The past year was characterized by a remarkable were intensified by double-digit increases in unit degree of turbulence against a backdrop of high labor costs over the past two years. These ininflation. But as 1980 ended, the level of econom- creases reflected in part an acceleration of wages ic activity was little different from a year earlier. in response to past price rises. In addition, cost A sharp, but unusually short recession in the first pressures were exacerbated by the decline in part of the year was followed by recovery in the productivity in the nonfarm business sector dursecond half (charts 1 and 2). The absence of any ing 1979-80. significant increase in output over the year re- The principal objective of the nation's ecoflected in part the influence of fiscal and mone- nomic policies during the past two years has tary policies, which had been directed toward re- been to reduce the rate of inflation. Monetary straining growth of aggregate demand in an effort policy has been focused on gradually restraining to reduce inflationary pressures. Yet despite the the growth of the monetary and credit aggregates weakness of activity, prices and wages rose rap- to rates consistent with the achievement of price idly to make 1979-80 one of the most severe in- stability. Accordingly, the Federal Open Market flationary periods in this century. Committee early last year announced annual The worsening inflation during the past two ranges for growth of the monetary aggregates years was attributable to another huge increase that were below the ranges of 1979. in international oil prices as well as to adverse During 1979 and early 1980, serious imbaldevelopments in the underlying determinants of ances and overextensions developed in the econprices. The price of imported crude oil more than omy, leaving consumers and businesses vulnerdoubled from the end of 1978 to the middle of able to a slowdown in activity. Growth of real disposable personal income during this period 1. Growth in real GNP "was weak, partly as a result of the sizable transfer of income to foreign oil producers. With income growth sluggish and consumers apparently 6 desiring to maintain living standards, individuals 4 reduced their rate of saving in late 1979 and early 2 1980. Balance sheets were strained further by a + record increase in borrowing by consumers dur- 0 ing 1979, which had pushed the share of income 2 devoted to servicing outstanding household debt 4 to a new high. In the business sector, increases in capital expenditures in 1979 and early 1980 ex- 1974 1976 1978 1980 "^j2 "79* ".gJJ2 ceeded the growth of internal funds. As a result, Department of Commerce data. Half-yearly data are at annual rates. short- and intermediate-term borrowing was es- In all charts, "percentage change" is from final quarter of preceding pecially large, so that aggregate measures of corperiod to final quarter of period indicated; "real" is in terms of 1972 dollars. porate liquidity deteriorated. These strains on Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • January 1981 consumers and businesses, occurring in the con- 3. Price of imported oil text of restrictive fiscal and monetary policies, Dollars per barrel contributed to a retrenchment of economic activity in early 1980. Although not evident at the time, the 1980 cyclical peak was reached in January. Indeed, in the opening months of the year, the apparent resistance of the economy to recessionary pressures surprised many observers. At the same time, inflation expectations were rising rapidly, • H H H1 in part because of unsettled international politi- 1974 1976 1978 1980 cal conditions. Intensified expectations of infla- Department of Commerce data. tion also contributed to substantial speculation in commodity markets. Dramatic price increases occurred not only for precious metals such as cial credit programs. During this period, congold and silver but also for several basic industri- sumer and business loans at commercial banks al commodities, including copper and aluminum contracted, the narrow monetary aggregates scrap. dropped sharply, and growth of the broader ag- In this environment, on March 14 the Presi- gregates decelerated. In light of these developdent announced a broad anti-inflation program, ments, a phaseout of the special credit programs including the invocation of the Credit Control began late in the spring and was completed in Act of 1969. Under that authority, the Board of July. The rebound of economic activity after Governors announced a set of temporary credit midyear was faster than most forecasters generrestraint measures aimed at reinforcing the ad- ally had expected; GNP in real terms grew about ministration's anti-inflation efforts and the re- VU percent at an annual rate over the second half strictive monetary policies already in place while of 1980. The recovery was especially sharp in the insuring, to the extent possible, that credit would housing and automobile industries, areas that remain available for productive uses. had been severely affected by the recession. During the second quarter, real gross national Personal consumption expenditures were parproduct fell at a record pace for the postwar peri- ticularly affected during the contraction as a conod as the general contraction already in progress sequence of accumulated weakness in the growth was aggravated by a curtailment of the supply of real disposable income and the strains on balof and demand for credit associated with the spe- ance sheets. Moreover, in the second quarter, consumers cut back considerably on their use of credit, even in areas not restricted by the credit 2. Output and employment programs. The curtailment of spending during the first half was concentrated in purchases of Index, 1967=100 consumer durable goods, especially domestic au- INDUSTRIAL PRODUCTION tomobiles. Residential construction activity also plummeted as mortgage interest rates rose to rec- Motor vehicles and ) ord postwar levels and some lenders stopped construction supplies issuing mortgages entirely. The May trough in tV i ti t i housing starts was close to the postwar low. Per- Change from previous year, millions of persons sonal consumption expenditures and housing NONFARM PAYROLL EMPLOYMENT starts rebounded during the second half to levels that had prevailed in the early months of the year. Wf\ Total In the business sector, capital outlays in real terms decreased after the first quarter, declining Manufacturing more rapidly than overall activity. The falloff in spending for nonresidential structures was espe- Industrial production, Federal Reserve data. Employment, Departcially pronounced. Businesses diminished their ment of Labor data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Economy in 1980 3 exposure to risk during 1980 by maintaining a 4. Prices cautious attitude toward inventory investment; inventory accumulation during the first half of warn Mm**- mmmmm • the year was quite small. Nonetheless, the se- C' onsi jmer price index vere falloff in final sales in the second quarter . n.n I raised inventory-sales ratios substantially, and 1 i 1 businesses liquidated inventories in the third Gross domestic Excluding food quarter. ^business product and ene; rgv m During the past year, federal government purchases of goods and services in real terms rose m —1 —1 m1 1> 111 1 ti L 1974 1976 1978 1980 rapidly, partly because of defense spending. In contrast, purchases by state and local govern- Consumer price index, Department of Labor data. Gross domestic business product fixed-weight index, Department of Commerce data. ments were virtually unchanged over the year, reflecting less favorable fiscal and financial conditions. continuation of high inflation reflected primarily As in recent years, the foreign sector provided a widespread deterioration of the underlying considerable support to the economy in 1980. price situation. This deterioration is most appar- Net exports rose in real terms partly because of ent in the aggregate price statistics that remove relatively weaker economic activity in the the direct effects of movements in the volatile United States compared with that of its major food and energy sectors. The GBP fixed-weight trading partners. Also, the larger surplus was price index excluding these items increased nearprobably associated with the lagged effects of the ly 83/ percent during 1980, about IV2 percentage 4 earlier depreciation of the dollar. During 1980, points faster than in 1979. Similarly, the conthe weighted-average exchange rate for the dol- sumer price index excluding these items rose lar fluctuated widely in response to variations in about 12V4 percent during 1980, IV2 percentage relative interest rates; by the end of 1980, the points faster than during the previous year. The dollar was about 5LH percent above the year-ear- more rapid underlying inflation rate reflected lier level. continued high rates of increase of unit labor costs, which in turn were due to an acceleration of compensation per hour and a poor perform- PRICES ance in productivity. Although energy prices continued to ex- Despite the slower growth of overall activity in acerbate underlying cost pressures last year, the 1979 and the contraction during the first half of price rise was substantially smaller than in 1979. 1980, inflationary pressures remained intense last At retail, energy prices rose 19 percent during year. Over the four quarters of 1980, the fixed- 1980—about half the pace of the previous year— weight price index for gross domestic business with most of the increase in the early months. product (GBP), a broad measure of prices in the The runup of energy prices resulted from sharply economy, rose 93U percent, about xh percent- higher prices of imported crude oil as well as the age point more than in 1979. The consumer price progressive decontrol of domestic crude oil index, as well as the producer price index for fin- prices. However, as 1980 wore on, prices in this ished goods, increased about \2XU percent over sector eased as consumers and businesses rethe four quarters of 1980, close to the extraordi- duced their consumption of gasoline during the narily high rates recorded in the previous year first half of 1980 and petroleum stocks were built (chart 4). up. The rapid rise in energy prices through early Unlike 1979, when the acceleration of prices 1980 and the subsequent deceleration were rewas heavily concentrated in the energy sector, flected in a similar pattern for prices of energyno single factor accounted for last year's rise. intensive intermediate materials, such as indus- The direct and indirect effects of the sharp rise in trial chemicals and plastics. energy prices and, later in the year, a surge in Despite a slowdown in energy prices in the food prices did play a significant role. But the second half of 1980, the GBP fixed-weight mea- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

4 Federal Reserve Bulletin • January 1981 sure of inflation did not improve, in part because 5. Productivity and costs food prices surged under the influence of re- Percentage change bounding farm prices and rising costs of market- Compensation ing. The acceleration in food prices during the 12 second half of the year brought the increase over the four quarters to more than 10 percent. Meat } , 1 1, ! i , 1 prices rose rapidly in the second half as production of pork and poultry declined. Moreover, a Productivity [ I j , , • i——| —| J—— —'—I— i—J ; o severe drought in the Midwest and South reduced agricultural supplies and added to upward price pressures for a number of farm products. Increases in crop prices were especially large in the second half of 1980, and their passthrough to the retail level is expected to keep food prices rising rapidly in 1981. Nonfarm business sector, Department of Labor data. 1980 Q4 estimates by Federal Reserve. Productivity and unit labor cost data do not reflect the 1980 national income accounts benchmark revisions. WAGES, PRODUCTIVITY, AND LABOR COSTS tion is typical of the early phase of a cyclical downturn. However, in the second half, produc- Wage rates accelerated during 1980 from the al- tivity grew very little, an unusual occurrence ready fast pace recorded in the previous year. during the first half year of a recovery. Conse- The index of average hourly earnings for produc- quently, over the four quarters of last year outtion and nonsupervisory workers in the private put per hour in the nonfarm business sector nonfarm economy—a broad measure of wage showed virtually no increase. This, coupled with rates—rose 9LH percent over the four quarters of the rapid rise in hourly compensation, resulted 1980, compared with 8 percent in 1979. The ac- in a double-digit increase in unit labor costs for celeration was most pronounced in the manufac- the second consecutive year. turing sector, where cost-of-living escalator provisions are prevalent. Wage rates also increased substantially in those industries in which new INCOME AND CONSUMPTION collective bargaining agreements were negotiated, as union workers sought to recover some of The acceleration of prices during the past two the recent losses in real wages. However, even in years, at a time when growth of nominal income the less unionized trade and service sectors, was slowing, put extreme strains on household wage gains during 1980 exceeded those of the budgets. In the latter half of 1979, consumers preceding year. chose to reduce personal saving in order to main- Hourly compensation—which includes the tain living standards. However, continuation of cost of fringe benefits and employer contribu- the squeeze on budgets prompted a substantial tions to social insurance as well as wages—rose downward adjustment of consumer spending slightly more than 10 percent in 1980 compared (chart 6). Retail sales in constant dollars fell at a with about 9 percent during 1979 (chart 5). As in record postwar rate from January through May, recent years, fringe benefits grew more rapidly a trend exacerbated by the effects of the credit than wage rates. A legislated change in social restraint programs. Beginning in June, consumpsecurity taxes also boosted compensation. tion expenditures rebounded with the pickup in The dismal performance of productivity per- employment and income growth, and the easing sisted in 1980, intensifying basic inflationary of credit conditions. pressures. After falling in 1979, output per hour Nominal personal income rose at an 11 percent in the nonfarm business sector deteriorated fur- annual rate during 1980, slightly faster than the ther during the first half of 1980; such deteriora- rise in consumption prices. During the first half, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Economy in 1980 5 6. Income, consumption, and saving income growth and these rapidly rising costs, discretionary-type outlays bore the brunt of the adjustment in consumer spending. Purchases of Real consumption expenditures 9 durable goods in real terms fell 25 percent at an annual rate in the first half of the year. Spending on durable goods was also depressed in the second quarter by the sharp runup in interest rates H2 and the curtailment of borrowing associated Real disposable income 5 J5 with the special credit restraint programs. During the period that the programs were in effect, lend- Percent ers tightened credit policies and many house- 10 holds were reluctant to use credit. In the durable goods category, the sharpest decline during the first half of last year was for purchases of new cars, especially domestic models. Department of Commerce data. Total auto sales in the second quarter were at an annual rate of 7.7 million units, 2 million units below the pace in the fourth quarter of 1979, personal income gains were unusually weak as while sales of domestic autos fell to an annual growth of wage and salary disbursements slowed rate of 5.5 million units—the slowest selling pace markedly and nonfarm proprietors' income de- of domestic autos in 20 years (chart 8). Spending clined. In addition, farm income was off because on furniture and other household durable goods of falling agricultural prices. In the second half, declined slightly during the first half of the year, personal income increased more rapidly as pri- partly because of the drop in home sales. vate employment rose and proprietors' income Tight budgets began to constrain outlays for advanced in response to the economic recovery nondurable goods and services by spring. Over and to the surge in farm prices. A cost-of-living the year, expenditures for nondurable goods in adjustment to social security payments in July real terms fell about 1 percent, one of the sharpest also boosted personal income. Growth of after- declines in the postwar period; real outlays on tax income was restrained last year because so- most major categories, including food, home cial insurance payroll taxes increased while in- heating fuel, and particularly gasoline, were flation pushed consumers into higher marginal down from their levels at year-end 1979. Expendtax brackets. These movements in income and itures for services rose in real terms, but by an taxes and concomitant rapid price increases were exceptionally weak 3 percent over the year. reflected in the decline in real disposable income over the first half of the year and the subsequent rise during the second half; however, over the 7. Share of food and energy in four quarters of 1980, real disposable income disposable personal income grew only about 1 percent, down from the already low 1979 rate of 2 percent. Percent The slow growth of purchasing power during the past two years coincided with more rapid price increases for food and energy items. Accordingly, the share of disposable income devoted to these items, which had been on a downtrend until 1973, climbed sharply to about 28 percent last year (chart 7). This was the largest share since the mid-sixties and was reached de- F i r I I T I I J } T I F I I I I T T T I spite a substantial cutback in the volume of gaso- '60 '64 "68 '12 '16 ^80 line purchases. In the squeeze between weak Department of Commerce data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

6 Federal Reserve Bulletin • January 1981 8. Auto sales promptly and increases in home prices accelerated. Indeed, the rebound of housing starts from Annual rate, millions of units May to September was the strongest in any comparable postwar period. However, the upward momentum was halted in the autumn and winter as the tightening of mortgage market conditions that had started in early August had a restraining effect on real estate activity. Total home sales peaked in September, and starts remained on a plateau of about IV2 million units (annual rate) during the September-December period. Ward's "Automotive Reports" data. The revival of consumer spending around mid- 9. Housing starts and home mortgage rate year reflected favorable developments in em- Millions of units Percent ployment and income, increased availability and willingness to use credit following termination of the credit restraint programs in July, and some easing in consumer interest rates. The pickup was consistent with the findings of household surveys, which showed an improvement in consumer confidence between April and November. Although personal income taxes may be reduced in 1981, the high rate of inflation—especially for food and energy items, the scheduled 1978 1979 1980 rise in social security taxes, and the increase in Housing starts are Department of Commerce data seasonally taxes induced by inflation probably will restrict adjusted at annual rates. Mortgage commitment rate, Federal Home Loan Mortgage Corporation data. any rise in real disposable income in the months ahead. Therefore, the squeeze on household budgets is likely to continue and consumers may The falloff in housing activity during 1980 was once again limit spending. concentrated in the single-family sector (chart 10). Single-family housing starts fell from 1.2 million units in 1979 to 850,000 in 1980. High financ- RESIDENTIAL CONSTRUCTION ing costs and inadequate cash flow depressed activity. In addition, the slower growth of home Over the year, housing activity exhibited sharp prices acted to damp the investment motive for movements, which reflected volatility in mort- homebuying. In recent years, the growth of avgage interest rates (chart 9). Private housing erage household incomes has consistently lagged starts fell from 1.7 million units in 1979 to 1.3 mil- increases in average downpayments and carrying lion units in 1980, the lowest level since 1975. costs involved in buying and occupying a home. The downtrend in total private housing starts, Although innovative financial instruments, such which had begun in the fall of 1979, steepened as graduated-payment mortgages, gained wider during the early months of 1980. By May, starts acceptance in 1980, standard mortgages remained had fallen to a near-record postwar low of 906,000 the dominant form of financing. The burden on units (annual rate) after mortgage rates topped 16 household budgets of the payments in the early percent in April and some lenders stopped is- years of such mortgages, particularly for firstsuing mortgages. As financial conditions im- time entrants into the mortgage market, was a proved during the late spring and early summer, factor holding down residential sales and conreal estate market activity rebounded sharply. struction. In addition, the deceleration in the av- Sales of both new and existing homes picked up erage price of existing homes sold from the near- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Economy in 1980 7 10. Housing starts of unutilized capital resources widened. The Millions of units capacity utilization rate in manufacturing fell into the range of 75 to 80 percent in the sec- 2.0 ond half of the year, well below the 87 percent peak reached in early 1979 (chart 12). In addi- 1.5 tion, some investment activity probably was curtailed by the rise in long-term interest rates dur- 1.0 ing 1980. Also, corporate economic profits dropped sharply in the second quarter and, de- .5 spite a recovery later in the year, remained be- 0 low the levels reached in 1979. One of the few 1980 favorable factors among the major determinants Department of Commerce data, seasonally adjusted at annual of business spending was the general upward rates. trend in the stock market, which made equity fily 20 percent pace of 1978 and the first half of nancing more attractive. In addition, the need to 1979 to around 15 percent in 1980 moderated the increase or to modify the capital stock in some investment incentive for homebuying. special areas, such as oil exploration and energy- Starts of multifamily units totaled 440,000 in related retooling, boosted capital outlays. 1980, about 100,000 fewer than in 1979 and the The decline in investment in real terms during lowest level since 1976. Activity was strongly 1980 was most pronounced in the construction supported by government subsidy programs, area. Spending on nonresidential structures, with units under the Housing and Urban Devel- which had risen 9LH percent during 1979, fell opment's section 8 program accounting for about by about 8 percent last year; declines were esone-fourth of total multifamily starts. In the pri- pecially pronounced in industrial building. Some vate multifamily area, cooperative and con- offset to the weakness in construction was prodominium construction was down only moder- vided by increases in petroleum drilling, stimately from 1979; the lower cost of these units ulated in part by the phased decontrol of domestic relative to single-family houses provided some cushion to the decline in this segment of the multifamily market. In the multifamily rental sector, 11. Real business fixed investment however, adverse credit conditions, relatively Percentage change small increases in rents, and market uncertainu 20 ties restricted construction activity. Business fixed investment Producers* durable equipment 10 l l n + BUSINESS FIXED INVESTMENT 0 • w The fundamental determinants of capital spend- 10 SSttrruucc tures ing were not favorable during 1979 and were even less so in 1980. Consequently, business 1974 1976 1978 1980 fixed investment in real terms slowed during 1979 Department of Commerce data. and early 1980 and declined sharply beginning with the second quarter of last year. By the oil prices. In producers' durable equipment, fourth quarter of 1980, real business fixed invest- marked declines occurred in outlays for motor ment was about 6 percent below the year-earlier vehicles, agricultural equipment, and metallevel (chart 11). working machinery. Expenditures for construc- Both financial and nonfinancial developments tion equipment also fell sharply, in line with last year tended to depress capital spending. Fi- the general weakness in building. nal sales in real terms, after growing slowly in By industry, capital spending slowed markedly 1979, stagnated during 1980, so that the margin in the manufacturing sector, especially at durable Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

8 Federal Reserve Bulletin • January 1981 12. Capacity utilization in manufacturing 1979 had substantially increased carrying costs. Percent Although total stock accumulation remained slight in real terms during the first half of 1980, the extraordinarily rapid decline in final sales pushed inventory-sales ratios up sharply. By May, the ratio for manufacturing and trade had nearly reached the peak level of the 1973-75 cycle (chart 13). This situation was corrected in the third quarter, when inventories were liquidated as the pickup of final sales helped trim excess stocks; by the fourth quarter most stocksales ratios had been reduced significantly. Federal Reserve data. Inventory developments during the first three goods producers. Indeed, for the first time since quarters of the year differed for the trade and 1976, increases in nominal spending for plant manufacturing sectors. In the trade sector, liquiand equipment by durable goods producers trailed dation of stocks in real terms occurred during the those of nondurable manufacturers. While most first half of the year, especially at the retail level. manufacturers reported slower growth or actual To a considerable extent, this reduction repredecreases in capital outlays, considerable strength sented a continued correction by the automobile was exhibited in the electrical machinery and industry of the overhang that had resulted from aircraft industries. Also, investment by produc- the previous summer's disruptions of energy ers of paper, chemicals, and petroleum was rela- supplies. However, dealers' auto stocks relative tively strong. Growth of capital outlays weakened to sales rose to excessive levels in the second in several nonmanufacturing industries. Trans- quarter as domestic sales fell to the lowest rate in portation carriers cut spending, and public utili- two decades. Although production was kept bety outlays were about unchanged. In contrast, low unit sales in the third quarter, the days supthe mining industry reported a fairly sizable ad- ply of autos remained relatively high throughout vance. the fall. According to currently available indicators, In the manufacturing sector, stocks in real business fixed investment is likely to remain terms continued to rise through April at both duweak in 1981, especially outside the defense and rable and nondurable goods producers. To some energy-related sectors. Although orders and con- extent, this increase reflected rising orders for tracts for plant and equipment in real terms rose items with long lead times such as commercial during the second half of 1980, by the fourth aircraft and defense equipment. But as sales fell quarter they still were below year-earlier levels. in the second quarter, stock-sales ratios rose Longer-term commitments outside the petro- sharply in a wide range of industries. In the prileum industry, such as capital appropriations, also are running below year-earlier levels. In addi- 13. Ratio of stocks to sales tion, surveys of plans for plant and equipment spending taken toward the end of 1980 suggest Constant-dollar basis little if any advance in real outlays for calendar year 1981. 1.7 BUSINESS INVENTORY INVESTMENT 1.6 As 1980 began, businesses maintained a cautious attitude toward inventory accumulation. A 1.5 weakening of final sales was widely expected, and the upturn in interest rates toward the end of Department of Commerce data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Economy in 1980 9 mary metal, transportation equipment, food and 14. Federal receipts, expenditures, and deficit beverage, and petroleum and coal industries, Billions of dollars these ratios surpassed the peaks reached in the 600 1973-75 recession. However, most overhangs were at least partially corrected during the third quarter when inventories were liquidated as ship- 500 ments picked up. ! The advance in final sales during the fourth 400 quarter helped businesses to keep inventories Receipts under relatively close control, and inventorysales ratios generally fell. The decline in the ratio was especially pronounced at manufacturers and retailers of durable goods. u ' u 'u L / —^ i • • H H ^ ^ H H H n ^ H HI l£4 1976 1978 1980 Department of Commerce national income accounts data. THE FEDERAL SECTOR 1980— 574 percent in real terms, the largest real With the downward trend in general economic increase in 13 years. National defense puractivity in 1980, reduced growth in income chases were particularly strong, rising 20 percent damped the rise in federal tax receipts, while in nominal dollars and 6 percent in real terms. high unemployment boosted income security In early 1980, in response to the curtailment of outlays. As a result of these developments and a grain sales to the Soviet Union, nondefense significant increase in defense purchases, the spending was bolstered by the agricultural price budget deficit on a national income accounts support operations of the Commodity Credit basis rose from $15 billion in calendar year 1979 Corporation. CCC spending, however, fell to slightly under $62 billion in 1980 (chart 14). sharply around midyear as farmers, reacting to For the calendar year, tax receipts grew 9 per- higher agricultural prices, began to repay CCC cent, compared with the brisk annual rate of in- loans and redeem the crops used as collateral. crease of 15 percent registered over the preced- Federal grants to states and localities increased ing two years. Individual tax receipts were only moderately. Finally, the large deficit and restrained not only by the slow growth in nomi- higher interest rates resulted in a sizable rise in nal income but also by an unusually large in- interest payments over the course of the year. crease in federal income tax refunds that resulted from overwithholding in 1979. Moreover, individual tax receipts would have risen even more STATE AND LOCAL GOVERNMENTS slowly had inflation not moved individuals into higher marginal tax brackets. Corporate profit Activity in the state and local sector was curaccruals, reflecting the impact of the recession tailed last year. In real terms, purchases of goods on earnings, fell 8 percent in calendar year 1980; and services fell fractionally over the four quarthis was the first decline since 1975. ters of 1980, following a VU percent increase On the expenditures side, transfer payments, during 1979. To some extent, this slowdown which account for about 40 percent of the federal reflected long-term trends related to demographic budget, rose about 21 percent during 1980, the factors, such as the contraction in the school-age largest increase since the 1973-75 recession. This population. However, in 1980 the slower growth increase in transfers was due primarily to higher of federal funds and the stringent conditions unemployment insurance benefits and to a 14.3 that emerged in financial markets early in the percent cost-of-living rise for social security re- year also were important influences on spending cipients. Over the four quarters of 1980, pur- patterns. Record interest rates caused the postchases of goods and services rose 20 percent in ponement or cancellation of many municipal Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

10 Federal Reserve Bulletin • January 1981 bond issues, and real investment outlays were INTERNATIONAL TRADE down 8V2 percent over the four quarters of 1980. Moreover, only 140,000 persons were added to Net exports of goods and services during 1980 the payrolls of states and localities during the provided substantial support for economic activiyear, the smallest gain in three decades; enroll- ty in the United States. Net exports of goods and ments in public employment programs under the services (on a national income accounts basis) in Comprehensive Employment and Training Act real terms increased from about $42 billion in the dropped, and many governments allowed attri- fourth quarter of 1979 to $53 billion a year later, tion to reduce the number of employees. because of both an increase in merchandise ex- State and local government revenues grew ports and a decline in merchandise imports (chart about 9 percent over the four quarters of the 16). Net services and military transactions in real year, slightly faster than during 1979; revenues terms showed little change during the year. In excluding federal grants-in-aid increased about nominal terms, the net export surplus increased IOV2 percent, while federal grants rose only $27 billion during 1980. 43/ percent. The slowdown in federal funding The volume of nonagricultural merchandise 4 last year was in sharp contrast to the 25 percent exports expanded about 4 percent over 1980— average annual rise during the 1970s. The sec- the third year of historically high rates of tor's operating balance showed a small surplus growth—despite a slowdown in real economic for calendar year 1980, in marked contrast to the growth in the nation's major industrial trading partners. Most notable were increases in the ex- 15. State and local governments ports of machinery, aircraft, and industrial supplies. The persistently strong U.S. export per- Billions of dollars formance, as well as its wide distribution by region and type of export, suggests that the improved competitive position of U.S. exporters brought about by the 1977-78 depreciation of the dollar's exchange value has continued to contribute to the strengthening of the U.S. external po- Operating balance sition. The volume of agricultural exports den ! clined slightly during 1980 but still remained at a U historically high level. The U.S. embargo on i MIB n^M-f^ - uti grain shipments to the Soviet Union, announced 1974 1976 1978 1980 January 4, 1980, limited amounts shipped to that Department of Commerce data. The operating balance for 1980 is the country to 8 million metric tons (the maximum average of the first three quarters. allowed without further negotiation under the terms of the grain agreement with the U.S.S.R.); sizable surpluses recorded in 1977 and 1978. this amount was considerably less than the (The operating balance is the total balance ex- amount of sales that had been expected. Howcluding net changes in social insurance funds.) ever, as other major grain-exporting countries By year-end, however, the weakened fiscal po- shifted their shipments to the U.S.S.R., the sitions of many states and localities and the cur- United States picked up sales in nontraditional tailment of services appeared to have made vot- markets. In addition, grain demand was larger ers cautious in regard to tax-relief and spending- than expected in Eastern Europe, China, and limitation initiatives, in marked contrast to their Latin America. popularity in recent years. Such measures were The volume of imports of merchandise into the on the ballots in 15 states and numerous localities United States dropped sharply in response to the in November, but most were defeated. The no- slowdown in domestic activity. Petroleum imtable exception was in Massachusetts, where ports, which account for about 32 percent of the voters endorsed a sharp reduction in property value of total merchandise imports, declined taxes. about 27 percent in volume over the year, partly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Economy in 1980 11 16. U.S. foreign transactions sales and the falloff in homebuilding. Job losses in the transportation equipment and primary and Billions of 1972 dollars fabricated metals industries totaled 650,000 between June 1979 and July 1980; more than half of these layoffs occurred between April and July of 1980. In addition, more than 400,000 workers at contract construction sites lost jobs between January and July. The rebound in activity during the second half of 1980 led to recalls of workers, especially in the hard goods and building sectors. By year-end, manufacturing employment was up about lh mil- Department of Commerce data. lion from its July trough, but it was still about 3A million short of its 1979 peak. In the construction offsetting a 38 percent increase in prices. The sector, despite a gain of 175,000 jobs, employreduction in the volume of oil imports was larger ment in that sector by December remained well than would have been expected from the weak- below its January high. In general, private servness in U.S. economic activity alone; higher ice-producing industries were more resistant petroleum prices apparently induced substantial than the goods-producing sector to the effects of conservation effects. The volume of nonpetro- the short recession. Nevertheless, a dip in trade leum imports declined about 6 percent; most of employment in the spring helped hold the expanthe decline came in industrial supplies, particu- sion in service-producing jobs to slightly more larly steel, building materials, natural gas, and than 1 million in 1980, compared with almost 13A crude rubber. The volume of consumer goods million in the preceding year. imports held fairly steady throughout the year as Limited job opportunities in 1980, which haltdid imports of capital goods. Imports of automo- ed the steady climb in labor force participation biles from Japan and Europe increased moder- that had been evident in the preceding four ately during the year; the 10 percent increase in years, and the general downtrend of population value was about evenly split between price and growth resulted in a slower growth in the civilian volume rises. labor force. The labor force grew by about 1 million over the year compared with the average annual increase of 23/4 million during 1976-79 (chart THE LABOR MARKET 17). The participation rate for adult men re- The recession in 1980 brought an end to five years of employment expansion; between Febru- 17. Labor force, employment, and unemployment ary and July, the number of workers on nonfarm Change from previous year, millions of persons payrolls fell VU million. This severe but brief Employment contraction was followed by a substantial in- I ^ crease in employment during the second half of Labor force m the year; nonetheless, payroll employment at year-end was still slightly below its February O n. peak level. With the recession concentrated in manufacwmmmmm turing, the demand for factory labor, which had Percent begun to weaken in mid-1979, deteriorated significantly during the spring of 1980. The cumulative decline in factory jobs through July came to 1.3 w i i i i i million. The cutbacks were especially large at 1974 1976 1978 1980 durable goods industries because of weak auto Department of Commerce data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

12 Federal Reserve Bulletin • January 1981 mained essentially unchanged in 1980. The rate workers and new hires about matched overall for adult women also was relatively stable in con- additions to the labor force, and the unemploytrast to previous years, when increased partici- ment rate held around lxh percent. Through pation by this group was a major source of labor July the largest increase in unemployment ocforce growth. The number of women aged 20 and curred among adult men, reflecting the concenolder entering the labor force totaled less than tration of layoffs in blue-collar jobs. Indeed, by 900,000 in 1980, down from the almost IV2 mil- mid-1980 the jobless rate for men aged 25 and lion annual average during 1976-79. The number older reached 572 percent, almost as high as the of teenagers in the labor force fell in 1980 for the rate at the trough of the 1973-75 recession. The second consecutive year because of both a con- unemployment rate for adult women, which usutinued decline in their population and a drop in ally is significantly higher than that of their male the participation rate of teenagers. counterparts, rose much less; it reached 53A per- As labor demand slackened during the first half cent by mid-1980. In the latter half of the year, of the year, the unemployment rate climbed joblessness among workers previously on layoff sharply from just under 6 percent at the end of declined; however, unemployment among wom- 1979 to VI2 percent by mid-1980. With the en and white-collar workers continued to edge rebound in activity in the second half, recalls of up. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

13 Staff Studies The staffs of the Board of Governors of the Fed- In all cases the analyses and conclusions set eral Reserve System and of the Federal Reserve forth are those of the authors and do not neces- Banks undertake studies that cover a wide range sarily indicate concurrence by the Board of Govof economic and financial subjects. In some in- ernors, by the Federal Reserve Banks, or by the stances the Federal Reserve System finances members of their staffs. similar studies by members of the academic pro- Single copies of the full text of each of the fession. studies or papers summarized in the BULLETIN From time to time the results of studies that are available without charge. The list of Federal are of general interest to the professions and to Reserve Board publications at the back of each others are summarized—or they may be printed BULLETIN includes a separate section entitled in full—in this section of the FEDERAL RESERVE "Staff Studies" that lists the studies that are cur- BULLETIN. rently available. STUDY SUMMARY PERFORMANCE AND CHARACTERISTICS OF EDGE CORPORATIONS James V. Houpt—Staff, Board of Governors Prepared as a staff paper. Since its enactment in 1919, Section 25(a) of the fices (corporations and branches), representing a Federal Reserve Act has offered U.S. banks a 64 percent increase in the number previously auway to ease the effect of interstate banking re- thorized. strictions for the purpose of conducting inter- Against the background of this long-term national banking business. Using this provision, growth trend and the recent surge in interest, it is U.S. banks have established "Edge" corpora- useful to examine the operations of banking Edge tions in a number of U.S. financial centers out- corporations, the type of customers they attract, side their home banking state. At year-end 1979, and their activities, financial performance, and 38 banks operated 70 out-of-state banking Edges effects on local markets. This study reviews with aggregate domestic assets of $14 billion. these areas as well as the initial impact of recent These numbers represent a rise of almost 80 per- regulatory changes. It compares Edge activities cent in the number of such corporations and a and earnings to those of large commercial banks tripling of their assets since 1972. and looks at the extent to which Edges have pen- To encourage international trade by facilitating etrated local markets. Generally, Edges in Miami its financing, the Congress liberalized Section and Houston have had higher growth and profit- 25(a) as part of the International Banking Act of ability and perform more significant roles in 1978. This change, and the Federal Reserve their markets than do Edges in other cities. Nev- Board's June 1979 revision to its Regulation K, ertheless, New York remains the most important ignited substantial interest in these corporations. center for Edges because of its central position in In the 18 months through year-end 1980, the international finance. Board has authorized 42 new banking Edge of- The initial effects of the regulatory changes ap- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

14 Federal Reserve Bulletin • January 1981 pear to be largely favorable. The recent increase by making their communities more attractive as in Edge offices suggests that the opportunity to regional centers for international trade and fibranch domestically and to expand Edge lever- nance. This effect should continue to operate as aging has been viewed as enhancing the competi- more Edges are established outside New York. tive position of Edges, which was the intent of Although the capital ratios of Edges have dethe Congress. Moreover, any adverse effects are clined slightly as a result of the more permissive likely to be minimal. The data reviewed suggest regulation, they remain high by bank standards. that the expansion of Edge corporations has not The study also reviews the activities of investharmed the international business of the local ment Edges, the nature of their business, and the banks, but may in fact have helped these banks location of their foreign subsidiaries. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

15 Industrial Production Released for publication January 15 output of durable, nondurable, and energy materials. The sharp rise in durable materials mainly Industrial production increased an estimated 1.0 reflected increases in the output of equipment percent in December, reflecting sizable output parts and basic metals, the latter boosted by a gain in the major product and material groupings continued production rebound in the steel indusof the index, with the exception of motor vetry and a post-strike surge in copper. Output of hicles. The December rise followed upward renondurable materials expanded 1.0 percent, with vised increases of 1.6, 1.9, and 1.6 percent in the large increases in the textile, paper, and chemical preceding three months. areas. A large rise in production of energy mate- The index of industrial production for Decemrials, 0.9 percent, was due mainly to increased ber, at 150.7 percent of the 1967 average, was coal production and electric power generation. 7.3 percent above its low of July 1980 but still Seasonally adjusted, ratio scale, 1967 = 100 1.2 percent below a year earlier. A preliminary TOTAL INDEX - 160 MATERIALS OUTPUT estimate of the index for 1980 shows industrial production to have been 3.5 percent below out- PRODUCTS OUTPUT put in 1979. J I I I I 1 Production of consumer nondurable goods MATERIALS: rose strongly in December, due in part to sub- Nondurable stantial gains in the output of residential utilities and consumer fuels. However, output of consumer durable goods declined 1.3 percent, as a sharp reduction in auto production was only I I I 1 CONSUMER GOODS: partially offset by a moderate increase in output Durable /\/"' V of home goods. Autos were assembled in Decem- Nondurable ber at an annual rate of 6.3 million units, about 8 percent below the rate in November. Output of J I I L_ business equipment increased 0.9 percent, about 1969 70 = 100 Annual rate, millions of units 160 16 - MANUFACTURING: the same as in November and October. Produc- 12 — Nondurable^- 160 tion of construction supplies continued to ad- 10 — — —s' A \ 7 140 8 vance strongly, although more slowly than in Durable 120 6 preceding months. K i i i i 1 100 1980 Production of materials increased 1.6 percent Federal Reserve indexes, seasonally adjusted. Latest figures Decernin December, reflecting widespread gains in the ber. Auto sales and stocks include imports. 1967 == 100 Percentage change from preceding month PPPeeerrrccceeennntttaaagggeee ccchhhaaannngggeee GGGrrrooouuupppiiinnnggg 1980 1980 DDDeeeccc... 111999777999 tttooo Nov.p Dec.6 July Aug. Sept. Oct. Nov. Dec. DDDeeeccc... 111999888000 Total industrial production 149.2 150.7 -.8 1.0 1.6 1.9 1.6 1.0 -1.2 Products, total 148.7 149.6 .2 .7 1.0 1.2 1.1 .6 -.1 Final products 147.2 148.0 .1 .3 .8 1.3 1.0 .5 .5 Consumer goods 148.1 148.4 -.1 .5 1.1 1.6 1.0 .2 -.1 Durable 142.4 140.5 .1 .2 3.2 5.2 2.0 -1.3 -4.2 Nondurable 150.3 151.6 -.1 .6 .4 .3 .6 .9 1.5 Business equipment 173.4 174.9 .2 .1 .1 .8 .9 .9 .5 Intermediate products 154.0 155.4 .7 2.1 2.0 1.2 1.0 .9 -2.6 Construction supplies 143.1 144.4 .1 3.5 3.2 2.3 1.9 .9 -7.3 Materials 150.0 152.4 -2.5 1.5 2.7 2.8 2.5 1.6 -2.7 Digitized for FRASER p Preliminary. e Estimated. NOTE. Indexes are seasonally adjusted. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

17 Statement to Congress Statement by Paul A. Volcker, Chairman, Board ty during the year little anticipated in timing and of Governors of the Federal Reserve System, be- magnitude, the strong recurrent concerns that infore the Committee on Banking, Housing, and flation might accelerate sharply or rise to a new Urban Affairs, U.S. Senate, January 7, 1981. and higher plateau, and—related in large part to those economic developments—the strong short- I am happy, at the start of a new congressional term volatility in credit demands, interest rates, session and a new Congress, to discuss recent and some measures of the money supply. monetary and economic developments and to The downturn in business in the second quaroutline some of the key issues relating to mone- ter, while exceptionally sharp, was also extary policy for 1981 and beyond. In that con- ceptionally short. Overall growth since July or nection, I should also note that I reviewed the August, while less than that immediately followactions of the Federal Reserve during 1980 in ing most earlier recessions, has exceeded that greater detail in a recent statement before a sub- anticipated by virtually every business forecast committee of the House Banking Committee, available during the summer. Employment which I have made available to each member of growth resumed, but unemployment, while bethis committee.1 low peak levels, remained on a fairly high plateau As you well know, the Congress itself has of about llh percent. placed considerable emphasis in recent years on Some industries, such as automobiles and the formulation of our monetary objectives in housing, have fallen well short of a normal cyquantitative terms. Target ranges for 1981 for clical recovery and, in the case of housing at various monetary and credit aggregates were ten- least, pressures on credit markets are currently tatively set forth at midyear in accordance with being reflected in reduced activity. Some inthe procedures under the Full Employment and dustries and areas of the country—those charac- Balanced Growth Act of 1978 (Humphrey-Haw- terized by a strong economic growth trend, kins Act). Those targets are being reviewed cur- concentrating on newer technologies or benefitrently by the Federal Open Market Committee ing from strong energy investment—were little and our decisions will be reported to you next affected by the recession and remain relatively month. At that time, of course, they can be eval- buoyant. uated in the light of the overall economic pro- As business turned up, so did concern about grams of a new administration. One of the major renewed inflationary pressures. The underlying themes of my remarks this morning is the inter- inflation rate today appears at least as high, and relationship of the fiscal position and outlook of probably higher, than a year ago. In addition, the the federal government, monetary policy, and possibility of a renewed surge in energy and food conditions in the credit and capital markets. prices remains a particular source of concern. So far as 1980 is concerned, it now appears But the momentum of continuing inflationary that the level of economic output during the last forces throughout the economy is perhaps better quarter of the year was about the same as during reflected in a higher rate of increase in worker the final quarter of 1979. However, you are well compensation, which accounts for some 75 peraware of the sharp fluctuations in business activi- cent of national income. In judging monetary developments, we now have nearly complete (but still preliminary) data for the entire year. Measuring from the fourth- 1. "Recent Developments in Monetary Policy," FEDERAL RESERVE BULLETIN, vol. 66 (December 1980), pp. 943-52. quarter average of 1979 to the fourth-quarter av- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

18 Federal Reserve Bulletin • January 1981 erage of 1980, both M-l series will be close to the illustration of both the need for and the problems upper end of the growth ranges set at the begin- associated with restraint on monetary and credit ning of the year assuming, as is appropriate, that growth. We want to restore a solid base for rethose ranges are adjusted for current estimates of newed and prolonged economic expansion while actual experience with transfers into negotiable at the same time dealing with inflation—and order of withdrawal (NOW) and automatic trans- without controlling inflation the objective of susfer service (ATS) accounts.2 M-2, on the same tained growth seems bound to elude us. What quarterly basis, appears to have been V2 to 3U springs out clearly as the lesson from the events percent above the upper end of its range; M-3 of the past few months is the desirability—indeed was roughly at the upper end, and bank credit the compelling need—to combine the monetary was well within its range. Looking at available restraint required to deal with inflation with apdata for December alone, both M-l A and M-IB propriate and complementary fiscal and other appear to have been within the indicated ranges. policies. In my judgment, no single monetary measure Creation of money and credit has clearly fallen should be emphasized to the exclusion of others, well short of meeting all the demands that arise in nor should undue weight be placed on short-term an economy that is both expanding and inflating. changes or small deviations from targets, partic- As a result, money and capital markets have ularly when those deviations are not consistent come under heavy pressure; currently, interest from one measure to another. We know, not just rates, despite some appreciable declines in rein the United States but elsewhere, there can be cent weeks, are still near historical highs, placing a great deal of month-to-month or quarter-to- heavy burdens on credit-dependent sectors of quarter volatility, especially in the narrower M-l the economy. While economic growth in recent measures. That is particularly true when under- months has been greater than anticipated, there lying economic conditions are rapidly changing. is understandable concern that the strong inter- These are technical qualifications. The basic est rate pressures may result in little further point remains that, judged broadly over reason- growth or actual declines in business activity in able periods of time, these monetary data are the months ahead. And in a longer perspective, meaningful. Most fundamentally, they are impor- growth has been very limited for two years, tant because persistent control of the money sup- unemployment is high, and important industries ply must be a crucial part of any anti-inflation have substantial excess capacity. effort. The ranges set forth have also become a Yet, in light of the need to encourage a remeans of communication about our objectives, turn to price stability, it could hardly be argued and the statistical results are a part of the process that the growth of money and credit has been unof accountability. They are a particularly useful duly constricted, whether one looks at the results focus for policy when the inflationary process it- for the year as a whole or during the months of self distorts the economic significance of interest business expansion. Indeed, some have argued rates and other economic data. the reverse. As I already have noted, monetary Looked at from the vantage point of monetary growth for the year has not fallen short of the targeting, recent developments provide a prime intentions reported to (and generally supported by) this committee in the past; most measures have been around the upper end of the estab- 2. The difference in growth in 1980 between M-IB and lished ranges. M-l A was originally assumed to be at V2 percent, and the What is clear in circumstances like these, stated growth ranges reflected that assumption. Actual experience shows a difference of about 2 percent. Some of that when efforts to restrain monetary growth congreater difference reflected shifts into ATS and NOW ac- front strong private credit demands, is that incounts included in M-IB from demand balances, depressing evitably large new borrowings by the federal M-l A relative to earlier assumptions. There were also shifts into NOW and ATS accounts from savings accounts or other government, whether to finance budgetary defisources of funds, raising M-IB relative to earlier assumptions. cits or off-budget programs, strongly aggravate Without these adjustments, M-IB in the fourth quarter was pressures on interest rates. As things stand, the about 3U percent above the upper end of the target range; M-l A was somewhat above the midpoint of its target range. deficit for the current fiscal year has been esti- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement to Congress 19 mated in a range of $50 billion to $60 billion by real growth. But monetary restraint is at best a informed observers, and the needs of the Federal rough-edged tool; the restraint falls on those fi- Financing Bank could add more than $20 billion. nancing inflationary excesses and potentially The demands by the federal government—the productive projects alike. The hard fact is that nation's prime borrower, but itself insensitive to in practice the purposes are typically indisinterest rates—will be met. The question is how tinguishable. Homeownership is a cherished many other potential borrowers—many with American dream, and buyers and sellers alike more productive uses of money—are shouldered would like to see the process lubricated by low aside by market pressures. mortgage rates. But the seller is also interested in From that point of view, the restraint on mon- holding on to essentially inflationary gains, and ey and credit creation might appear to jeopardize the buyer is often motivated by a desire to capiprospects for business expansion and the private talize on future inflationary appreciation. Many job creation that would otherwise be desirable. businessmen would like to expand plant or build But the creation of more money and credit than inventory at lower interest rates. But these borconsistent with dealing with inflation would pro- rowings also finance higher wages and other vide no escape from that apparent policy di- costs. The consumer is tempted to buy now and lemma. pay later and to maintain "investments" in pre- For one thing, interest rates and bond prices sumed inflation hedges. Amidst all these mixed can be heavily influenced by expectational fac- motives, it seems beyond human ingenuity to tors. To the extent that economic trends and distinguish between "legitimate" and "illegitipublic policies seem to be consistent with more mate"—"speculative" and "nonspeculative" — inflation rather than less, and to the extent that uses of credit in any systematic, sustainable way government financing is expected to remain high, by a system of credit allocation. savings will be impaired or directed to inflation Looked at another way, restraint on money hedges, borrowing will be further stimulated, and and credit growth places broad limits on the interest rate pressures will remain strong, despite growth of nominal gross national product. Those new money creation. Indeed, if money creation limits are not precise. For periods of months or were to validate the inflationary expectations, quarters, the relationship between changes in the present policy problem would only be aggra- money or credit and the GNP can fluctuate over vated, even in the short run. a considerable margin. At high levels of interest Far from finding their problems solved by rates, the market is particularly ingenious at demoney creation, builders, thrift institutions, and veloping new forms of "money" and econosmall businessmen that are particularly vulner- mizing on the use of credit. We currently are in a able to a continuing escalation of interest rates period of rapid institutional change that will afwould find their prospects worsening over time. fect the relationships among the aggregates and Put simply, I do not believe monetary policy affect their relation to GNP. But even with these can reasonably take the risk of encouraging and qualifications, the basic point remains: As long as validating the inflationary process by simply ac- inflationary forces are so strong and are expected commodating creation of money and credit to the to remain strong, money and credit targets in the amounts demanded by an inflating economy. To area in which we are operating are likely to imply be sure, strong credit demands pressing against a strong pressures on credit markets whenever limited supply can contribute to exceptionally business is strongly expanding, calling into queshigh interest rates for a time. But consider the tion the sustainability of the advance. alternative. If the supply of money is not re- Given enough time, sluggish business performstrained, the net result would surely be to acqui- ance should itself tend to restrain inflation. But esce in an inflationary process that over time our objective as a nation must be to speed the would result in still higher interest rates, pro- disinflationary process. That will be a legitimate longed indefinitely. expectation only if we can succeed in changing The ultimate purpose of monetary restraint is, attitudes and policies across a broad range of of course, to squeeze out inflation rather than public and private behavior. Only then can we Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

20 Federal Reserve Bulletin • January 1981 confidently anticipate that a relaxation of pres- This is not the time or place for a detailed dissures on financial markets could be sustained cussion of the budgetary problem. I would simand that the stage will be set for full recovery and ply emphasize that the so-called "uncontrollaexpansion. bles" that so often frustrate short-term budget The task is both difficult and painful because control can in fact be controlled over a relevant patterns of inflationary behavior are by now so time frame. deeply ingrained in individual attitudes that the I do not underestimate the difficulties. Experiprocess feeds on itself. That will change only ence amply illustrates—and private financial obwhen there is a visible, sustained commitment to servers are conscious of the fact—that official policies that will in fact reduce the strong upward projections of government spending extending price thrust—and permit market processes to pe- over several years ahead have almost invariably nalize those speculating on inflation—even when fallen far short of actual results. Part of the reathose policies, in the short run, entail risks and son is that inflation itself has exceeded exstrains. Credibility in policy commitment will pectations. But the hard fact is that old programs have to be earned by performance maintained usually turn out to be more costly than anticithrough thick and thin. That is one reason we in pated. New programs are added. And that insidithe Federal Reserve take our own monetary and ous pattern cannot be changed unless the Concredit objectives so seriously—in setting realistic gress itself takes on the burden of modifying the targets in the first place, in explaining their impli- programs and laws that generate the bulk of the cations and our methods for approaching them, spending. and in substantially meeting them over reason- Related in some respects to the budgetary able periods of time. But monetary policy, indis problem, and in some ways even more difficult to pensable as it is, is only one instrument, and as I control, are the myriad government programs have emphasized, relying entirely on that in- that in one way or another tend to build in higher strument focuses the strains on financial markets costs in the private economy or insulate firms or and those most dependent on them. workers from market pressures. These programs The fiscal posture of the federal government is are justified in major part by the national conthe most important of the other instruments that sensus that, in our market-oriented system, can be brought to bear in changing both ex- those subject to special risks and dislocations not pectations and current reality. That posture has of their own making are entitled to an economic several dimensions. "safety net." Other programs reflect our real The point has rightly been emphasized that the concerns about the environment, health, and level of federal taxation itself impairs incentives safety. Those fundamental objectives are not and adds to costs, and that taxes are not only likely to be—nor should they be—changed. But high but rising. The relevant question is not we urgently need to find ways to make sure that whether tax reduction is desirable in itself; it ob- an appropriate balance is maintained—that the viously is if we want a healthy private economy. protections do not exceed what is necessary and The real debate is how that desirable—even nec- justified, and they do not unduly impair inessary—objective can be achieved consistent centives to produce efficiently and control costs. with fighting inflation and reducing the pressures All of this implies an enormous effort by a on financial markets—pressures that could other- Congress and an administration in the months wise frustrate the beneficial effects. The concern ahead—and public understanding of what is at is not limited to reducing the immediate deficit, stake. But the result would, in my judgment, important as that is as a source of current interest repay that effort many times over. As the mesrate pressures. Even more significant in many sage is sent and heard that in a realistic time ways is the forward planning necessary to assure frame we can indeed succeed in achieving the exthat, as the economy returns to more satisfactory penditure control that makes the needed tax reoperating levels, the financial position of the gov- lief prudently possible, the private sector should ernment indeed returns to balance, making way indeed respond vigorously with job creation and for the private investment we need. greater productivity. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement to Congress 21 I am conscious in some of my own contacts nation, and reduced productivity are inexorably and correspondence—as you must be in yours— related, and that left alone inflation will get of a rather plaintive note emerging. In principle, worse, not better. no one likes inflation. But, the implicit argument The fact is we now have one of those rare opgoes, if strong financial pressures, budget cuts, portunities to marshall a national consensus for and regulatory changes are a necessary part of those measures necessary to restore the base for the process of restoring price stability, then per- more vigorous growth and prosperity. Of course, haps it is easier to live with inflation after all. we can always let the opportunity pass to anoth- That is pure delusion. Experience here and er day, but then we had better recognize that the abroad indicates unambiguously that we have nation would soon face still more difficult dinot been successful in living with inflation—that lemmas. Such postponement cannot be the rein an economy like ours persistent inflation, stag- sponsible course. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

23 Announcements FEES FOR FEDERAL RESERVE SERVICES 7. Noncash collection (the receipt, collection, and crediting of accounts of depository institu- The Federal Reserve Board on December 31, tions in connection with municipal and corporate 1980, made public schedules of fees for certain securities). services to depository institutions, implementa- 8. The cost to the Federal Reserve of float (the tion dates for pricing and access to Federal Re- interest on items—generally, the dollar value of serve services, and the principles underlying the checks—credited by the Federal Reserve to one Federal Reserve's schedule of charges. depository institution before being collected The Board also took the following actions: from another). 1. Adopted procedures for a depository insti- These requirements of the Monetary Control tution to follow if it maintains low or zero re- Act follow other provisions of the act that subquired reserve balances with the Federal Re- ject all depository institutions offering transacserve and it wishes to obtain services directly tion accounts and nonpersonal time accounts to from the Federal Reserve. uniform Federal Reserve requirements and that 2. Provided for immediate access by all non- require the Federal Reserve to provide System member depository institutions to Federal Re- services on the same terms to all depository instiserve regional check processing centers (RCPCs) tutions. for the collection of local checks under arrange- The Board said that the proposals are meant to ments available to nonmember commercial bank conform to the following objectives made clear in participants in RCPCs. the legislative history of the act: 3. Postponed for a short period the pricing of 1. The Congress regarded pricing for Federal all check collection services and access by non- Reserve services as a means of encouraging commember depository institutions to Federal Re- petition and efficiency in the provision of such serve check collection facilities other than services. RCPCs. 2. The Congress was concerned with the The Board's schedules for pricing its services amount of revenue that would be lost to the and the principles and price determinants under- Treasury under the act resulting from the lower lying the charges were adopted to implement reserve requirements the act establishes. Pricing provisions of the Monetary Control Act of 1980. for Federal Reserve services is expected in part Under the act, the Board is required to publish a to offset that loss. set of pricing principles and a proposed schedule At the same time, the Congress charged the of Federal Reserve fees, dealing with the follow- Board with adopting pricing principles that "give ing services: due regard to competitive factors and the provi- 1. Transportation of currency and coin and sion of an adequate level of such services nationcoin wrapping. wide." 2. Check clearing and collection. 3. Wire transfer of funds. 4. The use of Federal Reserve automated PROPOSED ACTIONS clearinghouse facilities. 5. Net settlement of debits and credits af- The Federal Reserve Board has invited comment fecting accounts held by the Federal Reserve. on proposals to amend its Regulation D (Reserve 6. Book entry, safekeeping, and other ser- Requirements of Depository Institutions) and vices connected with the purchase or sale of Regulation Q (Interest on Deposits) to permit the government securities. establishment in the United States of inter- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

24 Federal Reserve Bulletin • January 1981 national banking facilities (IBFs). The Board re- annually with members and staff of the Board quested comment by February 13, 1981. to advise on implementation of the Monetary Control Act of 1980 and to confer on other economic and financial institution matters. EARNINGS OF FEDERAL RESERVE BANKS Under the Monetary Control Act of 1980, thrift institutions, for the first time, are required to re- Preliminary figures indicate that gross earnings port deposits and to maintain reserves with the of the Federal Reserve Banks amounted to Federal Reserve on certain transactions ac- $12,802 million during 1980, a 24.2 percent in- counts and nonpersonal time deposits. crease from a year earlier. Current expenses for The following members were named: the 12 Reserve Banks and their branches totaled Mary A. Grigsby, President of Houston First $791 million—14.1 percent above the previous American Savings Association, Houston, Texas; year. Edwin B. Brooks, Jr., President of Security Fed- Assessment for expenditures of the Board of eral Savings and Loan Association, Richmond, Governors amounted to $62 million. There was Virginia; Walter H. Kropp, President of Franklin a net deduction in the profit and loss account of Federal Savings and Loan Association, Colum- $115 million, resulting primarily from a net loss bus, Ohio; James F. Montgomery, President of of $199 million on sales of U.S. government Great Western Savings and Loan Association, securities and a net profit of $96 million on for- Beverly Hills, California; Herbert M. Sandler, eign exchange operations. Chairman of the Board of World Savings and Net earnings before payments to the Treasury Loan Association, Oakland, California; Raleigh totaled $11,834 million. Payments to the Treasury W. Greene, Chairman of the Board and President as interest on Federal Reserve notes amounted of Florida Federal Savings and Loan Associato $11,707 million; statutory dividends to mem- tion, St. Petersburg, Florida; Robert W. Garver, ber banks, $70 million; and additions to Reserve President of Charlestown Savings Bank, Boston, Bank surplus, $57 million. Massachusetts; Harry W. Albright, President of Under the policy adopted by the Board of Dime Savings Bank, New York, New York; and Governors at the end of 1964, all net earnings Vernon J. Dwyer, General Manager of the Penafter the statutory dividend to member banks tagon Federal Credit Union. and additions to surplus to bring it to the level of paid-in capital were paid to the U.S. Treasury as interest on Federal Reserve notes. CONSUMER ADVISORY COUNCIL Compared with 1979, gross earnings were up $2,492 million, due mainly to an increase of New Members $2,407 million on U.S. government securities. Earnings of the Federal Reserve System are The Federal Reserve Board has named eight new derived primarily from interest accrued on U.S. members to its Consumer Advisory Council and government securities that the Federal Reserve designated a new chairman and vice chairman to has acquired through open market operations, replace members whose terms have expired. one of the tools of monetary policy. Ralph Rohner, a law professor at the Catholic University Law School, Washington, D.C., was designated Chairman. He succeeds William D. THRIFT INSTITUTIONS ADVISORY GROUP Warren, Dean of the U.C.L.A. School of Law, Los Angeles, California. The Federal Reserve Board announced on De- Charlotte H. Scott, professor of business adcember 19, 1980, creation of a Thrift Institutions ministration and commerce at the University of Advisory Group made up of nine representatives Virginia, Charlottesville, Virginia, will succeed from thrift institutions. Marcia A. Hakala as Vice Chairman. Mrs. Ha- The panel includes six savings and loan offi- kala is Assistant to the Vice Chancellor of the cials, two mutual savings bankers, and one credit University of Nebraska Medical Center, Omaha, union representative. It will meet four times Nebraska. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 25 The Council advises the Board in the field of and president of the Society of Certified Conconsumer credit protection laws. Its 30 members sumer Credit Executives. come from all parts of the country and include a William J. O'Connor, Jr., Buffalo, New York, broad representation of consumer and creditor partner in a Buffalo law firm. He is a practicing interests. The Council generally meets four times lawyer who has specialized in consumer credit, a year in sessions open to the public. commercial law, and financial service areas for The new members named for three-year terms many years. He takes a frequent role in the activare as follows: ities of the New York State Bar and the American Bar Association and in continuing legal edu- Arthur F. Bouton, Little Rock, Arkansas, cation programs. president-elect of the American Association of Nancy Z. Spillman, Los Angeles, California, Retired Persons. He has had a 25-year career in professor of economics at Los Angeles Trade banking and has been active in civic and church Technical College and the director of the Center groups. He was vice president of the Arkansas for Economic Education at the college. She edits Gerontological Society and is a member of the a national consumer education newsletter and State Inter-Agency Committee on Aging. has been active in the consumer field as a teach- Joseph N. Cugini, Westerly, Rhode Island, er, writer, and lecturer. chairman-elect of the Credit Union National Association, a trade group that represents 22,000 credit unions nationwide. He also is president Meeting and general manager of the Westerly Community Credit Union and a director of the Rhode Island The Federal Reserve Board has announced that Credit Union League. He is a member of the its Consumer Advisory Council met on January board of directors of the Rhode Island Share and 14 and 15, 1981. Deposit Indemnity Corporation. Susan Pierson De Witt, Springfield, Illinois, Assistant Attorney General and Chief of the Q UARTERL Y REPORTING Consumer Protection Division for the State of Il- B Y SMALL DEPOSITOR Y INSTITUTIONS linois. Her responsibilities include overseeing the complaint handling mechanisms of the divi- The Federal Reserve Board has taken two acsion and determining the lawsuits to be filed by tions to facilitate compliance by small depository the attorney general in the consumer fraud area institutions that are permitted to report and for the 96 down-state counties. maintain required reserves on a quarterly basis.1 Luther R. Gatling, New York, New York, The actions give nonmember institutions a director of the Budget and Credit Counseling once-only, eight-week lag between the end of Service in New York City, which counsels per- their first reserve computation period (January sons with financial problems. Formerly with the 15-21) and the date on which reserves must be New York Urban Coalition and active as a com- maintained (March 19). munity advocate, he is a lecturer and author This lag will alter the staggered reserve comon consumer credit matters. putation and maintenance schedule that was es- George S. Irvin, Denver, Colorado, operator tablished as part of the quarterly reporting proceof an automobile dealer franchise in Denver since 1950. He is president of the National Auto- 1 Depositories with total deposits between $2 million and mobile Dealers Association and has held a num- $15 million may report their deposits and maintain required ber of offices in the NADA and in state and local reserves quarterly rather than weekly, beginning January 15, automobile dealers associations. 1981. The simplified procedure affects some 10,000 commercial banks, savings and loan institutions, mutual savings Stan L. Mularz, Chicago, Illinois, president of banks, and credit unions. The Monetary Control Act of 1980 Trans Union Credit Information Co. and director requires all depository institutions to maintain federal reof the Associated Credit Bureaus and the Inter- serves on their transaction and nonpersonal time accounts. (Reserve requirements for depository institutions with total national Consumer Credit Association. He also deposits under $2 million as of December 31, 1979, have been is a director of the Merchants Research Council deferred until May 1981.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

26 Federal Reserve Bulletin • January 1981 dure. Under the procedure, quarterly reporters operating day will increase their operating are divided into three groups that report and expenses. maintain reserves a month apart. The February 2. Optional 4:30 p.m. to 6 p.m. Eastern time deposit report will be eliminated, and staggered intradistrict transfer period. This provides Disreporting will begin in March instead of Febru- tricts the option of using up to 90 minutes for ary. intradistrict, third-party transfers to alleviate the Also, in order to provide additional flexibility potential problems of having the same deadline for smaller depository institutions, beginning for inter- and intradistrict transfers. It also miniwith the first (March) staggered-deposit report, mizes (30 minutes) the amount of intradistrict the Board's new procedure for quarterly re- time West Coast banks will lose under the new porters provides a lag of 22 days—instead of uniform operating hour. the 8-day lag for weekly reporters—between the 3. Uniform 4:30 p.m. to 6:30 p.m. Eastern end of the reserve computation period and the time settlement period. A settlement period that start of the reserve maintenance period. This extends to at least 6:30 p.m. is needed to provide procedure applies to both member and non- a minimum (30 minutes) settlement period after member institutions. It will continue in effect for third-party activity closes off. subsequent quarterly reports. 4. 5 p.m. Eastern time for net settlement arrangements. Organizations will begin their settlement transactions with a Reserve Bank by 5 SYSTEM s WIRE NETWORK.- p.m. Eastern time. This deadline accommodates REVISED SCHEDULE banks that participate in a net settlement arrangement but do not want to participate in the The Federal Reserve System has adopted a re- full settlement period. It also provides banks anvised schedule of operating hours for the transfer other 90 minutes to adjust their reserve position. and settlement of funds dispatched over the System's wire network. This change was made to accommodate in- AMENDMENT TO REGULATION E creasing wire transfer traffic and to establish uniform deadlines, so as to ensure that all financial The Federal Reserve Board has adopted an institutions have equal access to the System's amendment to its Regulation E (Electronic Fund wire network. Transfers) to permit creditors to debit their cus- After consideration of comment received tomers accounts automatically for repayment of on an earlier proposal, the System has adopted preauthorized overdraft credit, effective January the following schedule to be implemented 15, 1981. May 1, 1981: The Board acted after consideration of comment received on a proposal made in October. 1. Uniform 4:30 p.m. Eastern time inter- The proposed amendment was adopted without district deadline. The extension of the inter- any material change. district window is needed to support future wire The EFT Act prohibits creditors from making transfer growth and to provide banks with a time automatic repayment of loans a condition of schedule that better accommodates their busi- extending credit. The Board exempted overdraft ness day. The proposed interdistrict deadline has credit plans from this prohibition in order to been shortened from the original proposal by 30 facilitate the continued extension of overdraft minutes to accommodate the concerns of banks checking protection to consumers by permitting in the Eastern time zone that the new, longer the automatic collection of repayments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

27 Record of Policy Actions of the Federal Open Market Committee Meeting Held changed little in October, according on November 18, 1980 to the advance report, following a large increase over the four preced- Domestic Policy Directive ing months. Sales of new automo- The information reviewed at this biles were at an annual rate of 9.0 meeting suggested that real GNP, million units in October, up from 8.8 which had increased at an annual million in September. rate of 1 percent in the third quarter Private housing starts rose further following a sharp second-quarter in September to an annual rate of contraction, was expanding further more than 1.5 million units, reflectin the current quarter. Average ing in part a bulge in starts of federalprices, as measured by the fixed- ly subsidized units at the end of the weight price index for gross domes- fiscal year. Sales of new houses detic business product, appeared to be clined in September for the second continuing to rise at a rapid pace, successive month, although sales of close to the annual rate of IOV2 per- existing houses rose further. Fragcent experienced in the second and mentary data for October suggested third quarters. that housing activity was weakening. The index of industrial production Producer prices of finished goods rose an estimated 1.6 percent in Oc- rose substantially in October after a tober, following substantial gains in small decline in September. Coneach of the two preceding months. sumer prices rose at an accelerated Over the three-month period, indus- pace in September, reflecting not ontrial production increased 4 percent, ly continued sharp advances in food but the index in October was still prices but increases in most other about 4 percent below its level in the categories as well. The index of avfirst quarter of 1980. Capacity utili- erage hourly earnings of private nonzation in manufacturing increased farm production workers rose at an about 1 percentage point further in annual rate of 9 percent over the first October to 77.6 percent, but re- ten months of the year, compared mained about 6 percentage points with an increase of about 8V4 perbelow the first-quarter rate. cent during 1979. Nonfarm payroll employment ex- In foreign exchange markets the panded substantially in October for trade-weighted value of the dollar the third consecutive month, and the against major foreign currencies had unemployment rate remained at risen about 3 percent over the interabout Vh percent. Employment val since the Committee's meeting in gains were widespread, but were es- mid-October. In September the U.S. pecially strong in durable goods foreign trade deficit was essentially manufacturing and construction—in- unchanged from the August level; in dustries in which earlier job losses the third quarter the deficit was had been sizable—and the average sharply below the average of the first workweek in manufacturing length- two quarters and was the smallest ened slightly. since the second quarter of 1976. The dollar value of retail sales The volume and value of oil imports Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

28 Federal Reserve Bulletin • January 1981 fell sharply in the third quarter, which were effective on Monday, while the value of exports—espe- November 17, were taken in view of cially agricultural products—in- the prevailing level of short-term creased. market interest rates and the recent At its meeting on October 21, the rapid growth in the monetary aggre- Committee had decided that open gates and bank credit. On November market operations in the period until 17, the day before this meeting, fedthis meeting should be directed to- eral funds traded at an average rate ward expansion of reserve aggre- of about I6V4 percent. gates consistent with the growth of Growth in M-l A and M-IB moder- M-l A, M-IB, and M-2 over the peri- ated further in October, but the anod from September to December at nual rates of about 9 and 11 percent annual rates of about 2XH percent, 5 respectively were substantially above percent, and llU percent respective- those consistent with the Commitly, or somewhat less, provided that tee's objectives for the period from in the period until the next regular September to December. Expansion meeting the weekly average federal in M-2 accelerated slightly in Octofunds rate remained within a range ber, to an annual rate of about 9 perof 9 to 15 percent. Early in the inter- cent, reflecting a pickup in growth of meeting period, incoming data in- nontransaction accounts included in dicated that the monetary aggre- that aggregate; growth in M-3 also gates, particularly M-l A and M-IB, accelerated somewhat. From the were growing much faster than both fourth quarter of 1979 through Octothe rates projected at the time of the ber, growth of M-l A was in the upmeeting and the rates consistent per part of the range set by the Comwith the Committee's objectives for mittee for the year ending in the the September-to-December period. fourth quarter of 1980; M-IB and Required reserves and member bank M-2 grew at rates somewhat above demands for reserves expanded sub- the upper ends of their respective stantially in relation to the con- ranges, while M-3 grew at a rate strained supply of reserves being near the upper end of its range. made available through open market Expansion in total credit outoperations. Consequently, member standing at U.S. commercial banks bank borrowings increased sharply, was relatively rapid in October, alto an average of $1.7 billion in the though somewhat below the pace in three statement weeks ending on August and September. Bank hold- November 12 from an average of ings of securities grew at about the $1.3 billion in the five weeks be- same pace in October as in the pretween the September and October vious month, while growth in total meetings. These developments were loans moderated somewhat despite associated with additional upward continuing strength in business loans. pressures on the federal funds rate Outstanding commercial paper of and other short-term interest rates; nonfinancial corporations fell by a in mid-November the funds rate av- record amount in October, extenderaged Wh percent, compared with ing the decline that began in August. about 12V2 percent in the days just Short-term market interest rates before the Committee's meeting on rose l3/4 to 3 percentage points fur- October 21. ther over the intermeeting period, After the markets closed on No- while long-term rates increased vember 14, the Board of Governors about 3A percentage point. Over the announced an increase in Federal interval, the prime rate charged by Reserve discount rates from 11 to 12 commercial banks on short-term percent and a surcharge of 2 percent- business loans was raised from 14 to age points on frequent borrowing I6V4 percent. In home mortgage of large institutions. The actions, markets, average rates on new com- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 29 mitments rose about 40 basis points taxes effective at the beginning of further over the intermeeting period, the new year, and by the prospects and available information suggested for legislation next year to reduce a slowing in new commitment activi- federal taxes. ty at nonbank thrift institutions most At its meeting in July, the Comrecently. mittee had reaffirmed the ranges for The staff projections presented at monetary growth in 1980 that it had this meeting suggested that growth established in February. Thus, the in real GNP would be a little greater Committee had agreed that from the in the fourth quarter as a whole than fourth quarter of 1979 to the fourth in the third. However, the recovery quarter of 1980, average rates of in activity appeared to be in the growth in the monetary aggregates process of weakening, and the pro- within the following ranges appeared jections suggested little growth in to be consistent with broad economreal GNP and some increase in the ic aims: M-1A, 3V2 to 6 percent; unemployment rate over the next M-1B, 4 to 6V2 percent; M-2, 6 to 9 few quarters. The rise in the fixed- percent; and M-3, 6V2 to 9V2 percent. weight price index for gross domes- The associated range for the rate of tic business product was projected growth in commercial bank credit to be only a little less rapid over the was 6 to 9 percent. For the period year ahead than during the past year. from the fourth quarter of 1980 to the In the Committee discussion of fourth quarter of 1981, the Comthe economic situation and its impli- mittee looked toward a reduction in cations for policy, the members con- the ranges for growth of M-1A, sidered the possibility that the great- M-1B, and M-2 on the order of V2 er-than-anticipated strength of the percentage point from the ranges recovery in recent months would be adopted for 1980, abstracting from followed in early 1981 by a decline in institutional influences affecting the real GNP. It was recognized that in behavior of the aggregates. It was the near term the recent rise in inter- understood that the longer-run est rates would be an important ranges would be reconsidered as force restraining activity in some conditions warranted. sectors. At the same time, the higher In contemplating policy for the peinterest rates resulted in part from riod immediately ahead, the Comthe continuing rapid pace of infla- mittee noted that growth of the nartion, which remained a major source rower monetary aggregates in of concern and of current and pro- October had substantially exceeded spective instability. The observation the rates consistent with the objecwas made that, assuming monetary tives for growth over the period from expansion in line with the Com- September to December adopted at mittee's longer-run objectives, the the meeting on October 21. If those progress of recovery in the months objectives were to be realized, M-1A ahead was likely to be limited unless would have to decline slightly over inflation abated. It was also noted, the final two months of the year and however, that the rise in prices had growth of M-1B would have to be not slowed and that once again the very slow. economy might be subjected to According to a staff analysis, the shocks from substantial increases in demand for money had been quite prices of both energy and foods, and strong in recent months because reperhaps from a reduction in supplies covery in economic activity and in of energy as well. The outlook was nominal GNP had been much larger clouded, moreover, by unusual un- than anticipated. Growth of transaccertainty regarding prospective fed- tion balances was projected to slow eral outlays, especially for national significantly over the remainder of defense, by the increases in federal the year, in part because of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

30 Federal Reserve Bulletin • January 1981 lagged effect on the demand for mon- templated might lead promptly to ey of the sharp rise in interest rates further increases in interest rates, over recent months and in part be- which were probably already concause of the apparent weakening of straining the business recovery and the recovery in activity. slowing monetary growth. Sub- In the Committee's discussion of sequent declines in rates might be policy for the period immediately unduly large, and if monetary ahead, the members generally fa- growth accelerated again in lagged vored pursuit of a sharp reduction in response, inflationary expectations monetary expansion from the rapid could well be heightened. At the pace of recent months. Such a slow- same time, an aggressive response to ing might already be developing for any temporary slackening in the dethe reasons given in the staff analy- mand for money that developed in sis, but it was emphasized that un- the period just ahead appeared incertainties were great concerning the appropriate, particularly in the light projection of a weakening in the of the excessive monetary growth of pace of the business recovery and al- recent months. In either case, the reso about the impact of nominal GNP sult might be undesirable instability and current levels of interest rates in both interest rates and monetary on monetary growth. growth over time, which could gen- In the circumstances, most mem- erate uncertainty about the basic bers favored reaffirming essentially thrust of Federal Reserve policy. the objectives for monetary growth Reflecting these concerns, some over the period from September to members suggested setting the upper December that had been adopted at limit of the intermeeting range for the meeting in mid-October, with the the federal funds rate relatively close same proviso that somewhat less to the average rate in the latest stategrowth would be acceptable if it ment week, while others suggested emerged. A number of members pre- setting a lower limit not much below ferred adoption of somewhat higher the latest week's average. growth rates over the near term, At the conclusion of the diswith a view to scaling down mone- cussion, the Committee decided to tary growth over a slightly longer pe- specify essentially the same moneriod than the six weeks remaining tary growth rates for the period from before the end of the year, but they September to December that had also were willing to accept slower been adopted at the meeting in Octogrowth if it emerged. In addition, ber, with a range for the federal some sentiment was expressed for funds rate that was somewhat narspecification of somewhat lower rower and was centered on about the rates of monetary growth. average rate in the most recent state- While favoring sharply reduced ment week. Thus, the Committee growth of the monetary aggregates agreed that open market operations in the period immediately ahead, a in the period until the next meeting number of members expressed con- should be directed toward expansion cern about inadvertently contrib- of reserve aggregates consistent with uting to the volatility of interest growth of M-l A, M-IB, and M-2 rates, because of the implications of over the September-to-December such volatility for economic activity, period at annual rates of about Vh for inflationary psychology, and for percent, 5 percent, and VU percent the functioning of financial markets. respectively, or somewhat less, pro- Specifically, a substantial reduction vided that in the period before the in the provision of nonborrowed re- next regular meeting the weekly avserves or other measures in a highly erage federal funds rate remained aggressive pursuit of the short-run within a range of 13 to 17 percent. monetary growth rates being con- While some shortfall from the speci- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 31 fied rates of monetary growth would have risen sharply in recent weeks; averbe accepted, it was also understood age rates on new home mortgage commitments have continued upward. On that operations would not be di- November 14 the Board of Governors rected toward placing substantial announced an increase in Federal Readditional pressures on bank re- serve discount rates from 11 to 12 perserve positions unless growth of the cent and a surcharge of 2 percentage points on frequent borrowing of large monetary aggregates and the associmember banks from Federal Reserve ated demands for reserves proved to Banks. be significantly greater than antici- The Federal Open Market Committee pated. If it appeared during the peri- seeks to foster monetary and financial od before the next regular meeting conditions that will help to reduce inflation, encourage economic recovery, and that the constraint on the federal contribute to a sustainable pattern of infunds rate was inconsistent with the ternational transactions. At its meeting objective for the expansion of re- in July, the Committee agreed that these serves, the Manager for Domestic objectives would be furthered by growth of M-1A, M-1B, M-2, and M-3 from the Operations was promptly to notify fourth quarter of 1979 to the fourth quarthe Chairman, who would then deter of 1980 within ranges of Vh to 6 percide whether the situation called for cent, 4 to 6V2 percent, 6 to 9 percent, and supplementary instructions from the 6V2 to 9V2 percent respectively. The as- Committee. sociated range for bank credit was 6 to 9 percent. For the period from the fourth The following domestic policy di- quarter of 1980 to the fourth quarter of rective was issued to the Federal Re- 1981, the Committee looked toward a reserve Bank of New York: duction in the ranges for growth of M-1A, M-1B, and M-2 on the order of V2 percentage point from the ranges adopted for 1980, abstracting from insti- The information reviewed at this tutional influences affecting the behavior meeting suggests that real GNP is recovof the aggregates. These ranges will be ering further in the fourth quarter from reconsidered as conditions warrant. the sharp contraction in the second quarter, while prices on the average continue In the short run, the Committee seeks to rise rapidly. In October industrial pro- behavior of reserve aggregates consistduction and nonfarm payroll employ- ent with growth of M-1A, M-1B, and ment expanded substantially for the third M-2 over the period from September to consecutive month, and the unemploy- December at annual rates of about 2lh ment rate remained around ll12 percent. percent, 5 percent, and VU percent re- The value of retail sales changed little, spectively, or somewhat less, provided following four months of recovery. The that in the period before the next regurise in the index of average hourly earn- lar meeting the weekly average federal ings over the first ten months of 1980 was funds rate remains within a range of 13 to somewhat more rapid than in 1979. 17 percent. The weighted average value of the dol- If it appears during the period before lar in exchange markets on balance has the next meeting that the constraint on risen further over the past month. The the federal funds rate is inconsistent with U.S. trade deficit was essentially un- the objective for the expansion of rechanged in September, and the rate in serves, the Manager for Domestic Operthe third quarter was sharply lower than ations is promptly to notify the Chairthat in the first half. man, who will then decide whether the Growth in M-1A and M-1B moderated situation calls for supplementary instrucfurther in October but was still relatively tions from the Committee. rapid; growth in M-2 accelerated slightly, reflecting a pickup in expansion of its nontransactions component. From the Votes for this action: Messrs. Volckfourth quarter of 1979 to October, er, Gramley, Guffey, Morris, Partee, growth of M-1A was in the upper part of Rice, Roos, Schultz, Solomon, and the range set by the Committee for Wallich. Votes against this action: growth over the year ending in the fourth Mrs. Teeters and Mr. Winn. quarter of 1980, while growth of M-1B and M-2 was somewhat above the upper Mrs. Teeters dissented from this limits of their ranges. Expansion in comaction because she believed that it mercial bank credit was rapid in October, although not so rapid as in August would result in additional increases and September. Market interest rates in interest rates, which would in- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

32 Federal Reserve Bulletin • January 1981 tensify downward pressures on de- Votes for this action: Messrs. Volckmands for housing, automobiles, and er, Gramley, Guffey, Morris, Partee, Rice, Schultz, Solomon, Wallich, and business fixed capital and thus risk a Baughman. Vote against this action: major contraction in economic activ- Mrs. Teeters. Absent: Messrs. Roos ity with a substantial rise in unem- and Winn. (Mr. Baughman voted as ployment. In her view, open market alternate for Mr. Roos.) operations over the weeks immediately ahead should be directed Mrs. Teeters dissented from this toward maintaining the federal funds action for essentially the same rearate within a range of 11 to 15 sons that she had dissented from the percent. action to adopt the domestic policy Mr. Winn dissented from this ac- directive at the Committee's meeting tion because he favored specifica- on November 18, 1980. tion of lower rates of expansion in On December 4, after closing of the monetary aggregates for the peri- the markets, the Board of Governors od from September to December announced an increase in Federal than those adopted at this meeting. Reserve discount rates. In light of In his view, more vigorous action the current level of market interest was appropriate in order to enhance rates and consistent with existing the prospects for restraining the ex- policy to restrain excessive growth pansion of the monetary aggregates in money and credit, the Board apand establishing growth paths con- proved an increase from 12 to 13 persistent with the monetary growth ob- cent in the basic rate and an increase jectives for 1981 contemplated by from 2 to 3 percentage points in the the Committee in July 1980. surcharge on frequent borrowings of Shortly after the meeting, in- large institutions, effective Decemcoming data indicated that M-l A and ber 5. M-IB were growing much faster The increase in discount rates exthan the rates consistent with the erted additional upward pressure on Committee's objectives for the peri- the federal funds rate. In trading durod from September to December. ing the morning of December 5, the Required reserves and member bank rate generally was well above 18 perdemands for reserves had expanded cent, the level to which the upper substantially in relation to the supply limit of the intermeeting range for of reserves being made available the weekly average funds rate had through open market operations, been raised about a week earlier, and member bank borrowings had and other short-term interest rates increased further. These develop- rose substantially as well. At the ments were associated with addition- same time, incoming data suggested al upward pressure on the federal that M-l A and M-IB currently might funds rate, which in the first state- be growing a little less rapidly than ment week after the meeting had projected a week earlier, which been at about or somewhat above would imply a somewhat lower level the upper limit of the range of 13 to of required reserves and also some 17 percent specified by the Com- reduction in member bank demands mittee. In a telephone conference on for reserves in relation to the supply November 26, the Committee raised being made available through open the upper limit of the intermeeting market operations. range for the funds rate to 18 per- Thus, it was possible that the addicent. tional upward pressure on the federal funds rate would prove to be tran- On November 26, the Committee sitory. Alternatively, pursuit of the modified the domestic policy directive Committee's short-run objective for adopted at its meeting on November 18, the growth of reserves might be as- 1980, to raise the upper limit of the range for the federal funds rate to 18 percent. sociated with a federal funds rate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 33 above the upper limit of the existing intermeeting period, which in his range, even if some weakness in de- view would be consistent with the mands for reserves developed, but action on the preceding day to raise the extent of any upward pressure Federal Reserve discount rates. on the rate was difficult to gauge The Committee held another telewhile markets were in the process of phone conference in the afternoon of adjusting to the discount rate action. Friday, December 12. In the state- In light of these uncertainties, the ment week ending December 10, the Committee decided in a telephone federal funds rate had averaged conference in the afternoon of De- about 183/4 percent, and since then cember 5 to take account of the re- the rate had been in a range of 19 to percussions of the increases in dis- 20 percent. At the same time, the count rates by providing the most recent data tended to support Manager for Domestic Operations the indications of the week before with leeway to pursue the Com- that M-l A and M-IB currently might mittee's short-run objectives for the be growing a little less rapidly than behavior of reserve aggregates with- projected earlier and that the deout operations being precisely con- mand for reserves could be easing. strained in the current statement Market conditions were unsettled, week by the 18 percent upper limit of however, and there was considthe intermeeting range for the feder- erable uncertainty about the relaal funds rate, pending another con- tionship between money market sultation in about a week if one ap- conditions and objectives for the bepeared to be desirable. havior of reserves. In these circumstances, the Committee decided to On December 5, the Committee modiextend through the period before the fied the domestic policy directive next regular meeting, scheduled for adopted at its meeting on November 18, 1980, and subsequently modified on No- December 19, the leeway for open vember 26, to take account of the action market operations that it had voted of the Board of Governors on December to approve on December 5. 4 to raise discount rates by providing leeway for pursuit of the Committee's On December 12, the Committee modshort-run objectives for the behavior of ified the domestic policy directive issued reserve aggregates without operations on November 18, 1980, and subbeing precisely constrained in the cursequently modified on November 26 and rent statement week by the 18 percent December 5, to extend through the periupper limit of the intermeeting range for od before the next regular meeting the federal funds rate. leeway for pursuit of the Committee's short-run objectives for the behavior of Votes for this action: Messrs. Volckreserve aggregates without operations er, Gramley, Gufifey, Morris, Partee, being precisely constrained by the 18 Rice, Roos, Solomon, and Winn. percent upper limit of the intermeeting Votes against this action: Mrs. range for the federal funds rate. Teeters and Mr. Wallich. Absent: Mr. Schultz. Votes for this action: Messrs. Volcker, Gramley, Gufifey, Morris, Partee, Mrs. Teeters dissented from this Rice, Roos, Schultz, Solomon, and action for essentially the same rea- Winn. Vote against this action: Mrs. Teeters. Absent: Mr. Wallich. sons that she had dissented from the action to adopt the domestic policy directive at the Committee's meeting Mrs. Teeters dissented from this on November 18, 1980. action for essentially the same rea- Mr. Wallich dissented from this sons that she had dissented from the action because he preferred to raise action to adopt the domestic policy the upper limit of the federal funds directive at the Committee's meeting rate range for the remainder of the on November 18, 1980. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

35 Legal Developments AMENDMENTS TO REGULATION C (e) Calendar year disclosure. For purposes of disclosure of data relating to calendar year 1980 and The Board of Governors has amended its Regulation thereafter, references in this section to a fiscal year C, Home Mortgage Disclosure: (1) to require institu- shall be deemed to refer to a calendar year. tions to compile and disclose mortgage loan data for 1980 on a calendar year basis, and (2) to establish March 31, 1981, as the due date for 1980 disclosure AMENDMENTS TO REGULATION D statements. These changes implement a portion of the amendments to the Home Mortgage Disclosure Act 1. The Board of Governors has amended its Regulacontained in the Housing and Community Develop- tion D—Reserve Requirements of Depository Institument Act of 1980. tions which imposes Federal reserve requirements on Effective December 5, 1980, Regulation C is depository institutions that maintain transaction acamended as follows: counts or nonpersonal time deposits. Under the amendment, a depository institution may permit a de- 1. Section 203.4 is amended by adding a new para- positor to effect three or less telephone or pregraph, (d), to read as follows: authorized transfers from an account during a statement cycle or similar period of at least four weeks Section 203.4—Compilation of Mortgage Loan without subjecting such account to reserve require- Data ments on transaction accounts. Effective December 1, 1980, Regulation D is amended as follows: (d) Calendar year basis. (1) Notwithstanding the requirements set forth else- 1. In section 204.2(e)(6), the second sentence is where in this section, each depository institution amended to read as set forth below: shall aggregate its mortgage loan data on a calendar year basis beginning with data relating to calendar Section 204.2—Definitions year 1980. For this purpose, references in this section to a fiscal year shall be deemed to refer to a calendar year. (e) "Transaction account"* * * (2) Each depository institution shall also aggregate mortgage loan data for the period, if any, between the end of its last fiscal year prior to calendar year (6) * * * An account that permits or authorizes more 1980 and January 1, 1980. than three such withdrawals in a calendar month, or statement cycle (or similar period) of at least four 2. Section 203.5 is amended by adding new para- weeks, is a "transaction account" whether or not graphs (d) and (e), to read as follows: more than three such withdrawals actually are made during such period. * * * Section 203.5—Disclosure Requirements 2. In section 204.2(b)(l)(vii), by inserting the word "which" after the words "withdrawal period has ex- (d) Special rule on due dates. Notwithstanding the pired and" and before the words "have not been reprovisions of paragraph (a) of this section, each de- newed." pository institution shall make available by March 31, 3. In section 204.3(a), the third sentence is revised by 1981, the disclosure statement that relates to calendar deleting "$5 million" and inserting in its place "$15 year 1980 and any statement relating to the period be- million". tween the end of its last fiscal year prior to calendar 4. In section 204.3(a), subparagraphs (l)(ii) and (2)(ii) year 1980 and January 1, 1980. are revised to read as follows: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

36 Federal Reserve Bulletin • January 1981 Section 204.3—Computation and Maintenance 7. In section 204.4(g)(2)(iv), by deleting the phrase "daily average vault cash" and inserting "daily aver- (a) Maintenance of required reserves. * * * age total required reserves" in both places that it ap- (1) United States branches and agencies of foreign pears. banks. 8. In section 204.6(b)(1), by deleting the word "on" ^ * * * which appears after the word "imposed" and before (ii) * * * If the low reserve tranche cannot be fully the word "for." utilized by a single office or by a group of offices filing a single report of deposits, the unused por- 2. The Board of Governors has amended Regulation tion of the tranche may be assigned to other of- D—Reserve Requirements of Depository Institutions fices of the same foreign bank until the amount of to extend the lag between the last day of the reserve the tranche is exhausted. The foreign bank shall computation period and the first day of the corredetermine this assignment subject to the restric- sponding reserve maintenance period from eight to 22 tion that if a portion of the tranche is assigned to days for depository institutions subject to the quarteran office in a particular State, any unused portion ly procedure for filing deposit data used to compute must first be assigned to other offices located required reserves. In addition, for nonmember deposiwithin the same State and within the same Federal tory institutions, the beginning of the reserve mainte- Reserve District, that is, to other offices included nance period associated with the first quarterly reserve on the same aggregated report of deposits. If nec- computation period is being deferred from January 29, essary in order to avoid under-utilization of the 1981, until March 19, 1981. low reserve tranche, the allocation may be Effective January 15, 1981, Regulation D is amended changed at the beginning of a calendar month. Un- by revising subparagraph (2) of section 204.3(d) to read der other circumstances, the low reserve tranche as follows: may be reallocated at the beginning of a calendar year. Section 204.3—Computation and Maintenance (2) Edge and Agreement Corporations. (j) * * * (d) Special rule for depository institutions that have (ii) * * * If the low reserve tranche cannot be fully total deposits of less than $15 million. utilized by a single office or by a group of offices filing a single report of deposits, the unused portion of the tranche may be assigned to other of- (2) Required reserves are computed on the basis of fices of the same institution until the amount of the depository institution's daily average deposit the tranche is exhausted. An Edge or Agreement balances during the seven-day computation period. Corporation shall determine this assignment sub- In determining the reserve balance that a depository ject to the restriction that if a portion of the institution is required to maintain with the Federal tranche is assigned to an office in a particular Reserve, the average daily vault cash held during State, any unused portion must first be assigned to the computation period is deducted from the amount other offices located within the same State and of the institution's required reserves. The reserve within the same Federal Reserve District, that is, balance that is required to be maintained with the to other offices included on the same aggregated Federal Reserve shall be maintained during a correreport of deposits. If necessary in order to avoid sponding period that begins on the fourth Thursday under-utilization of the low reserve tranche, the following the end of the institution's computation allocation may be changed at the beginning of a period and ends on the third Wednesday after the calendar month. Under other circumstances, the close of the institution's next computation period. low reserve tranche may be reallocated at the be- Such reserve balance shall be maintained in the ginning of a calendar year. amount required on a daily average basis during each week of the quarterly reserve maintenance period. 5. In sections 204.4(b)(l)(ii) and (2)(ii), by deleting the word "exceeds" and inserting in its place "exceed." 6. In section 204.4(b)(2), by deleting the parentheses AMENDMENTS TO REGULATIONS H AND Y that appear around the phrase "than its required reserves computed using the reserve ratios in effect on The Board of Governors has amended its Regulations August 31, 1980." H and Y to eliminate the requirement that registered Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 37 transfer agents file amendments to their registration operates a branch, agency, or commercial lending statement on Form TA-1 to reflect changes in pre- company subsidiary in the United States or that conviously filed information listing securities for which trols a bank in the United States; and a company of the institutions act as transfer agents. which such foreign bank is a subsidiary. Effective January 3, 1981, Regulations K and Y are (3) "Subsidiary" means an organization more than amended as set forth below: 25 per cent of the voting stock of which is held directly or indirectly by a foreign banking organization 1. The second sentence in 12 CFR § 208.8(f)(2) is de- or which is otherwise controlled or capable of being leted. controlled by a foreign banking organization. 2. 12 CFR § 208.8(f)(4) is deleted in its entirety. 3. The second sentence in 12 CFR § 225.5(c)(2) is de- (b) Qualifying foreign banking organizations. Unless leted. specifically made eligible for the exemptions by the 4. 12 CFR § 225.5(c)(4) is deleted in its entirety. Board, a foreign banking organization shall qualify for the exemptions afforded by this section only if, disregarding its United States banking, more than half of AMENDMENTS TO REGULATIONS K AND Y its worldwide business is banking; and more than half of its banking business is outside the United States. In The Board of Governors has amended its Regulation order to qualify, a foreign banking organization shall: K, International Banking Operations, to implement (1) meet at least two of the following requirements: and interpret exemptions contained in the Bank Hold- (i) banking assets held outside the United States1 ing Company Act. In addition, the Board has approved exceed total worldwide nonbanking assets; a related amendment to Regulation Y, Bank Holding (ii) revenues derived from the business of bank- Companies and Change in Bank Control. ing outside the United States exceed total rev- Effective January 3, 1981, Regulations K and Y are enues derived from its worldwide nonbanking amended as set forth below: business; (iii) net income derived from the business of 1. Section 225.4(g) of Regulation Y is revised to read banking outside the United States exceeds total as follows: net income derived from its worldwide nonbanking business; and (g) Foreign banking organizations. In addition to (2) meet at least two of the following requirements: the exemptions afforded by this Part, a foreign bank- (i) banking assets held outside the United States ing organization (as defined in 12 C.F.R. § 211.23) exceed banking assets held in the United States; may engage in activities and make investments un- (ii) revenues derived from the business of bankder Part 211 (Regulation K). ing outside the United States exceed revenues derived from the business of banking in the United 2. Regulation K is amended by adding within Subpart States; B—Foreign Banking Organizations, new section 211.23, (iii) net income derived from the business of Nonbanking Activities of Foreign Banking Organiza- banking outside the United States exceeds net intions. New section 211.23 is added as follows: come derived from the business of banking in the United States. Subpart B (c) Determining assets, revenues, and net income. (1) For purposes of paragraph (b), the total assets, Section 211.23—Nonbanking Activities of revenues, and net income of an organization may be Foreign Banking Organizations determined on a consolidated or combined basis. Assets, revenues and net income of companies in (a) Definitions. The definitions of section 211.2 in Sub- which the foreign banking organization owns 50 per part A apply to this section subject to the following: cent or more of the voting shares shall be included (1) "Directly or indirectly" when used in reference when determining total assets, revenues, and net into activities or investments of a foreign banking or- come. The foreign banking organization may include ganization means activities or investments of the foreign banking organization or of any subsidiary of 1. None of the direct or indirect assets, revenues, or net income of the foreign banking organization. a United States subsidiary bank, branch, agency, commercial lending company, or other company engaged in the business of banking in the (2) "Foreign banking organization" means a foreign United States shall be considered held or derived from the business of bank (as defined in section 1(b)(7) of the IB A) that banking "outside the United States." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

38 Federal Reserve Bulletin • January 1981 assets, revenues, and net income of companies in petition, conflicts of interests, or unsound banking which it owns 25 per cent or more of the voting practices. Such determination shall be subject to any shares if all such companies within the organization conditions and limitations imposed by the Board. are included; (2) Assets devoted to, or revenues or net income (f) Permissible activities and investments. A foreign derived from, activities listed in section 211.5(d) banking organization that qualifies under paragraph (b) of this Part shall be considered banking assets, or may: revenues or net income derived from the banking (1) Engage in activities of any kind outside the business, when conducted within the foreign bank- United States; ing organization by a foreign bank or its subsidiaries. (2) Engage directly in activities in the United States that are incidental to its activities outside the United (d) Loss of eligibility for exemptions. A foreign bank- States; ing organization that qualified under paragraph (b) of (3) Own or control voting shares of any company this section or an organization that qualified as a "for- that is not engaged, directly or indirectly, in any aceign bank holding company" under section 225.4(g) of tivities in the United States other than those that are Regulation Y (12 C.F.R. § 225.4(g) (1980))2 shall cease incidental to the international or foreign business of to be eligible for the exemptions of this section if it such company; fails to meet the requirements of paragraph (b) for two (4) Own or control voting shares of any company in consecutive years as reflected in its Annual Reports a fiduciary capacity under circumstances that would (F.R. Y-7) filed with the Board. A foreign banking or- entitle such shareholding to an exemption under secganization that ceases to be eligible for the exemptions tion 4(c)(4) of the BHCA if the shares were held or may continue to engage in activities or retain invest- acquired by a bank; ments commenced or acquired prior to the end of the (5) Own or control voting shares of a foreign comfirst fiscal year for which its Annual Report reflects pany that is engaged directly or indirectly in businonconformance with paragraph (b). Activities com- ness in the United States other than that which is menced or investments made after that date shall be incidental to its international or foreign business, terminated or divested within three months of the fil- subject to the following limitations: ing of the second Annual Report unless the Board (i) more than 50 per cent of the foreign company's grants consent to continue the activity or retain the consolidated assets shall be located, and consoliinvestment under paragraph (e). dated revenues derived from, outside the United States; (e) Specific determination of eligibility for non- (ii) the foreign company shall not engage directly, qualifying foreign banking organizations. A foreign nor own or control more than 5 per cent of the banking organization that does not qualify under para- voting shares of a company that engages, in the graph (b) for the exemptions afforded by this section, business of underwriting, selling, or distributing or that has lost its eligibility for the exemptions under securities in the United States except to the extent paragraph (d), may apply to the Board for a specific permitted bank holding companies; determination of eligibility for the exemptions. A for- (iii) if the foreign company is a subsidiary of the eign banking organization may apply for a specific de- foreign banking organization, its direct or indirect termination prior to the time it ceases to be eligible for activities in the United States shall be subject to the exemptions afforded by this section. In determin- the following limitations: ing whether eligibility for the exemptions would be (A) the foreign company's activities in the consistent with the purposes of the BHCA and in the United States shall be the same kind of activipublic interest, the Board shall consider the history ties or related to the activities engaged in directand the financial and managerial resources of the or- ly or indirectly by the foreign company abroad ganization; the amount of its business in the United as measured by the "establishment" categories States; the amount, type and location of its non- of the Standard Industrial Classification (SIC) banking activities; and whether eligibility of the for- (an activity in the United States shall be consideign banking organization would result in undue con- ered related to an activity outside the United centration of resources, decreased or unfair com- States if it consists of supply, distribution or sales in furtherance of the activity); (B) the foreign company may engage in activi- 2. " '[F]oreign bank holding company' means a bank holding com- ties in the United States that consist of banking pany organized under the laws of a foreign country, more than half of or financial operations, or types of activities whose consolidated assets are located or consolidated revenues derived, outside the United States." (12 C.F.R. § 225.4(g)(iii) (1980)). permitted by regulation or order under section Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 39 4(c)(8) of the BHCA, only with the prior ap- reasonable effort or expense or because it rests peproval of the Board. Activities within Division culiarly within the knowledge of a company that is H (Finance, Insurance, and Real Estate) of the not controlled by the organization, the organization SIC shall be considered banking or financial op- shall (i) give such information on the subject as it erations for this purpose, with the exception of possesses or can reasonably acquire together with acting as operators of nonresidential buildings the sources thereof; and (ii) include a statement ei- (SIC 6512), operators of apartment buildings ther showing that unreasonable effort or expense (SIC 6513), operators of dwellings other than would be involved or indicating that the company apartment buildings (SIC 6514), and operators whose shares were acquired is not controlled by the of residential mobile home sites (SIC 6515); and organization and stating the result of a request for operating title abstract offices (SIC 6541). In ad- information. dition, the following activities shall be consid- (3) A request for information required by this paraered banking or financial operations and may be graph need not be made of any foreign government, engaged in only with the approval of the Board or an agency or instrumentality thereof, if, in the under subsection (g): computer and data pro- opinion of the organization, such request would be cessing services (SIC 7372, 7374 and 7379); harmful to existing relationships. management consulting (SIC 7392); certain rental and leasing activities (SIC 7394, 7512, 7513 and 7519); accounting, auditing and bookkeeping services (SIC 8931); and arrangement AMENDMENTS TO RULES of passenger transportation (SIC 4722). REGARDING DELEGATION OF A UTHORITY AND REGULATION K (g) Exemptions under section 4(c)(9) of the BHCA. A foreign organization that is of the opinion that other 1. The Board has amended section 211.5(c)(2) of its activities or investments may, in particular circum- Regulation K to allow the Board to waive the 60 days' stances, meet the conditions for an exemption under prior notification period for those proposals that qualisection 4(c)(9) of the BHCA may apply to the Board fy for the Board's prior notification procedure but for such a determination by submitting to the Reserve must be consumated in less than 60 days, and section Bank of the district in which its banking operations in 265.2(c) of its Rules Regarding Delegation of Authority the United States are principally conducted a letter to give the Director of the Division of Banking Supersetting forth the basis for that opinion. vision and Regulation authority to exercise this waiver. (h) Reports. Effective December 30, 1980 sections 211.5(c)(2) (1) The foreign banking organization shall inform and 265.2(c) are amended as follows: the Board through the organization's Reserve Bank within 30 days after the close of each quarter of all 1. Pursuant to its authority under the Federal Reshares of companies engaged, directly or indirectly, serve Act, the Board amends section 211.5(c)(2) of in activities in the United States that were acquired Regulation K as follows: during such quarter under the authority of this section. The foreign banking organization shall also re- Section 211.5—Investments in Other port any direct activities in the United States com- Organizations menced during such quarter by a foreign subsidiary of the foreign banking organization. This information shall (unless previously furnished) include a (c) Investments procedures. *** brief description of the nature and scope of each company's business in the United States, including the 4-digit SIC numbers of the activities in which the (2) Prior notification. An investment in a subsidiary company engages. Such information shall also in- *** notice to the Board, unless the Board waives clude the 4-digit SIC numbers of the direct parent of such period because it finds immediate action by the any U.S. company acquired, together with a state- investor is required by the circumstances presented, ment of total assets and revenues of the direct if the total amount ****. parent. (2) If any required information is unknown and not 2. Pursuant to its authority under section ll(k) of the reasonably available to the foreign banking organi- Federal Reserve Act, the Board amends its Rules Rezation, either because obtaining it would involve un- garding Delegation of Authority as follows: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

