Federal Reserve Bulletin, 1981-02

FEBRUARY 1981 FEDERAL RESERVE BULLETIN Federal Reserve and the Payments System Cyclical and Secular Developments in the U.S. Steel Industry Domestic Financial Developments in the Fourth Quarter of 1980 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE BULLETIN (USPS 351-150). Controlled Circulation Postage Paid at Richmond. Virginia. POSTMASTER: Send address changes to Publications Services, MP-510, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. A copy of the FEDERAL RESERVE BULLETIN is sent to each member bank without charge; member banks desiring additional copies may secure them at a special $10.00 annual rate. The regular subscription price in the United States and its possessions, and in Bolivia, Canada. Chile. Colombia, Costa Rica. Cuba. Dominican Republic, Ecuador. Guatemala. Haiti, Republic of Honduras, Mexico. Nicaragua. Panama, Paraguay. Peru, El Salvador, Uruguay, and Venezuela is $20.00 per annum or $2.00 per copy: elsewhere, $24.00 per annum or $2.50 per copy. Group subscriptions in the United States for 10 or more copies to one address, $1.75 per copy per month, or $18.00 for 12 months. The BULLETIN may be obtained from Publications Services. Board of Governors of the Federal Reserve System, Washington, D.C. 20551. and remittance should be made payable to the order of the Board of Governors of the Federal Reserve System in a form collectible at par in U.S. currency. (Stamps and coupons are not accepted.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

VOLUME 67 • NUMBER 2 • FEBRUARY 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 109 FEDERAL RESERVE AND THE on Industrial Growth and Productivity of PAYMENTS SYSTEM the Senate Committee on the Budget, January 27, 1981. The Federal Reserve is modernizing its communications network because of the 141 Chairman Volcker reviews the current econeed to broaden its services as the volume nomic situation and emphasizes that reducof electronic payments increases during the ing inflation will require changes in behavnext decade. ior patterns, which have become deeply ingrained, and that the effort necessary to 117 CYCLICAL AND SECULAR achieve such changes must be carried out DEVELOPMENTS over a broad range of integrated policies, IN THE U.S. STEEL INDUSTRY before the Joint Economic Committee, February 5, 1981. Production by the U.S. steel industry plummeted in the first half of 1980, but made a 143 Nancy H. Teeters, Member, Board of Govvigorous recovery in the five months that ernors, presents the views of the Board on followed the July trough. the proposed Cash Discount Act, by which a seller could provide a discount to a cus- 127 DOMESTIC FINANCIAL DEVELOPMENTS tomer for payment by cash, check, or IN THE FOURTH QUARTER OF 1980 means other than an open-end credit card and would not have to disclose the discount Demands for credit grew substantially in as a finance charge under the Truth in the quarter and market interest rates Lending Act; Mrs. Teeters says that the reached new highs. Board favors encouraging such discounts, before the Subcommittee on Consumer Af- 134 INDUSTRIAL PRODUCTION fairs of the House Committee on Banking, Output rose about 0.6 percent in January. Finance and Urban Affairs, February 5, 1981. 135 STATEMENTS TO CONGRESS Paul A. Volcker, Chairman, Board of Gov- 145 ANNOUNCEMENTS ernors, outlines some of the key issues for Proposed revision and simplification of economic policy for 1981 and beyond and Regulation C, which implements the Home says that the preeminent objective of eco- Mortgage Disclosure Act. nomic policy should be to break the inflationary momentum that grips the economy, Adoption of forms to be filed by foreign before the Senate Committee on Appropri- organizations that conduct banking busiations, January 27, 1981. ness in the United States to meet the requirements of the Bank Holding Company 137 Henry C. Wallich, Member, Board of Gov- Act and the International Banking Act of ernors, discusses his personal views on the 1978. prospects for increased growth in productivity in the United States and on the role Interpretation of Regulation K dealing with that the federal government should take in investments by a U.S. banking organization the effort to improve productivity perform- in a foreign company that does business in ance, before the Temporary Subcommittee the United States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Availability of Federal Reserve Regulatory fluctuations in the federal funds rate, taken Service that will ultimately include all over a period of time, within a range of 15 Board regulations and related interpreta- to 20 percent were likely to be inconsistent tions and documents. with the monetary and related reserve paths, the Manager for Domestic Oper- Adoption of procedures for cooperation ations was promptly to notify the Chairwith the Department of Labor in enforceman, who would then decide whether the ment of the Employee Retirement Income situation called for supplementary instruc- Security Act of 1974. tions from the Committee. Settlement of enforcement proceedings instituted by the Board against Mid America 155 LEGAL DEVELOPMENTS Bancorporation, Inc., and Irwin L. Jacobs Amendments to Regulations E, F, and Q; of Minneapolis. various rules; various bank holding com- Changes in Board staff. pany and bank merger orders; and pending cases. Admission of twelve state banks to membership in the Federal Reserve System. Ai FINANCIAL AND BUSINESS STATISTICS 149 RECORD OF POLICY ACTIONS OF THE A3 Domestic Financial Statistics FEDERAL OPEN MARKET COMMITTEE A44 Domestic Nonfinancial Statistics At the conclusion of its meeting on Decem- A52 International Statistics ber 18-19, 1980, the Committee decided to A68 Special Tables seek behavior of reserve aggregates associated with growth of M-1A, M-1B, and M-2 A67 GUIDE TO TABULAR PRESENTATION, over the first quarter along a path consist- STATISTICAL RELEASES, AND SPECIAL ent with the ranges for growth in 1981 TABLES contemplated in July 1980, abstracting from the effects of deposit shifts connected with A74 BOARD OF GOVERNORS AND STAFF the introduction of NOW accounts on a nationwide basis. The members recognized A76 FEDERAL OPEN MARKET COMMITTEE that the spread of NOW accounts and ATS AND STAFF; ADVISORY COUNCILS accounts nationally was likely to widen the differential between growth of M-l A and of AH FEDERAL RESERVE BANKS, BRANCHES, M-1B to an unpredictable extent and that AND OFFICES operational paths for reserves would have to be adjusted in the light of the developing A78 FEDERAL RESERVE BOARD differential. Some shortfall in growth would PUBLICATIONS be acceptable in the near term if that developed in the context of reduced pressures in A80 INDEX TO STATISTICAL TABLES the money market. If it appeared during the period before the next regular meeting that A82 MAP OF FEDERAL RESERVE SYSTEM Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve and the Payments System Upgrading Electronic Capabilities for