40 Federal Reserve Bulletin • January 1981 Section 265.2—Specific Functions Delegated to ministered by the Board. The Board has delegated its Board Employees and to the Federal Reserve authority to enter into such an agreement to the Feder- Banks al Reserve Banks. Effective December 30, 1980 section 265.2(f) is amended as follows: (c) The Director of the Division of Banking Supervision and Regulation (or, in the Director's absence, Section 265.2—Specific Functions Delegated to the Acting Director) is authorized: Board Employees and to the Federal Reserve Banks (27) Under section 25 and 25(a) of the Federal Reserve Act and Part 211 of this chapter (Regulation (f) Each Federal Reserve Bank is authorized as to a K), to waive the 60 days' prior notice period for an member bank or other indicated organization for investment that qualifies for the prior notification which the Reserve Bank is responsible for receiving procedures set forth in section 211.5(c)(2) of Regula- applications or registration statements; as to its offices tion K (12 C.F.R. 211.5(c)(2)). under subparagraph (23) of this paragraph; and as to its own facilities under subparagraph (26) of this para- 2. In order to fulfill its responsibility under the Inter- graph: national Banking Act of 1978 with regard to the examination of branches, agencies, banks and commercial lending company subsidiaries of foreign banks, the (49) Under the provisions of section 5 of the Inter- Board of Governors has delegated the authority for se- national Banking Act of 1978 (12 U.S.C. § 3103), to lecting and approving the appointment of examiners of enter into an agreement or undertaking with a forsuch institutions to the Director of the Board's Divi- eign bank that such bank shall receive only such desion of Banking Supervision and Regulation. posits at its out-of-home State branch as would be Effective December 30, 1980, section 265.2(c) is permissible for an Edge Corporation. amended as follows: 4. In acting upon applications and requests pursuant Section 265.2—Specific Functions Delegated to to the Board's Regulation K as revised on June 17, Board Employees and to Federal Reserve 1979, the Board has found that a number of administra- Banks tive actions that currently must be taken by the Board are of a ministerial nature and could be more expeditiously handled by the Reserve Banks. Accordingly, (c) The Director of the Division of Banking Superthe Board has delegated certain authority under Reguvision and Regulation (or, in the Director's absence, lation K to the Director of the Division of Banking Suthe Acting Director) is authorized: pervision and Regulation and the Federal Reserve (1) Under the provisions of sections 9 and 25(a) of Banks. the Federal Reserve Act (12 U.S.C. §§ 325, 338 and Effective December 30, 1980, sections 265.2(c) and 625), section 5(c) of the Bank Holding Company Act 265.2(f) are revised as follows: (12 U.S.C. § 1844(c)), and section 7(c)(1) of the International Banking Act of 1978 (12 U.S.C. Section 265.2—Specific Function Delegated to § 3105(b)(1)), to select or to approve the appoint- Bank Employees and to Federal Reserve ment of Federal Reserve examiners, assistant exam- Banks iners and special examiners for the purpose of making examinations for or by the direction of the Board. (c) The Director of the Division of Banking Supervision and Regulation (or, in the Director's absence, the Acting Director) is authorized: 3. The International Banking Act of 1978 requires a foreign bank to enter into agreement with the Board that a U.S. branch outside of the foreign bank's home (28) Pursuant to section 211.5(c)(2) of this Chapter State would "receive only such deposits at the place of (Regulation K), to require that an investor file an apoperation of such [a] branch as would be permissible plication for the Board's specific consent. for a corporation organized under section 25(a) of the Federal Reserve Act under rules and regulations ad- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 41 (f) Each Federal Reserve Bank is authorized as to a (52) Pursuant to section 211.5(c)(2) of this Chapter member bank or other indicated organization for (Regulation K), to require that an investor file an apwhich the Reserve Bank is responsible for receiving plication for the Board's specific consent. application of registration statements ; as to its officers under subparagraph (23) of this paragraph; and as to its own facilities under subparagraph (26) of this paragraph: AMENDMENTS TO RULES OF PROCEDURE The Board of Governors has amended its Rules of Pro- (18) Under the provisions of the second paragraph cedure to reflect steps taken by the Board to improve of section 25(a) of the Federal Reserve Act (12 the effectiveness of newspaper notices of applications U.S.C. 612) and § 211.4(a)(2) of this chapter (Regu- required under section 262.3(b) of the Board's Rules of lation K), to issue to an Edge Corporation a final Procedure, by requiring the use of a standardized form permit to commence business and to approve of notice; specifying that notices appear in the classiamendments to the Articles of Association of any fied legal notices section of the newspaper; and requir- "Edge Corporation" to reflect the following: ing submission of the application immediately after the first notice is published. Effective for all applications for which notice is pub- (iv) any change in the name of such corporation; lished on or after February 1, 1981, Rules of Procedure and is amended as follows: (v) deletion of the requirement that all directors and shareholders of such corporation must be U.S. Section 262.3—Applications citizens. (b) Notice of applications. (27) Under section 211.5(e) of this chapter (Regula- (1) In the case of applications, tion K), to extend the time within which an investor (i) for membership in the Federal Reserve System must divest itself of interests in a foreign portfolio where such membership would confer Federal deinvestment, joint venture or subsidiary acquired in posit insurance on a bank, satisfaction of a debt previously contracted. (ii) by a State member bank for the establishment of a domestic branch or other facility that would be authorized to receive deposits, (45) To extend the time within which an Edge or (iii) by a State member bank for the relocation of Agreement Corporation or a member bank or a bank a domestic branch office, holding company may accomplish a purchase of (iv) for merger, consolidation, or acquisition of stock pursuant to section 25 or 25(a) of the Federal assets or assumption of liabilities, if the acquiring, Reserve Act or section 4(c)(13) of the Bank Holding assuming, or resulting bank is to be a State mem- Company Act if no material change has occurred in ber bank, the general condition of the corporation, the mem- (v) to become a bank holding company, and ber bank or the bank holding company since such (vi) by a bank holding company to acquire ownauthorization. ership or control of shares or assets of a bank, or to merge or consolidate with any other bank holding company, (50) Pursuant to section 211.4(c)(2) of this Chapter (Regulation K), to approve an Edge Corporation ap- the applicant shall cause to be published on the same plication to establish a branch that represents the day of each of two consecutive weeks a notice in the conversion of an Edge Corporation to a branch of form prescribed by the Board. The notice shall be another Edge Corporation with the same parent. placed in the classified advertising legal notices sec- (51) Pursuant to section 211.5(c) of this Chapter tion of the newspaper, and the first notice may ap- (Regulation K), to grant prior specific consent to an pear no more than ninety calendar days prior to acinvestor for an investment in its first subsidiary, its ceptance by the Reserve Bank of the application. first joint venture, and its first portfolio investment, The notice must provide an opportunity for the pubwhere such investment does not exceed the general lic to give written comment on the application to the consent limitations of section 211.5(c)(l)(i) of this appropriate Federal Reserve Bank for at least thirty Chapter. days after the date of publication of the first notice. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

42 Federal Reserve Bulletin • January 1981 In addition, between publication of the first and sec- cial Policy is responsible for preparation of position ond notice, the applicant shall submit to the appro- papers and other documents on monetary policy ispriate Reserve Bank for acceptance copies of the ap- sues, including issues relating to open market, displication, together with a copy of the notice as it count, and reserve requirement policy ; performance of appeared in the newspaper. Such notice shall be Secretariat functions for the Federal Open Market published in a newspaper of general circulation in Committee, coordination of regulatory and statistical (A) the community in which the head office of the issues closely related to monetary policy; liaison with bank is or is to be located in the case of an appli- the trading desk at the Federal Reserve Bank of New cation for membership that would confer deposit in- York in connection with open market operations; liaisurance, (B) the community or communities in son with Treasury or other agencies in the domestic which the head office of the bank and the proposed financial area; coordination with the System Account branch or other facility (other than an electronic Manager and with the Treasury on foreign exchange funds transfer facility) are located in the case of an market operations; Eurodollar and international bankapplication for the establishment of a domestic ing policy issues; coordination of analysis and develbranch or other facility that would be authorized to opment of options for Board consideration with regard receive deposits, (C) the community or communities to foreign exchange policies and the international payin which the head office of the bank, the office to be ments mechanism; and appropriate staff coordination closed, and the office to be opened are located in the with other agencies in these areas. case of an application for the relocation of a domes- The Office also reviews and coordinates statistical tic branch office, (D) the community or communities and regulatory reports required by the Board of banks in which the head office of each of the banks to be and bank holding companies; and performs Secretariat party to the merger, consolidation, or acquisition of functions for the Depository Institutions Deregulation assets or assumption of liabilities are located in the Committee. case of an application by a bank for merger, consolidation, or acquisition of assets or assumption of lia- (c) Office of Staff Director for Federal Reserve Bank bilities, or (E) the community or communities in Activities is responsible for overseeing the Division of which the head offices of the largest subsidiary Federal Reserve Bank Operations, assisting the bank, if any, or an applicant and of each bank, Board's Committee on Federal Reserve Bank Activishares of which are to be directly or indirectly ac- ties, and coordinating the functions of other Board Diquired, are located in the case of applications under visions that relate to Federal Reserve Bank matters. section 3 of the Bank Holding Company Act. The responsibilities of this office also include all Reserve Bank director matters, coordination of the annual evaluation program for Federal Reserve Banks, the AMENDMENTS TO RULES OF ORGANIZATION Federal Reserve System's program for emergency preparedness, and representing the Board in activities The Secretary of the Board has approved technical pertaining to Bank operational matters in meetings amendments to the Board's Rules of Organization to with foreign central banks and other United States reflect organizational changes. The amendments will Government agencies. bring up to date descriptions of the functions of various offices and divisions of the Board. (d) Office of Staff Director for Management is respon- Effective December 31, 1980, section 3 of Rules of sible for the planning and coordination of staff opera- Organization is revised as follows: tions and organization and for resource management, and supervision of the following functions: Board Section 3—Central Organization building administration and operations, Board budget and accounting activities, data processing; personnel- The Board's central organization consists of the mem- related activities, Equal Employment Opportunity, bers of the Board and the following Offices, Divisions, and contingency planning operations. and Officials: (e) Office of the Secretary, headed by the Board's (a) Office of Board Members consists of the members Secretary, coordinates and handles items requiring of the Board, Assistants, and Special Assistants to the Board action, including actions under delegated au- Board assigned to public affairs and Congressional thority; prepares agenda for Board meetings; impleliaison. ments actions taken at Board meetings; prepares, circulates and indexes minutes of the Board; has (b) Office of Staff Director for Monetary and Finan- responsibility for the Board's Regulatory Improve- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 43 ment Project; provides liaison at the staff level with the reau of the Mint for the production and distribution of Federal Advisory Council and ad hoc groups of the coin. Reserve Banks; makes arrangements for individuals and groups visiting the Board; maintains custody of (j) Division of Banking Supervision and Regulation, and provides reference service to official records of the headed by a Director, coordinates the bank supervi- Board; handles correspondence and public informa- sory functions of the System and evaluates the examition requests; secures passports and visas for official nation procedures of the Reserve Banks; exercises foreign travel of System personnel; and provides relief general supervision of the commercial and fiduciary secretarial and stenographic services. activities of State member banks; administers the supervisory features of laws and regulations relating to (f) Legal Division, headed by the Board's General affiliates and bank holding companies, supervises vari- Counsel, advises the Board in carrying out its statu- ous foreign banking activities of member banks and tory and regulatory responsibilities by the preparation foreign banking and financing corporations; adminisof Board decisions, regulations, rules, instructions and ters the public disclosure provisions of the Securities legal interpretations of statutes and regulations admin- Exchange Act of 1934, as amended, in their appliistered by the Board, represents the Board in civil liti- cation to State member banks, and the provisions of gation and administrative proceedings, assists other the Act giving responsibility to the Board for regulat- Divisions in fulfilling their responsibilities in such ing security credit transactions; administers the perareas as contracting, fiscal agency activities, Federal tinent provisions of the Financial Institutions Act of Reserve Bank matters, labor law, personnel, supervi- 1966, and amendments contained in the Financial Insory enforcement matters, and prepares testimony or stitutions Regulatory and Interest Rate Control Act of comments on proposed legislation. 1978 in their application to State member banks, bank holding companies, nonbank subsidiaries, Edge Act (g) Division of Research and Statistics. * * * Corporations, foreign banks with domestic operations and persons related to such institutions; monitors the (h) Division of International Finance. * * * Currency and Foreign Transactions Reporting Act, in its application to State member banks; processes and presents to the Board applications filed pursuant to the (i) Division of Federal Reserve Bank Operations, Bank Holding Company Act of 1956, as amended, and headed by a Director, advises and assists the Board the Bank Merger Act and various other applications with respect to matters concerning the planning and submitted under the provisions of the Federal Reserve programs for operations of the Federal Reserve Act or related statutes; and advises the Board regard- Banks. It provides an appraisal of Reserve Bank building developments in banking and bank supervisory ing programs; provides analysis and recommendations policies and procedures. for Board policy in the payments mechanism area; provides an appraisal of Reserve Bank communication and automation plans and proposals; and maintains li- (k) Division of Consumer and Community Affairs, aison with various interested parties on payments headed by a Director, implements consumer affairs mechanism matters. legislation for which the Board has responsibility. Its The Division is responsible for financial examina- functions include drafting regulations and intertions and operational reviews of Federal Reserve Bank pretations pursuant to the Truth in Lending Act (as functions including: protection, fiscal agency, open amended), the Federal Trade Commission Improvemarket, check processing, data processing, communi- ments Act, the Equal Credit Opportunity Act (as cations, coin and currency, audit, and various staff amended), the Home Mortgage Disclosure Act, the functions. The Division administers an expense con- Fair Credit Billing Act, the Consumer Leasing Act and trol and budgeting system for collection and analysis the Electronic Funds Transfer Act, for financial instiof budget and expense data; prescribes accounting tutions and other firms engaged in consumer credit and principles, standards and related requirements to be leasing activities. The division also administers the followed by the Reserve Banks; and provides certain Board's consumer complaint handling system, and centralized financial accounting services. The Division monitors enforcement activities with regard to State also maintains liaison with the Treasury and other member banks. The legislation enforced includes the Government agencies and with various interested par- acts already mentioned above as well as the Commuties on matters related to Reserve Bank operation nity Reinvestment, Fair Credit Reporting, Fair Debt within its area of responsibility. The Division also Collection Practices, Fair Housing, Flood Disaster coordinates the printing and distribution of Federal Protection, and Real Estate Settlement Procedures Reserve notes and is jointly responsible with the Bu- Acts and Regulation Q, Interest on Deposits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

44 Federal Reserve Bulletin • January 1981 (1) Division of Personnel, headed by a Director, is re- "finders fee") shall not be regarded as a payment of sponsible for the development and implementation of interest to the depositor for purposes of determining Board personnel policies and programs, and advises compliance with interest rate ceilings, if the institution and assists the Board and the Reserve Banks on per- complies with all of the requirements set forth in subsonnel matters pertaining to the Federal Reserve section (b). For purposes of this section, a qualifying Banks. depository institution is a depository institution that has been certified by its primary federal supervisor to (m) Division of Support Services, headed by a Direc- have demonstrated that finders fees have accounted tor, is responsible for duplication and distribution of for 25 per cent or more of its outstanding domestic Board publications, press releases, speeches and testi- small-denomination (under $100,000) time and savings mony; space management; printing, contracting, and deposits, on average, over the ten-calendar quarter pesupply services; communications; food service man- riod ending June 30, 1980. agement; operation and maintenance of electrical and mechanical systems; building and grounds mainte- (b) A qualifying depository institution must comply nance; personnel and building security. with all of the following requirements to be eligible for the phaseout granted under subsection (a) of this sec- (n) Office of the Controller, headed by the Board's tion: Controller, is responsible for maintaining an effective (1) During the phaseout period, the maximum internal financial management system, including bud- amount of small-denomination (under $100,000) geting, accounting, receiving and disbursing Board time and savings deposits that may be raised funds, financial reporting, and internal auditing and through the use of finders fees may not exceed 85 operations reviews. per cent of the amount of domestic small-denomination (under $100,000) time and savings deposits on (o) Division of Data Processing. * * * which finders fees had been paid that mature in the semi-annual period ending June 30,1981,60 per cent (p) Other personnel. * * * of the amount of such deposits that mature in the semi-annual period ending December 31, 1981, and 40 per cent of the amount of such deposits that ma- DEPOSITORY INSTITUTIONS DEREGULATION ture in the semi-annual period ending June 30, 1982. COMMITTEE Provided, however, that during the phaseout period, the amount of small-denomination (under $100,000) Amendments to Interest on Deposits time and savings deposits on which finders fees are paid may not exceed the amount of domestic small- 1. The Depository Institutions Deregulation Commit- denomination (under $100,000) time and savings detee has adopted a final rule permitting a phaseout of posits outstanding on June 30, 1980 on which finders finders fee programs over an 18-month period for those fees had been paid. depository institutions that can demonstrate that find- (2) Any maturing domestic small-denomination (uners fees accounted, on average, for 25 per cent or more der $100,000) deposit on which a finders fee had of their outstanding domestic small-denomination time been paid and that is renewed, whether automaticaland savings deposits over the ten-quarter period end- ly or otherwise, whether or not a finders fee is paid ing June 30, 1980. upon renewal, must be included in the amount of Effective December 31, 1980, the Committee deposits raised through the use of finders fees for the amends Part 1204 (Interest on Deposits) by adding sec- purpose of determining compliance with the above tion 114 as follows: per cent limitations. (3) All finders fees must be paid in cash, except that Part 1204—Interest on Deposits an institution may utilize as finders fees any merchandise it owned on December 1, 1980. (4) Any advertisement, announcement or solicita- Section 1204.114—Phaseout of Finders Fees tion concerning the continued availability of finders fees during the phaseout period by an institution (a) Notwithstanding the provisions of (12 CFR shall be limited to contacting directly the institu- § 1204.110), during the period from December 31, 1980 tion's depositors or former sponsors of depositors or through June 30, 1982 (the "phaseout period"), any to displaying or distributing promotional materials in fee paid by a qualifying depository institution to a per- an institution's offices. During the phaseout period, son who introduces a depositor to the institution (a an institution shall not advertise the continued avail- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 45 ability of finders fees by television, radio, billboards Bank Corporation ("Bank Corporation"), Miami, Floror other mass media of general circulation (such as ida, a registered bank holding company, and by innewspapers, magazines). directly acquiring City National Bank, Miami, Florida. 2. The Depository Institutions Deregulation Com- Notice of the application, affording opportunity for mittee ("Committee") has adopted a rule providing interested persons to submit comments and views, has that where a time deposit held in an Individual Retire- been given in accordance with section 3(b) of the Act. ment Account ("IRA") or Keogh (H.R. 10) plan is The time for filing comments and views has expired, paid before maturity within seven days of the estab- and the Board has considered the application and all lishment of the IRA or Keogh plan, the minimum re- comments received in light of the factors set forth in quired early withdrawal penalty is the forfeiture only section 3(c) of the Act (12 U.S.C. § 1842(c)). of the interest earned on the time deposit. Applicant is a nonoperating company organized for Effective December 15, 1980, the Committee the purpose of becoming a bank holding company by amends Part 1204 (Interest on Deposits) by adding sec- acquiring Bank Corporation, the 19th largest banking tion 113 as follows: organization in Florida. Bank Corporation's sole bank subsidiary, City National Bank ("Bank"), Miami, Part 1204—Interest on Deposits Florida, has total deposits of $340.9 million, representing approximately 1.0 percent of the total deposits in commercial banks in the state.1 Bank is the 10th larg- Section 1204.113—Early Withdrawal of IRA and est banking organization in the Miami-Fort Lauderdale Keogh (H.R. 10) Plan Time Deposits. banking market,2 and holds 2.9 percent of total deposits in commercial banks in that market. None of Appli- Notwithstanding the provisions of 12 C.F.R. cant's principals is associated with any other banking § 1204.103, where a time deposit, or any portion there- organization and consummation of the proposal would of, held in an Individual Retirement Account estab- not have any adverse effects on existing or potential lished in accordance with 26 U.S.C. § 408 is paid competition, or on the concentration of banking rebefore maturity within seven days after the estab- sources, in any relevant area. Accordingly, the Board lishment of the Individual Retirement Account pur- concludes that competitive considerations are consissuant to the provisions of 26 CFR § 1.408-(l)(d)(4), tent with approval of the application. or where a time deposit, or any portion thereof, held in The financial and managerial resources and future a Keogh (H.R. 10) plan established in accordance with prospects of Bank Corporation, Bank and Applicant 26 U.S.C. § 401 is paid before maturity within seven are consistent with approval. Applicant will not incur days after the establishment of the Keogh (H.R. 10) any debt in connection with this proposal. While there plan, a depositor shall forfeit an amount at least equal will be no immediate changes in the services offered by to the interest earned on the amount withdrawn at the Bank Corporation or Bank upon consummation of the nominal (simple interest) rate being paid on the deposit. proposal, considerations relating to the convenience and needs of the community to be served are consistent with approval of the application. Based upon the BANK HOLDING COMPANY AND BANK MERGER foregoing and other considerations reflected in the rec- ORDERS ISSUED BY THE BOARD OF GOVERNORS ord of this application, it is the Board's judgment that consummation of the proposal to acquire Bank Corpo- Orders Under Section 3 of Bank Holding ration would be consistent with the public interest and Company Act that the application should be approved. On the basis of the record, the application is ap- City Voting Trust, proved for the reasons summarized above. The trans- Miami, Florida action should not be made before the thirtieth calendar day following the effective date of this Order, or later Order Approving Formation of Bank Holding than three months after the effective date of this Or- Company der, unless such period is extended for good cause by the Board, or by the Federal Reserve Bank of Atlanta City Voting Trust, Miami, Florida, has applied for the pursuant to delegated authority. Board's approval under section 3(a)(1) of the Bank Holding Company Act (12 U.S.C. § 1842(a)(1)) of for- 1. All banking data are as of June 30, 1980. mation of a bank holding company by acquiring more 2. The Miami-Fort Lauderdale banking market is approximated by than 50 percent of the voting shares of City National Dade and Broward counties. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

46 Federal Reserve Bulletin • January 1981 By order of the Board of Governors, effective exercise sufficient influence over the affairs of Hawk- December 23, 1980. eye's subsidiary bank to warrant a finding of adverse competitive effects.3 Therefore, it appears that no sig- Voting for this action: Chairman Volcker and Governors nificant amount of existing competition would be elim- Wallich, Partee, Rice, and Gramley. Absent and not voting: inated as a result of consummation of this proposal. Governors Schultz and Teeters. Furthermore, it appears that consummation of this proposal would not have an adverse effect upon poten- (Signed) JAMES MCAFEE, tial competition nor would it increase the concentra- [SEAL] Assistant Secretary of the Board. tion of resources in any relevant market. Accordingly, the Board concludes that competitive considerations associated with this proposal are consistent with ap- Colfax Bancorporation, proval of the application. Des Moines, Iowa Where principals of an applicant are engaged in operating a chain of banking organizations, in addition to Order Approving Formation of Bank Holding an analysis of the one-bank holding company proposal Company before it the total chain is considered, and the financial and managerial resources and future prospects of the Colfax Bancorporation, Des Moines, Iowa, has ap- chain is analyzed, in the context of the Board's multiplied for the Board's approval under section 3(a)(1) bank holding company standards. Based upon such an of the Bank Holding Company Act (12 U.S.C. analysis is this case, the financial and managerial re- § 1842(a)(1)) of formation of a bank holding company sources and future prospects of Applicant and Bank by acquiring 97.1 percent of the voting shares of The appear satisfactory. First National Bank in Colfax ("Bank"), Colfax, Iowa. The future prospects of Applicant are dependent up- Notice of the application, affording opportunity for on the financial resources of Bank. Although Appliinterested persons to submit comments has been given cant will incur debt in connection with this proposal, it in accordance with section 3(b) of the Act. The time appears that this debt can be serviced without placing for filing comments has expired, and the Board has undue strain on the financial resources of Applicant or considered the application and all comments received Bank. Therefore, the Board concludes that considin light of the factors set forth in section 3(c) of the Act erations relating to banking factors are consistent with (12 U.S.C. § 1842(c)). approval of the application. Applicant, a nonoperating corporation with no sub- Upon consummation of the proposed transaction, sidiaries, was organized for the purpose of becoming a Applicant will expand the services offered by Bank, bank holding company by acquiring Bank, which holds including the introduction of free checking accounts, deposits of $21.8 million.1 Bank is the fourth largest of overdraft checking and the payment of the maximum nine banks in the Jasper County banking market, con- allowable rates on savings deposits. In addition, Applitrolling 11.1 percent of the total deposits in com- cant will increase Bank's efforts in meeting the mortmercial banks in that market.2 This application repre- gage credit needs of its local community. Accordingly, sents a reorganization whereby ownership of Bank will convenience and needs considerations are consistent be transferred from individuals to a corporation owned with approval of this proposal. Based upon the foreby the same individuals. Applicant neither engages in going and other facts of record, the Board concludes any activity directly nor holds shares of any other that consummation of the proposal would be in the bank or nonbank organization. Two of applicant's public interest and that the application should be apprincipals are also associated with other banking or- proved. ganizations, only one of which, Hawkeye Bancorpora- On the basis of the record, the application is aption ("Hawkeye"), Des Moines, Iowa, competes in proved for the reasons summarized above. The transthe relevant market through a subsidiary bank. How- action shall not be consummated before the thirtieth ever, the Board finds that Applicant's principals do not control Hawkeye or its subsidiary banks, and that 3. One of Applicant's principals, Mr. Robert Murray, a director, Hawkeye does not control Applicant, its principals or officer and 10 percent shareholder of Applicant, is senior vice presi- Bank. Nor does it appear that Applicant's principals dent of Hawkeye with responsibilities in financial and accounting matters. However, Mr. Murray does not own or control any shares of Hawkeye, nor is he on Hawkeye's board of directors. Moreover, Mr. Murray has no position with Hawkeye's subsidiary bank located in the Jasper County banking market. The Board finds, that based on the 1. All banking data are as of December 31, 1979. facts of record in this application there is little likelihood that Mr. 2. The Jasper County banking market is approximated by Jasper Murray's roles with the two banking organizations would result in the County, Iowa. two organizations being substantially less competitive with each other. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 47 calendar day following the effective date of this Order comments received in light of the factors set forth in or later than three months after the effective date of section 3(c) of the Act (12 U.S.C. § 1842(c)). this Order, unless such period is extended for good Applicant became a bank holding company as a recause by the Board or by the Federal Reserve Bank of sult of the 1970 Amendments to the Act by virtue of its Chicago pursuant to delegated authority. direct ownership and control of 47.5 percent of the By order of the Board of Governors, effective outstanding voting shares of Bank. In 1973 and 1974, December 23, 1980. without the prior approval of the Board, Applicant acquired approximately 3.2 percent of the outstanding Voting for this action: Chairman Volcker and Governors voting shares of Bank in four unrelated transactions. Wallich, Partee, Teeters, and Gramley. Voting against this Subsequently, Applicant acquired 11,482 shares withaction: Governors Schultz and Rice. out prior Board approval and sold 757 shares, bringing its total holdings to 90.3 percent of the outstanding (Signed) THEODORE E. ALLISON, voting shares of Bank. These acquisitions were appar- [SEAL] Secretary of the Board. ently made in reliance on section 3(a)(B) of the Act (12 U.S.C. § 1842(a)(B)) which permits a bank holding Dissenting Statement of Governors Schultz and Rice company controlling a majority of a Bank's shares to acquire additional shares without prior Board approv- We concur with the majority's conclusion that Hawk- al. Applicant mistakenly believed it could aggregate eye would not control Applicant upon consummation with its direct holdings shares held by its directors and of the proposed application. Nevertheless, we believe their families and its principal shareholders. The that Mr. Murray's roles as director and officer of Ap- Board does not believe such aggregation is appropriate plicant and senior vice president of Hawkeye, which and Applicant's share acquisitions were therefore in controls the largest bank in Bank's relevant market, violation of the Act. Applicant now seeks the Board's require denial of this application. Although Applicant approval to retain all of the acquired shares, representsubmits that Mr. Murray's position with each organi- ing 46.5 percent of the voting shares of Bank. zation would not result in any conflicts of interest or Bank, which holds deposits of $54.8 million, is the possible lessening of competition between the two or- 58th largest Bank in Wisconsin and controls 0.3 perganizations and their subsidiary banks, we cannot cent of the total deposits in commercial banks in the agree with this contention. We believe that Mr. Mur- state.1 Bank is the second largest of 16 banking organiray's position with each organization creates the likeli- zations in the relevant banking market and controls hood that the amount and effectiveness of competition 19.7 percent of the total deposits in commercial banks between the two organizations would be lessened. Ac- in the market.2 Applicant has no other banking subcordingly, we would deny the proposed bank holding sidiaries. Since Applicant already controls Bank and company formation. this application is to retain shares acquired by Applicant, it does not appear that approval of this appli- December 23, 1980 cation would have any adverse effect on competition or the concentration of banking resources in any relevant area. Thus, competitive considerations are con- Commercial Banc-Corp, sistent with approval of the application. Monroe, Wisconsin The financial and managerial resources and future prospects of Applicant and Bank are considered gener- Order Approving Retention of Bank Shares ally satisfactory. In making its analysis of the managerial resources of Applicant, the Board notes that this Commercial Banc-Corp, Monroe, Wisconsin, a bank application is an after-the-fact request for the Board's holding company within the meaning of the Bank approval to retain shares acquired in violation of the Holding Company Act, has applied for the Board's ap- Act. The Board has taken into consideration the fact proval under section 3(a)(3) of the Act (12 U.S.C. that Applicant has taken steps to conform its opera- § 1842(a)(3)), to retain 46.5 percent of the voting tions to the Act by promptly filing this application. In shares of The Commercial and Savings Bank ("Bank"), addition, Applicant's management has furnished the Monroe, Wisconsin. Board with definite and satisfactory undertakings re- Notice of the application, affording opportunity for garding its future conduct, including the adoption of an interested persons to submit comments and views, has been given in accordance with section 3(b) of the Act. 1. All banking data are as of December 31, 1979. The time for filing comments and views has expired, 2. The relevant market is approximated by all of Green County and and the Board has considered the application and all the eastern three-fifths of Lafayette County, Wisconsin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

48 Federal Reserve Bulletin • January 1981 affirmative compliance program under the direction of in light of the factors set forth in section 3(c) of the Act an individual responsible for ensuring that Applicant's (12 U.S.C. § 1842(c)). management is aware of its responsibilities under the Applicant, a nonoperating corporation with no sub- Bank Holding Company Act and the Board's Regula- sidiaries, was organized to acquire Bank and become a tion Y. The Board expects that these actions will assist bank holding company. Bank is the smallest of five Applicant in avoiding any future violations. Upon con- banks in the Crawford County banking market; its desideration of the above and other information in the posits of $15.2 million represent 10.5 percent of the record evidencing Applicant's intent to comply with deposits in commercial banks in that market.1 Under the requirements of the Act and all the circumstances Applicant's proposal Bank's ownership would shift surrounding the stock acquisitions made without the from individuals to a corporation owned by the same required prior approval of the Board, the Board has individuals. Applicant and Bank are not associated, determined that the circumstances of the violations do through their principals or otherwise, with any other not warrant denial of the application. With respect to bank in the Crawford County market, and consumits other operations and the operations of Bank, Appli- mation of the proposal would not have an adverse efcant's managerial resources are regarded as generally fect on competition or concentration in any relevant satisfactory. Accordingly, considerations relating to area. Accordingly, competitive considerations are banking factors are consistent with approval. consistent with approval of the application. Although no immediate changes in the services or The financial and managerial resources and future facilities of Bank are contemplated as a result of this prospects of Applicant and Bank are generally satisproposal, considerations relating to the convenience factory. As part of this proposal Applicant will inand needs of the community to be served are consis- crease Bank's capital significantly, and it appears that tent with approval of the application. Therefore, it is Applicant will be able to maintain Bank's capital at the Board's judgment that Applicant's retention of the adequate levels while retiring its acquisition debt. shares of Bank would be consistent with the public in- These considerations relating to Bank's financial reterest and that the application should be approved. sources and future prospects lend weight toward ap- On the basis of the record, the application is ap- proval of the application. proved for the reasons summarized above. Considerations relating to the convenience and By order of the Board of Governors, effective needs of the community that Bank serves, however, December 16, 1980. embrace some positive and some negative elements. On the positive side, the record shows that Bank's Voting for this action: Chairman Volcker and Governors loan-to-deposit ratio, while still low, has increased Schultz, Wallich, Partee, Teeters, Rice, and Gramley. considerably over the last ten years at the direction of Bank's current president, and that much of this loan (Signed) THEODORE E. ALLISON, growth was in the area of residential mortgage lending. [SEAL] Secretary of the Board. The record also shows that Bank has been active in lending to local farms and businesses. In addition, the Board notes that Bank has complied with the con- Hutsonville Bank Corp., sumer protection laws and regulations applicable to it. Hutsonville, Illinois On the other hand, the Board notes with concern that in 1978 Bank stopped making residential mortgage Order Approving Formation of Bank Holding loans. Since there are no other banks, savings and loan Company associations, or mortgage companies in Hutsonville, local residents can obtain such mortgage loans only by Hutsonville Bank Corp., Hutsonville, Illinois, has ap- travelling to other cities and towns. Public policy as plied for the Board's approval under section 3(a)(1) of embodied in the Community Reinvestment Act is that the Bank Holding Company Act (12 U.S.C. a bank has an obligation to serve the credit needs of its § 1842(a)(1)) of formation of a bank holding company community consistent with safety and soundness, and by acquiring 80 percent or more of the voting shares of the Board would add that this is especially true when Farmers and Merchants Bank of Hutsonville ("Bank"), that bank is the only depository institution in its town. Hutsonville, Illinois. The Board, however, is encouraged by the fact that Notice of the application, affording opportunity for the increase in Bank's capital that will result from coninterested persons to submit comments, has been given in accordance with section 3(b) of the Act. The time for filing comments has expired, and the Board has 1. The Crawford County banking market is approximated by Crawconsidered the application and all comments received ford County, Illinois. All banking data are as of December 31, 1979. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 49 summation of this proposal will enable it to accommo- Lodge, Montana ("Red Lodge Bank"); Roundup Indate its community's needs more fully. Therefore, the surance Agency, Inc., thereby indirectly acquiring Board concludes that on balance considerations re- Montana Bank of Roundup, Roundup, Montana lated to convenience and needs do not weigh for de- ("Roundup Bank"); and Sidney Holding Company, nial. thereby indirectly acquiring The Sidney National Accordingly, it is the Board's judgment that the pro- Bank, Sidney, Montana ("Sidney Bank"). posed transaction is in the public interest and that the Notice of the application, affording opportunity for application should be approved. On the basis of the interested persons to submit comments and views, has record the application is approved for the reasons been given in accordance with section 3(b) of the Act. summarized above. The transaction shall not be made The time for filing comments and views has expired before the thirtieth day after the effective date of this and the Board has considered the application and all Order or later than three months after the effective comments received, including those of Bank of Mondate of this Order, unless that period is extended for tana System, Great Falls, Montana ("Protestant"), in good cause by the Board, or by the Federal Reserve light of the factors set forth in section 3(c) of the Act Bank of St. Louis pursuant to delegated authority. (12 U.S.C. § 1842(c)). By order of the Board of Governors, effective Applicant is a nonoperating corporation organized December 15, 1980. for the purpose of becoming a bank holding company through the acquisition of the above-described banks Voting for this action: Vice Chairman Schultz and Gover- and bank holding companies. The eleven banks to be nors Teeters, Rice, and Gramley. Absent and not voting: acquired have a common ownership. Several princi- Chairman Volcker and Governors Wallich and Partee. pals of Applicant own directly or indirectly shares of stock in each bank. Other principals of Applicant own (Signed) THEODORE E. ALLISON, shares in one or more of the banks to be acquired. Up- [SEAL] Secretary of the Board. on acquisition of these organizations (aggregate deposits of $286 million), Applicant would become the third largest banking organization in Montana with 6.8 per- MontanaBancsystem, Inc., cent total deposits in commercial banks in the state.1 Billings, Montana In light of the structure of banking in Montana, consummation of the proposal would not have any ad- Order Approving Formation of a Bank Holding verse effects on banking structure in the state. Company Baker Bank is the smaller of two commercial banking organizations located in its relevant banking mar- Montana Bancsystem, Inc., Billings, Montana, has ap- ket and holds approximately $13.0 million in deposits plied for the Board's approval under section 3(a)(1) of representing about 40.4 percent of total commercial the Bank Holding Company Act (12 U.S.C. bank deposits in that market.2 Butte Bank is the fourth § 1842(a)(1)) of formation of a bank holding company largest of seven banking organizations in its relevant by acquiring 85 percent or more of the voting shares of banking market with about $19.7 million or 9.8 percent Montana Bank of Belgrade, Belgrade, Montana ("Bel- of market deposits.3 Circle Bank is the larger of the grade Bank"); Montana Bank of Circle, N.A., Circle, two banks in the relevant market, holding about $15.0 Montana ("Circle Bank"); First National Montana million or 72.1 percent of total deposits in commercial Bank of Missoula, Missoula, Montana ("Missoula banks in the market.4 Red Lodge Bank, the second Bank"); Montana Bank of South Missoula, Missoula, largest of four banks in the Carbon County banking Montana ("South Missoula Bank"); Baker Bancorpo- market, holds approximately $12.3 million or 31.2 perration, Inc., thereby indirectly acquiring Montana cent of total deposits in commercial banks in the mar- Bank of Baker, N.A., Baker, Montana ("Baker Bank"); Bozeman Bancorporation, Inc., thereby indirectly acquiring Montana Bank of Bozeman, N.A., Bozeman, Montana ("Bozeman Bank"); Butte Insur- 1. Banking data are as of December 31, 1979. ance Agency, Inc., thereby indirectly acquiring Mon- 2. For Baker Bank, the relevant banking market is approximated by tana Bank of Butte, N.A., Butte, Montana ("Butte Fallon County, Montana, plus an area extending approximately 20 miles east of Fallon County into North Dakota. Bank"); Mineral County Bancorporation, Inc., there- 3. For Butte Bank, the relevant banking market is approximated by by indirectly acquiring Montana Bank of Mineral Deer Lodge County, Silver Bow County, and the southwestern third County, Superior, Montana ("Superior Bank"); Red of Jefferson County, Montana. 4. For Circle Bank, the relevant banking market is approximated by Lodge Bancorporation, Inc., thereby indirectly ac- McCone County, the western portion of Richland County and the quiring Montana Bank of Red Lodge, N.A., Red southwestern third of Dawson County, Montana. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

50 Federal Reserve Bulletin • January 1981 ket.5 Roundup Bank is the larger of two banks in its mation of the proposal would cause Applicant to conrelevant market and holds $15.9 million or 55.9 percent trol 40.8 percent of total deposits in commercial banks of market deposits.6 Sidney Bank is the second largest in the market. At the time Superior Bank was acquired of five commercial banking organizations in its market by shareholders who also had interests in Missoula with $31.3 million or 35 percent of total deposits in the Bank and South Missoula Bank, some existing commarket.7 From the facts of records it appears that no petition was eliminated. However, Superior Bank is competition was eliminated at the time these banks be- separated from the Missoula Banks by 57 miles. Thus, came affiliated. Because these banks compete in mar- it appears that the effects on competition of the affiliakets separate and distinct from one another and in tion of these banks is at most only slightly adverse. In markets different from those of the other banks to be light of the above, it appears that consummation of the acquired, acquisition of these banks would not have transaction would have only slightly adverse effects on any adverse effects on competition in any relevant competition.10 area. The financial and managerial resources of Applicant Bozeman Bank is the third largest of eight com- and Banks are generally satisfactory and the future mercial banking organizations in the Gallatin County prospects for each appear favorable. In considering banking market (the relevant market)8 and holds ap- the effect of this transaction on the convenience and proximately $27.9 million or 13.3 percent of total de- needs of the communities to be served, the Board posits in commercial banks in the market. Belgrade notes that the banking structure of Montana is cur- Bank is the sixth largest banking organization in that rently dominated by two large bank holding companies market, holding $8.5 million or 4.1 percent of market based in Minnesota. Consummation of the proposal deposits. Although the original affiliation between would provide another large bank holding company to Bozeman and Belgrade Bank may have eliminated compete with these organizations. Bank holding comsome existing competition, at the time the Banks were pany affiliation would permit Applicant's proposed acquired by their current shareholders they had been banking subsidiaries to compete more effectively in affiliated for five years. In light of the facts of record, their respective markets by allowing them to raise including the fact that the two largest banking organi- funds more efficiently and to offer expanded services. zations in the market have a substantially larger pres- In this regard, Applicant indicates that it intends to ence in the market than would Applicant upon con- cause its proposed subsidiary banks to increase their summation, and that there remain four independent commercial lending, lending to rural areas, and mortbanks within the market, the Board concludes that the gage lending, and will make available trust services at acquisition of Bozeman Bank and Belgrade Bank by those banks. Therefore, the Board has determined that Applicant is consistent with approval. considerations relating to the convenience and needs Missoula Bank and South Missoula Bank are the of the communities to be served lend sufficient weight second and third largest of eight banks competing in the relevant banking market9 with 31.3 percent (total deposits of $94.9 million) and 6.8 percent (total deposits of $20.8 million), respectively, of deposits held in 10. Protestant has alleged that several principals of Applicant may have violated the Bank Holding Company Act and the Change in Bank commercial banks in the market. South Missoula Bank Control Act by acquiring in their own names less than ten percent of was organized in 1966 by the controlling shareholders the voting shares of Protestant. Although the facts of record indicate of Missoula Bank prior to the acquisition of these that several individuals who have ownership interests in Applicant have purchased shares of Protestant, the number of shares held by Banks by the current shareholders. Superior Bank is each individual does not rise to a level that would require the filing of a the seventh largest bank in the market, holding $8.0 notice under the Change in Bank Control Act (12 U.S.C. § 1817(j)). In million or 2.7 percent of market deposits. Consum- any event, it appears that this issue is rendered moot by the acquisition by Mr. Stephen Adams of the shares of Protestant previously held by one of Applicant's shareholders. Protestant has also alleged that the name of Applicant, Montana 5. For Red Lodge Bank, the relevant banking market is approxi- Bancsystem, is deceptively similar to the name of Protestant, Bank mated by Carbon County, Montana. of Montana System. Protestant contends that the Board should not 6. For Roundup Bank, the relevant banking market is approxi- proceed to act on the application until this issue has been resolved. It mated by Musselshell and Golden Valley Counties, Montana. is the Board's understanding that Applicant and Protestant are in liti- 7. For Sidney Bank, the relevant banking market is approximated gation in a state court proceeding on the issue of whether the respecby the western portion of McCone County, Richland County, an area tive names are deceptively similar. As the Board has previously extending 20 miles into North Dakota and 10 miles north and south of stated, it is of the view that the resolution of such issues rests with the Sidney, and the northwestern third of Dawson County. courts and is not properly within the jurisdiction of the Board under 8. For Bozeman and Belgrade Banks, the relevant banking market section 3(c) of the Act. First Security Corporation, 61 FEDERAL REis approximated by Gallatin County, Montana. SERVE BULLETIN 589, n. 1 (1975). In light of these considerations, it 9. For Missoula, South Missoula and Superior Banks, the relevant appears that Protestant has presented no evidence of factual disputes geographic market is approximated by the southern two-thirds of Min- or other matters that would warrant a hearing on the application. eral County, Missoula County, the northern portion of Ravalli County Therefore, the Board has determined that Protestant's request for a and the southern portion of Lake County. hearing should be denied. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 51 to outweigh any adverse competitive effects that might largest banking organization in Florida, controlling 16 result from consummation of the proposal. Accord- banks holding aggregate deposits of $1.4 billion repreingly, the Board has determined that the application senting 4.1 percent of the total deposits in commercial should be approved. banks in the state. Consummation of this proposal On the basis of the record, the application is ap- would not result in a significant increase in the concenproved for the reasons summarized above. The trans- tration of banking resources in Florida. action shall not be made before the thirtieth calendar Applicant is the largest of nineteen banking organiday following the effective date of this Order, or later zations in the North Pinellas County banking market than three months after the effective date of this Order and controls Bank of Clearwater, Clearwater, Florida unless such period is extended for good cause by the ("Clearwater Bank"), which holds 14.0 percent of the Board, or by the Federal Reserve Bank of Minneapolis total deposits in commercial banks in the market. Inunder delegated authority. asmuch as none of First's subsidiary banks compete in By order of the Board of Governors, effective the same market as Clearwater Bank, consummation December 19, 1980. of this proposal will not eliminate any existing competition between Applicant and First. Applicant's rela- Voting for this action: Chairman Volcker and Governors tive size makes it an unlikely entrant into any of the Wallich, Partee, Rice, and Gramley. Absent and not voting: markets served by First. While First could establish a Governors Schultz and Teeters. de novo bank in the North Pinellas market, based on the facts of record it appears that First is an unlikely (Signed) JAMES MCAFEE, entrant into the market at this time. In addition, other [SEAL] Assistant Secretary of the Board. facts of record demonstrate that the proposal would not result in a significant foreclosure of competition. The market is not highly concentrated, and contains Multi-Line, Inc., many competitors, including eight of the ten largest Tampa, Florida bank holding companies in Florida. Furthermore, ten organizations in the South Pinellas County banking Order Approving Acquisition of Additional Shares of market may expand into the market by branching. Bank Holding Company Thus, in the Board's judgment, consummation of the proposal would not have any adverse effects upon Multi-Line, Inc., Tampa, Florida, a bank holding com- existing or potential competition, nor would it increase pany within the meaning of the Bank Holding Compa- the concentration of banking resources in any relevant ny Act ("Act"), has applied for the Board's approval area. Accordingly, the Board concludes that comunder section 3(a)(3) of the Act (12 U.S.C. petitive considerations are consistent with approval of § 1842(a)(3)), to acquire an additional 10.3 percent of the application. the outstanding voting shares of First Florida Banks, The financial and managerial resources of Applicant Inc., ("First"), Tampa, Florida, also a bank holding and its subsidiary bank are considered to be satisfaccompany within the meaning of the Act. Applicant tory and their future prospects appear favorable. The currently owns 8.1 percent of the outstanding voting financial and managerial resources of First are generalshares of First. Upon consummation of the proposed ly satisfactory and consistent with approval. In this acquisition, Applicant would own 18.4 percent of the connection, the Board notes that acquisition by Applioutstanding voting shares of First. cant of this significant interest in First would provide Notice of the application, affording opportunity for First with a continuing source of capital. Accordingly, interested persons to submit comments and views, has banking factors are consistent with approval of this apbeen given in accordance with section 3(b) of the Act. plication. Although Applicant proposes no immediate The time for filing comments and views has expired, changes in the services offered by First, considand the Board has considered the application and all erations related to the convenience and needs of the comments received in light of the factors set forth in communities to be served appear to be consistent with section 3(c) of the Act (12 U.S.C. § 1842(c)). approval of the application. Applicant, the 55th largest banking organization in In considering this application, the Board has re- Florida, controls one bank with deposits of $122.9 mil- viewed Applicant's continued eligibility for an exemplion, representing 0.4 percent of the total deposits in tion from the prohibition on nonbanking activities in commercial banks in the state.1 First is the seventh section 4 of the Act pursuant to the provisions of section 4(c)(ii) of the Act.2 When the Board approved Ap- 1. All banking data are as of June 30, 1979. 2. Section 4(c)(ii) exempts from the prohibitions of section 4: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

52 Federal Reserve Bulletin • January 1981 plicant's application to become a bank holding compa- that Applicant divest its impermissible nonbanking acny, the Board found that, as, a successor to its former tivities, particularly its container manufacturing operaparent, Lykes Bros., Inc., Tampa, Florida, Applicant tions, within no later than two years of the date of this could retain its container manufacturing business in re- Order. The transaction shall not be consummated beliance on the 4(c)(ii) exemption.3 However, the Board fore the thirtieth calendar day following the effective has previously determined that this exemption would date of this Order or later than three months after the not continue to be available to eligible companies that effective date of this Order, unless such period is exexpand their banking interests and become engaged in tended for good cause by the Board, or by the Federal the management of banks.4 The Board believes that in Reserve Bank of Atlanta pursuant to delegated authordeciding whether to approve Applicant's proposal, the ity. Board may legitimately consider whether Applicant By order of the Board of Governors, effective will be engaged in the management of banks upon ap- December 9, 1980. proval. Upon examination, the Board believes that the facts Voting for this action: Vice Chairman Schultz and Goverof the relationship between Applicant and First in- nors Teeters, Rice, and Gramley. Absent and not voting: Chairman Volcker and Governors Wallich and Partee. dicate that Applicant will be engaged in the management of banks upon consummation. This application involves a considerable expansion of Multi-Line's (Signed) THEODORE E. ALLISON, banking business. In particular, the Board notes that [SEAL] Secretary of the Board. Applicant presently owns one bank with $122.9 million in deposits; while First, Florida's seventh largest banking organization, has 16 banking subsidiaries with National City Corporation, $1.4 billion in deposits. Moreover, upon consum- Cleveland, Ohio mation of this proposal, Applicant will be the largest single shareholder of First with no other shareholder Order Approving Acquisition of Bank owning more than 5 percent of First's shares. Applicant's investment in First will represent an increase of National City Corporation, Cleveland, Ohio ("Nation- Applicant's total assets by 28.8 percent. After consid- al City"), a bank holding company within the meaning eration of all the facts of record, the Board finds it rea- of the Bank Holding Company Act ("BHC Act"), has sonably likely that upon consummation of the proposal applied for the Board's approval under section 3(a)(3) Applicant will be capable of exerting a significant influ- of the BHC Act (12 U.S.C. § 1842(a)(3)) to acquire 100 ence over the management and policies of First. Ac- percent of the voting shares of The Henry County cordingly, it is the Board's judgment that, upon the Bank, Napoleon, Ohio ("Bank"). acquisition of the shares of First, Applicant may not Notice of this application has been given in accordretain its container manufacturing operations on the ance with sections 3(b) of the BHC Act and section basis of the section 4(c)(ii) exemption in the Act. The 262.3 of the Board's Rules of Procedure (12 C.F.R. Board believes it is appropriate to allow Applicant two § 262.3), affording interested persons an opportunity years in which to divest its manufacturing operations.5 to comment. The time for filing comments and views Based on the foregoing, it is the Board's judgment has expired. Comments have been received from Ohio that the proposed transaction would be consistent with Public Interest Campaign and Citizens to Bring Broadthe public interest and that the application should be way Back (together, "Protestants"). Comments have approved. Accordingly, the application is approved also been received from the Farm Labor Organizing for the reasons summarized above, upon the condition Committee ("FLOC") and Mrs. Earl Bowers.1 Protestants' comments on this application principally relate to the record of National City's lead bank, National "a company covered in 1970 more than 85 percentum of the vot- City Bank, Cleveland, Ohio ("NCB"), under the ing stock of which was collectively owned on June 30, 1968 and continuously thereafter, directly or indirectly by or for members of the same family, or their spouses, who are lineal descendents of common ancestors." 3. Multi-Line Inc., 66 FEDERAL RESERVE BULLETIN 329 (1980). 1. While these comments from FLOC and Mrs. Bowers were re- 4. Guaranty Development Company, 66 FEDERAL RESERVE BUL- ceived after the close of the comment period, these comments have LETIN 165 (1980). been reviewed by the Board in connection with its consideration of 5. In the Board's view, the loss of the 4(c)(ii) exemption is analo- this matter. In connection with its comments on this application, gous to the situation where a company becomes a bank holding com- FLOC also requested that the Board hold a hearing on this applipany subject to the prohibitions of section 4 of the Act against non- cation. Section 262.3(d) of the Board's Rules of Procedure, 12 C.F.R. banking acquisitions. Under section 4(a)(2) of the Act, such § 262.3(d), precludes Board consideration of this request. In any companies have two years in which to divest their impermissible non- event, the Board believes that its disposition of Protestants' hearing bank activities. request also addresses the issues raised by FLOC's request. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 53 Community Reinvestment Act of 1977 (12 U.S.C. mercial banks.4 In addition, Bank, through its §§ 2901-05) ("CRA"). The Board has considered the operation of a branch office in Pleasant Township, application and all comments received in light of the Ohio (deposits of $11.5 million), is the sixth largest of factors set forth in section 3(c) of the BHC Act and the eight banking organizations in the Defiance banking CRA. market, controlling 7.0 percent of that market's com- In addition to interposing numerous objections to mercial bank deposits.5 Protestants assert that conthe proposed acquisition, Protestants have requested summation of this proposal would have adverse effects that the Board order a formal hearing to air the issues on competition and that this acquisition would further they have raised. Section 3(b) of the Act requires that concentrate banking resources in Ohio since Bank is the Board hold a formal hearing concerning an appli- the only remaining independent bank in Henry Councation only when the appropriate state banking author- ty. ity makes a timely written recommendation of denial Based on its review of the record in this case, the of the application, and no such recommendation has Board does not find that the proposed acquisition been received from the state of Ohio Superintendent of would have any significantly adverse competitive ef- Banks with respect to Applicant's proposal. While no fects. While National City is one of the largest banking formal hearing is required in this instance, the Board organizations in Ohio, it is not dominant, and in the could in its discretion order a formal or informal pro- Board's judgment, the acquisition of a relatively small ceeding if it deemed it appropriate. In general the institution the size of Bank would have a de minimis Board will hold a hearing if it determines there are ma- impact on the concentration of banking resources in terial questions of facts in dispute that can only be re- Ohio. Moreover, the proposal would not eliminate any solved by means of a trial-type proceeding. The Board existing competition between National City and Bank, has scrutinized the record of this application, and has inasmuch as none of National City's banking subdetermined that there are no material factual dif- sidiaries operate in either of the banking markets ferences in the record that would warrant a hearing on where Bank is located, and National City's nearest this application. Rather, Protestants' arguments con- banking subsidiary is located in Williams County, an cern the interpretation or significance that should be adjacent banking market. accorded to certain facts in the record. Inasmuch as With respect to potential competition, the Board the Board is charged by statute with making these notes that National City has the resources to enter judgments, and in view of the fact that all parties have both the Henry County and Defiance banking markets been afforded ample opportunity to present their argu- de novo either by establishing a new bank or by ments in written submissions to the record as well as branching into Henry County through its subsidiary lothe opportunity to comment on one another's sub- cated in Williams County. Generally, the Board remissions, the Board has determined that a hearing gards the effects of a proposed acquisition on potential would serve no useful purpose.2 Accordingly, Protes- competition as most serious where the markets intants' request for a formal hearing is hereby denied. volved are concentrated; one of the organizations in- The Board has considered the application, as well as volved is dominant in the market; and the other organi- Protestants' objections to the proposal, on the merits. zation is one of a few likely entrants into the market. National City, the third largest banking organization While the Henry County and Defiance banking marin Ohio, controls 12 banks with aggregate deposits of kets are somewhat concentrated, it appears that Bank approximately $3.0 billion, representing 7.9 percent of should not be regarded as a dominant organization in total commercial bank deposits in the state.3 Acquisi- either market.6 Moreover, it appears that after the protion of Bank, with deposits of $28.5 million, would in- posed acquisition is consummated, numerous potencrease Applicant's share of commercial bank deposits tial entrants would remain, since only three of Ohio's in Ohio by one-tenth of one percent and would not al- bank holding companies presently are represented in ter its statewide ranking. Bank is the second largest of six banking organizations in the Henry County banking market, with deposits of $14.8 million, represent- 4. The Henry County banking market is approximated by Henry ing 16.9 percent of that market's deposits in com- County, except Flatrock and Pleasant townships; all market data are as of June 30, 1978. 5. The Defiance banking market is approximated by Defiance and Paulding Counties (except Hicksville Township in Defiance County; Carryall Township in Paulding County); Flatrock and Pleasant town- 2. In addition, on September 10, 1980, staff of the Federal Reserve ships in western Henry County; and Monroe and Perry Townships in Bank of Cleveland attended a public meeting in Cleveland arranged by Putnam County. Protestants. Reserve Bank staff heard oral testimony by Protestants, 6. The Board notes that while Bank is the second largest bank in the and an analysis of this meeting as well as the materials distributed at Henry County market, the largest bank in the market, which is owned the meeting have been made a part of the record in this matter. by the state's largest holding company, holds more than two times the 3. All banking data are as of December 31, 1978. market deposits held by Bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

54 Federal Reserve Bulletin • January 1981 the Henry County market, and only one is represented Protestants. The Board has also considered the conin the Defiance market. Accordingly, it is the Board's clusions of the Office of the Comptroller of the Curjudgment that the proposal would not have serious ef- rency resulting from an examination of NCB that infects on potential competition in either market. Ac- cluded an assessment of NCB's record of meeting the cordingly, the Board concludes that consummation of requirements of the CRA. At the outset the Board the acquisition of Bank by National City would not notes that Protestants do not challenge a finding that have any significantly adverse effects on existing or NCB has reasonably delineated its local community,8 potential competition in any market. or that NCB is in technical compliance with the proce- The financial and managerial resources of National dural requirements of the CRA and the Comptroller's City, its banking subsidiaries and Bank are regarded as regulation. There is no evidence of prescreening or satisfactory. Therefore, the Board regards banking other illegal credit practices by NCB. factors as consistent with approval of this application. With respect to NCB's record of residential mort- In considering the effects of the proposed acquisi- gage lending, the Board notes that NCB has a strong tion on the convenience and needs of the community retail presence in Cuyahoga County, with 21 percent to be served, the Board has examined the record of of its loan portfolio consisting of residential mortgage performance by National City and its banking sub- loans and 24 percent consisting of consumer installsidiaries in meeting the credit needs of its community ment loans. From the record it appears that both the as provided in the CRA and the Board's Regulation number and dollar volume of such loans made by NCB BB (12 C.F.R. § 228). The CRA requires the Board to in the city of Cleveland are low, particularly when assess the records of these subsidiaries in meeting the compared with the number and dollar volume of such credit needs of their communities, including low and loans in the suburban areas of NCB's community. moderate income neighborhoods consistent with safe However, on previous occasions the Board has inand sound operation, and to take these records into dicated that it does not believe that a comparison of account in its evaluation of this application. deposits to total loans can be prima facie evidence of Protestants have challenged the CRA record of Na- discrimination.9 Further, a review of NCB's mortgage tional City's subsidiary, National City Bank, Cleve- loan application records for the years 1977, 1978 and land, Ohio ("NCB"). Specifically, Protestants allege 1979 discloses that the geographic distribution of mortthat NCB has failed to meet the need for housing-re- gage credit extended by NCB closely parallels the geolated credit in the city of Cleveland, particularly its graphic distribution of the applications it has received. low and moderate income neighborhoods; that it has Moreover, when the volume of NCB's suburban and discriminated against residents of neighborhoods with city mortgage lending is viewed in light of the demand large non-white populations or those undergoing racial for such loans, as approximated by the number of deed transition; that it has failed to meet the credit needs of transfers, there is not a great disparity in NCB's recsmall businesses in its community; and that its efforts ord of meeting the demand in the suburban versus the to ascertain the credit needs of its community are in- city areas of its community. Finally, based on a review adequate.7 In addition, Protestants allege that Appli- of NCB's mortgage lending record for the years 1977, cant has engaged in discriminatory employment prac- 1978 and 1979, the Board notes that the disparity betices. tween NCB's suburban and city mortgage lending de- In support of its objections, Protestants have sub- clined from a ratio of 13 suburban loans to each city mitted the results of their research regarding the distri- loan in 1977 to a ratio of 3 suburban loans extended to bution of NCB's mortgage and home improvement each city loan in 1979. lending in various sections of Cuyahoga County their This improvement in NCB's mortgage lending recanalysis of the demand for residential housing credit ord in city neighborhoods in part may be attributed to and the level of NCB's participation in SBA-guaran- recent efforts by NCB to inform these segments of its teed lending programs. community of the availability of mortgage and home The Board has examined the submissions of Protestants and National City regarding the issues raised by 8. NCB delineates its community as Cuyahoga County and North Ridgeville, Ohio. Approximately 23 percent of the population of Cuyahoga County lives on low and moderate income census tracts. The city of Cleveland contains 203 census tracts, of which 110 or 54.2 7. Protestants also alleged that the acquisition of Bank by National percent are classified as low or moderate income. Of the remaining City would result in further mechanization of the tomato industry in census tracts within NCB's community, six are classified as low or Henry County to the detriment of migrant farm workers, but have moderate income. These six census tracts are located in the suburbs of submitted no evidence to demonstrate how this issue is relevant to the Cuyahoga County. There are no low or moderate income census tracts factors that the Board must consider in acting on applications under in North Ridgeville. the BHC Act and the CRA. Accordingly, the Board views this allega- 9. AmeriTrust, 66 FEDERAL RESERVE BULLETIN, 238 (1980); CRA tion as being without merit. Information Statement (45 Federal Register 1940 (1980)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 55 improvement credit. Specifically, NCB has instituted a mitted figures indicating that NCB's mortgage lending program whereby all branch managers are required to activities across neighborhoods declines as the permaintain contact with local realtors to ascertain the centage of non-white population increases in a particuneed for residential mortgage credit in that area, and to lar neighborhood. When the number of deed transfers inform them of the availability of such credit at NCB. is used as a proxy for demand, it appears that NCB has In addition, NCB advertises its services in newspapers been about 5.7 times more active in providing residenof general circulation, as well as in local newspapers tial mortgage credit in predominantly white neighborwith an inner city orientation. hoods than in predominantly black neighborhoods. Another aspect of NCB's housing-related lending A number of factors appear to account for part of record is its home improvement lending. Based on the the disparity in NCB's lending record, including difnumber of owner-occupied dwellings in the suburbs ferent income levels and the number of owner-occuand in the city, it appears that the number of NCB's pied dwellings between predominantly black and prehome improvement loans is fairly distributed between dominantly white neighborhoods. In addition, the city and suburbs. Moreover, from the record, it ap- record indicates that mortgage banking companies pears that within the city, a greater proportion of have a high market penetration rate in predominantly NCB's home improvement loans are in low and mod- non-white neighborhoods.11 The Board also notes that erate income neighborhoods. The Board regards NCB's home mortgage lending pattern in large part re- NCB's record of home improvement lending as a posi- flects the geographic distribution of its home mortgage tive factor. loan application.12 Moreover, Protestants have not Protestants allege that NCB has not served the cred- provided affidavits from individuals who claim to have it needs of small businesses in its community. In sup- been discriminated against. port of this contention Protestants provided informa- The Board has also reviewed NCB's record of extion relating to NCB's record of extending Small tending home improvement credit in predominantly Business Administration ("SBA") guaranteed loans white, predominantly non-white and transitional from 1977 to 1979. The record indicates that during neighborhoods within its community. The facts of recthese years NCB extended $2.2 million in SBA-guar- ord demonstrate that during 1977-1979 NCB extended anteed loans. Protestants' argument that NCB is not approximately the same number and dollar volume of meeting the credit needs of small businesses in its home improvement loans in predominantly non-white community is based solely on NCB's SBA-guaranteed as in predominantly white areas of Cleveland. Analylending record and fails to take into account other sis of these figures relative to the number of one-tocomparable extensions of credit by NCB. The Board four family owner-occupied dwellings in each area inviews SBA-guaranteed loans as only part of a bank's dicates that during these years NCB was 1.5 times small business loan portfolio. In particular, the Board more active in extending home improvement loans in notes that as of June 30, 1980, 20.1 percent of NCB's the predominantly non-white neighborhoods than in outstanding commercial and industrial loan portfolio the predominantly white neighborhoods in Cleveland. was comprised of loans to small business, and that Protestants have alleged that NCB has failed to adebased on a sample it appears that approximately one- quately assess the credit needs of its community, parfourth of such loans were made in Cleveland's low and ticularly its low and moderate income neighborhoods. moderate income neighborhoods. Accordingly, the Protestants have not provided specific factual support Board concludes that Protestants' allegations con- for this contention; instead, they question whether the cerning NCB's record of serving the credit needs of kinds of programs NCB has instituted to assess its small businesses within its community are without community's credit needs reflect a genuine commerit. mitment to the CRA. In this regard, Protestants ques- Protestants allege that NCB engages in racial dis- tion whether NCB's policy of encouraging employees crimination in extending housing-related credit. In to participate in various community service and action support of this allegation Protestants have submitted groups represents a commitment to the spirit of the data indicating that NCB has been less active in ex- CRA. tending mortgage credit in those areas of its community with predominantly non-white populations and in neighborhoods undergoing racial transition than in other areas of its community.10 Protestants also sub- 11. Over 80 percent of FHA loans extended in non-white neighborhoods were originated by mortgage banking companies. 12. In 1977 NCB received 7.2 percent of its total mortgage loan applications from predominantly non-white neighborhoods. In 1978, 10. A predominantly non-white census tract is defined as a census this figure was 6.0 percent and in 1979 the percentage dropped to 2.8 tract in which more than 75 percent of the population is black. percent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

56 Federal Reserve Bulletin • January 1981 The record indicates that NCB has undertaken a issues are presently before the proper administrative number of programs to monitor the needs of all seg- agency. Accordingly, the Board believes it would be ments of its community. NCB does encourage its em- inappropriate at this time for it to pass upon the merits ployees to participate in various community organiza- of these allegations. tions. In addition, NCB maintains contact with various In conclusion, the Board has examined the entire community-oriented organizations some of which are record relating to National City's record of compliance involved in housing rehabilitation programs in various with the CRA, including the results of the CRA comparts of Cleveland. Moreover, through contacts with pliance examination by the OCC and the surveys and these organizations, NCB has supported various hous- field investigations undertaken by staff. The Board ing rehabilitation projects and other community serv- concludes that NCB has offered its services throughice activities. NCB also maintains a small business call out its community and has not arbitrarily excluded any program in order to ascertain the credit needs of this area. NCB has taken a number of steps aimed specifisegment of its community. For example, in 1979, per- cally to help meet the credit needs of low and modersonnel at the two Broadway branches made a total of ate income areas. With respect to NCB's performance 367 calls to commercial and industrial firms within in meeting the credit needs of low and moderate intheir territory of which 100 were to businesses with come neighborhoods, several aspects of NCB's record less than $250,000 in annual sales. During the first sev- of extending credit to the Cleveland area appear favoren months of 1980 personnel at the two Broadway able. In particular, the Board notes that NCB's record branches made 343 calls to businesses within their ter- of extending home improvement and small business ritory of which 79 were to businesses with less than credit indicates that it has met its affirmative obligation $250,000 in annual sales. to help meet the credit needs of its community. More- Protestants have alleged that "National City's rec- over, it appears that the disparity between the amount ord of employment of women and minorities appears of funds committed by Applicant to housing-related to be severely lacking." In support of this contention, credit in low and moderate income areas versus all Protestants cite a 1978 Report by Cleveland Women other areas may be partially the result of factors that Working which indicated that NCB had fewer women affect the demand for such credit. In addition, the disand minorities in management positions than any of the parity in NCB's lending record between prefive major banks in metropolitan Cleveland.13 Protes- dominantly white and predominantly black areas, tants also point out that "National City Bank has when viewed in light of other facts of record, does not recently been the focus of an investigation by the U.S. permit a conclusion that NCB has engaged in racial Department of Labor ("DOL"), which has issued a discrimination. finding of discrimination against the bank".14 Con- Furthermore, National City has made several comtrary to Protestants' assertion, at this time there has mitments to the Board designed to improve NCB's been no finding that either NCB or National City has CRA record of performance. Specifically, National been engaged in discriminatory employment practices. City will cause NCB to create and implement an ad- Nor have Protestants supplied the Board with any evi- vertising campaign designed specifically to inform low dence that either National City or NCB has discrimi- and moderate income groups of credit services availnated against women or minorities in their employ- able to them; create and implement a CRA Sensitivity ment practices.15 Moreover, it appears that these Program for the bank's personnel, and increase attendance by bank personnel at community group meetings together with a stepped-up call program to visit 13. Protestants state that there are no women or minorities on the these neighborhood organizations. The Board regards Board of Directors of [National City]. At the same time, Protestants these commitments by National City as steps designed concede "that there are four females on the Boards of Directors of primarily to foster more effective communication with affiliate banks, and that one affiliate will soon have a woman president." However, Protestants allege, without proof, that this is due to the low and moderate income neighborhoods in its National City's policy of allowing its affiliates to retain some independence in personnel selection, and does not reflect National City's own policy concerning the employment of women and minorities. 14. DOL has commenced an investigation of NCB's employment practices and an administrative complaint was issued against NCB on tions to be relevant to NCB's record of meeting the credit needs of its May 20, 1980. On June 22, 1980, NCB filed an answer to the com- community although the Board has considered the submissions of inplaint, denying the allegations of discriminatory employment practices dividuals who alleged that an applicant or its banking subsidiary were and raising affirmative defenses. This matter has been docketed by the engaged in discriminatory employment practices in connection with Adminstrative Law Judge and is scheduled to go to trial in March bank holding company applications. The Board has also recognized 1981. U.S. Department of Labor, OFCCP v. National City Bank of that there may be limits to the extent it may take into consideration Cleveland. matters of public interest that nevertheless are not directly within the 15. Protestants contend that discriminatory employment practices scope of the Board's regulatory responsibilities under the BHC Act. should be considered in connection with National City's CRA record. Texas American Bankshares, 64 FEDERAL RESERVE BULLETIN 982 The Board does not consider the issue raised by Protestants' allega- (1978). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 57 community. The Board has relied on each of these directly related to extensions of credit by FSHB's commitments and will closely monitor National City's banking subsidiaries. Fort Sam Life engages in underefforts to effect compliance. writing credit life, and credit accident and health insur- With respect to other convenience and needs con- ance in connection with extensions of credit by siderations, approval of National City's acquisition of FSHB's banking subsidiaries. These activities have Bank will enable Bank to provide additional services been determined by the Board to be closely related to to its customers. Upon consummation of the proposed banking (12 C.F.R. §§ 225.4(a)(9)(ii) and (10)). transaction, Bank will reduce minimum denominations Notice of the applications, affording opportunity for on certificates of deposit, offer statement savings interested persons to submit comments and views has plans, and increase its automobile lending activity. In been given in accordance with sections 3 and 4 of the addition, affiliation with National City will enable Act (45 Federal Register 3668 and 47922). The time for Bank to increase its residential mortgage lending activ- filing comments and views has expired, and the appliities and offer credit at more competitive rates. On bal- cations and all comments received have been considance, these factors are sufficient to outweigh any ad- ered in light of the factors set forth in section 3(c) of verse aspects of NCB's CRA performance. the Act (12 U.S.C. § 1842(c)) and the considerations It is the Board's judgment that approval of the appli- specified in section 4(c)(8) of the Act. cation would be in the public interest and that the ap- On the basis of the record, the application is application should be approved. On the basis of the rec- proved for the reasons set forth in the Board's Stateord the application is approved for the reasons ment, which will be released at a later date. summarized above. This transaction shall not be made By order of the Board of Governors, effective before the thirtieth day following the effective date of November 28, 1980. this Order or later than three months after that date, unless such period is extended for good cause by the Voting for this action: Chairman Volcker, Governors Board or by the Federal Reserve Bank of Cleveland Schultz, Wallich, Partee, Rice, and Gramley. Voting against pursuant to authority hereby delegated. this action: Governor Teeters. Present and not voting on the insurance activities: Governors Schultz and Wallich. By order of the Board of Governors, effective December 3, 1980. (Signed) BARBARA R. LOWREY, Voting for this action: Vice Chairman Schultz and Gover- [SEAL] Assistant Secretary of the Board. nors Wallich, Partee, Teeters, Rice, and Gramley. Absent and not voting: Chairman Volcker. Statement by the Board of Governors of the Federal (Signed) THEODORE E. ALLISON, Reserve System Regarding the Application of [SEAL] Secretary of the Board. Republic of Texas Corporation to Merge With Fort Sam Houston BankShares, Incorporated Republic of Texas Corporation, By Order dated November 28, 1980, the Board ap- Dallas, Texas proved the application of Republic of Texas Corporation Dallas, Texas, for the Board's approval under Order Approving Merger of Bank Holding Companies section 3(a)(5) of the Bank Holding Company Act (12 U.S.C. § 1842(a)(5)) to merge with Fort Sam Houston Republic of Texas Corporation, Dallas, Texas, has ap- BankShares, Incorporated, San Antonio, Texas plied for the Board's approval under section 3(a)(5) ("FSHB"), under the name and charter of Applicant.1 of the Bank Holding Company Act (12 U.S.C. The Board also approved the application under Sec- § 1842(a)(5)) to merge with Fort Sam Houston Bank- tion 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8)) and Shares, Incorporated, San Antonio, Texas ("FSHB"), under the name and charter of Republic of Texas Corporation ("Applicant"). 1. Protests have been received from a number of minority shareholders of FSHB who allege, among other things, that the merger Applicant has also applied for the Board's approval would disadvantage them. Unequal offers to shareholders or disparity under section 4(c)(8) of the Act (12 U.S.C. § 1843(c)(8) of benefits to shareholders resulting from the merger are not issues and section 225.4(b)(2)) of the Board's Regula- that the Board may consider in acting on an application under section 3 of the Bank Holding Company Act. Western Bancshares, Inc. v. tion Y (12 C.F.R. § 225.4(b)(2)), to acquire all of the Board of Governors, 480 F.2d 749 (10th Cir. 1973). outstanding shares of Fort Sam Life Insurance Com- Several shareholders also contend that the transaction is not necespany, San Antonio, Texas ("Fort Sam Life"), a sub- sary for FSHB to continue its services to the military and that consummation would adversely affect competition. These issues are dissidiary of FSHB, and to engage in the sale of insurance cussed in the Board's Statement. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

58 Federal Reserve Bulletin • January 1981 section 225.4(b)(2) of Regulation Y (12 C.F.R. trols two subsidiary banks that hold combined depos- § 225.4(b)(2)) to acquire all of the outstanding shares its of $182.5 million, representing 4.5 percent of total of Fort Sam Life Insurance Company, San Antonio, commercial bank deposits in the market. FSHB ranks Texas ("Fort Sam Life"), a subsidiary of FSHB, and as the fifth largest banking organization in the market to engage in the sale of insurance directly related to and controls three subsidiary banks with aggregate deextensions of credit by FSHB's banking subsidiaries. posits of $190.8 million, representing 4.7 percent of to- By Order dated June 11, 1980, the Board denied the tal market deposits. Consummation of the transaction application of Applicant to merge with FSHB. The would increase Applicant's share of market deposits to Board found that consummation of the transaction 9.2 percent and would cause Applicant to become the would have substantially adverse effects on existing third largest banking organization in the market. Data competition in the relevant banking market that were more recent than that available at the time the Board not outweighed by increased benefits to the conve- acted to deny this application indicate that the rank of nience and needs of the community to be served. Al- both organizations within the market and their respecthough the Board noted the military orientation of tive shares of market deposits have declined since FSHB's lead bank and the presence within the market 1978. Furthermore, for the reasons discussed below, of thrift institutions, the Board at that time did not find the share of deposits that would be held by the resultthat such facts sufficiently reduced the anticompetitive ing organization does not accurately reflect the amount effects of the merger so that approval of the appli- of competition that would be eliminated by consumcation was warranted. Thereafter, Applicant re- mation of the proposal. quested reconsideration of the Board's action and, on In its previous action denying this application, the July 7, 1980, the Board's General Counsel, acting un- Board was concerned with what it perceived to be a der delegated authority, granted Applicant's request substantially adverse impact on competition within the for reconsideration. In connection with the reconsider- relevant market. With respect to the transaction's efation of this application, Applicant has submitted sig- fect on the local market, Applicant has provided subnificant new material concerning the extent to which stantial factual information demonstrating that FSHB's FSHB's lead bank serves a market other than a locally lead bank, The National Bank of Fort Sam Houston limited geographic market. Applicant has also present- ("Fort Sam Bank"), which holds almost 92 percent of ed new information concerning competition afforded total deposits held by FSHB's banking subsidiaries, is by thrift institutions within the market. a "military bank" and orients its business to custom- Applicant, the fourth largest banking organization in ers located outside the San Antonio market. Over 75 Texas, controls 23 banks with aggregate deposits of percent of all demand deposit accounts and over 50 approximately $5.0 billion, representing 7.2 percent of percent of total demand deposit volume at Fort Sam total deposits in commercial banks in the state.2 Bank are derived from customers, primarily military FSHB, the twentieth largest banking organization in personnel, located outside the San Antonio SMSA. Texas, owns three subsidiary banks and controls total Furthermore, almost 75 percent of loan accounts and deposits of approximately $190.8 million, representing between 50 and 60 percent of Fort Sam Bank's total 0.3 percent of total statewide commercial bank depos- loan volume are derived from out-of-area customers. its. Upon consummation, the resulting banking organi- Applicant further asserts that the non-local character zation would rank as the fourth largest in the state, of Fort Sam Bank's business is demonstrated by the controlling about 7.5 percent of the total deposits in fact that Fort Sam Bank advertises for business in 29 commercial banks in Texas. Although the Board has cities throughout the United States where substantial expressed concern about the concentration of banking numbers of military personnel are based. Moreover, resources in Texas in its consideration of other appli- Applicant states that over 70 percent, or 43,000, of cations, the Board concludes that consummation of Fort Sam Bank's demand deposit accounts are derived this transaction would not so significantly increase the from direct deposit military payroll accounts which are concentration of banking resources in Texas as to re- credited at the end of each month. Applicant asserts sult in significantly adverse effects on competition in that this factor causes FSHB's competitive strength in the state. the market to be overstated because deposits are at the maximum volume on the last day of each month, and Applicant, the sixth largest of 42 banking organizations located in the San Antonio banking market,3 con- this coincides with the call date for reporting deposit data. Applicant states that the drawdown of these accounts is substantial over the course of the month.4 2. Unless otherwise noted, all banking data are as of December 31, 1979, and reflect bank holding company formations and acquisitions approved as of October 31, 1980. 4. As an example, Applicant cites data that show Fort Sam Bank's 3. The San Antonio market is approximated by the San Antonio total deposits as of June 30, 1980, at $183.0 million. Three days earlier, SMSA. Fort Sam Bank's total deposits were $141.1 million. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 59 The Board has reviewed the record as supplemented size, number of lending powers of these organizations by Applicant and has determined that, in light of the within the San Antonio market. Applicant maintains unique composition of Fort Sam Bank's business that that area thrifts offer the same cluster of services that results in an out-of-market orientation for the FSHB are offered by commercial banks. Savings and loan asorganization as a whole,5 the effects of the merger on sociations offer many of the same services as area competition within the San Antonio banking market commercial banks, such as interest-bearing draft/ would not be so serious as to warrant denial. Although checking accounts, tax-deferred retirement plans, this transaction involves a large horizontal acquisition home-improvement loans, travelers checks, transfer in a market where Applicant is already well represent- of savings to checking, and telephone transfer served, the anticompetitive effects are mitigated sub- ices. Applicant also asserts that area state-chartered stantially by the fact that over one half of FSHB's loan savings and loan associations, which have some comand deposit business is conducted outside the market mercial lending powers, have a sizeable percentage of and that FSHB's marketing philosophy is directed at business loans. Applicant contends that the level of enhancing its position as a military bank serving mili- commercial lending activity engaged in by these institary personnel throughout the world. Normally the tutions is significant and places these thrift institutions Board views an acquisition of this size with concern, in direct competition with area commercial banks. and in the absence of the unique facts presented by The Board is of the view that the evidence presented this application would ordinarily not approve such an to date concerning thrift institutions does not compel a acquisition; however, the adverse competitive effects conclusion that these institutions compete actively of this merger within the local market are limited by with commercial banks over a sufficient range of finanthe fact that FSHB is not as strong a local competitor cial services to consider them full competitors of comas its size would apparently indicate. Moreover, while mercial banks. However, the facts of record support a all banks in the San Antonio market can be expected to finding that thrift institutions in San Antonio compete compete for the business of military personnel in San sufficiently with commercial banks in the provision of Antonio, it is the degree to which FSHB serves this financial services to customers that the competition afsegment of the community that gives it its unique char- forded by thrift institutions serves to reduce the adacter and lessens its competitive position in the San verse competitive effects associated with the merger of Antonio market.6 Although FSHB is a viable inde- these commercial banking organizations. In light of all pendent organization and, absent evidence to the con- the facts of record, it is the Board's judgment that contrary, could be expected to expand throughout the summation of the merger would have only slightly admarket, FSHB's history of service to the military com- verse effects on competition. munity and recent actions in seeking to expand its mili- The financial and managerial resources and future tary services indicate a concentration on serving mili- prospects of Applicant, FSHB, and their subsidiaries tary personnel worldwide. For example, FSHB was are considered satisfactory. Accordingly, banking facrecently granted a contract by the Department of De- tors are consistent with approval of the application. fense to operate banking facilities at 14 military bases Although Applicant will continue Fort Sam Bank's overseas. Based on these and other facts of record, it current services to military personnel and intends to is the Board's view that consummation of the transac- expand and improve significantly those services in the tion would not result in such adverse competitive ef- future, Applicant also proposes to develop the local fects in the relevant market that would warrant denial customer and commercial business of FSHB's banks of the application. with particular emphasis on development of Fort Sam Applicant has also asserted that the thrift institu- Bank's local business. While FSHB appears to have tions in the San Antonio market should be considered the resources to develop those commercial services inas competitors of commercial banks, based upon the dependent of affiliation with Applicant, it has not clearly demonstrated a willingness or ability to do so. Applicant also intends to initiate trust services and in- 5. Although FSHB operates two banks other than Fort Sam Bank, vestment advisory services, especially to FSHB's milalmost 92 percent of FSHB's total deposits are derived from Fort Sam itary customers. Applicant has also committed that Bank. one million dollars will be made available to lend to 6. In this regard, the Community Reinvestment Act, which requires a financial institution to serve the convenience and needs of its entire local residents for rehabilitation of homes and small community, recognizes that a military bank's community need not be businesses in the vicinity of Fort Sam Bank. In the defined geographically. It states that: Board's view, the benefits to the public that may be A financial institution whose business predominantly consists of serving the needs of military personnel who are not located within expected from consummation of the proposed transaca defined geographic area may define its "entire community" to tion lend weight sufficient to outweigh any adverse efinclude its entire deposit customer base without regard to geofects on competition that may result. Accordingly, it is graphic proximity. (12 U.S.C. § 2902). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

60 Federal Reserve Bulletin • January 1981 the Board's judgment that the proposed transaction SERVE BULLETIN 580 (1980).] I continue to believe that would be in the public interest and that the application this transaction would have substantially adverse efshould be approved. fects on competition within the San Antonio banking With respect to the application to acquire Fort Sam market that are not outweighed by considerations re- Life and to engage in credit-related insurance activi- lating to the convenience and needs of the community ties, the Board has determined that the balance of pub- to be served. In my opinion, the new material sublic interest factors prescribed by section 4(c)(8) of the mitted in support of the application does not differ sig- Act warrant approval. There is no evidence that Appli- nificantly from that originally presented to the Board. I cant's acquisition of Fort Sam Life would result in un- do not believe that there is adequate evidence in the due concentration of resources, decreased or unfair record to support the reversal of the Board's earlier competition, conflicts of interest, unsound banking action. For these reasons, I would deny this application. practices, or other adverse effects on the public interest. Based on the foregoing and other facts and consid- December 22, 1980 erations reflected in the record, the Board has determined in accordance with the provisions of section 4(c)(8) of the Act, that the acquisition of Fort Sam Life U.S. Bancorp, and the sale of credit insurance directly related to ex- Portland, Oregon tensions of credit by FSHB's bank subsidiaries can reasonably be expected to produce benefits to the pub- Order Denying Acquisition of Bank lic that outweigh any possible adverse effects and that the application should be approved. U.S. Bancorp, Portland, Oregon ("Applicant"), a On the basis of the record, the applications are ap- bank holding company within the meaning of the Bank proved for the reasons summarized above. The merger Holding Company Act ("Act"), has applied for the shall not be made before the thirtieth calendar day fol- Board's approval under section 3(a)(3) of the Bank lowing the effective date of the Board's Order, or later Holding Company Act (12 U.S.C. § 1842(a)(3)) to acthan three months after the effective date of the Order quire all the outstanding shares of The Forest Grove unless such period is extended for good cause by the National Bank, Forest Grove, Oregon ("Bank"). Board, or by the Federal Reserve Bank of Dallas pur- Notice of the application, affording opportunity for suant to delegated authority. The approval of the ap- interested persons to submit comments, has been givplication to acquire Fort Sam Life and to engage in the en in accordance with section 3 of the Act. The time sale of insurance as agent or broker is subject to the for filing comments has expired and the Board has conconditions set forth in section 225.4(c) of Regulation Y sidered the application and all comments received, inand to the Board's authority to require such modifica- cluding those of the United States Department of Justion or termination of the activities of a holding compa- tice, as well as Orbanco Financial Services ny or any of its subsidiaries as the Board finds neces- Corporation ("Protestant"), Portland, Oregon, in light sary to assure compliance with the provisions and of the factors set forth in section 3(c) of the Act purposes of the Act and the Board's regulations and (12 U.S.C. § 1842(c)).1 orders issued thereunder, or to prevent evasion there- Section 3(c) of the Act provides, in part, that the of. Board may not approve any proposed acquisition, the Board of Governors of the Federal Reserve System, effect of which, in any section of the country, may be December 22, 1980. substantially to lessen competition or to tend to create a monopoly, or which in any other manner would be in (Signed) THEODORE E. ALLISON, restraint of trade, unless the Board finds that the anti- [SEAL] Secretary of the Board. competitive effects of the transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served. The Board views with Dissenting Statement of Governor Teeters concern the effects that consummation of the proposed acquisition would have on existing competition and on I would again deny the application of Republic of Tex- the concentration of banking resources within the local as Corporation to merge with Fort Sam Houston BankShares, Incorporated, for the reasons stated in the Board's previous Order relating to this appli- 1. The Board notes that Protestant originally requested that the cation. [Republic of Texas Corporation (Fort Sam Board hold a hearing concerning this application, but has withdrawn Houston BankShares, Incorporated), 66 FEDERAL RE- that request. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 61 banking market, as well as on the concentration of tration of banking resources in Oregon. Applicant, one banking resources in the state of Oregon. of Oregon's two largest banking organizations, con- Bank is the fifteenth largest of 29 banking organiza- trols aggregate deposits of approximately $3.5 billion, tions in the Portland banking market,2 with 0.5 percent representing 33.5 percent of total commercial bank deof market deposits.3 Bank conducts its banking busi- posits in the state. Bank, the 25th largest banking orness through a banking office located in Forest Grove, ganization in Oregon, holds deposits of $30.2 million, Oregon, and a branch located in Cornelius, Oregon. representing 0.29 percent of statewide deposits. While Applicant is the second largest banking organization in the acquisition of Bank by Applicant would increase the Portland banking market, with 65 banking offices in Applicant's statewide share of commercial bank dethe market and $1.5 billion or 27.1 percent of total mar- posits by 0.29 percent and would not alter Applicant's ket deposits. The acquisition of Bank by Applicant rank as the state's second largest banking organizawould result in the elimination of existing competition tion, the Board views the impact of this proposal on between the two organizations within the local bank- the concentration of banking resources in Oregon with ing market. The Board regards this elimination of great concern, particularly in view of the fact that the existing competition with particular concern in view of state of Oregon exhibits one of the highest concentrathe fact that three of Applicant's banking offices are tion of banking resources in the nation. It ranks fourth within 3.5 miles of Bank's branch in Cornelius. From in the United States in terms of the percentage of dethe record it appears that the Forest Grove portion of posits controlled by the two largest banking organizathe market is growing rapidly and is a particularly at- tions, with Applicant and the largest banking organizatractive area for expansion. Indeed, Applicant has tion in Oregon controlling 68.4 percent of statewide adequate resources to establish a de novo bank in For- banking deposits, while the four largest banking organest Grove immediately and in 1984 it will be permitted izations control 78.1 percent of total statewide banking to branch into Forest Grove.4 Based on the record, the deposits. Although Applicant's proposal would not Board finds that Bank must be regarded as a viable, significantly add to the concentration of banking reindependent competitor of Applicant in the relevant sources within Oregon, it would represent a reversal of banking market, especially with regard to the Forest the recent trend toward deconcentration at the state- Grove portion of that market.5 The Board is also con- wide level,6 and accordingly, is viewed as an adverse cerned about the effects of consummation of the pro- factor by the Board. posal on the concentration of banking resources in the Under section 3(c) of the Act, the Board is not re- Portland banking market, where the two largest bank- quired to tolerate the development of undue concening organizations, including Applicant, control 56.9 tration among banking organizations before it is empercent of marketing deposits, and the four largest powered to intervene. Indeed, the Clayton Act, which control 71.9 percent of the market. was incorporated into section 3(c) of the Act, provides In addition to its effects on competition within the authority for arresting mergers in order to break the local banking market the proposed acquisition will force of a trend toward undue concentration before it have an impact on statewide structure and the concen- gathers momentum. See Brown Shoe Co. v. United States. 370 U.S. 294, 317-18. Accordingly, in view of the elimination of existing competition in the market 2. The Portland banking market is approximated by the Portland and the high level of concentration both in the Portland Ranally Metro Area (RMA), which includes portions of Washington, banking market and statewide, the Board has con- Yamhill, Clackamas, Marion, Multnomah, and Columbia Counties, cluded that the overall effects of this proposal would Oregon, and Clark County, Washington. The Applicant, Protestant and Department of Justice suggested that the Board regard the rele- be to substantially lessen competition.7 vant banking market as SMSA, the local service areas of Bank and The financial and managerial resources of Appli- Applicant's branches, and Washington County, respectively. The cant, its subsidiaries and Bank are regarded as general- Board generally regards the RMA as a more accurate representation than the SMSA since it is based on more detailed analysis of commuting data. The Board has, however, also considered the effects of the proposed acquisition on existing competition in the context of the more immediate local area in which Bank operates. 6. Statewide banking concentration has declined somewhat in Ore- 3. All banking data are as of December 31, 1979. Unless otherwise gon in recent years. As of December 31, 1975, the two largest banking specified the term deposits refers to total commercial bank deposits. organizations in Oregon controlled approximately 73 percent of total 4. Oregon law currently prohibits banks from expanding into cities state banking deposits and the four largest banking organizations conwith populations of less than 50,000 and containing the home office of trolled 82 percent of such deposits, compared to 68.4 percent and 78.1 a bank except by merger or the establishment of a de novo bank. Be- percent respectively today. ginning in January of 1984, however, statewide de novo branching will 7. The Board also has evaluated the impact of thrift institutions on be permitted under Oregon law. competition within the Portland market. Although thrifts hold some 5. This view is supported by the findings of the U.S. Department of deposits in Portland banking market, the relative size and nature of Justice that within Washington County the proposed acquisition their operations are not such that the Board regards their presence in would have significantly adverse effects on existing competition, as the market as sufficient to compensate for the adverse effects on comwell as on the concentration of banking resources. petition that would result from this proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

62 Federal Reserve Bulletin • January 1981 ly satisfactory and future prospects are favorable. Ac- result of the Bank Holding Company Act Amendments cordingly, banking factors are consistent with of 1970. It has engaged, through Leumi Securities, in approval. Although Applicant proposes to introduce acting as broker, dealer, or underwriter in securities some new services at Bank, the Board concludes that transactions in the United States since 1962.2 Leumi the banking needs of the area are already being met. Securities currently engages in the following activities: While Applicant has stated that approval of the pro- (1) acting as broker or dealer with respect to bonds or posal would resolve a management succession prob- other obligations issued by the state of Israel; (2) actlem at Bank, there is no evidence in the record to sug- ing as broker for the purchase or sale of securities gest that Bank will be unable to resolve this issue where Leumi Securities solicits trades of securities without resorting to an anticompetitive acquisition. only of companies having a significant connection with Thus, the Board regards the convenience and needs Israel, and acts as broker for transactions in securities factors in this proposal to be very slight, and not suf- of other companies only upon customer request; and ficient to outweigh the anticompetitive effects of the (3) acting as dealer or underwriter with respect to proposal. securities of companies with a significant connection Based on the foregoing and other considerations re- with Israel. The Board has previously determined that flected in the record, it is the Board's judgment that securities activities are not closely related to banking, the proposed acquisition would not be in the public and therefore not generally permissible for bank holdinterest and that the application should be denied. Ac- ing companies. cordingly, the application is hereby denied. Section 4(c)(9) of the Act provides that the non- By order of the Board of Governors, effective banking prohibitions of section 4 shall not apply to the December 19, 1980. investments or activities of a foreign bank holding company that conducts business outside the United Voting for this action: Chairman Volcker and Governors States, if the Board by regulation or order determines Schultz, Wallich, Partee, Teeters, Rice, and Gramley. that, under the circumstances and subject to the conditions set forth in the regulation or order, the exemption (Signed) THEODORE E. ALLISON, would not be substantially at variance with the pur- [SEAL] Secretary of the Board. poses of the Act and would be in the public interest. In acting on earlier requests from foreign bank holding companies, the Board has consistently refused to Orders Under Section 4 of Bank Holding exempt securities activities under section 4(c)(9).3 As Company Act a general matter, the Board believes that granting a request from a foreign bank holding company to en- Bank Leumi Le-Israel B.M., gage in securities activities would be contrary to the Tel Aviv, Israel public interest in light of the clear intent of Congress, when it enacted the Glass-Steagall Act, to restrict affil- Order Approving Request Pursuant to the Bank iations of banks and securities companies in the Holding Company Act for Permission to Continue United States because of potential conflicts of inter- Certain Securities Activities ests and unsound banking practices. In determining whether to grant an exemption under section 4(c)(9), Bank Leumi le-Israel B.M., Tel Aviv, Israel ("Bank the Board has also considered whether such exemp- Leumi"), a bank holding company within the meaning tion would give the foreign institution a competitive of the Bank Holding Company Act (the "Act"), has advantage over domestic or other foreign banking orrequested the Board's approval under section 4(c)(9) ganizations.4 of the Act (12 U.S.C. § 1843(c)(9)), to continue to engage through its subsidiary, Leumi Securities Corpora- 2. The Board has determined, in a separate action, that Bank Leumi is not entitled to permanent grandfather privileges because it tion, New York, New York ("Leumi Securities"), in did not own or control a subsidiary bank on June 30, 1968, as required certain securities activities.1 by section 4(a)(2) of the Act (12 U.S.C. § 1843(a)(2)). Bank Leumi, a bank organized under the laws of the 3. See Board Orders approving applications of The Industrial Bank of Japan, Ltd., and The Fuji Bank Ltd., to become bank holding comstate of Israel, became a bank holding company as a panies (39 Federal Register 39,503 and 39,504 (1974)). 4. See Board letter of September 17, 1979, to Banco di Roma, S.p.A. (denying a request for reconsideration of a denial of an appli- 1. The Board has also considered this as a request by Bank Leumi's cation under section 4(c)(9)); and Orders involving Bank of Tokyo (Toaffiliates, Otzar Hityashvuth Hayehudim B.M., Tel Aviv, Israel; JCT kyo Bancorp International (Houston), Inc.), 61 FEDERAL RESERVE Trust Company Limited, Tel Aviv, Israel; and the Trust Created by BULLETIN 449 (1975) (denying an application under section 4(c)(9)); Otzar Hityashvuth Hayehudim Jewish Colonial Trust Limited, Lon- Lloyd's Bank Limited, 60 FEDERAL RESERVE BULLETIN 139 (1974) don, England, and JCT Trust Company Limited, Tel Aviv, Israel. All (conditionally approving retention of export credit and marketing coractions taken herein also apply to these affiliates. poration). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 63 Bank Leumi operated a branch in New York, New not be substantially at variance with the purposes of York, from 1961 until July 15, 1968, when Bank Leumi the Act and would be consistent with the public interopened a subsidiary bank in New York and transferred est. all of the assets and liabilities of its New York branch Based upon the foregoing and other considerations to its subsidiary. This transfer was effected pursuant to reflected in the record, and based upon the assumption a contract entered into in November 1967, and was that Bank Leumi will continue to qualify as a foreign originally scheduled to occur on June 30, 1968. If Bank bank holding company under section 4(c)(9) and the Leumi had opened its subsidiary bank on or before Board's regulations, the application is approved with June 30, 1968, its U.S. securities activities would respect to the activity of acting as broker or dealer be grandfathered under section 4(a)(2) of the Act with respect to bonds and other obligations of the (12 U.S.C. § 1843(a)(2)); and if it had never converted state of Israel, and denied for all other activities enits U.S. branch into a subsidiary bank, its securities ac- gaged in by Leumi Securities. This approval is subject tivities would be grandfathered under section 8(c) of the to considerations set forth in section 225.4(c) of the International Banking Act (12 U.S.C. § 3106(c)). Bank Board's Regulation Y and to the Board's authority to Leumi believes that under these circumstances it is en- require reports by and make examinations of bank titled to an exemption under section 4(c)(9). In the holding companies and their subsidiaries, and to re- Board's view, it would be inconsistent with the pur- quire such modification or termination of the activities poses of the Act and the public interest to permit Bank of a bank holding company or any of its subsidiaries as Leumi to retain all of the securities activities currently the Board finds necessary to assure compliance with engaged in by Leumi Securities. Such retention would the provisions and purposes of the Act and the Board's give Bank Leumi an unfair competitive advantage over Orders and regulations issued thereunder, to prevent U.S. banking organizations and over foreign banking evasion thereof, or if it otherwise appears that continorganizations that are also prohibited from engaging in uation of the activities approved herein is not in the securities activities in the United States under the public interest. Bank Holding Company Act or the International By order of the Board of Governors, effective Banking Act. Furthermore, the Board does not view December 8, 1980. the current small scale of Bank Leumi's securities activities as a justification for disregarding the possible Voting for this action: Vice Chairman Schultz and Goveradverse effects of affiliation of banking and securities nors Wallich, Partee, Teeters, Rice, and Gramley. Absent institutions that concerned Congress when it enacted and not voting: Chairman Volcker. the Glass-Steagall Act. The Board believes that these concerns are miti- (Signed) THEODORE E. ALLISON, gated, however, with respect to the activity of acting [SEAL] Secretary of the Board. as broker or dealer for transactions only in bonds and other obligations issued by the state of Israel, which constitutes a substantial portion of Bank Leumi's U.S. First Union Corporation, securities operations. The Board does not view the Charlotte, North Carolina ability of Bank Leumi to engage in activities of this limited nature and scope as giving Bank Leumi a sub- Determination Regarding "Grandfather Privileges" stantial competitive advantage over domestic or for- Under the Bank Holding Company Act eign banking organizations competing in the United States. Furthermore, the Board notes that the Glass- Section 4 of the Bank Holding Company Act Steagall Act permits national banks to deal in, under- (12 U.S.C. § 1843) provides certain privileges ("grandwrite, and purchase for their own account obligations father privileges") with respect to nonbanking activiissued by the United States.5 Therefore, it appears ties of a company that, by virtue of the 1970 Amendthat there would be no serious conflict with the con- ments to the Act, became subject to the Act. Pursuant cerns of Congress, as reflected in the Glass-Steagall to section 4(a)(2) of the Act, a "company covered in Act, if Bank Leumi acted as broker or dealer with re- 1970" may continue to engage, either directly or spect only to securities issued by the state of Israel. In through a subsidiary, in nonbanking activities that view of these considerations and the particular circum- such a company was lawfully engaged in on June 30, stances of this case, it is the Board's judgment that 1968 (or on a date subsequent to June 30, 1968, in the approval of the request for this limited activity would case of activities carried on as a result of the acquisition by such company or subsidiary, pursuant to a binding written contract entered into on or before 5. 12 U.S.C. § 24. June 30, 1968, of another company engaged in such ac- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

64 Federal Reserve Bulletin • January 1981 tivities at the time of the acquisition), and has been con- and that these activities characterize a company entinuously engaged in since June 30, 1968 (or such sub- gaged generally in real estate activities. In particular, sequent date). Section 4(a)(2) of the Act provides, CBC has been engaged directly and indirectly through inter alia, that the Board may terminate such grand- subsidiaries, including joint ventures, continuously father privileges if, having due regard for the purpose since prior to June 30, 1968, in the activities of investof the Act, it determines that such action is necessary ing in and holding real estate for its own account for to prevent an undue concentration of resources, de- residential and commercial development; developing creased or unfair competition, conflicts of interest, or for its own account, including construction, incomeunsound banking practices. producing properties, such as apartment complexes, Notice of the Board's proposed review of grand- office buildings and shopping centers, for sale or lease; father privileges of First Union Corporation ("First managing properties in which it has a significant own- Union"), Charlotte, North Carolina, and an opportu- ership or leasehold interest; and appraising real estate. nity for interested persons to submit comments or Accordingly, these activities appear to be eligible for views or request a hearing, has been given. The time retention on the basis of permanent grandfather privifor filing comments, views, and requests has expired, leges. Moreover, in view of the fact that these activiand all those received have been considered by the ties historically have accounted for a relatively small Board in light of the factors set forth in section 4(a)(2) share of First Union's income and total assets, and in of the Act.1 light of certain commitments made by First Union in First Union became a bank holding company on this regard, the Board will not require modification or December 31, 1970, as a result of the 1970 Amendments termination of these activities at this time. to the Act, by virtue of First Union's ownership of all In connection with CBC's real estate activities, First of the voting shares of First Union National Bank of Union also manages properties in which it does not North Carolina ("Bank"), Charlotte, North Carolina have an ownership or leasehold interest, acts as advis- (assets of $1.1 billion as of December 31, 1970).2 First er with respect to real estate loans, engages in real es- Union is the 3rd largest banking organization in the tate brokerage, and holds interests in recreational fastate of North Carolina, controlling deposits of $2.0 cilities and a water company. From the record, it does billion, representing 11.9 percent of the total com- not appear that these represent activities that were enmercial bank deposits in the state.3 gaged in on June 30, 1968, and continuously thereafter, First Union, through its subsidiary, Cameron- and accordingly are not eligible to be continued Brown Company ("CBC"), and CBC's subsidiaries, beyond December 31, 1980, on the basis of permanent engages in real estate development activities, includ- grandfather privileges. Inasmuch as First Union's reing investing in, developing and disposing of by sale or tention of these activities and interests apparently lease, real property. In previous determinations under arose out of its interpretation of the scope of its persection 4(a)(2) of the Act, the Board generally has not manently grandfathered activities, and these activities regarded the making of isolated real property invest- were integrally related to and undertaken directly in ment and development as an activity eligible for per- connection with grandfathered real estate activities, it manent grandfather privileges, but, rather has viewed is the Board's view that First Union may retain the each real estate investment as a separate activity.4 investments and interests it currently holds, but may Based on its review of the evidence of record in this not make new investments or continue to hold itself matter, however, it is the Board's judgement that First out as engaged in those activities without obtaining ad- Union has demonstrated that on June 30, 1968, it was ditional authority from the Board. engaged in an organized pattern of planning, invest- First Union engaged indirectly through subsidiaries ment, development and disposition of real property, in several insurance activities. Through CBC it acts as agent for the sale of all types of insurance. Another First Union subsidiary, General Financial Agency, Inc., acts as agent for the sale of property casualty, 1. During the pendency of this determination, the Independent Insurance Agents' Association (TIAA") registered objections to First credit life, and credit accident and health insurance in Union's claim that certain of its insurance agency activities are grand- connection with extensions of credit by affiliates of fathered. Upon submission by First Union of evidence to demonstrate First Union. Finally, General Financial Life Insurance the efficacy of its claim, the IIAA withdrew its objections, as well as its request for a hearing. Company engages in the activity of underwriting as 2. On December 31, 1970, First Union was known as First Union reinsurer credit life and credit accident and health in- National Bancorp, Inc. It was subsequently renamed Cameron Finansurance related to extensions of credit by affiliates of cial Corporation, and finally, First Union Corporation. 3. Banking data are as of December 31, 1979. First Union. From the record it appears that First 4. Schroders Limited, 66 FEDERAL RESERVE BULLETIN 255 (1980); Union was engaged in these insurance activities The Republic National Bank, 59 FEDERAL RESERVE BULLETIN 768 through its subsidiaries on June 30, 1968, and has en- (1973). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 65 gaged in these activities continuously thereafter. Ac- ity to require modification or termination of the activicordingly, the activities appear to be eligible for ties of First Union or any of its nonbanking subretention on the basis of grandfather privileges. sidiaries as the Board finds necessary to assure First Union engages through CBC in mortgage bank- compliance with the provisions and purposes of the ing activities; that is, purchasing, brokering and serv- Act and the Board's regulations and orders issued icing first and second mortgage loans on residential thereunder, or to prevent evasion thereof. and commercial properties. It also engages through its By order of the Board of Governors, effective subsidiary, First Card Corporation, in servicing December 23, 1980. Bank's credit card accounts. Inasmuch as First Union was engaged in these activities on June 30, 1968, and Voting for this action: Chairman Volcker and Governors continuously thereafter, it appears that the activities Wallich, Partee, Rice, and Gramley. Absent and not voting: Governors Schultz and Teeters. Governor Wallich did not may be retained on the basis of grandfather privileges. vote on this action insofar as it concerns First Union's insur- On the basis of the foregoing and all the facts before ance activities. the Board, including certain commitments by First Union, it appears that the volume, scope and nature of (Signed) JAMES MCAFEE, the activities of First Union described herein do not [SEAL] Assistant Secretary of the Board. demonstrate an undue concentration of resources, decreased or unfair competition, conflicts of interest or unsound banking practices. Thus, there appears to be Platte Valley Bancorp, Inc., no reason to require First Union to terminate its grand- Brighton, Colorado fathered interests. It is the Board's judgment that, at this time, termination of the grandfather privileges of Order Denying Acquisition of Valley Bancorp, Inc. First Union described herein is not necessary in order to prevent an undue concentration of resources, de- Platte Valley Bancorp, Inc., Brighton, Colorado, a creased or unfair competition, conflicts of interest, or bank holding company within the meaning of the Bank unsound banking practices. This determination does Holding Company Act (the "Act"), has applied for the not authorize the entry into any new activity or prod- Board's approval under section 4(c)(8) of the Act uct extension that was not engaged in on June 30, (12 U.S.C. § 1843(c)(8)) and section 225.4(b) of the 1968, and continuously thereafter, or any activity that Board's Regulation Y (12 C.F.R. § 225.4(b)(2)), to acis not the subject of this determination. quire all of the voting shares of Valley Bancorp, Inc. A significant alteration in the nature or extent of ("VBI"), and its subsidiary, Yampa Valley Industrial First Union's activities or a change in location thereof Bank ("Industrial Bank"), both of Steamboat Springs, will be cause for a reevaluation by the Board of First Colorado. Applicant has applied to engage, through Union's activities under the provisions of section Industrial Bank, in the activities of industrial banking 4(a)(2) of the Act; that is, whenever the alteration or and acting as an insurance agent with respect to insurchange is such that the Board finds that a termination ance directly related to extensions of credit or the proof the grandfather privileges is necessary to prevent an vision of other financial services by Industrial Bank. undue concentration of resources or any of the other Such activities have been determined by the Board to adverse consequences at which the Act is directed. No be closely related to banking (12 C.F.R. §§ 225.4(a)(2) merger, consolidation, acquisition of assets other than and (9)(ii)(a)). in the ordinary course of business, or acquisition of Notice of the application, affording opportunity for any interest in a going concern, to which First Union interested persons to submit comments, has been givor any nonbank subsidiary thereof is a party, may be en in accordance with section 4, of the Act (45 Fedconsummated without prior approval of the Board. eral Register 70,982 (1980)). The time for filing com- Further, the provision of any credit, property, or serv- ments and views has expired, and the Board has ice by First Union or any subsidiary shall not be sub- considered the application and all comments received ject to any condition which, if imposed by a bank, in light of the considerations specified in section would constitute an unlawful tie-in arrangement under 4(c)(8) of the Act. section 106 of the Bank Holding Company Act In order to approve an application under section Amendments of 1970. 4(c)(8) of the Act, the Board must determine that the The determination herein does not preclude a later proposed activity is "so closely related to banking or review by the Board of First Union's nonbank activi- to managing or controlling banks as to be a proper inties and a future determination by the Board in favor of cident thereto." Even where, as here, the proposed termination of grandfather benefits of First Union. The activities have been previously determined by reguladetermination herein is subject to the Board's author- tion to be closely related to banking, the Board is also Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

66 Federal Reserve Bulletin • January 1981 required to determine whether the performance of the effects upon competition, and would not increase the proposed activities by a nonbank subsidiary of a bank concentration of banking or nonbanking resources in holding company "can reasonably be expected to pro- any relevant area. Therefore, competitive considduce benefits to the public, such as greater conve- erations are consistent with approval of the applinience, increased competition, or gains in efficiency, cation. that outweigh possible adverse effects, such as undue Applicant believes that consummation of the pro- . concentration of resources, decreased or unfair com- posal would produce public benefits that outweigh any petition, conflicts of interests, or unsound banking adverse effects associated with the application. Applipractices." This statutory test requires a positive cant states that the proposed acquisition would assure showing by an applicant that the public benefits of its continuity and consistency in management to the comproposal outweigh the possible adverse effects. munity served by Industrial Bank and would better en- Applicant is a multibank holding company con- able the resulting organization as a whole to provide trolling two commercial banks, Platte Valley Bank, each subsidiary with additional skill and efficiency re- Brighton, Colorado ("Brighton Bank"), and Platte sulting in "adequate" earnings to "attract further debt Valley Bank of Weld County, Frederick, Colorado capital and/or service should the need arise." How- ("Frederick Bank"), respectively, the 165th and ever, in view of the financial and managerial consid- 272nd largest banks in Colorado, with deposits of erations discussed above and other facts of record, the $15.1 million and $5.5 million, representing a com- Board does not view any public benefits resulting from bined total of 0.52 percent of total commerical bank the consummation of this proposal as sufficient to outdeposits in the state.1 Applicant also controls an in- weigh the adverse effects that would result from condustrial bank, Platte Valley Industrial Bank, Brighton, summation of the proposal. Colorado ("Platte Valley"), with $2.8 million in de- Based upon the foregoing and other considerations posits, which engages in industrial loan activities. reflected in the record, the Board has determined that This proposal involves a restructuring of the own- the balance of the public interest factors that the Board ership of VBI from control by individuals to control by is required to consider under section 4(c)(8) is not faa corporation controlled by the same individuals. Up- vorable. Accordingly, the application is denied for the on consummation of the proposal, Applicant would reasons summarized above. assume $147,000 of VBI's longterm debt VBI sub- By order of the Board of Governors, effective sequently would be merged into Applicant and December 22, 1980. Industrial Bank ($0.4 million in deposits) would become Applicant's direct subsidiary. The Board has fre- Voting for this action: Chairman Volcker and Governors quently indicated that it believes that bank holding Partee, Rice, and Gramley. Present and not voting: Governor Wallich. Absent and not voting: Governors Schultz and companies should constitute a source of financial and Teeters. managerial strength to their subsidiary banks. From the record relating to this application, it appears that (Signed) JAMES MCAFEE, Applicant's assumption of the acquisition debt associ- [SEAL] Assistant Secretary of the Board. ated with this proposal, coupled with Applicant's current leveraged position, could adversely affect Applicant's ability to serve as a source of financial strength Republic Bancorporation, Inc., to its banking subsidiaries. Moreover it appears that at Tulsa, Oklahoma this time all of Applicant's managerial resources are required to deal with the needs of its existing sub- Order Denying Acquisition of Guaranty Trust sidiaries. Company Applicant's industrial banking and banking subsidiaries are all located at least 110 miles from Industri- Republic Bancorporation, Inc., Tulsa, Oklahoma, a al Bank in separate banking markets. In view of the bank holding company within the meaning of the Bank distances between Applicant's subsidiaries and Indus- Holding Company Act (the "Act"), has applied for the trial Bank and other facts of record, it appears that no Board's approval under section 4(c)(8) of the Act significant existing or potential competition would be (12 U.S.C. § 1843(c)(8)) and section 225.4(b)(2) of the eliminated between Applicant's subsidiaries and In- Board's Regulation Y (12 C.F.R. § 225.4(b)(2)), to acdustrial Bank by consummation of this proposal. Ac- quire all of the voting shares of Guaranty Trust Comcordingly, the Board concludes that consummation of pany, Ponca City, Oklahoma ("Guaranty Trust"), a the proposal would not have any significant adverse failed trust company organized under the laws of the state of Oklahoma, and to engage through Guaranty 1. All banking data are as of December 31, 1979. Trust in industrial loan activities. Such activities have Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 67 been determined by the Board to be closely related to Applicant plans to reorganize Guaranty Trust by asbanking (12 C.F.R. § 225.4(a)(2)). Applicant has also suming a portion of the claims pending against Guaranrequested the Board's approval to establish a branch ty Trust ($6.7 million in deposits and $0.6 million in of Guaranty Trust in Oklahoma City, Oklahoma, and other unsecured claims) and by acquiring the compato consolidate the Oklahoma City branch of its subsidi- ny's securities portfolio. Applicant proposes to reimary, Republic Trust and Savings Company ("Republic burse Guaranty Trust's claimants for 80 percent of Trust"), into the Oklahoma City branch of Guaranty their claims: 16 percent in cash, 32 percent in subordi- Trust. nated debt of Applicant, and 32 percent in preferred Notice of the application, affording opportunity for shares of Applicant.3 The remaining 20 percent would interested persons to submit comments, has been pub- remain unpaid. The subordinated debt and preferred lished (45 Federal Register 62547 (1980)). The time for shares to be issued by Applicant in connection with filing comments has expired, and the Board has con- this proposal would mature in seven years. sidered the application and all comments received in Since Guaranty Trust is currently an inactive comlight of the factors set forth in section 4(c)(8) of the pany, consummation of the proposal would have no Act. effect on existing competition. Furthermore, Appli- In order to approve an application under section cant's subsidiary industrial loan companies do not en- 4(c)(8) of the Act, the Board must determine that the gage in the trust activities previously engaged in by proposed activity is "so closely related to banking or Guaranty Trust. Accordingly, consummaton of the to managing or controlling banks as to be a proper in- proposal would not have any significant adverse efcident thereto." Even where, as here, the proposed fects on competition or concentration of resources in activities have been previously determined by regula- any relevant market. tion to be closely related to banking, the Board is also The Board has frequently indicated that it believes required to determine whether the performance of the that bank holding companies should constitute a proposed activities by a nonbank subsidiary of a bank source of financial and managerial strength to their holding company "can reasonably be expected to pro- subsidiary banks. From the record relating to this apduce benefits to the public, such as greater conve- plication, it appears that Applicant's assumption of 80 nience, increased competition, or gains in efficiency, percent of Guaranty Trust's unsecured liabilities could that outweigh possible adverse effects, such as undue adversely affect its ability to serve as a source of financoncentration of resources, decreased or unfair com- cial strength to its subsidiary bank. The Board is conpetition, conflicts of interests, or unsound banking cerned that Applicant's managerial and financial repractices." This statutory test requires a positive sources could be strained by the acquisition and showing by an applicant that the public benefits of its resumption of activities of Guaranty Trust in view of proposal outweigh the possible adverse effects. the insolvent condition of Guaranty Trust. Further- Applicant is a one-bank holding company that con- more, in view of Applicant's leveraged position, the trols Republic Bank and Trust Company, Tulsa, Okla- debt that would be incurred in acquiring Guaranty homa, the 26th largest bank in Oklahoma, with depos- Trust could result in an adverse diversion of Appliits of $88.1 million, representing 2.2 percent of total cant's financial and managerial resources. commercial bank deposits in the state.1 Applicant also Applicant believes that consummation of the procontrols Republic Trust (deposits of $10.3 million), a posal would produce public benefits that outweigh trust company organized under Oklahoma law, and any adverse effects associated with the application. Republic Financial Corporation (deposits of $27.0 mil- Although the Board recognizes that the partial satislion), both of which engage in industrial loan activities. faction of the claims of the approximately 850 depos- Guaranty Trust is an inactive company that oper- itors and other unsecured creditors of Guaranty Trust ated as a trust company under Oklahoma law until resulting from this proposal constitutes a public bene- December 29, 1978, when it filed for relief under the fit, the record indicates that there are other remedies federal Bankruptcy Act and ceased to conduct business available to the claimants.4 Regardless of whether Apother than that necessary for winding up its affairs. The state subsequently revoked Guaranty Trust's au- 3. The Board has treated the preferred shares as debt for the purpose of analyzing the financial effects of the proposal because the thority to do business. Guaranty Trust's business conshares are nonvoting, are due in seven years, and are subject to resisted primarily of investing the proceeds of passbook demption by Applicant. savings deposits and certificates of deposit in secu- 4. The record indicates that if Guaranty Trust is liquidated, its claimants may recover between 30 and 50 percent of their claims. rities, as well as trust activities.2 Even under Applicant's proposal, the claimants have the option of requiring Applicant to repurchase its debt instruments not earlier than 1. All banking data are as of December 31, 1979. 210 days, nor later than 360 days, after the date of consummation of 2. Applicant would not engage in any trust activities through Guar- the proposal. Claimants that elect to exercise this right will recover anty Trust. only 44.8 percent of their claims. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

68 Federal Reserve Bulletin • January 1981 plicant's proposal is preferable to other available rem- in Washington and Arizona. Company operates solely edies, the Board does not view the public benefits as- in the state of California and does not compete in any sociated with Applicant's proposal as sufficient to market in which Applicant and its subsidiaries engage outweigh the serious adverse financial effects that in mortgage banking and construction financing activiwould result from consummation of the proposal. ties. Accordingly, consummation of the proposed Based upon the foregoing and other considerations transaction would not result in the elimination of any reflected in the record, the Board has determined that existing competition. Although Applicant could enter the balance of the public interest factors that the Board the markets in which Company operates de novo, is required to consider under section 4(c)(8) is not fa- based on Company's relative size and market share, vorable. Accordingly, the application should be, and this acquisition represents a foothold entry by Applihereby is, denied for the reasons summarized above. cant into these markets. Accordingly, it does not ap- By order of the Board of Governors, effective pear that acquisition of Company by Applicant would December 17, 1980. have any significant effects on competition. Section 4(c)(8) of the Act requires that a determina- Voting for this action: Vice Chairman Schultz and Gover- tion be made that the performance of a nonbanking acnors Teeters, Rice, and Gramley. Absent and not voting: tivity by a bank holding company can reasonably be Chairman Volcker and Governors Partee and Wallich. expected to result in benefits to the public that out- (Signed) JEFFERSON A. WALKER, weigh possible adverse effects. Upon consummation [SEAL] Assistant Secretary of the Board. of the proposed transaction, Applicant will expand the services currently offered by Company to include the extension of single-family home construction loans, acquisition and development loans, apartment house Seafirst Corporation, loans, multi-family project loans and commercial and Seattle, Washington industrial financing. Accordingly, it is concluded that approval of the proposed transaction would result in Order Approving Acquisition of Arden Mortgage net public benefits and would be in the public interest. Service Corporation Furthermore, there is no evidence in the record to indicate that Applicant's acquisition of Company would Seafirst Corporation, Seattle, Washington, a bank result in any undue concentration of resources, unfair holding company within the meaning of the Bank competition, conflicts of interests, unsound banking Holding Company Act, has applied for the Board's ap- practices, or other adverse effects. proval under section 4(c)(8) of the Act (12 U.S.C. Based on the foregoing and other considerations re- § 1843(c)(8)) and section 225.4(b)(2) of the Board's flected in the record, it has been determined that the Regulation Y (12 C.F.R. § 225.4(b)(2)) to acquire vot- balance of the public interest factors the Board is reing shares of Arden Mortgage Service Corporation, quired to consider under section 4(c)(8) of the Act is Walnut Creek, California ("Company"). Company en- favorable. Accordingly, the application is hereby apgages in mortgage lending and servicing and construc- proved. This determination is subject to the conditions tion financing activities. These activities have been de- set forth in section 225.4(c) of the Board's Regulation termined by the Board to be closely related to banking Y and to the Board's authority to require such modifiand therefore permissible for bank holding companies cation or termination of the activities of a holding com- (12 C.F.R. § 225.4(a)(1) and (3)). pany or any of its subsidiaries as the Board finds nec- Notice of the application, affording an opportunity essary to assure compliance with the provisions and for interested persons to submit comments and views purposes of the Act and the Board's regulations issued on the public interest factors has been duly published thereunder, or to prevent evasion thereof. (45 Federal Register 76249 (1980)). The time for filing The transaction shall not be made later than three comments and views has expired, and the application months after the effective date of this Order, unless and all comments received have been considered in such period is extended by the Board or by the Federal light of the public interest factors set forth in section Reserve Bank of San Francisco pursuant to delegated 4(c)(8) of the Act. authority. Applicant is a one-bank holding company by virtue By order of the Secretary of the Board, acting purof its control of Seattle First National Bank, Seattle, suant to delegated authority from the Board of Gover- Washington (deposits of $6.6 billion), the largest bank nors, effective December 30, 1980. in the state, controlling 37.6 percent of the state's deposits in commercial banks. Applicant also engages in (Signed) JAMES MCAFEE, mortgage banking and construction finance activities [SEAL] Assistant Secretary of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 69 Certifications Pursuant to the Bank Holding 3. Aarestad became a bank holding company on Company Tax Act of 1976 December 31, 1970, as a result of the 1970 amendments to the BHC Act by virtue of its ownership and AARESTAD FARM PRODUCTS, INC., control on that date of more than 25 percent of the Halstad, Minnesota outstanding voting shares of Bank. It registered as such with the Board on September 15, 1971. Aarestad Prior Certification Pursuant to the Bank Holding would have been a bank holding company on July 7, Company Tax Act of 1976 1970, had the BHC Act Amendments of 1970 been in effect on that date by virtue of its ownership and Aarestad Farm Products, Inc., Halstad, Minnesota control on that date of more than 25 percent of the ("Aarestad"), has requested a prior tax certification outstanding voting shares of Bank. pursuant to section 1101(b) of the Internal Revenue 4. Aarestad holds property acquired by it on or be- Code ("Code"), as amended by section 2(a) of the fore July 7, 1970, the disposition of which is neces- Bank Holding Company Tax Act of 1976, that its pro- sary or appropriate to effectuate section 4 of the posed divestiture of all of the 9462/3 shares of Red BHC Act if Aarestad were to continue to be a bank River State Bank, Halstad, Minnesota ("Bank"), holding company beyond December 31, 1980, and presently held by Aarestad through the distribution of which property is "prohibited property" within the such shares to Aarestad's shareholders, is necessary meaning of section 1103(c) of the Code. or appropriate to effectuate the policies of the Bank Holding Company Act (12 U.S.C. § 1841 et seq.) On the basis of the foregoing information, it is here- ("BHC Act"). by certified that: In connection with this request, the following infor- (A) Aarestad is a qualified bank holding corporation mation is deemed relevant:1 within the meaning of section 1103(b) of the Code 1. Aarestad is a corporation organized under the and satisfies the requirements of that section; laws of the state of Minnesota on February 1, 1955. (B) The 9462/3 shares of Bank that Aarestad pro- 2. On January 20, 1969, Aarestad acquired own- poses to distribute to its shareholders are all or part ership and control of 550 shares, representing 91.67 of the property by reason of which Aarestad conpercent of the outstanding voting shares of Bank. trols (within the meaning of section 2(a) of the BHC On July 7, 1970, Aarestad also owned and controlled Act) a bank or a bank holding company ;3 and 550 shares, representing 91.67 percent of the out- (C) The distribution of the 9462/3 shares of Bank is standing voting shares of Bank. On January 20, necessary or appropriate to effectuate the policies of 1972, Aarestad purchased 10 shares from a retiring the BHC Act. director of Bank pursuant to a contract granting Aarestad the right of first refusal with respect to the This certification is based upon the representations purchase of these shares. On March 6, 1973, Aares- made to the Board by Aarestad and upon the facts set tad received 1862/3 shares of Bank stock as a stock forth above. In the event the Board should hereafter dividend. Also on March 6, 1973, Aarestad pur- determine that facts material to this certification are chased 200 additional shares of Bank stock in order other than as represented by Aarestad, or that Aaresto increase Bank's capital. Thus, Aarestad presently tad has failed to disclose other material facts to the owns and controls 9462/3 shares, representing 94.67 Board, it may revoke this certification. percent of the outstanding voting shares of Bank. By order of the Board of Governors, acting through The remaining 53V3 shares, representing 5.33 percent of Bank's shares, are held by Bank's directors as qualifying shares.2 on March 6, 1973, were acquired as a result of a transaction in which gain was not recognized under section 305(a) of the Code. Accordingly, even though such shares were acquired after July 7, 1970, these 1. This information derives from Aarestad's communications with shares would nevertheless qualify as property eligible for the tax benethe Board concerning its request for this certification, Aarestad's Reg- fits provided in section 1101(b) of the Code by virtue of section istration Statement filed with the Board pursuant to the BHC Act, and 1101(c), if the shares of Bank were in fact received in a transaction in other records of the Board. which gain was not recognized under section 305(a) of the Code. The 2. Under section 1101(c) of the Code, property acquired after July 10 shares acquired on January 20, 1972, and the 200 shares acquired 7, 1970, generally does not qualify for the tax benefits of section on March 6, 1973, however, represent property acquired after July 7, 1101(b) when distributed by an otherwise qualified bank holding cor- 1970, for which none of the exceptions provided in section 1101(c) of poration. However, where such property was acquired by a qualified the Code appears to be available. bank holding corporation in a transaction in which gain was not recog- 3. As noted above 210 of the shares of Bank to be distributed by nized under section 305(a) of the Code, then section 1101(b) is appli- Aarestad were acquired by it after July 7, 1970, and do not appear to cable. Aarestad has indicated that the 1862/3 shares of Bank acquired be eligible for the tax benefits of section 1101(b) of the Code. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

70 Federal Reserve Bulletin • January 1981 its General Counsel, pursuant to delegated authority 4. Archer would have been a bank holding company (12 C.F.R. § 265.2(b)(3)) effective December 16,1980. on July 7, 1970, had the BHC Act Amendments of 1970 been in effect on that date by virtue of its own- (Signed) JEFFERSON A. WALKER, ership and control on that date of more than 25 per- [SEAL] Assistant Secretary of the Board. cent of the outstanding voting shares of Bank. 5. Archer holds property acquired by it on or before July 7, 1970, the disposition of which is necessary or The Archer Company, appropriate to effectuate section 4 of the BHC Act if Palmer, Nebraska Archer were to continue to be a bank holding company beyond December 31, 1980, and which proper- Prior Certification Pursuant to the Bank Holding ty is "prohibited property" within the meaning of Company Tax Act of 1976 section 1103(c) of the Code. The Archer Company, Palmer, Nebraska ("Archer") On the basis of the foregoing information, it is herehas requested a prior tax certification pursuant to sec- by certified that: tion 1101(b) of the Internal Revenue Code ("Code"), (A) Archer is a qualified bank holding corporation as amended by section 2(a) of the Bank Holding Com- within the meaning of section 1103(b) of the Code pany Tax Act of 1976, that its proposed divestiture of and satisfies the requirements of that section; 932 shares of the State Bank of Palmer, Palmer, Ne- (B) The 932 shares of Bank that Archer proposes to braska ("Bank"), presently held by Archer through distribute to its shareholders are all or part of the distribution of such shares to Archer's shareholders is property by reason of which Archer controls (within necessary or appropriate to effectuate the policies of the meaning of section 2(a) of the BHC Act) a bank the Bank Holding Company Act (12 U.S.C. § 1841 et or a bank holding company ; and seq.) ("BHC Act"). (C) The distribution of such shares is necessary or In connection with this request, the following infor- appropriate to effectuate the policies of the BHC mation is deemed relevant:1 Act. 1. Archer is a corporation organized under the laws of the state of Nebraska on December 15, 1969. This certification is based upon representations 2. In December, 1969, Archer acquired ownership made to the Board by Archer and the facts set forth and control of 233 shares, representing 46.6 percent above. In the event the Board should determine the of the outstanding voting shares, of Bank.2 facts material to this certification are other than as rep- 3. Archer became a bank holding company on resented by Archer, or that Archer has failed to dis- December 31, 1970, as a result of the 1970 Amend- close to the Board other material facts, the Board may ments to the BHC Act by virtue of its ownership and revoke this certification. control on that date of more than 25 percent of the By order of the Board of Governors, acting through outstanding voting shares of Bank. It registered as a its General Counsel, pursuant to delegated authority, bank holding company on August 16, 1971. 12 C.F.R. § 265.2(b)(3), effective December 31, 1980. (Signed) JAMES MCAFEE, [SEAL] Assistant Secretary of the Board. 1. This information derives from Archer's communications with the Board concerning its request for this certification, Archer's Registration Statement filed with the Board pursuant to the BHC Act, and other records of the Board. Baldwin-United Corporation, 2. On May 17, 1975, Archer acquired 233 additional shares of Bank Cincinnati, Ohio as a result of a stock dividend. On February 25, 1980, Archer acquired an additional 466 shares as a result of another stock dividend. Under section 1101(c) of the Code, property acquired after July 7, 1970, gen- Prior Certification Pursuant to the Bank Holding erally does not qualify for the tax benefits of section 1101(b) when distributed by an otherwise qualified bank holding corporation. How- Company Tax Act of 1976 ever, where such property was acquired by a qualified bank holding corporation in a transaction in which gain was not recognized under section 305(a) of the Code, then section 1101(b) is applicable. Archer Baldwin-United Corporation and its wholly-owned has indicated that the shares of Bank acquired in 1975 and 1980 were subsidiary D. H. Baldwin Company ("DHB") (hereacquired as a result of a transaction in which gain was not recognized inafter jointly referred to as Baldwin) both of Cincinunder section 305(a) of the Code. Accordingly, even though such shares were acquired after July 7, 1970, these shares would never- nati, Ohio, have requested a prior certification purtheless qualify as property eligible for the tax benefits provided in sec- suant to section 6158(a) of the Internal Revenue Code tion 1101(b) of the Code by virtue of section 1101(c), if the shares of ("Code"), as amended by section 3(a) of the Bank Bank were in fact received in a transaction in which gain was not recognized under section 305(a) of the Code. Holding Company Tax Act of 1976 (the "Tax Act"), Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 71 that Baldwin's proposed transfer of 803,362 shares Act Amendments of 1970 had been in effect on such ("Bank Shares") of the stock of Central Bank of Denver date, by virtue of its ownership and control on that ("Bank"), Denver, Colorado, to Central Colorado Com- date of 25 percent or more of the voting shares of pany, Denver, Colorado, a Colorado limited partnership Bank. and proposed bank holding company, is necessary or 3. DHB holds property acquired by it on or before appropriate to effectuate the policies of the Bank July 7, 1970, the disposition of which would be nec- Holding Company Act (12 U.S.C. § 1841 et seq.) essary or appropriate under section 4 of the BHC ("BHC Act"). The shares of Bank are presently held Act if DHB were to remain a bank holding company by Central Bancorporation, Inc., Denver, Colorado, a beyond December 31, 1980, and which property is wholly-owned subsidiary of Baldwin. Baldwin pro- "prohibited property" within the meaning of section poses to transfer all of the common stock of Central 1103(c) of the Code. Bancorporation, Inc., to Central Colorado Company, 4. In 1977, DHB filed with the Board an irrevocable in exchange for a Class II limited partnership interest declaration pursuant to section 4(c)(12) of the BHC in Central Colorado Company pursuant to a plan of Act and section 225.4(d) of the Board's Regulation divestiture approved by the Board.1 Y that it would cease to be a bank holding company In connection with this request, the following infor- prior to January 1, 1981, by divesting itself of all of mation is deemed relevant for purposes of issuing the its interest in Bank and DHB's other banking subrequested certification.2 sidiaries. In accordance with this portion of the reg- 1. DHB is a corporation organized on February 19, ulation and DHB's commitment, DHB has been per- 1898, under the laws of the state of Ohio. On July 1, mitted to expand its nonbanking activities without 1968, DHB acquired ownership and control of seeking the Board's prior approval. 462,069 shares of Bank (then known as Central Bank 5. In 1977, DHB was reorganized. DHB became a & Trust Company). Between July 1, 1968, and July subsidiary of New Parent Company (a Delaware 7, 1970, DHB acquired 43,752 additional shares of Corporation formed by DHB), Cincinnati, Ohio, and Bank, increasing its ownership to 505,821 shares the common and convertible preferred stockholders representing 99.2 percent of Bank's outstanding of DHB became stockholders of New Parent Comshares. Baldwin currently owns and controls pany. In January 1978, New Parent Company 806,055 shares, representing 99.5 percent of the vot- merged with The United Corporation, New York, ing shares of Bank.3 New York, and adopted the name Baldwin-United 2. DHB became a bank holding company on Corporation. December 31, 1970, as a result of the 1970 Amend- 6. Baldwin has represented that under relevant law, ments to the BHC Act, by virtue of its ownership Baldwin-United Corporation should be regarded as and control of 25 percent or more of the outstanding a successor to DHB. In 1980 Baldwin contributed to voting shares of Bank, and it registered as such with Central Bancorporation, Inc., a wholly-owned subthe Board on June 1, 1971. DHB would have been a sidiary of Baldwin acquired in 1974, all of its shares bank holding company on July 7, 1970, if the BHC of Bank as well as the shares of all other banking and certain inactive subsidiaries of Baldwin. 7. Following Baldwin's transfer of the stock of Central Bancorporation, Inc., to Central Colorado Com- 1. 66 FEDERAL RESERVE BULLETIN 655 (1980). pany, no person who is a director, officer or in a 2. This information derives from Baldwin's correspondence with policy-making position (including an advisory or the Board concerning its request for this certification, Baldwin's Registration Statement filed with the Board pursuant to the BHC Act and honorary position) with Baldwin or any of its subother records of the Board. sidiaries as a director, policy-making employee or 3. Under subsection (c) of the section 1101 of the Code, property acquired after July 7, 1970, generally does not qualify for the tax bene- consultant, or who performs (directly, or through an fits of section 6158(a) when distributed by an otherwise qualified bank agent, representative or nominee) functions comholding company. However, when such property was acquired by a parable to those normally associated with such ofqualified bank holding company in a transaction in which gain was not recognized under section 305(a) of the Code, then section 6158(a) is fice or position, will hold any such office or position applicable. Baldwin has stated that with respect to the 505,821 shares or perform any such function with Central Colorado of Bank held as of July 7, 1970, it received an additional 297,541 shares as a stock dividend, a transaction in which gain was not recognized Company, its general partner, CCB, Inc., Central under section 305(a) of the Code. If these shares were in fact acquired Bancorporation, Inc., or with any of its subsidiary in a transaction in which gain was not recognized under section 305(a) banks. of the Code, these shares would, accordingly, be eligible for the benefits provided in section 6158(a), by virtue of section 1101(c)(1)(A) of the Code. Baldwin also acquired an additional 2,693 shares of Bank On the basis of the foregoing information, it is hereafter July 7, 1970. Since these shares were acquired by Baldwin subby certified that: sequent to July 7, 1970, section 1101(c) makes these shares ineligible for the tax benefits of section 6158(a). (A) Baldwin is a qualified bank holding corporation, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

72 Federal Reserve Bulletin • January 1981 within the meaning of section 1103(b) of the Code, 1. Catlan is a corporation organized under the laws and satisfies the requirements of that subsection; of Texas on September 7, 1961, all of the shares of (B) Bank Shares covered by the instant request are which are held by J. A. Whittenburg, III and memall or part of the property by reason of which Bald- bers of his family. win controls (within the meaning of section 2(a) of 2. On November 17, 1961, Catlan acquired ownthe BHC Act) a bank or bank holding company; and ership and control of 1,310 shares, representing 65.5 (C) the disposition of Bank shares is necessary or percent of the outstanding voting shares, of Bank. appropriate to effectuate the policies of the BHC On July 7, 1970, Catlan owned and controlled Act. 25,374 shares, representing 84.58 percent of the outstanding voting shares of Bank. This certification is based upon the representations 3. Catlan became a bank holding company on and commitments made to the Board by Baldwin and December 31, 1970, as a result of the 1970 Amendupon the facts set forth above. In the event the Board ments to the BHC Act, by virtue of its ownership should hereafter determine that facts material to this and control at that time of more than 25 percent of certification are otherwise than as represented by the outstanding voting shares of Bank, and it regis- Baldwin, or that Baldwin has failed to disclose to the tered as such with the Board on October 6, 1971. Board other material facts or to fulfill any com- Catlan would have been a bank holding company on mitments made to the Board in connection herewith, it July 7, 1970, if the BHC Act Amendments of 1970 may revoke this certification. had been in effect on that date by virtue of its own- By order of the Board of Governors, acting through ership and control on that date of more than 25 perits General Counsel, pursuant to delegated authority cent of the outstanding voting shares of Bank. Cat- (12 C.F.R. § 265.2(b)(3)), effective December 29,1980. lan currently owns and controls 48,634 shares, of Bank's total 60,000 shares, representing approxi- (Signed) JAMES MCAFEE, mately 81 percent of such shares.2 [SEAL] Assistant Secretary of the Board. 4. Catlan holds property acquired by it on or before July 7, 1970, the disposition of which, but for clause (ii) of section 4(c) of the BHC Act, and the proviso Catlan Corporation, of section 4(a)(2) of that Act, would be necessary or Amarillo, Texas appropriate to effectuate section 4 of the BHC Act if Catlan were to continue to be a bank holding compa- Prior Certification Pursuant to the Bank Holding ny beyond December 31, 1980, and which property, Company Tax Act of 1976 but for such clause and such proviso, would be "prohibited property" within the meaning of section Catlan Corporation, ("Catlan"), Amarillo, Texas, has 1103(c) of the Code. Sections 1103(g) and 1103(h) of requested a prior certification pursuant to section the Code provide that any bank holding company 1101(b) of the Internal Revenue Code ("Code"), as may elect, for purposes of Part VIII of subchapter O amended by section 2(a) of the Bank Holding Compa- of Chapter 1 of the Code, to have the determination ny Tax Act of 1976 ("Tax Act"), that its proposed di- whether property is "prohibited property" or is vestiture of 48,248 shares, representing 81 percent of property eligible to be distributed without recognithe outstanding voting shares, of The First State Bank tion of gain under section 1101(b)(1) of the Code, of Stratford, ("Bank"), Stratford, Texas, currently held by Catlan, through a pro rata distribution of such shares to Catlan's stockholders, is necessary or appro- 2. Under subsection (c) of section 1101 of the Code, property acpriate to effectuate the policies of the Bank Holding quired after July 7, 1980, generally does not qualify for tax benefits of Company Act (12 U.S.C. § 1841 et seq.) ("BHC section 1101(b) when distributed by an otherwise qualified bank holding corporation. However, when such property was acquired by a Act"). qualified bank holding corporation in a transaction in which gain was In connection with this request, the following infor- not recognized under section 305(a) of the Code, then section 1101(b) mation is deemed relevant for purposes of issuing the is applicable. Catlan has stated that, with respect to the 25,374 shares of Bank it held as of July 7, 1970, on February 18, 1976, it received requested certification:1 24,317 shares of Bank in a transaction in which gain was not recognized under section 305(a) of the Code. If these shares were in fact acquired in a transaction in which gain was not recognized under section 305(a) of the Code, these shares would, accordingly, be eligible for the benefits provided in section 1101(b) by virtue of section 1. This information derives from Catlan's correspondence with the 1101(c)(1)(A) of the Code. Catlan also acquired 193 shares of Bank Board concerning its request for this certification, Catlan's Registra- after July 7, 1970, and sold 1,250 shares. These shares and 193 of the tion Statement filed with the Board pursuant to the BHC Act, and shares acquired in the 1976 transaction do not appear to be eligible for other records of the Board. benefits under the Tax Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 73 made under the BHC Act as if that Act did not con- 200,000 shares of First Bancshares, Incorporated, Bartain clause (ii) of section 4(c) or the proviso of sec- tlesville, Oklahoma ("Bancshares"), presently held by tion 4(a)(2). Catlan has represented that it will make CSI through the distribution of such shares to Affilisuch an election.3 ates, and Affiliates' ensuing divestiture of the same shares through the pro rata distribution of such shares On the basis of the foregoing, it is hereby certified to Affiliates' shareholders are necessary or appropriate that: to effecuate the policies of the Bank Holding Company (A) Catlan is a qualified bank holding corporation Act (12 U.S.C. § 1841 et seq.) ("BHC Act"). within the meaning of subsection (b) of section 1103 In connection with this request, the following inforof the Code and satisfies the requirements of that mation is deemed relevant, for purposes of issuing the subsection; requested certification:1 (B) the 48,248 shares of Bank that Catlan proposes 1. CSI is a corporation organized under the laws of to distribute are all or part of the property by reason Delaware on March 15, 1956. Affiliates is a corporaof which Catlan controls (within the meaning of sec- tion organized under the laws of Oklahoma on Aution 2(a) of the BHC Act) a bank; and gust 28, 1976. (C) distribution of the shares of Bank to share- 2. On December 23, 1965, CSI acquired ownership holders of Catlan is necessary or appropriate to ef- and control of 19,783 shares of the First National fectuate the policies of the BHC Act. Bank of Bartlesville ("Bank"), representing 19.8 percent of Bank's 100,000 then outstanding shares. This certification is based upon the representations On July 7, 1970, CSI owned 20,000 shares of Bank, made to the Board by Catlan and upon the facts set representing exactly 20 percent of Bank's then outforth above. In the event the Board should hereafter standing shares. determine that facts material to this certification are 3. On January 1, 1974, CSI exchanged its 20,000 otherwise than as represented by Catlan or that Catlan shares of Bank for 200,000 shares of Bancshares, a has failed to disclose to the Board other material facts, registered bank holding company organized under it may revoke this certification. the laws of Delaware that now owns 100 percent of By order of the Board of Governors, acting through the shares of Bank. CSI currently owns 200,000 its General Counsel, pursuant to delegated authority shares of Bancshares, which represent 19.0 percent (12 C.F.R. § 265.2(b)(3)), effective December 10,1980. of Bancshares' 1,052,501 currently outstanding shares.2 (Signed) THEODORE E. ALLISON, 4. On July 7, 1970, CSI was wholly owned by six [SEAL] Secretary of the Board. members of the Adams family (mother and five children). On that date, four members of this family and certain family trusts owned a total of 16,408 shares Central States Investment Company, of Bank, which represented 16.4 percent of the then Bartlesville, Oklahoma outstanding shares of Bank, and two such family members were directors of CSI. Adams Affiliates, Inc., 5. On April 28, 1977, the ownership and control of Bartlesville, Oklahoma Prior Tax Certification Pursuant to the Bank Holding 1. This information derives from CSI's communications with the Company Tax Act of 1976 Board concerning its request for this certification, Bancshares' Registration Statement filed with the Board pursuant to the BHC Act, and other records of the Board. Central States Investment Company, Bartlesville, 2. Under subsection (c) of section 1101 of the Code, property ac- Oklahoma ("CSI"), and Adams Affiliates, Inc., Bar- quired after July 7, 1970, generally does not qualify for the tax benefits of section 1101(b) when distributed by an otherwise qualified bank tlesville, Oklahoma ("Affiliates"), have requested priholding corporation. However, when such property was acquired by a or certifications pursuant to section 1101(b) of the In- qualified bank holding corporation in a transaction in which gain was ternal Revenue Code ("Code"), as amended by not recognized under certain parts of section 354 of the Code pursuant to a reorganization described in section 368(a)(1)(A) of the Code, then section 2(a) of the Bank Holding Company Tax Act of section 1101(b) is applicable. CSI has stated that, with respect to the 1976 ("Tax Act"), that CSI's proposed divestiture of 20,000 shares of Bank it held as of July 7, 1970, on January 1, 1974, it received 200,000 shares of Bancshares in a transaction in which gain was not recognized under section 354(a)(1) of the Code pursuant to a reorganization described in section 368(a)(1)(A) of the Code. If these 3. Sections 1103(g) and 1103(h) of the Code require only that an shares were in fact acquired in a transaction in which gain was not election thereunder be made "at such time and in such manner as the recognized under section 354(a)(1) of the Code, these shares would be Secretary [of the Treasury] or his delegate may by regulations pre- eligible for the benefits provided in section 1101(b) by virtue of section scribe." As of this date no such regulations have been adopted. 1101(c)(1)(A) of the Code. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

74 Federal Reserve Bulletin • January 1981 all the outstanding shares of CSI was acquired by filiates control, within the meaning of section 2(a) of Adams Affiliates, which has been wholly owned by the BHC Act, a bank or bank holding company; and members of the Adams family since its incorpora- (C) The distribution of the shares of Bancshares is tion.3 Adams family members and family trusts cur- necessary or appropriate to effectuate the policies of rently own a total of 15.9 percent of the currently the BHC Act. outstanding shares of Bancshares. Three Adams family members are currently officers of Affiliates, This certification is based upon the representations two of these individuals are currently officers of made to the Board by CSI and Affiliates and upon the CSI, and one of these two is also a director of both facts set forth above. In the event that the Board Bancshares and Bank. should hereafter determine the facts material to this 6. In accordance with section 1103(b)(2) of the Tax certification are otherwise than as represented by CSI Act and pursuant to section 2(a)(2)(c) of the BHC and Affiliates, or that CSI and Affiliates have failed to Act, CSI is deemed, solely for the purpose of issuing disclose to the Board other material facts, it may rethe requested certification, to have controlled Bank/ voke this certification. Bancshares continuously since July 7, 1970, by vir- By order of the Board of Governors acting through tue of exercising a controlling influence over Bank/ its General Counsel, pursuant to delegated authority Bancshares continuously since July 7, 1970. (12 C.F.R. § 265.2(b)(3)), effective December 31,1980. 7. CSI holds property acquired by it on or before July 7, 1970, the disposition of which would be nec- (Signed) JAMES MCAFEE, essary or appropriate to effectuate the BHC Act, if [SEAL] Assistant Secretary of the Board. CSI were to continue to be a bank holding company beyond December 31, 1980, and which property is "prohibited property" within the meaning of section Conlon-Moore Corporation, 1103(c) of the Code. Berwyn, Illinois 8. CSI and Affiliates have committed to the Board that after December 31, 1980, no person holding an Prior Certification Pursuant to the Bank Holding office or position (including an advisory or honorary Company Tax Act of1976. position) with CSI and Affiliates or any of their subsidiaries as an officer, director, policy-making em- Conlon-Moore Corporation, Berwyn, Illinois ("Conployee or management consultant, or who performs lon-Moore") has requested a prior certification pursu- (directly or through an agent, representative or nom- ant to section 1101(c)(3) of the Internal Revenue Code inee) functions comparable to those normally asso- ("Code"), as amended by section 2(a) of the Bank ciated with such office or position, will hold any Holding Company Tax Act of 1976, that its proposed such office or perform any such function with Banc- divestiture of all of its 10,214 shares of Commercial shares, Bank, or any of their subsidiaries.4 National Bank of Berwyn, Berwyn, Illinois ("Bank"), is necessary or appropriate to effectuate the policies of On the basis of the foregoing information, it is here- the Bank Holding Company Act (12 U.S.C. § 1841 et by certified that: seq.) ("BHC Act"). Conlon-Moore proposes to ex- (A) CSI and Affiliates are qualified bank holding change the 10,214 shares of Bank that it presently corporations within the meaning of section 1103(b) owns for all of the shares of Moore Financial Corporaof the Code, and satisfy the requirements of that tion, a new subsidiary of Conlon-Moore ("New Corsection, poration"), created and availed of solely for the pur- (B) The 200,000 shares of Bancshares that CSI pro- pose of receiving Conlon-Moore's shares of Bank, and poses to distribute to Affiliates and that Affiliates immediately thereafter to distribute all of Conlonproposes to distribute to its shareholders are all or Moore's shares of New Corporation on a pro rata basis part of the property by reason of which CSI and Af- to Conlon-Moore's shareholders. In connection with this request, the following information is deemed relevant, for purposes of issuing the requested certification:1 3. No gain was recognized in connection with the transfer of the shares of CSI to Affiliates. Similarly, the transaction did not alter the beneficial ownership of Bank and CSI. Accordingly, Affiliates appears to be a successor to CSI for purposes of section 1101(c) of the Code. 4. Since management interlocks between Affiliates or CSI and Bancshares are one of the principal means by which Affiliates' or 1. This information derives from Conlon-Moore's communications CSI's control might be maintained over Bancshares, termination of with the Board concerning its request for this certification, Conlonthe interlocking relationships appears necessary to insure a complete Moore's Registration Statement filed with the Board pursuant to the divestiture of Affiliates' and CSI's control over Bancshares. BHC Act, and other records of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 75 1. Conlon-Moore is a corporation organized under part of the property by reason of which Conlonthe laws of the state of Delaware on March 18, 1947. Moore controls (within the meaning of section 2(a) 2. Between 1962 and July 7, 1970, Conlon-Moore of the BHC Act) a bank or bank holding company; acquired ownership and control of 10,074 shares, and representing 83.95 percent of the 12,000 outstanding (C) the exchange of the shares of Bank for the voting shares, of Bank. Conlon-Moore presently shares of New Corporation and the distribution to owns and controls 10,214 shares, representing 85.12 the shareholders of Conlon-Moore of the shares of percent of the 12,000 outstanding voting stock of New Corporation are necessary or appropriate to ef- Bank.2 fectuate the policies of the BHC Act. 3. Conlon-Moore became a bank holding company on December 31, 1970, as a result of the 1970 This certification is based upon the representations Amendments to the BHC Act, by virtue of its own- made to the board by Conlon-Moore and upon the ership and control at that time of more than 25 per- facts set forth above. In the event the Board should cent of the outstanding voting shares of Bank, and hereafter determine that facts material to this certificaregistered as such with the Board on October 19, tion are otherwise than as represented by Conlon- 1971. Conlon-Moore would have been a bank hold- Moore or that Conlon-Moore has failed to disclose to ing company on July 7, 1970, if the BHC Act the Board other material facts, it may revoke this certi- Amendments of 1970 had been in effect on that date fication. by virtue of its ownership and control on that date of By order of the Board of Governers, acting through more than 25 percent of the outstanding voting its General Counsel, pursuant to delegated authority shares of Bank. (12 C.F.R. § 265.2(b)(3), effective December 1, 1980. 4. Conlon-Moore holds property acquired by it on or before July 7, 1970, the disposition of which (Signed) THEODORE E. ALLISON, would be required by section 4 of the BHC Act if [SEAL] Secretary of the Board. Conlon-Moore were to continue to be a bank holding company beyond December 31, 1980, and which property is "prohibited property" within the mean- Criss Concrete Company, Inc., ing of section 1103(c) of the Code. Parkersburg, West Virginia 5. Conlon-Moore has committed to the Board that by December 31, 1980, no person holding an office Prior Certification Pursuant to the Bank Holding or position (including honorary position) with Con- Company Tax Act of 1976 lon-Moore or any of its subsidiaries as an officer, director, policy-making employee or management Criss Concrete Company , Inc. ("Criss Concrete"), consultant, or who performs (directly or through an Parkersburg, West Virginia has requested a prior certiagent, representative or nominee) functions com- fication pursuant to section 1101(b) of the Internal parable to those normally associated with such of- Revenue Code (the "Code"), as amended by section fice or position, will hold any such office or perform 2(a) of the Bank Holding Company Tax Act of 1976, any such function with New Corporation, Bank, or that its proposed divestiture of 3,732 shares of Wilany of their subsidiaries. liamstown National Bank ("Bank"), Williamstown, West Virginia presently held by Criss Concrete, On the basis of the foregoing information, it is here- through a pro rata distribution to Criss Concrete's by certified that: stockholders, is necessary or appropriate to effectuate (A) Conlon-Moore is a qualified bank holding cor- the policies of the Bank Holding Company Act poration within the meaning of section 1103(b) of the (12 U.S.C. § 1841 et seq.) ("BHC Act"). Code, and satisfies the requirements of that section; In connection with this request, the following infor- (B) the shares of Bank that Conlon-Moore proposes mation is deemed relevant, for purposes of issuing the to exchange for shares of New Corporation are all or requested certification:1 1. Criss Concrete is a corporation organized under the laws of West Virginia in 1939. 2. Subsequent to July 7, 1970, Conlon-Moore acquired an addition- 2. On September 14, 1962, Criss Concrete acquired al 140 shares of Bank. Under section 1101(c)(1) of the Code, property acquired after July 7, 1970, generally does not qualify for the tax benefits of Section 1101(b) when distributed by an otherwise qualified bank holding company. Since Conlon-Moore has not claimed that any of the 1. This information derives from Criss Concrete's correspondence exceptions to this general rule are applicable to it, the 140 shares ac- with the Board concerning its request for this certification, Criss Conquired after July 7, 1970, appear to be ineligible for tax benefits under crete's Registration Statement filed with the Board pursuant to the the Act. BHC Act, and other records of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

76 Federal Reserve Bulletin • January 1981 ownership and control of 4,897 shares, representing tion 1103 of the Code, and satisfies the requirements 32.6 percent of the outstanding voting shares of of that subsection; Bank. (B) The 3,697 shares of Bank acquired prior to July 3. Criss Concrete became a bank holding company 7, 1970, that Criss Concrete proposes to distribute on December 31, 1970, as a result of the 1970 are all or part of the property by reason of which Amendments to the BHC Act, by virtue of its own- Criss Concrete controls (within the meaning of secership and control at that time of more than 25 per- tion 2(a) of the BHC Act) a bank or bank holding cent of the outstanding voting shares of Bank, and company; and registered as such with the Board on July 19, 1971. (C) Distribution of the shares of Bank to the share- Criss Concrete would have been a bank holding holders of Criss Concrete is necessary or appropricompany on July 7, 1970, if the BHC Act Amend- ate to effectuate the policies of the BHC Act. ments of 1970 had been in effect on that date by virtue of its ownership and control on that date of more This certification is based upon the representations than 25 percent of the outstanding voting shares of made to the Board by Criss Concrete and upon the Bank. Criss Concrete presently owns and controls facts set forth above. In the event the Board should 3,732 shares, representing 24.9 percent of the out- hereafter determine that facts material to this certificastanding voting shares of Bank.2 tion are otherwise than as represented by Criss Con- 4. Criss Concrete holds property acquired by it on crete or that Criss Concrete has failed to disclose to or before July 7, 1970, the disposition of which, but the Board other material facts, it may revoke this certifor clause (ii) of section 4(c) of the BHC Act, and the fication. This certification is granted upon the condiproviso of section 4(a)(2) of that Act, would be nec- tion that Criss Concrete make the elections required essary or appropriate to effectuate section 4 of the by sections 1103(g) and 1103(h) of the Code at such BHC Act, if Criss Concrete were to continue to be a time and in such manner as the Secretary of the Treasbank holding company beyond December 31, 1980, ury or his delegate may by regulation prescribe. and which property, but for such clause and such By order of the Board of Governors, acting through proviso, would be "prohibited property" within the its General Counsel, pursuant to delegated authority meaning of section 1103(c) of the Code. Sections (12 C.F.R. § 265.2(b)(3)), effective December 31,1980. 1103(g) and 1103(h) of the Code provide that any bank holding company may elect, for purposes of (Signed) JAMES MCAFEE, Part VIII of subchapter O of Chapter 1 of the Code, [SEAL] Assistant Secretary of the Board. to have the determination whether property is "prohibited property," or is property eligible to be distributed without recognition of gain under section Frank J. Eicher Company, Inc., 1101(b)(1) of the Code, made under the BHC Act as Coralville, Iowa if that Act did not contain clause (ii) of section 4(c) or the proviso of section 4(a)(2). Criss Concrete rep- Final Certification pursuant to the Bank Holding resented that it will make such an election.3 Company Tax Act of 1976 On the basis of the foregoing information, it is here- Frank J. Eicher Company, Inc., Coralville, Iowa by certified that: ("Company"), has requested a final certification pur- (A) Criss Concrete is a qualified bank holding cor- suant to section 1101(e) of the Internal Revenue Code poration within the meaning of subsection (b) of sec- ("Code"), as amended by section 2(a) of the Bank Holding Company Tax Act of 1976 (the "Tax Act"), that it has (before the expiration of the period prohibit- 2. Subsequent to July 7, 1970, Criss Concrete acquired 35 shares of ed property is permitted under the Bank Holding Com- Bank and later sold 1,200 shares of Bank, not including the 35 shares pany Act (12 U.S.C. § 1841 et seq.) (the "BHC Act") of Bank acquired after July 7, 1970. Under section 1101(c)(1) of the Code, property acquired after July 7, 1970, generally does not qualify to be held by a bank holding company) disposed of all for the tax benefits of section 1101(b) when distributed by an other- the property the desposition of which is necessary or wise qualified bank holding company. Similarly, property sold before appropriate to effectuate section 4 of the BHC Act. a prior tax certification is granted generally is not eligible for tax benefits. Since Criss Concrete has not claimed that any of the exceptions to In connection with this request, the following inforthese general rules are applicable to it, the 1,200 shares sold prior to mation is deemed relevant for purposes of issuing the the granting of the tax certification and 35 shares acquired after July 7, 1970, appear to be ineligible for tax benefits under the Tax Act. requested certification.1 3. Sections 1103(g) and 1103(h) of the Code require that an election thereunder be made "at such time and in such manner as the Secretary [of the Treasury] or his delegate may by regulations prescribe." 1. This information derives from Company's communications with As of this date, no such regulations have been adopted. the Board concerning its request for this certification, Company's Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 77 1. Effective April 26, 1979, the Board issued a prior Gammino Realty Company, Inc., certification pursuant to section 1101(a)(1) of the Providence, Rhode Island Code with respect to the proposed divestiture by Company of 1,010 voting shares of Eichers, Inc., Prior Certification Pursuant to the Bank Holding Iowa City, Iowa ("Eichers"), and 19,750 voting Company Tax Act of 1976 shares of Seville Corporation, Iowa City, Iowa ("Seville"), then held by Company, through the pro Gammino Realty Company, Inc., Providence, Rhode rata distribution of such shares to the two share- Island ("Realty"), has requested a prior certification holders of Company, who are husband and wife. pursuant to section 1101(b)(1) of the Internal Revenue 2. The Board's Order certified that: Code ("Code"), as amended by section 2(a) of the A. Company is a qualified bank holding corpora- Bank Holding Company Tax Act of 1976 ("Tax Act"), tion within the meaning of section 1103(b) of the that its proposed divestiture of substantially all of the Code, and satisfies the requirements of that section; shares of National Columbus Bancorp, Inc. ("Ban- B. The 1,010 shares of Eichers Inc., and the corp") currently held by Realty, through the pro rata 19,750 shares of Seville Corporation are "pro- distribution of the stock of Bancorp to Realty's sharehibited property" within the meaning of section holders, is necessary or appropriate to effectuate the 1103(c) of the Code. policies of the Bank Holding Company Act (12 U.S.C. C. The distribution of the 1,010 shares of Eichers, § 1841 et seq.) ("BHC Act"). Inc., and the 19,750 shares of Seville Corporation In connection with this request, the following inforis necessary or appropriate to effectuate the pol- mation is deemed relevant, for purposes of issuing the icies of the BHC Act. requested certification:1 3. On September 30, 1979, Company distributed to 1. Realty is a corporation organized under the laws its shareholders, on a pro rata basis, all of its shares of Rhode Island on March 30, 1926. of Eichers, Inc., and all of its shares of Seville Cor- 2. On April 30, 1957, Realty acquired ownership poration. Company does not currently own any and control of 557 of the 145,000 outstanding shares shares of Eichers, Inc., or Seville Corporation. of Columbus National Bank of Rhode Island 4. Company has represented that it does not exer- ("Bank") and continued to purchase shares of cise a controlling influence over the management or Bank/Bancorp at various times thereafter. Bancorp policies of Eichers, Inc., or Seville Corporation. became a bank holding company on December 31, 5. Company has represented that it holds no other 1970, after having acquired 100 percent (less direcproperty the disposition of which is required by sec- tors' qualifying shares) of the outstanding shares of tion 4 of the BHC Act. Bank in exchange for shares of its own stock on a one-for-one basis on February 27, 1970. On July 7, On the basis of the foregoing information, it is here- 1970, Realty owned 21,000 of the 145,000 outby certified that Company has (before the expiration of standing shares of Bancorp, representing 14.5 perthe period prohibited property is permitted under the cent of such shares. Realty currently owns and con- BHC Act to be held by a bank holding company) dis- trols 20,900 shares, representing 14.4 percent of the posed of all of the property the disposition of which is outstanding shares of Bancorp. necessary or appropriate to effectuate section 4 of the 3. On July 7, 1970, Michael A. Gammino, Jr. was BHC Act. both the President and a director of Bancorp and a This certification is based upon the representations director of Realty. On that date, he owned and conmade to the Board by Company and upon the facts set trolled 10,300 shares of Bancorp, representing 7.1 forth above. In the event the Board should determine percent of the shares outstanding. Also on that date, that facts material to this certification are otherwise members of the family of Michael A. Gammino, Jr. than as represented by Company, or that Company (two brothers, a sister, and a brother-in-law) owned has failed to disclose to the Board other material facts, a total of 15,800 shares in Bancorp, representing it may revoke this certification. 10.9 percent of the shares outstanding. Michael A. By order of the Board of Governors, acting through Gammino, Jr., currently holds the same positions its General Counsel, pursuant to delegated authority with Bancorp and Realty that he held on July 7, (12 C.F.R. § 265.2(b)(3)), effective December 31,1980. 1970, and he currently owns and controls 20,300 (Signed) JAMES MCAFEE, [SEAL] Assistant Secretary of the Board. 1. This information derives from Realty's communications with the Board concerning its request for this certification, Bancorp's Registra- Registration Statement filed with the Board pursuant to the BHC Act, tion Statement filed with the Board pursuant to the BHC Act, and and other records of the Board. other records of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

78 Federal Reserve Bulletin • January 1981 shares of Bancorp, representing exactly 14 percent forth above. In the event the Board should hereafter of the shares outstanding. The same members of Mr. determine that facts material to this certification are Gammino's family now own 12.3 percent of Ban- otherwise than as represented by Realty, or that Realcorp' s outstanding shares. ty has failed to disclose to the Board other material 4. No person other than Michael A. Gammino, Jr. facts, it may revoke this certification. or the members of his immediate family has ever By order of the Board of Governors acting through owned, controlled, or had power to vote as much as its General Counsel, pursuant to delegated authority 5 percent of the shares of Bancorp. (12 C.F.R. § 265.2(b)(3)), effective December 30,1980. 5. In accordance with section 1103(b)(2) of the Tax Act, Realty is deemed, solely for the purpose of is- (Signed) JAMES MCAFEE, suing the requested certification, to have controlled [SEAL] Assistant Secretary of the Board. Bancorp as of July 7, 1970, by virtue of exercising a controlling influence over Bancorp as of that date, pursuant to section 2(a)(2)(C) of the BHC Act. This The Gilmanton Company, control relationship has existed continuously since Foley, Minnesota July 7, 1970. 6. Realty holds property acquired by it on or before Prior Certification Pursuant to the Bank Holding July 7, 1970, the disposition of which would be nec- Company Tax Act of 1976 essary or appropriate to effectuate section 4 of the BHC Act, if Realty were to continue to be a bank The Gilmanton Company ("Gilmanton"), Foley, Minholding company beyond December 31, 1980, and nesota, has requested a prior certification pursuant to which property is "prohibited property" within the section 1101(a)(1) of the Internal Revenue Code meaning of section 1103(c) of the Code. ("Code"), as amended by section 2(a) of the Bank 7. Realty has committed to the Board that after De- Holding Company Tax Act of 1976, that its proposed cember 31, 1980, no person holding an office or posi- divestiture of all of the assets of its two unincorporated tion (including an advisory or honorary position) insurance agency subsidiaries, Gilman State Insurance with Realty or any of its subsidiaries as an officer, Agency ("Gilman"), Gilman, Minnesota, and Foley director, policy-making employee or management State Insurance Agency ("Foley"), Foley, Minnesota, consultant, or who performs (directly or through an currently held by Gilmanton, through distribution to agent, representative or nominee) functions com- the sole shareholder of Gilmanton, is necessary or apparable to those normally associated with such of- propriate to effectuate section 4 of the Bank Holding fice or position, will hold any such office or perform Company Act (12 U.S.C. § 1841 et seq.) ("BHC any such function with Bancorp, Bank, or any of Act"). their subsidiaries.2 In connection with this request, the following information is deemed relevant for the purpose of issuing On the basis of the foregoing information, it is here- the requested certification:1 by certified that: 1. Gilmanton is a corporation organized under the (A) Realty is a qualified bank holding corporation laws of Minnesota on February 14, 1969. within the meaning of section 1103(b) of the Code, 2. On February 14, 1969, Gilmanton acquired ownand satisfies the requirements of that section. ership and control of 720 shares, representing 96 (B) The 20,900 shares of Bancorp that Realty pro- percent of the outstanding voting shares, of First poses to distribute to its shareholders are all or part State Bank of Gilman ("Bank"), Benton County, of the property by reason of which Realty controls, Minnesota. within the meaning of section 2(a) of the BHC Act, a 3. Gilmanton became a bank holding company on bank or bank holding company, and December 31, 1970, as a result of the 1970 Amend- (C) Distribution to the shareholders of Realty of the ments to the BHC Act, by virtue of its ownership shares of Bancorp is necessary or appropriate to ef- and control at that time of more than 25 percent of fectuate the policies of the BHC Act. the outstanding voting shares of Bank, and it regis- This certification is based upon the representations tered as such with the Board on August 30, 1971. made to the Board by Realty and upon the facts set Gilmanton would have been a bank holding compa- 2. Since management interlocks between Realty and Bancorp are one of the principal means by which Realty's control might be main- 1. This information derives from Gilmanton's communications with tained over Bancorp, termination of the interlocking relationships ap- the Board concerning its request for this certification, Gilmanton's pears necessary to insure a complete divestiture of Realty's control of registration statement filed with the Board pursuant to the BHC Act, Bancorp. and other records of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 79 ny on July 7, 1970, if the BHC Act Amendments of ("Henson"), has requested a prior tax certification 1970 had been in effect on that date by virtue of its pursuant to section 1101(a)(2) of the Internal Revenue ownership and control on that date of more than 25 Code ("Code"), as amended by section 2(a) of the percent of the outstanding voting shares of bank. Bank Holding Company Tax Act of 1976, that its pro- 4. Since its formation on February 14, 1969, Gil- posed divestiture of all of its general insurance agency manton has been engaged in general insurance agen- assets through the pro rata distribution to Henson's cy activities through its unincorporated insurance stockholders of the stock of a new corporation ("New agency subsidiaries, Gilman and Foley. Corporation") created and availed of solely for the 5. Gilmanton has not filed an application with the purpose of receiving Henson's general insurance agen- Board, and has not otherwise obtained the Board's cy assets, is necessary or appropriate to effectuate secapproval, pursuant to section 4(c)(8) of the BHC tion 4 of the Bank Holding Company Act (12 U.S.C. Act, to continue to engage in the operation of insur- § 1841 et seq.) ("BHC Act"). ance agencies.2 In connection with this request, the following information is deemed relevant for the purpose of issuing On the basis of the foregoing information it is hereby the requested certification.1 certified that: 1. Henson is a corporation organized under the laws (A) Gilmanton is a qualified bank holding company of Oklahoma on October 20, 1967. within the meaning of section 1103(b) of the Code, 2. On October 25, 1968, Henson acquired ownand satisfies the requirements of that subsection; ership and control of 195.13 of the 700 outstanding (B) The assets of the two insurance agencies that voting shares of First National Bank, Maysville, Gilmanton proposes to distribute are "prohibited Oklahoma ("Bank"). On July 7, 1970, Henson property" within the meaning of section 1103(c) of owned and controlled 360.17 of the shares of Bank, the Code; representing approximately 51.5 percent of such (C) The distribution of the assets of the two insur- shares. Henson presently owns and controls 616.83 ance agencies is necessary or appropriate to ef- of the 700 outstanding voting shares of Bank, reprefectuate section 4 of the BHC Act. senting approximately 88.12 percent of the shares of Bank. This certification is based upon the representations 3. Henson became a bank holding company on made to the Board by Gilmanton and upon the facts set December 31, 1970 as a result of the 1970 Amendforth above. In the event that the Board should hereaf- ments to the BHC Act, by virtue of its ownership and ter determine that the facts material to this certifica- control at that time of more than 25 percent of the tion are otherwise than as represented by Gilmanton outstanding voting shares of Bank, and registered as or that Gilmanton has failed to disclose to the Board such with the Board on September 2, 1971. Henson other material facts, the Board may revoke this certifi- would have been a bank holding company on July 7, cation. 1970, if the BHC Act Amendments of 1970 had been By order of the Board of Governors, acting through in effect on that date by virtue of its ownership and its General Counsel pursuant to delegated authority control on that date of more than 25 percent of the (12 C.F.R. § 265.2(b)(3)), effective December 12,1980. outstanding voting shares of Bank. 4. Henson has directly engaged in the operation of a (Signed) JEFFERSON A. WALKER, general insurance agency since its incorporation. [SEAL] Assistant Secretary of the Board. Henson did not file an application with the Board, and did not otherwise obtain the Board's approval The H. Pat Henson Company, pursuant to section 4(c)(8) of the BHC Act, to con- Maysville, Oklahoma tinue to engage in its insurance activities.2 Prior Certification Pursuant to the Bank Holding Company Tax Act of 1976 1. This information derives from Henson's communications with the Board concerning its request for this certification, Henson's Regis- The H. Pat Henson Company, Maysville, Oklahoma tration Statement filed with the Board pursuant to the BHC Act, and other records of the Board. 2. Some or all of Gilman's activities may be among those activities 2. Some or all of Henson's insurance activities may be among those that the Board previously has determined to be closely related to activities that the Board has previously determined to be closely rebanking under section 4(c)(8) of the BHC Act. However, in the ab- lated to banking under section 4(c)(8) of the BHC Act. However, in sence of approval by the Board of an application by Gilmanton to the absence of approval to retain its insurance activities, Henson may retain Gilman, Gilmanton may not retain Gilman beyond December not retain these activities beyond December 31, 1980. (Cf. Wachovia 31, 1980. (See Wachovia Corp., No. TCR 76-132, 63 FEDERAL RE- Corp. Docket No. TCR-132, 63 FEDERAL RESERVE BULLETIN 606 SERVE BULLETIN 606 (1977). (1977)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

80 Federal Reserve Bulletin • January 1981 On the basis of the foregoing information, it is here- with respect to the proposed sale of 66,748 shares, by certified that: representing 26 percent of the outstanding voting (A) Henson is a qualified bank holding corporation shares of Post Oak Bank, Houston, Texas within the meaning of section 1103(b) of the Code, ("Bank"), to one individual ("Buyer"). The and satisfies the requirements of that section; Board's Order certified that: (B) The insurance agency assets that Henson pro- A. Houston is a qualified bank holding corporaposes to exchange for shares of New Corporation tion within the meaning of sections 6158(f)(1) and are "prohibited property" within the meaning of 1103(b) of the Code and satisfies the requirements section 1103(c) of the Code; of those sections; (C) The exchange of Henson's insurance agency as- B. the Bank shares that Houston proposes to disets for the shares of New Corporation and the dis- vest are all or part of the property by reason of tribution to the shareholders of Henson of the shares which Houston controls (within the meaning of of New Corporation are necessary or appropriate to section 2(a) of the BHC Act) a bank or bank holdeffectuate section 4 of the BHC Act. ing company; and C. the sale of such shares of Bank is necessary or This certification is based upon the presentations appropriate to effectuate the policies of the BHC made to the Board by Henson and upon the facts set Act. forth above. In the event that the Board should hereaf- 2. On June 27, 1979, Houston sold to Buyer all of its ter determine that the facts material to this certifica- interest in Bank for cash, and Buyer is not otherwise tion are otherwise than as represented by Henson or indebted to Houston. that Henson has failed to disclose to the Board other 3. The prior certification issued on June 20, 1979, material facts, the Board may revoke this certification. was granted on the condition that no person holding By order of the Board of Governors, acting through an office or position (including an advisory or honorits General Counsel pursuant to delegated authority ary position) with Houston as a director, officer, pol- (12 C.F.R. § 265.2(b)(3)), effective December 31, 1980. icy-making employee or consultant, or who performs (directly or through an agent, representative (Signed) JAMES MCAFEE, or nominee) functions comparable to those normally [SEAL] Assistant Secretary of the Board. associated with such office or position, will hold any such office or position or perform any such function with Bank or any of its subsidiaries or affiliates. Ef- Houston Corporation, fective June 28, 1979, all interlocking relationships Houston, Texas between Houston and Bank were terminated. 4. The prior certification issued on June 20, 1979, Final Certification Pursuant to the Bank Holding was granted upon the representation of Houston Company Tax Act of 1976 that it would elect, for purposes of Part VIII of subchapter O of Chapter I of the Code, to have a deter- Houston Corporation, Houston, Texas ("Houston"), mination of whether property is "prohibited properhas requested a final certification pursuant to section ty" or is property eligible to be distributed without 6158(c)(2) of the Internal Revenue Code ("Code"), as recognition of gain under section 1101(b)(1) of the amended by section 3(a) of the Bank Holding Compa- Code, made under the BHC Act as if such Act did ny Tax Act of 1976, that it has, before the expiration of not contain clause (ii) of section 4(c) or the proviso the period prohibited property is permitted under the of section 4(a)(2) thereof as provided in sections Bank Holding Company Act, (12 U.S.C. § 1841 et 1103(g) and 1103(h) of the Code. Houston made this seq.), ("BHC Act") to be held by a bank holding com- election by resolution on June 22, 1979. pany, ceased to be a bank holding company. 5. Houston has represented that it does not exercise In connection with this request, the following infor- a controlling influence over the management or polimation is deemed relevant for the purposes of issuing cies of Bank, or any other bank or bank holding the requested certification:1 company. 1. Effective June 20, 1979, the Board issued a prior 6. Houston has represented that it does not control certification pursuant to section 6158(a) of the Code in any manner the election of a majority of the directors, or own or control, directly or indirectly, more than 5 percent of the outstanding shares of any bank 1. This information derives from Houston's communications with or bank holding company. the Board concerning its request for this certification, Houston's Reg- On the basis of the foregoing information, it is hereistration Statement filed with the Board pursuant to the BHC Act, and other records of the Board. by certified that Houston has (before the expiration of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 81 the period prohibited property is permitted under the Code, and satisfies the requirements of that sub- BHC Act to be held by a bank holding company) section; ceased to be a bank holding company, and has dis- B. The assets sold by How-Win were prohibited posed of all its banking property. property within the meaning of section 1103(c) of This certification is based upon the representations the Code. and commitments made to the Board by Houston and C. The sale by How-Win of its farm and farm-reupon the facts set out above. In the event the Board lated properties was necessary or appropriate to should hereafter determine that facts material to this effectuate section 4 of the BHC Act. certification are otherwise than as represented by 3. On January 1, 1980 How-Win transferred to Houston, or that Houston has failed to disclose to the Winn-Acres, Ltd. its farm and farm-related property Board other material facts or to fulfill any of its com- solely in exchange for all of the stock of Winn mitments, the Board may revoke this certification. Acres, Ltd. By order of the Board of Governors, acting through 4. How-Win has represented to the Board that it has its General Counsel pursuant to delegated authority disposed of all of its nonbanking property, and that (12 C.F.R. § 265.2(b)(3)), effective December 10,1980. it does not own or control any nonbanking shares or property or engage in any activities that must be dis- (Signed) JEFFERSON A. WALKER, posed of under section 4(a)(2) of the Act. [SEAL] Assistant Secretary of the Board. On the basis of the foregoing information, it is hereby certified that How-Win has (before the expiration of How-Win Development Co., the period prohibited property is permitted under the Cresco, Iowa BHC Act to be held by a bank holding company) disposed of all of the property the disposition of which is Final Certification Pursuant to the Bank Holding necessary or appropriate to effectuate the policies of Company Tax Act of 1976 section 4 of the BHC Act. This certification is based upon the representations How-Win Development Co., Cresco, Iowa ("How- made by the Board to How-Win and upon the facts set Win"), has requested a final certification pursuant to forth above. In the event the Board should hereafter Section 1101(e) of the Internal Revenue Code determine that facts material to this certification are ("Code"), as amended by Section 2(a) of the Bank otherwise than as represented by How-Win, or that Holding Company Tax Act of 1976, that it has, before How-Win has failed to disclose to the Board other mathe expiration of the period prohibited property is per- terial facts, it may revoke this certification. mitted under the Bank Holding Company Act, By order of the Board of Governors, acting through (12 U.S.C. § 1841 et seq.) ("BHC Act") to be held by its General Counsel, pursuant to delegated authority a bank holding company, divested of all such prohibit- (12 C.F.R. § 265.2(b)(3)), effective December 29, 1980. ed property. In connection with this request, the following infor- (Signed) JAMES MCAFEE, mation is deemed relevant for the purposes of issuing [SEAL] Assistant Secretary of the Board. the requested certification.1 1. Effective December 13, 1979, the Board issued a prior certification pursuant to section 1101(a) with Midwest Bancorporation, Inc., respect to the proposed divestiture by How-Win of Hays, Kansas all of its farmland and farm-related property through the pro rata distribution of shares of a proposed new Prior Certification Pursuant to the Bank Holding corporation formed solely for the purpose of receiv- Company Tax Act of 1976 ing such property, to all of the shareholders of How- Win. Midwest Bancorporation, Inc. ("MBI"), Hays, Kan- 2. The Board's Order certified that: sas, has requested a prior certification pursuant to sec- A. How-Win is a qualified bank holding corpora- tion 1101(c)(2) of the Internal Revenue Code tion within the meaning of section 1103(b) of the ("Code"), as amended by section 2(a) of the Bank Holding Company Tax Act of 1976, that its proposed divestiture of all of its general insurance agency assets 1. This information derives from How-Win's correspondence with through the pro rata distribution to MBI's stockthe Board concerning its request for this certification, How-Win's holders of the stock of a new corporation ("New Cor- Registration Statement filed with the Board pursuant to the BHC Act and other records of the Board. poration") created and availed of solely for the pur- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

82 Federal Reserve Bulletin • January 1981 pose of receiving MBFs general insurance agency tion to the shareholders of MBI of the shares of New assets, is necessary or appropriate to effectuate sec- Corporation are necessary or appropriate to eftion 4 of the Bank Holding Company Act (12 U.S.C. fectuate section 4 of the BHC Act. § 1841 et seq.) ("BHC Act"). In connection with this request, the following infor- This certification is based upon the representations mation is deemed relevant for the purpose of issuing made to the Board by MBI and upon the facts set forth the requested certification.1 above. In the event that the Board should hereafter 1. MBI is a corporation organized under the laws of determine that the facts material to this certification Kansas on April 3, 1970. are otherwise than as represented by MBI or that MBI 2. During April, May, and June of 1970, MBI ac- has failed to disclose to the Board other material facts, quired ownership and control of 2,697 of the 3,000 the Board may revoke this certification. outstanding voting shares of Farmers State Bank By order of the Board of Governors, acting through and Trust Company ("Bank"), representing 89.9 its General Counsel pursuant to delegated authority percent of such shares. MBI presently owns and (12 C.F.R. § 265.2(b)(3)), effective December 3, 1980. controls 6,586 of the 7,000 outstanding voting shares of Bank, representing 94.1 percent of such shares. (Signed) THEODORE E. ALLISON, 3. MBI became a bank holding company on Decem- [SEAL] Secretary of the Board. ber 31, 1970, as a result of the 1970 Amendments to the BHC Act, by virtue of its ownership and control at that time of more than 25 percent of the out- Midwestern Fidelity Corporation, standing voting shares of Bank, and registered as Milford, Ohio such with the Board on July 15, 1971. MBI would have been a bank holding company on July 7, 1970, Prior and Final Certifications Pursuant to the Bank if the BHC Act Amendments of 1970 had been in Holding Company Tax Act of 1976 effect on that date by virtue of its ownership and control on that date of more than 25 percent of the Midwestern Fidelity Corporation (formerly Midoutstanding voting shares of Bank. western Financial Corporation of Ohio), Milford, Ohio 4. MBI has directly engaged in the operation of a ("MFC"), has requested a prior certification pursuant general insurance agency since its formation on to section 6158(a) of the Internal Revenue Code (the April 3, 1970. MBI did not file an application with "Code"), as amended by section 2(a) of the Bank the Board, and did not otherwise obtain the Board's Holding Company Tax Act of 1976 (the "Tax Act"), approval pursuant to section 4(c)(8) of the BHC Act that the sale on September 30, 1975, of all of the assets to continue to engage in its insurance activities.2 of The Miami Deposit Bank, Yellow Springs, Ohio ("Bank"), to MDB Bank, Inc., Yellow Springs, Ohio On the basis of the foregoing information, it is here- ("MDB"), a subsidiary of First National Cincinnati by certified that: Corporation, Cincinnati, Ohio ("FNCC"), a regis- (A) MBI is a qualified bank holding company within tered bank holding company, was necessary or approthe meaning of section 1103(b) of the Code, and sat- priate to effectuate the policies of the Bank Holding isfies the requirements of that section; Company Act of 1956, as amended (12 U.S.C. § 1841 (B) The insurance agency assets that MBI proposes et seq.) ("BHC Act"). MFC has also requested a final to exchange for shares of New Corporation are certification pursuant to section 6158(c)(2) of the Code "prohibited property" within the meaning of section that MFC has (before the expiration of the period pro- 1103(c) of the Code; hibited property is permitted under the BHC Act to be (C) The exchange of MBI's insurance agency assets held by a bank holding company) ceased to be a bank for the shares of New Corporation and the distribu- holding company.1 1. This information derives from MBI's communications with the Board concerning its request for this certification, MBI's registration 1. Pursuant to sections 2(d)(2) and 3(c)(2) of the Tax Act, in the statement filed with the Board pursuant to the BHC Act, and other case of any sale that takes place either on or before December 31, 1976 records of the Board. (the 90th day after the date of the enactment of the Tax Act), the 2. Some or all of MBI's insurance activities may be among those certification described in section 6158(a) shall be treated as made beactivities that the Board has previously determined to be closely re- fore the sale, and the certification described in § 6158(c)(2) shall be lated to banking under section 4(c)(8) of the BHC Act. However, in treated as made before the close of the calendar year following the the absence of approval by the Board of an application by MBI to calendar year in which the last such sale occurred, if application for retain its insurance activities, MBI may not retain these activities such certification was made before the close of December 31, 1976. beyond December 31, 1980. (Cf. Wachovia Corp., Docket No. TCR MFC's request for such certifications was made to the Board prior to 76-132, 63 FEDERAL RESERVE BULLETIN 606 (1977)). that date. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 83 In connection with these requests, the following in- any bank or any company that controls a bank. formation is deemed relevant for the purposes of is- 8. No officer, director (including honorary or advisuing the prior and final certifications:2 sory director) or employee with policymaking func- 1. MFC is a corporation organized under the laws of tions of MFC or any subsidiary of MFC also holds the state of Ohio on January 2, 1968. any such position with FNCC or any subsidiary of 2. On August 19, 1969, MFC acquired direct own- FNCC, including Bank, or with any other bank or ership and control of 14,813 shares, representing any company that owns a bank. 82.29 percent of the outstanding voting shares, of 9. MFC has represented that it does not control in Bank. In addition, on December 11, 1969, two any manner the election of a majority of directors, wholly owned subsidiaries of MFC acquired direct or exercise a controlling influence over the manageownership and control of 3,000 shares, representing ment or policies of FNCC or its subsidiaries, includ- 16.7 percent of Bank's outstanding voting shares.3 ing Bank, or of any other bank or company that con- 3. MFC became a bank holding company on De- trols a bank. cember 31, 1970, as a result of the enactment of the 1970 Amendments to the BHC Act, by virtue of On the basis of the foregoing, it is hereby certified MFC's ownership and control at that time of more that: than 25 percent of the outstanding voting shares of (A) at the time of its sale of Bank to FNCC, MFC Bank, and it registered as such with the Board on was a qualified bank holding corporation, within the August 24, 1971. MFC would have been a bank meaning of section 6158(f)(1) and subsection (b) of holding company on July 7, 1970, if the BHC Act section 1103 of the Code and satisfied the require- Amendments of 1970 had been in effect on such ments of that subsection; date, by virtue of MFC's direct and indirect own- (B) the assets of Bank that MFC sold to a subsidiary ership and control on that date of more than 25 per- of FNCC were all or part of the property by reason cent of the outstanding voting shares of Bank. of which MFC controlled (within the meaning of 4. On September 30, 1975, MFC held property ac- section 2(a) of the BHC Act) a bank or a bank holdquired by it on or before July 7, 1970, the disposition ing company;5 of which would have been necessary or appropriate (C) the sale of Bank by MFC was necessary or apto effectuate section 4 of the BHC Act if MFC had propriate to effectuate the policies of the BHC Act; remained a bank holding company beyond Decem- and ber 31, 1980, and which property would have been (D) MFC has (before the expiration of the period "prohibited property" within the meaning of section prohibited property is permitted under the BHC Act 6158(f)(1) and 1103(c) of the Code. to be held by a bank holding company) ceased to be 5. On February 25, 1971, MFC filed with the Board a bank holding company. an irrevocable declarartion, pursuant to section 225.4(d) of the Board's Regulation Y that it would This certification is based upon the representations cease to be a bank holding company by December and commitments made to the Board by MFC and up- 31, 1980. on the facts set forth above. In the event that the 6. On September 30, 1975, MFC sold all of the as- Board should hereafter determine that facts material to sets, properties, business, and goodwill of Bank to these certifications are otherwise than as represented MDB, a wholly owned subsidiary of FNCC.4 by MFC, or that MFC has failed to disclose to the 7. Neither MFC nor any subsidiary of MFC directly Board other material facts, or has failed to fulfill any or indirectly owns, controls or has power to vote 25 commitments, the Board may revoke these certificapercent or more of any class of voting securities of tions. By order of the Board of Governors, acting through its General Counsel, pursuant to delegated authority 2. This information derives from MFC's correspondence with the (12 C.F.R. § 265.2(b)(3)), effective December 24,1980. Board concerning its request for certification, MFC's Registration Statement, Annual Reports filed with the Board pursuant to the BHC Act, and other records of the Board. (Signed) JAMES MCAFEE, 3. MFC's wholly owned subsidiary, The Midwestern Indemnity Company ("MIC"), and MIC's wholly owned subsidiary, Mid-Ameri- [SEAL] Assistant Secretary of the Board. ca Fire & Casualty Company, both located in Milford, Ohio, together comprised the "Midwestern Group," which acquired these shares. 5. On July 7, 1970, MFC directly and through its subsidiary MIC, 4. MDB Bank was organized on August 12, 1975, to acquire the owned and controlled 17,813 shares, representing 98.96 percent of the assets of Bank for $3,562,500 of which $1,000,000 was paid for in cash outstanding voting shares of Bank. Under section 6158 of the Code, on September 30, 1975, and $2,562,500 was indebtedness evidenced the assets representing that portion of Bank acquired by MFC after by promissory notes (with interest payable at a rate of 6 percent per July 7, 1970, generally would not qualify for the tax benefits of section year) issued by FNCC to MFC and MIC, on a pro rata basis, and 6158(a) of the Code when sold by an otherwise qualified holding compayable in varying installments over a period of seven years. pany. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

84 Federal Reserve Bulletin • January 1981 Steego Corporation, 5. MWC became a bank holding company on De- West Palm Beach, Florida cember 31, 1970, as a result of the 1970 Amendments to the BHC Act, by virtue of its direct own- Milwaukee Western Corporation, ership and control, at that time, of more than 25 West Palm Beach, Florida percent of the outstanding voting shares of Bank, and it registered as such with the Board on Septem- Prior Certifications Pursuant to the Bank Holding ber 29, 1971. Company Tax Act of 1976 6. Steego became a bank holding company on December 31, 1970, as a result of the 1970 Amend- Steego Corporation (formerly Sterling Precision Cor- ments to the BHC Act, by virtue of its indirect ownporation), West Palm Beach, Florida ("Steego"), and ership and control at that time through its its subsidiary, Milwaukee Western Corporation, West subsidiary, MWC, of more than 25 percent of the Palm Beach, Florida ("MWC"), have requested prior outstanding voting shares of Bank, and it registered certifications pursuant to section 6158(a) of the Inter- as such with the Board on August 26, 1971. nal Revenue Code ("Code") as amended by section 7. Both Steego and MWC hold property that they 3(a) of the Bank Holding Company Tax Act of 1976 acquired on or before July 7, 1970, the disposition of ("Tax Act"), that their proposed sale of 41,282 shares which would be necessary or appropriate to ef- ("Bank Shares"), representing 68.6 percent of the out- fectuate section 4 of the BHC Act if Steego and standing voting shares of Milwaukee Western Bank, MWC were to continue to be bank holding com- Milwaukee, Wisconsin ("Bank"), to Western Banc- panies beyond December 31, 1980. This property is shares, Inc., Milwaukee, Wisconsin ("Western"), is "prohibited property" within the meaning of section necessary or appropriate to effectuate the policies of 1103(c) of the Code. the Bank Holding Company Act (12 U.S.C. § 1841 et 8. Both Steego and MWC have committed that after seq.) ("BHC Act"). the sale of Bank Shares, no person who is a director, In connection with these requests for prior certifica- officer or policymaking employee (including honortion, the following information is deemed relevant for ary and advisory directors) of Steego, MWC, or purposes of issuing the requested certifications:1 their subsidiaries will serve in a similar capacity 1. Steego is a corporation organized and existing with Bank, Western or its subsidiaries. In addition, under the laws of Delaware on October 24, 1955. all persons affiliated with Steego and MWC cur- 2. MWC is a corporation organized and existing un- rently serving as directors, officers, or policymaking der the laws of Delaware on February 24, 1969. employees of Bank will resign their positions ef- 3. MWC is a subsidiary of Steego by virtue of fective as of the closing date of the sale. Steego's ownership of 1,513,762 voting shares of MWC, representing 90.5 percent of MWC's com- On the basis of the foregoing information, it is heremon stock. Steego acquired 100 percent of MWC's by certified that: voting shares on May 8, 1969, and reduced its own- (A) Steego and MWC are qualified bank holding ership interest in MWC to 90.5 on June 30, 1969. corporations within the meaning of section 1103(b) 4. On May 8, 1969, Steego, through its subsidiary, of the Code, and satisfy the requirements of that MWC, purchased 29,452 shares, representing 58.9 section; percent of the outstanding shares of Bank. On De- (B) 29,628 of Bank Shares are part of the property cember 9, 1969, and January 16, 1970, Steego, by reason of which Steego and MWC control (within through MWC, purchased an additional 176 shares, the meaning of section 2(a) of the BHC Act) a bank; thereby increasing its percentage of ownership of and Bank to 59.26 percent of the outstanding voting (C) the sale of such shares is necessary or approprishares of Bank. On July 7, 1970, Steego, through ate to effectuate the policies of the BHC Act. MWC, held 29,628 of the outstanding shares of Bank. Between July 7, 1970, and the present, This certification is based upon the representations Steego, through MWC, has acquired 11,654 shares and commitments made to the Board by Steego and of Bank in various transactions.2 MWC and upon the facts set forth above. In the event 1. This information derives from correspondence of Steego and MWC with the Board concerning their requests for these certifications the tax benefits of section 6158(a) of the Code when sold by an otherand the Registration Statements of Steego and MWC filed with the wise qualified bank holding company. While Steego and MWC intend Board pursuant to the BHC Act. to sell all of the shares of Bank held by them to Western, they are not 2. Under section 6158 of the Code, the shares of Bank acquired by seeking tax relief under the Tax Act for shares of Bank acquired after Steego, through MWC, after July 7, 1970, generally do not qualify for July 7, 1970. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 85 the Board should determine that facts material to this 3. On October 31, 1969, Northwestern acquired certification are otherwise than as represented by ownership and control of 15,000 shares, represent- Steego and MWC, or that Steego or MWC has failed to ing 100 percent of the voting shares, of MJF.2 disclose to the Board other material facts or to fulfill 4. Northwestern holds property acquired by it on or any commitments made to the Board in connection before July 7, 1970, the disposition of which would herewith, it may revoke the certification. be necessary or appropriate to effectuate section 4 By order of the Board of Governors, acting through of the BHC Act if Northwestern is to remain a bank its General Counsel, pursuant to delegated authority holding company beyond December 31, 1980, and (12 C.F.R. 265.2(b)(3)), effective December 4, 1980. which property is "prohibited property" within the meaning of section 1103(c) of the Code. (Signed) THEODORE E. ALLISON, 5. Northwestern has committed to the Board that [SEAL] Secretary of the Board. after December 31, 1980, no person holding an office or position (including an advisory or honorary position) with Northwestern or any of its subsidiaries as Northwestern Financial Corporation, an officer, director, policy-making employee or North Wilkesboro, North Carolina management consultant, or who performs (directly or through an agent, representative or nominee) Prior Certification Pursuant to the Bank Holding functions comparable to those normally associated Company Tax Act of 1976 with such office or position, will hold any such office or perform any such function with MJF, Credithrift, Northwestern Financial Corporation, North Wilkes- or any of their subsidiaries. boro, North Carolina ("Northwestern"), has requested a prior certification pursuant to section On the basis of the foregoing information, it is here- 6158(a) of the Internal Revenue Code ("Code"), as by certified that: amended by section 3(a) of the Bank Holding Compa- (A) Northwestern is a qualified bank holding corpony Tax Act of 1976 ("Tax Act"), that its proposed sale ration within the meaning of sections 6158(f)(1) and of 300 shares of common stock of M & J Financial Cor- 1103(b) of the Code and satisfies the requirements of poration, Shelby, North Carolina ("MJF"), is neces- section 1103(b); sary or appropriate to effectuate the policies of the (B) the shares of MJF to be divested are "prohibit- Bank Holding Company Act (12 U.S.C. § 1841 et seq.) ed property" within the meaning of section ("BHC Act"). 6158(f)(2) and 1103(c) of the Code; and In connection with this request, the following infor- (C) the sale of MJF is necessary or appropriate3 to mation is deemed relevant for the purposes of issuing effectuate section 4 of the BHC Act. the requested certification.1 1. Northwestern is a corporation organized on January 1, 1969, under the laws of the state of North 2. Before October 1980, MJF engaged directly in consumer financ- Carolina. On August 1, 1969, Northwestern ac- ing, second mortgage lending, data processing services, and acting as agent for the sale of credit life, accident and health insurance. In Octoquired ownership and control of 1,291,875 shares, ber 1980, Northwestern reorganized the corporate structure of MJF representing 100 percent of the outstanding voting into a holding company format. Northwestern exchanged shares of its shares of The Northwestern Bank, North Wilkes- inactive subsidiary, Financial Supplies, Inc. ("Financial") for MJF's consumer finance assets, which were transferred to Financial. Northboro, North Carolina ("Northwestern Bank"). western exchanged shares of its inactive subsidiary, Northwestern In- 2. Northwestern became a bank holding company vestment Management Company ("Investment Management"), for the on December 31, 1970, as a result of the 1970 MJF leasing and data processing activities, which were transferred to Investment Management. Thereafter MJF terminated its credit insur- Amendments to the BHC Act by virtue of its own- ance, dealer floor plan lending and second mortgage lending activities. ership and control at that time of more than 25 per- MJF changed its name to M & J Group, Inc. ("Group"), which is the parent company for all MJF activities. Financial, now a subsidiary of cent of the voting shares of Northwestern Bank, and Group, changed its name to M & J Financial Corporation ("New it registered as such with the Board on November MJF"). Investment Management, now a subsidiary of Group, 26, 1971. Northwestern presently owns and controls changed its name to M & J Leasing Corporation. This certification is being issued with regard to the shares of the New MJF now held by 100 percent of the outstanding voting shares of Group. No gain was recognized in connection with the transfer of the Bank. finance company assets to New MJF, nor did this transfer alter the beneficial ownership of these assets. Accordingly, New MJF appears to be a successor to old MJF under section 1101(c) of the Code. 3. Since Northwestern has received Board approval to retain cer- 1. This information derives from Northwestern's communications tain offices of MJF, Northwestern's divestiture of all of MJF is no with the Board concerning its request for certification, North- longer necessary, but would be appropriate to effectuate the policies western's registration statement filed with the Board pursuant to the of section 4 of the BHC Act, if completed on or before December 31, BHC Act, and other records of the Board. 1980. In general, section 4 of the BHC Act Amendments of 1970 re- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

86 Federal Reserve Bulletin • January 1981 This certification is based upon the representations 1. Parker is a corporation organized under the laws made to the Board by Northwestern and upon facts set of the state of Oklahoma on February 28, 1969. forth above. In the event that the Board should hereaf- 2. On April 15, 1969, Parker acquired 205 shares of ter determine that the facts material to this certifica- Cleo State Bank, Cleo Springs, Oklahoma tion are otherwise than as represented by North- ("Bank"), representing 82 percent of the outwestern, or that Northwestern has failed to disclose to standing voting shares of Bank. the Board other material facts, the Board may revoke 3. Parker became a bank holding company on this certification. December 31, 1970, as a result of the 1970 Amend- By order of the Board of Governors, acting through ments to the BHC Act, by virtue of its ownership its General Counsel pursuant to delegated authority and control at that time of more than 25 percent of (12 C.F.R. § 265.2(b)(3)), effective December 30,1980. the outstanding voting shares of Bank, and it registered as such with the Board on July 29, 1971. Park- (Signed) JAMES MCAFEE, er would have been a bank holding company on July [SEAL] Assistant Secretary of the Board. 7, 1970, if the BHC Act Amendments of 1970 had been in effect on that date by virtue of its ownership and control on that date of more than 25 percent of Parker Insurance Agency Incorporated, the outstanding shares of Bank. Parker presently Cleo Springs, Oklahoma owns and controls 800 shares, representing 80 percent of the outstanding voting shares of Bank. Prior Certification Pursuant to the Bank Holding 4. Since its formation on February 28, 1969, Parker Company Tax Act of 1976 has been engaged in general insurance agency activities. Parker Insurance Agency Incorporated, Cleo Springs, 5. Parker has not filed an application with the Oklahoma ("Parker"), has requested a prior certifica- Board, and has not otherwise obtained the Board's tion pursuant to section 1101(a) of the Internal Reve- approval, pursuant to section 4(c)(8) of the BHC nue Code ("Code"), as amended by section 2(a) of the Act, to continue to engage in the operation of an in- Bank Holding Company Tax Act of 1976 ("Tax Act"), surance agency.2 that its proposed divestiture of its general insurance agency assets, through the pro rata distribution to all On the basis of the foregoing information, it is hereof the shareholders of Parker, of shares of a proposed by certified that: new corporation ("New Corporation") created and A. Parker is a qualified bank holding company withavailed of solely for the purpose of receiving such in the meaning of section 1103(b) of the Code, and property, is necessary or appropriate to effectuate sec- satisfies the requirements of that subsection; tion 4 of the Bank Holding Company Act (12 U.S.C. B. The general insurance agency assets that Parker § 1841 et seq.) ("BHC Act"). proposes to transfer to the proposed new corpora- In connection with this request, the following infor- tion are "prohibited property" within the meaning mation is deemed relevant for the purpose of issuing of section 1103(c) of the Code; and the requested certification.1 C. The exchange of the insurance agency assets for the shares of New Corporation and the distribution to the shareholders of Parker of the shares of New 1. This information is derived from Parker's communications with Corporation are necessary or appropriate to efthe Board concerning its request for this certification, Parker's registration statement filed with the Board pursuant to the BHC Act, and fectuate section 4 of the BHC Act. other records of the Board. This certification is based upon the reprsentations made to the Board by Parker and upon the facts set quires a one-bank holding company to divest either its banking or nonforth above. In the event that the Board should hereafbanking properties on or before December 31, 1980. However, the policy of section 4(a) also provides an exemption for companies cov- ter determine that the facts material to this certificaered by the BHC Act's 1970 Amendments to retain, after December tion are otherwise than as represented by Parker or 31, 1980, companies engaged in activities permitted by the Board under section 4(c)(8). Nevertheless, this exemptive provision and the orders issued pursuant to it should be read as permissive and not mandatory. Such an interpretation accomodates both the policy of section 2. Some or all of Parker's activities may be among those activities 4 and the flexibility of the Board to create exemptions under section that the Board previously has determined to be closely related to 4(c)(8). Thus, a divestiture of nonbanking property on or before De- banking under section 4(c)(8) of the BHC Act. However, in the abcember 31, 1980, is "appropriate" to effectuate the policy of section 4 sence of approval by the Board of an application by Parker to engage even if the bank holding company has received the Board's approval in general insurance activities, Parker may not retain this activity to retain the nonbanking property after December 31, 1980. See, e.g., beyond December 31, 1980. (See Wachovia Corp., No. TCR 76-132, Wachovia Corp., 63 FEDERAL RESERVE BULLETIN 863 (1977). 63 FEDERAL RESERVE BULLETIN 606 (1977). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 87 that Parker has failed to disclose to the Board other preferred stock.3 Patagonia also held 821,668 shares material facts, the Board may revoke this certification. of common stock of Pima on July 7, 1970, and has By order of the Board of Governors, acting through since acquired 566,244 additional shares through its General Counsel pursuant to delegated authority stock dividends.4 (12 C.F.R. § 265.2(b)(3)), effective December 31,1980. 3. Patagonia became a bank holding company on December 31, 1970, as a result of the 1970 Amend- (Signed) JAMES MCAFEE, ments of the BHC Act, by virtue of its ownership [SEAL] Assistant Secretary of the Board. and control at the time of more than 25 percent of the outstanding voting shares of Bank, and it registered as such with the Board on July 1, 1971. Patagonia would have been a bank holding company on Patagonia Corporation, July 7, 1970, if the 1970 Amendments of the BHC Tucson, Arizona Act had been in effect on such date, by virtue of its ownership and control on that date of more than 25 Prior Certification Pursuant to the Bank Holding percent of the outstanding voting shares of Bank. Company Tax Act of 1976 Patagonia presently owns and controls 412,762 shares, representing 100 percent of the outstanding Patagonia Corporation, Tucson, Arizona C'Pata- voting shares of Bank (except for directors' qualigonia"), has requested a prior certification pursuant to fying shares); and owns and controls 1,387,912 section 6158(a) of the Internal Revenue Code shares, representing 100 percent of the outstanding ("Code"), as amended by section 3(a) of the Bank voting shares of Pima, (except for director's quali- Holding Company Tax Act of 1976 ("Tax Act"), that fying shares). its proposed sale of 1,387,912 shares of common stock 4. Patagonia holds property acquired by it on or beof Pima Savings & Loan Association ("Pima"), to fore July 7, 1970, the disposition of which would be Heron Corporation Limited of London, England necessary or appropriate to effectuate section 4 or ("Heron"), or its proposed sale of 412,762 shares of the policies of the BHC Act if Patagonia were to recommon stock of Great Western Bank & Trust main a bank holding company beyond December 31, (formerly Bank of Tucson) ("Bank"), to GWB Hold- 1980, and which is "prohibited property" within the ing Company, a Delaware Corporation ("GWB"), is meaning of section 1103(c) of the Code. necessary or appropriate to effectuate the policies of 5. Patagonia held 100,459 shares, representing the Bank Holding Company Act (12 U.S.C. § 1841 et 20.005 percent of the outstanding shares of Pima priseq.) ("BHC Act") or section 4 of that Act.1 or to June 30, 1968, which shares are exempt from In connection with this request the following infor- the December 31, 1980 divestiture requirement unmation is deemed relevant for purposes of issuing the der the proviso of section 4(a)(2) of the BHC Act. certification:2 1. Patagonia is a corporation organized on June 29, 1967, under the laws of the state of Delaware. 3. Under section 1101(c) of the Code, property acquired after July 7, 1970, generally, does not qualify for the tax benefits of section 2. At the time of incorporation Patagonia acquired 6158(a) of the Code when divested by an otherwise qualified bank 50,948 shares, representing 44 percent of the out- holding company. However, where such property was acquired by a standing shares of Bank, and 100,459 shares, repre- qualified bank holding company in a transaction in which gain was not recognized under section 354 of the Code with respect to a reorganizasenting 20.005 percent of the outstanding shares of tion described in section 368 (a)(1)(E) of the Code, then section Pima. On July 7, 1970, Patagonia owned 354,820 6158(a) is applicable. Patagonia contends that these 57,942 shares of shares of common stock of Bank and 200,000 shares Bank were acquired in such a transaction. Therefore, even though these shares of Bank were acquired by Patagonia after July 7, 1970, of preferred stock of Bank. Since July 7, 1970, Patathese shares would qualify as property eligible for the tax benefits progonia has acquired 57,942 additional shares of com- vided in section 6158(a) of the Code, if they were in fact received in a mon stock in Bank, through the conversion of its transaction described in § 368(a)(1)(E) of the Code in which no gain was recognized. 4. As noted above, property acquired by a qualified bank holding company after July 7, 1970, generally does not qualify for the tax benefits of section 6158(a) of the Code. However, where such property 1. Patagonia understands that it may receive tax benefits for only was acquired by a qualified bank holding company in a transaction in one of these divestitures. Uncertainty as to which transaction will be which gain was not recognized under § 305(a) of the Code, then secconsummated prior to December 31, 1980, prompted Patagonia to tion 6158(a) is applicable. Patagonia has indicated that these 566,244 request a certification allowing either transaction to receive tax bene- shares of Pima were acquired in such a transaction. Consequently, fits. even though these shares of Pima were acquired by Patagonia after 2. This information is derived from Patagonia's communications July 7, 1970, these shares would qualify as property eligible for the tax with the Board concerning its request for this certification, Pata- benefits provided in section 6158(a) of the Code, by virtue of gonia's Registration Statement filed with the Board pursuant to the § 1101(c), if they were in fact received in a transaction described in BHC Act, and other records of the Board. § 305(a) of the Code in which no gain was recognized. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

88 Federal Reserve Bulletin • January 1981 Section 1103(g) of the Code provides that any bank above. In the event the Board should hereafter deterholding company may elect, for the purposes of Part mine that facts material to this certification are other- VIII of subchapter O of chapter 1 of the Code, to wise than as represented by Patagonia or that Patahave the determination whether property is "pro- gonia has failed to disclose to the Board other material hibited property" or is property eligible to be dis- facts, or to fulfill any commitments made to the Board tributed without recognition of gain under in connection herewith, it may revoke this certifica- § 1101(b)(1) of the Code, made under the BHC Act tion. as if such Act did not contain the proviso of § 4(a)(2) By order of the Board of Governors, acting through thereof. Patagonia has represented that it will make its General Counsel, pursuant to delegated authority such an election.5 (12 CFR § 265.2(b)(3)), effective December 12, 1980. 6. Patagonia has committed to the Board that no person holding an office or position (including an (Signed) THEODORE E. ALLISON, advisory or honorary position) with Patagonia or [SEAL] Secretary of the Board. any of its subsidiaries as an officer, director, policymaking employee, or management consultant, or who performs (directly, or through an agent, representative or nominee) functions comparable to those Peoples Bancorp, Inc., normally associated with such office or position, will Kansas City, Missouri hold any such office or position or perform any such function with Bank or Pima or any of their sub- Prior Certification Under the Bank Holding Company sidiaries. Patagonia has further committed that all Tax Act of 1976 such interlocking relationships presently existing will be terminated no later than June 12, 1981. Peoples Bancorp, Inc. (formerly Feeney Insurance 7. The proposed purchaser of Pima, Heron, will fi- Agency, Inc.), ("Peoples"), Kansas City, Missouri, nance part of the purchase through Bank. The finan- has requested a prior certification pursuant to section cial resources of Heron are more than sufficient to 1101(a)(1) of the Internal Revenue Code ("Code"), as service this indebtedness, making any potential con- amended by section 2(a) of the Bank Holding Compatrol by Patagonia over Pima as a creditor of Heron ny Tax Act of 1976 ("Tax Act"), that its proposed diunlikely in the event the sale of the Bank is not con- vestiture of three partnership interests1 currently held summated. by Peoples, through the distribution of such property to the sole shareholder of Peoples, is necessary or ap- On the basis of the foregoing information, it is here- propriate to effectuate section 4 of the Bank Holding by certified that: Company Act (12 U.S.C. § 1841 et seq.) ("BHC Act"). (A) Patagonia is a qualified bank holding corpora- In connection with this request, the following infortion within the meaning of section 1103(b) of the mation is deemed relevant for the purpose of issuing Code, and satisfies the requirements of that section; the requested certification.2 (B) The 1,387,912 shares of Pima that Patagonia 1. Peoples is a corporation organized under the laws proposes to sell to Heron are "prohibited property" of Missouri on January 12, 1968. within the meaning of sections 6158(f)(2) and 1103(c) 2. On February 20, 1968, Peoples acquired ownof the Code. ership and control of 53,156 shares, representing (C) The 412,762 shares of Bank that Patagonia pro- 66.45 percent of the outstanding voting shares, of poses to sell to GWB are all or part of the property the Peoples Bank of Kansas City ("Bank"), Kansas by reason of which Patagonia controls (within the City, Missouri. meaning of section 2(a) of the BHC Act) a bank; and (D) The sale of the Bank or Pima is necessary or 1. The three partnership interests held by Peoples are described below: appropriate to effectuate the policies of section 4 or 1. An undivided 20 percent interest in a partnership known as Benthe policies of the BHC Act. ton County Property, holding real property in Benton County, Missouri; 2. An undivided 10 percent interest in a partnership known as This certification is based upon the facts set forth Leighport Investment Company, holding real property in Platte County, Missouri; and 3. An undivided 17.5 percent interest in a partnership known as 5. Section 1103(g) requires that an election thereunder be made "at Sky view East Company, also holding real property in Platte Counsuch time and in such manner as the Secretary [of the Treasury] or his ty, Missouri. delegate may by regulations prescribe." As of this date, no final regu- 2. This information derives from Peoples' communications with the lations have been promulgated. However, Patagonia has indicated Board concerning its request for this certification, Peoples' Registrathat it will comply with the temporary regulations issued by the Secre- tion Statement filed with the Board pursuant to the BHC Act, and tary of the Treasury. 26 C.F.R. 7570. other records of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 89 3. Peoples became a bank holding company on De- section 6158(c)(2) of the Internal Revenue Code (the cember 31, 1970, as a result of the 1970 Amend- "Code"), as amended by section 3(a) of the Bank ments to the BHC Act, by virtue of its ownership Holding Company Tax Act of 1976 (the "Tax Act"), and control at that time of more than 25 percent of that it has, before the expiration of the period prohibitthe outstanding voting shares of Bank, and it regis- ed property is permitted under the Bank Holding tered as such with the Board on August 20, 1971. Company Act, 12 U.S.C. § 1841 et seq. ("BHC Act"), Peoples would have been a bank holding company to be held by a bank holding company, disposed of all on July 7, 1970, if the BHC Act Amendments of 1970 the property the disposition of which is necessary or had been in effect on that date by virtue of its own- appropriate to effectuate section 4 of the BHC Act. ership and control on that date of more than 25 per- In connection with this request, the following inforcent of the outstanding voting shares of Bank. mation is deemed relevant for the purpose of issuing 4. Peoples acquired its partnership interests in Ben- the requested certification:1 ton County Property on January 26, 1970; Leighport 1. Effective March 30, 1977, the Board issued a pri- Investment Company on September 12, 1969; and or certification pursuant to section 6158(a) of the Sky view East Company on April 12, 1969. Peoples Code with respect to the proposed sale by The Howhas held such partnership interests continuously ard Corporation ("Howard"), a subsidiary of Resince acquisition. public, of the Town & Country Shopping Center, 5. The disposition of the three partnership interests Midland, Texas ("Town & Country"). would be necessary or appropriate to effectuate sec- 2. Effective April 15, 1977, the Board issued a prior tion 4 of the BHC Act if Peoples were to continue to certification pursuant to section 6158(a) of the Code be a bank holding company beyond December 31, with respect to the proposed sale by Howard of the 1980, and such property is "prohibited property" Uptown Shopping Center, Shreveport, Louisiana within the meaning of section 1103(c) of the Code. ("Uptown"). 3. Effective May 25, 1977, the Board issued a prior On the basis of the foregoing information, it is here- certification pursuant to section 6158(a) of the Code by certified that: with respect to the proposed sale by Howard of cer- A. Peoples is a qualified bank holding corporation tain of its nonbanking assets, (the "Howard Aswithin the meaning of section 1103(b) of the Code, sets"). and satisfies the requirements of that subsection; 4. Effective January 12, 1978, the Board issued a B. The distribution of the three partnership inter- prior certification pursuant to section 6158 of the ests is necessary or appropriate to effectuate the pol- Code with respect to the proposed sale by Howard icies of the BHC Act. of certain of its nonbanking assets ("Old Howard Assets"). This certification is based upon the representations 5. Effective February 14, 1979, the Board issued a made to the Board by Peoples and upon the facts set prior certification pursuant to section 6158(a) of the forth above. In the event the Board should hereafter Code with respect to the proposed sale by Westgate determine that the facts material to this certification Company, a subsidiary of Republic, of 4.474 acres are otherwise than as represented by Peoples or that of real estate located in Irving, Texas ("Westgate Peoples has failed to disclose to the Board other mate- Property"), which was acquired by Howard on Norial facts, the Board may revoke this certification. vember 13, 1969. By order of the Board of Governors, acting through 6. Effective March 30, 1979, the Board issued a its General Counsel pursuant to delegated authority prior certification pursuant to section 6158(a) of the (12 C.F.R. § 265.2(b)(3)), effective December 10,1980. Code with respect to the proposed sale by Oxford Corporation, a subsidiary of Republic, of a fifty (Signed) JEFFERSON A. WALKER, percent joint venture interest in Westgate Company, [SEAL] Assistant Secretary of the Board. which owned 37.49 acres of real property in Irving, Texas ("Westgate").2 Republic of Texas Corporation, Dallas, Texas 1. This information derives from Republic's correspondence with the Board concerning its request for this certification, Republic's Reg- Final Certification Pursuant to the Bank Holding istration Statement filed with the Board pursuant to the BHC Act as well as the Registration Statement of Republic National Bank and oth- Company Tax Act of 1976 er records of the Board. 2. Westgate and Westgate Property were acquired by Howard on Republic of Texas Corporation, Dallas, Texas ("Re- November 13, 1969, and is a part of the property of Howard in which Republic acquired a beneficial interest pursuant to section 2(g)(2) of public"), has requested a final certification pursuant to the BHC Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

90 Federal Reserve Bulletin • January 1981 7. With respect to each of the above, the Board's posed of all of the property the disposition of which is Order certified that: necessary or appropriate to effectuate section 4 of the A. Prior to May 9, 1974, Republic National Bank BHC Act. of Dallas ("Old Republic Bank") was a "qualified This certification is based upon the representations bank holding corporation" within the meaning of and commitments made to the Board by Republic and subsection (b) of section 1103 of the Code, and upon the facts set out above. In the event the Board satisfied the requirements of that section.3 should hereafter determine that facts material to its B. The present Republic National Bank of Dallas certification are otherwise than as represented by Re- ("New Republic Bank") is a corporation that ac- public, or that Republic has failed to disclose to the quired substantially all of the properties of (Old Board other material facts or to fulfill any of its com- Republic Bank) a qualified bank holding corpora- mitments, the Board may revoke this certification. tion, and as such is treated as a qualified bank By order of the Board of Governors, acting through holding corporation for the purposes of section its General Counsel pursuant to delegated authority 6158 of the Code, pursuant to section 3(d) of the (12 C.F.R. § 265.2(b)(3)), effective December 22,1980. Tax Act. C. Republic is a corporation in control (within the (Signed) THEODORE E. ALLISON, meaning of section 2(a)(2) of the BHC Act) of [SEAL] Secretary of the Board. New Republic Bank, and as such is treated as a qualified bank holding corporation for the purposes of section 6158 of the Code, pursuant to Safeway Insurance Company, section 3(d) of the Tax Act. Chicago, Illinois D. Howard is a subsidiary (within the meaning of section 2(d) of the BHC Act) of Republic, and as Final Certification Pursuant to the Bank Holding such is treated as a qualified bank holding corpo- Company Tax Act of 1976 ration for the purposes of section 6158 of the Code, pursuant to section 3(d) of the Tax Act. Safeway Insurance Company, Chicago, Illinois E. Town & Country, Uptown, the Howard As- ("Safeway"), has requested a final certification pursets, the Westgate Property and Westgate are suant to section 1101(e) to the Internal Revenue Code "prohibited property" within the meaning of sec- ("Code"), as amended by section 2(a) of the Bank tion 6158 of the Code. Holding Company Tax Act of 1976 ("Tax Act"), that F. The sale of Town & Country, Uptown, the it has (before the expiration of the period prohibited Howard Assets, the Westgate Property and West- property is permitted under the Bank Holding Compagate is necessary and appropriate to effectuate ny Act (12 U.S.C. § 1841 et seq.) ("BHC Act") to be section 4 of the BHC Act. held by a bank holding company) ceased to be a bank 8. As of May 9, 1979, Republic sold all of its interest holding company. in Town & Country, Uptown, the Howard Assets, In connection with this request, the following inforthe Westgate Property and Westgate.4 mation is deemed relevant for purposes of issuing the 9. Republic has represented that it has disposed of requested certification:1 all of its impermissible nonbanking property. 1. Effective December 31, 1979, the Board issued a perior certification pursuant to section 1101(b) of the On the basis of the foregoing information, it is here- Code with respect to the proposed divestiture by by certified that Republic has (before the expiration of Safeway of 411,588 shares of Bank then held by the period prohibited property is permitted under the Safeway through the pro rata distribution of such BHC Act to be held by a bank holding company) dis- shares to the holders of the common stock of Safeway. 2. The Board's Order certified that: 3. On July 7, 1970, Old Republic Bank indirectly controlled 29.9 percent of the outstanding voting shares of Oak Cliff Bank and Trust A. Safeway is a qualified bank holding corpora- Company, Dallas, Texas. tion within the meaning of subsection (b) of sec- 4. By virtue of three one-year extensions granted by the Board, tion 1103 of the Code and satisfies the require- Republic had until May 9, 1979, to complete the divestitures required by the Board's Order of October 25, 1973. Pursuant to the provisions ments of that subsection; of § 4(a)(2) of the BHC Act, Republic was required by that Order to divest itself, within two years from the date as of which it would become a bank holding company, of the impermissible nonbanking interests that would be directly or indirectly controlled by the successor by 1. This information derives from Safeway's communications with merger to Old Republic Bank, including such impermissible interest the Board concerning its request for this certification, Safeway's Regheld by Howard. On May 9, 1974, Republic became a bank holding istration Statement filed with the Board pursuant to the BHC Act, and company. other records of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 91 B. The 411,588 shares of The National Republic Sloan State Corporation, Bank of Chicago ("Bank") that Safeway proposes Sloan, Iowa to distribute to its shareholders are all or part of the property by reason by which Safeway controls Final Certification Pursuant to the Bank Holding (within the meaning of section 2(a) of the BHC Company Tax Act of 1976 Act) a bank or a bank holding company; and C. The distribution of such shares is necessary or Sloan State Corporation, Sloan, Iowa ("Sloan"), has appropriate to effectuate the policies of the BHC requested a final certification pursuant to section Act. 1101(e) of the Internal Revenue Code ("Code"), as 3. On December 31, 1979, Safeway distributed to its amended by section 2(a) of the Bank Holding Compashareholders on a pro rata basis 376,110 shares of ny Tax Act of 1976, that it has (before the expiration of Bank. On July 7, 1980, Safeway distributed an addi- the period prohibited property is permitted under the tional 15,000 shares of Bank.2 Safeway continues to Bank Holding Company Act (12 U.S.C. § 1841 et seq.) own 32,390 shares. ("BHC Act") to be held by a bank holding company) 4. Safeway has represented to the Board it will not disposed of all property the disposition of which is own or control more than 5 percent of the out- necessary or appropriate to effectuate the policies of standing voting shares of any bank or any company section 4 of the BHC Act. that controls a bank beyond January 10, 1981. In connection with the request, the following infor- 5. Safeway has represented that it has terminated mation is deemed relevant for purposes of issuing the all interlocking director, officer and management of- requested certification.1 ficial positions between Safeway and Bank. Safeway 1. Effective December 27, 1979, the Board issued a has represented that it does not control in any man- prior certification pursuant to section 1101(a)(1) of ner the election of a majority of directors or exercise the Code with respect to the divestiture of approxia controlling influence over the management or poli- mately 75 acres of real property. cies of Bank or any company that controls a bank. 2. The Board's Order certified that: (A) At the time of the disposition by Sloan of its 75 On the basis of the foregoing information, it is here- acres of real property, Sloan was a qualified bank by certified that Safeway has (before the expiration of holding corporation within the meaning of subthe period prohibited property is permitted under the section 1103(b) of the Code and satisfies the re- BHC Act to be held by a bank holding company) quirements of that subsection; ceased to be a bank holding company. (B) The assets divested by Sloan were "prohibited This certification is based upon representations and property" within the meaning of section 1103(c) commitments made to the Board by Safeway and upon of the Code; the facts set forth above. In the event the Board should (C) The divestiture by Sloan of its 75 acres of real hereafter determine that facts material to this certifica- property was necessary or appropriate to eftion are otherwise than as represented by Safeway or fectuate the policies of section 4 of the BHC Act ; that Safeway has failed to disclose to the Board other 3. On June 30, 1980, Sloan transferred to its sharematerial facts or to fulfill any commitments made to holders as tenants in common the approximately 75 the Board in connection herewith, it may revoke this acres of real property. certification. 4. Sloan has represented to the Board that it has dis- By order of the Board of Governors, acting through posed of all of its nonbanking shares and property, its General Counsel, pursuant to delegated authority, and that it does not own or control any nonbanking (12 C.F.R. § 265.2(b)(3)), effective December 31, 1980. shares or property or engage in any nonbanking activities that must be disposed of under section 4(a) (Signed) JAMES MCAFEE, (2) of the Act. [SEAL] Assistant Secretary of the Board. On the basis of the foregoing it is hereby certified that Sloan has (before the expiration of the period prohibited property is permitted under the BHC Act to be held by a bank holding company) disposed of all the 2. In accordance with the Board's Order, Safeway was required to divest shares of Bank that it had acquired subsequent to July 7, 1970, to below 5 percent of Bank's shares. Safeway has not requested certification for the 15,000 shares of Bank it acquired subsequent to July 7, 1. This information derives from Sloan's correspondence with the 1970, and which it was required to divest in accordance with the prior Board concerning its request for certification, Sloan's Registration certification. Statement and other records of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

92 Federal Reserve Bulletin • January 1981 property the disposition of which is necessary or ap- mation is deemed relevant, for purposes of issuing the propriate to effectuate section 4 of the BHC Act. requested certification:3 This certification is based upon representations 1. Southern is a corporation organized under the made to the Board by Sloan and upon the facts set laws of the state of North Carolina on September 24, forth above. In the event the Board should hereafter 1968. determine that facts material to this certification are 2. On January 1, 1969, Southern acquired ownotherwise than as represented by Sloan, or that Sloan ership and control of 980,621 shares, representing has failed to disclose to the Board other material facts, 100 percent of the outstanding voting shares of it may revoke this certification. Southern National Bank of North Carolina, Lum- By order of the Board of Governors, acting through berton, North Carolina ("Bank"). its General Counsel, pursuant to delegated authority 3. Southern became a bank holding company on (12 C.F.R. § 265.2(b)(3)), effective December 29, 1980. December 31, 1970, as a result of the 1970 Amendments to the BHC Act, by virtue of its control at that (Signed) THEODORE E. ALLISON, time of more than 25 percent of the outstanding vot- [SEAL] Secretary of the Board. ing shares of Bank, and it registered as such with the Board on November 2, 1971. Southern would have been a bank holding company on July 7, 1970, if the Southern National Corporation, BHC Act Amendments of 1970 had been in affect on Lumberton, North Carolina such date, by virtue of its ownership and control on that date of more than 25 percent of the voting Prior and Final Certification Pursuant to the Bank shares of Bank. Southern presently owns and con- Holding Company Tax Act of 1976 trols 100 percent (less directors' qualifying shares) of the outstanding voting shares of Bank. Southern National Corporation, Lumberton, North 4. Southern holds property acquired by it on or be- Carolina ("Southern"), has requested a prior certifica- fore July 7, 1970, the disposition of which would be tion pursuant to § 6158(a) of the Internal Revenue necessary or appropriate to effectuate § 4 of the Code (the "Code"), as amended by § 3 (a) of the Bank BHC Act if Southern were to continue to be a bank Holding Company Tax Act of 1976 (the "Tax Act"), holding company beyond December 31, 1980, which that the sale by Southern of the five general insurance property is "prohibited property" within the meanagency offices of Southern National Insurance Serv- ing of sections 6158 (g)(2) and 1103(c) of the Code. ices, Inc. ("Services"), a wholly-owned subsidiary of 5. On December 31, 1976, Southern sold its Lum- Southern, on December 31, 1976, is necessary or ap- berton, North Carolina general insurance agency propriate to effectuate the policies of the Bank Holding business to McLean, Brady & McLean Agency, Company Act (12 U.S.C. § 1841 et seq.) (the "BHC Inc; on February 17, 1977, Southern sold its Fair- Act").1 Southern has also requested a final certifica- mont, North Carolina general insurance agency tion pursuant to § 6158(c)(2) of the Code that Southern business to Grantham Insurance Agency, Inc.; on has (before the expiration of the period prohibited September 1, 1977, Southern sold its Rockingham, property is permitted under the BHC Act to be held by North Carolina general insurance agency business a bank holding company) disposed of all property the to Lloyd Johnson and Company, Inc.; on January 1, disposition of which is necessary or appropriate to ef- 1978, Southern sold its Mayodan, North Carolina fectuate section 4 of the BHC Act.2 general insurance agency business to Idol Insurance In connection with this request, the following infor- Agency; and October 31, 1977, Southern sold its Henderson general insurance agency business to Henderson Loan & Insurance Company. In each instance the sale included the good will, customer rec- 1. The Lumberton, North Carolina office was sold on December 31, ords, licenses, accounts receivable and all office fur- 1976, the Fairmont, North Carolina office was sold on February 28, niture and fixtures. The sale of the Mayodan and 1977, the Rockingham, North Carolina office was sold on September 1, 1977, the Mayodan, North Carolina office was sold on January 1, Henderson offices were for cash. 1978, and the Henderson, North Carolina office was sold on 6. Southern did not file an application with the October 31, 1977. 2. Pursuant to §§ 2(d)(2) and 3(e)(2) of the Tax Act, in the case of Board and did not otherwise obtain the Board's apany sale that takes place on or before December 31, 1976 (the 90th day after the date of the enactment of the Tax Act), the certification described in § 6158(a) shall be treated as made before the sale if application for such certification was made before the close of December 3. This information derives from Southern's correspondence with 31, 1976. Southern's application for such certification was mailed on the Board concerning its request for this certification, Southern's Reg- December 30, 1976, and was received by the Board on January 3, istration Statement filed with the Board pursuant to the BHC Act, and 1977. other records of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 93 proval pursuant to section 4(c)(8) of the BHC Act to On the basis of the foregoing information it is hereby continue to engage in any of the activities engaged in certified that: at any of the offices of Services.4 (A) At the time of the sales described in paragraph 7. On each of the dates set forth in paragraph 5 5 above, Southern was a qualified bank holding Southern held property acquired by it on or before corporation within the meaning of section 6158(f) 1 July 7, 1970, the disposition of which was necessary and subsection (b) of section 1103 of the Code, or appropriate to effectuate § 4 of the BHC Act if and satisfied the requirements of subsection Southern were to continue to be a bank holding 1103(b) and; company beyond December 31, 1980, which proper- (B) The properties sold by Southern as described ty was "prohibited property" within the meaning of in paragraph 5 above, are "prohibited property" §§ 6158(b)(1) and 1103(c) of the Code. within the meaning of §§ 6158(f)(2) and 1103(c) of 8. Neither Southern nor any subsidiary of Southern the Code; and holds any interest in any of the purchasers of the (C) Southern has (before the expiration of the peproperty described in paragraph 5 (the "Purchas- riod prohibited property is permitted under the ers") or in any subsidiary of Purchasers. BHC Act to be held by a bank holding company) 9. None of the Purchasers, or any subsidiary of Pur- disposed of all of property the disposition of chasers, holds any interest in Southern or in any which is necessary or appropriate to effectuate subsidiary of Southern. section 4 of the BHC Act. 10. No officer, director (including honorary or advisory director) or employee with policy-making func- These certifications are based on the representations tions of Southern or any subsidiary of Southern also made to the Board by Southern and on the facts set holds any such position with any of Purchasers or forth above. In the event the Board should hereafter any subsidiary of any of Purchasers. determine that facts material to these certifications are 11. Southern does not control in any manner the otherwise than as represented by Southern, or that election of a majority of the directors, or exercise a Southern has failed to disclose to the Board other macontrolling influence over the management or poli- terial facts, it may revoke these certifications. cies of any or Purchasers or any subsidiary of any of By order of the Board of Governors acting through Purchasers. its General Counsel pursuant to delegated authority 12. Southern does not at present own or control any (12 C.F.R. § 265.2(b)(3)), effective December 31, 1980. property the disposition of which would be necessary or appropriate to effectuate § 4 of the BHC Act (Signed) JAMES MCAFEE, if Southern were to remain a bank holding company [SEAL] Assistant Secretary of the Board. beyond December 31, 1980. Tri-State Investment Corporation, 4. Although Southern did not seek Board approval to retain Services, some or all of Services' activities may be among those activities Pensacola, Florida that the Board has previously determined to be closely related to banking, under § 4(c)(8). See 12 C.F.R. §§ 225.4(a)(9); Alabama Asso- Prior Certification Pursuant to the ciation for Insurance Agents et al. v. Board of Governors of the Federal Reserve System, 544 2d. (1977). Under the Board's present proce- Bank Holding Company Tax Act of 1976 dures, however, the question whether, or to what extent, Southern would have been permitted to retain these activities would not have Tri-State Investment Corporation ("Tri-State"), Penbeen determinable unless and until Southern filed an application for permission to retain the activities. In passing upon such an application sacola, Florida, has requested a prior tax certification the Board would have been required to apply the second test set forth pursuant to section 1101(c)(2) of the Internal Revenue in § 4(c)(8) and to determine whether the performance of these activities by a subsidiary of Southern "can reasonably be expected to pro- Code ("Code"), as amended by section 2(a) of the duce benefits to the public, such as greater convenience, increased Bank Holding Company Tax Act of 1976 ("Tax Act"), competition, or gains in efficiency, that outweigh possible adverse efthat its proposed divestiture of certain nonbanking asfects, such as undue concentration of resources, decreased or unfair competition, conflicts of interest, or unsound banking practices." In sets presently held by Tri-State through the pro rata the absence of favorable action on such an application Southern would distribution of Tri-State's stockholders of the stock of have had no authority for retaining Services beyond December 31, 1980, if it continued to be a bank holding company beyond that date. a new corporation ("Corporation") created and avail- The legislative history of the Tax Act does not indicate a Congression- ed solely for the purpose of receiving Tri-State's nonal intent that companies subject to such a divestiture requirement exbanking assets, is necessary or appropriate to efhaust the possibilities for retaining the activity before being eligible for tax relief, and in view of the paramount purpose of § 4 of the BHC fectuate section 4 of the Bank Holding Company Act Act, that "banking and commerce should remain separate," S. Rep. (12 U.S.C. § 1841 et seq.) ("BHC Act"). No. 1084, 91st Cong., 2d Sess. 12 (1970), it would appear that the disposition of a potentially permissible activity, without first seeking In connection with this request, the following inforapproval for retention, is at least "appropriate" to effectuate § 4. mation is deemed relevant for the purpose of issuing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

94 Federal Reserve Bulletin • January 1981 the requested certification:1 Date of Asset 1. Tri-State is a corporation organized under the Acquisition laws of Florida on December 12, 1955. 2. Prior to July 7, 1970, Tri-State had acquired (D) 160 acres of vacant land de- June 15, 1960 scribed as the SE lU of the NW lU, ownership and control of 10,103 of the 33,000 then SW V4 of the NEV4, NW lU of the outstanding voting shares of The West Florida Bank SE V, SW V4 of the SE lU, all in 4 ("Bank"), Pensacola, Florida, representing approx- Section 5, Township 8 South, Range 5 East, Baldwin County, imately 30.6 percent of such shares. Tri-State pres- Alabama ently owns and controls 26,889 of the 61,205 cur- (E) 3194 shares of the capital stock May 18, 1959, and Ocrently outstanding voting shares of Bank, of Pensacola Loan and Savings Bank tober 31, 1959; August representing 43.9 percent of such shares. ("S&L"), a banking corporation 25, 1970, and October 3. Tri-State became a bank holding company on under Florida law, comprising ap- 30, 1971 (from stock proximately 12.2 percent of the out- splits and dividends) December 31, 1970, as a result of the 1970 Amend- standing shares of said Bank ments to the BHC Act, by virtue of its ownership Tri-State acquired 70 shares on May 18, 1959 and 301 shares on Ocand control at that time of more than 25 percent of tober 31, 1959. This 371 shares repthe outstanding voting shares of Bank, and regis- resented about 12.2 percent of the tered as such with the Board on October 19, 1971. issued stock. As of about August 25, 1970, there had been stock splits Tri-State would have been a bank holding company or dividends as the result of which on July 7, 1970, if the BHC Act Amendments of 1970 the 371 shares became 2129 shares had been in effect on that date, by virtue of its own- still representing 12.2 percent. On or about October 30, 1971, there ership and control on that date of more than 25 per- was a stock dividend of 50 percent cent of the outstanding voting shares of Bank. resulting in addition of 1065 shares, making a total of 3194 shares in lieu 4. Tri-State holds property acquired by it on or of the original 371 shares.2 before July 7, 1970, the disposition of which would be required by section 4 of the BHC Act, if Tri-State (F) Two lots in Venice East Sub- April 19, 1966 division near Venice in Sarasota May 13, 1968 were to continue to be a bank holding company County, Florida Lot 12 Block 1, beyond December 31, 1980, and which property is Section 1 Lot 1, Block 2, Section l3 "prohibited property" within the meaning of section 1103(c) of the Code. 5. The nonbanking assets of Tri-State con- 6. Tri-State has committed that no person holding stituting its "prohibited property" for purposes of an office or position (including an advisory or honorthis prior tax certification and the dates of acquisi- ary position) with Tri-State, or any of its subtion of such assets are as follows: sidiaries, as a director, officer, policy-making employee or consultant, or who performs functions comparable to those normally associated with such Date of Asset Acquisition office or position, will hold any such office or position or perform any such function with Corporation. (A) Baroco Electric Company (in- July 31, 1963 eluding accounts receivable, work in progress, inventory and stock in trade, vehicles, equipment and all 2. Under subsection (c) of section 1101 of the Code, property acother assets used in and about busi- quired after July 7, 1970, generally does not qualify for the tax benefits ness of Baroco Electric Company) of section 1101 when distributed by an otherwise qualified bank holding company. However, when such property was acquried by a quali- (B) Building and real estate located August 31, 1956 fied bank holding company in a transaction in which gain was not recat 3605 North Davis Street, Pen- ognized under section 305(a) of the Code, then section 1101 is sacola, Florida applicable. Tri-State has stated that the acquisition of 1758 additional shares of S&L as of August 25, 1970, and 1065 shares of S&L as of (C) Building and real estate located January 9, 1956 October 30, 1971, were the result of stock splits and stock dividends in at 3800 Navy Boulevard, Pen- which gain was not recognized under section 305(a) of the Code. If sacola, Flordia (Lots 21 and 22, these shares were, in fact, received in transactions in which gain was not recognized under section 305(a) of the Code, then these shares Westerly Heights) are, accordingly, eligible for the benefits provided in section 1101(a) by virtue of section 1101(c)(1)(A) of the Code. 3. In addition to the assets described in paragraph 5 above, Tri- State presently owns certain other nonbanking assets acquired subsequent to July 7, 1970. Tri-State proposes to likewise divest these assets by transferring them to Corporation. Since none of the ex- 1. This information derives from Tri-State's communications with ceptions to the general rule of section 1101(c) of the Code (discussed the Board concerning its request for this certification, Tri-State's reg- in footnote 2 supra) appear to be applicable to these assets and these istration statement filed with the Board pursuant to the BHC Act, and assets do not otherwise qualify for certification under the Code, they other records of the Board. appear to be ineligible for benefits under the Tax Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 95 On the basis of the foregoing information, it is here- 1. TVA is a corporation organized under the laws y certified that: of the state of Minnesota on April 30, 1969. (A) Tri-State is a qualified bank holding company 2. On May 1, 1969, TVA acquired ownership and within the meaning of section 1103(b) of the Code, control of 460 shares, representing 92 percent of its and satisfies the requirements of that subsection; outstanding voting shares, of Bank. (B) The assets identified in paragraph 5 above that 3. TVA became a bank holding company on De- Tri-State proposes to distribute to its shareholders cember 31, 1970, as a result of the 1970 amendments are "prhobitied property" within the meaning of to the BHC Act by virtue of its ownership and consection 1103(c) of the Code; trol at that time of more than 25 percent of the out- (C) The exchange of Tri-State's nonbanking assets standing voting shares of Bank. It registered as a for the shares of Corporation and the distribution to bank holding company on June 28, 1971. the shareholders of Tri-State of the shares of Corpo- 4. TVA would have been a bank holding comparation are necessary or appropriate to effectuate sec- ny on July 7, 1970, had the 1970 amendments to the tion 4 of the BHC Act. BHC Act been in effect on that date, by virtue of its ownership and control on that date of more than 25 This certification is based upon the representations percent of the outstanding voting shares of Bank. made to the Board by Tri-State and upon the facts set TVA currently owns 460 shares of Bank, representforth above. In the event that the Board should hereaf- ing 92 percent of the outstanding voting shares. ter determine that the facts material to this certifica- 5. TVA holds property acquired by it on or before tion are otherwise than as represented by Tri-State or July 7, 1970, the disposition of which would be rethat Tri-State has failed to disclose to the Board other quired under section 4 of the BHC Act if TVA were material facts, the Board may revoke this certification. to remain a bank holding company beyond Decem- By order of the Board of Governors, acting through ber 31, 1980, and which is "prohibited property" its General Counsel pursuant to delegated authority within the meaning of section 1103(c) of the Code. (12 C.F.R. § 265.2(b)(3)), effective December 31,1980. On the basis of the foregoing information, it is here- (Signed) JAMES MCAFEE, by certified that: [SEAL] Assistant Secretary of the Board. A. TVA is a qualified bank holding corporation within the meaning of section 1103(b) of the Code and satisfies the requirements of that subsection; B. The 460 shares of Bank that TVA proposes to Twin Valley Agency, Inc., distribute are all or part of the property by reason of Twin Valley, Minnesota which TVA controls (within the meaning of section 2(a) of the BHC Act) a bank or bank holding com- Prior Certification Pursuant to the Bank Holding pany; Company Tax Act of 1976 C. The distribution of such shares is necessary or appropriate to effectuate the policies of the BHC Twin Valley Agency, Inc., Twin Valley, Minnesota Act. ("TVA"), has requested a prior certification, pursuant to section 1101(b) of the Internal Revenue Code This certification is based upon representations ("Code"), as amended by section 2(a) of the Bank made to the Board by TVA and the facts set forth Holding Company Tax Act of 1976 ("Tax Act") that above. In the event the Board should determine that its proposed distribution of 460 shares, representing 92 facts material to this certification are other than as reppercent of the outstanding voting shares of the Twin resented by TVA, or that TVA has failed to disclose to Valley State Bank, Twin Valley, Minnesota ("Bank"), the Board other material facts, the Board may revoke to TVA's sole shareholder is necessary or appropriate this certification. to effectuate the policies of the Bank Holding Compa- By order of the Board of Governors, acting through ny Act, (12 U.S.C. § 1841 et seq.), ("BHC Act"). its General Counsel, pursuant to delegated authority, In connection with this request, the following infor- (12 C.F.R. § 265.2(b)(3)), effective December 12,1980. mation is deemed relevant for purposes of issuing the requested certification.1 (Signed) JEFFERSON A. WALKER, [SEAL] Assistant Secretary of the Board. 1. This information derives from TVA's correspondence with the statement filed with the Board pursuant to the BHC Act, and other Board concerning its request for this certification, TVA's registration records of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

96 Federal Reserve Bulletin • January 1981 University Bancorp, Inc., (A) at the time of the sale by Ward Parkway of its Kansas City, Missouri warehouse property, Merchants was a qualified bank holding corporation within the meaning of Final Certification Pursuant to the Bank Holding section 6158(f)(1) and subsection (b) of section Company Tax Act of 1976 1103 of the Code and satisfies the requirements of that subsection; University Bancorp, Inc., Kansas City, Missouri (B) the assets sold by Ward Parkway were "pro- ("University") (formerly Orwig and Company, Inc. hibited property" within the meaning of sections ("Orwig")) has requested a final certification pursuant 6158(f)(2) and 1103(c) of the Code; to section 6158(c)(2) of the Internal Revenue Code (C) the sale of the Ward Parkway properties was ("Code"), as amended by section 3(a) of the Bank necessary or appropriate to effectuate section 4 of Holding Company Tax Act of 1976, that it has (before the BHC Act. the expiration of the period prohibited property is per- 3. On June 12, 1975, Ward Parkway sold the propermitted under the Bank Holding Company Act ty to Graham Investment Company, Wichita, Kan- (12 U.S.C. § 1841 et seq.) ("BHC Act") to be held sas, for $1,450,000 in cash. Neither Graham Investby a bank holding company) disposed of all property ment Company nor its subsidiaries are indebted to the disposition of which is necessary or appropriate Merchants or its subsidiaries or any corporation to effectuate section 4 of the BHC Act.1 succeeding to the rights and liabilities of Merchants. In connection with the request, the following infor- On December 31, 1975, Ward Parkway was dismation is deemed relevant for purposes of issuing the solved and its assets (consisting of cash) were liquirequested certification:2 dated into Merchants. 1. Effective September 14, 1978, the Board issued a 4. No director, officer, or employee with policyprior certification pursuant to section 6158(a) of the making functions of University or any of its sub- Code with respect to the sale of property located at sidiaries (including honorary and advisory directors) 7215 Topeka Boulevard, Topeka, Kansas, known as holds any such position with Graham Investment the "Heart of America warehouse property" by Company or any of its subsidiaries. Ward Parkway Building Company ("Ward Park- 5. University has represnted to the Board that it has way"), a wholly owned subsidiary of Merchants In- disposed of all of its nonbanking shares and propervestors, Inc., Kansas City, Missouri ("Mer- ty, and that it does not presently own or control any chants"). University is the successor under nonbanking shares or property or engage in any non- Missouri law to all of the rights, privileges and inter- banking activities that must be disposed of under ests of Merchants.3 section 4(a)(2) of the Act. 2. The Board's Order certified that: On the basis of the foregoing information, it is hereby certified that University has (before the expiration of the period prohibited property is permitted under the BHC Act to be held by a bank holding company) 1. Pursuant to sections 2(d)(2) and 3(e)(2) of the Tax Act, in the disposed of all of the property the disposition of which case of any sale that takes place on or before December 31, 1976 (the 90th day after the date of the enactment of the Tax Act), the certifica- is necessary or appropriate to effectuate section 4 of tion described in section 6158(a) shall be treated as made before the the BHC Act. sale, and the certification described in section 6158(c)(2) shall be treated as made before the close of the calendar year in which the last such sale occurred, if application for such certification was made be- This certification is based upon the representations fore the close of December 31, 1976. University's application for such made to the Board by University and upon the facts certification was dated December 27, 1976, and was received by the Board on December 29, 1976. set forth above. In the event the Board should hereaf- 2. This information drives from University's correspondence with ter determine that facts material to this certification the Board concerning its request for certification, University's Regisare otherwise than as represented by University, or tration Statement, Annual Reports filed with the Board pursuant to the BHC Act, and other records of the Board. that University has failed to disclose to the Board oth- 3. On December 1, 1975, the Board of Governors of the Federal er material facts, it may revoke this certification. Reserve System issued an Order approving the application of Orwig By order of the Board of Governors, acting through and Company, Kansas City, Missouri ("Orwig", a bank holding company controlled by the Schultz family) to merge with Merchants pur- its General Counsel, pursuant to delegated authority suant to section 3(a)(5) of the BHC Act. On December 31, 1975, Mer- (12 C.F.R. § 265.2(b)(3)), effective December 9,1980. chants merged with Orwig under the charter and title of Orwig. On June 9, 1976, Orwig amended its articles of corporation to change its name to University Bancorp, Inc. ("University"). Under Missouri law, section 351.450 Mo. Rev. Stat. (1969), University succeeded to all the rights that Merchants held prior to the merger of Merchants and (Signed) JEFFERSON A. WALKER, Orwig on December 31, 1975. [SEAL] Assistant Secretary of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 97 Orders Under Section 2 of Bank loan. The Hubby loan bears interest at the rate of Holding Company Act prime plus one quarter percent with interest payable quarterly and annual principal reductions over twelve years. The sale of Bank's shares by Allied appears to Allied Bancshares, have been at arm's-length. There is no evidence that Houston, Texas the financial resources of principals are not sufficient to repay the debt to Allied Bank, and the payments on the loan are current. Order Granting Determination Under the Bank Principals indebtedness to Allied Bank is secured by Holding Company Act 10,140 shares of Bank. In this regard, Allied has committed, in the event of default by principals, Allied will not reacquire the pledged shares without notification Allied Bancshares ("Allied") Houston, Texas, a bank to the Federal Reserve Bank of Dallas and should Alholding company within the meaning of the Bank lied reacquire the shares it will dispose of them within Holding Company Act of 1956, as amended, six months of reacquisition. Finally, Allied has stated (12 U.S.C. § 1841 et seq.) has requested a determina- that it will not enter into any oral or written agreement tion under section 2(g)(3) of the Act (12 U.S.C. § 1841(g) with principals concerning the shares without the spe- (3)) that Allied and its subsidiary, Allied Bank of Texas cific written approval of the Federal Reserve Bank of ("Allied Bank") Houston, Texas, are not in fact ca- Dallas. The terms governing the debt relationship are pable of controlling Lott State Bank ("Bank") Lott, those reasonably required to ensure repayment of the Texas, Turner E. Hubby ("Hubby"), an individual to debt in accordance with accepted banking practices. whom Allied Bank transferred 5,220 shares of Bank, There are no other business relationships between Alor Allen R. Greenstein ("Greenstein"), an individual lied, Allied Bank or any of their subsidiaries and Bank, who is jointly liable on a loan from Allied Bank to any of its subsidiaries or principals. Furthermore, Hubby in connection with Hubby's purchase of the there are no officer or director or employee interlocks shares of Bank. between Allied, Allied Bank or any of their sub- Under the provisions of section 2(g)(3) of the Act, sidiaries on the one hand, and Bank or any of its subshares transferred after January 1, 1966, by any bank sidiaries on the other hand. Finally, Allied has subholding company to a transferee that is indebted to the mitted resolutions of its Board of Directors stating that transferor are deemed to be indirectly owned or con- it will not attempt to exercise control over them or trolled by the transferor unless the Board, after oppor- Bank. tunity for hearing, determines that the transferor is not Accordingly, it is ordered that the request of Allied in fact capable of controlling the transferee. Allied has for a determination pursuant to section 2(g)(3) is grantnot made a request for a hearing. Allied has submitted ed. This determination is based on representations evidence to the Board to support its contention that it made to the Board by Allied, Allied Bank, Bank and is not in fact capable of controlling Hubby, Greenstein principals. In the event that the Board should hereafter (together, "principals") or Bank either directly or determine that facts material to this determination are through Allied Bank, and the Board has received no otherwise than as represented, or that Allied, Allied contradictory evidence. It is hereby determined that Bank, Bank or principals have failed to disclose to the Allied is not in fact capable of controlling or exercising Board other material facts, this determination may be a controlling influence, either directly or indirectly, revoked, and any change in the facts and circumover principals or Bank. This determination is based stances relied upon by the Board in making this deterupon the evidence of record in this matter, including mination could result in the Board reconsidering the the following facts. determination made herein. Allied Bank acquired 5,220 shares of Bank by fore- By the order of the Board of Governors, acting closure in June and August of 1977. These shares were through its General Counsel, pursuant to delegated ausold to Hubby in August, 1977, through an independ- thority (12 C.F.R. § 265.2(b)(1)) effective December 15, ent broker. Hubby received a loan from Allied Bank in 1980. the amount of $349,535.34 on which he pledged 5,020 of the acquired shares of Bank as collateral. Hubby purchased an additional 5,220 shares of Bank and in December, 1978, sold 5,120 shares to Greenstein. Greenstein pledged 5,020 of his shares to Allied Bank as security for the loan initiated by Hubby, and be- (Signed) JEFFERSON A. WALKER, came jointly and severally liable with Hubby on that [SEAL] Assistant Secretary of the Board. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

98 Federal Reserve Bulletin • January 1981 Clinton Cable T.V. Co. Inc., Mr. Nichols. In the event that the Board should here- Terre Haute, Indiana after determine that facts material to this determination are otherwise than as represented or that Clinton Order Granting Determination Under the Bank or Mr. Nichols has failed to disclose to the Board other Holding Company Act material facts, this determination may be revoked, and any change in the facts or circumstances relied upon Clinton Cable T.V. Co. Inc., ("Clinton"), Terre by the Board in making this determination could result Haute, Indiana, a bank holding company within the in the Board reconsidering the determination made meaning of section 2(a) of the Bank Holding Company herein. Act of 1956, as amended (12 U.S.C. § 1841a) (Act) by By order of the Board of Governors, acting through virtue of its control of Dulaney National Bank of Mar- its General Counsel, pursuant to delegated authority shall ("Bank"), Marshall, Illinois, has requested a de- (12 C.F.R. § 265.2(b)(1)), effective December 16,1980. termination, pursuant to the provisions of section 2(g) (3) of the Act (12 U.S.C. § 1841(g)(3)), that Clinton is (Signed) JEFFERSON A. WALKER, not in fact capable of controlling George Nichols, to [SEAL] Assistant Secretary of the Board. whom it transferred 1206 shares of Bank, or Bank notwithstanding the fact that George Nichols is an officer and director of Clinton and Bank. Frank J. Eicher Company, Inc., Under the provisions of section 2(g)(3) of the Act, Coralville, Iowa shares transferred after January 1, 1966, by any bank holding company to a transferee that is indebted to the Order Granting a Determination Under the Bank transferor or has one or more officers, directors, Holding Company Act trustees or beneficiaries in common with or subject to control by the transferor, are deemed to be indirectly Frank J. Eicher Company, Inc., Coralville, Iowa owned or controlled by the transferor unless the ("Company"), a bank holding company within the Board, after opportunity for hearing, determines that meaning of section 2(a) of the Bank Holding Company the transferor is not in fact capable of controlling the Act of 1956, as amended (12 U.S.C. § 1841(a)) (the transferee. "Act"), by virtue of its ownership and control of uni- It is hereby determined that Clinton is not, in fact, Bank and Trust Company, Coralville, Iowa ("Bank"), capable of controlling George Nichols. This determi- has requested a determination pursuant to the provination is based on the evidence of record in this mat- sions of seciton 2(g)(3) of the Act (12 U.S.C. § 1841(g) ter, including the following facts. Clinton is a small (3) that Company is not in fact capable of controlling closely-held corporation of which George Nichols is Franklin J. Eicher or Mary Jo Eicher ("Transferees") the President and members of his immediate family are individuals to whom it transferred its shares of Eichers the only other shareholders. Clinton divested its inter- Inc., ("Eichers") and Seville Corporation ("Seville") est in Bank by distributing the Bank shares held by it both located in Iowa City, Iowa, notwithstanding the on a pro rata basis to George Nichols and the other fact that these individuals are officers and directors of shareholders of Clinton. Thus, Clinton now has no in- Company, Eichers and Seville. terest in Bank. Under the provisions of section 2(g)(3) of the Act, Mr. Nichols and his family now hold a total of 50.0 shares transferred after January 1, 1966, by a bank percent of Bank's voting shares. Inasmuch as holding company to a transferee that is indebted to the Mr. Nichols and his family are the sole shareholders of transferor or has one or more officers, directors, Clinton and he and his family is its only officers and trustees, or beneficiaries in common with or subject to directors, the divestiture of Bank does not appear to control by the transferor, are deemed to be indirectly have been a means of perpetuating Clinton's control owned or controlled by the transferor unless the over Bank. On the basis of the above and other facts of Board, after opportunity for hearing, determines that record, the Board concludes that control of Clinton re- the transferor is not in fact capable of controlling the sides with George Nichols and his family as individ- transferee.1 No request for a hearing was made by uals and that Clinton does not control and is not in fact Company. Instead, Company has submitted evidence capable of controlling George Nichols in his capacity as transferee of Bank's stock or otherwise. Accordingly, it is ordered that the request of Clinton for a determination pursuant to section 2(g)(3) be and 1. In its January 26, 1978, interpretation of section 2(g)(3), the Board stated that the presumption would also apply where shares are is hereby granted. This determination is based upon transferred directly to one or more persons who are directors or offithe representations made to the Board by Clinton and cers of the transferor, 12 C.F.R. § 225.139. 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Legal Developments 99 to the Board to support its contention that it is in- a determination under section 2(g)(3) of the Act capable of controlling Transferees either directly or in- (12 U.S.C. § 1841(g)(3)), that it is not in fact capable directly. The Board has received no contradictory evi- of controlling, directly or indirectly, MDB Bank, Inc., dence. Yellow Springs, Ohio ("MDB"), the successor to the It is hereby determined that Company is not, in fact, Miami Deposit Bank of Yellow Springs Ohio capable of controlling Transferees. This determination ("Bank"), or its parent, First National Cincinnati Coris based upon the evidence in the matter, including the poration, Cincinnati, Ohio ("FNCC"), notwithstandfollowing facts. Company is a small closely-held cor- ing the indebtedness incurred by FNCC to MFC and poration. Transferees own 100 percent of Company's its subsidiary, the Midwestern Indemnity Company, stock and are its only officers and directors. Company Milford, Ohio ("MIC") in connection with the transfer distributed pro rata all the shares of Eichers and Se- of the assets of Bank by MFC to MDB. ville, to its shareholders, Transferees. Thus, Compa- Under section 2(g)(3) of the Act, shares transferred ny's interest in Eichers and Seville has terminated. after January 1, 1966, by any bank holding company to Transferees now own all of the shares of Eichers and a transferee that is indebted to the transferor are Seville. Transferees are the sole shareholders of Com- deemed to be owned or controlled by the transferor pany, and the divestiture does not appear to have been unless the Board, after opportunity for hearing, detera means of perpetuating Company's control over Ei- mines that the transferor is not in fact capable of conchers or Seville. On the basis of the above and other trolling the transferee. It is hereby determined that facts of record the Board concludes that control of MFC is not in fact capable of controlling MDB or Company, Eicher's and Seville resides with Transfer- FNCC. This determination is based upon the evidence ees as individuals and that Company does not control of record in this matter, including the following facts. and is not in fact capable of controlling Transferees in Prior to the transfer, MFC directly held 82.29 pertheir capacity as transferees of the stock of Eichers cent, and through its subsidiary MIC indirectly held an and Seville. additional 16.7 percent,1 of the outstanding voting Accordingly, it is ordered, that the request of Com- shares of the Bank. Pursuant to the agreement by pany for a determination pursuant to section 2(g)(3) is which MFC and MIC transferred the assets of Bank to granted. This determination is based on the represen- MDB, MFC and MIC on a pro rata basis loaned FNCC tations made to the Board by Company and Transfer- $2,562,500, evidenced by a note, to enable FNCC to ees. In the event the Board should hereafter determine purchase the assets of Bank.2 The principal payments that facts material to this determination are otherwise on the note are payable in varying installments over a than as represented, or that Company, or Transferees period of seven years. Payments on the note are curhave failed to disclose to the Board other material rent and it is anticipated that the note will be paid in facts, this determination may be revoked, and any full on September 30, 1982. As of October 23, 1980, the change in the facts and circumstances relied upon by balance due on the note was $562,500 (representing the Board in making this determination could result in 15.8 percent of the total purchase price). Based on the the Board reconsidering the determination made here- facts of record, it appears that FNCC has adequate rein. sources to repay the loan, and there is no evidence to By order of the Board of Governors, acting through indicate that the note will not be repaid in accordance its General Counsel, pursuant to delegated authority with its terms. Moreover, inasmuch as the loan is not (12 C.F.R. § 265.2(b)(1)), effective December 31,1980. secured by the transferred property, there is little likelihood that MFC or MIC would reacquire the property (Signed) JAMES MCAFEE, as a result of FNCC's indebtedness to them. Finally, [SEAL] Assistant Secretary of the Board. MFC has represented to the Board that MFC does not, and will not attempt to, exercise a controlling influence directly or indirectly over MDB or FNCC. Midwestern Fidelity Corporation, Based on these and other facts of record, it is hereby Milford, Ohio determined that MFC is not, in fact, capable of controlling MDB or FNCC, and that the request of MFC Order Granting Determination Under the Bank Holding Company Act 1. MFC's wholly-owned subsidiary, MIC, and MIC's wholly-owned subsidiary, Mid-American Fire & Casualty Company, both located in Midwestern Fidelity Corporation (formerly Mid- Milford, Ohio, together comprised the "Midwestern Group," which western Financial Corporation of Ohio), Milford, Ohio held 16.7 percent of Bank's shares. 2. MDB Bank was organized on August 12, 1975, to acquire the ("MFC"), a bank holding company within the meanassets of Bank for $3,562,500, of which $1,000,000 was paid for in cash ing of the Bank Holding Company Act, has requested by FNCC on September 30, 1975. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

100 Federal Reserve Bulletin • January 1981 for a determination pursuant to section 2(g)(3) should Under the provisions of section 2(g)(3) of the Act, be and hereby is granted. This determination is based shares2 transferred after January 1, 1966, by a bank upon representations made to the Board by MFC. In holding company to a transferee that is indebted to the the event that the Board should hereafter determine transferor or has one or more officers, directors, that facts material to this determination are otherwise trustees, or beneficiaries in common with or subject to than as represented, or that MFC has failed to disclose control by the transferor, are deemed to be indirectly any material facts, this determination may be revoked; owned or controlled by the transferor unless the and any material change in the facts or circumstances Board, after opportunity for a hearing, determines that relied upon in making these determinations or any ma- the transferor is not in fact capable of controlling the terial breach of any of the commitments upon which transferee. this decision is based could result in reconsideration of The time provided for requesting a hearing has exthe determination made herein. pired. No such request has been received by the By order of the Board of Governors, acting through Board. Instead, Republic has submitted evidence to its General Counsel, pursuant to delegated authority the Board to show that it is not in fact capable of con- (12 C.F.R. § 265.2(b)(1)), effective December 24,1980. trolling the assets of the joint ventures or their respective purchasers, and the Board has received no con- (Signed) JAMES MCAFEE, tradictory evidence. [SEAL] Assistant Secretary of the Baord. On the basis of the facts of record, it is hereby determined that Republic is not in fact capable of controlling the assets sold by its real estate joint ventures Republic of Texas Corporation or the purchasers of those assets. In each case, the Dallas, Texas sales of the assets appear to have been negotiated at arms-length. There are no business relationships be- Order Granting a Determination Under the Bank tween Republic, or any of its subsidiaries and the pur- Holding Company Act chasers of the assets, other than as regular bank customers. Furthermore, there are no officer or director Republic of Texas Corporation, Dallas, Texas ("Re- interlocks between Republic, or any of its subsidiaries, public"), a bank holding company within the meaning on one hand, and the purchasers of the assets, on the of the Bank Holding Company Act of 1956, as other hand. Moreover, there is no evidence that the amended, (12 U.S.C. § 1841 et seq.) ("Act"), has re- financial resources of the purchasers are not sufficient quested a determination under section 2(g)(3) of the to repay the debt to Republic and Bank. The terms Act (12 U.S.C. § 1841(g)(3)) that Republic and its sub- governing the debt relationship are those reasonably sidiary, Republic National ("Bank"), are not in fact required in accordance with sound and accepted bankcapable of controlling the assets of certain real estate ing practices. Finally, Republic has undertaken that it joint venture activities,1 notwithstanding the in- will not attempt to exercise control over the assets debtedness on the part of the purchasers of such prop- sold by the real estate joint ventures or the purchasers erty to Bank and Republic. of such assets, and the purchasers of the assets have each undertaken not to allow Republic, to exercise control over them or the assets purchased from the real estate joint ventures. 1. By Order dated October 25, 1973, the Board approved Repub- Accordingly, it is ordered that the request of Republic's application to become a bank holding company by acquiring Republic National Bank ("Bank"). The acquisition was consummated lic for a determination pursuant to section 2(g)(3) is on May 9, 1974. Pursuant to section 4(a)(2) of the Act, Republic had a granted. This determination is based on the representotal of five years until May 9, 1979 to divest all of Bank's impermistations made to the Board by Republic, and the pursible nonbanking activities, including assets held by The Howard Corporation ("Howard"), as trustee, for the benefit of Bank's share- chasers of its real estate joint venture assets. In the holders. The impermissible assets of Howard consisted primarily of event that the Board should hereafter determine that numerous oil and gas interests as well as several real estate joint venfacts material to this determination are otherwise than tures. On May 27, 1977, Republic sold the bulk of the impermissible Howard assets to American Airlines in a cash transaction. The imper- represented, or that either Republic or the purchasers missible assets remaining after that sale consisted of real estate joint of its real estate joint venture assets have failed to disventures. They were acquired on the following dates: (1) On April 9, close to the Board other material facts, this determina- 1979, Mr. Alden Wagner acquired Westgate Company, (2) On April 10, 1979, HBH Investment Company ("HBH") sold 140 acres of land to Fox & Jacobs, Inc., (3) On April 11, 1979, Mr. William Campbell acquired Collin Corporation, (4) On April 24, 1979, HBH sold 124 acres of land to Messrs. James A. Moran and Harry R. Hoffman, (5) On 2. For purposes of section 2(g)(3), the Board deems the transfer of April 30, 1979, Mr. Sidney Steiner acquired 1-20 Company and North all or substantially all of the assets of a company or the disposition of a Westgate Company, and (6) On April 30, 1979, Calusa Developments separate activity of a company to involve a transfer of shares, acquired 1-35 Corporation. 12 C.F.R. § 225.139(c)(3). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 101 tion may be revoked, and any change in the facts and tunity for hearing, determines that the transferor is not circumstances relied upon by the Board in making this in fact capable of controlling the transferee. No determination could result in the Board reconsidering request for a hearing was made by Southern. Southern the determination made herein. has submitted evidence to the Board in support of its By order of the Board of Governors, acting through contention that it is not in fact capable of controlling its General Counsel, pursuant to delegated authority Purchasers and the Board has received no contrary (12 C.F.R. § 265.2(b)(1)), effective December 22,1980. evidence. Based on the evidence of record in this matter, it is hereby determined that Southern is not in fact (Signed) THEODORE E. ALLISON, capable of controlling Purchasers. [SEAL] Secretary of the Board. This determination is based upon the evidence of record in this matter, including the following facts: That the sale of insurance agencies by Southern was Southern National Corporation, the result of arms-length negotiations; that Purchasers Lumberton, North Carolina are in sound financial condition; that Sellers are unaffiliated with Southern and that there are no manage- Southern National Corporation, Lumberton, North ment or director interlocks between Southern and its Carolina (''Southern"), a bank holding company with- affiliates and Purchasers. On the basis of the above in the meaning of § 2(a) of the Bank Holding Company and other facts of record the Board concludes that Act of 1956, as amended (12 U.S.C. § 1841 et seq.) Southern does not control and is not in fact capable of (the "Act"), has requested a determination pursuant controlling Purchasers. to the provisions of section 2(g)(3) of the Act Accordingly, it is ordered that the request of South- (12 U.S.C. § 1841(g)(3)), that with respect to the sale ern for a determination pursuant to section 2(g)(3) be by Southern of three of the offices of its subsidiary, and is hereby granted. This determination is based up- Southern National Insurance Services, Inc., engaged on the representations made to the Board by Southern. in the general insurance agency business in Lumber- In the event the Board should hereafter determine that ton, Fairmont and Rockingham all in North Carolina facts material to this determination are otherwise than (together, "insurance agencies"), to McLean, Brady as represented or that Southern has failed to disclose & McLean Agency, Inc.; Grantham Insurance Agen- to the Board other material facts, this determination cy, Inc.; and Lloyd Johnson & Company, Inc.; respec- may be revoked, and any change in the facts or cirtively, (together, Purchasers"), Southern is not in fact cumstances relied upon by the Board in making this capable of controlling Sellers notwithstanding the fact determination could result in the Board reconsidering the Purchasers are indebted to Southern in connection the determination made herein. with their purchase of insurance agencies. By order of the Board of Governors, acting through Under the provisions of section 2(g)(3) of the Act, its General Counsel, pursuant to delegated authority shares transferred after January 1, 1966, by any bank (12 C.F.R. § 265.2(b)(1)) effective December 31,1980. holding company to a transferee that is indebted to the transferor are deemed to be indirectly owned or con- (Signed) JAMES MCAFEE, trolled by the transferor unless the Board, after oppor- [SEAL] Assistant Secretary of the Board. ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT By the Board of Governors During December 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

102 Federal Reserve Bulletin • January 1981 Section 3 Board action Applicant Bank(s) (effective date) Barnett Banks of Florida, Inc., Hobe Sound National Bank, December 2,1980 Jacksonville, Florida Hobe Sound, Florida Manufacturers National Corporation, Bank of Lansing, December 24,1980 Detroit, Michigan Lansing, Michigan Sections 3 and 4 Nonbanking Effective Applicant Bank(s) company date (or activity) Panhandle Aviation, Inc. Farmers Savings Bank, to engage directly in the sale December 23, 1980 Clarinda, Iowa Freemont, Iowa of general insurance Section 4 Nonbanking Effective Applicant company date (or activity) Guaranty Securities Corporation, to continue to act as agent for the sale of December 18, 1980 Minneapolis, Minnesota credit life and credit accident and health insurance directly related to extensions of credit by its subsidiary bank JCT Trust Company Limited, et al. to engage in commercial finance activities December 29, 1980 Tel Aviv, Israel Tower-Sudan Agency, Inc., to retain its general insurance agency business December 18, 1980 Tower, Minnesota Vic Sather & Associates Inc., to retain its general insurance agency business December 29, 1980 Bloomington, Minnesota 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 Alamosa Bancorporation, Ltd., The Alamosa National Bank, Kansas City November 28,1980 Denver, Colorado Denver, Colorado Alpha Banco Inc., Farmers State Bank of Alpha, Chicago December 24, 1980 Alpha, Illinois Alpha, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 103 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date The American Bank Corporation, American Bank of Casper, et al. Kansas City November 7, 1980 Denver, Colorado Casper, Wyoming American National Bancorp, Inc., The American National Bank of Kansas City November 26, 1980 Lawton, Oklahoma Lawton, Lawton, Oklahoma American National Sidney Corp., The American National Bank of Kansas City November 28, 1980 Sidney, Nebraska Sidney, Sidney, Nebraska Arbuckle Bancorp, Inc., First Oklahoma Bank and Trust Kansas City December 1, 1980 Sulphur, Oklahoma Company, Sulphur, Oklahoma Asco, Inc., Rock Rapids State Bank, Chicago December 9, 1980 Rock Rapids, Iowa Rock Rapids, Iowa Bantex Bancshares, Inc., Greater Houston Bank, Dallas December 19, 1980 Houston, Texas Houston, Texas Blythedale Bancshares, Inc., Citizens Bank of Blythedale, Kansas City December 11, 1980 Blythedale, Missouri Blythedale, Missouri Bridgeport State Company, The Bridgeport State Bank, Kansas City November 13, 1980 Bridgeport, Nebraska Bridgeport, Nebraska Carter Lake Investment Co., First Bank and Trust of Carter Lake Chicago December 2, 1980 Carter Lake, Iowa Carter Lake, Iowa Central Bancorporation, Inc., et al. Central Bank of West Greeley, Kansas City November 26, 1980 Denver, Colorado Greeley, Colorado Central Nebraska Bankshares, Inc., Security State Bank, Kansas City November 14, 1980 Broken Bow, Nebraska Broken Bow, Nebraska Central Oklahoma Bancshares, Central Oklahoma Bank, Kansas City November 26, 1980 Inc., Depew, Oklahoma Depew, Oklahoma Chadwick Bancshares, Inc., Farmers' State Bank of Chadwick, Chicago November 28, 1980 Chadwick, Illinois Chadwick, Illinois Chimney Rock Bancorp., The First National Bank of Bayard, Kansas City December 1, 1980 Bayard, Nebraska Bayard, Nebraska Citizens Holding Company, Citizens Bank of Waverly, Atlanta December 22, 1980 Waverly, Tennessee Waverly, Tennessee Clara City Bancorporation, Inc., Clara City State, Minneapolis December 9, 1980 Clara City, Minnesota Clara City, Minnesota Clement Bancshares, Inc., First State Bank, St. Louis November 28, 1980 Plainview, Arkansas Plainview, Arkansas Columbus Corp., The First National Bank of Kansas City November 14, 1980 Columbus, Kansas Columbus, Columbus, Kansas Commerce Bancorporation, Inc., The Bank of Commerce, Kansas City December 11, 1980 McLoud, Oklahoma McLoud, Oklahoma Covington First State Bancshares, First State Bank, Kansas City November 21, 1980 Inc., Covington, Oklahoma Covington, Oklahoma Derby Bancshares, Inc., First National Bank of Derby, Kansas City November 20, 1980 Derby, Kansas Derby, Kansas Erick Bancorporation, Inc., First American Bank, Kansas City November 28, 1980 Digitized for FRA E S ri E c R k , Oklahoma Erick, Oklahoma http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

104 Federal Reserve Bulletin • January 1981 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Farmers Bancshares, Inc., Farmers Bank, Kansas City November 7, 1980 Nebraska City, Nebraska Nebraska City, Nebraska Farmers Bancshares, Inc., The Farmers National Bank, Kansas City November 13, 1980 Lincoln, Kansas Lincoln, Kansas Farmers & Stockmens Farmers & Stockmens Bank of Kansas City November 7, 1980 Bancorporation, Clayton, et al. Clayton, New Mexico Clayton, New Mexico Finance Ohio Company, Peoples Savings Bank Company, Cleveland December 16, 1980 Martins Ferry, Ohio Martins Ferry, Ohio Financial Security Corporation, Security State Bank of Basin, Kansas City December 1,1980 Basin, Wyoming Basin, Wyoming First Banc Group, Inc., First National Bank and Trust St. Louis November 26, 1980 Centralia, Illinois Company, Centralia, Illinois First Bancshares of Muskogee, Inc., First of Muskogee Corporation, Kansas City November 7, 1980 Muskogee, Oklahoma Muskogee, Oklahoma First Breck Holding Company, The First National Bank of Minneapolis December 15, 1980 Breckenridge, Minnesota Breckenridge, Breckenridge, Minnesota First Carthage Corporation, The Carthage Bank, Atlanta November 26, 1980 Carthage, Mississippi Carthage, Mississippi First Chattanooga Corporation, The First Bank of Chattanooga, Kansas City November 10, 1980 Chattanooga, Oklahoma Chattanooga, Oklahoma First Davis Bancorporation, Inc., The First National Bank of Davis, Kansas City November 28, 1980 Davis, Oklahoma Davis, Oklahoma First Jenks Bancorporation, The First National Bank of Jenks, Kansas City November 3, 1980 Incorporated, Jenks, Oklahoma Jenks, Oklahoma First Miami Bancshares, Inc., The First National Bank and Trust Kansas City November 28, 1980 Miami, Oklahoma Company of Miami, Miami, Oklahoma The First National Bank of Palm First National Bank in Palm Beach, Atlanta December 3, 1980 Beach, Incorporated, Palm Beach, Florida Palm Beach, Florida First Oklahoma National The First National Bank, Kansas City November 26, 1980 Corporation, Stigler, Oklahoma Stigler, Oklahoma First State Bancorporation of The First State Bank, Childress, Dallas December 22, 1980 Childress, Inc., Texas, Childress, Texas Childress, Texas First State Bancorporation of First State Bank, Kansas City November 13, 1980 Watonga, Inc., Watonga, Oklahoma Watonga, Oklahoma First Western Bancorporation, The First National Bank of La Jara, Kansas City November 14, 1980 La Jara, Colorado La Jara, Colorado Geiger Corporation, Holstein State Bank, Chicago November 26,1980 Edina, Minnesota Holstein, Iowa Great Plains Bank Corporation, Eureka State Bank, Minneapolis December 12, 1980 Eureka, South Dakota Eureka, South Dakota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 105 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Great Western Financial Services, The Western National Bank of Kansas City November 28, 1980 Inc., Colorado Springs, Colorado Springs, Colorado Colorado Springs, Colorado Green City Bancshares, Inc., Farmers Bank of Green City, Kansas City November 28, 1980 Green City, Missouri Green City, Missouri Guardian Bancorp, Inc., Guardian State Bank, San Francisco December 16, 1980 Salt Lake City, Utah Salt Lake City, Utah Harrisburg Bancshares, Inc., The Harrisburg National Bank, St. Louis December 12, 1980 Harrisburg, Illinois Harrisburg, Illinois Hawkeye Bancorporation, Capital City State Bank, Chicago November 28, 1980 Des Moines, Iowa Des Moines, Iowa Hudson Bancshares Corporation, State Bank of Hudson, Minneapolis December 19, 1980 Hudson, Wisconsin Hudson, Wisconsin IDA GROVE BANCSHARES, INC., Ida County State Bank, Chicago December 19, 1980 Ida Grove, Iowa Ida Grove, Iowa Irene Bancorporation, Inc., Farmers State Bank of Irene, Minneapolis November 28, 1980 Irene, South Dakota Irene, South Dakota Jones National Corporation, Jones National Bank and Trust Kansas City November 14, 1980 Seward, Nebraska Company of Seward, Seward, Nebraska Lamoni Bancshares, Inc., State Bank of Lamoni, Chicago November 28, 1980 Lamoni, Iowa Lamoni, Iowa McPherson County Bancorp., Inc., The Farmers State Bank & Trust Kansas City November 7, 1980 Canton, Kansas Co., Canton, Kansas Morning Sun Bank Corp., Iowa State Bank, Chicago December 15, 1980 Morning Sun, Iowa Morning Sun, Iowa Mountain Financial Services, Inc., Southeast National Bank, Kansas City November 28, 1980 Denver, Colorado Denver, Colorado Mountain States Bancorporation, Mountain States Bank, Kansas City November 28, 1980 Inc., Denver, Colorado Denver, Colorado Nimrod Enterprises, Inc., State Bank of Foley, Minneapolis December 11, 1980 Foley, Minnesota Foley, Minnesota North Holding Company, Inc., Neillsville Bank, Chicago December 26, 1980 Neillsville, Wisconsin Neillsville, Wisconsin North Side Bancshares, Inc., North Side State Bank, Kansas City November 28, 1980 Tulsa, Oklahoma Tulsa, Oklahoma Oakdale Bancshares, Inc., First State Bank, Kansas City December 1, 1980 Oakdale, Nebraska Oakdale, Nebraska Old Kent Financial Corporation, Old Kent Bank of Kalamazoo, Chicago December 19, 1980 Grand Rapids, Michigan Kalamazoo, Michigan Peoples Bancorp, Inc., The First National Bank of Cleveland December 18, 1980 Marietta, Ohio Caldwell, Caldwell, Ohio Pipestone Bancshares, Inc., The First National Bank of Minneapolis December 12, 1980 Pipestone, Minnesota Pipestone, Pipestone, Minnesota RANDALL-STORY Randall Story State Bank, Chicago December 4, 1980 BANCSHARES, INC., Story City, Iowa Digitized for FRASER Story City, Iowa http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

106 Federal Reserve Bulletin • January 1981 Section 3—Continued Reserve Effective AApppplliiccaanntt BBaannkk((ss)) Bank date Raymond Bancshares, Inc., Farmers State Bank of Raymond, Minneapolis November 26, 1980 Raymond, Minnesota Raymond, Minnesota Republic of Texas Corporation, The First National Bank of Dallas December 18, 1980 Dallas, Texas Richmond, Richmond, Texas Ridgeway Bancshares, Inc., Farmers National Bank of Kansas City November 7, 1980 Ridge way, Missouri Ridgeway, Ridgeway, Missouri SBT Corporation, First National Bank of Valdosta, Atlanta November 26, 1980 Savannah, Georgia Valdosta, Georgia Security National Corporation, First State Bank, Chicago December 22, 1980 Sioux City, Iowa Maple ton, Iowa South Banking Company, Alma Exchange Bank and Trust, Atlanta November 28, 1980 Alma, Georgia etal. Alma, Georgia Southwest Florida Banks, Inc., Bank of Riverview, Atlanta December 22, 1980 Fort Myers, Florida Riverview, Florida Southwest Security, Inc., First Natchez Bank, Atlanta December 12, 1980 Natchez, Mississippi Natchez, Mississippi Stratford Investment Company, The Farmers Savings Bank, Chicago November 28, 1980 Jewell, Iowa Stratford, Iowa Temple Bancorporation, Inc., First National Bank of Temple, Kansas City November 28, 1980 Temple, Oklahoma Temple, Oklahoma Texas Commerce Bancshares, Inc., Banc-Southwest Corporation, Dallas December 24, 1980 Houston, Texas Amarillo, Texas Thunderbird Bancshares, Inc., Federal National Bank and Trust Kansas City December 1, 1980 Shawnee, Oklahoma Company of Shawnee, Shawnee, Oklahoma Trust Company of Georgia, Commerce National Bank of Atlanta December 16, 1980 Atlanta, Georgia Warner Robins, Warner Robins, Georgia Twin Cedars Bancorp., State Bank of Bussey, Chicago November 28, 1980 Bussey, Iowa Bussey, Iowa Valley Bancshares, Inc., Valley Bank of Kalispell, Minneapolis December 17, 1980 Kalispell, Montana Kalispell, Montana VEIS BANKSHARES, The Citizens State Bank of Scobey, Minneapolis December 4,1980 INCORPORATED, Scobey, Montana Scobey, Montana West Bancshares, Inc., West Bank & Trust, Dallas November 28, 1980 West, Texas West, Texas Western Bancorp, Inc., The Western State Bank, Kansas City November 28, 1980 Garden City, Kansas Garden City, Kansas Western Bancshares, Inc., Milwaukee Western Bank, Chicago November 28, 1980 Milwaukee, Wisconsin Milwaukee, Wisconsin Western Bancshares of Truth or Western Bank, Dallas December 18, 1980 Consequences, Inc., Truth or Consequences, New Truth or Consequences, New Mexico Mexico Winters National Corporation, The First National Bank of Cleveland December 15, 1980 Dayton, Ohio Circle ville, Digitized for FRASER Circleville, Ohio http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 107 Section 3—Continued Reserve Effective Applicant Bank(s) Bank date Wirtz Corporation, First Security Trust and Savings Chicago December 4, 1980 Chicago, Illinois Bank, Elmwood Park, Illinois Wood & Huston Bancorporation, South East Missouri Bank, Kansas City November 21, 1980 Inc., Cape Girardeau, Missouri Marshall, Missouri Sections 3 and 4 Nonbanking Reserve Effective Applicant Bank(s) company Bank date (or activity) Brunswick Bancshares, Brunswick State Bank, to engage in general Kansas City November 7, 1980 Inc., Brunswick, insurance agency Brunswick, Nebraska Nebraska activities in a community of less than 5,000 population CAARGO Financial Bentonville State to engage in the sale of Chicago December 10, 1980 Corporation, Bank, general insurance in Bentonville, Indiana Bentonville, Indiana a community with a population of less than 5,000 KEYSTONE, INC., Sioux County State to engage in general Chicago December 18, 1980 Rock Rapids, Iowa Bank, et al. insurance activities Orange City, Iowa in a community with a population of less than 5,000 NorKitt Bancorp, Inc., C-D-L Corporation, to acquire and retain Minneapolis December 22, 1980 Hallock, Minnesota Hallock, Minnesota indirect control of the assets of Northwestern Insurance Agency, Hallock, Minnesota Section 4 Nonbanking Reserve Effective Applicant company Bank date (or activity) NORTHWEST INVESTMENT to continue to engage in equipment Minneapolis December 30, 1980 COMPANY OF CLOQUET, leasing activities INC., Cloquet, Minnesota Oliver Jensen Agency, Inc., to continue to engage in general Kansas City November 21, 1980 Ravenna, Nebraska insurance agency activities Republican Valley Investment to continue to engage in general Kansas City October 31, 1980 Company, insurance activities Digitized for FRASER Orleans, Nebraska http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

108 Federal Reserve Bulletin • January 1981 PENDING CASES INVOLVING THE BOARD OF GOVERNORS* This list of pending cases does not include suits Berkovitz, et al., v. Government of Iran, et al., filed against the Federal Reserve Banks in which the Board June 1980, U.S.D.C. for the Northern District of of Governors is not named a party. California. Mercantile Texas Corporation v. Board of Governors, Securities Industry Association v. Board of Gover- filed May 1980, U.S.C.A. for the Fifth Circuit. nors, et al., filed October 1980, U.S.D.C. for the Corbin, Trustee v. United States, filed May 1980, District of Columbia. United States Court of Claims. Securities Industry Association v. Board of Gover- Louis J. Roussel v. Board of Governors, filed April nors, et al., filed October 1980, U.S.C.A. for the 1980, U.S.D.C. for the District of Columbia. District of Columbia. Ulysses S. Crockett v. United States et al., filed April A. G. Becker, Inc. v. Board of Governors et al., filed 1980, U.S.D.C. for the Eastern District of North October 1980, U.S.D.C. for the District of Colum- Carolina. bia. County National Bancorporation and TGB Co. v. A. G. Becker, Inc. v. Board of Governors et al., filed Board of Governors, filed September 1979, October 1980, U.S.C.A. for the District of Colum- U.S.C.A. for the Eighth Circuit. bia. Gregory v. Board of Governors, filed July 1979, Independent Insurance Agents of America and Inde- U.S.D.C. for the District of Columbia. pendent Insurance Agents of Missouri v. Board of Donald W. Riegel, Jr. v. Federal Open Market Com- Governors, filed September 1980, U.S.C.A. for the mittee, filed July 1979, U.S.D.C. for the District of Eighth Circuit. Columbia. Independent Insurance Agents of America and Inde- Connecticut Bankers Association, et al., v. Board of pendent Insurance Agents of Virginia v. Board of Governors, filed May 1979, U.S.C.A. for the Dis- Governors, filed September 1980, U.S.C.A. for the trict of Columbia. Fourth Circuit. Independent Insurance Agents of America, et al., v. Nebraska Bankers Association, et al., v. Board of Board of Governors, filed May 1979, U.S.C.A. for Governors, et al., filed September 1980, U.S.D.C. the District of Columbia. for the District of Nebraska. Independent Insurance Agents of America, et al., v. Republic of Texas Corporation v. Board of Governors, Board of Governors, filed April 1979, U.S.C.A. for filed September 1980, U.S.C.A. for the Fifth Cir- the District of Columbia. cuit. Independent Insurance Agents of America, et al., v. Consumers Union of the United States, Inc., v. Board Board of Governors, filed March 1979, U.S.C.A. for of Governors et al, filed August 1980, U.S.D.C. for the District of Columbia. the District of Columbia. Security Bancorp and Security National Bank v. Board A. G. Becker Inc., v. Board of Governors, et al., filed of Governors, filed March 1978, U.S.C.A. for the August 1980, U.S.D.C. for the District of Columbia. Ninth Circuit. Otero Savings and Loan Association v. Board of Gov- Investment Company Institute v. Board of Governors, ernors, filed August 1980, U.S.D.C. for the District filed September 1977, U.S.D.C. for the District of of Columbia. Columbia. Edwin F. Gordon v. Board of Governors, et al., filed Roberts Farms, Inc., v. Comptroller of the Currency, August 1980, U.S.C.A. for the Fifth Circuit. et al., filed November 1975, U.S.D.C. for the Martin-Trigona v. Board of Governors, filed July 1980, Southern District of California. U.S.C.A. for the District of Columbia. David Merrill, et al., v. Federal Open Market Com- U.S. League of Savings Associations v. Depository mittee, filed May 1975, U.S.D.C. for the District of Institutions Deregulation Committee, et al., filed Columbia. June 1980, U.S.D.C. for the District of Columbia. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A1 Financial and Business Statistics CONTENTS Domestic Financial Statistics WEEKLY REPORTING COMMERCIAL BANKS A3 Monetary aggregates and interest rates Assets and liabilities A4 Reserves of depository institutions, reserve, A18 All reporting banks bank credit A19 Banks with assets of $ 1 billion or more A5 Reserves and borrowings of depository A20 Banks in New York City institutions A21 Balance sheet memoranda A6 Federal funds and repurchase agreements of A22 Commercial and industrial loans large member banks A23 Gross demand deposits of individuals, partnerships, and corporations POLICY INSTRUMENTS A7 Federal Reserve Bank interest rates FINANCIAL MARKETS A8 Depository institutions reserve requirements A9 Maximum interest rates payable on time and A23 Commercial paper and bankers dollar savings deposits at federally insured institutions acceptances outstanding A10 Federal Reserve open market transactions A24 Prime rate charged by banks on short-term business loans A24 Terms of lending at commercial banks FEDERAL RESERVE BANKS A25 Interest rates in money and capital markets A26 Stock market—Selected statistics All Condition and Federal Reserve note statements A12 Maturity distribution of loan and security A27 Savings institutions—Selected assets and holdings liabilities MONETARY AND CREDIT AGGREGATES FEDERAL FINANCE A12 Bank debits and deposit turnover A28 Federal fiscal and financing operations A13 Money stock measures and components A29 U.S. budget receipts and outlays A14 Aggregate reserves of depository institutions A30 Federal debt subject to statutory limitation and member bank deposits A30 Gross public debt of U.S. Treasury—Types and A15 Loans and securities of all commercial banks ownership A31 U.S. government marketable securities- Ownership, by maturity COMMERCIAL BANKS A32 U.S. government securities dealers- Transactions, positions, and financing A16 Major nondeposit funds A33 Federal and federally sponsored credit A17 Assets and liabilities, last Wednesday-of-month agencies—Debt outstanding series Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • January 1981 SECURITIES MARKETS AND A53 U.S. reserve assets CORPORATE FINANCE A54 Foreign branches of U.S. banks—Balance sheet data A34 New security issues—State and local A56 Selected U.S. liabilities to foreign official governments and corporations institutions A35 Open-end investment companies—Net sales and asset position A35 Corporate profits and their distribution REPORTED BY BANKS IN THE UNITED STATES A36 Nonfinancial corporations—Assets and liabilities A36 Total nonfarm business expenditures on new A56 Liabilities to and claims on foreigners plant and equipment A57 Liabilities to foreigners A37 Domestic finance companies—Assets and A59 Banks' own claims on foreigners liabilities; business credit A60 Banks' own and domestic customers' claims on foreigners A60 Banks' own claims on unaffiliated foreigners REAL ESTATE A61 Claims on foreign countries—Combined domestic offices and foreign branches A38 Mortgage markets A39 Mortgage debt outstanding SECURITIES HOLDINGS AND TRANSACTIONS CONSUMER INSTALLMENT CREDIT A62 Marketable U.S. Treasury bonds and notes— Foreign holdings and transactions A40 Total outstanding and net change A62 Foreign official assets held at Federal Reserve A41 Extensions and liquidations Banks A63 Foreign transactions in securities FLOW OF FUNDS REPORTED BY NONBANKING BUSINESS A42 Funds raised in U.S. credit markets ENTERPRISES IN THE UNITED STATES A43 Direct and indirect sources of funds to credit markets A64 Liabilities to unaffiliated foreigners A65 Claims on unaffiliated foreigners Domestic Nonfinancial Statistics INTEREST AND EXCHANGE RATES A44 Nonfinancial business activity—Selected measures A66 Discount rates of foreign central banks A44 Output, capacity, and capacity utilization A66 Foreign short-term interest rates A45 Labor force, employment, and unemployment A66 Foreign exchange rates A46 Industrial production—Indexes and gross value A48 Housing and construction A49 Consumer and producer prices Special Tables A50 Gross national product and income A51 Personal income and saving A67 Survey of time and savings deposits at commercial banks, October 31, 1980 International Statistics A71 Guide to Tabular Presentation, A52 U.S. international transactions—Summary Statistical Releases, and Special Tables A53 U.S. foreign trade 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 1980 1980 Item Q4 Q1 Q2 Q3 July Aug. Sept. Oct. Nov. Monetary and credit aggregates (annual rates of change, seasonally adjusted in percent)1 Reserves of depository institutions 1 Total 11.6' 3.9' 0.4' 6.7' 3.5' 15.3' 21.3' 5.2' 35.9 2 Required 10.4' 5.1' 0.6' 5.8' 0.9' 14.9' 22.9' 6.8' 27.0 3 Nonborrowed 5.1' 2.9' 7.4' 12.4' 3.1' 7.0' 0.7' 5.4' 13.2 4 Monetary base2 9.3' 7.6' 5.2' 9.9' 8.8' 15.1' 9.7' 10.1' 14.9 Concepts of money and liquid assets3 11.0 5 M-1A 4.5 4.8 -3.9 7.8 19.3 12.6 9.4 6.8 6 M-1B 5.0 5.9 -2.4 13.5 11.1 21.6 15.8 11.5 9.3 7 M-2 7.1 7.2 5.5 15.5 18.2 14.5 8.6 8.8' 10.4 8 M-3 9.1 7.8 5.7 12.6' 13.5 13.6 9.2 10.4' 14.8 9 L 8.5 8.3 7.7 9.6 7.7 13.3 14.2 7.9 n.a. Time and savings deposits Commercial banks 10 Total 12.4 8.4 9.8 4.2 2.3 7.3 12.4 11.1 22.0 11 Savings4 -16.5 -19.3 -22.6 26.4 38.6 26.5 7.6 9.4 -7.5 12 Small-denomination time5 32.1 29.1 33.9 0.6 -3.1 0.0 6.1 10.9 28.1 13 Large-denomination time6 19.7 11.3 10.1 -8.3 -19.7 1.5 23.1 12.6 38.9 14 Thrift institutions7 6.7 2.7 5.0 10.0 9.1 11.3 10.5' 11.8' 13.1 15 Total loans and securities at commercial banks8 8.6 9.5 -.5 7.0 8.2 17.9 14.1 13.3 16.6 1980 1980 Q1 Q2 Q3 Q4 Aug. Sept. Oct. Nov. Dec. Interest rates (levels, percent per annum) Short-term rates 16 Federal funds9 15.05' 12.69' 9.83' 15.85 9.61 10.87 12.81 15.85' 18.90 17 Federal Reserve discount10 12.51 12.45 10.35 11.78 10.00 10.17 11.00 11.47 12.87 18 Treasury bills (3-month market yield)11 13.35 9.62 9.15 13.61 9.13 10.27 11.62 13.73 15.49 19 Commercial paper (3-month)11'2 14.54 11.18 9.65 15.26 9.57 10.97 12.52 15.18 18.07 Long-term rates Bonds 20 U.S. government13 11.78 10.58 10.95 12.23 11.07 11.47 11.75 12.44 12.49 21 State and local government14 8.23 7.95 8.58 n.a. 8.67 8.94 9.11 9.56 10.11 22 Aaa utility (new issue)15 13.22 11.77 12.20 13.49 12.32 12.74 13.18 13.85 14.51 23 Conventional mortgages16 14.32 12.70 n.a. n.a. 13.25 13.65 14.10 14.70 15.05 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-denomination time deposits are those issued in amounts of less than are adjusted for discontinuities in series that result from changes in Regulations $100,000. D and M. 6. Large-denomination time deposits are those issued in amounts of $100,000 or 2. Includes reserve balances at Federal Reserve Banks in the current week plus more. vault cash held two weeks earlier used to satisfy reserve requirements at all deposi- 7. Savings and loan associations, mutual savings banks, and credit unions. tory institutions plus currency outside the U.S. Treasury, Federal Reserve Banks, 8. Changes calculated from figures shown in table 1.23. the vaults of depository institutions, and surplus vault cash at depository institu- 9. Averages of daily effective rates (average of the rates on a given date weighted tions. by the volume of transactions at those rates). 3. M-1A: Averages of daily figures for (1) demand deposits at all commercial 10. Rate for the Federal Reserve Bank of New York. banks other than those due to domestic banks, the U.S. government, and foreign 11. Quoted on a bank-discount basis. banks and official institutions less cash items in the process of collection and Federal 12. Beginning Nov. 1977, unweighted average of offering rates quoted by at least Reserve float; and (2) currency outside the Treasury, Federal Reserve banks, and five dealers. Previously, most representative rate quoted by these dealers. Before the vaults of commercial banks. Nov. 1979, data shown are for 90- to 119-day maturity. M-1B: M-1A plus negotiable order of withdrawal and automated transfer service 13. Market yields adjusted to a 20-year maturity by the U.S. Treasury. accounts at banks and thrift institutions, credit union share draft accounts, and 14. Bond Buyer series for 20 issues of mixed quality. demand deposits at mutual savings banks. 15. Weighted averages of new publicly offered bonds rated Aaa, Aa, and A by M-2: M-1B plus savings and small-denomination time deposits at all depository Moody's Investors Service and adjusted to an Aaa basis. Federal Reserve cominstitutions, overnight repurchase agreements at commercial banks, overnight Eu- pilations. rodollars held by U.S. residents other than banks at Caribbean branches of member 16. Average rates on new commitments for conventional first mortgages on new banks, and 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 depository 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 • January 1981 1.11 RESERVES OF DEPOSITORY INSTITUTIONS, RESERVE BANK CREDIT Millions of dollars Monthly averages of Weekly averages of daily figures for week-ending daily figures 1980 1980 Oct.P Nov.P Dec.P Nov. 19p Nov. 26P Dec. 3p Dec. 10p Dec. 17 p Dec. 24p Dec. 31 p SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 141,695 142,984 143,250 142,641 142,123 142,557 141,255 143,982 144,173 145,857 2 U.S. government securities1 121,455 120,656 119,074 120,131 121,150 119,126 118,947 121,322 119,337 117,608 3 Bought outright 119,866 119,094 118,548 118,976 118,974 118,111 117,991 120,724 119,071 117,098 4 Held under repurchase agreements 1,589 1,562 526 1,155 2,176 1,015 956 598 266 510 5 Federal agency securities 9,206 9,087 8,821 8,914 9,083 8,977 8,843 8,881 8,749 8,837 6 Bought outright 8,769 8,761 8,743 8,761 8,761 8,757 8,750 8,739 8,739 8,739 7 Hela under repurchase agreements 437 326 78 153 322 220 93 142 10 98 8 Acceptances 353 397 124 195 312 279 215 112 30 191 9 Loans 1,335 2,156 1,617 1,979 2,215 2,142 1,786 1,505 1,649 1,627 10 Float 3,722 4,288 5,797 5,107 3,209 5,561 4,482 4,221 6,038 9,049 11 Other Federal Reserve assets 5,624 6,400 7,817 6,315 6,154 6,472 6,982 7,941 8,370 8,544 12 Gold stock 11,165 11,163 11,161 11,163 11,163 11,162 11,162 11,161 11,161 11,161 13 Special drawing rights certificate account .. 3,268 3,325 3,313 3,354 3,368 3,368 3,368 3,368 3,368 3,125 14 Treasury currency outstanding 13,369 13,439 13,409 13,376 13,376 13,554 13,399 13,408 13,410 13,426 ABSORBING RESERVE FUNDS 15 Currency in circulation 130,582 132,787 135,663 133,159 133,080 134,256 134,892 135,365 135,960 136,912 16 Treasury cash holdings 464 458 447 476 454 450 448 445 446 445 Deposits, other than member bank reserves, with Federal Reserve Banks 17 Treasury 3,196 2,964 2,722 3,468 2,946 2,845 2,228 2,784 2,287 3,286 18 Foreign 284 314 353 308 309 323 284 386 395 375 19 Other 330 401 403 375 387 472 384 391 392 416 20 Other Federal Reserve liabilities and capital 4,665 4,772 4,881 4,674 4,785 4,785 4,851 4,977 4,974 4,857 21 Reserve accounts2 29,976 29,215 26,664 28,079 28,068 27,510 26,096 27,572 27,659 27,277 End-of-month figures Wednesday figures 1980 1980 Oct. Nov. Dec. Nov. 19 Nov. 26 Dec. 3 Dec. 10 Dec. 17 Dec. 24 Dec. 31 SUPPLYING RESERVE FUNDS 22 Reserve bank credit outstanding 141,189 146,115 146,382 144,379 144,197 135,751 138,306 148,364 147,075 146,382 23 U.S. government securities1 112211,,448822 112200,,881122 112211,,332288 112211,,669900 112200,,664422 114,677 114,992 112222,,112233 118,308 112211,,332288 24 Bought outright 111199,,885522 111188,,993366 111199,,229999 111199,,114455 111199,,116611 114,677 114,992 112200,,006699 118,308 111199,,229999 25 Held under repurchase agreements 11,,663300 11,,887766 22,,002299 22,,554455 11,,448811 22,,005544 22,,002299 26 Federal agency securities 99,,222200 99,,116655 99,,226644 88,,990044 99,,008866 8,752 8,739 99,,112288 8,739 99,,226644 27 Bought outright 88,,776611 88,,776611 88,,773399 88,,776611 88,,776611 8,752 8,739 88,,773399 8,739 88,,773399 28 Held under repurchase agreements 459 404 525 143 325 389 525 29 Acceptances 566 523 776 374 387 327 776 30 Loans 1,567 2,284 1,809 2,468 3,985 1,355 2,101 1,616 1,388 1,809 31 Float 2,194 6,792 4,467 4,981 3,599 3,866 4,934 6,561 9,673 4,467 32 Other Federal Reserve assets 6,160 6,539 8,738 5,962 6,498 7,101 7,540 8,609 8,967 8,738 33 Gold stock 11,163 11,162 11,161 11,163 11,162 11,162 11,161 11,161 11,161 11,161 34 Special drawing rights certificate account .. 3,268 3,368 2,518 3,368 3,368 3,368 3,368 3,368 3,368 2,518 35 Treasury currency outstanding 13,716 13,779 13,427 13,376 13,376 13,396 13,408 13,408 13,423 13,427 ABSORBING RESERVE FUNDS 36 Currency in circulation 131,075 134,104 136,829 133,351 133,823 134,875 134,630 135,904 136,771 136,829 37 Treasury cash holdings 460 449 441 455 451 450 446 441 447 441 Deposits, other than member bank reserves. with Federal Reserve Banks 38 Treasury 1,864 2,435 3,062 3,477 2,323 3,116 1,516 2,653 2,540 3,062 39 Foreign 368 368 411 236 279 283 272 287 413 411 40 Other 338 478 617 363 461 391 466 403 379 617 41 Other Federal Reserve liabilities and capital 4,713 5,061 4,671 4,658 4,621 4,461 4,616 5,009 4,741 4,671 42 Reserve accounts2 30,518 31,528 27,456 29,746 30,144 20,101 23,297 31,604 29,735 27,456 1. Includes securities loaned—fully guaranteed by U.S. government securities 2. Includes reserve balances of all depository institutions, pledged with Federal Reserve Banks—and excludes (if any) securities sold and NOTE: For amounts of currency and coin held as reserves, see table 1.12. scheduled to be bought back under matched sale-purchase transactions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Member Banks A5 1.12 RESERVES AND BORROWINGS Depository Institutions Millions of dollars Monthly averages of daily figures Reserve classification 1979 1980 Dec. Apr. May June July Aug. Sept. Oct. Nov. Dec. 1 Reserve balances with Reserve Banks1 32,473 33,777 32,755 32,125 31,384 28,923 29,164 29,976 29,215 26,664 -> 15.311 1188,,114499 3 Vault cash at institutions with required reserve balances2 11,344 10,889 10,999 11,141 11,287 11,262 11,811 11,678 11,876 12,602 4 Vault cash equal to required reserves at other institutions n. a. n.a. n. a. n. a. n. a. n.a. n.a. n. a. 443399 770044 5 Surplus vault cash at other institutions3 . n.a. n., a. n. a. n. a. n. a. n. a. n. a. n. a. 2,996 4,843 6 Reserve balances + total vault cash4 43,!972 44,877 43,968 43,479 42,859 40,373 41,164 41,815 44,674 44,940 7 Reserve balances + total vault cash used to satisfy reserve requirements4-5 n.a. n.a. n. a. n. a. n. a. n. a. n.a. n. a. 41,678 40,097 8 Required reserves (estimated) 43,578 44,683 43,785 43,268 42,575 40,071 40,908 41,498 40,723 40,067 9 Excess reserve balances at Reserve Banks4-6 394 194 183 211 284 302 256 317 955 30 10 Total borrowings at Reserve Banks 1,473 2,455 1,028 380 395 659 1,311 1,335 2,156 1,617 11 Seasonal borrowings at Reserve Banks 82 155 63 12 7 10 26 67 99 116 Large commercial banks 12 Reserves held 24,940 13 Required 25,819 14 Excess -879 Small commercial banks 15 Reserves held 13,719 16 Required 13,523 17 Excess n., a. n.a. n.a. n. a. n. a. n. a. n.a. n. a. n, a. 196 U.S. agencies and branches 18 Reserves held 226600 19 Required 230 20 Excess 30 All other institutions 21 Reserves held 494 22 Required 495 23 Excess -1 Weekly averages of daily figures for week ending Oct. 29 Nov. 5 Nov. 12 Nov. 19 Nov. 26 Dec. 3 Dec. 10 Dec. 17 Dec. 24 Dec. 31 24 Reserve balances with Reserve Banks1 30,258 30,412 29,658 28,079 28,068 27,510 26,096 27,572 27,659 27,277 2255 Total vault cash (estimated) 1177,,335500 1166,,993377 1188,,331177 1188,,006644 1188,,331177 1177,,666633 1188,,448822 2266 Vault cash at institutions with required reserve balances2 11,544 12,028 12,273 11,553 11,385 12,413 12,531 12,660 12,345 12,954 27 Vault cash equal to required reserves at other institutions n. a. n. a. n.a. 730 730 740 700 700 700 700 28 Surplus vault cash at other institutions3 . n. a. n. a. n. a. 5,067 4,822 5,164 4,833 4,957 4,618 4,828 29 Reserve balances + total vault cash4 41,966 42,599 42,090 45,588 45,134 45,955 44,288 46,013 45,456 45,882 30 Reserve balances + total vault cash used to satisfy reserve requirements4-5 n. a. n.a. n. a. 40,521 40,312 40,791 39,455 41,056 40,838 41,054 31 Required reserves (estimated) 41,930 42,032 41,686 40,017 39,995 39,910 39.193 40,554 40,029 40,558 32 Excess reserve balances at Reserve Banks4-6 36 567 404 504 317 881 262 502 809 496 33 Total borrowings at Reserve Banks 1,435 1,878 2,067 1,979 2,215 2,142 1,786 1,505 1,649 1,627 34 Seasonal borrowings at Reserve Banks 87 72 96 96 115 110 111 124 119 116 Large commercial banks 35 Reserves held 24,526 25,354 25,698 24,495 25,584 25,757 25,700 36 Required 25,763 25,724 25,631 25,171 26,248 25,773 26,163 37 Excess -1,237 -370 67 -676 -664 -16 -463 Small commercial banks 38 Reserves held 14,187 13,618 13,880 13,517 13,706 13,828 13,955 39 Required 13,491 13,574 13,547 13,324 13,566 13,551 13,643 40 Excess n. a. n. a. n.a. 696 44 333 193 140 277 312 U.S. agencies and branches 41 Reserves held 233 235 237 244 274 261 262 42 Required 259 228 244 230 223 221 234 43 Excess -26 7 -7 14 51 40 28 All other institutions 44 Reserves held 478 487 500 454 535 463 527 45 Required 504 469 488 468 517 484 518 4466 Excess --2266 1188 12 -14 1188 -21 9 1. Includes all reserve balances of depository institutions. existing member bank, or when a nonmember bank joins the Federal Reserve 2. Prior to Nov. 13, 1980, the figures shown reflect only the vault cash held by System. For weeks for which figures are preliminary, figures by class of bank do member banks. not add to total because adjusted data by class are not available. 3. Total vault cash at institutions without required reserve balances less vault 5. Reserve balances with Federal Reserve Banks plus vault cash at institutions cash equal to their required reserves. with required reserve balances plus vault cash equal to required reserves at other 4. Adjusted to include waivers of penalties for reserve deficiencies in accordance institutions. with Board policy, effective Nov. 19, 1975, of permitting transitional relief on a 6. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy graduated basis over a 24-month period when a nonmember bank merged into an reserve requirements less required reserves. (This measure of excess reserves is comparable to the old excess reserve concept published historically.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Financial Statistics • January 1981 1.13 FEDERAL FUNDS AND REPURCHASE AGREEMENTS Large Member Banks' Averages of daily figures, in millions of dollars 1980, week ending Wednesday BByy mmaattuurriittyy aanndd ssoouurrccee Nov. 5 Nov. 12 Nov. 19' Nov. 26' Dec. 3 Dec. 10 Dec. 17 Dec. 24 Dec. 31 One day and continuing contract 1 Commercial banks in United States 49,000 52,886' 51,545 47,910 51,213 52,508 51,140 46,739 45,902 2 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies 14,139 15,280 15,986 15,573 14,205 14,306 14,076 13,924 14,050 3 Nonbank securities dealers 2,670 2,698 2,638 2,793 2,581 2,355 2,864 2,682 2,252 4 Allother 16,584 15,873 17,505 17,067 15,484 18,042 17,847 16,656 14,937 All other maturities 5 Commercial banks in United States 4,645' 4,781' 3,868 4,112 4,501 4,007 4,070 4,322 5,165 6 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies 7,790' 7,927' 7,438 7,283 7,225 7,309 7,534 7,750 7,748 7 Nonbank securities dealers 4,051 4,186 4,174 4,240 4,494 4,139 4,136 4,495 4,476 8 Allother 10,987 10,790 9,874 10,611 12,147 10,303 9,981 10,834 13,463 MEMO: Federal funds and resale agreement loans in maturities of one day or continuing contract 9 Commercial banks in United States 13,305 12,545' 14,872 11,316 14,697 14,163 14,411 13,389 15,340 10 Nonbank securities dealers 2,774 2,731 2,787 2,547 2,721 2,974 2,950 3,253 2,768 1. Banks with assets of $1 billion or more as of December 31, 1977. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A7 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per annum Current and previous levels Extended credit SShhoorrtt--tteerrmm EEmmeerrggeennccyy ccrreeddiitt aaddjjuussttmmeenntt ccrreeddiitt11 ttoo aallll ootthheerrss FFFeeedddeeerrraaalll RRReeessseeerrrvvveee Seasonal credit Special circumstances2 uunnddeerr sseeccttiioonn 113333 BBBaaannnkkk Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous Rate on Effective Previous 12/31/80 date rate 12/31/80 date rate 12/31/80 date rate 12/31/80 date rate Boston 13 12/8/80 12 13 12/8/80 12 14 12/8/80 13 16 12/8/80 15 New York 13 12/5/80 12 13 12/5/80 12 14 12/5/80 13 16 12/5/80 15 Philadelphia 13 12/8/80 12 13 12/8/80 12 14 12/8/80 13 16 12/8/80 15 Cleveland 13 12/5/80 12 13 12/5/80 12 14 12/5/80 13 16 12/5/80 15 Richmond 13 12/5/80 12 13 12/5/80 12 14 12/5/80 13 16 12/5/80 15 Atlanta 13 12/5/80 12 13 12/5/80 12 14 12/5/80 13 16 12/5/80 15 Chicago 13 12/8/80 12 13 12/8/80 12 14 12/8/80 13 16 12/8/80 15 St. Louis 13 12/5/80 12 13 12/5/80 12 14 12/5/80 13 16 12/5/80 15 Minneapolis 13 12/5/80 12 13 12/5/80 12 14 12/5/80 13 16 12/5/80 15 Kansas City 13 12/5/80 12 13 12/5/80 12 14 12/5/80 13 16 12/5/80 15 Dallas 13 12/8/80 12 13 12/8/80 12 14 12/8/80 13 16 12/8/80 15 San Francisco 13 12/5/80 12 13 12/5/80 12 14 12/5/80 13 16 12/5/80 15 Range of rates in recent years4 5 Range (or F.R. Range (or F.R. Range (or F.R. Effective date A le H ve F l) . — R. Ba o n f k Effective date A le l v l e F l) . — R. Ba o n f k Effective date A le l v l e F l) . — R. Ba o n f k Banks N.Y. Banks N.Y. Banks N.Y. In effect Dec. 31, 1970 5Yi 5 Yi 1974— Apr. 25 lYi-% 8 1978— July 10 7V4-73/4 7V4 1971— Jan. 8 5Y+-5Yi 5VA 30 8 8 Aug. 21 73/4 73/4 15 5VA 5VA Dec. 9 73/4-8 73/4 Sept. 22 8 8 19 5-51/4 5Va 16 73/4 73/4 Oct. 16 S-SYl 8 Vi 22 5-51/4 5 20 8 Vi 8Y2 29 5 5 1975— Jan. 6 IYA 1V4 Nov. 1 SV2r-9Vl 9 Yi Feb. 13 43A-5 5 10 IVA 71/4 3 9 Yi 9 Yi 19 43/4 43/4 24 IVA 7V4 JJuullyy 16 4^-5 5 Feb. 5 &/*r-lY\ 63/4 1979— July 20 10 10 23 5 5 7 63/4 63/4 AAuugg.. 17 10-10 Yi WYi Nov. 11 43/4-5 5 Mar. 10 6>/4-63/4 61/4 20 10 Yi 19 43/4 43/4 14 6V4 6^4 SSeepptt.. 19 iote-11 11 Dec. 13 4 YItAVA 43/4 May 16 6-6V4 6 21 11 11 17 4^43/4 4 Yi Oct. 8 11-12 12 24 4 Yi AYi 1976— Jan. 19 5^-6 5Y1 10 12 12 23 5V2 5Yi 1973— Jan. 15 5 5 Nov. 22 5V4-5 Yi 5Va 1980— Feb. 15 12-13 13 Feb. 26 5-5 Yi 5Vi 26 5V4 5Va 19 13 13 Mar. 2 5Yi 5Yi MMaayy 29 12-13 13 Apr. 23 5^-53/4 5Yi 1977— Aug. 30 5V4-53/4 5V4 30 12 12 MMaayy 4 53/4 53/4 31 5V+-53/4 53/4 June 13 11-12 11 11 53/4-6 6 Sept. 2 53/4 53/4 16 11 11 18 6 6 Oct. 26 6 6 JJuullyy 28 10-11 10 June 11 6-6Y2 6 Yi 29 10 10 15 6 Yi 6 Yi 1978— Jan. 9 6-6 Yi evi Sept. 26 11 11 July 2 7 1 20 6Vz 6Y1 Nov. 17 12 12 AAuugg.. 14 1-1 Yi lYi May 11 6Y2r-l 7 Dec. 5 12-13 13 23 IVi IVi 12 7 7 8 13 13 July 3 7-71/4 1V4 In effect Dec. 31, 1980 13 13 1. Effective Dec. 5, 1980, a 3 percent surcharge was applied to short term 4. Rates for short-term adjustment credit. For description and earlier data see adjustment credit borrowings by institutions with deposits of $500 million or more the following publications of the Board of Governors: Banking and Monetary who borrowed in successive weeks or in more than 4 weeks in a calendar quarter. Statistics, 1914-1941 and 1941-1970; Annual Statistical Digest, 1971-1975, 1972-1976, 2. Applicable to advances when exceptional circumstances or practices involve 1973-1977, and 1974-1978. only a particular depository institution as described in section 201.3(b) (2) of Reg- 5. Twice in 1980, the Federal Reserve applied a surcharge to short-term adulation A. justment credit borrowings by institutions with deposits of $500 million or more 3. Applicable to emergency advances to individuals, partnerships, and corpo- who had borrowed in successive weeks or in more than 4 weeks in a calendar rations as described in section 201.3(c) of Regulation A. quarter. A 3 percent surcharge was in effect from Mar. 17, 1980, through May 7, 1980. On Nov. 17,1980, a 2 percent surcharge was adopted which was subsequently raised to 3 percent on Dec. 5, 1980. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Financial Statistics • January 1981 1.15 DEPOSITORY INSTITUTIONS RESERVE REQUIREMENTS' Percent of deposits Member bank requirements Depository institution requirements before implementation of the after implementation of the TTyyppee ooff ddeeppoossiitt,, aanndd ddeeppoossiitt iinntteerrvvaall Monetary Control Act TTyyppee ooff ddeeppoossiitt,, aanndd Monetary Control Act5 iinn mmiilllliioonnss ooff ddoollllaarrss ddeeppoossiitt iinntteerrvvaall Percent Effective date Percent Effective date Net demand2 Net transaction accounts6 0-2 777 111222///333000///777666 $0-$25 million 333 111111///111333///888000 2-10 999 VVViii 111222///333000///777666 Over $25 million 111222 111111///111333///888000 10-100 111111^^^444 111222///333000///777666 100-400 111222333///444 111222///333000///777666 Nonpersonal time deposits1 Over 400 III666VVV444 111222///333000///777666 By original maturity Less than 4 years 333 111111///111333///888000 Time and savings2 3 4 years or more 000 111111///111333///888000 Savings 333 333///111666///666777 Eurocurrency liabilities Time4 All types 333 111111///111333///888000 0-5, by maturity 30-179 days 333 333///111666///666777 180 days to 4 years 111///888///777666 4 years or more 222 VVViii 111000///333000///777555 Over 5, by maturity 111 30-179 days 666 111222///111222///777444 180 days to 4 years 222VVViii 111///888///777666 4 years or more 111 111000///333000///777555 1. For changes in reserve requirements beginning 1963, see Board's Annual (b) Effective with the reserve maintenance period beginning Oct. 25, 1979, a Statistical Digest, 1971-1975 and for prior changes, see Board's Annual Report for marginal reserve requirement of 8 percent was added to managed liabilities in 1976, table 13. Under provisions of the Monetary Control Act, depository insti- excess of a base amount. This marginal requirement was increased to 10 percent tutions include commercial banks, mutual savings banks, savings and loan asso- beginning April 3, 1980, was decreased to 5 percent beginning June 12, 1980, and ciations, credit unions, agencies and branches of foreign banks, and Edge Act was reduced to zero beginning July 24, 1980. Managed liabilities are defined as corporations. large time deposits. Eurodollar borrowings, repurchase agreements against U.S. 2. (a) Requirement schedules are graduated, and each deposit interval applies government and federal agency securities, feeleral funds borrowings from nonto that part of the deposits of each bank. Demand deposits subject to reserve member institutions, and certain other obligations. In general, the base for the requirements are gross demand deposits minus cash items in process of collection marginal reserve requirement was originally the greater of (a) $100 million or (b) ana demand balances due from domestic banks. the average amount of the managed liabilities held by a member bank, Edge (b) The Federal Reserve Act as amended through 1978 specified different ranges corporation, or family of U.S. branches and agencies of a foreign bank for the two of requirements for reserve city banks and for other banks. Reserve cities were statement weeks ending Sept. 26,1979. For the computation period beginning Mar. designated under a criterion adopted effective Nov. 9,1972, by which a bank having 20,1980, the base was lowered by (a) 7 percent or (b) the decrease in an institution's net demand deposits of more than $400 million was considered to have the character U.S. office gross loans to foreigners and gross balances due from foreign offices of business of a reserve city bank. The presence of the head office of such a bank of other institutions between the base period (Sept. 13-26, 1979) and the week constituted designation of that place as a reserve city. Cities in which there were ending Mar. 12,1980, whichever was greater. For the computation period beginning Federal Reserve Banks or branches were also reserve cities. Any banks having net May 29,1980, the base was increased by lYi percent above the base used to calculate demand deposits of $400 million or less were considered to have the character of the marginal reserve in the statement week of May 14-21, 1980. In addition, business of banks outside of reserve cities and were permitted to maintain reserves beginning Mar. 19, 1980, the base was reduced to the extent that foreign loans and at ratios set for banks not in reserve cities. balances declined. (c) Effective Aug. 24, 1978, the Regulation M reserve requirements on net 5. For existing nonmember banks and thrift institutions, there is a phase-in balances due from domestic banks to their foreign branches and on deposits that period ending Sept. 3, 1987. For existing member banks the phase-in period is foreign branches lend to U.S residents were reduced to zero from 4 percent and about three years, depending on whether their new reserve requirements are greater 1 percent, respectively. The Regulation D reserve requirement on borrowings from or less than the old requirements. For existing agencies and branches of foreign unrelated banks abroad was also reduced to zero from 4 percent. banks, the phase-in ends Aug. 12, 1982. All new institutions will have a two-year (d) Effective with the reserve computation period beginning Nov. 16, 1978, phase-in beginning with the date that they open for business. domestic deposits of Edge corporations were subject to the same reserve require- 6. Transaction accounts include all deposits on which the account holder is ments as deposits of member banks. permitted to make withdrawals by negotiable or transferable instruments, payment 3. (a) Negotiable order of withdrawal (NOW) accounts and time deposits such orders of withdrawal, telephone and preauthorized transfers (in excess of three per as Christmas and vacation club accounts were subject to the same requirements month), for the purpose of making payments to third persons or others. as savings deposits. 7. In general, nonpersonal time deposits are time deposits, including savings (b) The average reserve requirement on savings and other time deposits before deposits, that are not transaction accounts and in which the beneficial interest is implementation of the Monetary Control Act had to be at least 3 percent, the held by a depositor which is not a natural person. Also included are certain transminimum specified by law. ferable time deposits held by natural persons, and certain obligations issued to 4. (a) Effective Nov. 2, 1978, a supplementary reserve requirement of 2 percent depository institution offices located outside the United States. For details, see was imposed on large time deposits o f $100,000 or more, obligations of affiliates, section 204.2 of Regulation D. and ineligible acceptances. This supplementary requirement was eliminated with the maintenance period beginning July 24, 1980. NOTE. Required reserves must be held in the form of deposits with Federal Reserve Banks or vault cash. After implementation of the Monetary Control Act, nonmembers may maintain reserves on a pass-through basis with certain approved institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A9 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 Dec. 31, 1980 Previous maximum In effect Dec. 31, 1980 Previous maximum Percent Effective Percent Effective Percent Effective Percent date date date 1 Savings 5V4 7/1/79 7/1/73 5Vz 7/1/79 5V4 2 Negotiable order of withdrawal accounts 2 5V4 12/31/80 1/1/74 51/4 12/31/80 5 Time accounts 3 Fixed ceiling rates by maturity 4 4 3 9 1 0 4 - d 8 a 9 y d s a t y o s 1 ° year 5 5 V 3/4 4 8 1 / / 1 1 / / 7 8 9 0 55 h 7 7 / / 1 1 / / 7 7 3 3 6<6) 1/1/80 (6) 53/4 6 5 2 1 t t o o 2 2 V y z e a y r e s a r ' s 7 7/1/73 5 5 3 V / i 4 1 1 / / 2 2 1 1 / / 7 7 0 0 6 63 V /4 z ( 0 ' ) ) 6 5 3/4 1 1 1 7 9 8 0 1 2 I 8 2 6 I 4 s n V y s t t d o o z u e i t e v a 6 8 o d r i s d y y 4 t u e e o o y a a a r l e r r g s s m a r o r e 8 8 o v s t e r i 7 e r r e n 8 m m e e n n t t a a l c u c n o i u t n s ts ( a a ll n m d a K tu e r o it g i h e s ( ') H 1 . 0 R . 10) 6 7 i IV V V V A A z z 12 1 7 6 / 6 1 2 / / / / 1 1 3 1 1 / / / / / 7 7 7 7 7 4 8 3 3 8 ( ( 9 6 I L ) 5 7 7 3 3 ^ / / 4 4 4 ' 1 1 l 2 i / / / 2 2 i/ 1 3 7 / / 7 3 7 0 4 * I 73 V /4 z 12 1 6 6 / 1 2 / / / 1 1 3 1 / / / / 7 7 7 7 8 4 8 3 > } 6 7 7 3 * / 4 plans (3 years or more) 10>u 6/1/78 73/4 7/6/77 6/1/78 73/4 Special variable ceiling rates by maturity 8 8 cm 13 6-month money market time deposits 12 14 2Vz years or more 1. July 1, 1973, for mutual savings banks; July 6, 1973, for savings and loan or less. Thrift institutions may pay a maximum 9 percent when the six-month bill associations. rate is between 83/4 and 9 percent. Also effective March 15, 1979, interest com- 2. For authorized states only, federally insured commercial banks, savings and pounding was prohibited on six-month money market time deposits at all offering loan associations, cooperative banks, and mutual savings banks in Massachusetts institutions. The maximum allowable rates in December for commercial banks ana and New Hampshire were first permitted to offer negotiable order of withdrawal thrift institutions were as follows: Dec. 4,14.804; Dec. 11,15.319; Dec. 18,15.673; (NOW) accounts on Jan. 1, 1974. Authorization to issue NOW accounts was ex- Dec. 26, 14.282. Effective for all six-month money market certificates issued betended to similar institutions throughout New England on Feb. 27, 1976, and in ginning June 5, 1980, the interest rate ceilings will be determined by the discount New York State on Nov. 10, 1978, and in New Jersey on Dec. 28, 1979. Author- rate (auction average) of most recently issued six-month U.S. Treasury bills as ization to issue NOW accounts was extended to similar institutions nationwide follows: effective Dec. 31, 1980. Bill rate Commercial bank ceiling Thrift ceiling 3. For exceptions with respect to certain foreign time deposits see the FEDERAL 8.75 and above bill rate + V4 percent bill rate + VA percent RESERVE BULLETIN for October 1962 (p. 1279), August 1965 (p. 1084), and Feb- 8.50 to 8.75 bill rate + VA percent 9.00 ruary 1968 (p. 167). 7.50 to 8.50 bill rate + VA percent bill rate + Vz percent 4. Effective Nov. 10, 1980, the minimum notice period for public unit accounts 7.25 to 7.50 7.75 bill rate + Vz percent at savings and loan associations was decreased to 14 days and the minimum maturity Below 7.25 7.75 7.75 period for time deposits at savings and loan associations in excess of $100,000 was The prohibition against compounding interest in these certificates continues. decreased to 14 days. Effective Oct. 30, 1980, the minimum maturity or notice 14. Effective Jan. 1,1980, commercial banks, savings and loan associations, and period for time deposits was decreased from 30 days to 14 days for mutual savings mutual savings banks were authorized to offer variable-ceiling nonnegotiable time banks. deposits with no required minimum denomination and with maturities of 2Vz years 5. Effective Oct. 30, 1980, the minimum maturity or notice period for time or more. The maximum rate for commercial banks is 3A percentage point below deposits was decreased from 30 days to 14 days for commercial banks. the yield on 2kz-year U.S. Treasury securities; the ceiling rate for thrift institutions 6. No separate account category. is VA percentage point higher than that for commercial banks. Effective Mar. 1, 7. No minimum denomination. Until July 1, 1979, a minimum of $1,000 was 1980, a temporary ceiling of 11^4 percent was placed on these accounts at comrequired for savings and loan associations, except in areas where mutual savings mercial banks; the temporary ceiling is 12 percent at savings and loan associations banks permitted lower minimum denominations. This restriction was removed for and mutual savings banks. Effective for all variable ceiling nonnegotiable time deposits maturing in less than 1 year, effective Nov. 1, 1973. deposits with maturities of 2Vz years or more issued beginning June 2, 1980, the 8. No minimum denomination. Until July 1, 1979, minimum denomination was ceiling rates of interest will be determined as follows: $1,000 except for deposits representing funds contributed to an Individual Retire- Treasury yield Commercial bank ceiling Thrift ceiling ment Account (IRA) or a Keogh (H.R. 10) plan established pursuant to the Internal 12.00 and above 11.75 12.00 Revenue Code. The $1,000 minimum requirement was removed for such accounts 9.50 to 12.00 Treasury yield- VA percent Treasury yield in December 1975 and November 1976 respectively. Below 9.50 9.25 9.50 9. Between July 1, 1973, and Oct. 31, 1973, there was no ceiling for certificates Interest may be compounded on these time deposits. The ceiling rates of interest maturing in 4 years or more with minimum denominations of $1,000; however, the at which these accounts may be offered vary biweekly. The maximum allowable amount of such certificates that an institution could issue was limited to 5 percent rates in December for commercial banks were as follows: Dec. 11, 11.75; Dec. 26, of its total time and savings deposits. Sales in excess of that amount, as well as 11.75. The maximum allowable rates in December for thrift institutions were as certificates of less than $1,000, were limited to the 6Vz percent ceiling on time follows: Dec. 11, 12.00; Dec. 26, 12.00. deposits maturing in 2Vz years or more. 15. Between July 1, 1979, and Dec. 31, 1979, commercial banks, savings and Effective Nov. 1, 1973, ceilings were reimposed on certificates maturing in 4 loan associations, and mutual savings banks were authorized to offer variable ceiling years or more with minimum denomination of $1,000. There is no limitation on accounts with no required minimum denomination and with maturities of 4 years the amount of these certificates that banks can issue. or more. The maximum rate for commercial banks was 1^4 percentage points below 10. Accounts subject to fixed rate ceilings. See footnote 8 for minimum denom- the yield on 4-year U.S. Treasury securities; the ceiling rate for thrift institutions ination requirements. was VA percentage point higher than that for commercial banks. 11. Effective January 1, 1980, commercial banks are permitted to pay the same NOTE. Before Mar. 31, 1980, the maximum rates that could be paid by federally rate as thrifts on IRA and Keogh accounts and accounts of governmental units insured commercial banks, mutual savings banks, and savings and loan associations when such deposits are placed in the new 2^-year or more variable ceiling certif- were established by the Board of Governors of the Federal Reserve System, the icates or in 26-week money market certificates regardless of the level of the Treasury Board of Directors of the Federal Deposit Insurance Corporation, and the Federal bill rate. Home Loan Bank Board under the provisions of 12 CFR 217, 329, and 526, 12. Must have a maturity of exactly 26 weeks and a minimum denomination of respectively. Title II of the Depository Institutions Deregulation and Monetary $10,000, and must be nonnegotiable. Control Act of 1980 (P.L. 96-221) transferred the authority of the agencies to 13. Commercial banks, savings and loan associations, and mutual savings banks establish maximum rates of interest payable on deposits to the Depository Instiwere authorized to offer money market time deposits effective June 1, 1978. The tutions Deregulation Committee. The maximum rates on time deposits in denomceiling rate for commercial banks on money market time deposits entered into inations of $100,000 or more with maturities of 30-89 days were suspended in June before June 5,1980, is the discount rate (auction average) on most recently issued 1970; such deposits maturing in 90 days or more were suspended in May 1973. For six-month U.S. Treasury bills. Until Mar. 15,1979, the ceiling rate for savings and information regarding previous interest rate ceilings on all types of accounts, see loan associations and mutual savings banks was V4 percentage point higher than earlier issues of the FEDERAL RESERVE BULLETIN, the Federal Home Loan Bank the rate for commercial banks. Beginning March 15,1979, the VVpercentage-point Board Journal, and the Annual Report of the Federal Deposit Insurance Corpointerest differential is removed when the six-month Treasury bill rate is 9 percent ration. or more. The full differential is in effect when the six-month bill rate is 83/4 percent Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Financial Statistics • January 1981 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS Millions of dollars 1980 TTyyppee ooff ttrraannssaaccttiioonn 11997777 11997788 11997799 May June July Aug. Sept. Oct. Nov. U.S. GOVERNMENT SECURITIES Outright transactions (excluding matched salepurchase transactions) Treasury bills 1 Gross purchases 13,738 16,628 15,998 838 322 0 0 200 991 0 2 Gross sales 7,241 13,725 6,855 232 0 2,264 47 237 531 600 3 Exchange 0 0 0 0 274 0 0 0 0 0 4 Redemptions 2,136 2,033 2,900 0 0 950 0 0 700 500 Others within 1 year1 5 Gross purchases 3,017 1,184 3,203 155 121 0 137 0 0 0 6 Gross sales 0 0 0 0 0 0 0 0 0 0 7 Maturity shift 4,499 -5,170 17,339 1,670 412 311 2,423 589 596 2,368 9 8 E R x e c d h e a m n p g t e i ons 2 500 0 -11 2 , , 3 6 0 0 8 0 -5,276 0 -1,479 0 -788 0 -3,134 0 -1,459 0 -420 0 -879 0 1 to 5 years 10 Gross purchases 2,833 4,188 2,148 405 465 0 541 0 0 0 11 Gross sales 0 0 0 0 0 0 0 0 0 0 1 1 3 2 E M x a c t h u a ri n t g y e s hift 6 649 178 -12 7 , , 6 5 9 0 3 8 -1 3 , , 3 0 0 0 2 0 - 1 4 ,4 1 7 2 9 -3 7 1 8 1 8 - 1 7 ,7 2 5 0 0 - 1 5 ,4 8 5 9 9 -5 4 9 2 6 0 -2,3 5 6 0 8 0 5 to 10 years 14 Gross purchases 758 1,526 523 133 164 0 236 0 0 0 15 Gross sales 0 0 0 0 0 0 0 0 0 0 1 1 7 6 E M x a c t h u a ri n t g y e s hift 584 2,803 -4 2 , , 6 1 4 8 6 1 1 - ,3 2 0 5 0 0 0 0 0 -1 1 , , 7 0 0 0 3 0 0 0 0 0 220 0 Over 10 years 18 Gross purchases 553 1,063 454 216 129 0 320 0 0 0 19 Gross sales 0 0 0 0 0 0 0 0 0 0 2 2 1 0 E M x a c t h u a ri n t g y e s hift 1,565 2,545 1,619 0 -3 9 4 7 2 6 0 0 0 0 384 0 0 0 0 0 159 0 All maturities1 22 Gross purchases 20,898 24,591 22,325 1,747 1,200 0 1,234 200 991 0 23 Gross sales 7,241 13,725 6,855 232 0 2,264 47 237 531 600 24 Redemptions 4,636 2,033 5,500 0 0 950 0 0 700 500 Matched transactions 25 Gross sales 425,214 511,126 627,350 49,934 50,590 48,370 72,315 55,766 55,787 40,944 26 Gross purchases 423,841 510,854 624,192 50,965 52,076 46,023 71,645 56,207 56,462 41,129 Repurchase agreements 27 Gross purchases 178,683 151,618 107,051 7,717 12,810 10,719 2,783 3,203 20,145 24,169 28 Gross sales 180,535 152,436 106,968 4,811 15,258 10,110 3,016 2,743 19,808 23,924 29 Net change in U.S. government securities 5,798 7,743 6,896 5,452 238 -4,952 284 863 771 -670 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 1,433 301 853 0 0 0 0 0 0 0 31 Gross sales 0 173 399 0 0 0 0 0 0 0 32 Redemptions 223 235 134 0 2 2 * 91 21 0 Repurchase agreements 33 Gross purchases 13,811 40,567 37,321 1,611 3,035 1,737 1,082 977 5,922 4,825 34 Gross sales 13,638 40,885 36,960 1,258 3,351 1,242 1,132 1,188 5,734 4,880 35 Net change in federal agency obligations 1,383 -426 681 353 -318 492 -50 -302 167 -55 BANKERS ACCEPTANCES 36 Outright transactions, net -196 0 0 0 0 0 0 0 0 0 37 Repurchase agreements, net 159 -366 116 366 7 -64 -33 222 67 -43 38 Net change in bankers acceptances -37 -366 116 366 7 -64 -33 222 67 -43 39 Total net change in System Open Market Account 7,143 6,951 7,693 6,171 -73 -4,523 202 784 1,005 -768 1. Both gross purchases and redemptions include special certificates created NOTE. Sales, redemptions, and negative figures reduce holdings of the System when the Treasury borrows directly from the Federal Reserve, as follows (millions Open Market Account; all other figures increase such holdings. Details may not of dollars): September 1977, 2,500; March 1979, 2,600. add to totals because of rounding. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Reserve Banks All 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements Millions of dollars Wednesday End of month Account 1980 1980 Dec. 3 Dec. 10 Dec. 17 Dec. 24 Dec. 31 Oct. Nov. Dec. Consolidated condition statement ASSETS 1 Gold certificate account 11,162 11,161 11,161 11,161 11,161 11,163 11,162 11,161 2 Special drawing rights certificate account 3,368 3,368 3,368 3,368 2,518 3,268 3,368 2,518 3 400 394 401 405 397 429 416 397 Loans 4 To depository institutions 1,355 2,101 1,616 1,388 1,809 1,567 2,284 1,809 5 Other 0 0 0 0 0 0 0 0 Acceptances 6 Held under repurchase agreements 0 0 327 0 776 566 523 776 Federal agency obligations 7 Bought outright 8,752 8,739 8,739 8,739 8,739 8,761 8,761 88,,773399 8 Held under repurchase agreements 0 0 389 0 525 459 404 525 U.S. government securities BBoouugghhtt oouuttrriigghhtt 9 BBiillllss 39,166 39,481 44,458 42,697 43,688 44,341 43,425 43,688 10 Notes 58,618 58,618 58,718 58,718 58,718 58,703 58,618 58,718 11 Bonds 16,893 16,893 16,893 16,893 16,893 16,808 16,893 16,893 12 Total1 114,677 114,992 120,069 118,308 119,299 119,852 118,936 119,299 13 Held under repurchase agreements 0 0 2,054 0 2,029 1,630 1,876 2,029 14 Total U.S. government securities 114,677 114,992 122,123 118,308 121,328 121,482 120,812 121,328 15 Total loans and securities 124,784 125,832 133,194 128,435 133,177 132,835 132,784 133,177 16 Cash items in process of collection 10,849 11,380 14,466 17,225 12,554 8,691 12,831 12,554 17 Bank premises 456 457 458 454 457 453 457 457 Other assets 18 Denominated in foreign currencies2 3,667 4,416 5,086 5,137 5,104 2,750 3,631 5,104 19 Allother 2,978 2,667 3,065 3,376 3,177 2,957 2,451 3,177 20 Total assets 157,664 159,675 171,199 169,561 168,545 162,546 167,100 168,545 LIABILITIES 21 Federal Reserve notes 122,329 123,062 123,338 124,201 124,241 118,248 121,191 124,241 Deposits 22 Depository institutions 20,101 23,297 31,604 29,735 27,456 30,518 31,528 27,456 23 U.S. Treasury—General account 3,116 1,516 2,653 2,540 3,062 1,864 2,435 3,062 24 Foreign—Official accounts 283 272 287 413 411 368 368 411 25 Other 391 466 403 379 617 338 478 617 26 Total deposits 23,891 25,551 34,947 33,067 31,546 33,088 34,809 31,546 27 Deferred availability cash items 6,983 6,446 7,905 7,552 8,087 6,497 6,039 8,087 28 Other liabilities and accrued dividends3 1,888 2,030 2,357 2,112 2,265 2,042 2,317 2,265 29 Total liabilities 155,091 157,089 168,547 166,932 166,139 159,875 164,356 166,139 CAPITAL ACCOUNTS 30 Capital paid in 1,199 1,199 1,202 1,202 1,203 1,199 1,199 1,203 31 Surplus 1,145 1,145 1,145 1,145 1,203 1,145 1,145 1,203 32 Other capital accounts 229 242 305 282 0 327 400 0 33 Total liabilities and capital accounts 157,664 159,675 171,199 169,561 168,545 162,546 167,100 168,545 34 MEMO: Marketable U.S. government securities held in custody for foreign and international account 90,562 90,891 91,227 92,963 91,795 86,150 90,529 91,795 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to Bank) ... 139,468 140,268 140,697 140,393 140,184 137,871 138,699 140,184 36 Less-held by bank4 17,139 17,206 17,359 16,192 15,943 19,623 17,508 15,943 37 Federal Reserve notes, net 122,329 123,062 123,338 124,201 124,241 118,248 121,191 124,241 Collateral for Federal Reserve notes 38 Gold certificate account 11,162 11,161 11,161 11,161 11,161 11,163 11,162 11,161 39 Special drawing rights certificate account 3,368 3,368 3,368 3,368 2,518 3,268 3,368 2,518 40 Other eligible assets 0 0 0 0 0 0 0 0 41 U.S. government and agency securities 107,799 108,533 108,809 109,672 110,562 103,817 106,661 110,562 42 Total collateral 122,329 123,062 123,338 124,201 124,241 118,248 121,191 124,241 1. Includes securities loaned—fully guaranteed by U.S. government securities 3. Includes exchange-translation account reflecting the monthly revaluation at pledged with Federal Reserve Banks—and excludes (if any) securities sold and market exchange rates of foreign-exchange commitments. scheduled to be bought back under matched sale-purchase transactions. 4. Beginning September 1980, Federal Reserve notes held by the Reserve Bank 2. Includes U.S. government securities held under repurchase agreement against are exempt from tne collateral requirement. receipt of foreign currencies and foreign currencies warehoused for the U.S. Treasury. Assets shown in this line are revalued monthly at market exchange rates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Financial Statistics • January 1981 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holdings Millions of dollars Wednesday End of month TTTyyypppeee aaannnddd mmmaaatttuuurrriiitttyyy gggrrrooouuupppiiinnngggsss 1980 1980 Dec. 3 Dec. 10 Dec. 17 Dec. 24 Dec. 31 Oct. 31 Nov. 30 Dec. 31 1 Loans—Total 1,355 2,101 1,616 1,388 1,809 1,567 2,283 1,809 2 Within 15 days 1,313 2,041 1,573 1,364 1,757 1,550 2,272 1,757 3 16 days to 90 days 42 60 43 24 52 17 11 52 4 91 days to 1 year 0 0 0 0 0 0 0 0 5 Acceptances—Total 0 0 327 0 776 566 523 776 6 Within 15 days 0 0 327 0 776 566 523 776 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—Total 114,677 114,992 122,123 118,308 121,328 121,482 120,812 121,328 10 Within 15 days1 5,276 2,185 5,011 4,303 4,780 2,993 5,494 4,780 11 16 days to 90 days 17,230 19,116 22,888 19,542 23,499 24,059 23,086 23,499 12 91 days to 1 year 29,157 30,677 31,210 31,450 30,187 30,293 28,934 30,187 13 Over 1 year to 5 years 34,657 34,657 34,657 34,657 34,505 36,160 34,942 34,505 14 Over 5 years to 10 years 13,355 13,355 13,355 13,354 13,355 13,135 13,354 13,355 15 Over 10 years 15,002 15,002 15,002 15,002 15,002 14,842 15,002 15,002 16 Federal agency obligations—Total 8,752 8,739 9,128 8,739 9,264 9,220 9,165 9,264 17 Within 15 days1 63 0 389 180 705 63 556 705 18 16 days to 90 days 541 595 595 415 426 1,003 467 426 19 91 days to 1 year 1,490 1,530 1,530 1,530 1,519 1,558 1,495 1,519 20 Over 1 year to 5 years 4,881 4,837 4,837 4,837 4,837 4,771 4,870 4,837 21 Over 5 years to 10 years 1,092 1,092 1,092 1,092 1,092 1,140 1,092 1,092 22 Over 10 years 685 685 685 685 685 685 685 685 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. 1980 BBaannkk ggrroouupp,, oorr ttyyppee ooff ccuussttoommeerr 11997777 11997788 11997799 July Aug. Sept. Oct. Nov. Debits to demand deposits1 (seasonally adjusted) 1111 AAAAllllllll ccccoooommmmmmmmeeeerrrrcccciiiiaaaallll bbbbaaaannnnkkkkssss 34,322.8 40,297.8 49,750.7 63,088.5 65,385.9 65,111.5 65,645.5 67.780.0 2222 MMMMaaaajjjjoooorrrr NNNNeeeewwww YYYYoooorrrrkkkk CCCCiiiittttyyyy bbbbaaaannnnkkkkssss 13,860.6 15,008.7 18,512.2 25,538.8 26,705.7 26,103.5 26,034.2 26.822.1 3333 OOOOtttthhhheeeerrrr bbbbaaaannnnkkkkssss 20,462.2 25,289.1 31,238.5 37,549.8 38,680.2 39,008.0 39,611.4 40,957.9 Debits to savings deposits2 (not seasonally adjusted) 4444 AAAATTTTSSSS////NNNNOOOOWWWW3333 5.5 17.1 83.3 161.6 145.2 175.0 193.0 172.8 5555 BBBBuuuussssiiiinnnneeeessssssss4444 21.7 56.7 77.4 85.1 84.9 91.4 98.6 94.2 6666 OOOOtttthhhheeeerrrrssss5555 152.3 359.7 557.6 633.7 631.1 719.2 775.5 570.2 7777 AAAAllllllll aaaaccccccccoooouuuunnnnttttssss 179.5 432.9 718.2 880.4 861.2 985.6 1,067.1 837.2 Demand deposit turnover1 (seasonally adjusted) 8 All commercial banks 129.2 139.4 163.4 203.7 205.5 202.1 201.4 209.7 9 Major New York City banks 503.0 541.9 646.2 844.5 859.6 818.5 779.3' 842.2 10 Other banks 85.9 96.8 113.2 134.4 134.7 134.4 135.0 140.5 Savings deposit turnover2 (not seasonally adjusted) 11 ATS/NOW3 6.5 7.0 7.8 9.7 8.2 9.4 10.0 8.4 12 Business4 4.1 5.1 7.2 8.5 7.9 8.5 8.9 8.6 13 Others5 1.5 1.7 2.9 3.6 3.5 4.0 4.3 3.2 14 All accounts 1.7 1.9 3.3 4.3 4.1 4.7 5.0 4.0 1. Represents accounts of individuals, partnerships, and corporations, and of NOTE: Historical data for the period 1970 through June 1977 have been estimated; states and political subdivisions. these estimates are based in part on the debits series for 233 SMS As, which were 2. Excludes special club accounts, such as Christmas and vacation clubs. available through June 1977. Back data are available from Publications Services, 3. Accounts authorized for negotiable orders of withdrawal (NOW) and accounts Division of Administrative Services, Board of Governors of the Federal Reserve authorized for automatic transfer to demand deposits (ATS). ATS data availability System, Washington, D.C. 20551. Debits and turnover data for savings deposits starts with December 1978. are not available before July 1977. 4. Represents corporations and other profit-seeking organizations (excluding commercial banks but including savings and loan associations, mutual savings banks, credit unions, the Export-Import Bank, and federally sponsored lending agencies). 5. Savings accounts other than NOW; business; and, from December 1978, ATS. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Aggregates A13 1.21 MONEY STOCK MEASURES AND COMPONENTS Billions of dollars, averages of daily figures 1980 t 1976 1977 1978 1979 uec. June July Aug. Sept. Oct. Nov. Seasonally adjusted MEASURES1 1 M-1A 305.0 328.4 351.6 369.7 371.3 373.7 379.7 383.7 386.7 388.9 2 M-1B 307.7 332.5 359.9 386.4 390.9 394.5 401.6 406.9 410.8 414.0 3 M-2 1,166.7 1,294.1 1,401.5 1,525.5 1,585.7 1,609.7 1,629.2 1,640.9 1,652.9' 1,667.2 4 M-3 1,299.7 1,460.3 1,623.6 1,775.5 1,844.5 1,865.2 1,886.3 1,900.7' 1,917.1' 1,940.8 5 L2 1,523.5 1,715.5 1,927.7 2,141.1 2,229.1 2,243.4 2,268.2 2,295.1 2,310.1' n.a. COMPONENTS 6 Currency 80.7 88.7 97.6 106.3 111.0 112.0 113.4 113.9 115.1 115.9 7 Demand deposits 224.4 239.7 253.9 263.4 260.3 261.6 266.3 269.8 271.6 273.1 8 Savings deposits 447.7 486.5 476.1 416.7 381.4 393.8 403.9 407.9 410.1' 405.1 9 Small-denomination time deposits3 396.6 454.9 533.8 656.5 719.6 717.2 717.1 720.9 727.9 743.9 10 Large-denomination time deposits4 118.0 145.2 194.7 219.4 230.7 226.2 225.3 229.0 231.9' 241.7 Not seasonally adjusted MEASURES1 11 M-1A 313.5 337.2 360.9 379.2 370.1 375.7 377.5 382.9 388.4 391.7 12 M-1B 316.1 341.3 369.3 396.0 389.7 396.5 399.4 406.1 412.5' 416.8 13 M-2 1,169.1 1,295.9 1,403.7 1,527.3 1,587.5 1,615.1 1,626.2 1,638.8' 1,653.3' 1,662.2 14 M-3 1,303.8 1,464.5 1,629.2 1,780.8 1,843.9 1,868.3 1,883.3 1,898.4' 1,918.3' 1,936.2 15 L2 1,527.1 1,718.5 1,931.1 2,143.6 2,227.3 2,244.6' 2,264.1 2,284.7 2,309.0 n.a. COMPONENTS 16 Currency 82.1 90.3 99.4 108.2 111.1 112.7 113.7 113.7 114.9 116.7 17 Demand deposits 231.3 247.0 261.5 271.0 259.0 263.0 263.9 269.2 273.5 275.0 18 Other checkable deposits5 2.7 4.1 8.3 16.7 19.6 20.8 21.9 23.2 24.1 25.1 19 Overnight RPs and Eurodollars6 13.6 18.6 23.9 25.3 22.5 26.6 28.9 30.1 29.9' 30.3 >0 Money market mutual funds 3.4 3.8 10.3 43.6 74.2 80.6 80.7 78.2 77.4 77.0 11 Savings deposits 444.9 483.2 472.9 413.8 383.6 396.7 404.6 408.2 408.8' 403.1 !2 Small-denomination time deposits3 .... 393.5 451.3 529.8 651.5 720.4 717.7 715.6 719.4 727.9 738.1 3 Large-denomination time deposits4 .... 119.7 147.7 198.2 223.0 228.4 223.8 225.4 228.7 232.7' 242.0 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-1A: Averages of daily figures for (1) demand deposits at all commercial banks other than banks, bankers acceptances, commercial paper. Treasury bills and other >ther than those due to domestic banks, the U.S. government, and foreign banks liquid Treasury securities, and U.S. savings bonds. ,nd official institutions less cash items in the process of collection and Federal 3. Small-denomination time deposits are those issued in amounts of less than Reserve float; and (2) currency outside the Treasury, Federal Reserve Banks, and $100,000. he vaults of commercial banks. 4. Large-denomination time deposits are those issued in amounts of $100,000 M-1B: M-1A plus negotiable order of withdrawal and automatic transfer service or more and are net of the holdings of domestic banks, thrift institutions, the U.S. accounts at banks and thrift institutions, credit union share draft accounts, and government, money market mutual funds, and foreign banks and official institudemand deposits at mutual savings banks. tions. M-2: M-lB plus savings and small-denomination time deposits at all depository 5. Includes ATS and NOW balances at all institutions, credit union share draft institutions, overnight repurchase agreements at commercial banks, overnight Eu- balances, and demand deposits at mutual savings banks. rodollars held by U.S. residents other than banks at Caribbean branches of member 6. Overnight (and continuing contract) RPs are those issued by commercial banks, and money market mutual fund shares. banks to the nonbank public, and overnight Eurodollars are those issued by Ca- M-3: M-2 plus large-denomination time deposits at all depository institutions ribbean branches of member banks to U.S. nonbank customers. and term RPs at commercial banks and savings and loan associations. NOTE. Latest monthly and weekly figures are available from the Board's H.6(508) release. Back data are available from the Banking Section, Division of Research and Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Financial Statistics • January 1981 1.22 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS1 AND MEMBER BANK DEPOSITS Billions of dollars, averages of daily figures 1980 Item 1977 1978 1979 Dec. Dec. Dec. May June July Aug. Sept. Oct. Nov.2 Seasonally adjusted 1 Total reserves3 36.00 41.16 43.57 44.45 43.96 42.78 40.75 41.52' 41.73' 41.23 2 Nonborrowed reserves 35.43 40.29 42.10 43.43 43.58 42.39 40.09 40.21' 40.42' 39.17 3 Required reserves 35.81 40.93 43.13 44.27 43.76 42.50 40.45 41.26' 41.52 40.73 4 Monetary base4 127.6 142.2 153.8 158.5 158.9 158.8 158.2 159.5 160.9 160.6 5 Member bank deposits subject to reserve requirements5 567.6 616.1 644.4 656.8 658.0 658.5 667.8 678.2 684.7' 694.5 6 Time and savings 385.6 428.7' 451.1 467.7 467.9 467.0 474.2 482.0 486.7' 494.2 Demand 7 Private 178.5 185.1 191.5 187.3 188.4 189.1 191.5 194.5 195.6' 198.2 8 U.S. government 3.5 2.2 1.8 1.8 1.7 2.5 2.1 1.8 2.4 2.2 Not seasonally adjusted 9 Monetary base4 129.8 144.6 156.3 157.8 158.6 159.6 158.0 158.9' 160.6 161.4 10 Member bank deposits subject to reserve requirements5 575.3 624.0 652.6 651.5 656.9 658.2 662.5 675.6 684.2' 694.8 11 Time and savings 386.4 429.6 452.0 467.7 467.4 466.0 471.8 479.6 485.8' 493.2 Demand 12 Private 185.1 191.9 198.6 182.1 187.2 190.0 189.0 193.9 196.4' 199.7 13 U.S. government 3.8 2.5 2.0 1.7 2.3 2.2 1.7 2.1 2.1 1.9 1. Reserves of depository institutions series reflect actual reserve requirement 2. Reserve measures for November reflect increases in required reserves assopercentages with no adjustment to eliminate the effect of changes in Regulations ciated with the reduction of weekend avoidance activities of a few large banks. The D and M. Before Nov. 13, 1980, the date of implementation of the Monetary reduction in these activities leads to essentially a one-time increase in the average Control Act, only the reserves of commercial banks that were members of the level of required reserves that need to be held for a given level of deposits entering Federal Reserve System were included in the series. Since that date the series the money supply. In November, this increase in required reserves is estimated at include the reserves of all depository institutions. In conjunction with the imple- $550 to $600 million. mentation of the act, required reserves of member banks were reduced about $4.3 3. Reserve balances with Federal Reserve Banks plus vault cash at institutions billion and required reserves of other depository institutions were increased about with required reserve balances plus vault cash equal to required reserves at other $1.4 billion. Effective Oct. 11, 1979, an 8 percentage point marginal reserve re- institutions. quirement was imposed on "Managed Liabilities." This action raised required 4. Includes reserve balances at Federal Reserve Banks in the current week plus reserves about $320 million. Effective Mar. 12, 1980, the 8 percentage point mar- vault cash held two weeks earlier used to satisfy reserve requirements at all ginal reserve requirement was raised to 10 percentage points. In addition the base depository institutions plus currency outside the U.S. Treasury, Federal Reserve upon which the marginal reserve requirement was calculated was reduced. This Banks, the vaults of depository institutions, and surplus vault cash at depository action increased required reserves about $1.7 million in the week ending Apr. 2, institutions. 1980. Effective May 29, 1980 the marginal reserve requirement was reduced from 5. Includes total time and savings deposits and net demand deposits as defined 10 to 5 percentage points and the base upon which the marginal reserve requirement by Regulation D. Private demand deposits include all demand deposits except those was calculated was raised. This action reduced required reserves about $980 million due to the U.S. government, less cash items in process of collection and demand in the week ending June 18, 1980. Effective July 24, 1980, the 5 percent marginal balances due from domestic commercial banks. reserve requirement on managed liabilities and the 2 percent supplementary reserve requirement against large time deposits were removed. These actions reduced NOTE. Latest monthly and weekly figures are available from the Board's H.3(502) required reserves about $3.2 billion. statistical release. Back data and estimates of the impact on required reserves and changes in reserve requirements are available from the Banking Section, Division of Research and Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Aggregates A15 1.23 LOANS AND SECURITIES All Commercial Banks' Billions of dollars; averages of Wednesday figures 1980 1980 CCCaaattteeegggooorrryyy 1977 DD 19 ee 7 cc 8 .. uu 1 ee 9 cc 7 .. 9 1977 1978 1979 DDeecc.. DDeecc.. DDeecc.. OOcctt.. NNoovv.. OOcctt.. Nov. Seasonally adjusted Not seasonally adjusted 1 Total loans and securities2 891.1 1,014.33 1,132.54 1,204.5 1,221.2 899.1 1,023.83 1,143.04 1,206.3 1,223.3 2 U.S. Treasury securities 99.5 93.4 93.8 107.9 109.3 100.7 94.6 95.0 105.5 108.2 3 Other securities 159.6 173.13 191.5 210.3 212.5 160.2 173.93 192.3 210.6 212.7 4 Total loans and leases2 632.1 747.83 847.24 886.2 899.4 638.3 755.43 855.74 890.2 902.4 5 Commercial and industrial loans 211.25 246.56 290.54 312.0 318.4 212.6s 248.26 292.44 311.8 318.4 6 Real estate loans 175.2s 210.5 242.44 256.1 258.3 175.5s 210.9 242.94 257.3 259.6 7 Loans to individuals 138.2 164.9 182.7 171.4 171.6 139.0 165.9 183.8 173.3 173.0 8 Security loans 20.6 19.4 18.3 15.9 16.9 22.0 20.7 19.6 16.1 17.2 9 Loans to nonbank financial institutions . 25.85 27.17 30.34 29.5 30.2 26.3s 27.67 30.84 29.6 30.3 10 Agricultural loans 25.8 28.2 31.0 33.5 33.9 25.7 28.1 30.8 33.8 34.0 11 Lease financing receivables 5.8 7.4 9.5 10.9 11.0 5.8 7.4 9.5 10.9 11.0 12 All other loans 29.5 43.63 42.6 56.9 59.1 31.5 46.63 45.9 57.3 58.9 MEMO: 13 Total loans and securities plus loans sold2'9 895.9 1,018.13 1,135.34'8 1,207.2 1,223.9 903.9 1,027.63 1,145.74'8 1,209.0 1,226.0 14 Total loans plus loans sold2-9 636.9 751.63 850.004-8 889.0 902.1 643.0 759.23 858.44-8 893.0 905.1 15 Total loans sold to affiliates9 4.8 3.8 2.8« 2.8 2.6 4.8 3.8 2.88 2.8 2.6 16 Commercial and industrial loans plus loans sold9 213.95 248.56-10 292.34-8 313.8 320.1 215.3s 250.16.io 294.24-8 313.6 320.1 17 Commercial and industrial loans sold9 .. 2.7 1.910 1.8« 1.8 1.7 2.7 1.910 1.88 1.8 1.7 18 Acceptances held 7.5 6.8 8.5 9.2 8.7 8.6 7.5 9.4 9.0 9.1 19 Other commercial and industrial loans .. 203.75 239.7 282.0 302.9 309.7 203.9s 240.9 283.1 302.8 309.3 20 To U.S. addressees11 193.8s 226.6 263.2 281.4 287.6 193.7s 226.5 263.2 281.6 287.1 21 To non-U.S. addressees 9.9s 13.1 18.8 21.5 22.1 10.3s 14.4 19.8 21.2 22.2 22 Loans to foreign banks 13.5 21.2 18.7 23.9 24.6 14.6 23.0 20.1 23.4 23.9 23 Loans to commercial banks in the United States 54.1 57.3 77.8 97.7 n.a. 56.9 60.3 81.9 94.9 n.a. 1. Includes domestic chartered banks; U.S. branches, agencies, and New York 7. As of Dec. 1, 1978, nonbank financial loans were reduced $0.1 billion as the investment company subsidiaries of foreign banks; and Edge Act corporations. result of reclassification. 2. Excludes loans to commercial banks in the United States. 8. As of Dec. 1, 1979, loans sold to affiliates were reduced $800 million and 3. As of Dec. 31, 1978, total loans and securities were reduced by $0.1 billion. commercial and industrial loans sold were reduced $700 million due to corrections "Other securities" were increased by $1.5 billion and total loans were reduced by of two banks in New York City. $1.6 billion largely as the result of reclassifications of certain tax-exempt obligations. 9. Loans sold are those sold outright to a bank's own foreign branches, non- 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 securities 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 amount reduced by $0.3 billion. 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 were 11. United States includes the 50 states and the District of Columbia. reduced $0.2 billion and nonbank financial loans $0.1 billion; real estate loans were increased $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 billion banks, and averages of current and previous month-end data for foreign-related as a result of reclassifications. institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • January 1981 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS' Monthly averages, billions of dollars December outstanding Outstanding in 1980 SSoouurrccee 1977 1978 1979 Mar. Apr. May June July' Aug.' Sept.' Oct. Nov. Total nondeposit funds 1 Seasonally adjusted2 61.8 85.4 118.8 133.3' 124.2 119.9' 114.1' 112.2 107.3 112.0 115.4 n.a. 2 Not seasonally adjusted 60.4 84.4 117.4 130.2' 121.1 123.0' 114.2' 116.4 110.3 112.5 116.4 n.a. Federal funds, RPs, and other borrowings from nonbanks 3 Seasonally adjusted3 58.4 74.8 88.0 97.9 94.7 94.2 96.7' 98.5 94.0 100.2 103.2 n.a. 4 Not seasonally adjusted 57.0 73.8 86.5 94.8 91.7 97.4 96.8' 102.7 97.1 100.8 104.2 n.a. 5 Net Eurodollar borrowings, not seasonally adjusted ... -1.3 6.8 28.1 32.8' 26.9' 23.0' 14.6' 10.9 10.3 8.9 9.5 6.7 6 Loans sold to affiliates, not seasonally adjusted4-5 4.8 3.8 2.8 2.6 2.6 2.6 2.8 2.8 2.9 2.9 2.8 2.6 MEMO 7 Domestic chartered banks net positions with own foreign branches, not seasonally adjusted6 -12.5 -10.2 6.5 9.3 5.9' 2.6' -5.4' -8.4 -10.3 -14.5 -12.9 -14.3 8 Gross due from balances 21.1 24.9 22.8 23.6 24.5' 27.4' 30.1' 32.7 35.8 38.2 38.4 36.9 9 Gross due to balances 8.6 14.7 29.3 33.0' 30.4 30.0 24.7 24.3 25.5 23.7 25.5 22.6 10 Foreign-related institutions net positions with directly related institutions, not seasonally adjusted7 11.1 17.0 21.6 23.5' 20.9 20.5 19.9 19.3 20.6 23.3 22.4 21.0 11 Gross due from balances 10.3 14.2 28.9 31.9 28.4' 28.4 28.5 30.8 30.9 30.3 29.3 31.8 12 Gross due to balances 21.4 31.2 50.5 55.6 49.4 48.8 48.4 50.1 51.6 53.6 51.6 52.8 13 Security RP borrowings, seasonally adjusted8 36.3 44.8 49.2 45.0 41.5 40.1 45.0 50.4 52.7 51.4 54.8 53.7 14 Not seasonally adjusted 35.1 43.6 47.9 44.1 40.6 42.1 44.7 50.2 54.2 53.8 54.6 55.7 15 U.S. Treasury demand balances, seasonally adjusted9 . 4.4 8.7 8.1 7.5 8.6 9.4 8.6 10.7 11.6 12.5 13.9 7.1 16 Not seasonally adjusted 5.1 10.3 9.6 7.8 9.0 8.4 10.0 9.2 9.1 14.1 12.7 6.9 17 Time deposits, $100,000 or more, seasonally adjusted10 162.0 213.0 227.7 237.1 240.3 242.0 237.0 233.1 233.4 237.9 240.4 248.2 18 Not seasonally adjusted 165.4 217.9 233.0 239.2 238.4 240.1 234.9 229.2 231.1 235.8 239.9 249.7 1. Commercial banks are those in the 50 states and the District of Columbia with 4. Loans initially booked by the bank and later sold to affiliates that are still national or state charters plus U.S. branches, agencies, and New York investment held by affiliates. Averages of Wednesday data. company subsidiaries of foreign banks and Edge Act corporations. 5. As of Dec. 1, 1979, loans sold to affiliates were reduced $800 million due to 2. Includes seasonally adjusted federal funds, RPs, and other borrowings from corrections of two New York City banks. nonbanks and not seasonally adjusted net Eurodollars and loans to affiliates. In- 6. Includes averages of daily figures for member banks and quarterly call report cludes averages of Wednesday data for domestic chartered banks and averages of figures for nonmember banks. current and previous month-end data for foreign-related institutions. 7. Includes averages of current and previous month-end data until August 1979; 3. Other borrowings are borrowings on any instrument, such as a promissory beginning September 1979 averages of daily data. note or due bill, given for the purpose of borrowing money for the banking business. 8. Based on daily average data reported by 122 large banks beginning February This includes borrowings from Federal Reserve Banks and from foreign banks, 1980 and 46 banks before February 1980. term federal funds, overdrawn due from bank balances, loan RPs, and participa- 9. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at tions in pooled loans. Includes averages of daily figures for member banks and commercial banks. Averages of daily data. averages of current and previous month-end data for foreign-related institutions. 10. Averages of Wednesday figures. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A17 1.25 ASSETS AND LIABILITIES OF COMMERCIAL BANKING INSTITUTIONS Last-Wednesday-of-Month Series Billions of dollars except for number of banks 1980 Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. DOMESTICALLY CHARTERED COMMERCIAL BANKS1 1 Loans and investments, excluding interbank 1,085.6' 1,087.2' 1,089.5' 1,083.1' 1,086.6' 1,091.5' 1,104.7' 1,115.1' 1,132.3' 1,148.0' 1,174.5 2 Loans, excluding interbank 799.0' 799.0' 798.8' 789.7' 790.4' 790.6' 799.1' 806.9' 819.5' 830.5' 849.3 3 Commercial and industrial 256.2 258.3 259.2 256.0 256.8 256.4 258.7 262.9 268.2 274.8 280.7 4 Other 542.9 540.7 539.6 533.7 533.6 534.1 540.3 543.9 551.3 555.7 568.6 5 U.S. Treasury securities 93.6 94.2 93.5 93.9 95.2 97.6 100.3 102.1 103.3 106.0 110.0 6 Other securities 192.9 193.9 197.2 199.5 201.0 203.3 205.3 206.1 209.4 211.5 215.1 7 Cash assets, total 149.9 153.8 168.2 172.4 150.4 154.1 148.7 156.6 156.0 175.7 194.4 8 Currency and coin 17.1 16.8 16.8 17.8 17.4 17.7 18.4 18.0 18.5 17.1 20.2 9 Reserves with Federal Reserve Banks 30.7 34.2 33.2 37.9 29.5 32.1 28.9 31.2 31.6 30.3 28.2 10 Balances with depository institutions 43.4 43.1 49.7 47.9 45.4 44.7 45.6 46.6 47.0 56.2 63.0 11 Cash items in process of collection .. 58.7 59.8 68.6 68.9 58.0 59.6 55.8 60.9 58.8 72.2 83.0 12 Other assets2 123.0' 121.7' 135.7' 140.1' 144.0' 143.8' 150.4' 154.6' 154.9' 151.5' 166.8 13 Total assets/total liabilities and capital .. 1,358.4 1,362.7 1,393.5 1,395.7 1,381.0 1,389.4 1,403.8 1,426.3 1,443.2 1,475.2 1,535.6 14 Deposits 1,028.9 1,032.1 1,060.0 1,057.3 1,044.7 1,050.1 1,059.5 1,074.9 1,091.1 1,124.3 1,185.4 15 Demand 358.7 354.5 377.4 370.2 358.0 363.6 363.4 370.0 376.3 393.4 432.7 16 Savings 199.9 196.5 189.3 192.3 197.8 205.7 208.7 209.4 211.4 210.0 201.8 17 Time 470.3 481.1 493.4 494.8 488.9 480.8 487.4 495.5 503.5 520.9 550.9 18 Borrowings 145.1 142.1 147.0 154.1 152.5 158.6 160.1 165.3 163.4 159.0 156.8 19 Other liabilities 81.6 84.2 81.2 78.5 76.6 74.8 76.2 76.4 75.6 79.0 80.0 20 Residual (assets less liabilities) 102.9 104.2 105.2 105.7 107.1 106.0 108.0 - 109.6 113.1 112.9 113.5 MEMO: 21 U.S. Treasury note balances included in borrowing 8.1 9.4 14.3 5.1 13.1 7.6 8.7 15.2 11.5 4.4 9.5 22 Number of banks 14,609 14,626 14,629 14,639 14,646 14,658 14,666 14,678 14,760 14,692 14,693 ALL COMMERCIAL BANKING INSTITUTIONS3 23 Loans and investments, excluding interbank 1,152.5' 1,156.6' 1,158.8' 1,151.2' 1,157.1' 1,192.4' 24 Loans, excluding interbank 862.7' 865.0' 864.7' 854.4' 857.4' 877.0' 25 Commercial and industrial 298.5 301.7 302.0 298.1 297.8 307.1 26 Other 564.2 563.4 562.7 556.2 559.6 573.1 27 U.S. Treasury securities 95.5 96.2 95.5 95.9 97.2 104.5 28 Other securities 194.4 195.4 198.6 201.0 202.4 207.7 29 Cash assets, total 168.8 174.0 187.3 190.7 172.0 179.8 30 Currency and coin 17.1 16.8 16.8 17.8 17.4 18.0 31 Reserves with Federal Reserve Banks 31.3 35.0 33.9 38.7 30.3 31.7 32 Balances with depository institutions 60.5 61.1 66.6 63.8 64.6 n. a. n. a. 67.6 n. a. n. a. n. a. 33 Cash items in process of collection .. 60.0 61.2 69.9 70.4 59.7 62.5 34 Other assets2 165.1' 166.8' 181.1' 186.1' 190.3' 204.4' 35 Total assets/total liabilities and capital .. 1,486.5 1,497.5 1,527.2 1,528.0 1,519.4 1,576.6 36 Deposits 1,070.0 1,073.5 1,101.1 1,097.1 1,088.7 1,122.2 37 Demand 376.8 373.6 396.6 387.7 379.1 391.2 38 Savings 200.3 196.7 189.5 192.6 198.2 209.8 39 Time 492.9 503.2 515.0 516.9 511.4 521.2 40 Borrowings 182.9 186.5 190.8 196.3 197.9 212.6 41 Other liabilities 128.4 130.9 127.8 126.6 124.1 130.6 42 Residual (assets less liabilities) 105.2 106.5 107.4 108.1 108.7 111.2 MEMO: 43 U.S. Treasury note balances included in borrowing 8.1 9.4 14.3 5.1 13.1 15.2 44 Number of banks 14,978 14,995 15,004 15,016 15,019 15,069 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. Other assets include loans to U.S. commercial banks. other banking institutions are for last Wednesday except at end of quarter, when 3. Commercial banking institutions include domestically chartered commercial they are for the last day of the month. banks, branches and agencies of foreign banks. Edge Act and Agreement corporations, and New York state foreign investment corporations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Financial Statistics • January 1981 1.26 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 1980 VTov. 5 Nov. 12 Nov. 19 Nov 26 Dec. 3P Dec. 10 P Dec. 17p Dec. 24P Dec. 31P 1 Cash items in process of collection 60,774 62,167 53,195 58,074 57,443 53,026 59,930 58,175 66,468 2 Demand deposits due from banks in the United States 24,903 24,449 18,245 18,702 19,632 18,353 19,448 19,693 21,643 3 All other cash and due from depository institutions 35,103 31,660 34,215 33,679 24,940 28,825 36,905 34,018 34,316 4 Total loans and securities 544,001 545,182 542,085 543,367 554,145 553,585 556,117 555,787 563,622 Securities 5 U.S. Treasury securities 38,294 38,397 38,741 38,506 39,409 39,557 39,181 37,985 39,566 6 Trading account 4,360 4,380 4,689 4,354 4,987 5,175 4,788 3,883 4,300 7 Investment account, by maturity 33,933 34,017 34,052 34,153 34,422 34,382 34,392 34,102 35,265 8 One year or less 8,528 8,611 8,615 8,745 9,161 9,202 9,167 9,098 10,245 9 Over one through five years 21,981 22,011 22,042 22,053 21,947 21,846 21,821 21,691 21,662 10 Over five years 3,424 3,395 3,395 3,355 3,314 3,334 3,404 3,313 3,358 11 Other securities 76,722 77,274 76,907 76,756 77,111 77,764 77,311 77,809 78,496 12 Trading account 3,142 3,458 2,967 2,745 3,132 3,781 3,018 3,067 3,355 13 Investment account 73,580 73,815 73,940 74,011 73,978 73,982 74,292 74,742 75,141 14 U.S. government agencies 15,907 15,939 15,889 15,855 15,814 15,802 16,027 16,221 16,235 15 States and political subdivision, by maturity .. 54,987 55,174 55,288 55,398 55,367 55,400 55,512 55,729 56,095 16 One year or less 7,354 7,432 7,434 7,406 7,467 7,452 7,475 7,486 7,344 17 Over one year 47,633 47,742 47,854 47,991 47,900 47,948 48,037 48,243 48,751 18 Other bonds, corporate stocks and securities . 2,686 2,702 2,763 2,758 2,798 2,780 2,754 2,792 2,810 Loans 19 Federal funds sold1 27,267 28,163 24,858 23,505 30,179 29,115 28,063 27,469 27,761 20 To commercial banks 20,448 19,944 17,640 16,741 22,116 20,207 20,650 19,387 19,396 21 To nonbank brokers and dealers in securities ... 4,660 5,252 5,307 4,663 5,621 6,092 5,540 6,054 6,377 22 To others 2,158 2,968 1,910 2,100 2,442 2,816 1,873 2,028 1,988 23 Other loans, gross 414,517 414,180 414,426 417,425 420,261 420,008 424,408 425,307 430,095 24 Commercial and industrial 169,140 169,593 169,456 171,395 172,260 172,761 174,017 172,582 174,570 25 Bankers acceptances and commercial paper .. 4,692 4,713 4,313 4,374 4,104 3,952 3,709 3,696 4,183 26 All other 164,449 164,880 165,142 167,022 168,157 168,809 170,308 168,885 170,387 27 U.S. addressees 157,948 158,286 158,351 160,132 161,196 161,954 163,223 161,826 163,104 28 Non-U.S. addressees 6,500 6,593 6,791 6,890 6,961 6,855 7,085 7,060 7,283 29 Real estate 109,743 110,164 110,493 110,602 110,743 111,035 111,315 111,482 111,675 30 To individuals for personal expenditures 71,073 70,955 71,042 71,226 71,301 71,492 71,836 72,385 72,511 To financial institutions 31 Commercial banks in the United States 3,877 4,197 3,812 4,074 4,142 3,568 4,245 4,938 4,897 32 Banks in foreign countries 8,449 8,455 8,374 8,333 8,596 8,634 8,807 9,535 9,699 33 Sales finance, personal finance companies, etc 9,796 9,056 8,907 9,061 9,276 9,597 10,446 9,977 10,119 34 Other financial institutions 15,540 15,578 15,691 15,398 15,566 15,513 15,883 15,638 15,904 35 To nonbank brokers and dealers in securities ... 5,613 5,466 6,034 5,874 6,795 6,251 6,471 6,144 7,811 36 To others for purchasing and carrying securities2 2,130 2,115 2,164 2,148 2,155 2,185 2,198 2,168 2,152 37 To finance agricultural production 5,497 5,466 5,469 5,369 5,331 5,282 5,284 5,300 5,404 38 Allother 13,658 13,134 12,982 13,943 14,094 13,689 13,906 15,157 15,352 39 LESS: Unearned income 7,078 7,076 7,081 7,053 7,004 7,041 7,040 7,034 6,650 40 Loan loss reserve 5,722 5,755 5,766 5,772 5,811 5,818 5,806 5,750 5,646 41 Other loans, net 401,718 401,349 401,579 404,600 407,446 407,149 411,562 412,523 417,800 42 Lease financing receivables 9,013 9,030 9,062 9,078 9,094 9,091 9,103 9,143 9,279 43 All other assets 81,252 82,535 80,828 81,588 83,058 82,811 83,210 84,574 87,930 44 Total assets 755,047 755,022 737,629 744,488 748,312 745,691 764,714 761,391 783,259 Deposits 45 Demand deposits 218,474 219,874 197,063 201,805 208,754 200,317 208,368 208,122 228,492 46 Mutual savings banks 868 873 618 607 718 602 619 700 842 47 Individuals, partnerships, and corporations 146,716 149,846 137,070 142,094 144,784 141,132 145,592 145,212 158,315 48 States and political subdivisions 5,088 4,569 4,674 4,922 4,804 4,644 4,807 4,888 5,905 49 U.S. government 2,927 1,359 2,883 2,143 2,964 2,078 1,248 1,457 1,104 50 Commercial banks in the United States 44,183 44,329 33,869 34,419 36,789 33,148 37,358 3377,,558877 41,606 51 Banks in foreign countries 7,975 8,929 8,810 8,139 7,661 8,797 7,931 88,,888833 9,121 52 Foreign governments and official institutions ... 2,261 1,933 1,424 1,585 2,149 1,870 1,477 2,019 2,417 53 Certified and officers' checks 8,455 8,036 7,716 7,895 8,884 8,046 9,336 7,376 9,182 54 Time and savings deposits 291,389 294,984 297,515 300,364 300,976 302,899 305,916 311,027 313,642 55 Savings 76,550 75,748 75,349 74,645 74,965 74,319 73,386 71,631 72,216 56 Individuals and nonprofit organizations 71,714 70,958 70,548 69,917 70,286 69,728 68,990 67,403 67,959 57 Partnerships and corporations operated for profit 4,142 4,102 4,066 4,052 4,011 3,973 3,771 3,633 3,605 58 Domestic governmental units 674 664 709 655 649 598 605 568 628 59 All other 20 24 25 22 19 20 21 26 24 60 Time 214,839 219,236 222,166 225,719 226,011 228,579 232,530 239,397 241,426 61 Individuals, partnerships, and corporations ... 182,735 186,727 189,201 192,594 193,252 195,445 198,530 203,890 205,777 62 States and political subdivisions 19,521 19,767 20,123 20,237 19,873 19,818 19,898 20,435 20,244 63 U.S. government 328 322 308 303 291 292 270 301 300 64 Commercial banks in the United States 5,805 5,998 6,097 6,261 6,285 6,614 7,454 8,135 8,430 65 Foreign governments, official institutions, and banks 6,451 6,422 6,437 6,324 6,309 6,411 6,377 6,636 6,677 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks 2,365 1,401 1,638 2,975 740 1,322 725 656 1,055 67 Treasury tax-and-loan notes 774 278 1,901 2,839 432 173 5,590 7,022 6,605 68 All other liabilities for borrowed money3 132,295 129,418 128,318 124,449 126,743 128,836 129,345 122,450 119,911 69 Other liabilities and subordinated notes and debentures 60,207 59,500 61,869 62,620 60,784 62,387 65,127 62,570 63,387 70 Total liabilities 705,504 705,454 688,304 695,052 698,430 695,934 715,071 711,847 733,092 71 Residual (total assets minus total liabilities)4 49,543 49,568 49,325 49,436 49,881 49,757 49,643 49,544 50,166 1. Includes securities purchased under agreements to resell. 4. This is not a measure of equity capital for use in capital adequacy analysis or 2. Other than financial institutions and brokers and dealers. for other analytic uses. 3. Includes federal funds purchased and securities sold under agreements to repurchase; for information on these liabilities at banks with assets of $1 billion Digitized for FoRr mAoSreE oRn Dec. 31, 1977, see table 1.13. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Banks A19 1.27 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 1980 AAccccoouunntt Nov. 5 Nov. 12 Nov. 19 Nov. 26 Dec. 3P Dec. 10P Dec. 17 P Dec. 24P Dec. 31p 1 Cash items in process of collection 57,905 58,552 50,530 54,967 54,621 50,465 57,108 55,174 63,071 2 Demand deposits due from banks in the United States ... 24,236 23,763 17,675 18,144 19,036 17,797 18,845 18,858 20,889 3 All other cash and due from depository institutions 32,746 29,320 31,886 31,561 23,151 26,935 34,599 31,590 31,838 4 Total loans and securities 507,419 508,958 505,741 506,792 517,051 516,512 518,944 518,658 525,527 Securities U.S. Treasury securities 35,628 35,719 36,055 35,824 36,618 36,784 36,403 35,190 36,605 6 Trading account 4,293 4,297 4,616 4,296 4,926 5,140 4,747 3,842 4,252 7 Investment account, by maturity 31,334 31,422 31,438 31,527 31,692 31,644 31,655 31,348 32,352 8 One year or less 7,996 8,085 8,080 8,200 8,491 8,516 8,484 8,410 9,464 9 Over one through five years 20,278 20,306 20,327 20,327 20,240 20,152 20,125 19,996 19,912 in Over five years 3,060 3,031 3,031 3,000 2,960 2,976 3,046 2,941 2,977 ii Other securities 70,365 70,909 70,514 70,352 70,725 71,335 70,827 71,289 71,951 i? Trading account 3,049 3,391 2,894 2,684 3,075 3,714 2,939 2,999 3,282 13 Investment account 67,315 67,518 67,620 67,668 67,650 67,621 67,888 68,290 68,669 14 U.S. government agencies 14,699 14,718 14,665 14,624 14,585 14,547 14,745 14,895 14,902 15 States and political subdivision, by maturity 50,101 50,266 50,360 50,456 50,440 50,466 50,562 50,777 51,130 16 One year or less 6,581 6,648 6,638 6,607 6,675 6,665 6,678 6,690 6,529 17 Over one year 43,520 43,618 43,722 43,849 43,765 43,801 43,884 44,087 44,601 18 Other bonds, corporate stocks and securities 2,515 2,534 2,595 2,588 2,625 2,607 2,580 2,618 2,637 Loans 19 Federal funds sold1 23,987 25,297 21,998 20,167 26,768 25,802 24,895 24,578 24,330 70 To commercial banks 17,514 17,468 15,101 14,264 19,228 17,317 17,937 17,031 16,494 71 To nonbank brokers and dealers in securities 4,342 4,895 5,027 4,288 5,143 5,705 5,131 5,550 5,879 77 To others 2,130 2,934 1,870 2,066 2,398 2,780 1,827 1,996 1,957 73 Other loans, gross 389,296 388,920 389,074 391,879 394,780 394,472 398,687 399,414 403,970 74 Commercial and industrial 160,542 160,980 160,781 162,649 163,502 164,025 165,193 163,760 165,614 75 Bankers acceptances and commercial paper 4,472 4,485 4,086 4,145 3,885 3,754 3,504 3,495 3,983 26 All other 156,070 156,496 156,695 158,504 159,617 160,271 161,689 160,264 161,631 27 U.S. addressees 149,635 149,968 149,970 151,678 152,718 153,477 154,666 153,266 154,409 28 Non-U.S. addressees 6,435 6,528 6,725 6,826 6,898 6,794 7,023 6,998 7,222 29 Real estate 103,448 103,852 104,175 104,294 104,408 104,676 104,931 105,106 105,273 30 To individuals for personal expenditures 62,702 62,606 62,672 62,805 62,865 63,013 63,318 63,791 63,839 To financial institutions 31 Commercial banks in the United States 3,754 4,075 3,684 3,892 4,018 3,437 4,126 4,783 4,767 32 Banks in foreign countries 8,372 8,344 8,300 8,257 8,523 8,557 8,721 9,454 9,628 33 Sales finance, personal finance companies, etc 9,632 8,881 8,715 8,868 9,092 9,413 10,274 9,796 9,937 34 Other financial institutions 15,136 15,165 15,272 14,982 15,158 15,112 15,471 15,233 15,503 35 To nonbank brokers and dealers in securities 5,527 5,384 5,954 5,804 6,724 6,175 6,380 6,058 7,683 36 To others for purchasing and carrying securities2 1,885 1,873 1,926 1,903 1,910 1,937 1,955 1,922 1,907 37 To finance agricultural production 5,333 5,301 5,305 5,212 5,175 5,128 5,130 5,143 5,245 38 Allother 12,964 12,458 12,292 13,212 13,405 12,999 13,188 14,367 14,573 39 LESS: Unearned income 6,466 6,463 6,466 6,442 6,365 6,399 6,396 6,395 6,018 40 Loan loss reserve 5,391 5,424 5,434 5,437 5,475 5,481 5,472 5,417 5,311 41 Other loans, net 377,440 377,033 377,174 379,999 382,940 382,591 386,819 387,601 392,641 42 Lease financing receivables 8,752 8,768 8,800 8,814 8,827 8,824 8,836 8,876 9,007 43 All other assets 78,923 80,320 78,724 79,394 80,822 80,727 81,027 82,378 85,444 44 Total assets 709,981 709,682 693,356 699,674 703,509 701,260 719,358 715,535 735,778 Deposits 45 Demand deposits 205,451 206,548 184,872 189,184 195,988 188,059 195,674 195,125 214,215 46 Mutual savings banks 829 838 588 577 687 574 596 671 810 47 Individuals, partnerships, and corporations 136,612 139,312 127,439 131,981 134,779 131,272 135,451 134,760 147,108 48 States and political subdivisions 4,489 3,991 4,094 4,357 4,283 4,145 4,265 4,251 5,268 49 U.S. government 2,654 1,243 2,672 1,988 2,724 1,929 1,098 1,330 988 50 Commercial banks in the United States 42,644 42,714 32,507 33,050 35,252 31,850 35,959 36,261 39,955 51 Banks in foreign countries 7,854 8,829 8,728 8,059 7,573 8,706 7,819 8,800 9,006 52 Foreign governments and official institutions 2,259 1,916 1,422 1,566 2,119 1,854 1,472 2,002 2,412 53 Certified and officers' checks 8,109 7,705 7,423 7,604 8,571 7,729 9,013 7,049 8,669 54 Time and savings deposits 271,230 274,790 277,141 279,865 280,513 282,393 285,320 290,214 292,654 55 Savings 70,762 70,032 69,676 69,005 69,312 68,708 67,843 66,227 66,756 56 Individuals and nonprofit organizations 66,308 65,614 65,248 64,642 64,996 64,482 63,803 62,333 62,850 57 Partnerships and corporations operated for profit ... 3,826 3,786 3,755 3,739 3,701 3,658 3,475 3,351 3,317 58 Domestic governmental units 607 607 649 602 595 547 544 517 566 59 Allother 20 24 25 21 19 20 21 26 24 60 Time 200,468 204,758 207,465 210,860 211,202 213,685 217,476 223,987 225,898 61 Individuals, partnerships, and corporations 170,459 174,368 176,679 179,911 180,621 182,729 185,648 190,718 192,548 62 States and political subdivisions 17,678 17,908 18,218 18,345 17,975 17,929 18,026 18,525 18,282 63 U.S. government 313 306 293 287 276 277 255 286 284 64 Commercial banks in the United States 5,566 5,753 5,838 5,993 6,020 6,340 7,170 7,823 8,107 65 Foreign governments, official institutions, and banks 6,451 6,422 6,437 6,324 6,309 6,411 6,377 6,636 6,677 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks 2,352 1,154 1,528 2,797 603 1,298 640 543 972 67 Treasury tax-and-loan notes 710 230 1,730 2,640 360 134 5,223 6,527 6,142 68 All other liabilities for borrowed money3 125,112 122,523 121,532 117,819 120,033 121,926 122,403 115,692 113,105 69 Other liabilities and subordinated notes and debentures 58,812 58,114 60,493 61,203 59,386 60,966 63,725 61,155 61,809 70 Total liabilities 663,667 663,361 647,295 653,508 656,884 654,776 672,984 669,256 688,897 71 Residual (total assets minus total liabilities)4 46,314 46,321 46,060 46,165 46,625 46,484 46,374 46,279 46,881 1. Includes securities purchased under agreements to resell. 4. This is not a measure of equity capital for use in capital adequacy analysis or 2. Other than financial institutions and brokers and dealers. for other analytic uses. 3. Includes federal funds purchased and securities sold under agreement to repurchase; for information on these liabilities at banks with assets of $1 billion or more on Dec. 31, 1977, see table 1.13. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Financial Statistics • January 1981 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1980 Nov. 5 Nov. 12 Nov. 19 Nov. 26 Dec. 3P Dec. 10P Dec. HP Dec. 24P Dec. 31 P 1 Cash items in process of collection 22,246 22,704 18,836 20,101 21,348 20,636 23,140 19,879 24,782 2 Demand deposits due from banks in the United States .. 18,887 18,161 12,747 12,558 13,340 12,850 13,237 12,343 14,724 3 All other cash and due from depository institutions 9,670 8,744 8,784 9,183 6,480 7,223 11,737 8,528 7,742 4 Total loans and securities1 122,382 122,470 122,274 122,367 125,853 124,994 125,774 126,070 129,259 Securities 5 U.S. Treasury securities2 6 Trading account2 7 Investment account, by maturity 8,097 8,169 8,237 8,292 8,440 8,446 8,474 8,320 8,418 8 One year or less 1,323 1,340 1,366 1,387 1,402 1,437 1,442 1,438 1,454 9 Over one through five years 6,236 6,291 6,332 6,357 6,500 6,471 6,494 6,343 6,412 10 Over five years 538 538 538 549 538 538 539 539 551 11 Other securities2 12 Trading account2 13 Investment account 13,791 13,860 13,827 13,782 13,803 13,809 13,802 13,859 13,676 14 U.S. government agencies 2,396 2,396 2,342 2,309 2,312 2,307 2,302 2,301 2,305 15 States and political subdivision, by maturity 10,837 10,895 10,900 10,892 10,885 10,894 10,890 10,946 10,750 16 One year or less 1,789 1,846 1,852 1,830 1,835 1,822 1,809 1,825 1,664 17 Over one year 9,048 9,050 9,048 9,061 9,050 9,072 9,081 9,121 9,087 18 Other bonds, corporate stocks and securities 558 569 586 582 606 608 611 613 620 Loans 19 Federal funds sold3 7,467 8,115 7,575 6,967 8,831 7,889 6,790 7,189 7,284 20 To commercial banks 4,061 4,553 3,868 3,641 5,399 4,044 3,292 3,555 3,461 21 To nonbank brokers and dealers in securities 2,102 2,398 2,596 2,193 2,317 2,888 2,747 2,676 3,061 22 To others 1,303 1,163 1,112 1,133 1,116 957 751 957 762 23 Other loans, gross 95,938 95,260 95,590 96,281 97,737 97,824 99,672 99,667 102,815 24 Commercial and industrial 49,593 49,831 49,754 50,418 51,105 51,780 51,864 50,754 51,836 25 Bankers acceptances and commercial paper 1,036 875 931 885 894 832 594 537 767 26 Allother 48,557 48,956 48,822 49,533 50,211 50,948 51,269 50,217 51,068 27 U.S. addressees 46,438 46,800 46,632 47,369 47,976 48,682 48,884 47,854 48,558 28 Non-U.S. addressees 2,119 2,156 2,190 2,164 2,235 2,266 2,385 2,364 2,510 29 Real estate 14,404 14,472 14,559 14,559 14,573 14,611 14,651 14,741 14,826 30 To individuals for personal expenditures 9,038 9,050 9,060 9,084 9,148 9,187 9,242 9,318 9,369 31 To financial institutions Commercial banks in the United States 1,328 1,780 1,519 1,542 1,413 1,218 1,607 2,043 1,768 32 Banks in foreign countries 4,339 4,019 4,172 4,029 4,110 4,056 4,221 4,780 5,015 33 Sales finance, personal finance companies, etc 4,379 3,858 3,665 3,821 3,836 4,141 4,718 4,371 4,395 34 Other financial institutions 4,523 4,405 4,586 4,392 4,453 4,486 4,668 4,690 4,848 35 To nonbank brokers and dealers in securities 3,380 3,023 3,391 3,408 3,932 3,478 3,628 3,394 4,838 36 To others for purchasing and carrying securities4 426 400 427 403 413 428 460 420 405 37 To finance agricultural production 534 531 533 516 506 492 481 461 435 38 Allother 3,994 3,890 3,924 4,108 4,247 3,948 4,132 4,694 5,079 39 LESS: Unearned income 1,124 1,131 1,144 1,149 1,134 1,139 1,140 1,164 1,149 40 Loan loss reserve 1,787 1,803 1,812 1,807 1,825 1,836 1,824 1,801 1,783 41 Other loans, net 93,027 92,326 92,634 93,325 94,778 94,848 96,708 96,702 99,882 42 Lease financing receivables 1,682 1,684 1,694 1,696 1,705 1,705 1,710 1,711 1,758 43 All other assets5 31,736 33,384 31,724 32,462 33,346 33,746 33,707 33,741 37,241 44 Total assets 206,604 207,147 196,060 198,367 202,072 201,153 209,305 202,273 215,506 Deposits 45 Demand deposits 75,142 75,726 63,335 64,681 68,558 66,066 69,820 67,066 76,854 46 Mutual savings banks 402 439 299 270 339 285 290 350 436 47 Individuals, partnerships, and corporations 34,531 34,242 31,258 32,986 34,564 33,380 35,004 33,694 38,570 48 States and political subdivisions 374 395 366 379 414 353 330 421 578 49 U.S. government 393 207 672 524 694 484 294 333 173 50 Commercial banks in the United States 27,485 28,033 18,961 19,411 20,534 19,227 21,818 20,592 23,832 51 Banks in foreign countries 6,201 7,172 7,063 6,256 5,947 6,949 6,080 6,868 7,149 52 Foreign governments and official institutions 1,992 1,611 1,111 1,290 1,836 1,487 1,186 1,645 2,032 53 Certified and officers' checks 3,762 3,628 3,603 3,566 4,230 3,900 4,818 3,162 4,083 54 Time and savings deposits 51,900 53,307 54,057 54,843 54,851 54,910 55,866 56,994 57,318 55 Savings 10,003 9,980 9,936 9,866 9,858 9,788 9,666 9,480 9,547 56 Individuals and nonprofit organizations 9,512 9,463 9,407 9,350 9,379 9,325 9,239 9,063 9,124 57 Partnerships and corporations operated for profit .. 348 356 353 366 350 341 320 311 308 58 Domestic governmental units 138 151 168 143 124 117 99 98 107 59 Allother 5 8 8 7 5 6 7 8 8 60 Time 41,897 43,328 44,121 44,977 44,992 45,122 46,201 47,514 47,770 61 Individuals, partnerships, and corporations 35,270 36,571 37,379 38,288 38,381 38,500 39,570 40,761 41,064 62 States and political subdivisions 1,784 1,823 1,845 1,773 1,781 1,763 1,703 1,600 1,436 63 U.S. government 26 29 26 22 22 21 21 14 14 64 Commercial banks in the United States 1,970 2,044 2,015 2,038 1,992 1,993 2,149 2,278 2,370 65 Foreign governments, official institutions, and banks 2,846 2,860 2,856 2,856 2,817 2,845 2,758 2,860 2,886 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks 900 1,725 881155 475 67 Treasury tax-and-loan notes 2 1 319 633 31 1,703 1,941 1,831 68 All other liabilities for borrowed money6 40,275 40,083 38,058 37,555 39,706 39,391 40,165 37,392 37,977 69 Other liabilities and subordinated notes and debentures . 23,911 22,652 24,060 23,703 23,346 24,435 26,201 23,538 25,296 70 Total liabilities 191,231 191,769 180,729 183,140 186,492 185,617 193,755 186,931 199,751 71 Residual (total assets minus total liabilities)4 15,374 15,379 15,330 15,227 15,580 15,536 15,550 15,341 15,755 1. Excludes trading account securities. 5. Includes trading account securities. 2. Not available due to confidentiality. 6. Includes federal funds purchased and securities sold under agreements to 3. Includes securities purchased under agreements to resell. repurchase 4. Other than financial institutions and brokers and dealers. 4. This is not a measure of equity capital for use in capital adequacy analysis or for other analytic uses. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Weekly Reporting Banks A21 1.29 LARGE WEEKLY REPORTING COMMERCIAL BANKS Balance Sheet Memoranda Millions of dollars, Wednesday figures 1980 AAccccoouunntt Nov. 5 Nov. 12 Nov. 19 Nov. 26 Dec. 3P Dec. 10p Dec. 17 P Dec. 24P Dec. 31 P BANKS WITH ASSETS OF $750 MILLION OR MORE 1 Total loans (grossl and securities adjusted1 532,474 533,873 533,479 535,376 540,702 542,669 544,068 544,246 551,625 2 Total loans (gross) adjusted1 417,458 418,202 417,831 420,114 424,182 425,348 427,576 428,451 433,563 3 Demand deposits adjusted2 110,589 112,018 107,116 107,169 111,559 112,065 109,831 110,902 119,314 4 Time deposits in accounts of $100,000 or more 139,328 142,411 144,967 148,024 147,896 150,091 153,003 158,514 159,350 5 Negotiable CDs 100,475 102,792 104,777 107,450 107,400 109,049 111,327 115,608 116,597 6 Other time deposits 38,853 39,619 40,190 40,574 40,496 41,042 41,676 42,906 42,753 7 Loans sold outright to affiliates3 2,733 2,597 2,577 2,650 2,657 2,668 2,712 2,736 2,744 8 Commercial and industrial 1,734 1,704 1,700 1,744 1,742 1,768 1,767 1,791 1,795 9 Other 999 892 877 906 915 900 945 946 949 BANKS WITH ASSETS OF $1 BILLION OR MORE 10 Total loans (gross) and securities adjusted1 498,007 499,302 498,857 500,516 505,646 507,638 508,749 508,656 515,595 11 Total loans (gross) adjusted1 392,014 392,674 392,288 394,341 398,303 399,519 401,519 402,177 407,039 12 Demand deposits adjusted2 102,248 104,040 99,163 99,178 103,390 103,815 101,508 102,359 110,201 13 Time deposits in accounts of $100,000 or more 130,971 134,016 136,405 139,328 139,274 141,428 144,234 149,499 150,274 14 Negotiable CDs 94,467 96,728 98,615 101,177 101,220 102,868 105,092 109,197 110,144 15 Other time deposits 36,504 37,287 37,790 38,151 38,054 38,559 39,143 40,302 40,130 16 Loans sold outright to affiliates3 2,688 2,554 2,534 2,606 2,614 2,630 2,669 2,693 2,706 17 Commercial and industrial 1,708 1,678 1,675 1,720 1,719 1,746 1,744 1,768 1,778 18 Other 980 876 859 887 895 884 925 925 928 BANKS IN NEW YORK CITY 19 Total loans (gross) and securities adjusted1-4 119,904 119,071 119,843 120,140 122,000 122,706 123,839 123,437 126,963 20 Total loans (gross) adjusted1 98,016 97,042 97,778 98,065 99,756 100,451 101,563 101,258 104,870 21 Demand deposits adjusted2 25,017 24,782 24,865 24,645 25,982 25,719 24,568 26,261 28,067 22 Time deposits in accounts of $100,000 or more 32,895 34,075 34,784 35,569 35,549 35,632 36,529 37,720 37,701 23 Negotiable CDs 24,383 25,428 26,010 26,837 26,655 26,657 27,457 28,583 28,649 24 Other time deposits 8,512 8,647 8,773 8,732 8,894 8,975 9,072 9,137 9,052 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, nonbanks. 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic NonfinancialS tatistics • January 1981 1.30 LARGE WEEKLY REPORTING COMMERCIAL BANKS Domestic Classified Commercial and Industrial Loans Millions of dollars Outstanding Net change during AAAdddjjjuuusssttt--- IIInnnddduuussstttrrryyy ccclllaaassssssiiifffiiicccaaatttiiiooonnn 1980 1980 mmmeeennnttt bbbaaannnkkk111 Aug. 27' Sept. 24' Oct. 29' Nov. 26 Dec. 31 P Q3' 04 P Oct. Nov. Dec.P 1 Durable goods manufacturing 22,964 23,512 23,335 24,088 24,657 783 1,145 -177' 754 569 46 2 Nondurable goods manufacturing .... 18,798 19,533 20,273 20,804 20,469 1,195 935 740' 530 -335 39 3 Food, liquor, and tobacco 3,896 4,350 4,584 4,921 5.382 649 1,032 234 337 460 6 4 Textiles, apparel, and leather 5,230 5,204 5,070 4,906 4,136 269 -1,068 -133 -164 -770 6 5 Petroleum refining 2,694 2,686 3,153 3,129 3,618 -28 932 466' -24 489 1 6 Chemicals and rubber 3,707 3,733 3,846 4,158 3.922 30 188 112 312 -236 14 7 Other nondurable goods 3,270 3,559 3,620 3,690 3,410 275 -148 61 70 -279 12 8 Mining (including crude petroleum and natural gas) 13,559 13,956 14,716 15,338 16,408 199 2,452 760 622 1,070 14 9 Trade 24,732 24,950 26,270 27,050 26,270 350 1,320 1,320 781 -780 121 10 Commodity dealers 1,853 2,118 2.470 2,402 2,562 588 444 352 -69 161 6 11 Other wholesale 11,611 11,586 11,876 12,182 12,298 -94 712 290' 306 117 34 12 Retail 11,268 11,245 11,923 12,467 11,409 -144 164 678' 544 -1,058 82 13 Transportation, communication. and other public utilities 19,218 19,223 19,316 20,099 21.310 478 2,088 93 783 1,211 14 14 Transportation 7,651 7,735 7,788 8,019 8,379 136 643 52 231 359 7 15 Communication 2,918 2,993 3,094 3,161 3,315 154 322 101 67 154 1 16 Other public utilities 8,649 8,495 8,434 8,919 9,616 188 1,121 -60 484 697 5 17 Construction 5,871 6,030 5,924 5,992 5.994 60 -37 -106' 69 1 23 18 Services 20,805 21,311 21.530 22,160 22,854 1,014 1,543 219' 630 694 96 19 All other2 15,250 15,402 15,634 16,146 16,447 403 1,045 232' 511 301 288 20 Total domestic loans 141,197 143,917 146,998 151,678 154,409 4,483 10,492 3,081' 4,679 2,731 641 21 MEMO: Term loans (original maturity more than 1 year) included in domestic loans 74,976 76,536 76,912 78,956 81,671 2,241 5,135 376 2,044 2,714 33 1. Adjustment bank amounts represent accumulated adjustments originally NOTE. New series. The 134 large weekly reporting commercial banks with domade to offset the cumulative effects of mergers. These adjustment amounts should mestic assets of $1 billion or more as of December 31, 1977, are included in this be added to outstanding data for any date in the year to establish comparability series. The revised series is on a last-Wednesday-of-the-month basis. Partly estiwith any date in the subsequent year. Changes shown have been adjusted for these mated historical data are available from the Banking Section, Division of Research amounts. and Statistics, Board of Governors of the Federal Reserve System, Washington, 2. Includes commercial and industrial loans at a few banks with assets of $1 D.C., 20551. billion or more that do not classify their loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Deposits and Commercial Paper A23 1.31 GROSS DEMAND DEPOSITS of Individuals, Partnerships, and Corporations! Billions of dollars, estimated daily-average balances Commercial banks TTyyppee ooff hhoollddeerr 19792 1980 11997755 11997766 11997777 11997788 DDeecc.. DDeecc.. DDeecc.. DDeecc.. June Sept. Dec. Mar. June Sept. 1 All holders—Individuals, partnerships, and corporations 236.9 250.1 274.4 294.6 285.6 292.4 302.2 288.4 288.6 302.0 2 Financial business 20.1 22.3 25.0 27.8 25.4 26.7 27.1 28.4 27.7 29.6 3 Nonfinancial business 125.1 130.2 142.9 152.7 145.1 148.8 157.7 144.9 145.3 151.9 4 Consumer 78.0 82.6 91.0 97.4 98.6 99.2 99.2 97.6 97.9 101.8 5 Foreign 2.4 2.7 2.5 2.7 2.8 2.8 3.1 3.1 3.3 3.2 6 Other 11.3 12.4 12.9 14.1 13.7 14.9 15.1 14.4 14.4 15.5 Weekly reporting banks 19793 1980 11997755 11997766 11997777 11997788 DDeecc.. DDeecc.. DDeecc.. DDeecc.. June Sept. Dec. Mar. June Sept. 7 AH holders—Individuals, partnerships, and corporations 124.4 128.5 139.1 147.0 128.8 132.7 139.3 133.6 133.9 140.6 8 Financial business 15.6 17.5 18.5 19.8 18.4 19.7 20.1 20.1 20.2 21.2 9 Nonfinancial business 69.9 69.7 76.3 79.0 68.1 69.1 74.1 69.1 69.2 72.4 10 Consumer 29.9 31.7 34.6 38.2 33.0 33.7 34.3 34.2 33.9 36.0 11 Foreign 2.3 2.6 2.4 2.5 2.7 2.8 3.0 3.0 3.1 3.1 12 Other 6.6 7.1 7.4 7.5 6.6 7.4 7.8 7.2 7.5 7.9 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 estisample 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. 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING Millions of dollars, end of period 1980 Instrument 1976 1977 1978 19791 Dec. Dec. Dec. Dec. May June July Aug. Sept. Oct. Nov. Commercial paper (seasonally adjusted) 1 All issuers 53,010 65.036 83,420 112,803 121,032 123,937 122,259 122,607 123,460 122,383 124,776 Financial companies2 Dealer-placed paper3 2 Total 7,263 8,888 12,300 17,579 18,526 19,100 18,207 19,092 19,509 18,992 19,556 3 Bank-related 1,900 2,132 3,521 2,874 3,591 3,188 3,198 3,313 3,370 3,442 3,436 Directly placed paper4 4 Total 32,622 40,612 51,755 64,931 63,813 62,623 63,777 64,550 65,542 66,628 67,345 5 Bank-related 5,959 7,102 12,314 17,598 18,845 19,436 19,239 19,909 19,692 21,146 21,939 6 Nonfinancial companies5 13,125 15,536 19,365 30,293 38,693 42,214 40,275 38,965 38,409 36,763 37,875 Bankers dollar acceptances (not seasonally adjusted) 7 Total 22,523 25,450 33,700 45,321 52,636 54,356 54,334 54,486 55,774 56,610 55,226 Holder 8 Accepting banks 10,442 10,434 8,579 9,865 9,262 10,051 9,764 9,644 10,275 11,317 10,236 9 Own bills 8,769 8,915 7,653 8,327 8,768 9,113 8,603 8,544 9,004 9,808 8,837 10 Bills bought 1,673 1,519 927 1,538 493 939 1,161 1,100 1,270 1,509 1,399 Federal Reserve Banks 11 Own account 991 954 1 704 366 373 310 277 499 566 523 12 Foreign correspondents 375 362 664 1,382 1,718 1,784 1,899 1,841 1,820 1,915 1,852 13 Others 10,715 13,700 24,456 33,370 41,290 42,147 42,361 42,724 43,179 42,813 42,616 Basis 14. Imports into United States 4,992 6,378 8,574 10,270 11,651 11,536 12,109 11,861 11,731 12,254 11,774 15 Exports from United States 4,818 5,863 7,586 9,640 11,347 11,339 12,401 12,582 12,991 13,445 13,670 16 All other 12,713 13,209 17,540 25,411 29,637 31,480 29,824 30,043 31,052 30,911 29,782 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 1979. 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 such activities as comfactoring, finance leasing, and other business lending; insurance underwriting; and munications, construction, manufacturing, mining, wholesale and retail trade, Digitized for FotRheAr SinEveRstm ent activities. transportation, and reserves. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Nonfinancial Statistics • January 1981 1.33 PRIME RATE CHARGED BY BANKS on Short-Term Business Loans Percent per annum Effective date Rate Effective Date Rate Month Average Month rate 1980—Sept 19 12.50 1980—Dec 2 18.50 1979—Sept. 12.90 1980—May 26 13.00 5 19.00 Oct. 14.39 June Oct. 1 13.50 10 20.00 Nov. 15.55 July • 17 14.00 16 21.00 Dec. 15.30 Aug 29 14.50 19 21.50 Sept Nov. 6 15.50 1980—Jan. 15.25 Oct 17 16.25 1981—Jan. 2 20.50 Feb. 15.63 Nov 21 17.00 Mar. 18.31 Dec 26 17.75 Apr. 19.77 1.34 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, November 3-8, 1980 Size of loan (in thousands of dollars) All Item sizes 1,000 1-24 25-49 50-99 100-499 500-999 and over SHORT-TERM COMMERCIAL AND INDUSTRIAL LOANS 1 Amount of loans (thousands of dollars) 13,100,722 729,247 549,089 562,389 1,819,646 665,483 8,774,868 2 Number of loans 131,579 92,779 16,539 9,235 10,024 1,049 1,953 3 Weighted-average maturity (months) 2.2 3.0 3.5 2.9 3.0 3.4 1.7 4 Weighted-average interest rate (percent per annum) . 15.71 15.97 15.72 16.39 15.52 15.87 15.68 5 Interquartile range1 15.12-16.65 14.75-17.23 13.52-17.11 15.50-17.50 14.50-16.75 15.31-16.61 15.25-16.50 Percentage of amount of loans 6 With floating rate 50.5 2255..00 27.9 4400..77 52.1 68.3 53.0 7 Made under commitment 45.7 25.1 22.3 35.3 46.4 65.6 48.0 8 With no stated maturity 25.2 14.9 12.0 17.4 24.3 31.0 27.1 LONG-TERM COMMERCIAL AND INDUSTRIAL LOANS 9 Amount of loans (thousands of dollars) 3,152,110 306,233 571,615 171,411 2,102,851 10 Number of loans 17,989 15,060 2,245 245 439 11 Weighted-average maturity (months) 46.3 48.3 34.4 40.6 49.6 12 Weighted-average interest rate (percent per annum) . 15.07 15.42 15.29 15.20 14.95 13 Interquartile range1 14.50-15.62 14.93-16.65 14.75-15.50 14.50-16.25 14.50-15.50 Percentage of amount of loans 14 With floating rate 70.1 39.3 29.5 72.3 85.5 15 Made under commitment 58.1 29.0 25.1 70.2 70.3 CONSTRUCTION AND LAND DEVELOPMENT LOANS 16 Amount of loans (thousands of dollars) 1,072,203 105,341 242,030 167,557 230,726 326,549 17 Number of loans 24,383 13,527 6,586 2,637 1,413 221 18 Weighted-average maturity (months) 13.4 9.4 5.0 19.4 10.0 18.0 19 Weighted-average interest rate (percent per annum) . 15.31 15.23 14.64 14.74 15.24 16.16 20 Interquartile range1 14.00-16.65 14.04-16.99 13.10-15.50 14.00-14.75 14.00-17.00 15.50-17.00 Percentage of amount of loans 21 With floating rate 4444..44 2222..77 8.8 4455..66 47.9 74.7 22 Secured by real estate 81.9 84.3 98.2 96.7 89.8 56.0 23 Made under commitment 60.9 48.7 60.9 21.5 78.2 73.0 24 With no stated maturity 16.5 4.9 26.9 3.1 35.8 5.8 Type of construction 25 1- to 4-family 40.9 75.0 66.9 57.7 24.9 13.3 26 Multifamiip.O 8.2 2.2 3.6 8.9 10.7 27 Nonresidential 50.9 22.7 23.1 38.7 66.2 76.0 All 250 sizes 1-9 10-24 25-49 50-99 100-249 and over LOANS TO FARMERS 28 Amount of loans (thousands of dollars) 1,301,641 191,079 217,452 190,952 196,075 275,324 230,759 29 Number of loans 72,123 46,721 14,605 5,800 2,838 1,789 370 30 Weighted-average maturity (months) 7.3 6.7 7.1 5.6 6.6 10.6 5.8 31 Weighted-average interest rate (percent per annum) . 15.46 15.10 15.02 15.22 15.55 15.74 15.96 32 Interquartile range1 14.49-16.64 14.30-15.97 14.32-15.95 14.04-16.21 15.00-16.10 14.48-16.64 14.93-17.05 By purpose of loan 33 Feeder livestock 15.45 15.10 15.09 14.93 15.23 15.79 16.32 34 Other livestock 15.35 15.19 15.96 14.84 15.46 15.30 (2) 35 Other current operating expenses 15.44 15.17 15.14 15.33 15.88 15.97 15.21 36 Farm machinery and equipment 15.13 15.01 14.81 15.44 15.42 (2) (2) 37 Other 15.75 14.91 13.90 16.06 15.79 15.44 17.25 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 A25 1.35 INTEREST RATES Money and Capital Markets Averages, percent per annum 1980 1980 and 1981, week ending Instrument 1978 1979 1980 Sept. Oct. Nov. Dec. Dec. 5 Dec. 12 Dec. 19 Dec. 26 Jan. 2 Money market rates 1 Federal funds1 7.93' 11.19' 13.36 10.87 12.81 15.85' 18.90 17.72 18.82 19.83 19.44 18.45 Commercial paper2-3 7 1-month 7.76 10.86 12.76 10.82 12.59 15.23 18.95 17.42 19.64 20.33 19.06 17.89 3 3-month 7.94 10.97 12.66 10.97 12.52 15.18 18.07 17.09 19.00 19.55 17.51 16.34 4 6-month 7.99 10.91 12.29 11.04 12.32 14.73 16.49 16.05 17.57 17.49 15.49 15.05 Finance paper, directly placed2-3 5 1-month 7.73 10.78 12.44 10.62 12.32 14.87 17.87 16.90 18.55 19.36 17.30 16.66 6 3-month 7.80 10.47 11.49 10.28 11.24 13.14 15.00 14.18 15.17 15.62 15.26 14.63 7 6-month 7.78 10.25 11.28 10.29 11.15 13.07 14.78 14.03 14.84 15.32 15.11 14.53 8 Prime bankers acceptances, 90-day3-4 ... 8.11 11.04 12.78 11.13 12.69 15.34 17.96 17.28 19.23 19.24 16.84 16.28 Certificates of deposit, secondary market5 9 1-month 7.88 11.03 12.91 10.89 12.69 15.39 19.24 17.66 20.08 20.76 19.23 17.87 10 3-month 8.22 11.22 13.07 11.29 12.94 15.68 18.65 17.58 19.93 20.23 17.60 16.99 11 6-month 8.61 11.44 12.99 11.73 12.99 15.36 17.10 16.57 18.34 18.19 15.87 15.76 12 Eurodollar deposits, 3-month6 8.74 11.96 14.00 12.07 13.55 16.46 19.47 18.16 19.46 21.36 19.29 17.79 U.S. Treasury bills3-7 Secondary market 13 3-month 7.19 10.07 11.43 10.27 11.62 13.73 15.49 14.98 16.76 16.21 14.62 14.31 14 6-month 7.58 10.06 11.37 10.57 11.63 13.50 14.64 14.57 15.39 15.18 13.81 13.73 15 1-year 7.74 9.75 10.89 10.48 11.30 12.66 13.23 13.43 13.75 13.71 12.40 12.38 Auction average8 16 3-month 7.221 10.041 11.506 10.321 11.580 13.888 15.661 14.649 16.335 16.667 14.992 13.908 17 6-month 7.572 10.017 11.374 10.546 11.566 13.612 14.770 14.554 15.069 15.423 14.032 13.411 1188 1-vear 77..667788 99..881177 1100..774488 99..996677 1111..113366 1122..221199 1133..226611 1133..226611 1122..007744 Capital market rates U.S. TREASURY NOTES AND BONDS Constant maturities9 19 1-year 8.34 10.67 12.05 11.52 12.49 14.15 14.88 15.18 15.52 15.44 13.82 13.86 20 2-year 8.34 10.12 11.77 11.57* 12.09 13.51 14.08 14.21 14.66 14.77 13.15 13.00 21 2^-year10 14.00 14.15 12.75 22 3-year 8.29 9.71 11.55 11.57 12.01 13.31 13.65 13.77 14.10 14.17 12.91 12.81 23 5-year 8.32 9.52 11.48 11.62 11.86 12.83 13.25 13.40 13.68 13.69 12.50 12.54 24 7-year 8.36 9.48 11.43 11.57 11.79 12.71 13.00 13.09 13.38 13.40 12.37 12.43 25 10-year 8.41 9.44 11.46 11.51 11.75 12.68 12.84 12.91 13.19 13.18 12.29 12.36 26 20-year 8.48 9.33 11.39 11.47 11.75 12.44 12.49 12.48 12.86 12.81 11.99 12.05 27 30-year 8.49 9.29 11.30 11.34 11.59 12.37 12.40 12.44 12.78 12.68 11.87 11.95 Composite11 28 Over 10 years (long-term) 7.89 8.74 10.81 10.94 11.20 11.83 11.89 11.92 12.25 12.15 11.38 11.49 STATE AND LOCAL NOTES AND BONDS MMooooddyy''ss sseerriieess1122 29 5.52 5.92 7.85 8.36 8.38 8.71 9.44 9.20 9.40 9.80 9.80 9.00 30 Baa 6.27 6.73 9.01 9.38 9.41 9.74 10.64 10.00 11.00 11.00 11.00 10.20 31. Bond Buyer series13 6.03 6.52 8.59 8.94 9.11 9.56 10.11 9.84 10.42 10.56 9.99 9.76 CORPORATE BONDS 32 Seasoned issues, all industries14 9.07 10.12 12.75 12.80 13.07 13.64 14.04 13.85 14.19 14.31 13.91 13.82 By rating group 33 Aaa 8.73 9.63 11.94 12.02 12.31 12.97 13.21 13.15 13.47 13.49 12.89 12.83 34 Aa 8.92 9.94 12.50 12.52 12.68 13.34 13.78 13.59 13.95 14.05 13.64 13.54 35 A 9.12 10.20 12.89 12.97 13.05 13.59 14.03 13.83 14.11 14.33 13.94 13.82 36 Baa 9.45 10.69 13.67 13.70 14.23 14.64 15.14 14.84 15.21 15.36 15.19 15.09 Aaa utility bonds15 3377 New issue 8.96 10.03 12.74 12.74 13.18 13.85 14.51 14.51 3388 Recently offered issues 8.97 10.02 12.70 12.72 13.13 13.91 14.38 14.16 15.03 14.25 14.20 14.15 MEMO: Dividend/price ratio16 39 Preferred stocks 8.25 9.07 10.57 10.14 10.64 11.33? 11.94 11.66 12.04 12.08 11.83 12.09 40 Common stocks 5.28 5.46 5.25 4.90 4.80 4.65 P 4.74 4.63 4.94 4.78 4.66 4.67 1. Weekly figures are seven-day averages of daily effective rates for the week of the month. The rate for each month was used to determine the maximum interest ending Wednesday; the daily effective rate is an average of the rates on a given rate payable in the following month on small saver certificates, until June 2, 1980. day weighted by the volume of transactions at these rates. Each weekly figure is calculated on a biweekly basis and is the average of five 2. Beginning November 1977, unweighted average of offering rates quoted by business days ending on the Monday following the calendar week. Beginning June at least five dealers (in the case of commercial paper), or finance companies (in 2, the biweekly rate is used to determine the maximum interest rate payable in the the case of finance paper). Previously, most representative rate quoted by those following two-week period on small saver certificates. (See table 1.16.) dealers and finance companies. Before November 1979, maturities for data shown 11. Unweighted averages for all outstanding notes and bonds neither due nor are 30-59 days, 90-119 days, and 120-179 days for commercial paper; and 30-59 callable in less than 10 years, including several very low yielding "flower" bonds. days, 90-119 days, and 150-179 days for finance paper. Based on daily closing bid prices. 3. Yields are quoted on a bank-discount basis. 12. General obligations only, based on figures for Thursday, from Moody's 4. Average of the midpoint of the range of daily dealer closing rates offered for Investors Service. domestic issues. 13. Twenty issues of mixed quality. 5. Five-day average of rates quoted by five dealers (three-month series was 14. Averages of daily figures from Moody's Investors Service. previously a seven-day average). 15. Compilation of the Federal Reserve. Issues included are long-term (20 years 6. Averages of daily quotations for the week ending Wednesday. or more). New-issue yields are based on quotations on date of offering; those on 7. Except for auction averages, yields are computed from daily closing bid prices. recently offered issues (included only for first 4 weeks after termination of under- 8. Rates are recorded in the week in which bills are issued. writer price restrictions), on Friday close-of-business quotations. 9. Yield on the more actively traded issues adjusted to constant maturities by 16. Standard and Poor's corporate series. Preferred stock ratio based on a sample the U.S. Treasury, based on daily closing bid prices. of ten issues: four public utilities, four industrials, one financial, and one trans- 10. Each monthly figure is an average of only five business days near the end 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

A26 Domestic Nonfinancial Statistics • January 1981 1.36 STOCK MARKET Selected Statistics 1980 IInnddiiccaattoorr 11997788 11997799 11998800 June July Aug. Sept. Oct. Nov. Dec. Prices and trading (averages of daily figures) CCoommmmoonn ssttoocckk pprriicceess 11 NNeeww YYoorrkk SSttoocckk EExxcchhaannggee ((DDeecc.. 3311,, 11996655 == 5500)) .. 53.76 55.67 68.06 65.43 68.56 70.87 73.12 75.17 78.15 76.69 22 IInndduussttrriiaall 58.30 61.82 78.64 74.47 78.67 82.15 84.92 88.00 92.32 90.37 33 TTrraannssppoorrttaattiioonn 43.25 45.20 60.52 54.04 59.14 62.48 65.89 70.76 77.22 75.74 44 UUttiilliittyy 39.23 36.46 37.35 38.50 38.77 38.18 38.77 38.44 38.35 37.84 55 FFiinnaannccee 56.74 58.65 64.28 65.16 66.76 67.22 69.33 68.29 67.21 67.46 66 SSttaannddaarrdd && PPoooorr''ss CCoorrppoorraattiioonn ((11994411^^33 == 1100))11 .... 96.11 98.34 118.71 114.55 119.83 123.50 126.49 130.22 135.65 133.48 77 AAmmeerriiccaann SSttoocckk EExxcchhaannggee ((AAuugg.. 3311,, 11997733 == 110000)) 144.56 186.56 300.94 286.21 310.29 321.87 337.01 350.08 349.97 347.56 VVoolluummee ooff ttrraaddiinngg ((tthhoouussaannddss ooff sshhaarreess)) 88 NNeeww YYoorrkk SSttoocckk EExxcchhaannggee 28,591 32,233 44,867 39,508 46,444 45,984 50,397 44,860 54,895 46,620 99 AAmmeerriiccaann SSttoocckk EExxcchhaannggee 3,622 4,182 6,377 5,240 6,195 6,452 7,880 7,087 7,852 6,410 Customer financing (end-of-period balances, in millions of dollars) 10 Regulated margin credit at brokers/dealers2 11,035 11,619 11,370 11,522 12,007 12,731 13,293 14,363 11 Margin stock3 10,830 11,450 11,200 11,320 11,800 12,520 13,080 14,140 12 Convertible bonds 205 167 166 198 204 208 211 220 13 Subscription issues 1 2 n. a. 4 4 3 3 2 3 n .a. Free credit balances at brokers4 14 Margin-account 835 1,105 1,345 1,665 1,695 1,850 5,500 5,590 15 Cash-account 2,510 4,060 4,790 4,905 4,925 5,680 1,950 2,120 Margin-account debt at brokers (percentage distribution, end of period) 16 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 By equity class (in percent)5 17 Under 40 33.0 16.0 17.0 12.0 11.0 13.0 13.0 13.0 18 40-49 28.0 29.0 31.0 27.0 25.0 28.0 29.0 18.0 19 50-59 18.0 27.0 n.. a. 23.0 28.0 30.0 26.0 25.0 31.0 n.a. 20 60-69 10.0 14.0 13.0 16.0 16.0 15.0 15.0 18.0 1 21 70-79 6.0 8.0 1 8.0 9.0 10.0 10.0 10.0 11.0 1• 22 80 or more 5.0 7.0 t 7.0 8.0 8.0 8.0 8.0 9.0 Special miscellaneous-account balances at brokers (end of period) 23 Total balances (millions of dollars)6 . 13,092 16,150 t 16,920 17,886 18,350 19,283 19,929 21,600 t Distribution by equity status (percent) 1 1 2 2 5 4 D Ne e 6 t b 0 t c p r s e e t d a r i c t t u e s s n , t t a e t o q u r u s m ity o r o e f 4 4 5 1 . . 1 3 4 4 7 4 . . 0 2 n t . 1 •a . 4 4 3 7 . . 4 6 4 4 3 8. . 7 8 4 4 4 8 . . 6 2 4 4 3 9 . . 4 0 4 4 6 6 . . 2 8 4 4 6 6 . . 5 8 n t 1 . 1 a . 26 Less than 60 percent 13.6 8.8 9.0 8.0 7.0 7.6 7.0 6.7 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 related collateral in the customer's margin account or deposits of cash (usually sales proequity instruments and secured at least in part by stock. Credit extended is end-of- ceeds) occur. 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 A27 1.37 SAVINGS INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1980 Account 1978 1979 Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov./7 Savings and loan associations 1 Assets 523,542 579,307 585,685 589,498 591,108 593,321 594,792 597,023 603,720 609,764 617,773 623,744 2 Mortgages 432,808 475,797 477,303 479,078 480,165 480,092 481,184 482,985 487,198 492,068 496,495 499,945 3 Cash and investment securities1 44,884 46,541 50,168 50,899 50,576 52,670 52,613 52,370 53,545 53,647 56,146 57,206 4 Other 45,850 56,969 58,214 59,521 60,367 60,559 60,995 61,668 62,977 64,049 65,132 66,593 5 Liabilities and net worth 523,542 579,307 585,685 589,498 591,108 593,321 594,792 597,023 603,720 609,764 617,773 623,744 6 Savings capital 430,953 470,171 473,862 478,265 478,591 481,613 486,900 489,123 491,638 497,244 500,861 503,329 7 Borrowed money 42,907 55,375 55,276 57,346 57,407 55,353 54,950 53,615 55,552 58,578 60,727 61,958 8 FHLBB 31,990 40,441 40,337 42,413 42,724 41,529 40,613 39,882 41,005 42,547 44,325 45,543 9 Other 10,917 14,934 14,939 14,933 14,683 13,824 14,337 13,733 14,547 16,031 16,402 16,415 10 Loans in process 10,721 9,511 8,269 8,079 7,660 7,126 6,974 7,055 7,483 8,184 8,654 £5 ,837 11 Other 9,904 11,684 15,385 12,683 14,260 16,246 13,056 14,455 16,291 12,877 14,502 16,421 12 Net worth2 29,057 32,566 32,893 33,125 33,190 32,983 32,912 32,775 32,756 32,881 33,029 33,199 13 MEMO: Mortgage loan commitments outstanding3 18,911 16,007 16,744 15,844 14,193 13,929 15,368 18,020 20,280 20,313 19,077 17,846 Mutual savings banks4 14 Assets 158,174 163,405 164,270 165,107 165,366 166,340 166,982 167,959 168,752 169,409 170,432 Loans 15 Mortgage 95,157 98,908 99,220 99,151 99,045 99,163 99,176 99,301 99,289 99,306 99,523 16 Other 7,195 9,253 10,044 10,131 10,187 10,543 11,148 11,390 11,122 11,415 11,382 Securities 17 U.S. government5 4,959 7,658 7,436 7,629 7,548 7,527 7,483 7,796 8,079 8,434 8,622 18 State and local government 3,333 2,930 2,853 2,824 2,791 2,727 2,706 2,702 2,709 2,728 2,754 19 Corporate and other6 39,732 37,086 37,223 37,493 37,801 38,246 38,276 38,863 39,327 39,609 39,720 20 Cash 3,665 3,156 3,012 3,361 3,405 3,588 3,561 3,260 3,456 3,153 3,592 21 Other assets 4,131 4,412 4,481 4,518 4,588 4,547 4,631 4,648 4,770 4,764 4,839 n .a. 22 Liabilities 158,174 163,405 164,270 165,107 165,366 166,340 166,982 167,959 168,752 169,409 170,432 23 Deposits 142,701 146,006 145,171 146,328 145,821 146,637 148,606 149,580 150,187 151,765 151,998 24 Regular7 141,170 144,070 143,284 144,214 143,765 144,646 146,416 147,408 148,018 149,395 149,797 25 Ordinary savings 71,816 61,123 58,234 56,948 54,247 54,669 56,388 57,737 58,191 58,658 57,651 26 Time and other 69,354 82,947 85,050 87,266 89,517 89,977 90,028 89,671 89,827 90,736 92,146 27 Other 1,531 1,936 1,887 2,115 2,056 1,990 2,190 2,172 2,169 2,370 2,200 28 Other liabilities 4,565 5,873 7,485 7,135 7,916 8,161 6,898 6,964 7,211 6,299 7,117 29 General reserve accounts 10,907 11,525 11,615 11,643 11,629 11,542 11,478 11,416 11,353 11,344 11,317 30 MEMO: Mortgage loan commitments outstanding8 4,400 3,182 2,618 2,397 2,097 1,883 1,898 1,939 1,849 1,883 1,817 Life insurance companies 31 Assets 389,924 432,282 438,638 439,733 442,932 447,020 450,858 455,759 459,362 464,483 468,057 Securities 32 Government 20,009 0,338 20,438 20,545 20,470 20,529 20,395 20,736 20,833 20,853 20,942 33 United States9 4,822 4,888 4,898 5,004 5,059 5,107 4,990 5,325 5,386 5,361 5,390 34 State and local 6,402 6,428 6,488 6,454 6,351 6,352 6,349 6,361 6,421 6,474 6,484 35 Foreign10 8,785 9,022 9,052 9,087 9,060 9,070 9,056 9,050 9,026 9,018 9,068 36 Business 198,105 222,332 223,423 221,214 222,175 223,556 224,874 228,645 230,477 233,652 236,115 n. a. 37 Bonds 162,587 178,371 182,521 182,536 182,750 183,356 184,329 186,385 187,839 189,586 191,229 38 Stocks 35,518 39,757 40,902 38,678 39,425 40,200 40,545 42,260 42,638 44,066 44,886 39 Mortgages 106,167 118,421 120,926 122,314 123,587 124,563 125,455 126,461 127,357 128,089 128,977 40 Real estate 11,764 13,007 13,201 13,512 13,696 13,981 14,085 14,164 14,184 14,460 14,702 41 Policy loans 30,146 34,825 35,839 36,901 38,166 38,890 39,354 39,649 39,925 40,258 40,548 42 Other assets 23,733 27,563 24,811 25,247 24,838 25,501 26,695 26,104 26,586 27,171 26,765 Credit unions 43 Total assets/liabilities and capital 62,348 65,854 64,857 65,678 65,190 66,103 68,102 68,429 69,553 70,515 70,702 71,335 44 Federal 34,760 35,934 35,425 36,091 35,834 36,341 37,555 37,573 38,168 39,219 39,155 39,428 45 State 27,588 29,920 29,432 29,587 29,356 29,762 30,547 30,856 31,385 31,296 31,547 31,907 46 Loans outstanding 50,269 53,125 51,626 51,337 50,344 49,469 48,172 47,829 47,884 47,211 47,221 47,299 47 Federal 27,687 28,698 27,783 27,685 27,119 26,550 25,773 25,435 25,401 25,381 25,288 25,273 48 State 22,582 24,426 23,843 23,652 23,225 22,919 22,399 22,394 22,483 21,830 21,933 22,026 49 Savings 53,517 56,232 55,790 56,743 56,338 57,197 59,310 60,574 61,403 63,728 63,957 64,304 50 Federal (shares) 29,802 35,530 32,256 30,948 30,851 31,403 32,764 33,472 33,964 35,961 36,030 36,183 51 State (shares and deposits) 23,715 25,702 25,534 25,795 25,487 25,794 26,546 27,102 27,439 27,767 27,927 28,121 For notes see bottom of page A28. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Nonfinancial Statistics • January 1981 1.38 FEDERAL FISCAL AND FINANCING OPERATIONS Millions of dollars Calendar year FFiissccaall FFiissccaall FFiissccaall Type of account or operation yyeeaarr yyeeaarr yyeeaarr 1979 1980 1980 11997788 11997799 11998800 HI H2 HI Sept. Oct. Nov. U.S. budget 1 Receipts' 401,997 465,940 520,050 246,574 233,952 270,864 53,544 38,923 39,175 2 Outlays1 450,836 493,673 579,011 245.616 263,044 289,899 47,289 56,304 48,049 3 Surplus, or deficit( -) -48,839 -27,733 -58,961 958 -29,093 -19,035 6,255 -17,382 -8,874 4 Trust funds 12,693 18,335 8,791 4.041 9,679 4,383 8,286 -7,452 -3,049 ' Federal funds2 -61,532 -46.069 -67,752 -3.083 -38,773 -23,418 -2,031 -9,929 -5,825 OOffff--bbuuddggeett eennttiittiieess ((ssuurrpplluuss,, oorr ddeeffiicciitt (("")))) 66 FFeeddeerraall FFiinnaanncciinngg BBaannkk oouuttllaayyss -10,661 -13,261 -14,549 -7.712 -5,909 -7,735 -1,861 -1,157 -1,358 77 OOtthheerr33 334 832 330 -447 805 -528 41 1,403 -466 U.S. budget plus off-budget, including Federal Financing Bank 8 Surplus, or deficit (-) -59,166 -40,162 -73,180 -7.201 -34,197 -27,298 4,435 -17,136 -10,698 Source or financing 9 Borrowing from the public 59,106 33,641 70,515 6,039 31,320 24,435 6,260 4,758 9,231 10 Cash and monetary assets (decrease, or increase (- ))* -3,023 -408 -355 -8,878 3,059 -3,482 -9,692 8,488 4,077 11 Other5 3,083 6,929 3,020 10,040 -182 6,345 -1,002 3,890 -2,610 MEMO: 12 Treasury operating balance (level, end of period) 22,444 24,176 20,990 17.485 15,924 14,092 20,990 12,678 7,226 13 Federal Reserve Banks 16,647 6,489 4,102 3,290 4,075 3,199 4,102 1,864 2,435 14 Tax and loan accounts 5,797 17,687 16,888 14.195 11,849 10,893 16,888 10,814 4,791 1. Effective June 1978, earned income credit payments in excess of an indi- 5. Includes accrued interest payable to the public; allocations of special drawing vidual's tax liability, formerly treated as income tax refunds, are classified as outlays rights; deposit funds; miscellaneous liability (including checks outstanding) and retroactive to January 1976. asset accounts; seignorage; increment on gold; net gain/loss for U.S. currency 2. Half-year figures are calculated as a residual (total surplus/deficit less trust valuation adjustment; net gain/loss for IMF valuation adjustment; and profit on fund surplus/deficit). the sale of gold. 3. Includes Pension Benefit Guaranty Corporation; Postal Service Fund; Rural Electrification and Telephone Revolving Fund; and Rural Telephone Bank. SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S. 4. Includes U.S. Treasury operating cash accounts; special drawing rights; gold Government," Treasury Bulletin, and the Budget of the United States Government, tranche drawing rights; loans to International Monetary Fund; and other cash and Fiscal Year 1981. monetary assets. NOTES TO TABLE 1.37 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 Inassets." 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 associations 3. Excludes figures for loans in process, which are shown as a liability. 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. Beginning April 1979, includes obligations of U.S. government agencies. Life insurance companies: Estimates of the American Council of Life Insurance Before 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 checking, 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 A29 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS Millions of dollars Calendar year Fiscal Fiscal Fiscal SSoouurrccee oorr ttyyppee year year year 1979 1980 1980 1978 1979 1980 HI H2 HI Sept. Oct. Nov. RECEIPTS 1 All sources1 401,997 465,940 520,050 246,574 233,952 270,864 53,544 38,923 39,175 7 Individual income taxes, net 180,988 217,841 244,069 111,603 115,488 119,988 26,936 21,150 20,851 3 Withheld 165,215 195,295 223,763 98,683 105,764 110,394 18,731 20,237 20,379 4 Presidential Election Campaign Fund .. 39 36 39 32 3 34 0 0 0 S Nonwithheld 47,804 56,215 63,746 44,116 12,355 49,707 8,632 1,454 673 6 Refunds1 32,070 33,705 43,479 31,228 2,634 40,147 429 540 201 Corporation income taxes 7 Gross receipts 65,380 71,448 72,380 42,427 29,169 43,434 9,531 2,598 11,,777744 8 Refunds 5,428 5,771 7,790 2,889 3,306 4,064 647 1,314 771 9 Social insurance taxes and contributions, net 123,410 141,591 160,747 75,609 71,031 86,597 12,860 11,283 13,242 10 Payroll employment taxes and contributions2 99,626 115,041 133,042 59,298 60,562 69,077 11,520 9,645 11,189 11 Self-employment taxes and contributions3 4,267 5,034 5,723 4,616 417 5,535 419 0 0 12 Unemployment insurance 13,850 15,387 15,336 8,623 6,899 8,690 299 1,068 1,499 13 Other net receipts4 5,668 6,130 6,646 3,072 3,149 3,294 622 570 554 14 Excise taxes 18,376 18,745 24,329 8,984 9,675 11,383 2,734 2,778 2,080 15 Customs deposits 6,573 7,439 7,174 3,682 3,741 3,443 605 654 546 16 Estate and gift taxes 5,285 5,411 6,389 2,657 2,900 3,091 611 610 543 17 Miscellaneous receipts5 7,413 9,237 12,741 4,501 5,254 6,993 914 1,163 909 OUTLAYS 18 All types1 450,836 493,673 579,011 245,616 263,044 289,899 47,289 56,304c 48,049 19 National defense 105,186 117,681 135,880 57,643 62,002 69,132 11,636 13,040 11,812 20 International affairs 5,922 6,091 10,476 3,538 4,617 4,602 532 984 674 21 General science, space, and technology .. 4,742 5,041 5,999 2,461 3,299 3,150 391 588 549 22 Energy 5,861 6,856 6,339 4,417 3,281 3,126 630 631 627 23 Natural resources and environment 10,925 12,091 14,142 5,672 7,350 6,668 1,314 1,406 1,086 24 Agriculture 7,731 6,238 4,951 3,020 1,709 3,193 -184 221 878 25 Commerce and housing credit 3,324 2,565 7,537 60 3,002 3,878 -26 1,626 -357 26 Transportation 15,445 17,459 20,840 7,688 10,298 9,582 2,077 2,066 1,808 27 Community and regional development ... 11,039 9,482 10,182 4,499 4,855 5,302 1,128 989 847 28 Education, training, employment, social services 26,463 29,685 31,397 14,467 14,579 16,686 2,595 2,947 22,,222233 29 Health 43,676 49,614 58,165 24,860 26,492 29,299 5,284 5,432 4,891 30 Income security1 146,212 160,198 192,160 81,173 86,007 94,600 17,487 18,361 17,216 31 Veterans benefits and services 18,974 19,928 21,167 10,127 10,113 9,758 747 2,859 719 32 Administration of justice 3,802 4,153 4,553 2,096 2,174 2,291 350 466 348 33 General government 3,737 4,153 4,878 2,291 2,103 2,422 428 39 464 34 General-purpose fiscal assistance 9,601 8,372 8,268 3,890 4,286 3,940 150 1,929 210 35 Interest6 43,966 52,556 64,571 26,934 29,045 32,658 4,752 5,349 5,338 36 Undistributed offsetting receipts6-7 -15,772 -18,489 -22,494 -8,999 -12,164 -10,387 -2,000 -2,630 -1,285 1. Effective June 1978, earned income credit payments in excess of an individual's 6. Effective September 1976, "Interest" and "Undistributed offsetting receipts" tax liability, formerly treated as income tax refunds, are classified as outlays ret- reflect the accounting conversion from an accrual basis to a cash basis for the roactive to January 1976. interest on special issues for U.S. government accounts. 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

A30 Domestic Financial Statistics • January 1981 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars 1978 1979 1980 IItteemm Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31. Mar. 31 June 30 Sept. 30 1 Federal debt outstanding 780.4 797.7 804.6 812.2 833.8 852.2 870.4 884.4 914.3 2 Public debt securities 771.5 789.2 796.8 804.9 826.5 845.1 863.5 877.6 907.7 3 Held by public 603.6 619.2 630.5 626.4 638.8 658.0 677.1 682.7 710.0 4 Held by agencies 168.0 170.0 166.3 178.5 187.7 187.1 186.3 194.9 197.7 5 Agency securities 8.9 8.5 7.8 7.3 7.2 7.1 7.0 6.8 6.6 6 Held by public 7.4 7.0 6.3 5.9 5.8 5.6 5.5 5.3 5.1 7 Held by agencies 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 8 Debt subject to statutory limit 772.7 790.3 797.9 806.0 827.6 846.2 864.5 878.7 908.7 9 Public debt securities 770.9 788.6 796.2 804.3 825.9 844.5 862.8 877.0 907.1 10 Other debt1 1.8 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.6 11 MEMO: Statutory debt limit 798.0 798.0 798.0 830.0 830.0 879.0 879.0 925.0 925.0 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. 1.41 GROSS PUBLIC DEBT OF U.S. TREASURY Types and Ownership Billions of dollars, end of period 1980 TTyyppee aanndd hhoollddeerr 11997766 11997777 11997788 11997799 Aug. Sept. Oct. Nov. Dec. 1 Total gross public debt 653.5 718.9 789.2 845.1 893.4 907.7 908.2 913.8 930.2 By type 2 Interest-bearing debt 652.5 715.2 782.4 844.0 888.7 906.4 906.9 909.4 928.9 3 Marketable 421.3' 459.9 487.5 530.7 583.4 594.5 599.4 605.4 623.2 4 Bills 164.0 161.1 161.7 172.6 199.3 199.8 202.3 208.7 216.1 5 Notes 216.7 251.8 265.8 283.4 300.3 310.9 311.9 311.1 321.6 6 Bonds 40.6 47.0 60.0 74.7 83.9 83.8 85.2 85.5 85.4 7 Nonmarketable1 231.2 255.3 294.8 313.2 305.3 311.9 307.5 304.0 305.7 8 Convertible bonds^ 2.3 2.2 2.2 2.2 9 State and local government series 4.5 13.9 24.3 24.6 23.6 23.6 23.9 24.0 23.8 10 Foreign issues3 22.3 22.2 29.6 28.8 25.8 25.2 24.8 24.5 24.0 11 Government 22.3 22.2 28.0 23.6 19.4 18.7 18.4 18.1 17.6 12 Public 0 0 1.6 5.3 6.4 6.4 6.4 6.4 6.4 13 Savings bonds and notes 72.3 77.0 80.9 79.9 73.2 73.0 73.0 72.8 72.5 14 Government account series4 129.7 139.8 157.5 177.5 182.4 189.8 185.7 182.4 185.1 15 Non-interest-bearing debt 1.1 3.7 6.8 1.2 4.7 1.3 1.3 4.4 1.3 By holder5 16 U.S. government agencies and trust funds 147.1 154.8 170.0 187.1 189.8 197.7 193.4 17 Federal Reserve Banks 97.0 102.5 109.6 117.5 119.3 120.7 121.5 18 Private investors 409.5 461.3 508.6 540.5 583.8 589.2 593.3 19 Commercial banks 103.8 101.4 93.1 97.0 98.1 100.9 103.4 20 Mutual savings banks 5.9 5.9 5.0 4.7 5.0 5.3 5.5 21 Insurance companies 12.7 15.5 14.9 14.4 14.1 14.4 15.3 22 Other companies 27.7 22.7 21.2 23.9 24.6 25.5 25.3 n. a. n. a. 23 State and local governments 41.6 54.8 64.4 67.4 70.7 73.4 73.1 Individuals 24 Savings bonds 72.0 76.7 80.7 79.9 73.2 72.7 73.0 25 Other securities 28.8 28.6 33.3 34.2 50.9 50.0 49.9 26 Foreign and international6 78.1 109.6 137.8 123.8 125.4 126.0 127.6 27 Other miscellaneous investors7 38.9 46.0 58.2 97.6 121.8 120.7 120.2 1. Includes (not shown separately): Securities issued to the Rural Electrification 6. Consists of the investments of foreign balances and international accounts in Administration, depository bonds, retirement plan bonds, and individual retire- the United States. Beginning with July 1974, the figures exclude non-interest-bearment bonds. ing 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 penbe exchanged (or converted) at the owner's option for IV2 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 (line 5). 3. Nonmarketable dollar-denominated and foreign currency-denominated series NOTE. Gross public debt excludes guaranteed agency securities and, beginning held by foreigners. in July 1974, includes Federal Financing Bank security issues. 4. Held almost entirely by U.S. government agencies and trust funds. Data by type of security from Monthly Statement of the Public Debt of the United 5. Data for Federal Reserve Banks and U.S. government agencies and trust States (U.S. Treasury Department); data by holder from Treasury Bulletin. 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 A31 1.42 U.S. GOVERNMENT MARKETABLE SECURITIES Ownership, by maturity Par value; millions of dollars, end of period 1980 1980 TTyyppee ooff hhoollddeerr 1978 1979 11997788 11997799 Sept. Oct. Sept. Oct. All maturities 1 to 5 years 1 All holders 487,546 530,731 594,506 599,406 162,886 164,198 195,784 196,129 2 U.S. government agencies and trust funds 12,695 11,047 10,078 10,078 3,310 2,555 2,255 2,255 3 Federal Reserve Banks 109,616 117,458 120,711 121,482 31,283 28,469 37,285 37,162 4 Private investors 365,235 402,226 463,717 467,845 128,293 133,173 156,244 156,712 5 Commercial banks 68,890 69,076 75,029 76,921 38,390 38,346 45,390 45,571 6 Mutual savings banks 3,499 3,204 3,605 3,746 1,918 1,668 1,880 1,943 7 Insurance companies 11,635 11,496 11,464 12,026 4,664 4,518 4,417 4,679 8 Nonfinancial corporations 8,272 8,433 8,182 8,085 3,635 2,844 2,370 2,741 9 Savings and loan associations 3,835 3,209 4,021 3,994 2,255 1,763 2,193 2,183 10 State and local governments 18,815 15,735 20,467 20,410 3,997 3,487 4,555 4,642 11 All others 250,288 291,072 340,948 342,665 73,433 80,546 95,439 94,952 Total, within 1 year 5 to 10 years 12 All holders 228,516 255,252 276,529 279,673 50,400 50,440 53,372 53,337 13 U.S. government agencies and trust funds 1,488 1,629 1,084 1,084 1,989 871 1,398 1,398 14 Federal Reserve Banks 52,801 63,219 55,326 56,243 14,809 12,977 13,165 13,192 15 Private investors 174,227 190,403 220,084 222,346 33,601 36,592 38,809 38,747 16 Commercial banks 20,608 20,171 21,308 22,713 7,490 8,086 5,871 5,841 17 Mutual savings banks 817 836 981 1,057 496 459 454 459 18 Insurance companies 1,838 2,016 1,807 1,833 2,899 2,815 2,943 3,043 19 Nonfinancial corporations 4,048 4,933 4,638 4,123 369 308 318 367 20 Savings and loan associations 1,414 1,301 1,680 1,656 89 69 82 88 21 State and local governments 8,194 5,607 7,236 7,067 1,588 1,540 2,118 2,076 22 All others 137,309 155,539 182,434 183,896 20,671 23,314 27,022 26,875 Bills, within 1 year 10 to 20 years 23 AH holders 161,747 172,644 199,832 202,309 19,800 27,588 35,481 36,926 24 U.S. government agencies and trust funds 2 0 1 1 3,876 4,520 3,686 3,686 25 Federal Reserve Banks 42,397 45,337 44,098 44,650 2,088 3,272 5,895 5,903 26 Private investors 119,348 127,306 155,732 157,658 13,836 19,796 25,901 27,338 27 Commercial banks 5,707 5,938 8,168 9,455 956 993 1,129 1,425 28 Mutual savings banks 150 262 257 340 143 127 185 186 29 Insurance companies 753 473 528 498 1,460 1,305 1,495 1,740 30 Nonfinancial corporations 12 2,793 2,363 1,891 86 218 403 429 31 Savings and loan associations 262 219 802 801 60 58 54 54 32 State and local governments 5,524 3,100 4,836 4,912 1,420 1,762 3,559 3,574 33 All others 105,161 114,522 138,779 139,761 9,711 15,332 19,076 19,930 Other, within 1 year Over 20 years 34 AH holders 66,769 82,608 76,697 77,364 25,944 33,254 33,340 33,340 35 U.S. government agencies and trust funds 1,487 1,629 1,083 1,083 2,031 1,472 1,656 1,656 36 Federal Reserve Banks 10,404 17,882 11,262 11,593 8,635 9,520 9,005 8,982 37 Private investors 54,879 63,097 64,351 64,688 15,278 22,262 22,680 22,702 38 Commercial banks 14,901 14,233 13,140 13,258 1,446 1,470 1,332 1,371 39 Mutual savings banks 667 574 724 717 126 113 104 100 40 Insurance companies 1,084 1,543 1,280 1,336 774 842 802 730 41 Nonfinancial corporations 2,256 2,140 2,275 2,232 135 130 454 425 42 Savings and loan associations 1,152 1,081 878 855 17 19 13 13 43 State and local governments 2,670 2,508 2,400 2,155 3,616 3,339 2,998 3,051 44 All others 32,149 41,017 43,655 44,135 9,164 16,340 16,978 17,011 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) 413 nonfinancial corporations and 479 savings and loan associations, each about Data complete for U.S. government agencies and trust funds and Federal Reserve 50 percent; and (3) 492 state and local governments, about 40 percent. Banks, but data for other groups include only holdings of those institutions that "All others," a residual, includes holdings of all those not reporting in the report. The following figures show, for each category, the number and proportion Treasury Survey, including investor groups not listed separately. reporting as of Oct. 31, 1980: (1) 5,356 commercial banks, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Nonfinancial Statistics • January 1981 1.43 U.S. GOVERNMENT SECURITIES DEALERS Transactions Par value; averages of daily figures, in millions of dollars 1980, week ending Wednesday Item 1978 1979 Aug. Sept. Oct Aug. 27 Sept. 3 Sept. 10 Sept. 17 Sept. 24 Oct. 1 1 U.S. government securities 10,838 10,285 17,892 17,608 17,464 15,533 19,832 18,413 By maturity 2 Bills 6,746 6,173 7,915 10,387 10,789 11,543 9,843 10,475 9,520 11,333 11,730 10,818 3 Other within 1 year 237 392 454 465 325 350 433 377 310 178 290 465 4 1-5 years 2,320 1,889 2,417 2,745 3,377 2,745 4,544 2,813 2,508 2,805 4,754 3,777 5 5-10 years 1,148 965 1,121 1,692 1,611 1,060 979 3,091 1,793 1,382 1,686 1,281 6 Over 10 years 388 867 1,276 1,802 1,506 1,766 1,490 1,634 1,402 1,476 1,372 2,071 By type of customer 7 U.S. government securities dealers 1,268 1,135 1,448 1,333 1,503 1,296 1,541 1,257 1,103 1,397 1,902 8 U.S. government securities brokers 3,709 3,838 5,170 7,418 7,220 7,664 7,120 7,329 6,414 7,058 8,179 7,342 9 Commercial banks 2,294 1,804 1,904 2,164 2,228 2,019 2,290 2,451 2,004 2,354 2,371 2,169 10 All others1 3,567 3,508 4,660 6,977 6,657 6,485 6,337 7,354 6,012 6,365 7,381 6,808 11 Federal agency securities 1,729 2,666 3,277 2,958 2,456 2,347 2,311 3,392 2,822 1. Includes, among others, all other dealers and brokers in commodities and Transactions are market purchases and sales of U.S. government securities dealsecurities, 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. 1.44 U.S. GOVERNMENT SECURITIES DEALERS Positions and Sources of Financing Par value; averages of daily figures, in millions of dollars 1980 1980, week ending Wednesday Item 1977 1978 1979 Aug. Sept. Oct. July 30 Aug. 6 Aug. 13 Aug. 20 Aug. 27 Sept. 3 Positions1 1 U.S. government securities 5,172 2,656 3,223 5,947 3,338 2,701 7,076 6,230 7,571 6,568 4,351 4,500 2 Bills 4,772 2,452 3,813 5,149 3,753 2,557 5,674 5,381 5,318 6,337 4,300 4,330 3 Other within 1 year 99 260 -325 -1,336 -1,685 -1,082 -1,138 -910 -1,186 -1,558 -1,510 -1,603 4 1-5 years 60 -92 -455 1,391 620 755 2,031 1,739 2,152 1,026 939 648 5 5-10 years 92 40 160 218 122 -221 -99 -373 442 328 172 674 6 Over 10 years 149 -4 30 526 529 692 609 393 846 435 450 451 7 Federal agency securities 693 606 1,471 691 320 979 949 845 857 821 428 269 Financing2 8 All sources 9,877 10,204 16,003 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Commercial banks 9 New York City 1,313 599 1,396 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 10 Outside New York City 1,987 2,174 2,868 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 11 Corporations3 2,358 2,379 3,373 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 12 All others 4,158 5,052 4,104 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 1. Net 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 departments of commercial banks on a commitment, that is, trade- repurchase), plus internal funds used by bank dealer departments to finance podate 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 when 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 A33 1.45 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt outstanding Millions of dollars, end of period 1980 AAggeennccyy 11997766 11997777 11997788 Mar. Apr. May June July Aug. 1 Federal and federally sponsored agencies1 103,848 112,472 137,063 173,216 176,880 179,062 179,353 180,119 179,545 2 Federal agencies 22,419 22,760 23,488 25,583 25,776 25,904 26,667 26,810 26,930 3 Defense Department2 1,113 983 968 709 688 679 674 661 651 4 Export-Import Bank3-4 8,574 8,671 8,711 9,627 9,615 9,597 10,275 10,248 10,232 5 Federal Housing Administration5 575 581 588 550 537 531 524 516 508 6 Government National Mortgage Association participation certificates6 4,120 3,743 3,141 2,979 2,937 2,937 2,877 2,842 2,842 7 Postal Service7 2,998 2,431 2,364 1,837 1,837 1,770 1,770 1,770 1,770 8 Tennessee Valley Authority 4,935 6,015 7,460 9,440 9,695 9,920 10,075 10,300 10,445 9 United States Railway Association7 104 336 356 441 467 470 472 473 482 10 Federally sponsored agencies1 81,429 89,712 113,575 147,633 151,104 153,158 152,686 153,309 152,615 11 Federal Home Loan Banks 16,811 18,345 27,563 35,309 36,352 37,540 36,748 36,039 35,690 12 Federal Home Loan Mortgage Corporation 1,690 1,686 2,262 2,644 2,643 2,642 2,642 2,634 2,634 13 Federal National Mortgage Association 30,565 31,890 41,080 51,614 52,456 52,573 52,389 52,114 52,001 14 Federal Land Banks 17,127 19,118 20,360 15,106 13,940 13,940 13,940 12,765 12,765 15 Federal Intermediate Credit Banks 10,494 11,174 11,469 2,144 2,144 2,144 2,144 1,821 1,821 16 Banks for Cooperatives 4,330 4,434 4,843 584 584 584 584 584 584 17 Farm Credit Banks1 2,548 5,081 38,446 41,039 41,629 42,058 45,111 44,824 18 Student Loan Marketing Association8 410 515 915 1,785 1,945 2,105 2,180 2,240 2,295 19 Other 2 2 2 1 1 1 1 1 1 MEMO: 20 Federal Financing Bank debt7-9 28,711 38,580 51,298 71,885 74,009 76,009 77,408 78,870 80,024 Lending to federal and federally sponsored agencies 21 Export-Import Bank4 5,208 5,834 6,898 8,849 8,849 8,849 9,558 9,558 9,558 22 Postal Service7 2,748 2,181 2,114 1,587 1,587 1,520 1,520 1,520 1,520 23 Student Loan Marketing Association8 410 515 915 1,785 1,945 2,105 2,180 2,240 2,295 24 Tennessee Valley Authority 3,110 4,190 5,635 7,715 7,970 8,195 8,350 8,575 8,720 25 United States Railway Association7 104 336 356 441 467 470 472 473 482 Other Lending10 26 Farmers Home Administration 10,750 16,095 23,825 33,410 34,755 35,745 35,745 36,715 37,403 27 Rural Electrification Administration 1,415 2,647 4,604 7,039 7,155 7,631 7,942 8,084 8,233 28 Other 4,966 6,782 6,951 11,059 11,281 11,494 11,641 11,705 11,813 1. In September 1977 the Farm Credit Banks issued their first consolidated bonds, of Housing and Urban Development; Small Business Administration; and the and in January 1979 they began issuing these bonds on a regular basis to replace Veterans Administration. the financing activities of the Federal Land Banks, the Federal Intermediate Credit 7. Off-budget. Banks, and the Banks for Cooperatives. Line 17 represents those consolidated 8. Unlike other federally sponsored agencies, the Student Loan Marketing Asbonds outstanding, as well as any discount notes that have been issued. Lines 1 sociation may borrow from the Federal Financing Bank (FFB) since its obligations 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 and 9. The FFB, which began operations in 1974, is authorized to purchase or sell 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 particcurities market. ular agency being generally small. The Farmers Home Administration item consists 6. Certificates of participation issued prior to fiscal 1969 by the Government exclusively of agency assets, while the Rural Electrification Administration entry National Mortgage Association acting as trustee for the Farmers Home Admin- 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

A34 Domestic Nonfinancial Statistics • January 1981 1.46 NEW SECURITY ISSUES of State and Local Governments Millions of dollars TTyyppee ooff iissssuuee oorr iissssuueerr,, 1980 oorr uussee 11997777 11997788 11997799 Apr. May June July Aug. Sept.P 1 All issues, new and refunding1 46,769 48,607 43,490 4,833 4,570 5,960 4,692 3,792 4,255 Type of issue 2 General obligation 18,042 17,854 12,109 1,662 1,534 1,886 1,368 787 1,344 3 Revenue 28,655 30,658 31,256 3,170 3,032 4,071 3,319 2,995 2,902 4 Housing Assistance Administration2 5 U.S. government loans 7722 9955 112255 11 44 33 55 1100 99 Type of issuer 6 State 66,,335544 66,,663322 44,,331144 446666 774499 889977 118855 330044 664400 7 Special district and statutory authority 2211,,771177 2244,,115566 2233,,443344 22,,117755 22,,227766 33,,441144 33,,003344 22,,220000 22,,660033 8 Municipalities, counties, townships, school districts 1188,,662233 1177,,771188 1155,,661177 22,,119922 11,,553399 11,,664477 11,,446688 11,,227788 11,,000033 9 Issues for new capital, total 3366,,118899 3377,,662299 4411,,550055 44,,770044 44,,550011 55,,888866 44,,332277 33,,777711 33,,663399 Use of proceeds 55,,007766 55,,000033 55,,113300 448888 229977 778833 661188 226633 442222 10 Education 22,,995511 33,,446600 22,,444411 229999 119933 332299 114433 9988 442255 11 Transportation 88,,111199 99,,002266 88,,559944 660077 668888 556633 11,,222211 11,,117766 771166 12 Utilities and conservation 88,,227744 1100,,449944 1155,,996688 22,,006622 11,,880011 22,,998866 11,,660077 11,,442211 119988 13 Social welfare 44,,667766 33,,552266 33,,883366 331155 448844 333322 112200 334400 333311 14 Industrial aid 77,,009933 66,,112200 55,,553366 993333 11,,003388 889933 661188 447733 554477 15 Other purposes 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 reauiring the Housing Assistance Administration to make annual contributions to the local authority. 1.47 NEW SECURITY ISSUES of Corporations Millions of dollars 1980 Type of issue or issuer, or use 11997777 11997788 11997799 Mar. Apr. May June July' Aug. Sept. 1 All issues1 53,792 47,230 51,464 4,353 5,677 9,067 9,511 7,941 5,371 4,922 2 Bonds 42,015 36,872 40,139 2,771 4,775 7,335 8,148 6,567 4,147 2,813 Type of offering 3 Public 24,072 19,815 25,814 1,985 3,828 6,810 7,548 5,354 3,843 2,421 4 Private placement 17,943 17,057 14,325 786 947 525 600 1,213 304 392 Industry group 5 Manufacturing 12,204 9,572 9,667 693 1,697 2,400 2,318 2,851 1,499 509 6 Commercial and miscellaneous 6,234 5,246 3,941 215 457 560 1,629 999 203 357 7 Transportation 1,996 2,007 3,102 94 173 364 385 329 338 401 8 Public utility 8,262 7,092 8,118 1,423 572 723 1,412 316 971 555 9 Communication 3,063 3,373 4,219 196 598 1,171 209 787 580 517 10 Real estate and financial 10,258 9,586 11,095 152 1,278 2,116 2,195 1,284 556 472 11 Stocks 11,777 10,358 11,325 1,582 902 1,732 1,363 1,374 1,224 2,109 Type 12 Preferred 3,916 2,832 3,574 525 223 202 382 360 101 392 13 Common 7,861 7,526 7,751 1,057 679 1,530 981 1,014 1,123 1,717 Industry group 14 Manufacturing 1,189 1,241 1,679 598 81 215 127 165 293 502 15 Commercial and miscellaneous 1,834 1,816 2,623 404 374 512 202 390 238 569 16 Transportation 456 263 255 36 9 27 9 32 54 17 Public utility 5,865 5,140 5,171 408 319 615 494 714 463 633 18 Communication 1,379 264 303 27 53 25 126 46 6 19 Real estate and financial 1,049 1,631 1,293 109 67 338 406 104 152 345 1. Figures, which represent gross proceeds of issues maturing in more than one 1933, employee stock plans, investment companies other than closed-end, intrayear, 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 A35 1.48 OPEN-END INVESTMENT COMPANIES Net Sales and Asset Position Millions of dollars 1980 IItteemm 11997788 11997799 Apr. May June July Aug. Sept. Oct / Nov. INVESTMENT COMPANIES1 1 Sales of own shares2 6,645 7,495 1,010 1,175 1,772 1,890 1,507 1,405 1,523 1,289 2 Redemptions of own shares3 7,231 8,393 762 647 775 863 1,019 1,228 1,362 1,086 3 Net sales -586 -898 248 528 997 1,027 488 177 161 203 4 Assets4 44,980 49,493 47,270 50,539 52,946 54,406 54,941 55,779 56,156 60,335 5 Cash position5 4,507 4,983 5,862 6,209 6,495 5,629 5,619 5,481 5,460 5,470 6 Other 40,473 44,510 41,708 44,330 46,451 48,777 49,322 50,298 50,696 54,865 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 reinvestment curities. 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 Seother 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. 1.49 CORPORATE PROFITS AND THEIR DISTRIBUTION Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1979 1980 AAccccoouunntt 11997777 11997788 11997799 01 02 03 04 Q1 02 Q3 1 Profits before tax 177.1 206.0 236.6 233.3 227.9 242.3 243.0 260.4 204.8 222.4 2 Profits tax liability 72.6 84.5 92.5 91.3 88.7 94.0 96.1 102.4 77.6 85.2 3 Profits after tax 104.5 121.5 144.1 142.0 139.2 148.3 146.9 158.0 127.2 137.2 4 Dividends 42.1 47.2 52.7 51.5 52.3 52.8 54.4 56.7 58.6 59.7 5 Undistributed profits 62.4 74.4 91.4 90.5 86.9 95.5 92.5 101.3 68.6 77.5 6 Capital consumption allowances 109.3 119.8 131.0 125.4 130.4 132.8 135.2 137.4 139.3 141.4 7 Net cash flow 171.7 194.1 222.3 215.9 217.3 228.3 227.7 238.7 207.9 218.9 SOURCE. Survey of Current Business (U.S. Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 DomesticN onfinancialS tatistics • January 1981 1.50 NONFINANCIAL CORPORATIONS Current Assets and Liabilities Billions of dollars, except for ratio 1979 1980 AAccccoouunntt 11997755 11997766 11997777 11997788 Q1 Q2 Q3 Q4 Q1 Q2 1 Current assets 759.0 826.8 902.1 1,030.0 1,081.0 1,108.2 1,169.5 1,200.9 1,235.2 1,233.8 2 Cash 82.1 88.2 95.8 104.5 102.7 100.1 103.7 116.1 110.2 111.4 3 U.S. government securities 19.0 23.4 17.6 16.3 17.4 18.6 15.8 15.6 15.1 13.9 4 Notes and accounts receivable 272.1 292.8 324.7 383.8 408.1 421.1 453.0 456.8 471.2 464.2 5 Inventories 315.9 342.4 374.8 426.9 451.4 465.2 489.4 501.7 519.5 525.7 6 Other 69.9 80.1 89.2 98.5 101.4 103.2 107.7 110.8 119.3 118.7 7 Current liabilities 451.6 494.7 549.4 665.5 705.4 724.7 777.8 809.1 838.3 828.1 8 Notes and accounts payable 264.2 281.9 313.2 373.7 391.3 406.4 438.8 456.3 467.9 463.1 9 Other 187.4 212.8 236.2 291.7 314.1 318.3 339.0 352.8 370.4 364.9 10 Net working capital 307.4 332.2 352.7 364.6 375.6 383.5 391.7 391.8 397.0 405.7 11 MEMO: Current ratio 1 1.681 1.672 1.642 1.548 1.532 1.529 1.504 1.484 1.474 1.490 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. 1.51 TOTAL NONFARM BUSINESS EXPENDITURES on New Plant and Equipment Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1979 1980 1981 IInndduussttrryy 11997799 1199880022 Q3 Q4 Q1 Q2 Q3 Q42 Ql2 Q22 1 Total nonfarm business 270.46 294.30 273.15 284.30 291.89 294.36 296.23 294.95 310.59 323.84 Manufacturing 2 Durable goods industries 51.07 58.25 52.13 55.03 58.28 59.38 58.19 57.42 60.23 65.36 3 Nondurable goods industries 47.61 56.65 47.97 51.55 53.49 56.32 58.21 57.96 62.46 65.21 Nonmanufacturing 4 Mining 11.38 13.50 11.40 11.86 11.89 12.81 13.86 15.25 16.07 1188..0022 Transportation 5 Railroad 4.03 4.17 4.13 4.24 4.46 4.06 3.98 4.22 3.62 4.07 6 Air 4.01 3.97 3.95 4.55 3.90 4.27 4.06 3.59 4.04 3.41 7 Other 4.31 3.84 4.60 4.41 4.11 3.76 4.18 3.44 3.83 4.13 Public utilities 8 Electric 27.65 27.44 28.71 27.16 28.98 27.91 28.14 25.05 27.99 27.93 9 Gas and other 6.31 7.18 6.35 6.92 7.28 7.12 7.44 6.90 8.79 8.29 10 Trade and services 79.26 82.28 78.86 82.69 82.17 81.07 81.19 84.87 84.09 87.43 11 Communication and other1 34.83 37.02 35.05 35.90 37.34 37.66 36.97 36.26 39.48 40.01 1. "Other" consists of construction; social services and membership organization; 2. Anticipated by business, and forestry, fisheries, and agricultural services. 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 A37 1.52 DOMESTIC FINANCE COMPANIES Assets and Liabilities Billions of dollars, end of period 1979 1980 AAccccoouunntt 11997744 11997755 11997766 11997777 11997788 Q3 Q4 01 Q2 03 ASSETS Accounts receivable, gross 1 Consumer 36.1 36.0 38.6 44.0 52.6 62.3 65.7 67.7 70.2 71.7 2 Business 37.2 39.3 44.7 55.2 63.3 68.1 70.3 70.6 70.3 66.9 3 Total 73.3 75.3 83.4 99.2 116.0 130.4 136.0 138.4 140.4 138.6 4 LESS: Reserves for unearned income and losses ... 9.0 9.4 10.5 12.7 15.6 18.7 20.0 20.4 21.4 22.3 5 Accounts receivable, net 64.2 65.9 72.9 86.5 100.4 111.7 116.0 118.0 119.0 116.3 6 Cash and bank deposits 3.0 2.9 2.6 2.6 3.5 7 Securities .4 1.0 1.1 .9 1.3 25.81 24.9 23.7 26.1 28.3 8 Allother 12.0 11.8 12.6 14.3 17.3 9 Total assets 79.6 81.6 89.2 104.3 122.4 137.4 140.9 141.7 145.1 144.7 LIABILITIES 10 Bank loans 9.7 8.0 6.3 5.9 6.5 7.8 8.5 9.7 10.1 10.1 11 Commercial paper 20.7 22.2 23.7 29.6 34.5 39.2 43.3 40.8 40.7 40.5 Debt 12 Short-term, n.e.c 4.9 4.5 5.4 6.2 8.1 9.1 8.2 7.4 7.9 7.7 13 Long-term n.e.c 26.5 27.6 32.3 36.0 43.6 47.5 46.7 48.9 50.5 52.0 14 Other 5.5 6.8 8.1 11.5 12.6 15.4 14.2 15.7 16.0 14.6 15 Capital, surplus, and undivided profits 12.4 12.5 13.4 15.1 17.2 18.4 19.9 19.2 19.9 19.8 16 Total liabilities and capital 79.6 81.6 89.2 104.3 122.4 137.4 140.9 141.7 145.1 144.7 1. Beginning Q1 1979, asset items on lines 6, 7, and 8 are combined. NOTE. Components may not add to totals due to rounding. 1.53 DOMESTIC FINANCE COMPANIES Business Credit Millions of dollars, seasonally adjusted except as noted Changes in accounts Extensions Repayments receivable AAAccccccooouuunnntttsss rrreeeccceeeiiivvvaaabbbllleee TTTyyypppeee ooouuu SSS ttt eee sss ppp tttaaa ttt... nnn ddd 333 iii 000 nnn ,,, ggg 1980 1980 1980 111999888111''' July Aug. Sept. July Aug. Sept. July Aug. Sept. 1 Total 66,893 -599 -412 -321 15,187 15,545 14,808 15,786 15,957 15,129 2 Retail automotive (commercial vehicles) 12,799 -363 -232 -221 772 883 889 1,135 1,115 1,110 3 Wholesale automotive 10,004 -514 -101 -333 4,338 4,710 4,125 4,852 4,811 4,458 4 Retail paper on business, industrial and farm equipment 21,311 295 155 586 1,466 1,601 1,595 1,171 1,446 1,009 5 Loans on commercial accounts receivable and factored commercial accounts receivable . 5,843 -194 -358 -827 6,479 6,349 5,938 6,673 6,707 6,765 6 All other business credit 16,936 177 124 474 2,132 2,002 2,261 1,955 1,878 1,787 1. Not seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Nonfinancial Statistics • January 1981 1.54 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1980 Item 1976 1977 1978 June July Aug. Sept. Oct. Nov. 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 81.3 89.0 88.6 83.7 84.0 77.1 2 Amount of loan (thousands of dollars) 35.9 40.5 45.9 58.0 63.7 61.5 58.7 61.3 56.1 3 Loan/price ratio (percent) 74.2 76.3 75.3 74.1 73.5 71.2 72.2 75.0 75.2 4 Maturity (years) 27.2 27.9 28.0 28.4 28.9 27.7 27.6 28.2 27.6 5 Fees and charges (percent of loan amount)2 1.44 1.33 1.39 2.21 2.13 2.12 2.10 2.16 2.15 6 Contract rate (percent per annum) 8.76 8.80 9.30 12.24 12.11 11.84 11.95 12.20 12.62 Yield (percentper annum) 7 FHLBB series3 8.99 9.01 9.54 12.66 12.51 12.25 12.35 12.60 8 HUD series4 8.99 8.95 9.68 12.45 12.45 13.25 13.70 14.10 14.70 SECONDARY MARKETS Yield (percent per annum) 9 FHA mortgages (HUD series)5 8.82 8.68 9.70 11.85 12.39 13.54 14.26 14.38 14.47 10 GNMA securities6 8.17 8.04 8.98 11.04 11.53 12.34 12.84 12.91 13.55 FNMA auctions7 11 Government-underwritten loans 8.99 8.73 9.77 12.35 12.65 13.92 14.77 14.94 15.54 12 Conventional loans 9.11 8.98 10.01 12.93 12.80 13.66 14.45 14.70 15.30 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 32,904 34,370 43,311 55,419 55,362 55,361 55,632 56,188 56,619 14 FHA-insured 18,916 18,457 21,243 n.a. n.a. n.a. n.a. n.a. n.a. 15 VA-guaranteed 9,212 9,315 10,544 n.a. n.a. n.a. n.a. n.a. n.a. 16 Conventional 4,776 6,597 11,524 18,001 18,034 18,049 18,074 18,148 18,239 Mortgage transactions (during period) 17 Purchases 3,606 4,780 12,303 206 100 167 500 771 579 18 Sales 86 67 5 0 0 0 0 0 0 Mortgage commitments8 19 Contracted (during period) 6,247 9,729 18,960 441 734 1,180 1,070 514 472 20 Outstanding (end of period) 3,398 4,698 9,201 4,215 4,230 4,545 4,789 4,399 3,963 Auction of 4-month commitments to buy Government-underwritten loans 21 Offered9 4,929.8 7,974.1 12,978 602.5 1,055.6 1,063.3 907.0 427.8 252.0 22 Accepted 2,787.2 4,846.2 6,747.2 266.5 430.3 628.10 538.0 257.7 135.6 Conventional loans 23 Offered9 2,595.7 5,675.2 9,933.0 169.7 228.7 430.4 347.7 107.6 81.6 24 Accepted 1,879.2 3,917.8 5,110.9 76.0 140.9 218.8 209.8 93.9 68.8 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)10 25 Total 4,269 3,276 3,064 4,014 4,151 4,295 4,543 4,727 44,,884433 26 FHA/VA 1,618 1,395 1,243 1,072 1,066 1,058 1,050 1,044 1,038 27 Conventional 2,651 1,881 1,822 2,942 3,085 3,237 3,492 3,629 3,715 Mortgage transactions (during period) 28 Purchases 1,175 3,900 6,524 225 440 495 521 398 n.a. 29 Sales 1,396 4,131 6,211 232 288 320 275 187 93.7 Mortgage commitments11 30 Contracted (during period) 1,477 5,546 7,451 577 708 476 218 222 180 31 Outstanding (end of period) 333 1,063 1,410 1,246 1,386 1,300 934 726 653 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 mortgages institutional lender groups. Compiled by the Federal Home Loan Bank Board in carrying the prevailing ceiling rate. Monthly figures are unweighted averages of cooperation with the Federal Deposit Insurance Corporation. 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 servor the seller) in order to obtain a loan. icing) on accepted bids in Federal National Mortgage Association's auctions of 4- 3. Average effective interest rates on loans closed, assuming prepayment at the month commitments to purchase home mortgages, assuming prepayment in 12 end of 10 years. 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 A39 1.55 MORTGAGE DEBT OUTSTANDING Millions of dollars, end of period 1979 1980 TTyyppee ooff hhoollddeerr,, aanndd ttyyppee ooff pprrooppeerrttyy 11997777 11997788 11997799 Q3 Q4 Q1 Q2 Q3 1 All holders 1,023,505 1,172,754 1,333,550 1,295,935 1,333,550 1,363,787 1,386,344 1,419,155 2 1- to 4-family 656,566 761,843 872,068 846,287 872,068 890,121 904,226 926,161 3 Multifamily 111,841 121,972 130,713 128,270 130,713 132,795 133,646 136,010 4 Commercial 189,274 212,746 238,412 232,208 238,412 243,839 247,085 252,715 5 65,824 76,193 92,357 89,170 92,357 97,032 101,387 104,269 6 Major financial institutions 745,011 848,095 939,487 920,231 939,487 951,898 958,887 977,449 7 Commercial banks1 178,979 213,963 245,998 239,627 245,998 251,198 253,098 257,998 8 1- to 4-family 105,115 126,966 145,975 142,195 145,975 149,061 150,188 153,095 9 Multifamily 9,215 10,912 12,546 12,221 12,546 12,811 12,908 13,158 10 Commercial 56,898 67,056 77,096 75,099 77,096 78,725 79,321 80,857 11 Farm 7,751 9,029 10,381 10,112 10,381 10,601 10,681 10,888 12 Mutual savings banks 88,104 95,157 98,908 97,929 98,908 99,151 99,150 99,306 13 1- to 4-family 57,637 62,252 64,706 64,065 64,706 64,865 64,864 64,966 14 Multifamily 15,304 16,529 17,180 17,010 17,180 17,223 17,223 17,249 15 Commercial 15,110 16,319 16,963 16,795 16,963 17,004 17,004 17,031 16 Farm 53 57 59 59 59 59 59 60 17 Savings and loan associations 381,163 432,808 475,797 468,307 475,797 479,078 481,184 492,068 18 1- to 4-family 310,686 356,114 394,436 387,992 394,436 398,114 398,864 408,908 19 Multifamily 32,513 36,053 37,588 37,277 37,588 37,224 37,340 38,185 20 Commercial 37,964 40,641 43,773 43,038 43,773 43,740 43,980 44,975 21 Life insurance companies 96,765 106,167 118,784 114,368 118,784 122,471 125,455 128,077 22 1- to 4-family 14,727 14,436 16,193 14,884 16,193 16,850 17,796 17,996 23 Multifamily 18,807 19,000 19,274 19,107 19,274 19,590 19,284 19,357 24 Commercial 54,388 62,232 71,137 68,513 71,137 73,618 75,693 77,995 25 Farm 8,843 10,499 12,180 11,864 12,180 12,413 12,682 12,729 26 Federal and related agencies 70,006 81,853 97,293 93,143 97,293 104,133 108,742 110,695 27 Government National Mortgage Association 3,660 3,509 3,852 3,382 3,852 3,919 4,466 4,389 28 1- to 4-family 1,548 877 763 780 763 749 736 719 29 Multifamily 2,112 2,632 3,089 2,602 3,089 3,170 3,730 3,670 30 Farmers Home Administration 1,353 926 1,274 1,383 1,274 2,845 3,375 3,525 31 1- to 4-family 626 288 417 163 417 1,139 1,383 978 32 Multifamily 275 320 71 299 71 408 636 774 33 Commercial 149 101 174 262 174 409 402 370 34 Farm 303 217 612 659 612 889 954 1,403 35 Federal Housing and Veterans Administration 5,212 5,419 5,764 5,672 5,764 5,833 5,894 5,769 36 1- to 4-family 1,627 1,641 1,863 1,795 1,863 1,908 1,953 1,826 37 Multifamily 3,585 3,778 3,901 3,877 3,901 3,925 3,941 3,943 38 Federal National Mortgage Association 34,369 43,311 51,091 49,173 51,091 53,990 55,419 55,632 39 1- to 4-family 28,504 37,579 45,488 43,534 45,488 48,394 49,837 50,071 40 Multifamily 5,865 5,732 5,603 5,639 5,603 5,596 5,582 5,561 41 Federal Land Banks 22,136 25,624 31,277 29,804 31,277 33,311 35,574 36,837 42 1- to 4-family 670 927 1,552 1,374 1,552 1,708 1,893 1,985 43 Farm 21,466 24,697 29,725 28,430 29,725 31,603 33,681 34,852 44 Federal Home Loan Mortgage Corporation 3,276 3,064 4,035 3,729 4,035 4,235 4,014 4,543 45 1- to 4-family 2,738 2,407 3,059 2,850 3,059 3,210 3,037 3,459 46 Multifamily 538 657 976 879 976 1,025 977 1,084 47 Mortgage pools or trusts2 70,289 88,633 119,278 110,648 119,278 124,632 129,647 135,356 48 Government National Mortgage Association 44,896 54,347 76,401 69,357 76,401 80,843 84,282 89,452 49 1- to 4-family 43,555 52,732 74,546 67,535 74,546 78,872 82,208 87,276 50 Multifamily 1,341 1,615 1,855 1,822 1,855 1,971 2,074 2,176 51 Federal Home Loan Mortgage Corporation 6,610 11,892 15,180 14,421 15,180 15,454 16,120 16,659 52 1- to 4-family 5,621 9,657 12,149 11,568 12,149 12,359 12,886 13,318 53 Multifamily 989 2,235 3,031 2,853 3,031 3,095 3,234 3,341 54 Farmers Home Administration 18,783 22,394 27,697 26,870 27,697 28,335 29,245 29,245 55 1- to 4-family 11,397 13,400 14,884 14,972 14,884 14,926 15,224 15,224 56 Multifamily 759 1,116 2,163 1,763 2,163 2,159 2,159 2,159 57 Commercial 2,945 3,560 4,328 4,054 4,328 4,495 4,763 4,763 58 Farm 3,682 4,318 6,322 6,081 6,322 6,755 7,099 7,099 59 Individual and others3 138,199 154,173 177,492 171,913 177,492 183,153 189,068 195,655 60 1- to 4-family 72,115 82,567 96,037 92,580 96,037 99,012 102,357 106,340 61 Multifamily 20,538 21,393 23,436 22,921 23,436 23,936 24,558 25,353 62 Commercial 21,820 22,837 24,941 24,447 24,941 25,493 25,922 26,724 63 Farm 23,726 27,376 33,078 31,965 33,078 34,712 36,231 37,238 1. Includes loans held by nondeposit trust companies but not bank trust de- NOTE. Based on data from various institutional and governmental 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, state terpolations and extrapolations when required, are estimated mainly by the Federal 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

A40 Domestic Financial Statistics • January 1981 1.56 CONSUMER INSTALLMENT CREDIT1 Total Outstanding, and Net Change A Millions of dollars 1980 HHoollddeerr,, aanndd ttyyppee ooff ccrreeddiitt 1977 1978 1979 May June July Aug. Sept. Oct. Nov. Amounts outstanding (end of period) 1 Total 230,564 273,645 312,024 305,788 304,399 303,853 305,763 306,926 307,222 308,051 By major holder 2 Commercial banks 112,373 136,016 154,177 149,238 147,883 146,555 146,548 146,362 145,895 145,147 3 Finance companies 44,868 54,298 68,318 72,101 73,118 73,909 74,433 74,823 74,985 75,690 4 Credit unions 37,605 44,334 46,517 44,139 42,995 42,644 43,347 43,562 43,518 43,606 5 Retailers2 23,490 25,987 28,119 24,970 24,786 24,620 24,918 25,301 25,703 26,469 6 Savings and loans 7,089 7,097 8,424 8,782 8,823 8,991 9,141 9,266 9,611 9,687 7 Gasoline companies 2,963 3,220 3,729 3,948 4,175 4,500 4,710 4,872 4,736 4,662 8 Mutual savings banks 2,176 2,693 2,740 2,610 2,619 2,634 2,666 2,740 2,774 2,790 By major type of credit 9 Automobile 82,911 101,647 116,362 17,058 116,456 116,125 116,868 116,781 116,657 116,517 10 Commercial banks 49,577 60,510 67,367 65,035 64,224 63,344 63,177 62,734 62,350 61,848 11 Indirect paper 27,379 33,850 38,338 37,435 36,948 36,233 36,047 35,768 35,572 35,284 12 Direct loans 22,198 26,660 29,029 27,600 27,276 27,111 27,130 26,966 26,778 26,564 13 Credit unions 18,099 21,200 22,244 21,107 20,558 20,392 20,728 20,831 20,810 20,852 14 Finance companies 15,235 19,937 26,751 30,916 31,674 32,389 32,963 33,216 33,497 33,817 15 Revolving 39,274 48,309 56,937 53,225 53,042 53,036 53,771 54,406 54,598 55,304 16 Commercial banks 18,374 24,341 29,862 28,617 28,280 28,073 28,305 28,403 28,331 28,360 17 Retailers 17,937 20,748 23,346 20,660 20,587 20,463 20,756 21,131 21,531 22,282 18 Gasoline companies 2,963 3,220 3,729 3,948 4,175 4,500 4,710 4,872 4,736 4,662 19 Mobile home 14,945 15,235 16,838 16,912 16,988 17,004 17,068 17,113 17,276 17,293 20 Commercial banks 9,124 9,545 10,647 10,532 10,593 10,568 10,564 10,538 10,502 10,452 21 Finance companies 3,077 3,152 3,390 3,529 3,544 3,546 3,566 3,601 3,657 3,702 22 Savings and loans 2,342 2,067 2,307 2,382 2,391 2,437 2,477 2,511 2,654 2,675 23 Credit unions 402 471 494 469 460 453 461 463 463 464 24 Other 93,434 108,454 121,887 118,593 117,913 117,688 118,056 118,626 118,691 118,937 25 Commercial banks 35,298 41,620 46,301 45,054 44,786 44,570 44,502 44,687 44,712 44,487 26 Finance companies 26,556 31,209 38,177 37,656 37,900 37,974 37,904 38,006 37,831 38,171 27 Credit unions 19,104 22,663 23,779 22,563 21,977 21,799 22,158 22,268 22,245 22,290 28 Retailers 5,553 5,239 4,773 4,310 4,199 4,157 4,162 4,170 4,172 4,187 29 Savings and loans 4,747 5,030 6,117 6,400 6,432 6,554 6,664 6,755 6,957 7,012 30 Mutual savings banks 2,176 2,693 2,740 2,610 2,619 2,634 2,666 2,740 2,774 2,790 Net change (during period)3 31 Total 35,462 43,079 38,381 -2,677 -2,045 -1,199 489 1,055 702 839 By major holder 32 Commercial banks 18,645 23,641 18,161 -1,936 -1,783 -1,749 -682 -265 -336 -120 33 Finance companies 5,949 9,430 14,020 246 744 439 387 613 454 594 34 Credit unions 6,436 6,729 2,185 -986 -1,298 -270 465 36 63 218 35 Retailers2 2,654 2,497 2,132 -46 68 89 160 456 134 52 36 Savings and loans 1,309 7 1,327 100 96 155 5 93 246 -14 37 Gasoline companies 132 257 509 -47 124 132 136 90 98 72 38 Mutual savings banks 337 518 47 -8 4 5 18 32 43 37 By major type of credit 39 Automobile 15,204 18,736 14,715 -1,041 -1,026 -717 355 84 201 245 40 Commercial banks 9,956 10,933 6,857 -1,008 -1,007 -1,083 -344 -362 -348 -138 41 Indirect paper 5,307 6,471 4,488 -460 -601 -784 -286 -282 -170 -44 42 Direct loans 4,649 4,462 2,369 -548 -406 -299 -58 -80 -178 -94 43 Credit unions 2,861 3,101 1,044 -481 -636 -108 215 10 18 101 44 Finance companies 2,387 4,702 6,814 448 617 474 484 436 531 282 45 Revolving 6,248 9,035 8,628 -287 -95 38 281 478 273 265 46 Commercial banks 4,015 5,967 5,521 -241 -338 -259 -24 -81 -19 121 47 Retailers 2,101 2,811 2,598 1 119 165 169 469 194 72 48 Gasoline companies 132 257 509 -47 124 132 136 90 98 72 49 Mobile home 371 286 1,603 -50 58 14 33 43 141 24 50 Commercial banks 387 419 1,102 -71 26 -23 -8 -22 -21 -33 51 Finance companies -187 74 238 7 12 -2 14 30 42 44 52 Savings and loans 101 -276 240 23 29 45 21 35 120 11 53 Credit unions 70 69 23 -9 -9 -6 6 0 0 2 54 Other 13,639 15,022 13,435 -1,299 -982 -534 -180 450 87 305 55 Commercial banks 4,287 6,322 4,681 -616 -464 -384 -306 200 52 -70 56 Finance companies 3,749 4,654 6,968 -209 115 -33 -111 147 -119 268 57 Credit unions 3,505 3,559 1,118 -496 -653 -156 244 26 45 115 58 Retailers 553 -314 -466 -47 -51 -76 -9 -13 -60 -20 59 Savings and loans 1,208 283 1,087 77 67 110 -16 58 126 -25 60 Mutual savings banks 337 518 47 -8 4 5 18 32 43 37 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 $70.9 billion at the end of 1979, $64.7 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 $55.4 billion at the end of 1976. installments. 2. Includes auto dealers and excludes 30-day charge credit held by travel and ^ These data have been revised entertainment companies. 3. Net change equals extensions minus liquidations (repayments, charge-offs, and other credit); figures for all months are seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Consumer Debt A41 1.57 CONSUMER INSTALLMENT CREDIT Extensions and Liquidations A Millions of dollars; monthly data are seasonally adjusted. 1980 HHoollddeerr,, aanndd ttyyppee ooff ccrreeddiitt 1977 1978 1979 May June July Aug. Sept. Oct. Nov. Extensions 1 Total 257,600 297,668 324,777 22,093 22,349 23,997 26,176 27,064 27,365 25,991 By major holder 2 Commercial banks 117,896 142,433 154,733 9,785 9,892 10,098 11,107 11,671 11,977 11,432 3 Finance companies 41,989 50,505 61,518 4,320 4,439 4,809 5,155 5,355 5,323 4,852 4 Credit unions 34,028 38,111 34,926 1,575 1,318 2,305 3,085 2,752 2,872 2,795 5 Retailers1 42,183 44,571 47,676 4,072 4,186 4,148 4,263 4,596 4,291 4,250 6 Savings and loans 4,978 3,724 5,901 508 518 582 454 539 695 444 7 Gasoline companies 14,617 16,017 18,005 1,700 1,847 1,902 1,941 1,965 2,009 2,024 8 Mutual savings banks 1,909 2,307 2,018 133 149 153 171 186 198 194 By major type of credit 9 Automobile 75,641 87,981 93,901 5,533 5,550 6,068 7,400 77,,551188 77,,554444 77,,111177 10 Commercial banks 46,363 52,969 53,554 2,745 2,815 2,771 3,606 3,713 3,791 3,552 11 Indirect paper 25,149 29,342 29,623 1,600 1,490 1,329 1,866 2,035 2,135 1,962 12 Direct loans 21,214 23,627 23,931 1,145 1,325 1,442 1,740 1,678 1,656 1,590 13 Credit unions 16,616 18,539 17,397 817 707 1,197 1,570 1,455 1,457 1,402 14 Finance companies 12,662 16,473 22,950 1,971 2,028 2,100 2,224 2,350 2,296 2,163 15 Revolving 87,596 105,125 120,174 10,302 10,341 10,679 10,700 11,143 11,124 10,953 16 Commercial banks 38,256 51,333 61,048 4,996 4,771 5,059 4,989 5,067 5,264 5,155 17 Retailers 34,723 37,775 41,121 3,606 3,723 3,718 3,770 4,111 3,851 3,774 18 Gasoline companies 14,617 16,017 18,005 1,700 1,847 1,902 1,941 1,965 2,009 2,024 19 Mobile home 5,712 5,412 6,471 299 424 377 415 442 513 424 20 Commercial banks 3,466 3,697 4,542 164 281 226 263 250 257 243 21 Finance companies 644 886 797 52 54 52 56 84 89 93 22 Savings and loans 1,406 609 948 81 87 95 78 95 159 74 23 Credit unions 196 220 184 2 2 4 18 13 8 14 24 Other 88,651 99,150 104,231 5,959 6,034 6,873 7,661 7,961 8,184 7,497 25 Commercial banks 29,811 34,434 35,589 1,880 2,025 2,042 2,249 2,641 2,665 2,482 26 Finance companies 28,683 33,146 37,771 2,297 2,357 2,657 2,875 2,921 2,938 2,596 27 Credit unions 17,216 19,352 17,345 756 609 1,104 1,497 1,284 1,407 1,379 28 Retailers 7,460 6,796 6,555 466 463 430 493 485 440 476 29 Savings and loans 3,572 3,115 4,953 427 431 487 376 444 536 370 30 Mutual savings banks 1,909 2,307 2,018 133 149 153 171 186 198 194 Liquidations 31 Total 222,138 254,589 286,396 24,770 24,394 25,196 25,687 26,009 26,663 25,152 By major holder 32 Commercial banks 99,251 118,792 136,572 11,721 11,675 11,847 11,789 11,936 1122,,331133 11,552 33 Finance companies 36,040 41,075 47,498 4,074 3,695 4,370 4,768 4,742 4,869 4,258 34 Credit unions 27,592 31,382 32,741 2,561 2,616 2,575 2,620 2,716 2,809 2,577 35 Retailers1 39,529 42,074 45,544 4,118 4,118 4,059 4,103 4,140 4,157 4,198 36 Savings and loans 3,669 3,717 4,574 408 422 427 449 446 449 458 37 Gasoline companies 14,485 15,760 17,496 1,747 1,723 1,770 1,805 1,875 1,911 1,952 38 Mutual savings Banks 1,572 1,789 1,971 141 145 148 153 154 155 157 By major type of credit 39 Automobile 60,437 69,245 79,186 6,574 6,576 6,785 7,045 77,,443344 7,343 6,872 40 Commercial banks 36,407 42,036 46,697 3,753 3,822 3,854 3,950 4,075 4,139 3,690 41 Indirect paper 19,842 22,871 25,135 2,060 2,091 2,113 2,152 2,317 2,305 2,006 42 Direct loans 16,565 19,165 21,562 1,693 1,731 1,741 1,798 1,758 1,834 1,684 43 Credit unions 13,755 15,438 16,353 1,298 1,343 1,305 1,355 1,445 1,439 1,301 44 Finance companies 10,275 11,771 16,136 1,523 1,411 1,626 1,740 1,914 1,765 1,881 45 Revolving 81,348 96,090 111,546 10,589 10,436 10,641 10,419 10,665 10,851 10,688 46 Commercial banks 34,241 45,366 55,527 5,237 5,109 5,318 5,013 5,148 5,283 5,034 47 Retailers 32,622 34,964 38,523 3,605 3,604 3,553 3,601 3,642 3,657 3,702 48 Gasoline companies 14,485 15,760 17,496 1,747 1,723 1,770 1,805 1,875 1,911 1,952 49 Mobile home 5,341 5,126 4,868 349 366 363 382 399 372 400 50 Commercial banks 3,079 3,278 3,440 235 255 249 271 272 278 276 51 Finance companies 831 812 559 45 42 54 42 54 47 49 52 Savings and loans 1,305 885 708 58 58 50 57 60 39 63 53 Credit unions 126 151 161 11 11 10 12 13 8 12 54 Other 75,012 84,128 90,796 7,258 7,016 7,407 7,841 7,511 8,097 7,192 55 Commercial banks 25,524 28,112 30,908 2,496 2,489 2,426 2,555 2,441 2,613 2,552 56 Finance companies 24,934 28,492 30,803 2,506 2,242 2,690 2,986 2,774 3,057 2,328 57 Credit unions 13,711 15,793 16,227 1,252 1,262 1,260 1,253 1,258 1,362 1,264 58 Retailers 6,907 7,110 7,021 513 514 506 502 498 500 496 59 Savings and loans 2,364 2,832 3,866 350 364 377 392 386 410 395 60 Mutual savings banks 1,572 1,789 1,971 141 145 148 153 154 155 157 1. Includes auto dealers and excludes 30-day charge credit held by travel and A These data have been revised, entertainment companies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 DomesticN onfinancial Statistics • January 1981 1.58 FUNDS RAISED IN U.S. CREDIT MARKETS Billions of dollars; quarterly data are at seasonally adjusted annual rates. 1977 1978 1979 1980 TTrraannssaaccttiioonn ccaatteeggoorryy,, sseeccttoorr 1974 1975 1976 1977 1978 1979 H2 HI H2 HI H2 HI Nonfinancial sectors 1 Total funds raised 191.3 210.8 271.9 338.5 400.3 394.9 378.9 384.5 416.1 380.5 408.2 325.1 2 Excluding equities 187.4 200.7 261.1 335.4 398.2 390.6 373.8 387.1 409.3 377.7 402.3 316.5 By sector and instrument 3 U.S. government 11.8 85.4 69.0 56.8 53.7 37.4 67.4 61.4 46.0 28.6 46.1 62.8 4 Treasury securities 12.0 85.8 69.1 57.6 55.1 38.8 68.6 62.3 47.9 30.9 46.6 63.4 5 Agency issues and mortgages -.2 -.4 -.1 -.9 -1.4 -1.4 -1.2 -.9 -1.9 -2.3 -.5 -.6 6 All other nonfinancial sectors 179.5 125.4 202.9 281.8 346.6 357.6 311.5 323.1 370.2 351.9 362.1 262.3 7 Corporate equities 3.8 10.1 10.8 3.1 2.1 4.3 5.1 -2.6 6.8 2.8 5.9 8.6 8 Debt instruments 175.6 115.3 192.0 278.6 344.5 353.2 306.4 325.7 363.4 349.1 356.2 253.7 9 Private domestic nonfinancial sectors 164.1 112.1 182.0 267.9 314.4 336.4 294.2 302.5 326.3 338.6 333.0 234.2 10 Corporate equities 4.1 9.9 10.5 2.7 2.6 3.5 4.9 -1.8 7.0 2.8 4.1 6.3 11 Debt instruments 160.0 102.1 171.5 265.1 311.8 333.0 289.3 304.3 319.2 335.8 328.9 227.8 12 Debt capital instruments 98.0 98.4 123.5 175.6 196.6 199.9 192.5 188.0 205.1 198.8 201.1 168.1 13 State and local obligations 16.5 16.1 15.7 23.7 28.3 18.9 25.0 27.8 28.7 16.0 21.8 17.8 14 Corporate bonds 19.7 27.2 22.8 21.0 20.1 21.2 25.4 20.6 19.6 22.4 19.9 33.3 15 Home 34.8 39.5 63.7 96.4 104.5 109.1 103.1 99.8 109.2 109.8 108.5 72.3 16 Multifamily residential 6.9 * 1.8 7.4 10.2 8.9 8.4 9.3 11.2 8.1 9.7 7.2 17 Commercial 15.1 11.0 13.4 18.4 23.3 25.7 21.9 21.2 25.4 26.0 25.4 20.9 18 Farm 5.0 4.6 6.1 8.8 10.2 16.2 8.7 9.3 11.1 16.6 15.9 16.6 19 Other debt instruments 62.0 3.8 48.0 89.5 115.2 133.0 96.7 116.3 114.1 137.0 127.8 59.7 20 Consumer credit 9.9 9.7 25.6 40.6 50.6 44.2 44.5 50.1 51.0 48.3 39.0 -9.2 21 Bank loans n.e.c 31.7 -12.3 4.0 27.0 37.3 50.6 26.7 43.1 31.4 48.2 52.9 17.8 22 Open market paper 6.6 -2.6 4.0 2.9 5.2 10.9 2.4 5.3 5.1 12.0 9.7 29.7 23 Other 13.7 9.0 14.4 19.0 22.2 27.3 23.2 17.8 26.5 28.4 26.2 21.3 24 By borrowing sector 164.1 112.1 182.0 267.9 314.4 336.4 294.2 302.5 326.3 338.6 333.0 234.2 25 State and local governments 15.5 13.7 15.2 20.4 23.6 15.5 25.0 21.0 26.1 13.0 18.0 16.0 26 Households 51.2 49.5 90.7 139.9 162.6 165.0 150.4 156.1 169.1 168.1 161.0 91.4 27 Farm 8.0 8.8 10.9 14.7 18.1 25.8 13.8 15.3 20.8 23.5 28.1 23.6 28 Nonfarm noncorporate 7.7 2.0 5.4 12.5 15.4 15.8 12.5 16.3 14.5 15.3 16.0 9.2 29 Corporate 81.7 38.1 59.8 80.3 94.7 114.3 92.4 93.7 95.8 118.7 109.8 94.1 30 Foreign 15.4 13.3 20.8 13.9 32.3 21.1 17.3 20.6 43.9 13.3 29.1 28.1 31 Corporate equities -.2 .2 .3 .4 -.5 .9 .2 -.8 -.2 * 1.7 2.2 32 Debt instruments 15.7 13.2 20.5 13.5 32.8 20.3 17.1 21.4 44.1 13.3 27.3 25.9 33 Bonds 2.1 6.2 8.6 5.1 4.0 3.9 5.7 5.0 3.0 3.0 4.7 2.0 34 Bank loans n.e.c 4.7 3.9 6.8 3.1 18.3 2.3 6.5 9.3 27.3 1.0 3.5 2.7 35 Open market paper 7.3 .3 1.9 2.4 6.6 11.2 2.2 3.6 9.6 6.1 16.3 15.7 36 U.S. government loans 1.6 2.8 3.3 3.0 3.9 3.0 2.9 3.6 4.2 3.1 2.8 5.5 Financial sectors 37 Total funds raised 39.2 12.7 24.1 54.0 81.4 87.4 60.3 80.7 82.1 87.0 87.8 59.2 By instrument 38 U.S. government related 23.1 13.5 18.6 26.3 41.4 52.4 29.9 38.5 44.3 45.8 59.0 45.8 39 Sponsored credit agency securities 16.6 2.3 3.3 7.0 23.1 24.3 6.8 21.9 24.3 21.5 27.0 25.1 40 Mortgage pool securities 5.8 10.3 15.7 20.5 18.3 28.1 23.1 16.6 20.1 24.2 32.0 20.7 41 Loans from U.S. government .7 .9 -.4 -1.2 0 0 0 0 0 0 0 0 42 Private financial sectors 16.2 -.8 5.5 27.7 40.0 35.0 30.4 42.2 37.8 41.2 28.8 13.3 43 Corporate equities .3 .6 1.0 .9 1.7 1.2 .8 2.2 1.1 2.8 -.4 8.5 44 Debt instruments 15.9 -1.4 4.4 26.9 38.3 33.8 29.6 40.0 36.7 38.4 29.2 4.8 45 Corporate bonds 2.1 2.9 5.8 10.1 7.5 7.8 10.1 8.5 6.4 8.7 7.0 10.7 46 Mortgages -1.3 2.3 2.1 3.1 .9 -1.2 3.0 2.1 -.3 -.5 -1.9 -6.7 47 Bank loans n.e.c 4.6 -3.7 -3.7 -.3 2.8 -.4 1.2 2.5 3.1 -.7 -.2 .3 48 Open market paper and repurchase agreements 33..88 1.1 22..22 9.6 14.6 18.4 9.5 13.5 15.7 23.0 13.8 -3.5 49 Loans from Federal Home Loan Banks 6.7 -4.0 -2.0 4.3 12.5 9.2 5.8 13.2 11.8 7.8 10.5 4.1 By sector 50 Sponsored credit agencies 17.3 3.2 2.6 5.8 23.1 24.3 6.8 21.9 24.3 21.5 27.0 25.1 51 Mortgage pools 5.8 10.3 15.7 20.5 18.3 28.1 23.1 16.6 20.1 24.2 32.0 20.7 52 Private financial sectors 16.2 -.8 5.5 27.7 40.0 35.0 30.4 42.2 37.8 41.2 28.8 13.3 53 Commercial banks 1.2 1.2 2.3 1.1 1.3 1.6 1.5 1.5 1.1 1.3 1.8 2.3 54 Bank affiliates 3.5 .3 -.8 1.3 6.7 4.5 1.2 5.8 7.6 6.2 2.9 4.5 55 Savings and loan associations 4.8 -2.3 .1 9.9 14.3 11.4 11.5 16.4 12.2 9.9 12.9 -4.6 56 Other insurance companies .9 1.0 .9 .9 1.1 1.0 1.0 1.0 1.1 1.0 .9 .8 57 Finance companies 6.0 .5 6.4 17.6 18.6 18.9 18.5 18.9 18.2 23.5 14.3 5.5 58 REITs .6 -1.4 -2.4 -2.2 -1.0 -.4 -2.0 -1.0 -1.0 -.6 -.1 -.9 59 Open-end investment companies -.7 -.1 -1.0 -.9 -1.0 -2.1 -1.3 -.5 -1.5 -.3 -3.9 5.7 All sectors 60 Total funds raised, by instrument 230.5 223.5 296.0 392.5 481.7 482.3 439.2 465.2 498.3 467.4 496.0 384.2 61 Investment company shares -.7 -.1 -1.0 -.9 -1.0 -2.1 -1.3 -.5 -1.5 -.3 -3.9 5.7 62 Other corporate equities 4.8 10.8 12.9 4.9 4.7 7.6 7.2 .1 9.4 5.8 9.3 11.4 63 Debt instruments 226.4 212.8 284.1 388.5 478.0 476.8 433.3 465.5 490.4 461.9 490.5 367.2 64 U.S. government securities 34.3 98.2 88.1 84.3 95.2 89.9 97.4 100.0 90.4 74.5 105.2 108.8 65 State and local obligations 16.5 16.1 15.7 23.7 28.3 18.9 25.0 27.8 28.7 16.0 21.8 17.8 66 Corporate and foreign bonds 23.9 36.4 37.2 36.1 31.6 32.9 41.1 34.2 29.1 34.1 31.5 45.9 67 Mortgages 60.5 57.2 87.1 134.0 149.0 158.6 145.1 141.6 156.4 159.8 157.4 110.2 68 Consumer credit 9.9 9.7 25.6 40.6 50.6 44.2 44.5 50.1 51.0 48.3 39.0 -9.2 69 Bank loans n.e.c 41.0 -12.2 7.0 29.8 58.4 52.5 34.4 54.9 61.8 48.6 56.2 20.9 70 Open market paper and RPs 17.7 -1.2 8.1 15.0 26.4 40.5 14.0 22.4 30.4 41.1 39.8 41.9 71 Other loans 22.7 8.7 15.3 25.2 38.6 39.5 31.8 34.6 42.5 39.4 39.5 30.8 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A43 1.59 DIRECT AND INDIRECT SOURCES OF FUNDS TO CREDIT MARKETS Billions of dollars, except as noted; quarterly data are at seasonally adjusted annual rates 1977 1978 1979 1980 TTrraannssaaccttiioonn ccaatteeggoorryy,, oorr sseeccttoorr 11997744 11997755 11997766 11997777 11997788 11997799 H2 HI H2 HI H2 HI 1 Total funds advanced in credit markets to nonfinancial sectors 187.4 200.7 261.1 355.4 398.2 390.6 373.8 387.1 409.3 377.7 402.3 316.5 By public agencies and foreign 7 Total net advances 53.7 44.6 54.3 85.1 109.7 80.1 104.2 102.8 116.6 47.6 112.5 110044..77 3 U.S. government securities 11.9 22.5 26.8 40.2 43.9 2.0 53.3 43.7 44.0 -22.1 26.2 24.8 4 Residential mortgages 14.7 16.2 12.8 20.4 26.5 36.1 22.0 22.2 30.7 32.6 39.6 33.5 5 FHLB advances to savings and loans 6.7 -4.0 -2.0 4.3 12.5 9.2 5.8 13.2 11.8 7.8 10.5 4.1 6 Other loans and securities 20.5 9.8 16.6 20.2 26.9 32.8 23.1 23.7 30.1 29.2 36.3 42.3 Total advanced, by sector 7 U.S. government 9.8 15.1 8.9 11.8 20.4 22.5 17.8 19.4 21.4 23.8 21.3 3322..22 8 Sponsored credit agencies 26.5 14.8 20.3 26.8 44.6 57.5 32.0 39.4 49.8 49.9 65.2 44.0 9 Monetary authorities 6.2 8.5 9.8 7.1 7.0 7.7 4.0 13.4 .5 .9 14.5 14.3 10 Foreign 11.2 6.1 15.2 39.4 37.7 -7.7 50.4 30.6 44.9 -27.0 11.7 14.2 11 Agency borrowing not included in line 1 23.1 13.5 18.6 26.3 41.4 52.4 29.9 38.5 44.3 45.8 59.0 45.8 Private domestic funds advanced 1? Total net advances 156.8 169.7 225.4 276.5 330.0 362.9 299.6 322.8 337.1 375.9 348.8 225577..77 13 U.S. government securities 22.4 75.7 61.3 44.1 51.3 87.9 44.1 56.3 46.4 96.6 79.1 83.9 14 State and local obligations 16.5 16.1 15.7 23.7 28.3 18.9 25.0 27.8 28.7 16.0 21.8 17.8 15 Corporate and foreign bonds 20.9 32.8 30.5 22.5 22.5 25.6 27.0 24.1 20.9 26.9 24.3 31.5 16 Residential mortgages 26.9 23.2 52.7 83.3 88.2 81.8 89.4 86.7 89.6 85.1 78.5 45.9 17 Other mortgages and loans 76.8 17.9 63.3 107.3 152.2 157.9 119.7 141.1 163.3 159.1 155.6 82.6 18 LESS: Federal Home Loan Bank advances 6.7 -4.0 -2.0 4.3 12.5 9.2 5.8 13.2 11.8 7.8 10.5 4.1 Private financial intermediation 19 Credit market funds advanced by private financial institutions 125.5 122.5 190.3 255.9 296.9 291.4 265.0 301.7 292.0 308.2 274.5 231.3 20 Commercial banking 66.6 29.4 59.6 87.6 128.7 121.1 90.7 132.5 125.0 124.6 117.6 57.3 21 Savings institutions 24.2 53.5 70.8 82.0 75.9 56.3 82.6 75.8 75.9 57.7 54.9 28.8 22 Insurance and pension funds 29.8 40.6 49.9 67.9 73.5 70.4 70.6 76.9 70.2 75.4 65.5 84.6 23 Other finance 4.8 -1.0 10.0 18.4 18.7 43.6 21.2 16.6 20.8 50.6 36.6 60.7 24 Sources of funds 125.5 122.5 190.3 255.9 296.9 291.4 265.0 301.7 292.0 308.2 274.5 231.3 25 Private domestic deposits 67.5 92.0 124.6 141.2 142.5 136.7 143.8 138.3 146.7 121.7 151.6 149.7 26 Credit market borrowing 15.9 -1.4 4.4 26.9 38.3 33.8 29.6 40.0 36.7 38.4 29.2 4.8 27 Other sources 42.1 32.0 61.3 87.8 116.0 120.9 91.7 123.5 108.6 148.1 93.7 76.8 28 Foreign funds 10.3 -8.7 -4.6 1.2 6.3 26.3 .8 5.7 6.9 49.4 3.2 -16.5 29 Treasury balances -5.1 -1.7 -.1 4.3 6.8 .4 8.5 1.9 11.6 5.1 -4.3 -2.0 30 Insurance and pension reserves 26.2 29.7 34.5 49.4 62.7 49.0 53.4 66.2 59.2 53.9 44.0 59.8 31 Other, net 10.6 12.7 31.4 32.9 40.3 45.2 29.0 49.6 31.0 39.6 50.8 35.4 Private domestic nonfinancial investors 32 Direct lending in credit markets 47.2 45.8 39.5 47.5 71.4 105.4 64.1 61.1 81.7 106.1 103.5 31.2 33 U.S. government securities 18.9 24.1 16.1 23.0 33.2 57.8 34.2 32.1 34.4 64.1 51.5 14.6 34 State and local obligations 9.3 8.4 3.8 2.6 4.5 -2.5 5.7 7.0 2.0 -2.3 -2.7 -3.4 35 Corporate and foreign bonds 5.1 8.4 5.8 -3.3 -1.4 12.2 -6.5 -3.7 1.0 7.1 17.2 5.3 36 Commercial paper 5.8 -1.3 1.9 9.5 16.3 10.7 10.8 8.2 24.4 12.5 9.0 -8.0 37 Other 8.0 6.2 11.8 15.7 18.7 27.1 19.9 17.5 20.0 24.7 28.5 22.6 38 Deposits and currency 73.8 98.1 131.9 149.5 151.8 144.7 154.5 148.7 154.8 131.1 158.1 158.7 39 Security RPs -2.2 .2 2.3 2.2 7.5 6.6 .2 9.8 5.1 18.5 -5.3 5.3 40 Money market fund shares 2.4 1.3 * .2 6.9 34.4 .9 6.1 7.7 30.2 38.6 61.9 41 Time and savings accounts 65.4 84.0 113.5 121.0 115.2 84.7 126.7 110.7 119.8 71.4 97.9 91.6 42 Large at commercial banks 32.4 -15.8 -13.2 23.0 45.9 .4 49.6 33.9 57.9 -25.3 26.0 -11.0 43 Other at commercial banks 11.3 40.3 57.6 29.0 8.2 39.3 11.4 18.4 -1.9 41.3 37.3 60.8 44 At savings institutions 21.8 59.4 69.1 69.0 61.1 45.1 65.7 58.5 63.8 55.4 34.7 41.8 45 Money 8.2 12.6 16.1 26.1 22.2 18.9 26.8 22.1 22.3 10.9 26.8 -.1 46 Demand deposits 1.9 6.4 8.8 17.8 12.9 11.0 16.1 11.6 14.2 1.6 20.3 -9.2 47 Currency 6.3 6.2 7.3 8.3 9.3 7.9 10.8 10.5 8.1 9.3 6.5 9.0 48 Total of credit market instruments, deposits and currency 121.0 143.9 171.4 197.0 223.2 250.0 218.6 209.8 236.6 237.1 261.6 189.9 49 Public support rate (in percent) 28.7 22.2 20.8 25.4 27.5 20.5 27.9 26.5 28.5 12.6 28.0 33.1 50 Private financial intermediation (in percent) 80.0 72.2 84.4 92.5 90.0 80.3 88.5 93.5 86.6 82.0 78.7 89.8 51 Total foreign funds 21.5 -2.6 10.6 40.5 44.0 18.6 51.2 36.3 51.8 22.4 14.9 -2.2 MEMO: Corporate equities not included above 52 Total net issues 4.1 10.7 1111..99 4.0 33..77 55..55 55..99 --..44 77..99 55..55 55..44 1177..00 53 Mutual fund shares -.7 -.1 -1.0 -.9 -1.0 -2.1 -1.3 -.5 -1.5 -.3 -3.9 5.7 54 Other equities 4.8 10.8 12.9 4.9 4.7 7.6 7.2 .1 9.4 5.8 9.3 11.4 55 Acquisitions by financial institutions 5.8 9.6 12.3 7.4 7.6 15.7 8.1 .4 14.7 12.5 18.9 16.7 56 Other net purchases -1.7 1.1 -.4 -3.4 -3.8 -10.2 -2.2 -.8 -6.8 -7.0 -13.5 .3 NOTES BY LINE NUMBER. 30. Excludes net investment of these reserves in corporate equities. 1. Line 2 of p. A-42. 31. Mainlv retained earnings and net miscellaneous liabilities. 2. Sum of lines 3-6 or 7-10. 32. Line 1*2 less line 19 plus line 26. 6. Includes farm and commercial mortgages. 33-37. Lines 13-17 less amounts acquired by private finance. Lifie 37 includes 11. Credit market funds raised by federally sponsored credit agencies, and net mortgages. issues of federally related mortgage pool securities. Included below in lines 47. Mainly an offset to line 9. 3, 13, 33. 48. Lines 32 plus 38, or line 12 less line 27 plus 45. 12. Line 1 less line 2 plus line 11. Also line 19 less line 26 plus line 32. Also sum 49. Line 2/line 1. of lines 27, 32, 39, 40, 41, and 46. 50. Line 19/line 12. 17. Includes farm and commercial mortgages. 51. Sum of lines 10 and 28. 25. Sum of lines 39, 40, 41, and 46. 52. 54. Includes issues by financial institutions. 26. Excludes equity issues and investment company shares. Includes line 18. NOTE. Full statements for sectors and transaction types quarterly, and annually 28. Foreign deposits at commercial banks, bank borrowings from foreign branches, for flows and for amounts outstanding, may be obtained from Flow of Funds and liabilities of foreign banking agencies to foreign affiliates. Section, Division of Research and Statistics, Board of Governors of the Federal 29. Demand deposits at commercial banks. Reserve System, Washington, D.C. 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic Nonfinancial Statistics • January 1981 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures 1967 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1980 MMeeaassuurree 11997777 11997788 11997799 Apr. May June July Aug. Sept. Oct.' Nov. Dec.e 1 Industrial production1 138.2 146.1 152.5 148.3 144.0 141.5 140.4 141.8 144.1' 146.8 149.2 150.7 Market groupings 2 Products, total 137.9 144.8 150.0 146.6 143.7 142.5 142.8 143.8 145.3' 147.1 148.7 149.6 3 Final, total 135.9 142.2 147.2 143.1 142.3 142.4 142.8 143.9' 143.9' 145.7 147.2 148.0 4 Consumer goods 145.3 149.1 150.8 145.3 142.4 142.1 142.0 142.7 144.3' 146.6 148.1 148.4 5 Equipment 123.0 132.8 142.2 145.6 144.0 142.6 142.9 142.9 143.2' 144.5 146.1 147.4 6 Intermediate 145.1 154.1 160.5 150.8 146.2 143.5 144.5 147.6 150.6' 152.4 154.0 155.4 7 Materials 138.6 148.3 156.4 151.0 144.3 140.0 136.5 138.6 142.4' 146.4 150.0 152.4 Industry groupings 8 Manufacturing 138.4 146.8 153.6 147.9 143.4 140.3 139.1 140.6 143.4' 146.4 148.9 150.3 Capacity utilization (percent)1-2 9 Manufacturing 81.9 84.4 85.7 80.3 77.6 75.7 74.9 75.5 76.7' 78.1 79.3 79.8 10 Industrial materials industries 82.7 85.6 87.4 82.1 78.3 75.7 73.7 74.6 76.4' 78.4 80.2 81.2 11 Construction contracts (1972 = 100)3 160.5 174.3 181.5 130.0 125.0 145.0 148.0 192.0 163.0 167.0 210.0 n.a. 12 Nonagricultural employment, total4 125.3 131.4 136.0 138.2 137.5 136.8 136.6 137.0 137.4 137.9 138.2 138.5 13 Goods-producing, total 104.5 109.8 114.0 112.1 110.5 109.1 108.0 108.6 109.3 110.0 110.7 111.2 14 Manufacturing, total 101.2 105.3 107.9 106.1 104.3 102.9 102.0 102.5 103.1 103.7 104.3 104.6 15 Manufacturing, production-worker 98.8 102.8 104.9 101.7 99.1 97.4 96.2 97.0 97.7 100.7 99.1 99.5 16 Service-producing 136.7 143.2 148.1 152.6 152.3 152.1 152.3 152.6 152.7 153.1 153.2 153.4 17 Personal income, total 244.4 274.1 307.1 330.7 331.8 333.6 339.0 342.0 345.8 349.5 n.a. n.a. 18 Wages and salary disbursements 230.2 258.1 287.2 306.2 306.4 307.0 307.6 311.1 314.1 318.4 n.a. n.a. 19 Manufacturing 198.3 222.4 246.8 257.8 254.4 252.9 252.8 255.9 260.2 264.3 n.a. n.a. 20 Disposable personal income5 240.9' 268.7' 301.5' 327.7' 338.0' n a 21 Retail sales6 229.8 253.8 281.6 286.6 285.0 290.4 299.1 301.0 306.0 308.0 313.1 308.9 Prices7 22 Consumer 181.5 195.4 217.4 242.5 244.9 247.6 247.8 249.4 251.7 253.9 256.2 n.a. 23 Producer finished goods 180.6 194.6 216.1 240.5 241.6 243.0 246.6 249.0 248.9 252.2 235.2 254.7 1. The industrial production and capacity utilization series have been revised 5. Based on data in Survey of Current Business (U.S. Department of Commerce). back to January 1979. Series for disposable income is quarterly. 2. Ratios of indexes of production to indexes of capacity. Based on data from 6. Based on Bureau of Census data published in Survey of Current Business. Federal Reserve, McGraw-Hill Economics Department, and Department of Com- 7. Data without seasonal adjustment, as published in Monthly Labor Review. merce. Seasonally adjusted data for changes in the price indexes may be obtained from 3. Index of dollar value of total construction contracts, including residential, the Bureau of Labor Statistics, U.S. Department 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. Monthly data for lines 12 through 16 reflect March 1979 benchmarks; only sea- Figures for industrial production for the last two months are preliminary and sonally adjusted data are presently available. estimated, respectively. 2.11 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION Seasonally adjusted Series Q1 02 Q3' Q4 01 Q2 Q3 Q4 Q1 02 03 04 Output (1967 = 100) Capacity (percent of 1967 output) Utilization rate (percent) 1 Manufacturing 152.8 143.9 141.0 148.5 183.3 184.8 186.3 187.8 83.4 77.9 75.7 2 Primary processing 160.5 145.0 139.6 153.0 188.5 190.0 191.5 193.0 85.1 76.3 72.9 3 Advanced processing 148.8 143.3 141.8 146.2 180.5 182.0 183.5 185.0 82.5 78.7 77.3 4 Materials 156.3 145.1 139.2 182.8 184.3 185.8 187.2 85.5 78.7 74.9 5 Durable goods 155.0 140.6 131.5 187.2 188.6 190.0 191.5 82.8 74.6 69.2' 6 Metal materials 117.1 100.6 86.6 140.7 140.8 140.9 83.2 71.4 61.5' 7 Nondurable goods 179.3 166.0 161.9 175.1 199.8 202.0 204.3 206.5 89.7 82.2 79.2 8 Textile, paper, and chemical 187.5 171.9 165.6 182.3 208.3 211.0 213.7 216.2 90.0 81.5 77.5' 9 Textile 120.6 116.4 113.4 138.8 139.2 139.6 86.9 83.7 81.2 10 Paper 146.1 142.1 142.9 154.7 156.0 157.4 94.5 91.0 90.7' 11 Chemical 233.6 208.3 197.9 260.4 264.6 268.7 89.7 78.7 73.6' 12 Energy materials 130.8 130.0 129.6 129.1 151.1 151.8 152.6 86.6 85.6 85.0 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Labor Market A45 2.11 Continued Previous cycle1 Latest cycle2 1979 1980 Series High Low High Low Dec. June July Aug. Sept/ Oct/ Nov/ Dec. Capacity utilization rate (percent) 13 Manufacturing 88.0 69.0 87.2 74.9 84.1 75.7 74.9 75.5 76.7 78.1 79.3 79.8 14 Primary processing 93.8 68.2 90.1 70.9 86.3 72.7 70.9 72.5 75.2 77.6 79.6 80.6 15 Advanced processing 85.5 69.4 86.2 77.1 82.8 77.4 77.1 77.1 77.7 78.5 79.2 79.3 16 Materials 92.6 69.4 88.8 73.7 86.1 75.7 73.7 74.6 76.4 78.4 80.2 81.2 17 Durable goods 91.5 63.6 88.4 68.0 83.6 70.8 68.0 69.1 70.4 73.4 76.2 77.6 18 Metal materials 98.3 68.6 96.0 58.4 84.8 67.0 58.4 62.2 63.9 71.5 80.4 19 Nondurable goods 94.5 67.2 90.9 76.8 90.8 78.7 76.8 78.2 82.7 84.4 84.7 85.2 20 Textile, paper, and chemical 95.1 65.3 91.4 74.5 91.4 77.1 74.5 76.4 81.6 83.8 84.2 84.9 21 Textile 92.6 57.9 90.1 7799..55 89.3 81.8 8822..00 79.5 82.0 81.8 81.6 22 Paper 99.4 72.4 97.6 8888..11 97.6 91.6 8888..11 90.2 93.9 93.5 93.7 23 Chemical 95.5 64.2 9911..22 69.6 90.5 72.7 69.6 72.5 78.7 82.1 82.5 24 Energy materials 94.6 84.8 8888..88 83.2' 86.0 85.8 85.6 85.2 84.1 83.2 84.5 85.0 1. Monthly high 1973; monthly low 1975. 2. Preliminary; monthly highs December 1978 through January 1980; monthly lows July 1980 through October 1980. 2.12 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data are seasonally adjusted. Exceptions noted. 1980 CCaatteeggoorryy 1977 1978 1979 June July Aug. Sept. Oct. Nov. Dec. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 158,559 161,058 163,620 166,105 166,391 166,578 166,789 167,005 167,201 222 LLLaaabbbooorrr fffooorrrccceee (((iiinnncccllluuudddiiinnnggg AAArrrmmmeeeddd FFFooorrrccceeesss)))111 ...... 99,534 102,537 104,996 106,634 107,302 107,139 107,155 107,301 107,439 333 CCCiiivvviiillliiiaaannn lllaaabbbooorrr fffooorrrccceee 97,401 100,420 102,908 104,542 105,203 105,025 105,034 105,180 105,320 EEEmmmpppllloooyyymmmeeennnttt 444 NNNooonnnaaagggrrriiicccuuullltttuuurrraaalll iiinnnddduuussstttrrriiieeesss222 87,302 91,031 93,648 93,346 93,739 93,826 93,765 93,851 94,054 n. a. 555 AAAgggrrriiicccuuullltttuuurrreee 3,244 3,342 3,297 3,191 3,257 3,180 3,442 3,324 3,342 UUUnnneeemmmpppllloooyyymmmeeennnttt 666 NNNuuummmbbbeeerrr 6,855 6,047 5,963 8,006 8,207 8,019 7,827 8,005 7,924 777 RRRaaattteee (((pppeeerrrccceeennnttt ooofff ccciiivvviiillliiiaaannn lllaaabbbooorrr fffooorrrccceee))) 7.0 6.0 5.8 7.7 7.8 7.6 7.5 7.6 7.5 888 NNNooottt iiinnn lllaaabbbooorrr fffooorrrccceee 59,025 58,521 58,623 59,471 59,091 59,439 59,633 59,704 59,762 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 .... 82,423 86,446 89,497 90,047 89,867 90,142 90,384 90,710' 90,917r 91,122 10 Manufacturing 19,682 20,476 20,979 20,014 19,828 19,940 20,044 20,157' 20,282' 20,349 11 Mining 813 851 958 1,029 1,013 1,013 1,028 1,037' 1,054' 1,070 12 Contract construction 3,851 4,271 4,642 4,379 4,322 4,359 4,404 4,442' 4,468' 4,497 13 Transportation and public utilities 4,713 4,927 5,154 5,134 5,114 5,129 5,124 5,147' 5,133' 5,135 14 Trade 18,516 19,499 20,140 20,459 20,506 20,589 20,620 20,641' 20,647' 20,626 15 Finance 4,467 4,727 4,964 5,150 5,167 5,180 5,194 5,214' 5,227' 5,240 16 Service 15,303 16,220 17,047 17,652 17,760 17,788 17,861 17,913' 17,951' 18,025 17 Government 15,079 15,476 15,613 16,230 16,157 16,144 16,109 16,159' 16,155' 16,180 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 workfigures. Based on data from Employment and Earnings (U.S. Department of La- ers, and members of the Armed Forces. Data are adjusted to the March 1979 bor). benchmark and only seasonally adjusted data are available at this time. Based on 2. Includes self-employed, unpaid family, and domestic service workers. data from Employment and Earnings (U.S. Department of Labor). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics • January 1981 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value' Monthly data are seasonally adjusted. Grouping 1 p p ti 9 o r o o 6 r n - - 7 a 1 a v 9 g e 7 e r 9 - D 19 e 7 c 9 . Jan. Mar. Apr May June July Aug. Sept. Oct. NOV.P Dec.e Index (1967 = 100) MAJOR MARKET 1 Total index 100.00 152.5 152.5 152.7 152.1 148.3 144.0 141.5 140.4 141.8 144.1 146.8 149.2 2 Products 60.71 150.0 149.8 149.9 150.0 146.6 143.7 142.5 142.8 143.8 145.3 147.1 148.7 3 Final products AIM 147.2 147.2 147.0 147.7 145.4 143.1 142.3 142.4 142.8 143.9 145.7 147.2 4 Consumer goods 27.68 150.8 148.6 147.9 148.6 145.3 142.4 142.1 142.0 142.7 144.3 146.6 148.1 5 Equipment 20.14 145.8 145.2 145.8 146.6 145.6 144.0 142.6 142.9 142.9 143.2 144.5 146.1 6 Intermediate products 12.89 160.5 159.6 160.8 158.3 150.8 146.2 143.5 144.5 147.6 150.6 152.4 154.0 7 Materials 39.29 156.4 156.6 157.0 155.3 151.0 144.3 140.0 136.5 138.6 142.4 146.4 150.0 Consumer goods 8 Durable consumer goods 7.89 155.8 142.3 142.3 144.1 136.3 128.8 128.2 128.3 128.6 132.7 139.6 142.4 9 Automotive products 2.83 167.7 141.8 131.3 141.0 126.3 118.5 121.6 129.2 121.5 130.6 141.8 145.4 10 Autos and utility vehicles 2.03 154.3 121.4 108.7 122.0 102.3 92.6 97.1 106.4 94.1 105.5 120.2 124.2 11 Autos 1.90 136.7 110.2 98.0 114.9 97.1 88.4 95.7 105.2 91.3 98.0 110.7 114.3 12 Auto parts and allied goods 80 201.5 200.3 188.5 189.1 187.2 184.0 183.7 186.9 191.1 194.2 196.8 199.3 13 Home goods 5.06 149.2 149.4 148.5 145.8 142.0 134.6 132.0 127.7 132.6 134.0 138.3 140.8 14 Appliances, A/C, and TV 1.40 127.4 129.8 128.9 122.1 114.8 102.8 105.6 102.3 114.2 116.3 123.5 126.9 15 Appliances and TV 1.33 129.3 135.5 130.0 125.0 117.5 106.0 108.5 103.4 114.2 117.6 125.6 129.5 16 Carpeting and furniture 1.07 173.0 170.8 170.9 169.1 165.8 154.2 146.7 136.1 141.1 146.1 150.2 154.1 17 Miscellaneous home goods 2.59 151.1 149.4 149.8 149.0 146.8 143.8 140.2 138.1 139.1 138.6 141.5 142.8 18 Nondurable consumer goods 19.79 148.8 149.3 150.1 150.3 148.8 147.7 147.6 147.4 148.3 148.9 149.4 150.3 19 Clothing 4.29 131.9 131.3 130.2 131.8 128.7 127.9 126.7 122.5 123.6 122.1 126.1 20 Consumer staples 15.50 153.5 154.3 155.6 155.5 154.5 153.2 153.4 154.3 155.1 156.3 155.9 156.8 21 Consumer foods and tobacco 8.33 145.0 145.8 146.9 147.3 146.2 146.1 146.2 146.4 146.0 147.0 147.5 147.8 22 Nonfood staples 7.17 163.4 164.3 165.8 165.0 164.0 161.5 161.7 163.6 165.7 167.1 165.6 167.1 23 Consumer chemical products 2.63 205.5 207.8 210.5 208.9 206.9 203.0 202.6 204.3 209.3 213.0 210.2 210.9 24 Consumer paper products 1.92 120.8 121.0 124.1 121.6 120.4 120.2 120.6 121.5 122.0 122.3 124.8 126.3 25 Consumer energy products 2.62 152.2 152.4 151.5 152.7 152.8 150.1 150.9 153.5 153.9 154.0 150.9 153.1 2266 Residential utilities 11..4455 116633..88 116655..00 116611..99 116699..66 117722..55 116699..88 117700..11 117766..55 117788..66 117788..33 117744..99 Equipment 27 Business 12.63 171.3 174.1 174.9 176.1 174.2 171.9 169.8 170.1 170.3 170.5 171.8 173.4 28 Industrial 6.77 152.2 153.2 157.2 159.3 159.3 157.8 155.2 154.8 154.5 154.2 154.3 155.8 29 Building and mining 1.44 206.3 205.0 222.1 235.6 239.5 242.2 241.0 244.4 243.6 243.4 244.3 249.3 30 Manufacturing 3.85 130.3 132.1 132.6 133.1 131.9 129.5 126.1 126.0 124.4 123.9 123.6 124.1 31 Power 1.47 156.3 157.8 157.9 153.2 152.3 149.1 147.1 142.0 145.9 146.1 146.1 146.9 32 Commercial transit, farm 5.86 193.4 198.1 195.2 195.5 191.5 188.2 186.7 187.8 188.4 189.4 192.0 193.9 33 Commercial 3.26 228.1 237.2 238.2 240.4 235.6 232.0 228.8 229.0 233.6 237.2 240.5 242.0 34 Transit 1.93 151.6 151.9 142.8 142.5 143.0 136.3 138.0 140.9 138.4 133.8 135.0 137.4 35 Farm 67 144.9 141.0 137.1 129.7 116.4 124.6 121.6 122.5 112.7 116.8 120.2 122.4 36 Defense and space 7.51 93.4 96.7 97.0 97.1 97.6 97.2 96.8 97.2 96.9 97.4 98.5 100.2 Intermediate products 37 Construction supplies 6.42 158.0 155.7 156.4 152.3 139.4 133.0 128.5 128.6 133.1 137.4 140.5 143.1 38 Business supplies 6.47 163.1 163.5 165.1 164.3 162.0 159.4 158.4 160.4 161.9 163.6 164.2 164.8 39 Commercial energy products 1.14 172.0 173.8 172.4 174.1 174.8 172.0 168.7 172.1 173.7 175.2 174.5 175.0 Materials 40 Durable goods materials 20.35 157.8 155.8 156.0 154.2 148.2 139.8 133.8 129.0 131.3 134.2 140.2 145.9 41 Durable consumer parts 4.58 137.1 125.1 120.8 120.3 110.6 100.1 96.0 93.9 98.1 104.2 110.8 115.5 42 Equipment parts 5.44 189.9 196.7 199.8 199.2 195.8 190.8 182.5 177.6 176.3 176.0 178.5 183.3 43 Durable materials n.e.c 10.34 150.1 147.8 148.5 145.5 139.8 130.5 125.0 118.9 122.4 125.4 133.0 139.6 44 Basic metal materials 5.57 124.1 118.1 118.8 116.6 109.3 100.0 95.9 84.7 89.4 91.7 102.0 113.0 45 Nondurable goods materials 10.47 175.9 180.2 181.0 177.0 173.2 165.2 159.6 156.2 159.8 169.7 173.8 174.9 46 Textile, paper, and chemical materials . 7.62 183.7 189.2 189.3 185.2 180.7 171.5 163.4 158.5 163.2 175.1 180.6 182.0 47 Textile materials 1.85 121.0 123.8 120.1 120.7 117.7 117.6 114.0 114.4 111.0 114.7 114.5 114.3 48 Paper materials 1.62 143.5 150.1 148.2 144.2 141.2 141.7 143.4 138.4 142.0 148.2 148.1 148.8 49 Chemical materials 4.15 227.4 233.6 236.3 230.1 224.3 207.3 193.3 186.1 194.9 212.6 222.9 225.2 50 Containers, nondurable 1.70 167.4 168.2 172.7 167.1 166.8 155.8 157.7 159.0 158.8 167.2 168.6 168.9 51 Nondurable materials n.e.c 1.14 136.8 138.8 137.5 137.4 133.0 136.4 136.8 136.6 137.9 137.2 135.7 136.5 52 Energy materials 8.48 128.9 129.4 130.0 130.9 130.1 129.6 130.4 130.4 130.0 128.4 127.4 129.4 53 Primary energy 4.65 113.5 113.7 114.4 115.6 116.4 116.2 117.3 115.6 114.0 114.3 113.8 114.5 54 Converted fuel materials 3.82 147.7 148.5 149.0 149.6 146.9 145.8 146.4 148.4 149.4 145.4 143.9 147.6 Supplementary groups 55 Home goods and clothing 9.35 141.3 114411..11 114400..11 113399..44 113355..99 131.5 129.5 125.3 128.5 128.5 132.7 134.5 56 Energy, total 12.23 137.9 138.4 138.6 139.6 139.1 137.9 138.4 139.2 139.2 138.2 136.8 138.7 57 Products 3.76 158.2 158.9 157.8 159.1 159.5 156.7 156.3 159.1 159.9 160.5 158.0 159.7 58 Materials 8.48 128.9 129.4 130.0 130.9 130.1 129.6 130.4 130.4 130.0 128.4 127.4 129.4 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Output A47 2.13 Continued 1967 1979 1980 GGrroouuppiinngg SIC p p r o o r - - A 19 v 7 g 9 . code tion Dec. Jan. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Index (1967 = 100) MAJOR INDUSTRY 12.05 144.7 148.2 148.2 151.4 150.1 149.6 150.1 150.1 150.5 150.5 149.9 151.8 154.4 6.36 125.5 131.4 133.5 133.0 133.1 133.4 132.9 130.6 129.6 130.5 132.0 134.9 137.4 3 Utilities 5.69 166.0 166.9 164.8 172.0 169.1 167.7 169.3 171.8 173.8 172.7 169.9 170.7 173.4 3.88 185.8 186.0 183.4 192.4 187.9 186.0 188.7 192.4 195.4 193.9 189.6 87.95 153.6 153.2 153.4 152.1 147.9 143.4 140.3 139.2 140.6 143.4 146.4 148.9 150.3 35.97 164.0 165.3 166.0 164.7 161.6 158.0 155.3 154.7 156.9 160.3 161.9 163.6 165.2 7 Durable 5511..9988 114466..44 114444..88 144.7 143.4 113388..44 133.3 129.9 128.3 129.4 131.7 135.6 138.8 139.9 Mining 8 Metal 10 .51 127.0 136.9 137.6 132.7 123.5 120.8 120.0 83.1 71.2 73.1 89.1 100.5 9 Coal 11.12 .69 135.6 143.4 141.0 137.2 143.4 145.0 150.0 149.8 154.9 148.9 145.7 151.6 159.7 10 Oil and gas extraction 13 4.40 121.7 127.2 129.9 131.8 132.5 133.9 133.2 134.3 133.6 134.7 135.4 137.1 137.9 1144 ..7755 113377..66 114411..44 114444..66 113366..00 113333..11 112288..11 112233..99 112233..77 112233..55 112288..22 112299..00 113300..55 Nondurable manufactures 20 8.75 147.5 148.4 148.5 149.3 147.8 149.5 149.0 148.9 148.3 148.6 149.4 149.5 21 .67 117.8 116.6 118.7 122.2 121.9 116.2 113.9 119.6 117.4 119.1 123.1 22 2.68 145.0 148.0 143.4 142.0 139.9 137.1 133.6 132.5 132.6 133.0 134.1 135.8 15 Apparel products 23 3.31 134.4 131.1 131.5 136.1 131.3 128.6 127.2 121.5 123.8 126.7 128.1 16 Paper and products 26 3.21 151.0 155.7 157.4 152.7 148.2 145.7 146.2 143.6 147.1 152.3 153.4 154.0 155.5 17 Printing and publishing 27 4.72 136.9 137.8 138.9 139.2 136.5 135.5 135.4 138.6 140.3 140.3 141.5 143.2 145.1 18 Chemicals and products 28 7 74 211.8 216.8 218.0 213.6 209.1 199.2 191.1 190.3 197.8 206.8 209.2 212.7 19 Petroleum products 29 1.79 143.9 145.4 147.5 140.7 137.4 133.0 131.3 130.5 126.7 130.5 129.1 131.8 135.4 20 Rubber and plastic products 30 2.24 272.2 263.8 265.5 264.4 261.8 248.1 242.9 242.5 245.9 253.1 258.1 260.4 21 Leather and products .... 3311 ..8866 7711..77 7711..22 7744..22 7722..88 6699..99 7700..11 6688..55 67.8 6677..77 67.2 70.2 71.0 Durable manufactures 22 Ordnance, private and government 19.91 3.64 75.2 77.5 77.1 76.9 77.5 77.9 77.5 77.1 77.2 77.1 79.1 79.9 80.5 23 Lumber and products ... 24 1.64 136.9 132.4 131.6 25.3 105.2 104.5 109.7 112.8 121.7 122.6 122.2 125.4 24 Furniture and fixtures . . 25 1.37 161.5 161.0 160.8 159.5 157.1 149.5 143.1 138.6 141.1 144.8 147.2 148.0 25 Clay, glass, stone products 32 2.74 163.9 163.8 165.0 156.4 148.8 140.8 134.5 134.2 135.7 141.4 144.2 146.7 26 Primary metals 33 6.57 121.3 115.3 116.4 113.7 106.4 96.1 90.4 81.7 86.0 90.1 100.8 112.4 116.7 27 Iron and steel 331.2 4.21 113.2 106.6 107.2 105.9 97.4 84.4 75.4 68.1 75.3 79.8 93.3 107.1 28 Fabricated metal products 34 5.93 148.5 146.2 145.0 145.5 141.4 133.2 126.1 123.8 125.8 129.0 132.8 134.3 135.7 29 Nonelectrical machinery 35 9.15 163.7 163.0 167.1 166.5 163.2 162.1 158.3 158.5 158.8 159.1 160.5 161.7 162.1 30 Electrical machinery 36 8.05 175.0 181.6 181.7 179.2 177.0 171.4 166.6 165.0 166.7 167.5 170.0 172.3 174.2 31 Transportation equipment 37 9.27 135.4 127.3 122.1 123.8 115.1 109.8 110.0 110.7 108.3 112.9 118.8 121.8 120.6 32 Motor vehicles and parts 371 4.50 159.9 137.1 126.2 130.1 114.7 105.9 106.7 107.9 104.4 113.4 124.2 129.2 126.7 33 Aerospace and miscellaneous transportation equipment 372-9 4.77 112.2 118.1 118.3 117.8 115.5 113.5 113.1 113.4 111.9 112.3 113.6 114.8 114.9 34 Instruments 38 2.11 174.9 175.0 175.9 173.5 173.8 171.0 169.2 167.5 167.6 167.4 169.6 170.9 172.6 35 Miscellaneous manufactures 39 1.51 154.7 153.7 153.8 152.8 151.2 147.3 43.7 144.7 144.2 142.8 145.0 147.5 149.1 Gross value (billions of 1972 dollars, annual rates) MAJOR MARKET 36 Products, total 507.4 625.3 619.7 615.8 619.0 599.5 588.6 585.0 586.7 585.9 593.3 604.0 611.4 613.6 37 Final 390.92 480.8 476.1 471.2 475.9 464.5 457.3 455.6 456.9 453.0 458.0 467.0 473.0 473.9 38 Consumer goods 277.52 327.1 322.1 317.6 321.3 312.5 306.3 305.8 307.7 305.1 309.0 316.1 320.1 321.0 39 Equipment .. 113.42 153.6 154.0 153.6 154.6 152.0 151.0 149.8 149.2 147.9 149.0 150.9 152.9 153.0 40 Intermediate 111166..6622 114444..66 114433..66 114444..66 114433..11 113355..00 113311..33 112299..44 129.9 132.9 113355..33 137.0 113388..44 139.6 1. The industrial production series has been revised back to January 1979. NOTE. Published groupings include some series and subtotals not shown sepa- 2. 1972 dollars. rately. For description and historical data, see Industrial Production—1976 Revision (Board of Governors of the Federal Reserve System: Washington, D.C.), December 1977. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • January 1981 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates except as noted. 1980 IItteemm 1977 1978 1979 Apr. May June July Aug. Sept. Oct. Nov. Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 1,677 1,801 1,552 789 825 1,078 1,236 1,361 1,564 1,333 1,371 2 1-family 1,125 1,183 981 473 495 628 781 857 914 819 794 3 2-or-more-family 551 618 570 316 330 450 455 504 650 514 577 4 Started 1,987 2,020 1,745 1,030 906 1,223 1,265 1,429 1,541 1,561 1,555 5 1-family 1,451 1,433 1,194 628 628 757 869 1,003 1,059 1,037 987 6 2-or-more-family 536 587 551 402 278 466 396 426 482 524 568 7 Under construction, end of period1 .. 1,208 1,310 1,140 978 911 871 851 890' 867 843 n.a. 8 1-family 730 765 639 535 495 474 473 517' 499 474 n.a. 9 2-or-more-family 478 546 501 443 416 397 378 373' 368 369 n.a. 10 Completed 1,656 1,868 1,855 1,897 1,536 1,469 1,502 1,274' 1,251 1,405 n.a. 11 1-family 1,258 1,369 1,286 1,135 970 886 876 807' 751 917 n.a. 12 2-or-more-family 399 499 570 762 566 583 626 467' 500 488 n.a. 13 Mobile homes shipped 277 276 277 201 162 163 215 206 238 246 n.a. Merchant builder activity in 1-family units 14 Number sold 820 818 709 345 458 544 646 632' 570 545 577 15 Number for sale, end of period1 408 419 402 364 351 340 333 330 336 335 338 Price (thousands of dollars)2 Median 16 Units sold 49.0 55.8 62.7 62.8 63.2 65.4 64.4 63.2 68.7 66.0 68.0 Average 17 Units sold 54.4 62.7 71.9 74.1 73.1 76.3 76.8 76.5' 80.6 78.1 83.2 EXISTING UNITS (1-family) 18 Number sold 3,572 3,905 3,742 2,420 2,310 2,480 2,920 3,030 3,380 3,300 3,020 Price of units sold (thous. of do liars )2 19 Median 42.8 48.7 55.5 60.4 61.2 63.4 64.1 64.9 64.2 62.7 54.3 20 Average 47.1 55.1 64.0 70.6 71.2 75.7 75.7 76.2 75.5 73.4 74.9 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 173,976 205,457 228,948 225,833 218,909 215,021 214,315' 215,149' 223,660 226,208 231,786 22 Private 135,799 159,555 179,948 171,488 164,791 161,349 158,593' 162,057' 167,882 171,127 177,969 23 Residential 80,957 93,423 99,029 83,467 76,957 73,360 74,277' 78,632' 84,378 87,448 93,543 24 Nonresidential, total 54,842 66,132 80,919 88,021 87.834 87,989 84,316' 83,425' 83,504 83,679 84,426 Buildings 25 Industrial 7,713 10,993 14,953 13,611 14,197 15,022 13,267 13,046 13,102 12,996 13,283 26 Commercial 14,789 18,568 24,924 30,878 30,149 29,609 28,063 27,993 27,425 28,417 28,793 27 Other 6,200 6,739 7,427 8,220 8,571 8,256 8,115 8,095 8,447 8,760 8,967 28 Public utilities and other 26,140 29,832 33,615 35,312 34,917 35,102 34,871' 34,291' 34,530 33,506 33,383 29 Public 38,172 45,901 49,001 54,344 54,118 53,672 55,721' 53,092' 55,778 55,081 53,817 30 Military 1,428 1,501 1,641 2,048 1,671 1,748 2,041' 2,315' 1,717 2,144 1,914 31 Highway 9,380 10,713 11,915 14,393 13,230 14,012 13,758 10,866 n.a. n.a. n.a. 32 Conservation and development 3,862 4,457 4,586 5,000 5,285 4,241 5,893 4,295 n.a. n.a. n.a. 33 Other4 23,502 29,230 30,859 32,903 33,932 33,671 34,029' 35,616' n.a. n.a. 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 comparable and seasonally adjusted by the Census Bureau, and (b) sales and prices of existing with data in prior periods due to changes by the Bureau of the Census in its units, which are published by the National Association of Realtors. All back and estimating techniques. For a description of these changes see Construction Reports current figures are available from originating agency. Permit authorizations are (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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Prices A49 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 IIInnndddeeexxx llleeevvveeelll NNNooovvv... IIIttteeemmm 1979 1980 1980 111999888000 11997799 11998800 (((111999666777 NNoovv.. NNoovv.. === 111000000)))''' Dec. Mar. June Sept. July Aug. Sept. Oct. Nov. CONSUMER PRICES2 1 All items 12.6 12.6 13.7 18.1 11.6 7.0 0.0 .7 1.0 1.0 1.0 256.2 2 Commodities 12.7 11.5 12.5 16.1 5.0 12.8 .6 1.2 1.2 .8 1.0 242.5 3 Food 9.8 10.6 12.1 3.8 5.6 18.9 1.0 1.8 1.6 .8 1.1 264.5 4 Commodities less food 13.9 12.0 12.7 22.1 4.7 10.6 .5 .9 1.1 .8 .9 230.0 5 Durable 10.2 11.2 13.2 7.6 6.8 15.7 .5 1.6 1.6 1.2 1.3 220.6 6 Nondurable 18.9 13.0 12.8 39.8 3.5 4.0 .3 .4 .2 .1 .5 240.5 7 Services 12.6 14.1 15.8 20.9 21.6 -.6 -.8 -.1 .7 1.2 1.0 280.9 8 Rent 8.1 8.9 9.0 8.3 10.0 8.6 .5 .6 1.0 1.0 .6 198.3 9 Services less rent 13.3 14.8 16.9 22.8 23.3 1.8 -.9 -.2 .7 1.2 1.1 296.4 Other groupings 10 All items less food 13.3 13.0 14.2 21.7 13.0 4.6 -.2 .4 .9 1.0 .9 253.2 11 All items less food and energy 10.7 12.2 13.9 15.7 13.5 5.1 -.2 .5 .9 1.2 1.1 242.4 12 Homeownership 18.3 16.6 25.6 24.1 26.6 -5.6 -1.8 -.2 .6 2.1 1.7 329.4 PRODUCER PRICES 13 Finished goods 13.0 11.9 13.3 19.3 6.7 12.2 1.5 1.5 -.2 .8 .6 253.2 14 Consumer 14.8 12.2 14.6 21.6 4.9 13.8 1.8' 1.6' -.2 .6 .7 254.7 15 Foods 8.9 7.1 8.6' -1.2' -7.8' 36.9' 3.9' 4.3' -.2' .5 .5 246.9 16 Excluding foods 18.0 14.7 17.9 34.8 11.3 4.4 .8' .4' -.2' .6 .7 255.9 17 Capital equipment 8.6 11.3 10.0 13.4 11.3 8.5 1.4' .7' -.1 1.4 .6 249.1 18 Intermediate materials3 15.5 12.4 17.0 24.0 5.2 6.4 .7' .7' .1' .6 .9 288.0 Crude materials 19 Nonfood 24.9 20.6 27.8 21.9 -3.9 39.1 3.3' 2.8' 2.2' 2.5 1.8 452.0 20 Food 11.5 12.5 5.7 -16.7 -10.5 96.4 9.0 9.0 -.4 1.5 .6 277.3 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

A50 Domestic Nonfinancial Statistics • January 1981 2.16 GROSS NATIONAL PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data are at seasonally adjusted annual rates. 1979 1980 AAccccoouunntt 11997777 11997788 11997799 Q3 04 Q1 02 03 GROSS NATIONAL PRODUCT 1 Total 1,918.0 2,156.1 2,413.9 2,444.1 2,496.3 2,571.7 2,564.8 2,637.3 By source 2 Personal consumption expenditures 1,205.5 1,348.7 1,510.9 1,529.1 1,582.3 1,631.0 1,626.8 1,682.2 3 Durable goods 178.8 199.3 212.3 213.3 216.1 220.9 194.4 208.8 4 Nondurable goods 479.0 529.8 602.2 611.5 639.2 661.1 664.0 674.2 Services 547.7 619.6 696.3 704.3 727.0 749.0 768.4 799.2 6 Gross private domestic investment 322.3 375.3 415.8 421.7 410.0 415.6 390.9 377.1 7 Fixed investment 301.3 353.2 398.3 408.3 410.8 413.1 383.5 393.2 8 Nonresidential 205.5 242.0 279.7 288.5 290.2 297.8 289.8 294.0 9 Structures 64.6 78.7 96.3 99.6 105.1 108.2 108.4 107.3 10 Producers' durable equipment 140.9 163.3 183.4 189.0 185.1 189.7 181.4 186.8 11 Residential structures 95.8 111.2 118.6 119.8 120.6 115.2 93.6 99.2 12 Nonfarm 92.0 106.9 113.9 114.9 115.4 110.1 88.9 94.5 13 Change in business inventories 21.0 22.2 17.5 13.3 -0.8 2.5 7.4 -16.0 14 Nonfarm 20.2 21.8 13.4 7.8 -4.4 1.5 6.1 -12.3 15 Net exports of goods and services -0.4 -0.6 13.4 17.9 7.6 8.2 17.1 44.5 16 Exports 183.3 219.8 281.3 293.1 306.3 337.3 333.3 342.4 17 Imports 187.5 220.4 267.9 275.2 298.7 329.1 316.2 297.9 18 Government purchases of goods and services 394.5 432.6 473.8 475.4 496.4 516.8 530.0 533.5 19 Federal 143.9 153.4 167.9 165.1 178.1 190.0 198.7 194.9 20 State and local 250.6 279.2 305.9 310.4 318.3 326.8 331.3 338.6 By major type of product 2211 Final sales, total 1,897.0 2,133.9 2,396.4 2,430.8 2,497.1 2,569.1 2,557.4 2,653.4 22 Goods 852.6 946.6 1,056.0 1,064.9 1,078.4 1,116.9 1,106.4 1,129.4 23 Durable 362.7 409.8 451.2 455.9 448.1 456.4 444.6 456.5 24 Nondurable 489.9 536.8 604.7 609.0 630.3 660.5 661.8 672.9 25 Services 869.0 976.3 1,097.2 1,112.0 1,142.8 1,178.6 1,205.6 1,249.0 26 Structures 196.5 233.2 260.8 267.3 275.1 276.2 252.8 258.9 27 Change in business inventories 21.0 22.2 17.5 13.3 -0.8 2.5 7.4 -16.0 28 Durable goods 8.8 17.8 11.5 6.7 -0.4 -11.8 3.3 -8.4 29 Nondurable goods 12.2 4.4 6.0 6.6 -0.5 14.3 4.1 -7.7 30 MEMO: Total GNP in 1972 dollars 1,371.7 1,436.9 1,483.0 1,488.2 1,490.6 1,501.9 1,463.3 1,471.9 NATIONAL INCOME 31 Total 1,546.5 1,745.4 1,963.3 1,986.2 2,031.3 2,088.5 2,070.0 2,122.4 32 Compensation of employees 1,152.3 1,299.7 1,460.9 1,476.7 1,518.1 1,558.0 1,569.0 1,597.4 33 Wages and salaries 983.8 1,105.4 1,235.9 1,248.5 1,282.4 1,314.5 1,320.4 1,342.3 34 Government and government enterprises 202.3 219.6 235.9 237.0 243.3 246.7 250.5 253.9 35 Other 781.5 885.7 1,000.0 1,011.6 1,039.1 1,067.9 1,069.9 1,088.4 36 Supplement to wages and salaries 168.5 194.3 225.0 228.2 235.7 243.5 248.6 255.0 37 Employer contributions for social insurance 79.5 92.1 106.4 107.3 109.8 112.6 113.6 116.0 38 Other labor income 89.0 102.2 118.6 120.9 126.0 130.9 135.1 139.1 39 Proprietors'income1 103.5 117.1 131.6 132.9 136.3 133.7 124.9 129.7 40 Business and professional1 85.1 91.0 100.7 107.3 112.2 114.8 105.5 113.1 41 Farm1 18.3 26.1 30.8 30.2 29.5 25.7 23.3 22.1 42 Rental income of persons2 25.1 27.4 30.5 30.3 31.0 31.2 31.5 32.0 43 Corporate profits1 176.7 199.0 212.7 199.5 189.4 200.2 169.3 177.9 44 Profits before tax3 192.6 223.3 255.4 262.0 255.4 277.1 217.9 237.6 45 Inventory valuation adjustment -15.8 -24.3 -42.6 -46.5 -50.8 -61.4 -31.1 -41.7 46 Capital consumption adjustment -12.0 -13.5 -15.9 -16.1 -15.1 -15.4 -17.6 -17.9 47 Net interest 100.8 115.8 143.4 146.8 156.5 165.4 175.3 185.3 1. With inventory valuation and capital consumption adjustments. 3. For after-tax profits, dividends, and the like, see table 1.49. 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 A51 2.17 PERSONAL INCOME AND SAVING Billions of current dollars; quarterly data are at seasonally adjusted annual rates. Exceptions noted. 1980 1977 1978 Q3 Q4 Q1 Q2 PERSONAL INCOME AND SAVING 1 Total personal income 1,538.0 1,721.8 1,943.8 1,972.3 2,032.0 2,088.2 2,114.5 2 Wage and salary disbursements 983.9 1,105.2 1,236.1 1,248.6 1,282.2 1,314.7 1.320.4 3 Commodity-producing industries 343.5 389.1 437.9 441.6 450.4 461.7 456.0 4 Manufacturing 266.0 299.2 333.4 335.5 340.4 347.9 343.2 5 Distributive industries 239.4 270.5 303.0 306.5 315.0 322.6 323.2 6 Service industries 198.6 226.1 259.2 263.4 273.7 283.6 290.8 7 Government and government enterprises 202.3 219.4 236.1 237.1 243.1 246.8 250.5 8 Other labor income 89.0 102.2 118.6 120.9 126.0 130.9 135.1 9 Proprietors'income1 103.5 117.2 131.6 132.9 136.3 133.7 124.9 10 Business and professional1 85.1 91.0 100.8 102.7 106.8 107.9 101.6 11 Farm1 18.3 26.1 30.8 30.2 29.5 25.7 23.3 12 Rental income of persons2 25.1 27.4 30.5 30.3 31.0 31.2 31.5 13 Dividends 38.7 43.1 48.6 48.6 50.1 52.4 54.2 14 Personal interest income 151.6 173.2 209.6 214.3 225.7 239.9 253.6 15 Transfer payments 207.5 223.3 249.4 257.8 263.1 271.7 280.7 16 Old-age survivors, disability, and health insurance benefits 104.9 116.2 131.8 137.8 139.3 142.0 144.7 17 LESS: Personal contributions for social insurance 61.1 69.6 80.6 81.2 82.4 86.2 85.9 18 EQUALS: Personal income 1,538.0 1.721.8 1,943.8 1,972.3 2.032.0 2,088.2 2.114.5 19 LESS: Personal tax and nontax payments 226.5 258.8 302.0 308.4 321.8 323.1 330.3 20 EQUALS: Disposable personal income 1,311.5 1.462.9 1,641.7 1,663.8 1.710.1 1,765.1 1,784.1 21 LESS: Personal outlays 1,237.4 1,386.6 1,555.5 1,574.5 1,629.4 1,678.7 1,674.1 22 EQUALS: Personal saving 74.1 76.3 86.2 89.3 86.4 110.0 MEMO: Per capita (1972 dollars) 23 Gross national product 6,323 6,568 6,721 6,737 6,730 6,768 6,580 24 Personal consumption expenditures 3,061 4,136 4,219 4,225 4,251 4,251 4,134 25 Disposable personal income 4,332 4,487 4,584 4,598 4,596 4,600 4,532 26 Saving rate (percent) 5.6 5.2 5.2 5.4 4.7 4.9 6.2 GROSS SAVING 27 Gross saving 304.0 355.2 412.0 422.3 402.0 404.5 394.5 28 Gross private saving 322.4 355.4 398.9 409.8 396.4 413.0 435.9 29 Personal saving 74.1 76.3 86.2 89.3 80.7 86.4 110.0 30 Undistributed corporate profits1 80.1 95.7 117.6 60.9 50.6 52.1 42.1 31 Corporate inventory valuation adjustment -15.8 -24.3 -42.6 -46.5 -50.8 -61.4 -31.1 Capital consumption allowances 32 Corporate 122.4 136.4 155.4 158.7 161.5 167.1 173.0 33 Noncorporate 73.7 84.8 98.2 100.8 103.6 107.4 110.7 34 Wage accruals less disbursements .0 .0 .0 .0 .0 .0 .0 35 Government surplus, or deficit (-), national income and product accounts -18.3 -0.2 11.9 11.3 4.4 1.7 -29.6 36 Federal -46.4 -29.2 -14.8 -15.2 -24.5 -36.3 -66.5 37 State and local 28.1 29.0 26.7 26.5 28.9 26.6 23.9 38 Capital grants received by the United States, net .0 .0 1.1 1.1 1.1 1.1 1.1 39 Gross investment 308.4 361.6 414.1 425.1 401.3 407.3 392.5 40 Gross private domestic 322.3 375.3 415.8 421.7 410.0 415.6 390.9 41 Net foreign -13.9 -13.8 -1.7 3.4 -8.7 -8.3 1.7 42 Statistical discrepancy 4.4 6.4 2.2 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

A52 International Statistics • January 1981 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data are seasonally adjusted except as noted.1 1979 1980 IItteemm ccrreeddiittss oorr ddeebbiittss 11997777 11997788 11997799 Q3 04 Q1 Q2' Q3 P 1 Balance on current account -14,068 -14,259 -788 1,099 -1,802 -2,610' -2,431 4,900 1 --22,,990099 448866 --22,,442266'' --668800 448800 3 Merchandise trade balance2 -30,873 -33,759 -29,469 -7,060 -9,225 -10,850' -7,505 -2,828 4 Merchandise exports 120,816 142,054 182,055 47,198 50,237 54,708 54,710 56,288 5 Merchandise imports -151,689 -175,813 -211,524 -54,258 -59,462 -65,558' -62,215 -59,116 6 Military transactions, net 1,628 886 -1,274 -443 -700 -922 -994 -632 7 Investment income, net3 17,988 20,899 32,509 9,319 8,883 10,094 6,133 8,467 8 Other service transactions, net 1,794 2,769 3,112 690 792 880 1,261 1,370 9 MEMO: Balance on goods and services3-4 -9,464 -9,204 4,878 2,506 -250 -798' -1,105 6,377 10 Remittances, pensions, and other transfers -1,830 -1,884 -2,142 -529 -665 -565 -564 -574 11 U.S. government grants (excluding military) -2,775 -3,171 -3,524 -878 -887 -1,247 -762 -903 12 Change in U.S. government assets, other than official reserve assets, net (increase, -) -3,693 -4,644 -3,783 -766 -925 -1,467 -1,191 -1,320 13 Change in U.S. official reserve assets (increase, -) -375 732 -1,132' 2,779 -649' -3,268' 502 -1,109 14 Gold -118 -65 -65 0 -65 0 0 0 15 Special drawing rights (SDRs) -121 1,249 -1,136 0 0 1,152 112 261 16 Reserve position in International Monetary Fund -294 4,231 -189 -52 27 -34 -99 -294 17 Foreign currencies 158 -4,683 257' 2,831 -611' -2,082' 489 -554 18 Change in U.S. private assets abroad (increase, -)3 -31,725 -57,279 -56,858 -27,228 -11,918 -7,976 -25,023 -17,767 19 Bank-reported claims -11,427 -33,631 -25,868 -16,997 -7,213 -274 -21,051 -12,477 20 Nonbank-reported claims -1,940 -3,853 -2,029 -932 410 -1,474 147 n.a. 21 U.S. purchase of foreign securities, net -5,460 -3,450 -4,643 -2,143 -986 -765 -1,246 -805 22 U.S. direct investments abroad, net3 -12,898 -16,345 -24,318 -7,156 -4,129 -5,463 -2,873 -4,485 23 Change in foreign official assets in the United States (increase, +) 36,574 33,292 -14,270 5,789 -1,221 -7,215 7,775 8,025 24 U.S. Treasury securities 30,230 23,523 -22,356 5,024 -5,769 -5,357 4,314 3,769 25 Other U.S. government obligations 2,308 666 465 335 41 801 250 549 26 Other U.S. government liabilities5 1,159 2,220 -714 216 -924 181 737 305 27 Other U.S. liabilities reported by U.S. banks 773 5,488 7,219 56 4,881 -3,185 1,652 1,989 28 Other foreign official assets6 2,105 1,395 1,116 158 550 345 822 1,413 29 Change in foreign private assets in the United States (increase, +)3 14,167 30,804 51,845 19,152 5,246 14,409 174 2,978 30 U.S. bank-reported liabilities 6,719 16,259 32,668 13,185 400 6,355 -4,208 36 31 U.S. nonbank-reported liabilities 473 1,640 1,692 606 1,050 683 1,331 n.a. 32 Foreign private purchases of U.S. Treasury securities, net 553344 2,197 4,830 1,466 920 3,278 -1,225 -254 33 Foreign purchases of other U.S. securities, net 2,713 2,811 2,942 677 313 2,427 1,194 990 34 Foreign direct investments in the United States, net3 ... 3,728 7,896 9,713 3,218' 2,563' 1,666 3,082 2,206 35 Allocation of SDRs 0 0 1,139 0 0 1,152 0 0 36 Discrepancy -880 11,354 22,848' -825 11,269' 6,975' 20,194 4,293 37 Owing to seasonal adjustments --33,,664411 22,,440000 --9999'' 11,,446600 --44,,002222 38 Statistical discrepancy in recorded data before seasonal adjustment -880 11,354 23,848' 2,816 8,869' 7,074' 18,734 8,315 MEMO: Changes in official assets 39 U.S. official reserve assets (increase, -) -375 732 -1,132' 2,779 -649' -3,268' 502 -1,109 40 Foreign official assets in the United States (increase, +) 35,416 31,072 -13,556 5,573 -297 -7,396 7,038 7,720 41 Change in Organization of Petroleum Exporting Countries official assets in the United States (part of line 23 above) 6,351 -1,137 5,508 1,676 4,955 2,930 4,749 4,380 42 Transfers under military grant programs (excluded from lines 4, 6, and 11 above) 204 236 305 88 139 144 155 110 1. Seasonal factors are no longer calculated for lines 13 through 42. 5. Primarily associated with military sales contracts and other transactions ar- 2. Data are on an internationalaccounts (IA) basis. Differs from the census basis ranged with or through foreign official agencies. primarily because the IA basis includes imports into the U.S. Virgin Islands, and 6. Consists of investments in U.S. corporate stocks and in debt securities of it excludes military exports, which are part of line 6. private corporations and state and local governments. 3. Includes reinvested earnings of incorporated affiliates. 4. Differs from the definition of "net exports of goods and services" in the NOTE. Data are from Bureau of Economic Analysis, Survey of Current Business national income and product (GNP) account. The GNP definition makes various (U.S. Department of Commerce). adjustments to merchandise trade and service transactions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Trade and Reserve Assets A53 3.11 U.S. FOREIGN TRADE Millions of dollars; monthly data are seasonally adjusted. 1980 IItteemm 11997777 11997788 11997799 May June July Aug. Sept. Oct. Nov. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments 121,150 143,578 181,637 17,678 18,642 18,075 19,103 18,701 19,088 18,634 2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 147,685 171,978 206,326 20,439' 19,893 18,995 19,236 19,465 20,060 19,422 3 Trade balance -26,535 -28,400 -24,690 -2,762 -1,251 -920 -132 -764 -972 -788 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 the basis. Effective January 1978, major changes were made in coverage, reporting, Virgin Islands (largely oil for a refinery on St. Croix), which are not included in and compiling procedures. The international-accounts-basis data adjust the Census 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 1980 TTyyppee 11997777 11997788 11997799 June July Aug. Sept. Oct. Nov. Dec. 1 Total1 19,312 18,650 18,956 21,943 21,845 22,691 22,994 23,967 25,673 26,756 2 Gold stock, including Exchange Stabilization Fund1 11,719 11,671 11,172 11,172 11,172 11,172 11,168 11,163 11,162 11,160 3 Special drawing rights2 3 2,629 1,558 2,724 3,782 3,842 4,009 4,007 3,939 3,954 2,610 4 Reserve position in International Monetary Fund2 4,946 1,047 1,253 1,385 1,410 1,564 1,665 1,671 1,822 2,852 5 Foreign currencies4-5 18 4,374 3,807 5,604 5,421 5,946 6,154 7,194 8,735 10,134 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; $1,139 million on Jan. 1, 1979; and $1,152 million Jan. 1, 1980; plus net 2. Beginning July 1974, the IMF adopted a technique for valuing the SDR based transactions in SDRs. on a weighted average of exchange rates for the currencies of 16 member countries. 4. Beginning November 1978, valued at current market exchange rates. The U.S. SDR holdings and reserve position in the IMF also are valued on this 5. Includes U.S. government securities held under repurchase agreement against basis beginning July 1974. receipt of foreign currencies, if any. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics • January 1981 3.13 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data Millions of dollars, end of period 1980 AAsssseett aaccccoouunntt 1977 19781 1979 Apr. May June July Aug. Sept. Oct.P All foreign countries 1 Total, all currencies 258,897 306,795 364,233 376,146 378,899 376,722 377,813 386,200 385,011 380,988 2 Claims on United States 11,623 17,340 32,302 34,183 35,606 29,069 29,053 36,821 29,320 30,439 3 Parent bank 7,806 12,811 25,929 26,290 26,139 18,565 17,525 26,684 19,676 21,447 4 Other 3,817 4,529 6,373 7,893 9,467 10,504 11,528 10,137 9,644 8,992 5 Claims on foreigners 238,848 278,135 317,175 325,623 326,340 330,171 331,301 332,317 338,388 333,522 6 Other branches of parent bank 55,772 70,338 79,661 79,500 76,317 76,061 75,196 72,417 73,638 72,240 7 Banks 91,883 103,111 123,395 130,198 130,313 132,587 134,624 136,484 139,604 137,600 8 Public borrowers2 14,634 23,737 26,072 25,239 25,438 25,632 25,474 26,112 26,492 26,376 9 Nonbank foreigners 76,560 80,949 88,047 90,686 94,272 95,891 96,007 97,304 98,654 97,306 10 Other assets 8,425 11,320 14,756 16,340 16,953 17,482 17,459 17,062 17,303 17,027 11 Total payable in U.S. dollars 193,764 224,940 267,711 277,791 277,542 275,232 275,719 283,707' 281,444 278,239 12 Claims on United States 11,049 16,382 31,171 32,899 34,314 27,867 27,688 35,508 28,117 29,022 13 Parent bank 7,692 12,625 25,632 25,920 25,778 18,254 17,209 26,363 19,405 21,050 14 Other 3,357 3,757 5,539 6,979 8,536 9,613 10,479 9,145 8,712 7,972 15 Claims on foreigners 178,896 203,498 229.118 235.953 234,159 238,213 239,271 239,356' 244,910 240,707 16 Other branches of parent bank 44,256 55,408 61,525 61,768 58,908 58,456 57,813 54,965 56,445 55,031 17 Banks 70,786 78,686 96,243 103,256 102,693 104,902 106,313 107,976 111,651 108,872 18 Public borrowers2 12,632 19,567 21.629 20,998 21,221 21,382 21,233 21,785 22,059 22,406 19 Nonbank foreigners 51,222 49,837 49,721 49,931 51,337 53,473 53,912 54,630' 54,755 54,398 20 Other assets 3,820 5,060 7,422 8,939 9,069 9,152 8,760 8,843 8,417 8,510 United Kingdom 21 Total, all currencies 90,933 106,593 130,873 138,915 138,930 139,066 135,669 136,467 136,872 137,096 22 Claims on United States 4,341 5,370 11,117 11,533 11,399 9,157 8,366 8,465 8,022 8,206 23 Parent bank 3,518 4,448 9,338 9,300 9,140 6,870 5,705 6,023 5,788 5,969 24 Other 823 922 1,779 2,233 2,259 2,287 2,661 2,442 2,234 2,237 25 Claims on foreigners 84,016 98,137 115,123 122,105 121,851 124,059 120,914 121,805 122,825 122,890 26 Other branches of parent bank 22,017 27,830 34,291 36,015 34,305 34,824 32,231 31,607 30,792 31,399 27 Banks 39,899 45,013 51,343 54,020 54,076 54,855 54,824 55,530 56,911 56,396 28 Public borrowers2 2,206 4,522 4,919 5,578 5,591 5,897 5,710 5,865 6,005 5,943 29 Nonbank foreigners 19,895 20,772 24,570 26,492 27,879 28,483 28,149 28,803 29,117 29,152 30 Other assets 2,576 3,086 4,633 5,277 5,680 5,850 6,389 6,197 6,025 6,000 31 Total payable in U.S. dollars 66,635 75,860 94,287 100,628 98,809 98,013 93,158 93,720' 94,355 94,365 32 Claims on United States 4,100 5,113 10,746 11,071 10,988 8,790 7,831 7,954 7,656 7,637 33 Parent bank 3,431 4,386 9,297 9,179 9,059 6,810 5,629 5,960 5,744 5,817 34 Other 669 727 1,449 1,892 1,929 1,980 2,202 1,994 1,912 1,820 35 Claims on foreigners 61,408 69,416 81,294 86,818 85,013 86,404 82,434 82,705' 83,933 83,961 36 Other branches of parent bank 18,947 22,838 28,928 29,980 28,466 28,692 26,083 25,565 24,907 25,577 37 Banks 28,530 31,482 36,760 39,159 38,594 39,050 38,471 39,070 40,817 39,988 38 Public borrowers2 1,669 3,317 3,319 4.277 4,277 4,396 4,280 4,327 4,419 4,381 39 Nonbank foreigners 12,263 11,779 12,287 13,402 13,676 "14,266 13,600 13,743' 13,790 14,015 40 Other assets 1,126 1,331 2,247 2,739 2,808 2,819 2,893 3,061 2,766 2,767 Bahamas and Caymans 41 Total, all currencies 79,052 91,735 108,977 115,840 116,538 115,276 120,243 128,429 123,076 119,379 42 Claims on United States 5,782 9,635 19,124 20,060 21,406 17,682 18,240 25,846 18,293 19,642 43 Parent bank 3,051 6,429 15,196 15,269 15,334 10,660 10,497 19,129 11,839 13,857 44 Other 2,731 3,206 3,928 4,791 6,072 7,022 7,743 6,717 6,454 5,785 45 Claims on foreigners 71,671 79,774 86,718 91,683 90,995 93,432 98,001 98,463 100,832 95,854 46 Other branches of parent bank 11,120 12,904 9,689 13,438 12,454 12,977 14,362 13,160 14,724 13,093 47 Banks 27,939 33,677 43,171 47,212 46,782 48,012 50,780 51,712 52,622 49,673 48 Public borrowers2 9,109 11,514 12,905 11,355 11,636 11,554 11,627 12,054 12,076 12,439 49 Nonbank foreigners 23,503 21,679 20,953 19,678 20,123 20,889 21,232 21,537 21,410 20,649 50 Other assets 1,599 2,326 3,135 4,097 4,137 4,162 4,002 4,120 3,951 3,883 51 Total payable in U.S. dollars 73,987 85,417 102,368 109,728 110,872 109,715 114,474 122,581 117,142 113,538 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Overseas Branches A55 3.13 Continued 1980 LLiiaabbiilliittyy aaccccoouunntt 1977 19781 1979 Apr. May June July Aug. Sept. Oct .P All foreign countries 52 Total, all currencies 258,897 306,795 364,233 376,146 378,899 376,722 377,813 386,200 385,011 380,988 53 To United States 44,154 57,948 66,618 69,571' 73,263' 76,297' 83,151' 87,492' 83,938 84,096 54 Parent bank 24,542 28,590 24,462 24,348 26,603 30,918 35,357 37,400 38,398 37,103 55 Other banks in United States 12,212 13,968 12,833' 13,090' 12,432' 11,415' 14,725' 12,618 12,908 56 Nonbanks 17,146 28,188 32,390 33,570 32,947 36,379 35,367' 32,922 34,085 57 To foreigners 206,579 238,912 283,344 291,113' 289,754' 284,539' 279,567' 283,924' 287,018 283,050 58 Other branches of parent bank 53,244 67,496 77,601 75,096 72,530 72,061 72,067 69,158 70,258 69,462 59 Banks 94,140 97,711 122,849 130,675' 130,805' 127,636' 122,708' 130,344' 130,968 131,359 60 Official institutions 28,110 31,936 35,664 35,107 34,910 34,141 33,073 33,080 33,079 30,591 61 Nonbank foreigners 31,085 41,769 47,230 50,235 51,509 50,701 51,719 51,342' 52,713 51,638 62 Other liabilities 8,163 9,935 14,271 15,462 15,882 15,886 15,095 14,784 14,055 13,842 63 Total payable in U.S. dollars 198,572 230,810 273,819 283,880 285,131 282,578 283,026 291,606 288,436 285,734 64 To United States 42,881 55,811 64,530 67,216' 70,826' 73,704' 80,630' 84,650' 81,050 81,295 65 Parent bank 24,213 27,519 23,403 23,102 25,279 29,547 33,977 35,906 36,799 35,443 66 Other banks in United States 11,958 13,771 12,584' 12,826' 12,162' 11,155' 14,419' 12,382 12,609 67 Nonbanks 16,334 27,356 31,530 32,721 31,995 35,498 34,325' 31,869 33,243 68 To foreigners 151,363 169,927 201,476 207,847' 205,263' 199,872' 194,322' 198,754' 199,625 197,095 69 Other branches of parent bank 43,268 53,396 60,513 59,423 56,577 56,247 56,206 53,335 54,753 53,516 70 Banks 64,872 63,000 80,691 87,606' 87,029' 84,290' 78,911' 86,404' 85,345 86,224 71 Official institutions 23,972 26,404 29,048 28,685 28,360 26,961 26,177 26,165 25,659 23,274 72 Nonbank foreigners 19,251 27,127 31,224 32,133 33,297 32,374 33,028 32,850' 33,868 34,081 73 Other liaHMties 4,328 5,072 7,813 8,817 9,042 9,002 8,074 8,202 7,761 7,344 United Kingdom 74 Total, all currencies 90,933 106,593 130,873 138,915 138,930 139,066 135,669 136,467 136,872 137,096 75 To United States 7,753 9,730 20,986 20,838 19,877 20,189 21,404 20,608' 19,343 19,185 76 Parent bank 1,451 1,887 3,104 2,301 2,118 2,410 3,275 2,542 2,951 2,712 7 7 7 8 N O o th n e b r a b n a k n s ks in United States 6,302 4 3 , , 2 6 3 1 2 1 1 7 0 , , 6 1 9 8 3 9 1 6 2 , , 3 1 8 5 2 5 1 6 1 , , 2 4 6 9 5 4 1 6 1 , , 3 4 0 7 6 3 1 5 2 , , 5 5 6 6 7 2 1 5 2 , , 9 1 1 5 0 6 ' 1 5 1 , , 3 0 6 3 1 1 1 5 0 , , 8 6 4 2 8 5 79 To foreigners 80,736 93,202 104,032 111,375 111,769 111,878 107,739 109,604' 111,866 112,476 80 Other branches of parent bank 9,376 12,786 12,567 14,268 13,824 13,767 12,694 13,343 13,295 13,730 81 Banks 37,893 39,917 47,620 53,955 54,309 54,750 51,203 51,452 53,749 56,008 82 Official institutions 18,318 20,963 24,202 23,453 23,628 22,577 21,088 22,600 22,437 19,807 83 Nonbank foreigners 15,149 19,536 19,643 19,699 20,008 20,784 22,754 22,209' 22,385 22,931 84 Other liabilities 2,445 3,661 5,855 6,702 7,284 6,999 6,526 6,255 5,663 5,435 85 Total payable in U.S. dollars 67,573 77,030 95,449 101,679 101,170 100,117 95,314 96,453 96,403 96,133 86 To United States 7,480 9,328 20,552 20,337 19,284 19,498 20,843 20,007' 18,687 18,579 87 Parent bank 1,416 1,836 3,054 2,252 2,060 2,315 3,238 2,496 2,892 2,634 8 8 8 9 N O o th n e b r a b n a k n s ks in United States 6,064 4 3 , , 1 3 4 4 4 8 7 9, , 8 6 4 5 7 1 1 6 1 , , 3 7 1 6 8 7 1 6 1 , , 2 0 1 1 0 4 1 6 0 , , 2 9 3 5 3 0 1 5 2 , , 4 1 8 1 6 9 1 5 1 , , 8 7 0 0 9 2 ' 1 5 0 , , 2 5 5 3 9 6 1 5 0 , , 7 2 4 0 2 3 90 To foreigners 58,977 66,216 72,397 78,296 78,278 77,145 71,489 73,431' 75,001 75,190 91 Other branches of parent bank 7,505 9,635 8,446 10,468 10,021 9,758 8,672 9,128 9,215 9,731 92 Banks 25,608 25,287 29,424 34,485 34,488 35,217 31,352 31,726 32,865 34,741 93 Official institutions 15,482 17,091 20,192 19,554 19,558 18,300 16,846 18,253 18,046 15,338 94 Nonbank foreigners 10,382 14,203 14,335 13,789 14,211 13,870 14,619 14,324' 14,875 15,380 95 Other liabilities 1,116 1,486 2,500 3,046 3,608 3,474 2,982 3,015 2,715 2,364 Bahamas and Caymans 96 Total, all currencies 79,052 91,735 108,977 115,840 116,538 115,276 120,243 128,429 123,076 119,379 97 To United States 32,176 39,431 37,719 41,919' 45,618' 48,431' 54,190' 58,877' 56,263 56,139 1 9 9 0 8 9 0 P N O a o t r h n e e b n r a t b n b a k a n s n k k s in United States 2 1 0 1 , , 9 2 5 2 _ 6 0 2 1 0 6 2 , , , 4 0 8 8 7 7 2 3 6 1 1 5 5 7 , , , 2 2 2 0 6 4 4 7 8 1 1 5 9 7 , , , 4 0 4 3 6 1 5 6 8 ' 2 1 0 9 5 , , , 7 1 7 2 7 2 7 0 1 ' 2 2 2 0 5 , , , 7 4 2 4 8 0 8 3 0 ' 2 22 6 4 , , , 7 5 8 8 8 2 0 9 1 ' 2 2 9 2 7 , , , 1 2 4 8 2 6 9 8 0 ' 2 2 6 9 0 , , , 0 3 8 4 2 8 7 9 7 2 2 7 2 5 , , , 6 5 9 9 0 4 4 0 5 101 To foreigners 45,292 50,447 68,598 70,601' 67,971' 63,935' 63,171' 66,593' 63,918 60,438 102 Other branches of parent bank 12,816 16,094 20,875 22,470 20,009 20,102 20,409 18,081 17,079 16,719 103 Banks 24,717 23,104 33,631 33,046' 32,174' 28,917' 27,126' 34,086' 32,155 29,193 104 Official institutions 3,000 4,208 4,866 5,435 5,461 5,096 5,525 4,119 4,250 4,575 105 Nonbank foreigners 4,759 7,041 9,226 9,650 10,327 9,820 10,111 10,307 10,434 9,951 106 Other liabilities 1,584 1,857 2,660 3,320 2,949 2,910 2,882 2,959 2,895 2,802 107 Total payable in U.S. dollars 74,463 87,014 103,460 111,486 112,509 111,494 116,182 124,017 118,473 115,021 l.In May 1978 the exemption level for branches required to report was increased, rowers, including corporations that are majority owned by foreign governments, 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

A56 International Statistics • January 1981 3.14 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1980 IItteemm 11997777 11997788 11997799 May June July Aug. Sept. Oct.P Nov.P 1 Total1 131,097 162,589 149,451 143,465 149,094 152,982 154,579 156,804 157,259 163,082 By type 2 Liabilities reported by banks in the United States2 18,003 23,290 30,475 28,566 28,940 29,201 29,449 30,918 28,785 29,582 3 U.S. Treasury bills and certificates3 47,820 67,671 47,666 42,731 45,907 47,982 49,811 49,361 50,392 55,104 U.S. Treasury bonds and notes 4 Marketable 32,164 35,894 37,590 38,029 39,745 40.507 39,762 40,760 41,424 41,725 5 Nonmarketable4 20,443 20,970 17,387 16.184 15,954 15,954 15,654 15,254 15,254 15,254 6 U.S. securities other than U.S. Treasury securities5 12,667 14,764 16,333 17,955 18,548 19,338 19,903 20,511 21,404 21,417 By area 1 Western Europe1 70,748 93,089 85,602 74.174 75,246 78,141 78,424 76,649 75,999 80,875 8 Canada 2,334 2,486 1,898 2.134 2,157 1,907 2,156 1,901 1,736 1,433 9 Latin America and Caribbean 4,649 5,046 6,291 5,955 5,932 6,276 6,049 6,610 6,008 5,722 10 Asia 50,693 58,817 52,763 57,382 62,164 62,989 64,191 67,600 68,920 69,934 11 Africa 1,742 2,408 2,412 2.889 2,694 2,930 3,281 3,232 3,520 3,867 12 Other countries6 931 743 485 931 901 739 478 812 1,076 1,251 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 in of foreign countries. 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 1979 1980 IItteemm 11997777 11997788 Sept. Dec. Mar. June Sept. 1 Banks' own liabilities 925 2.363 2.401 1,868 2,237 2,580 2,688 2 Banks'own claims' 2,356 3.682 3,024 2,448 2,812 2,994 3,161 3 Deposits 941 1.795 1,376 1,003 1,212 1,048 1,120 4 Other claims 1.415 1.887 1.648 1,445 1,600 1,946 2,040 5 Claims of banks' domestic customers2 335588 660099 558822 11..006600 779988 559955 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

Nonbank-Reported Data A57 3.16 LIABILITIES TO FOREIGNERS Reported by Banks in the United States Payable in U.S. dollars Millions of dollars, end of period 1980 Holder and type of liability 1978 1979 May June July Aug. Sept. Oct. Nov.P 1 All foreigners 126,168 166,816 187,376 184,309 187,012 188,354 201,388 191,576' 195,574 204,564 2 Banks' own liabilities 78,718 117,183 116,348 116,811 116,645 128,246 118,663' 120,992 124,836 3 Demand deposits 18,996 19,218 23,325 22.511 25,967 22,138 22,511 22,474' 22,456 22,847 4 Time deposits1 11,521 12,431 13,627 12,678 12,778 12,899 13,158 13,824' 14,101 15,035 5 Other2 9,693 16,392 16,027 16,774 18,737 18,721 17,980' 17,224 17,085 6 Own foreign offices3 37,376 63,839 65,133 61,292 62,871 73,856 64,385' 67,210 69,869 7 Banks' custody liabilities4 88,098 70,193 67,961 70,201 71,708 73,142 72,913 74,582 79,728 8 U.S. Treasury bills and certificates5 48,906 68,202 48,573 45,523 48,193 49,627 51,505 50,731 51,990 56,484 9 Other negotiable and readily transferable instruments6 17,396 19,270 19,645 19,433 19,349 19,054 19,671 19,962 20,609 10 Other 2,499 2,350 2,793 2,575 2,732 2,584 2,511 2,630 2,635 11 Nonmonetary international and regional organizations7 3,274 2,607 2,351 3,212 3,504 2,903 2,820 2,549 2,734 2,476 12 Banks' own liabilities 906 709 377 847 607 501 476 352 383 13 Demand deposits 231 330 260 144 99 214 171 141 115 187 14 Time deposits1 139 84 151 88 92 93 101 100 95 92 15 Other2 492 298 145 657 299 229 235 143 104 16 Banks' custody liabilities4 1,701 1,643 2.835 2.657 2,296 2,319 2,073 2,382 2,093 17 U.S. Treasury bills and certificates 706 201 102 1.519 1,106 604 644 316 581 337 18 Other negotiable and readily transferable instruments6 1,499 1,538 1,3170 1,551 1,692 1,675 1,757 1,800 1,756 19 Other 1 2 0 0 0 0 0 0 20 Official institutions8 90,706 78,142 71,297 74,848 77,183 79,260 80,279r 79,177 84,687 21 Banks' own liabilities 12,129 18,228 15,442 16,341 17,061 17,591 18,548' 16,157 16,893 22 Demand deposits 3,528 3,390 4,704 4,484 5,042 4,218 3,898 4,348' 3,406 3,553 23 Time deposits1 1,797 2,550 3,041 2,591 2,670 2,695 2,959 3,477' 3,390 3,623 24 Other2 6,189 10,483 8.367 8,628 10,148 10,735 10,724 9,362 9,717 25 Banks' custody liabilities4 78,577 59,914 55,854 58,507 60,122 61,669 61,731 63,020 67,793 26 U.S. Treasury bills and certificates5 67,415 47,666 42,731 45,907 47,982 49,811 49,361' 50,392 55,104 27 Other negotiable and readily transferable instruments6 10,992 12,196 13,084 12,554 12,092 11,807 12,307 12,537 12,633 28 Other 170 52 40 45 48 52 63 90 56 29 Banks9 42,335 57,483 88,357 92,049 89,661 90,328 100,977 90,045r 94,817 97,620 30 Banks' own liabilities 52,693 83,357 86,221 84,270 84,846 95,664 84,804' 89,459 91,740 31 Unaffiliated foreign banks 15,317 19,517 21,088 22,977 21,975 21,808 20,419' 22,248 21,871 32 Demand deposits 10,933 11,257 13,274 13,003 14,986 12,974 13,427 12,995' 13,842 13,714 33 Time deposits1 2,040 1,443 1,680 1,423 1,479 1,544 1,514 1,412' 1,724 2,206 34 Other2 2,617 4,563 6,662 6,512 7,457 6,867 6,012' 6,682 5,951 35 Own foreign offices3 37,376 63,839 65,133 61,292 62,871 73,856 64,385' 67,210 69,869 36 Banks' custody liabilities4 4,790 5,000 5,828 5,392 5,482 5,313 5,241 5,359 5,880 37 U.S. Treasury and certificates 300 422 765 594 557 577 361 515 529 38 Other negotiable and readily transferable instruments6 2,425 2,405 2.490 2,522 2.395 2,435 2,533 2,417 2,883 39 Other 2,065 2,173 2,574 2,277 2,530 2,301 2,347 2,427 2,467 40 Other foreigners 14,736 16,020 18,526 17,752 18,999 17,940 18,330 18,703r 18,845 19,782 41 Banks' own liabilities 12,990 14,890 14.309 15,353 14,131 14,490 14,835' 15,023 15,820 42 Demand deposits 4,304 4,242 5,087 4,880 5,840 4,732 5,014 4,991 5,093 5,392 43 Time deposits 7,546 8,353 8,755 8.576 8,537 8,566 8,585 8,836 8,892 9,113 44 Other2 394 1,048 853 977 833 891 1.009' 1,038 1,314 45 Banks' custody liabilities4 3,030 3,636 3.443 3,646 3,809 3,841 3,868 3,822 3,962 46 U.S. Treasury bills and certificates 240 285 382 508 586 484 473 693 502 513 47 Other negotiable and readily transferable instruments6 2,481 3,131 2.755 2,806 3,170 3,137 3,074 3,208 3,337 48 Other 264 123 180 254 154 231 100 112 112 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 11,007 10,974 11.685 11,773 10,500 10,433 10,704 10,751 10,528 1. Excludes negotiable time certificates of deposit, which are included in "Other 5. Includes nonmarketable certificates of indebtedness and Treasury bills issued negotiable and readily transferable instruments." Data for time deposits before to official institutions of foreign countries. April 1978 represent short-term only. 6. Principally bankers acceptances, commercial paper, and negotiable time cer- 2. Includes borrowing under repurchase agreements. tificates of deposit. 3. U.S. banks: includes amounts due to own foreign branches and foreign sub- 7. Principally the International Bank for Reconstruction and Development, and sidiaries consolidated in "Consolidated Report of Condition" filed with bank reg- the Inter-American and Asian Development Banks. ulatory agencies. Agencies, branches, and majority-owned subsidiaries of foreign 8. Foreign central banks and foreign central governments and the Bank for banks: principally amounts due to head office or parent foreign bank, and foreign International Settlements. branches, agencies or wholly owned subsidiaries of head office or parent foreign 9. Excludes central banks, which are included in "Official institutions." bank. 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

A58 International Statistics • January 1981 3.16 LIABILITIES TO FOREIGNERS Continued 1980 AArreeaa aanndd ccoouunnttrryy 11997777 11997788 11997799 May June July Aug. Sept. Oct. NOV.p 1 Total 126,168 166,816 187,376 184,309 187,012 188,354 201,388 191,576' 195,574 204,564 2 Foreign countries 122,893 164,209 185,025 181,097 183,508 185,451 198,568 189,027' 192,840 202,088 3 Europe 60,295 85,157 90,935 82.756 82,911 83,871 86,072 83,476' 83,984 90,794 4 Austria 318 513 413 352 383 432 390 432 460 519 5 Belgium-Luxembourg 2,531 2.550 2,375 2,795 3,982 3,837 3,673 3,696 3,322 3,696 6 Denmark 770 1,946 1,092 588 553 534 525 528 493 586 7 Finland 323 346 398 435 438 433 403 311 307 363 8 France 5,269 9,208 10,433 10.850 11,272 12,178 12,596 12,332 11,654 12,380 9 Germany 7,239 17,286 12,935 5.427 6,954 7,626 9,121 7,854 7,557 9,171 10 Greece 603 826 635 610 626 567 642 591 643 710 11 Italy 6,857 7,739 7,782 6.942 5,778 7,138 6,530 5,969' 6,796 7,277 12 Netherlands 2,869 2,402 2,327 2.128 2,676 2,830 2,491 2,540 2,555 2,825 13 Norway 944 1,271 1,267 1.221 1,282 1,140 1,040 1,074 1,381 1,444 14 Portugal 273 330 557 339 391 398 506 571 491 437 15 Spain 619 870 1,259 1.386 1,366 1,371 1,491 1,321 1,520 1,379 16 Sweden 2.712 3,121 2,005 1,632 1,999 1,795 1,861 1,826 1,813 1,811 17 Switzerland 12,343 18,225 17,954 14.517 14,736 14,359 14,252 13,524 13,694 16,574 18 Turkey 130 157 120 136 153 156 147 237 171 257 19 United Kingdom 14,125 14,265 24,694 27.251 24,192 22,579 22,925 22,818' 23,795 24,518 20 Yugoslavia 232 254 266 144 254 190 135 169 203 533 21 Other Western Europe1 1.804 3,440 4,070 5.606 5,468 6,006 7,002 7,250 6,875 5,834 22 U.S.S.R 98 82 52 40 49 36 70 39 33 64 23 Other Eastern Europe2 236 325 302 354 357 267 271 392 220 416 24 Canada 4,607 6,969 7,379 8,201 9,157 9,228 9,187 10,234 9,992 9,871 25 Latin America and Caribbean 23,670 31,627 49,576 48.886 46,975 49,301 58,306 48,674' 52,257 53,132 26 Argentina 1,416 1,484 1,582 1,903 1,705 1,841 1,880 1,875 1,996 1,996 27 Bahamas 3,596 6,752 15,255 16,468 12,887 13,173 21,179 13,924' 17,340 16,791 28 Bermuda 321 428 430 512 576 464 559 677 595 547 29 Brazil 1,396 1,125 1,005 1.527 1,454 1,474 1,378 1,168' 1,342 1,558 30 British West Indies 3,998 6,014 11,117 9,571 10,369 12,072 13,422 11,410' 12,023 12,131 31 Chile 360 398 468 416 450 453 475 431 447 456 32 Colombia 1,221 1,756 2,617 2.780 2,854 2,932 2,893 2,916 3,037 2,962 33 Cuba 6 13 13 7 6 6 7 5 5 6 34 Ecuador 330 322 425 337 455 346 818 381 387 437 35 Guatemala3 416 414 350 360 373 372 373 365 359 36 Jamaica3 52 76 138 91 137 100 101 85 79 37 Mexico 2,876 3,417 4,096 4,111 3,918 4,208 4,202 4,119' 4,575 4,583 38 Netherlands Antilles 196 308 499 335 250 332 314 360' 393 568 39 Panama 2,331 2,967 4,483 4.082 4,176 4,685 4,617 3,894 3,595 4,575 40 Peru 287 363 383 412 346 350 401 355 380 345 41 Uruguay 243 231 202 208 232 232 241 199 220 244 42 Venezuela 2,929 3,821 4,192 3.953 4,707 4,350 3,692 4,405 3,659 3,667 43 Other Latin America and Caribbean 2,167 1,760 2,318 1.775 2,139 1,873 1,755 2,080 1,811 1,826 44 Asia 30,488 36,492 32,991 36,047 39,468 38,020 39,850 41,847' 4400,,887777 4411,,882211 China 45 Mainland 53 67 49 30 44 38 37 38 46 63 46 Taiwan 1.013 502 1,393 1.396 1,524 1,438 1,552 1,595 1,610 1,635 47 Hong Kong 1,094' 1,256 1,672 1.944 2,270 2,186 1,991 2,204 2,148 2,245 48 India 961 790 527 740 633 494 631 529' 485 438 49 Indonesia 410 449 504 670 807 849 632 827 811 715 50 Israel 559 688 707 570 584 488 569 534' 530 548 51 Japan 14,616 21,927 8,907 10.790 12,430 12,547 14,059 15,414 1155,,335544 15,704 52 Korea 602 795 993 988 1,087 1,482 1,473 1,994 11,,880099 1,764 53 Philippines 687 644 800 885 883 935 778 814 838 800 54 Thailand 264 427 277 472 405 405 304 517 403 440 55 Middle-East oil-exporting countries4 8.979 7,534 15,282 15.788 16,792 15,350 15,791 15,409' 14,611 15,219 56 Other Asia 1,250 1,414 1,879 1.771 2,010 1,808 2,033 1,972 2,232 2,250 57 Africa 2,535 2,886 3.239 3.810 3,708 3,792 4,218 3,902 4,245 4,725 58 Egypt 404 404 475 376 346 447 347 322 269 374 59 Morocco 66 32 33 31 35 33 47 32 57 38 60 South Africa 174 168 184 316 325 360 404 354 288 332 61 Zaire 39 43 110 86 107 78 38 42 36 34 62 Oil-exporting countries5 1,155 1,525 1,635 2.231 2,100 2,094 2,685 2,459 2,911 3,211 63 Other Africa 698 715 804 768 796 779 697 694 685 735 64 Other countries 1,297 1,076 904 1.397 1,290 1,239 936 894 1,484 1,746 65 Australia 1,140 838 684 1.150 1,019 959 692 613 1,190 1,413 66 Allother 158 239 220 247 271 281 243 281 294 333 67 Nonmonetary international and regional organizations 3,274 2,607 2,351 3.212 3,504 2,903 2,820 2,549 2,734 2,476 68 International 2.752 1,485 1,238 2,133 2,394 1,804 1,736 1,389 1,586 1,366 69 Latin American regional 278 808 806 790 807 785 800 837 841 801 70 Other regional6 245 314 308 289 302 314 285 323 307 309 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 Settlements, which is included in "Other Western Europe." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A59 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 1980 AArreeaa aanndd ccoouunnttrryy 11997777 11997788 11997799 May June July Aug. Sept. Oct. Nov.P 1 Total 90,206 115,603 133,855 139,733 149,447 151,196 163,300 161,518' 162,469 167,583 2 Foreign countries 90,163 115,547 133,823 139,699 149,413 151,165 163,262 161,484' 162,429 167,549 3 Europe 18,114 24,232 28,389 26,206 29,707 28,439 29,394 29,797' 29,241 32,880 4 Austria 65 140 284 292 305 309 280 264 196 214 5 Belgium-Luxembourg 561 1,200 1,339 1,471 1,866 1,622 1,881 1,954 1,680 1,946 6 Denmark 173 254 147 168 167 149 164 180 132 165 7 Finland 172 305 202 273 307 223 215 184 253 248 8 France 2,082 3,735 3,302 2,740 2,689 2,582 3,288 3,232 2,551 3,499 9 Germany 644 845 1,179 1,104 1,131 1,004 1,131 1,018 987 1,505 10 Greece 206 164 154 329 346 279 265 221 278 265 11 Italy 1,334 1,523 1,631 1,748 1,940 2,295 2,433 2,560 2,852 3,062 12 Netherlands 338 677 514 457 590 492 628 546 557 749 13 Norway 162 299 276 172 219 270 231 248 335 138 14 Portugal 175 171 330 246 300 346 335 330 341 468 15 Spain 722 1,120 1,051 1,106 1,189 1,011 1,139 1,106 1,113 1,094 16 Sweden 218 537 542 661 677 534 558 716 736 633 17 Switzerland 564 1,283 1,165 916 1,237 1,319 1,581 1,337 1,591 1,931 18 Turkey 360 300 149 151 144 143 137 144 124 149 19 United Kingdom 8,964 10,172 13,794 11,851 14,026 13,175 12,638 13,155' 12,923 14,305 20 Yugoslavia 311 363 611 614 658 648 647 682 684 690 21 Other Western Europe1 86 122 175 266 203 170 172 245 226 234 22 U.S.S.R 413 366 290 247 289 531 232 241 257 271 23 Other Eastern Europe2 566 657 1,254 1,394 1,424 1,336 1,438 1,434 1,427 1,314 24 Canada 3,355 5,152 4,143 4,283 5,272 4,654 4,775 5,255' 4,614 4,542 25 Latin America and Caribbean 45,850 57,567 68,011 71,656 74,100 78,703 89,189 85,693' 87,491 89,268 26 Argentina 1,478 2,281 4,389 5,117 5,226 5,234 5,393 5,629 5,859 6,275 27 Bahamas 19,858 21,555 18,918 23,295 25,093 28,710 31,866 30,194' 30,066 29,675 28 Bermuda 232 184 496 296 175 194 256 216 399 262 29 Brazil 4,629 6,251 7,720 8,064 8,316 9,002 9,218 9,639 10,135 10,029 30 British West Indies 6,481 9,692 9,822 9,047 8,667 8,637 14,570 11,980' 12,617 13,641 31 Chile 675 970 1,441 1,355 1,367 1,359 1,487 1,627 1,721 1,730 32 Colombia 671 1,012 1,614 1,408 1,435 1,448 1,490 1,493' 1,575 1,582 33 Cuba 10 0 4 4 4 4 3 6' 3 3 34 Ecuador 517 705 1,025 1,007 1,058 1,051 1,136 1,111 1,157 1,157 35 Guatemala3 94 134 107 120 153 102 105 112 114 36 Jamaica3 40 47 43 36 31 31 33 35 40 37 Mexico 4,909 5,479 9,099 9,726 10,239 10,660 10,750 11,123 11,745 11,979 38 Netherlands Antilles 224 273 248 693 728 760 729 710 799 816 39 Panama 1,410 3,098 6,031 4,538 4,952 4,552 4,931 4,461 3,972 4,368 40 Peru 962 918 652 628 711 647 687 671 719 749 41 Uruguay 80 52 105 154 103 91 105 100 100 105 42 Venezuela 2,318 3,474 4,669 4,528 4,295 4,469 4,737 4,879 4,743 5,113 43 Other Latin America and Caribbean 1,394 1,490 1,598 1,646 1,576 1,700 1,697 1,715 1,736 1,631 44 Asia 1199,,223366 25,386 30,628 34,902 3377,,226611 36,260 36,907 37,620' 37,808 37,783 China 45 Mainland 10 4 35 40 75 68 50 117' 126 187 46 Taiwan 1,719 1,499 1,821 1,889 2,100 2,224 2,284 2,492' 2,332 2,382 47 Hong Kong 543 1,479 1,804 2,362 2,269 2,174 2,063 2,099 1,980 1,931 48 India 53 54 92 61 83 97 118 84 103 125 49 Indonesia 232 143 131 128 155 205 245 208 214 248 50 Israel 584 888 990 828 1,028 950 1,012 918 1,055 1,127 51 Japan 9,839 12,671 16,924 20,395 21,606 20,575 21,187 20,663 20,567 20,313 52 Korea 2,336 2,282 3,796 5,057 5,417 5,521 5,462 5,574 5,885 5,842 53 Philippines 594 680 737 717 780 881 1,019 1,169 1,081 1,120 54 Thailand 633 758 935 918 922 939 947 947 925 916 55 Middle East oil-exporting countries4 1,746 3,125 1,548 978 1,262 1,120 1,040 1,471 1,300 1,538 56 Other Asia 947 1,804 1,813 1,530 1,564 1,506 1,480 1,876 2,240 2,052 57 Africa 2,518 2,221 1,797 1,770 2,016 2,166 1,977 2,029 2,090 1,933 58 Egypt 119 107 114 134 95 112 135 123 159 165 59 Morocco 43 82 103 107 121 134 180 166 119 146 60 South Africa 1,066 860 445 465 616 691 469 535 440 375 61 Zaire 98 164 144 108 107 107 98 101 123 98 62 Oil-exporting countries5 510 452 391 325 364 365 349 374 469 402 63 Other 682 556 600 632 714 757 746 729 780 747 64 Other countries 1,090 988 855 883 1,056 943 1,021 1,091 1,185 1,143 65 Australia 905 877 673 695 860 743 793 879 942 915 66 Allother 186 111 182 187 196 200 228 213 243 228 67 Nonmonetary international and regional organizations6 43 56 32 34 34 31 38 34 40 34 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

A60 International Statistics • January 1981 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 1980 TTyyppee ooff ccllaaiimm 11997777 11997788 11997799 May June July Aug. Sept. Oct. Nov.P 1 Total 9900,,220066 111111122222226666666,,,,,,,888888855555551111111 111111155555553333333,,,,,,,999999955555553333333 111111177777774444444,,,,,,,666666622222221111111 111111188888887777777,,,,,,,111111133333331111111''''''' 2 Banks' own claims on foreigners 111111111111115555555,,,,,,,666666600000003333333 111111133333333333333,,,,,,,888888855555555555555 139,733 111111144444449999999,,,,,,,444444444444447777777 151,196 163,300 111111166666661111111,,,,,,,555555511111118888888''''''' 162,469 167,583 3 Foreign public borrowers 11111110000000,,,,,,,222222266666663333333 11111115555555,,,,,,,444444499999991111111 15,115 11111115555555,,,,,,,777777722222223333333 16,444 17,238 11111118888888,,,,,,,999999966666669999999''''''' 19,051 20,470 4 Own foreign offices1 44444441111111,,,,,,,666666622222228888888 44444447777777,,,,,,,444444444444447777777 50,108 55555556666666,,,,,,,000000066666664444444 58,499 64,016 66666661111111,,,,,,,888888877777779999999''''''' 61,402 62,420 5 Unaffiliated foreign banks 44444440000000,,,,,,,555555544444445555555 44444441111111,,,,,,,000000022222223333333 42,859 44444444444444,,,,,,,000000066666661111111 42,007 47,528 44444446666666,,,,,,,000000000000008888888 46,560 48,914 6 Deposits 5555555,,,,,,,444444422222228888888 6666666,,,,,,,222222222222224444444 6.507 6666666,,,,,,,555555577777773333333 6,176 7,268 7777777,,,,,,,222222211111116666666''''''' 7,115 7,666 7 Other 33333335555555,,,,,,,111111111111117777777 33333334444444,,,,,,,777777799999999999999 36,352 33333337777777,,,,,,,444444488888888888888 35,832 40,261 33333338888888,,,,,,,777777799999992222222''''''' 39,445 41,248 8 All other foreigners 22222223333333,,,,,,,111111166666667777777 22222229999999,,,,,,,888888899999994444444 31,652 33333333333333,,,,,,,666666600000000000000 34,245 34,518 33333334444444,,,,,,,666666666666661111111''''''' 35,455 35,778 9 Claims of banks' domestic customers2 11111111111111,,,,,,,222222244444448888888 22222220000000,,,,,,,000000099999998888888 22222225555555,,,,,,,111111177777774444444 22222225555555,,,,,,,666666611111113333333 10 Deposits 444444488888880000000 999999955555555555555 999999911111110000000 1111111,,,,,,,222222211111118888888 1111 NNeeggoottiiaabbllee aanndd rreeaaddiillyy ttrraannssffeerraabbllee iinnssttrruummeennttss33 .... 5555555,,,,,,,444444411111114444444 11111113333333,,,,,,,111111122222224444444 11111117777777,,,,,,,444444477777770000000 11111115555555,,,,,,,222222266666665555555 1122 OOuuttssttaannddiinngg ccoolllleeccttiioonnss aanndd ootthheerr ccllaaiimmss''** .. .. 66,,117766 5555555,,,,,,,333333355555553333333 6666666,,,,,,,000000011111119999999 6666666,,,,,,,777777799999994444444 9999999,,,,,,,111111133333330000000 13 MEMO- Customer liability on acceptances 11111114444444,,,,,,,999999966666669999999 11111118888888,,,,,,,000000055555558888888 22222222222222,,,,,,,333333300000002222222 22222223333333,,,,,,,444444400000000000000 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States5 13,113 21,364 24,704 23,216 24,790 23,516 21,509 21,996 n.a. 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 certifbanks: principally amounts due from head office or parent foreign bank, and foreign icates of deposit denominated in U.S. dollars issued by banks abroad. For descripbranches, agencies, or wholly owned subsidiaries of head office or parent foreign tion of changes in data reported by nonbanks, see July 1979 BULLETIN, p. 550. 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 1980 Maturity; by borrower and area Dec. June Sept. Dec. Mar. June Sept. 1 Total 73,771 77,742 87,580 86,224 85,242 93,070 98,556 By borrower 2 Maturity of 1 year or less1 58,481 60,078 68,404 65,215 63,883 71,690 75,565 3 Foreign public borrowers 4,583 4.609 6,067 7,038 6,488 6,972 8,612 4 All other foreigners 53,898 55,469 62,337 58,177 57,035 64,718 66,954 5 Maturity of over 1 year1 15,289 17,664 19,176 21,009 21,359 21,380 22,991 6 Foreign public borrowers 5,361 6,433 7,652 8.114 8,430 8,512 9,592 7 All other foreigners 9,928 11.231 11,524 12,895 12,929 12,869 13,399 By area Maturity of 1 year or less1 8 Europe 15,176 14.033 16,799 15,214 13,844 17,407 16,849 9 Canada 2,670 2,703 2,471 1.777 1,818 2,013 2,161 10 Latin America and Caribbean 20,990 23,148 25,690 24,974 23,178 24,477 27,816 11 Asia 17,579 18,191 21,519 21,677 23,374 25,749 26,592 12 Africa 1,496 1,438 1,401 1,080 1,043 1,320 1,394 13 All other2 569 565 524 493 627 724 754 Maturity of over 1 year1 14 Europe 3,142 3.483 3,653 4,140 4,248 4,033 4,714 15 Canada 1.426 1.221 1,364 1,317 1,214 1,199 1,191 16 Latin America and Caribbean 8,464 10,279 11,771 12,821 13,397 13,902 14,215 17 Asia 1,407 1.884 1,578 1,911 1,728 1,524 2,178 18 Africa 637 614 623 652 620 576 567 19 Mother2 214 183 188 169 152 146 125 1. Remaining time to maturity. 2. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A61 3.20 CLAIMS ON FOREIGN COUNTRIES Held by U.S. Offices and Foreign Branches of U.S.-Chartered Banks* Billions of dollars, end of period 19782 1979 1980 AArreeaa oorr ccoouunnttrryy 11997766 11997777 Sept. Dec. Mar. June Sept. Dec. Mar. June Sept.P 1 Total 206.8 240.0 247.5 266.3 264.0 275.6 294.0 303.8 307.6 328.2 338.5 2 G-10 countries and Switzerland 100.3 116.4 113.5 124.8 119.1 125.3 135.8 138.4 140.4 154.4 159.7 3 Belgium-Luxembourg 6.1 8.4 8.4 9.0 9.4 9.7 10.7 11.1 10.8 13.1 13.6 4 France 10.0 11.0 11.7 12.2 11.7 12.7 12.0 11.6 12.0 14.1 13.9 5 Germany 8.7 9.6 9.7 11.3 10.5 10.8 12.8 12.2 11.4 12.7 12.9 6 Italy 5.8 6.5 6.1 6.7 5.7 6.1 6.1 6.4 6.2 6.9 7.2 7 Netherlands 2.8 3.5 3.5 4.4 3.9 4.0 4.7 4.8 4.3 4.5 4.4 8 Sweden 1.2 1.9 2.2 2.1 2.0 2.0 2.3 2.4 2.4 2.7 2.8 9 Switzerland 3.0 3.6 4.3 5.4 4.5 4.8 5.0 4.8 4.4 3.4 3.5 10 United Kingdom 41.7 46.5 44.2 47.3 46.4 50.3 53.7 56.4 57.6 64.7 67.3 11 Canada 5.1 6.4 4.9 6.0 5.9 5.5 6.0 6.3 6.8 7.2 7.9 12 Japan 15.9 18.8 18.5 20.6 19.0 19.5 22.3 22.4 24.7 25.2 26.2 13 Other developed countries 15.0 18.6 18.7 19.4 18.2 18.2 19.7 19.9 18.8 20.3 20.4 14 Austria 1.2 1.3 1.5 1.7 1.7 1.8 2.0 2.0 1.7 1.8 1.7 15 Denmark 1.0 1.6 1.9 2.0 2.0 1.9 2.0 2.2 2.1 2.2 2.3 16 Finland 1.1 1.2 1.0 1.2 1.2 1.1 1.2 1.2 1.1 1.3 1.2 17 Greece 1.7 2.2 2.2 2.3 2.3 2.2 2.3 2.4 2.4 2.5 2.6 18 Norway 1.5 1.9 2.1 2.1 2.1 2.1 2.3 2.3 2.4 2.4 2.4 19 Portugal .4 .6 .5 .6 .6 .5 .7 .7 .6 .6 38.6 20 Spain 2.8 3.6 3.5 3.5 3.0 3.0 3.3 3.5 3.5 3.9 4.2 21 Turkey 1.3 1.5 1.5 1.5 1.4 1.4 1.4 1.4 1.4 1.4 1.3 22 Other Western Europe .7 .9 1.0 1.3 1.1 .9 1.5 1.4 1.4 1.6 1.7 23 South Africa 2.2 2.4 2.2 2.0 1.7 1.8 1.7 1.3 1.1 1.5 1.2 24 Australia 1.2 1.4 1.3 1.4 1.3 1.4 1.3 1.3 1.2 1.2 1.2 25 OPEC countries3 12.6 17.6 20.4 22.7 22.6 22.7 23.4 22.9 21.8 20.9 21.2 26 Ecuador .7 1.1 1.6 1.6 1.5 1.6 1.6 1.7 1.8 1.8 1.9 27 Venezuela 4.1 5.5 6.2 7.2 7.2 7.6 7.9 8.7 7.9 7.9 8.3 28 Indonesia 2.2 2.2 1.9 2.0 1.9 1.9 1.9 1.9 1.9 1.9 1.9 29 Middle East countries 4.2 6.9 '8.7 9.5 9.4 9.0 9.2 8.0 7.8 6.9 6.7 30 African countries 1.4 1.9 2.0 2.5 2.6 2.6 2.8 2.6 2.5 2.5 2.4 31 Non-OPEC developing countries 44.2 48.7 49.6 52.6 53.9 55.9 58.8 62.8 63.7 67.5 72.8 Latin America 32 Argentina 1.9 2.9 2.9 3.0 3.1 3.5 4.1 5.0 5.5 5.6 7.5 33 Brazil 11.1 12.7 14.0 14.9 14.9 15.1 15.1 15.2 15.0 15.3 15.8 34 Chile .8 .9 1.3 1.6 1.7 1.8 2.2 2.5 2.5 2.7 3.2 1.3 1.3 1.3 1.4 1.5 1.5 1.7 2.2 2.1 2.2 2.3 36 Mexico 11.7 11.9 10.7 10.8 10.9 10.7 11.4 12.0 12.1 13.6 14.4 37 Peru 1.8 1.9 1.8 1.7 1.6 1.4 1.4 1.5 1.3 1.4 1.5 38 Other Latin America 2.8 2.6 3.4 3.6 3.5 3.3 3.6 3.7 3.6 3.6 3.9 Asia China 39 Mainland 0 .0 .0 .0 .1 .1 .1 .1 .1 .1 .1 40 Taiwan 2.4 3.1 2.4 2.9 3.1 3.3 3.5 3.4 3.6 3.7 4.1 41 India .2 .3 .3 .2 .2 .2 .2 .2 .2 .2 .2 42 Israel 1.0 .9 .7 1.0 1.0 .9 1.0 1.3 .9 1.2 1.1 43 Korea (South) 3.1 3.9 3.5 3.9 4.2 5.0 5.3 5.5 6.5 7.1 7.3 44 Malaysia4 .5 .7 .6 .6 .6 .7 .7 .9 .8 .9 .9 45 Philippines 2.2 2.5 2.8 2.8 3.2 3.7 3.7 4.2 4.4 4.6 4.8 46 Thailand .7 1.1 1.1 1.2 1.2 1.4 1.6 1.6 1.4 1.5 1.5 47 Other Asia .5 .4 .3 .2 .3 .4 .3 .4 .4 .5 .5 Africa 48 Egypt .4 .3 .4 .4 .5 .7 .6 .6 ..77 .7 .7 49 Morocco .3 .5 .5 .6 .6 .5 .5 .6 .5 .5 .6 50 Zaire .2 .3 .2 .2 .2 .2 .2 .2 .2 .2 .2 51 Other Africa5 1.2 .7 1.3 1.4 1.4 1.5 1.6 1.7 1.8 1.8 2.0 5.2 6.3 6.6 6.9 6.7 6.7 7.2 7.3 7.3 7.2 7.3 1.5 1.6 1.4 1.3 1.1 .9 .9 .7 .6 .5 .5 54 Yugoslavia .8 1.1 1.3 1.5 1.6 1.7 1.8 1.8 1.9 2.1 2.1 55 Other 2.9 3.7 3.9 4.1 4.0 4.1 4.6 4.8 4.9 4.6 4.7 56 Offshore banking centers 24.7 26.1 30.1 30.9 33.7 37.0 38.6 40.4 42.6 43.8 43.7 57 Bahamas 10.1 9.9 11.5 10.4 12.3 14.4 13.0 13.7 14.0 13.6 12.6 58 Bermuda .5 .6 .7 .7 .6 .7 .7 .8 .6 .6 .6 59 Cayman Islands and other British West Indies 3.8 3.7 6.7 7.4 7.1 7.4 9.5 9.4 11.3 9.5 10.1 60 Netherlands Antilles .6 .7 .6 .8 .8 1.0 1.1 1.2 .9 1.1 1.3 61 Panama6 3.0 3.1 3.1 3.0 3.4 3.8 3.4 4.3 4.9 5.6 5.7 62 Lebanon .1 .2 .1 .1 .1 .1 .2 .2 .2 .2 .2 63 Hong Kong 2.2 3.7 4.0 4.2 4.8 4.9 5.5 6.0 5.7 6.9 7.3 64 Singapore 4.4 3.7 2.9 3.9 4.2 4.2 4.9 4.5 4.7 5.9 5.6 65 Others7 .0 .5 .5 .5 .4 .4 .4 .4 .4 .4 .4 66 Miscellaneous and unallocated8 5.0 5.3 8.6 9.1 9.5 9.9 10.6 11.7 13.1 14.3 13.7 1.The banking offices covered by these data are the U.S. offices and foreign the claims of the U.S. offices also include customer claims and foreign currency branches of U.S.-owned banks and of U.S. subsidiaries of foreign-owned banks. claims (amounting in June 1978 to $10 billion). Offices not covered include (1) U.S. agencies and branches of foreign banks, and 3.In addition to the Organization of Petroleum Exporting Countries shown in- (2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are ad- dividually, this group includes other members of OPEC (Algeria, Gabon, Iran, justed to exclude the claims on foreign branches held by a U.S. office or another Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United Arab Emirates) foreign branch of the same banking institution. The data in this table combine as well as Bahrain and Oman (not formally members of OPEC). 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.Includes Canal Zone beginning December 1979. see also footnote 2. 7.Foreign branch claims only. 2.Beginning with data for June 1978, the claims of the U.S. offices 8.Includes New Zealand, Liberia, and international and regional organizations. Digitized for FiRn AthSis EtaRbl e include only banks' own claims payable in dollars. For earlier dates http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 International Statistics • January 1981 3.21 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Holdings and Transactions Millions of dollars 1980 1980 CCoouunnttrryy oorr aarreeaa 11997788 11997799 Jan.- Nov. May June July Aug. Sept. Oct. NOV.P Holdings (end of period)1 1 Estimated total2 44,946 50,255 51,294 53,054 53,742 52,979 54,727 55,411r 56,078 2 Foreign countries2 39,817 44,796 46,833 48,653 49,448 48,850 50,031 50,934' 51,728 3 Europe2 17,072 23,705 24,075 24,377 24,157 23,541 23,914 23,681 23,608 4 Belgium-Luxembourg 19 60 28 28 45 89 91 78 74 5 Germany2 8,705 12,937 13,225 12,976 12,578 11,978 11,991 11,704 11,639 6 Netherlands 1,358 1,466 1,412 1,437 1,547 1,522 1,640 1,658 1,777 7 Sweden 285 647 653 647 650 640 611 607 614 8 Switzerland2 977 1,868 1,574 1,731 1,675 1,675 1,566 1,517 1,491 9 United Kingdom 5,373 6,236 6,665 7,001 7,091 7,106 7,473 7,555 7,428 10 Other Western Europe 354 491 519 556 571 531 542 562 584 11 Eastern Europe 0 0 0 0 0 0 0 12 Canada 152 232 385 423 481 469 480 503 532 13 Latin America and Caribbean 416 466 512 616 690 706 768 768 942 14 Venezuela 144 103 103 200 248 261 302 292 292 15 Other Latin America and Caribbean 110 200 209 215 242 240 241 255 278 16 Netherlands Antilles 162 163 200 200 200 205 225 221 372 17 Asia 21,488 19,805 21,270 22,752 23,535 23,546 24,253 25,291 25,927 18 Japan 11,528 11,175 9,543 9,545 9,614 9,465 9,444 9,503 9,547 19 Africa 691 591 593 492 592 592 617 685' 715 20 All other -3 -3 -2 -6 -6 -5 0 5 4 21 Nonmonetary international and regional organizations 5,129 5,429 4,461 4,401 4,294 4,129 4,696 4,477 4,350 22 International 5,089 5,388 4,401 4,338 4,234 4,066 4,632 4,430 4,302 23 Latin American regional 41 37 60 60 60 60 65 44 44 Transactions (net purchases, or sales (-) during period) 24 Total2 6,305 5,278 5,854 -716 1,757 692 -767 1,752 681' 667 25 Foreign countries2 5,921 4,980 6,932 479 1,820 795 -598 1,181 903' 794 26 Official institutions 3.729 1,697 4,135 386 1,716 762 -745 998 664' 302 27 Other foreign2 2.193 3,284 2,795 93 104 33 146 183 240 492 28 Nonmonetary international and regional organizations 383 301 -1,077 -1,195 -63 -104 -168 571 -222 -127 MEMO: Oil-exporting countries 29 Middle East3 -1,785 - 1,014 7,314 462 1,427 598 140 601 990 561 30 Africa4 329 - 100 123 0 -100 100 0 25 68' 30 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 denominated in foreign currencies. 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 foreign United Arab Emirates (Trucial States). countries. 4. Comprises Algeria, Gabon, Libya, and Nigeria. 3.22 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS Millions of dollars, end of period 1980 AAsssseettss 11997777 11997788 11997799 June July Aug. Sept. Oct. Nov. Dec .P 1 Deposits 424 367 429 691 436 336 460 368 368 411 Assets held in custody 2 U.S. Treasury securities1 91,962 117,126 95,075 93,661 95,525 96,504 96,227 98,121 102,786 102,417 3 Earmarked gold2 15,988 15,463 15,169 15,034 15,034 15,025 14,987 14,986 14,968 14,965 1. Marketable U.S. Treasury bills, notes, and bonds; and nonmarketable U.S. NOTE. 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 A63 3.23 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1980 1980 , ___ TTrraannssaaccttiioonnss,, aanndd aarreeaa oorr ccoouunnttrryy Jan.- NOV. May June July Aug. Sept. Oct. NOV.P U.S. corporate securities STOCKS 1 Foreign purchases 20,145 22,643 35,855 1.940 2,550 3,080 3,505 3,569 4,438 4,455 2 Foreign sales 17,723 21,017 31,164 1,958 2,390 2,781 3,301 3,329 3,920 3,588 3 Net purchases, or sales (-) 2,423 1,627 4,690 -17 160 299 203 241 519 867 4 Foreign countries 2,469 1,610 4,694 -19 162 296 205 246 524 865 5 Europe 1,283 217 2,813 105 56 115 42 -83 300 631 6 France 47 122 422 23 9 62 30 -33 53 109 7 Germany 620 -221 177 14 -5 -13 -21 -18 35 121 8 Netherlands -22 -71 -311 -40 -25 -27 -26 -38 -29 -58 9 Switzerland -585 -519 394 -17 -19 -82 -127 -122 83 263 10 United Kingdom 1,230 964 2,203 106 99 188 216 153 172 251 11 Canada 74 552 617 -42 24 81 13 -22 -66 263 12 Latin America and Caribbean 151 -19 155 -4 27 -25 -32 -83 132 57 13 Middle East1 781 656 1,007 -60 20 130 183 410 126 -109 14 Other Asia 189 211 65 -21 28 -5 -22 19 33 18 15 Africa -13 -14 2 0 -2 -1 0 2 2 0 16 Other countries 3 7 35 3 8 2 21 4 -3 5 17 Nonmonetary international and regional organizations -46 17 -4 2 -2 2 -2 -5 -6 2 BONDS2 18 Foreign purchases 7,985 8,835 14,309 1.280 1,834 1,695 1,087 645 1,612 1,181 19 Foreign sales 5,688 7,602 9,137 1.257 1,152 898 589 481 739 902 20 Net purchases, or sales (-) 2,297 1,233 5,172 23 682 797 498 165 8731 » 278 21 Foreign countries 1,878 1,330 5,251 249 625 769 475 214 918 283 22 Europe 736 626 1,521 92 105 129 27 -23 284 151 23 France 30 11 131 47 12 8 6 -2 16 12 24 Germany -2 58 191 104 -14 -50 -11 4 30 13 25 Netherlands 12 -202 -82 -14 6 -26 -7 7 8 -7 26 Switzerland -202 -118 40 -29 -10 -16 -9 0 1 8 27 United Kingdom 930 814 1,275 -34 110 196 53 -5 235 154 28 Canada 102 80 142 9 5 -2 25 12 9 21 29 Latin America and Caribbean 98 109 190 25 23 29 32 18 7 11 30 Middle East1 810 424 3,299 104 483 600 382 194 594 105 31 Other Asia 131 88 84 17 5 13 9 14 24 -3 32 Africa -1 1 5 1 0 0 0 0 0 0 33 Other countries 1 1 10 0 4 1 0 -2 0 -1 34 Nonmonetary international and regional organizations 419 -96 -79 -226 57 28 23 -49 -45 -4 Foreign securities 35 Stocks, net purchases, or sales (-) 527 -786 -2,160 -241 -164 -76 -201 -558 -335 134 36 Foreign purchases 3,666 4,615 7,105 450 491 654 605 694 788 924 37 Foreign sales 3,139 5,401 9,265 691 655 731 805 1,253 1,143 790 38 Bonds, net purchases, or sales (-) -4,185 -3,858 -1,071 -251 -618 374 -259 -84 -206 92 39 Foreign purchases 11,098 12,661 15,241 1,479 1,637 1,725 1,374 1,231 1,651 1,247 40 Foreign sales 15,283 16,519 16,312 1.730 2,255 1,351 1,634 1,316 1,857 1,156 41 Net purchases, or sales (-), of stocks and bonds .. -3,658 -4,644 -3,231 -491 -781 298 -460 -643 -561 226 42 Foreign countries -3,471 -3,894 -3,733 -498 -800 -32 -384 -680 -576 203 43 Europe -61 -1,646 -858 -214 -474 10 -176 -110 113 -30 44 Canada -3,229 -2,601 -2,096 -256 -283 -29 42 -344 -651 328 45 Latin America and Caribbean 221 345 137 45 -25 34 -14 7 -35 -24 46 Asia 186 48 -1,041 -82 -65 -55 -313 -223 -16 -73 47 Africa -441 -65 31 4 3 1 0 -4 29 -1 48 Other countries -146 25 93 5 44 7 76 -6 -16 3 49 Nonmonetary international and regional organizations -187 -750 502 7 19 330 -76 37 15 23 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

A64 International Statistics • January 1981 3.24 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States' Millions of dollars, end of period 1979 1980 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11997788 11997799 Mar. June Sept. Dec. Mar. June. 1 Total 14,879' 16,950' 14,512' 15,519' 15,700' 16,950' 17,373' 18,500 2 Payable in dollars 11,516' 13,932' 11,535' 12,631' 12,692' 13,932' 14,437 15,145 3 Payable in foreign currencies2 3,363 3,018' 2,977 2,888' 3,008' 3,018' 2,936' 3,354 By type 4 Financial liabilities 6,305 7,311' 6,062' 6,049' 6,131' 7,311' 7,802' 8,303 5 Payable in dollars 3,841 5,101' 3,804' 3,876' 3,877' 5,101' 5,618 5,757 6 Payable in foreign currencies 2,464 2,210' 2,258 2,173' 2,254' 2,210' 2,184' 2,546 7 Commercial liabilities 8,574' 9,639' 8,450' 9,470' 9,568' 9,639' 9,571 10,197 8 Trade payables 4,008' 4,380' 3,528' 4,302' 4,051' 4,380' 4,138 4,299 9 Advance receipts and other liabilities 4,566 5,258' 4,922 5,168 5,518 5,258' 5,433 5,898 10 Payable in dollars 7,675' 8,830' 7,731' 8,755' 8,815' 8,830' 8,819 9,388 11 Payable in foreign currencies 899 808' 719 715' 754' 808' 752 809 By area or country Financial liabilities 12 Europe 3,903 4,579' 3,665' 3,582' 3,713' 4,579' 4,813 5,389 13 Belgium-Luxembourg 289 345 266 355 317 345 360 413 14 France 167 168 139 134 126 168 188 341 15 Germany 366 497 311 283 381 497 520 668 16 Netherlands 390 834 422 401 542 834 801 804 17 Switzerland 248 168 244 235 190 168 172 231 18 United Kingdom 2,110 2,372' 2.069' 1,955' 1,957 2,372' 2,568 2,763 19 Canada 244 445 252 290 304 445 383 482 20 Latin America and Caribbean 1,357 1,483 1,346 1,395 1,347 1,483 1,764' 1,632 21 Bahamas 478' 375' 447' 477' 390' 375' 459 433 22 Bermuda 4' 81' 5' 2' 2' 81' 83' 2 23 Brazil 10 18 13 19 14 18 22 25 24 British West Indies 194 514 201 189 198 514 694' 700 25 Mexico 102 121 101 131 122 121 101 101 26 Venezuela 49 72 55 68 71 72 70 72 27 791 795 790 772 757 795 821 775 28 Japan 714 723 714 706 700 723 737 680 29 Middle East oil-exporting countries3 32 31 23 25 19 31 26 31 30 Africa 5 4 5 6 5 4 11 10 31 Oil-exporting countries4 2 1 1 2 1 1 1 1 32 All other5 5 4 5 5 5 4 10 15 Commercial liabilities 33 Europe 3,033 3,621' 3,003 3,303' 3,393' 3,621' 3,682 4,006 34 Belgium-Luxembourg 75 137 70 81 103 137 117 132 35 France 321 467 350 353 394 467 503 485 36 Germany 529 534 395 471 539 534 533 714 37 Netherlands 246 227 224 230 206 227 288 245 38 Switzerland 302 310 329 439 348 310 382 462 39 United Kingdom 824 1,073' 870 997 1,015 1,073' 994 1,120 40 Canada 667 868' 614 663' 717' 868' 720 591 41 Latin America 997 1,323 1,168 1,335 1,401 1,323 1,253 1,307 42 Bahamas 25 69 16 65 89 69 4 26 43 Bermuda 97 32 42 82 48 32 47 107 44 Brazil 74 203 61 165 186 203 228 151 45 British West Indies 53 21 89 121 21 21 20 37 46 Mexico 106 257 236 216 270 257 235 311 47 Venezuela 303 301 356 323 359 301 211 210 48 2,932' 2.865' 2,650' 3,034' 2,996' 2,865' 2,912 3,051 49 Japan 448' 488' 429' 516' 517' 488' 578 411 50 Middle East oil-exporting countries3 1,523 1,017' 1,122 1,225 1,070 1,017' 901 1,017 51 Africa 743 728 779 891 775 728 742 875 52 Oil-exporting countries4 312 384 343 410 370 384 382 498 53 Allother5 203 233' 237 243 287 233' 263 367 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 A65 3.25 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States* Millions of dollars, end of period 1979 1980 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11997788 11997799 Mar. June Sept. Dec. Mar. June 1 27,859' 30,859' 30,798' 30,296' 30,949' 30,859' 31,953 31,808 2 Payable in dollars 24,861' 27,703' 27,990' 27,394' 28,280' 27,703' 28,956 28,778 3 Payable in foreign currencies2 2,998' 3,156' 2,808' 2,902' 2,668' 3,156' 2,997 3,030 By type 4 16,522' 18,107' 20,072' 19,303' 19,176' 18,107' 19,237 18,467 5 11,062' 12,461' 14,615' 13,643' 13,730' 12,461' 13,563 12,626 6 Payable in dollars 10,000' 11,572' 13,695' 12,706' 12,830' 11,572' 12,601 11,766 7 Payable in foreign currencies 1,061 889' 920 938 901 889' 963 860 8 Other financial claims 5,461' 5,646 5,458 5,660' 5,446' 5,646 5,673 5,841 9 Payable in dollars 3,855' 3,792' 3,906' 4,059' 4,030' 3,792' 4,046 4,097 10 Payable in foreign currencies 1,606 1,854' 1,551' 1,601' 1,416' 1,854' 1,627 1,744 11 Commercial claims 11,337 12,752' 10,726' 10,993' 11,773 12,752' 12,716 13,341 17 Trade receivables 10,778' 12,064' 10,056' 10,364' 11,061 12,064' 12,071 12,638 13 Advance payments and other claims 559 688 670 628 712 688 645 703 14 Payable in dollars 11,006' 12,339' 10,389' 10,629' 11,421 12,339' 12,309 12,915 15 Payable in foreign currencies 331 413' 337 363 352 413' 407 426 By area or country Financial claims 16 Europe 5,218' 6,115' 5,350' 5,638' 6,562' 6,115' 5,826 5,812 17 Belgium-Luxembourg 48 32 63 54 33 32 19 23 18 France 178 177 171 183 191 177 290 307 19 Germany 510 407' 266 361 393 407' 298 185 20 Netherlands 103 53 85 62 51 53 39 37 21 Switzerland 98 73 96 81 85 73 89 96 22 United Kingdom 4,023' 5,053' 4,431' 4,650' 5,522' 5,053' 4,778 4,835 23 Canada 4,482 4,812' 5,232' 5,146' 4,767' 4,812' 4,882 4,778 24 Latin America and Caribbean 5,665' 6,190' 8,405' 7,433' 6,682' 6,190' 7,512 6,800 25 Bahamas 2,959' 2,680' 4,493' 3,637' 3,284' 2,680' 3,448 2,962 26 Bermuda 80 30 63 57 31 30 34 25 27 Brazil 151 163 156 141 133' 163 128 120 28 British West Indies 1,288' 2,001' 2,536' 2,407' 1,838 2,001' 2,591 2,393 29 Mexico 163 158 160 159 156 158 169 178 30 Venezuela 150 133 142 151 139 133 132 132 31 922 693 829 800 818 693 708 756 32 Japan 307 190 207 217 222 190 226 253 33 Middle East oil-exporting countries3 18 16 16 17 21 16 18 16 34 Africa 181 253 204 227 277 253 265 256 35 Oil-exporting countries4 10 49 26 23 41 49 40 35 36 All other5 55 44 52 61 69 44 43 65 Commercial claims 37 Europe 3,985 4,895' 3,811 3,833 4,127 4,895' 4,751 4,808 38 Belgium-Luxembourg 144 203 173 170 179 203 208 255 39 France 609 727 490 470 518 727 703 662 40 Germany 399 584' 504 421 448 584' 515 504 41 Netherlands 267 298 275 307 262 298 347 297 42 Switzerland 198 269 230 232 224 269 349 429 43 United Kingdom 827 905 676 731 818 905 924 904 44 Canada 1,096' 843' 1,111' 1,106' 1,164' 843 862 895 45 Latin America and Caribbean 2,547 2,853' 2,395 2,406 2,595' 2,853' 2,990 3,278 46 Bahamas 109 21 117 98 16 21 19 19 47 215 197 241 118 154 197 135 133 48 Brazil 629 647 495 503 568 647 656 697 49 British West Indies 9 16 10 25 13 16 11 9 50 506 698' 489 584 648 698' 833 918 51 292 342 274 296 346 342 349 394 52 3,082' 3,365' 2,765 2,967 3,116 3,365' 3,370 3,544 53 976' 1,127 896 1,005 1,128 1,127 1,209 1,129 54 Middle East oil-exporting countries3 717 766' 682 685 701 766' 718 830 55 447 556 443 487 549 556 518 567 56 Oil-exporting countries4 136 133 131 139 140 133 114 116 57 Allother5 179 240 200 194 220 240 225 249 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 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

A66 International Statistics • January 1981 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Percent per annum Rate on Dec. 31, 1980 Rate on Dec. 31. 1980 Rate on Dec. 31, 1980 Country Country Country Per- Month Per- Month Percent effective cent effective cent Argentina 137.01 Dec. 1980 France 9.5 Aug. 1977 Sweden 10.0 Austria .. 6.75 Mar. 1980 Germany, Fed. Rep. of 7.5 May 1980 Switzerland .... 3.0 Belgium . 12.0 July 1980 Italy 16.5 Sept. 1980 United Kingdom 14.0 Brazil ... 40.0 June 1980 Japan 7.25 Nov. 1980 Venezuela 10.0 Canada . 17.26 Dec. 1980 Netherlands 8.0 Oct. 1980 Denmark 11.00 Oct. 1980 Norway 9.0 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 government securities for commercial banks or brokers. For countries with largest proportion of its credit operations. 3.27 FOREIGN SHORT-TERM INTEREST RATES Percent per annum, averages of daily figures 1980 CCoouunnttrryy,, oorr ttyyppee 11997788 11997799 11998800 June July Aug. Sept. Oct. Nov. Dec. 1 Eurodollars 8.74 11.96 14.00 9.41 9.33 10.82 12.07 13.55 16.46 19.47 2 United Kingdom 9.18 13.60 16.59 16.68 15.82 16.45 15.89 15.87 15.84 14.64 3 Canada 8.52 11.91 13.12 11.73 10.91 10.47 10.73 11.71 12.96 16.83 4 Germany 3.67 6.64 9.45 10.00 9.59 8.93 8.90 8.99 9.37 10.11 5 Switzerland 0.74 2.04 5.79 5.64 5.29 5.52 5.57 5.40 5.53 6.61 6 Netherlands 6.53 9.33 10.60 10.72 10.06 9.97 10.31 9.63 9.59 9.69 7 France 8.10 9.44 12.18 12.37 11.87 11.20 11.81 11.69 11.26 11.52 8 Italy 11.40 11.85 17.50 17.25 17.49 17.30 17.50 18.16 17.51 17.47 9 Belgium 7.14 10.48 14.06 14.69 13.30 12.52 12.35 12.24 12.40 12.75 10 Japan 4.75 6.10 11.45 13.51 12.89 12.04 11.46 10.98 9.74 9.60 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 1980 CCoouunnttrryy//ccuurrrreennccyy 11997788 11997799 11998800 June July Aug. Sept. Oct. Nov. Dec. 1 Australia/dollar 114.41 111.77 114.00 115.29 115.85 115.77 117.04 117.43 116.75 116.86 2 Austria/schilling 6.8958 7.4799 7.7349 7.9421 8.0578 7.8840 7.8916 7.6714 7.3433 7.1549 3 Belgium/franc 3.1809 3.4098 3.4247 3.5335 3.5766 3.4883 3.4844 3.3875 3.2457 3.1543 4 Canada/dollar 87.729 85.386 85.530 86.836 86.783 86.263 85.861 85.538 84.286 83.560 5 Denmark/krone 18.156 19.010 17.766 18.215 18.487 18.070 18.068 17.639 16.962 16.573 6 Finland/markka 24.337 27.732 26.892 27.448 27.699 27.353 27.428 27.122 26.452 25.903 7 France/franc 22.218 23.504 23.694 24.310 24.657 24.106 24.056 23.489 22.515 21.925 8 Germany/deutsche mark 49.867 54.561 55.089 56.584 57.245 55.867 55.883 54.280 52.113 50.769 9 India/rupee 12.207 12.265 12.686 12.751 12.875 12.849 12.903 12.932 12.868 12.608 10 Ireland/pound 191.84 204.65 205.77 211.16 214.74 210.62 210.34 203.88 194.59 189.01 11 Italy/lira .11782 .12035 .11694 .11973 .12026 .11801 .11742 .11441 .11000 .10704 12 Japan/yen .47981 .45834 .44311 .45894 .45232 .44666 .46644 .47777 .46928 .47747 13 Malavsia/ringgit 43.210 45.720 45.967 46.625 46.658 46.484 47.127 46.902 46.187 45.406 14 Mexico/peso 4.3896 4.3826 4.3535 4.3684 4.3511 4.3389 4.3443 4.3324 4.3166 4.3071 15 Netherlands/guilder 46.284 49.843 50.369 51.578 52.337 51.305 51.398 50.052 48.102 46.730 16 New Zealand/dollar 103.64 102.23 97.337 98.729 98.643 97.738 98.309 98.069 96.770 95.404 17 Norway/krone 19.079 19.747 20.261 20.608 20.762 20.555 20.676 20.421 19.938 19.370 18 Portugal/escudo 2.2782 2.0437 1.9980 2.0422 2.0466 2.0163 2.0096 1.9756 1.9178 1.8773 19 South Africa/rand 115.01 118.72 128.54 129.00 130.79 131.55 132.73 133.13 133.20 132.83 20 Spain/peseta 1.3073 1.4896 1.3958 1.4280 1.4122 1.3810 1.3639 1.3423 1.3085 1.2653 21 Sri Lanka/rupee 6.3834 6.4226 6.1947 6.2186 6.3288 6.2980 6.3196 5.9707 5.8139 5.7379 22 Sweden/krona 22.139 23.323 23.647 23.995 24.238 23.953 24.072 23.845 23.240 22.722 23 Switzerland/franc 56.283 60.121 59.697 61.207 62.203 60.527 61.012 60.185 57.942 56.022 24 United Kingdom/pound 191.84 212.24 232.58 233.59 237.32 237.04 240.12 241.64 239.41 234.59 MEMO: 25 United States/dollar1 92.39 88.09 87.39 85.29 84.65 86.09 85.50 86.59 89.31 90.99 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 A67 4.10 TIME AND SAVINGS DEPOSITS Held by Insured Commercial Banks on Recent Survey Dates Deposits TTTyyypppeeesss ooofff dddeeepppooosssiiitttsss,,, dddeeennnooommmiiinnnaaatttiiiooonnn,,, NNuummbbeerr ooff iissssuuiinngg bbaannkkss Millions of dollars Percentage change aaannnddd ooorrriiigggiiinnnaaalll mmmaaatttuuurrriiitttyyy Apr. 30, July 30, Oct. 29, Apr. 30, July 30, Oct. 29, Apr. 30- July 30- 1980 1980 1980 1980 1980 1980 July 30 Oct. 29 Total time and savings deposits 14,209 14,188 14,364 683,250 685,224 713,860 0.3 4.2 Savings 14,209 14,188 14,364 187,946 204,139 221111,,112288 8.6 3.4 Holder Individuals and nonprofit organizations 14,209 14,188 14,364 175,571 190,035 196,074 8.2 3.2 Partnerships and corporations operated for profit (other than commercial banks) 10,242 10,675 10,528 8,032 9,860 10,974 22.8 11.3 Domestic governmental units 8,849 8,946 9,333 3,868 3,632 3,567 -6.1 -1.8 Allother 1,431 2,092 1,530 475 612 512 28.9 -16.3 Interest-bearing time deposits, less than $100,000 14,094 14,073 14,246 271,514 269,173 274,507 -0.9 2.0 Holder Domestic governmental units1 9,680 10,098 9,125 1,785 2,069 2,232 15.9 7.9 30 up to 90 days 4,050 4,276 3,551 463 581 540 25.4 -7.0 90 up to 180 days 5,920 5,965 5,224 447 555 485 24.1 -12.5 180 days up to 1 year 4,278 5,019 3,756 370 428 335 15.8 -21.8 1 year and over 7,608 7,826 7,334 504 505 871 0.1 72.5 Other than domestic governmental units1 14,012 13,991 14,127 97,704 92,210 85,446 -5.6 -7.3 30 up to 90 days 4,357 4,882 4,360 1,748 1,572 1,404 -10.1 -10.7 90 up to 180 days 10,528 10,363 10,583 16,655 16,451 15,262 -1.2 -7.2 180 days up to 1 year 7,405 7,797 7,802 2,173 1,991 1,895 -8.4 -4.8 1 up to ZVi years 13,392 13,707 13,597 13,507 12,207 11,108 -9.6 -9.0 2Vi up to 4 years 12,773 12,575 12,636 9,291 8,529 7,606 -8.2 -10.8 4 up to 6 years 13,412 13,443 13,496 33,131 30,587 27,866 -7.7 -8.9 6 up to 8 years 11,443 11,627 11,586 18,775 18,373 17,776 -2.1 -3.2 8 years and over 8,310 8,488 8,111 2,424 2,501 2,528 3.2 1.1 IRA and Keogh Plan time deposits, 3 years or more . 10,284 10,283 10,392 5,064 5,309 5,488 4.9 3.4 Money market certificates, $10,000 or more, exactly 6 months 13,666 13,670 13,830 158,198 147,893 115522,,884488 -6.5 3.4 Variable interest rate ceiling time deposits of less than $100,000 with maturities of 2Vi years or more2 ... 12,612 12,888 13,374 8,763 21,691 28,493 147.5 31.4 Interest-bearing time deposits, $100,000 or more 12,519 12,593 13,163 218,256 205,372 222,513 -5.9 8.3 Non-interest-bearing time deposits 1,463 1,319 1,386 3,965 4,310 4,230 8.7 -1.9 Less than $100,000 1,166 914 1,018 939 838 910 -10.8 8.7 $100,000 or more 607 719 688 3,026 3,472 3,319 14.7 -4.4 Club accounts (Christmas savings, vacation, and the like) 8,968 8,962 8,375 1,570 2,232 1,483 42.1 -33.6 1. Excludes all money market certificates, IRAs, and Keogh Plan accounts. NOTE. All banks that had either discontinued offering or never offered certain 2. Effective Jan. 1, 1980, commercial banks, savings and loan associations, and types of deposits as of the survey date are not counted as issuing banks. However, mutual savings banks are authorized to offer variable ceiling accounts with no small amounts of deposits held at banks that had discontinued issuing certain types required minimum denomination and with maturities of 2Vi years or more. The of deposits are included in the amounts outstanding. maximum rate for commercial banks is 3/4 percentage points below the yield on Details may not add to totals because of rounding. 2^-year U.S. Treasury securities: the ceiling rate for thrift institutions is Va percentage point higher than that for commercial banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 Special Tables • January 1981 4.11 SMALL-DENOMINATION TIME AND SAVINGS DEPOSITS Held by Insured Commercial Banks on July 30, 1980, and Oct. 29, 1980, Compared with Previous Survey, by Type of Deposit, by Most Common Rate Paid on New Deposits in Each Category, and by Size of Bank Size of bank Size of bank (total deposits in millions of dollars) (total deposits in millions of dollars) All banks All banks DDDeeepppooosssiiittt gggrrrooouuuppp,,, ooorrriiigggiiinnnaaalll mmmaaatttuuurrriiitttyyy,,, aaannnaaa dddiiissstttrrriiibbbuuu--- Less than 100 100 and over Less than 100 100 and over tttiiiooonnn ooofff dddeeepppooosssiiitttsss bbbyyy mmmooosssttt cccooommmmmmooonnn rrraaattteee Oct. 29, July 30, Oct. 29, July 30, Oct. 29, July 30, Oct. 29, July 30, Oct. 29, July 30, Oct. 29, July 30, 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 Amount of deposits (in millions of dollars) Number of banks, or percentage distribution or percentage distribution Savings deposits Individuals and nonprofit Issuing banks 14,364 14,188 13,042 12,971 1,322 1,217 196,074 190,035 68,819 68,095 127,255 121,940 Distribution, total 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less 4.0 3.3 4.0 3.1 4.1 5.2 4.5 5.2 4.8 5.5 4.4 5.1 4.51-5.00 6.9 7.3 6.9 7.4 6.4 5.8 5.2 5.7 5.7 8.4 4.9 4.2 5.01-5.25 89.1 89.4 89.0 89.5 89.5 88.9 90.3 89.1 89.5 86.2 90.7 90.7 MEMO: Paying ceiling rate1 89.1 89.4 89.0 89.5 89.5 88.9 90.3 89.1 89.5 86.2 90.7 90.7 Partnerships and corporations Issuing banks 10,528 10,675 9,232 9,489 1,296 1,186 10,974 9,860 3,199 2,633 7,775 7,227 Distribution, total 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less 1.1 1.2 1.2 1.3 .8 1.0 .8 .8 .5 .8 .9 .9 4.51-5.00 5.6 6.9 5.5 7.1 6.2 5.3 5.6 5.3 6.5 7.7 5.2 4.4 5.01-5.25 93.3 91.9 93.3 91.6 92.9 93.7 93.7 93.9 93.0 91.6 93.9 94.7 MEMO: Paying ceiling rate1 93.3 91.9 93.3 91.6 92.9 93.7 93.7 93.9 93.0 91.6 93.9 94.7 Domestic governmental units Issuing banks 9,319 8,935 8,377 8,055 942 880 3,554 3,613 1,924 2,040 1,629 1,573 Distribution, total 100 100 100 100 100 100 100 100 100 100 100 100 4.50 or less 3.0 1.7 3.3 1.9 .6 .7 2.0 .2 3.6 .2 .2 .2 4.51-5.00 1.8 6.3 1.4 6.4 5.3 5.8 3.9 12.4 1.9 14.2 6.2 10.0 5.01-5.25 95.2 92.0 95.3 91.8 94.1 93.5 94.1 87.4 94.5 85.6 93.6 89.8 MEMO: Paying ceiling rate1 95.2 92.0 95.3 91.8 94.1 93.5 94.1 87.4 94.5 85.6 93.6 89.8 All other Issuing banks 1,525 2,092 1,284 1,888 240 204 512 612 360 424 152 188 Di 4 4 st . .5 r 5 i 0 1 b - u o 5 t r . i 0 o l 0 e n s , s total 1 4 6 0 . . 0 1 0 1 3 5 0 . . 5 9 0 1 4 6 0 . . 3 6 0 1 3 6 0 . . 8 0 0 1 5 1 0 . . 3 0 0 1 5 1 0 . . 5 1 0 1 1 5 1 0 . . 6 0 0 1 1 0 0 . . 3 0 7 2 1 2 ( 0 .2 0 2 ) 1 1 4 1 0 . . 0 9 0 1 3 ( 0 .5 0 2 ) 1 ( ( 00 2 2 ) ) 5.01-5.25 89.9 90.6 89.2 90.3 93.7 93.4 83.4 89.0 77.8 84.1 96.5 100.0 MEMO: Paying ceiling rate1 89.9 90.6 89.2 90.3 93.7 93.4 83.4 89.0 77.8 84.1 96.5 100.0 Time deposits less than $100,000 Domestic governmental units 30 up to 90 days Issuing banks 3,545 4,275 2,960 3,667 586 608 530 581 173 235 357 346 Distribution, total 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less 19.7 20.1 21.2 21.4 11.8 12.3 5.7 8.3 14.9 18.6 1.2 1.3 5.01-5.50 35.6 39.8 31.5 37.6 55.9 53.4 21.7 14.0 13.4 12.5 25.8 14.9 5.51-8.00 44.8 40.0 47.3 41.0 32.3 34.3 72.6 77.7 71.7 68.9 73.1 83.7 MEMO: Paying ceiling rate1 37.5 30.8 39.2 31.6 28.9 25.6 67.7 67.8 64.0 57.2 69.4 75.0 90 up to 180 days Issuing banks 5,218 5,961 4,452 5,194 766 767 483 554 331 385 152 169 Di 5 st .0 ri 0 b u o t r i o le n s , s total 1 4 0 .1 0 1 5 0 .0 0 1 4 0 .5 0 1 5 0 .6 0 1 1 0 .8 0 10 .6 0 10 . 0 7 10 . 0 9 10 . 0 6 1 1 0 .3 0 10 . 0 8 1 ( 002 ) 5.01-5.50 28.9 20.8 29.5 20.1 25.3 25.8 33.5 30.4 40.4 27.1 18.6 38.1 5.51-8.00 67.0 74.2 65.9 74.3 72.8 73.5 65.8 68.7 59.0 71.7 80.5 61.9 MEMO: Paying ceiling rate1 21.6 26.2 21.1 26.6 24.7 23.5 29.5 31.6 33.4 37.8 20.9 17.3 180 days up to 1 year Issuing banks 3,756 5,019 3,181 4,432 575 586 335 428 155 285 180 144 Di 5 st .0 ri 0 b u o t r i o le n s , s total 1 1 0 .6 0 1 4 0 .7 0 1 1 0 .9 0 1 5 0 .4 0 1 ( 002 ) 1 ( 002 ) 10 . 0 1 10 . 0 7 10 . 0 3 1 1 0 .0 0 1 ( 002 ) 1 ( 002 ) 5.01-5.50 27.4 20.0 28.6 20.2 20.9 18.0 14.7 19.1 16.2 23.9 13.5 9.6 5.51-8.00 71.0 75.3 69.5 74.4 79.1 82.0 85.2 80.2 83.6 75.1 86.5 90.4 MEMO: Paying ceiling rate1 25.6 31.8 25.3 32.8 27.2 24.0 34.6 29.5 45.4 37.9 25.3 12.7 1 year and over Issuing banks 7,322 7,821 6,535 7,070 787 751 870 505 692 418 178 87 Distribution, total 100 100 100 100 100 100 100 100 100 100 100 100 5.50 or less 2.8 3.7 2.6 3.6 4.3 4.7 44.0 11.8 54.4 12.4 3.5 8.6 5.51-6.00 52.9 49.4 52.7 48.6 55.0 56.2 35.9 40.7 25.5 40.5 76.4 41.7 6.01-8.00 44.3 46.9 44.7 47.7 40.7 39.1 20.1 47.5 20.0 47.1 20.1 49.6 MEMO: Paying ceiling rate1 11.5 23.9 10.2 24.6 22.4 17.3 7.3 25.3 5.6 24.6 14.0 28.6 For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Time and Savings Deposits A69 4.11 SMALL-DENOMINATION TIME AND SAVINGS DEPOSITS Continued Size of bank Size of bank (total deposits in millions of dollars) (total deposits in millions of dollars) All banks All banks DDDeeepppooosssiiittt gggrrrooouuuppp,,, ooorrriiigggiiinnnaaalll mmmaaatttuuurrriiitttyyy,,, aaannnddd dddiiissstttrrriiibbbuuu--- Less than 100 100 and over Less than 100 100 and over tttiiiooonnn ooofff dddeeepppooosssiiitttsss bbbyyy mmmooosssttt cccooommmmmmooonnn rrraaattteee Oct. 29, July 30, Oct. 29, July 30, Oct. 29, July 30, Oct. 29, July 30, Oct. 29, July 30, Oct. 29, July 30, 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 Amount of deposits (in millions of dollars) Number of banks or percentage distribution or percentage distribution Time deposits less than $100,000 (cont.) Other than domestic governmental units 30 up to 90 days Issuing banks 4,360 4,877 3,437 4,020 923 858 1,404 1,572 311 311 1,093 1,261 Distribution, total 100 100 100 100 100 100 100 100 100 100 100 100 5.00 or less 27.8 19.4 31.7 19.5 13.6 19.0 21.9 15.6 11.9 9.1 24.8 17.2 5.01-5.25 72.2 80.6 68.3 80.5 86.4 81.0 78.1 84.4 88.1 90.9 75.2 82.8 MEMO: Paying ceiling rate1 72.2 80.6 68.3 80.5 86.4 81.0 78.1 84.4 88.1 90.9 75.2 82.8 90 up to 180 days Issuing banks 10,578 10,322 9,288 9,137 1,290 1,186 15,245 16,349 4,947 6,215 10,298 10,135 Di 4 s . t 9 ri 9 b u o t r i o le n s , s total 1 ( 0 2 0 ) 1 ( 0 2 0 ) 1 ( 0 2 0 ) 1 ( 0 2 0 ) 1 ( 0 2 0 ) 1 ( 0 2 0 ) 1 ( 0 2 0 ) 1 ( 0 2 0 ) 1 ( 0 2 0 ) 1 ( 0 2 0 ) 1 ( 0 2 0 ) 1 ( 0 2 0 ) 5.00-5.50 33.5 29.4 34.7 29.7 24.7 26.8 31.6 29.7 27.4 21.8 33.6 34.5 5.51-5.75 66.5 70.6 65.3 70.3 75.3 73.2 68.4 70.3 72.6 78.2 66.4 65.5 MEMO: Paying ceiling rate1 66.5 70.6 65.3 70.3 74.9 73.2 68.3 70.3 72.6 78.2 66.3 65.5 180 days up to 1 year Issuing banks 7,790 7,756 6,862 6,886 928 869 1,890 1,981 593 798 1,298 1,183 Di 4 s . t 9 ri 9 b u o t r i o le n s , s total 10 .8 0 10 .9 0 10 .9 0 1 1 0 .0 0 10 .1 0 10 .1 0 1 ( 0 2 0 ) 1 ( 0 2 0 ) 10 .1 0 10 .1 0 1 ( 0 2 0 ) 1 ( 0 2 0 ) 5.00-5.50 50.1 45.2 53.5 48.1 25.2 22.6 39.9 44.9 31.7 47.7 43.6 42.9 5.51-5.75 49.0 53.9 45.6 50.9 74.7 77.3 60.1 55.1 68.2 52.2 56.4 57.1 MEMO: Paying ceiling rate1 49.0 53.9 45.6 50.9 74.7 77.3 60.1 55.1 68.2 52.2 56.4 57.1 1 up to 2Vi years Issuing banks 13,506 13,697 12,212 12,508 1,294 1,188 11,027 12,172 6,825 7,705 4,202 4,467 Distribution, total 100 100 100 100 100 100 100 100 100 100 100 100 5.50 or less .1 1.4 (2) 1.5 1.0 .9 .7 1.1 (2) .8 2.0 1.6 5.51-6.00 99.9 98.6 100.0 98.5 99.0 99.1 99.3 98.9 100.0 99.2 98.0 98.4 MEMO: Paying ceiling rate1 99.5 98.1 99.6 98.1 98.7 97.8 98.9 98.3 100.0 99.1 97.1 97.0 2Vi years up to 4 years Issuing banks 12,576 12,524 11,320 11,356 1,257 1,169 7,567 8,494 4,295 4,950 3,273 3,544 Distribution, total 100 100 100 100 100 100 100 100 100 100 100 100 6.00 or less 1.3 1.0 1.1 .8 2.8 2.4 1.6 .9 1.0 .1 2.4 2.0 6.01-6.5 0 98.7 99.0 98.9 99.2 97.2 97.6 98.4 99.1 99.0 99.9 97.6 98.0 MEMO: Paying ceiling rate1 97.6 98.6 97.7 98.9 96.9 96.3 97.9 98.6 98.5 99.9 97.2 96.7 4 up to 6 years Issuing banks 13,488 13,355 12,183 12,157 1,306 1,198 27,817 30,501 14,701 16,905 13,116 13,596 Distribution, total 100 100 100 100 100 100 100 100 100 100 100 100 7.00 or less 8.1 4.2 8.5 4.2 3.6 4.4 3.6 3.0 4.7 3.4 2.4 2.3 7.01-7.25 91.9 95.8 91.5 95.8. 96.4 95.6 96.4 97.0 95.3 96.6 97.6 97.7 MEMO: Paying ceiling rate1-3 91.9 95.7 91.5 95.8 95.6 94.8 96.3 97.0 95.3 96.6 97.4 97.5 6 up to 8 years Issuing banks 11,532 11,621 10,287 10,476 1,244 1,145 17,647 18,258 7,496 8,225 10,151 10,033 Distribution, total 100 100 100 100 100 100 100 100 100 100 100 100 7.25 or less 2.4 .6 2.5 .4 1.2 2.4 1.0 1.2 .3 .3 1.5 1.9 7.26-7.50 97.6 99.4 97.5 99.6 98.8 97.6 99.0 98.8 99.7 99.7 98.5 98.1 MEMO: Paying ceiling rate1-3 97.3 99.0 97.2 99.2 98.8 96.8 99.0 98.8 99.7 99.7 98.5 98.0 8 years and over Issuing banks 8,094 8.474 7,005 7,462 1,089 1,012 2,509 2,485 876 929 1,633 1,556 Distribution, total 100 100 100 100 100 100 100 100 100 100 100 100 7.50 or less 3.7 2.5 3.5 2.3 5.1 4.1 5.8 8.1 .4 .4 8.7 12.7 7.51-7.75 96.3 97.5 96.5 97.7 94.9 95.9 94.2 91.9 99.6 99.6 91.3 87.3 MEMO: Paying ceiling rate1-3 96.3 97.5 96.5 97.7 94.9 95.9 94.2 91.9 99.6 99.6 91.3 87.3 IRA and Keogh Plan time deposits, 3 years or more Issuing banks 10,056 9,988 8,833 8,859 1,223 1,129 5,433 5,267 1,817 1,903 3,616 3,364 M Di E 8 7 7 s M . t . . 0 5 5 r O i 0 1 1 b - - : u o 1 8 P t r 1 . i 0 a o . l 6 0 y e n 6 s i , n s g to t c a e l i ling rate1 3 4 1 1 1 1 8 1 9 0 . . . . 6 6 2 8 0 ( ( ( r r ) ) 4 4 4 ) ) ) 3 4 2 1 1 1 7 1 1 0 . . . . 7 1 2 9 0 r r ( ( r ) ) ) 4 4 ) ) 3 5 1 5 1 9 9 0 . . . . 8 2 3 5 0 ( (4 4 4) 4 ) 3 5 1 9 6 9 3 0 . . . . 3 2 9 8 0 ( WW 4 4 4 4 )) ) 4 4 1 ' 1 8 8 3 0 0 . . . . 1 4 5 4 0 ( ( ( 4 4 4 4 4 ) ) ) 3 5 1 8 5 5 9 0 . . . . 8 9 1 1 0 ( ( r ( ( 4 ) 4 4 ) ) ) 4 Money market certificates, $10,000 or more, 6 months D Is i s s 1 u t 1 i r n . i 0 g b 0 u b t o a i r o n n k le , s s t s o tal 13,7 1 6 0 0 .2 4 0 13,6 ( ( 7 4 4 0 ) ) 12,3 1 6 8 0 .6 4 0 12,4 ( r 5 4 ) 4 ) 1,3 1 2 2 0 .8 1 0 1,2 ( 1 4 4 6 ) 152,8 1 2 2 0 .4 1 0 147,8 ( 6 4 9 4 ) 67,3 1 3 4 0 . 7 8 0 67,3 ( 4 4 4 7 ) 85,4 1 1 7 0 . 4 4 0 80,5 ( ( 2 4 4 2 ) ) ME 1 M 1. O 01 : - p 1 a 1 y . i 6 n 6 g ceiling rate1 9 8 3 6 . . 8 8 r r ) ) 9 8 3 5 . . 4 7 r r ) ) 9 9 7 7 . . 2 1 ( ( 4 4 ) 9 94 7 . . 9 6 il4 9 9 0 6. . 2 3 ( ( 4 4 ) 9 9 8 8 . . 5 6 r r ) ) For notes see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables • January 1981 4.11 SMALL-DENOMINATION TIME AND SAVINGS DEPOSITS Continued Size of bank Size of bank (total deposits in millions of dollars) (total deposits in millions of dollars) All banks All banks DDDeeepppooosssiiittt gggrrrooouuuppp,,, ooorrriiigggiiinnnaaalll mmmaaatttuuurrriiitttyyy,,, aaannnddd dddiiissstttrrriiibbbuuu--- Less than 100 100 and over Less than 100 100 and over tttiiiooonnn ooofff dddeeepppooosssiiitttsss bbbyyy mmmooosssttt cccooommmmmmooonnn rrraaattteee Oct. 29, July 30, Oct. 29, July 30, Oct. 29, July 30, Oct. 29, July 30, Oct. 29, July 30, Oct. 29, July 30, 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 1980 Time deposits less than $100,000 (cont.) Number of banks, or percentage distribution Amount of deposits (in millions of dollars) Variable interest rate ceiling time de- or percentage distribution posits of less than $100,000 with maturities of 2!/2 years or more D Is i s s u t i r n i g b u b t a io n n k , s total 13,2 1 8 0 5 0 12,7 ( 6 4 7 ) 1,9 1 8 0 8 0 [,5 ($ 7 4 6 ) 1,2 1 9 0 7 0 1,1 ( 9 4 2 ) 28.4 1 1 0 9 0 21,5 ( 5 4 2 ) 15,2 1 5 0 3 0 11,6 ( 8 4 7 ) 13,1 1 6 0 6 0 9,8 ( 64) 6 11.00 or less 11.3 (4) 11.5 (4 9.0 (4) 7.6 (4 7.4 (4) 7.9 (4) 11.01-11.30 88.7 (4) 88.5 91.0 92.4 (4 92.6 (4 92.1 (4) MEMO: Paying ceiling rate1 84.0 (4) 83.3 91.0 4 91.6 (4) 91.1 (4) 92.1 (4) Club accounts Issuing banks 5,468 6,162 5,025 5,711 443 452 709 1,371 363 756 346 615 Distribution, total 100 100 100 100 100 100 100 100 100 100 100 100 0.00 48.2 51.9 48.7 52.7 41.6 42.5 26.0 27.1 19.4 29.9 32.9 23.6 0.01-4.00 29.1 27.9 29.6 27.8 22.9 28.6 24.9 28.3 30.8 29.9 18.6 26.3 4.01-4.50 6.8 5.3 6.3 5.1 12.3 7.8 15.5 13.6 16.6 9.9 14.4 18.2 4.51-5.50 15.9 14.9 15.3 14.4 23.2 21.1 33.6 31.0 33.2 30.3 34.0 31.9 1. See BULLETIN table 1.16 for the ceiling rates that existed at the time of each NOTE. All banks that either had discontinued offering or had never offered survey. particular types of deposits as of the survey date are not counted as issuing banks. 2. Less than .05 percent. Moreover, the small amounts of deposits held at banks that had discontinued issuing 3. In October 1979 these deposit categories included the variable ceiling rate deposits are not included in the amounts outstanding. Therefore, the deposit account of 4 years and over issued since July 1, 1979; the ceiling rate on such amounts shown in table 4.10 may exceed the deposit amounts shown in this table. accounts was 7.60 percent in October. In January 1980 all variable ceiling accounts The most common interest rate for each instrument refers to the stated rate per were excluded from these categories and hence the fixed rate ceilings that apply annum (before compounding) that banks paid on the largest dollar volume of to each maturity category are shown in the table. deposit inflows during the 2-week period immediately preceding the survey date. 4. See the October 1980 BULLETIN for a distribution in July 1980 of these accounts Details may not add to totals because of rounding. by size of bank and by the interest rates paid. 4.12 AVERAGE OF MOST COMMON INTEREST RATES PAID on Various Categories of Time and Savings Deposits at Insured Commercial Banks, Oct. 29, 1980 Bank size (total deposit in millions of dollars) TTyyppee ooff ddeeppoossiitt,, hhoollddeerr,, aanndd oorriiggiinnaall mmaattuurriittyy 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 7.88 8.22 8.25 7.99 7.83 7.56 7.62 Savings, total 5.19 5.20 5.19 5.17 5.20 5.16 5.20 Individuals and nonprofit organizations 5.19 5.20 5.19 5.16 5.20 5.16 5.20 Partnerships and corporations 5.23 5.19 5.24 5.23 5.23 5.19 5.24 Domestic governmental units 5.19 5.14 5.24 5.24 5.18 5.14 5.22 Allother 5.18 5.25 5.25 5.11 5.23 4.24 5.23 Other time deposits in denominations of less than $100,000, total 6.70 6.61 6.83 6.74 6.71 6.65 6.61 Domestic governmental units, total 6.37 6.58 6.73 5.68 6.75 6.25 6.28 30 up to 90 days 7.06 7.20 7.28 6.61 7.33 6.17 6.36 90 up to 180 days 6.31 6.57 6.42 6.24 5.90 6.02 6.29 180 days up to 1 year 6.50 7.31 6.61 6.12 6.05 6.37 7.04 1 year and over 5.93 6.13 6.85 5.46 6.74 6.58 5.93 Other than domestic government units, total 6.71 6.62 6.83 6.78 6.71 6.66 6.61 30 up to 90 days 5.18 5.23 5.20 5.22 5.23 5.10 5.17 90 up to 180 days 5.66 5.73 5.69 5.63 5.67 5.60 5.65 180 days up to 1 year 5.64 5.58 5.70 5.71 5.67 5.67 5.61 1 up to 2Vi years 5.95 5.88 6.00 6.00 5.97 5.95 5.95 2Vi up to 4 years 6.46 6.50 6.45 6.48 6.42 6.38 6.48 4 up to 6 years 7.22 7.22 7.24 7.24 7.20 7.24 7.20 6 up to 8 years 7.47 7.50 7.47 7.50 7.48 7.49 7.43 8 years or more 7.68 7.75 7.75 7.75 7.67 7.69 7.60 IRA and Keogh Plan time deposits, 3 years or more 9.17 7.49 9.66 9.43 9.23 9.09 9.02 Money market certificates, exactly 6 months 11.62 11.53 11.62 11.62 11.61 11.66 11.64 Variable interest rate ceiling time deposits of less than $100,000 with maturities of 2Vi years or more1 11.16 10.82 11.28 11.14 11.19 11.22 11.20 Club accounts2 4.26 3.34 3.96 4.42 3.91 4.10 4.83 1. See note 2 in table 4.10. reported on each type of deposit at each bank by the amount of that type of deposit 2. Club accounts are excluded from all of the other categories. outstanding. All banks that had either discontinued offering or never offered particular types of deposit as of the survey date were excluded from the calculations NOTE. The average rates were calculated by weighting the most common rate for those specific types of deposits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A71 Guide to Tabular Presentation, Statistical Releases, and Special Tables 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 millions) 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 periodic releases December 1980 A80 SPECIAL TABLES Published Irregularly, with Latest Bulletin Reference Commercial bank assets and liabilities, call dates, December 31, 1978, to March 31, 1980 October 1980 All Commercial bank assets and liabilities, June, 1980 December 1980 A68 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 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 DONALD J. WINN, Assistant to the Board for Congressional STEPHEN H. AXILROD, Staff Director Liaison EDWARD C. ETTIN, Deputy Staff Director FRANK O'BRIEN, JR., Special Assistant to the Board MURRAY ALTMANN, Assistant to the Board JOSEPH S. SIMS, 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. MCNEILL, Assistant to the General Counsel JAMES L. KICHLINE, Director J. VIRGIL MATTINGLY, Assistant General Counsel JOSEPH S. ZEISEL, Deputy Director GILBERT T. SCHWARTZ, Assistant General Counsel MICHAEL J. PRELL, Associate Director ROBERT A. EISENBEIS, Senior Deputy Associate Director tJoHN J. MINGO, Senior Deputy Associate Director OFFICE OF THE SECRETARY ELEANOR J. STOCKWELL, Senior Deputy Associate Director JARED J. ENZLER, Deputy Associate Director THEODORE E. ALLISON, Secretary J. CORTLAND G. PERET, Deputy Associate Director BARBARA R. LOWREY, Assistant Secretary HELMUT F. WENDEL, Deputy Associate Director JAMES MCAFEE, Assistant Secretary MARTHA BETHEA, Assistant Director * JEFFERSON A. WALKER, 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 GRIFFITH L. GARWOOD, Deputy Director JERAULD C. KLUCKMAN, Associate Director EDWIN M. TRUMAN, Director GLENN E. LONEY, Assistant Director ROBERT F. GEMMILL, Associate Director DELORES S. SMITH, Assistant Director GEORGE B. HENRY, Associate Director CHARLES J. SIEGMAN, Associate Director SAMUEL PIZER, Staff Adviser DIVISION OF BANKING JEFFREY R. SHAFER, Deputy Associate Director SUPERVISION AND REGULATION DALE W. HENDERSON, Assistant Director LARRY J. PROMISEL, Assistant Director JOHN E. RYAN, Director RALPH W. SMITH, JR., Assistant Director FREDERICK R. DAHL, Associate Director WILLIAM TAYLOR, Associate 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 LAURA M. HOMER, Securities Credit Officer Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A73 and Official Staff NANCY H. TEETERS LYLE E. GRAMLEY EMMETT J. RICE OFFICE OF OFFICE OF STAFF DIRECTOR FOR STAFF DIRECTOR FOR MANAGEMENT FEDERAL RESERVE BANK ACTIVITIES JOHN M. DENKLER, Staff Director WILLIAM H. WALLACE, 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 WALTER 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 DAVID L. ROBINSON, Assistant Director DIVISION OF PERSONNEL RAYMOND L. TEED, Assistant Director 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 ROBERT E. FRAZIER, Assistant Director WALTER W. KREIMANN, Associate Director *On loan from the Federal Reserve Bank of Richmond. tOn leave of absence. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Federal Reserve Bulletin • January 1981 FOMC and Advisory Councils FEDERAL OPEN MARKET COMMITTEE PAUL A. VOLCKER, Chairman ANTHONY M. SOLOMON, Vice Chairman LYLE E. GRAMLEY J. CHARLES PARTEE NANCY H. TEETERS ROGER GUFFEY EMMETT J. RICE HENRY C. WALLICH FRANK E. MORRIS LAWRENCE K. ROOS WILLIS J. WINN FREDERICK H. SCHULTZ MURRAY ALTMANN, Secretary RICHARD G. DAVIS, Associate Economist NORM AND 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 WILLIAM S. EDGERLY, First District ROBERT M. SURD AM, Seventh District DONALD C. PLATTEN, Second District RONALD TERRY, Eighth District JOHN W. WALTHER, Third District CLARENCE G. FRAME, Ninth District MERLE E. GILLIAND, Fourth District GORDON E. WELLS, Tenth District J. OWEN COLE, Fifth District T. C. FROST, JR., Eleventh District ROBERT STRICKLAND, Sixth District CHAUNCEY E. SCHMIDT, Twelfth District HERBERT V. PROCHNOW, Secretary WILLIAM J. KORSVIK, Associate Secretary CONSUMER ADVISORY COUNCIL RALPH J. ROHNER, Washington D.C., Chairman CHARLOTTE H. SCOTT, Charlottesville, Virginia, Vice Chairman ARTHUR F. BOUTON, Little Rock, Arkansas F. THOMAS JUSTER, Ann Arbor, Michigan JULIA H. BOYD, Alexandria, Virginia RICHARD F. KERR, Cincinnati, Ohio ELLEN BROADMAN, Washington, D.C. HARVEY M. KUHNLEY, Minneapolis, Minnesota JAMES L. BROWN, Milwaukee, Wisconsin THE REV. ROBERT J. MCEWEN, S.J., Chestnut Hill, MARK E. BUDNITZ, Atlanta, Georgia Massachusetts JOSEPH N. CUGINI, Westerly, Rhode Island STAN L. MULARZ, Chicago, Illinois RICHARD S. D'AGOSTINO, Philadelphia, Pennsylvania WILLIAM J. O'CONNOR, Buffalo, New York SUSAN PIERSON DE WITT, Springfield, Illinois MARGARET REILLY-PETRONE, Upper Montclair, New Jersey JOANNE S. FAULKNER, New Haven, Connecticut RENE REIXACH, Rochester, New York LUTHER GATLING, New York, New York FLORENCE M. RICE, New York, New York VERNARD W. HENELY, Richmond, Virginia HENRY B. SCHECHTER, Washington, D.C. JUAN JESUS HINOJOSA, McAllen, Texas PETER D. SCHELLIE, Washington, D.C. SHIRLEY T. HOSOI, LOS Angeles, California NANCY Z. SPILLMAN, LOS Angeles, California GEORGE S. IRVIN, Denver, Colorado RICHARD A. VAN WINKLE, Salt Lake City, Utah MARY W. WALKER, Monroe, Georgia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A75 Federal Reserve Banks, Branches, and Offices FEDERAL RESERVE BANK, Chairman President Vice President branch, or facility Zip Deputy Chairman First Vice President in charge of branch BOSTON* 02106 Robert P. Henderson Frank E. Morris Thomas I. Atkins James A. Mcintosh NEW YORK* 10045 Robert H. Knight, Esq. Anthony M. Solomon Boris Yavitz Thomas M. Timlen Buffalo 14240 Frederick D. Berkeley, III John T. Keane PHILADELPHIA , 19105 John W. Eckman Edward G. Boehne Jean A. Crockett Richard L. Smoot CLEVELAND* 44101 J. L. Jackson Willis J. Winn William H. Knoell Walter H. MacDonald Cincinnati 45201 Martin B. Friedman Robert E. Showalter Pittsburgh ..15230 Milton G. Hulme, Jr. Robert D. Duggan RICHMOND* 23261 Maceo A. Sloan Robert P. Black Steven Muller Jimmie R. Monhollon Baltimore 21203 Joseph H. McLain Robert D. McTeer, Jr. Charlotte 28230 Naomi G. Albanese Stuart P. Fishburne Culpeper Communications and Records Center 22701 Albert D. Tinkelenberg ATLANTA 30301 William A. Fickling, Jr. William F. Ford John H. Weitnauer, Jr. Robert P. Forrestal Birmingham 35202 Louis J. Willie Hiram J. Honea Jacksonville 32231 Jerome P. Keuper Charles D. East Miami 33152 Roy W. Vandegrift, Jr. F. J. Craven, Jr. Nashville 37203 John C. Bolinger, Jr. Jeffrey J. Wells New Orleans 70161 Horatio C. Thompson Pierre M. Viguerie CHICAGO* 60690 John Sagan Robert P. Mayo Stanton R. Cook Daniel M. Doyle Detroit 48231 Vacancy 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 Vacancy Robert E. Matthews MINNEAPOLIS , 55480 Stephen F. Keating E. Gerald Corrigan William G. Phillips Thomas E. Gainor Helena 59601 Norris E. Hanford Betty J. Lindstrom KANSAS CITY 64198 Paul H. Henson Roger Guffey Doris M. Drury 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 Gerald D. Hines Robert H. Boykin John V. James William H. Wallace El Paso 79999 Chester J. Kesey Joel L. Koonce, Jr. Houston 77001 Vacancy J. Z. Rowe San Antonio 78295 Carlos A. Zuniga Carl H. Moore SAN FRANCISCO 94120 Cornell C. Maier John J. Balles Caroline L. Ahmanson John B. Williams Los Angeles 90051 Harvey A. Proctor Richard C. Dunn Portland 97208 Vacancy Angelo S. Carella Salt Lake City 84125 Wendell J. Ashton A. Grant Holman Seattle 98124 George H. Weyerhaeuser Gerald R. Kelly r- * 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

A76 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- SURVEY OF CHANGES IN FAMILY FINANCES. 1968. 321 pp. TIONS. 1974. 125 pp. $1.00 each; 10 or more to one address, $.85 each. ANNUAL REPORT. REPORT OF THE JOINT TREASURY-FEDERAL RESERVE STUDY FEDERAL RESERVE BULLETIN. Monthly. $20.00 per year or OF THE U.S. GOVERNMENT SECURITIES MARKET. 1969. $2.00 each in the United States, its possessions, Canada, 48 pp. $.25 each; 10 or more to one address, $.20 each. and Mexico; 10 or more of same issue to one address, JOINT TREASURY-FEDERAL RESERVE STUDY OF THE GOV- $18.00 per year or $1.75 each. Elsewhere, $24.00 per ERNMENT SECURITIES MARKET; STAFF STUDIES—PART year or $2.50 each. 1. 1970. 86 pp. $.50 each; 10 or more to one address, $.40 BANKING AND MONETARY STATISTICS. 1914-1941. (Reprint each. Part 2, 1971. 153 pp. and Part 3, 1973. 131 pp. Each of Part I only) 1976. 682 pp. $5.00. volume $1.00; 10 or more to one address, $.85 each. BANKING AND MONETARY STATISTICS, 1941-1970. 1976. OPEN MARKET POLICIES AND OPERATING PROCEDURES— 1,168 pp. $15.00. STAFF STUDIES. 1971. 218 pp. $2.00 each; 10 or more to ANNUAL STATISTICAL DIGEST one address, $1.75 each. 1971-75. 1976. 339 pp. $4.00 per copy for each paid sub- REAPPRAISAL OF THE FEDERAL RESERVE DISCOUNT MECHAscription to Federal Reserve Bulletin; all others $5.00 NISM. Vol. 1. 1971. 276 pp. Vol. 2. 1971. 173 pp. Vol. 3. each. 1972. 220 pp. Each volume $3.00; 10 or more to one ad- 1972-76. 1977. 377 pp. $10.00 per copy. dress, $2.50 each. 1973-77. 1978. 361 pp. $12.00 per copy. THE ECONOMETRICS OF PRICE DETERMINATION CONFER- 1974-78. 1980. 305 pp. $10.00 per copy. ENCE, October 30-31, 1970, Washington, D.C. 1972. 397 FEDERAL RESERVE CHART BOOK. Issued four times a year in pp. Cloth ed. $5.00 each; 10 or more to one address, February, May, August, and November. Subscription $4.50 each. Paper ed. $4.00 each; 10 or more to one adincludes one issue of Historical Chart Book. $7.00 per dress, $3.60 each. year or $2.00 each in the United States, its possessions, FEDERAL RESERVE STAFF STUDY: WAYS TO MODERATE Canada, and Mexico. Elsewhere, $10.00 per year or FLUCTUATIONS IN HOUSING CONSTRUCTION. 1972. 487 $3.00 each. pp. $4.00 each; 10 or more to one address, $3.60 each. HISTORICAL CHART BOOK. Issued annually in Sept. Subscrip- LENDING FUNCTIONS OF THE FEDERAL RESERVE BANKS. tion to Federal Reserve Chart Book includes one issue. 1973. 271 pp. $3.50 each; 10 or more to one address, $1.25 each in the United States, its possessions, Canada, $3.00 each. and Mexico; 10 or more to one address, $1.00 each. Else- IMPROVING THE MONETARY AGGREGATES: REPORT OF THE where, $1.50 each. ADVISORY COMMITTEE ON MONETARY STATISTICS. CAPITAL MARKET DEVELOPMENTS. Weekly. $15.00 per year 1976. 43 pp. $1.00 each; 10 or more to one address, $.85 or $.40 each in the United States, its possessions, Canaeach. da, and Mexico; 10 or more of same issue to one address, ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— $13.50 per year or $.35 each. Elsewhere, $20.00 per year Regulation Z) Vol. I (Regular Transactions). 1969. 100 or $.50 each. pp. Vol. II (Irregular Transactions). 1969. 116 pp. Each SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SE- volume $1.00; 10 or more of same volume to one ad- RIES OF CHARTS. Weekly. $15.00 per year or $.40 each in dress, $.85 each. the United States, its possessions, Canada, and Mexico; FEDERAL RESERVE MEASURES OF CAPACITY AND CAPACITY 10 or more of same issue to one address, $13.50 per year UTILIZATION. 1978. 40 pp. $1.75 each; 10 or more to one or $.35 each. Elsewhere, $20.00 per year or $.50 each. address, $1.50 each. THE FEDERAL RESERVE ACT, as amended through December 1976, with an appendix containing provisions of certain THE BANK HOLDING COMPANY MOVEMENT TO 1978: A COMPENDIUM. 1978. 289 pp. $2.50 each; 10 or more to other statutes affecting the Federal Reserve System. 307 one address, $2.25 each. pp. $2.50. REGULATIONS OF THE BOARD OF GOVERNORS OF THE FED- IMPROVING THE MONETARY AGGREGATES: STAFF PAPERS. 1978. 170 pp. $4.00 each; 10 or more to one address, ERAL RESERVE SYSTEM $3.75 each. PUBLISHED INTERPRETATIONS OF THE BOARD OF GOVER- 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. $1.75 each; 10 or more to one address, $4.00 each. each; 10 or more to one address, $1.50 each. BANK CREDIT-CARD AND CHECK-CREDIT PLANS. 1968. 102 INTRODUCTION TO FLOW OF FUNDS. 1980. 68 pp. $1.50 each; pp. $1.00 each; 10 or more to one address, $.85 each. 10 or more to one address, $1.25 each. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

All CONSUMER EDUCATION PAMPHLETS MEASUREMENT OF CAPACITY UTILIZATION: PROBLEMS AND Short pamphlets suitable for classroom use. Multiple cop- TASKS, by Frank de Leeuw, Lawrence R. Forest, Jr., ies available without charge. Richard D. Raddock, and Zoltan E. Kenessey. July 1979. 264 pp. Alice in Debitland THE GNMA-GUARANTEED PASSTHROUGH SECURITY: MAR- The Board of Governors of the Federal Reserve System KET DEVELOPMENT AND IMPLICATIONS FOR THE Consumer Handbook To Credit Protection Laws GROWTH AND STABILITY OF HOME MORTGAGE LEND- The Equal Credit Opportunity Act and . . . Age ING, by David F. Seiders. Dec. 1979. 65 pp. The Equal Credit Opportunity Act and . . . Credit Rights in FOREIGN OWNERSHIP AND THE PERFORMANCE OF U.S. Housing BANKS, by James V. Houpt. July 1980. 27 pp. The Equal Credit Opportunity Act and . . . Doctors, Lawyers, Small Retailers, and Others Who May Provide Incidental Credit Printed in Full in the Bulletin The Equal Credit Opportunity Act and . . . Women Fair Credit Billing AN ASSESSMENT OF BANK HOLDING COMPANIES, by Robert The Federal Open Market Committee J. Lawrence and Samuel H. Talley. January 1976. Federal Reserve Bank Board of Directors Federal Reserve Banks Federal Reserve Glossary How to File A Consumer Credit Complaint If You Borrow To Buy Stock REPRINTS If You Use A Credit Card Most of the articles reprinted do not exceed 12 pages. Truth in Leasing U.S. Currency Measures of Security Credit. 12/70. What Truth in Lending Means to You Revision of Bank Credit Series. 12/71. Assets and Liabilities of Foreign Branches of U.S. Banks. 2/72. STAFF STUDIES Bank Debits, Deposits, and Deposit Turnover—Revised Se- Studies and papers on economic and financial subjects that ries. 7/72. are of general interest. Rates on Consumer Instalment Loans. 9/73. New Series for Large Manufacturing Corporation. 10/73. Summaries Only Printed in the Bulletin The Structure of Margin Credit. 4/75. Requests to obtain single copies of the full text or to be Industrial Electric Power Use. 1/76. added to the mailing list for the series may be sent to Pub- Revised Series for Member Bank Deposits and Aggregate Relications Services. serves. 4/76. Industrial Production—1976 Revision. 6/76. THE RELATIONSHIP BETWEEN RESERVE RATIOS AND THE Federal Reserve Operations in Payment Mechanisms: A MONETARY AGGREGATES UNDER RESERVES AND FED- Summary. 6/76. ERAL FUNDS RATE OPERATING TARGETS, by Kenneth J. The Commercial Paper Market. 6/77. Kopecky. Dec. 1978. 58 pp. The Federal Budget in the 1970's. 9/78. TIE-INS BETWEEN THE GRANTING OF CREDIT AND SALES OF Redefining the Monetary Aggregates. 1/79. INSURANCE BY BANK HOLDING COMPANIES AND OTHER Implementation of the International Banking Act. 10/79. LENDERS, by Robert A. Eisenbeis and Paul R. Schweit- U.S. International Transactions in 1979: Another Round of zer. Feb. 1979. 75 pp. Oil Price Increases. 4/80. INNOVATIONS IN BANK LOAN CONTRACTING; RECENT EVI- Perspectives on Personal Saving. 8/80. DENCE by Paul W. Boltz and Tim S. Campbell. May The Impact of Rising Oil Prices on the Major Foreign Indus- 1979. 40 pp. trial Countries. 10/80. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 Index to Statistical Tables References are to pages A-3 through A-70 alth he prefix "A" is omitted in this index ACCEPTANCES, bankers, 10, 23, 25 Demand deposits—Continued Agricultural loans, commercial banks, 18,19, 20, 24 Subject to reserve requirements, 14 Assets and liabilities (See also Foreigners) Turnover, 12 Banks, by classes, 17,18-21,27 Deposits (See also specific types) Domestic finance companies, 37 Banks, by classes, 3, 17, 18-21,27,67-70 Federal Reserve Banks, 11 Federal Reserve Banks, 4,11 Nonfinancial corporations, current, 36 Turnover, 12 Automobiles Discount rates at Reserve Banks (See Interest Consumer installment credit, 40, 41 rates) Production, 46,47 Discounts and advances by Reserve Banks (See Loans) BANKERS balances, 17, 18-20 (See also Foreigners) Dividends, corporate, 35 Banks for Cooperatives, 33 Bonds (See also U.S. government securities) EMPLOYMENT, 44, 45 New issues, 34 Eurodollars, 25 Yields, 3 Branch banks, 15, 21, 54 FARM mortgage loans, 39 Business activity, nonfinancial, 44 Farmers Home Administration, 39 Business expenditures on new plant and equipment, 36 Federal agency obligations, 4,10, 11,12, 32 Business loans (See Commercial and industrial loans) Federal and federally sponsored credit agencies, 33 Federal finance Debt subject to statutory limitation and types and CAPACITY utilization, 44 ownership of gross debt, 30 Capital accounts Receipts and outlays, 28,29 Banks, by classes, 17 Treasury operating balance, 28 Federal Reserve Banks, 11 Federal Financing Bank, 28,33 Central banks, 66 Federal funds, 3,6, 18, 19, 20,25, 28 Certificates of deposit, 21,25 Federal Home Loan Banks, 33 Commercial and industrial loans Federal Home Loan Mortgage Corporation, 33, 38, 39 Commercial banks, 15,24 Federal Housing Administration, 33, 38, 39 Weekly reporting banks, 18-21, 22 Federal Intermediate Credit Banks, 33 Commercial banks Federal Land Banks, 33, 39 Assets and liabilities, 3, 15, 17, 18-21,67-70 Federal National Mortgage Association, 33, 38, 39 Business loans, 24 Federal Reserve Banks Commercial and industrial loans, 22,24 Condition statement, 11 Consumer loans held, by type, 40, 41 Discount rates (See Interest rates) Loans sold outright, 21 U.S. government securities held, 4, 11,12, 30, 31 Nondeposit funds, 16 Federal Reserve credit, 4,5,11,12 Number by classes, 17 Federal Reserve notes, 11 Real estate mortgages held, by holder and property, 39 Federally sponsored credit agencies, 33 Commercial paper, 3, 23, 25,37 Finance companies Condition statements (See Assets and liabilities) Assets and liabilities, 37 Construction, 44,48 Business credit, 37 Consumer installment credit, 40, 41 Loans, 18, 19, 20, 40, 41 Consumer prices, 44,49 Paper, 23, 25 Consumption expenditures, 50, 51 Financial institutions, loans to, 18,19,20 Corporations Float, 4 Profits and their distribution, 35 Flow of funds, 42, 43 Security issues, 34,63 Foreign Cost of living (See Consumer prices) Currency operations, 11 Credit unions, 27,40,41 Deposits in U.S. banks, 4,11,18,19, 20 Currency and coin, 5,17 Exchange rates, 66 Currency in circulation, 4,13 Trade, 53 Customer credit, stock market, 26 Foreigners Claims on, 54, 56, 59, 60,61, 65 DEBITS to deposit accounts, 12 Liabilities to, 21, 54-58,62-64 Debt (See specific types of debt or securities) Demand deposits GOLD Adjusted, commercial banks, 12,14 Certificates, 11 Banks, by classes, 17,18-21 Stock,4,53 Ownership by individuals, partnerships, and Government National Mortgage Association, 33, 38, 39 corporations, 23 Gross national product, 50, 51 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A79 HOUSING, new and existing units, 48 REAL estate loans Banks, by classes, 18-20, 27, 29 INCOME, personal and national, 44, 50, 51 Life insurance companies, 27 Industrial production, 44, 46 Mortgage terms, yields, and activity, 3, 38 Installment loans, 40,41 Type of holder and property mortgaged, 39 Insurance companies, 27, 30, 31, 39 Repurchase ajgreements and federal funds, 6,18,19,20 Insured commercial banks, 67-70 Reserve requirements, member banks, 8 Interbank loans and deposits, 17 Reserves Interest rates Commercial banks, 17 Bonds, 3 Federal Reserve Banks, 11 Business loans of banks, 24 Member banks, 3, 4, 5,14,17 Federal Reserve Banks, 3,7 U.S. reserve assets, 53 Foreign countries, 66 Residential mortgage loans, 38 Money and capital markets, 3,25 Retail credit and retail sales, 40, 41, 44 Mortgages, 3, 38 Prime rate, commercial banks, 24 SAVING Time and savings deposits, 9, 70 Flow of funds, 42, 43 International capital transactions of the United States, 54-65 National income accounts, 51 International organizations, 54-59, 62-65 Savings and loan assns., 3,9,27, 31, 39,42 Inventories, 50 Savings deposits (See Time deposits) Investment companies, issues and assets, 35 Savings institutions, selected assets, 27 Investments (See also specific types) Securities (See also U.S. government securities) Banks, by classes, 17, 27 Federal and federally sponsored agencies, 33 Commercial banks, 3,15,17,18-20 Foreign transactions, 63 Federal Reserve Banks, 11,12 New issues, 34 Life insurance companies, 27 Prices, 26 Savings and loan associations, 27 Special drawing rights, 4,11,52, 53 State and local governments LABOR force, 45 Deposits, 18,19, 20 Life insurance companies (See Insurance companies) Holdings of U.S. government securities, 30, 31 Loans (See also specific types) New security issues, 34 Banks, by classes, 17,18-21,27 Ownership of securities of, 18, 19, 20, 27 Commercial banks, 3, 15,17, 18-21, 22, 24 Yields of securities, 3 Federal Reserve Banks, 3,4, 5, 7, 11,12 Stock market, 26 Insurance companies, 27, 39 Stocks (See also Securities) Insured or guaranteed by United States, 38, 39 New issues, 34 Savings and loan associations, 27 Prices, 26 MANUFACTURING Capacity utilization, 44 TAX receipts, federal, 29 Production, 44,47 Time deposits, 3,9, 12, 14, 17,18-21,67-70 Margin requirements, 26 Trade,foreign, 53 Member banks Treasury currency, Treasury cash, 4 Assets and liabilities, by classes, 17 Treasury deposits, 4, 11, 28 Borrowings at Federal Reserve Banks, 5,11 Treasury operating balance, 28 Federal funds and repurchase agreements, 6 Number, 17 UNEMPLOYMENT, 45 Reserve requirements, 8 U.S. balance of payments, 52 Reserves and related items, 3, 4, 5, 14 U.S. government balances Mining production, 47 Commercial bank holdings, 18, 19, 20 Mobile home shipments, 48 Member bank holdings, 14 Monetary aggregates, 3,14 Treasury deposits at Reserve Banks, 4,11, 28 Money and capital market rates (See Interest rates) U.S. government securities Money stock measures and components, 3,13 Bank holdings, 17, 18-20,27, 30, 31 Mortgages (See Real estate loans) Dealer transactions, positions, and financing, 32 Mutual funds (See Investment companies) Federal Reserve Bank holdings, 4, 11,12, 30, 31 Mutual savings banks, 3, 9, 18-20, 27, 30, 31, 39 Foreign and international holdings and transactions, 11, 30, 62 NATIONAL defense outlays, 29 Open market transactions, 10 National income, 50 Outstanding, by type and ownership, 30, 31 Rates, 3,25 OPEN market transactions, 10 Utilities, production, 47 PERSONAL income, 51 Prices VETERANS Administration, 38, 39 Consumer and producer, 44,49 Stock market, 26 WEEKLY reporting banks, 18-22 Prime rate, commercial banks, 24 Wholesale (producer) prices, 44,49 Production, 44,46 Profits, corporate, 35 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A80 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories Minneapolis Detroit Chicago /Sa/tLake City Omaha* Denver Kansas City \») . Louisville 't. Louis tfichm?2 Charlotte, \Oklahoma Citj ^mphisJashyilU }"ge/es it tie Rock Bjrminghai \ A ® t lanta > Dallas<s) Houston \San Antonio January 1978 LEGEND Boundaries of Federal Reserve Districts ® Federal Reserve Bank Cities Boundaries of Federal Reserve Branch • Federal Reserve Branch Cities Territories • Federal Reserve Bank Facility Q Board of Governors of the Federal Reserve System Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis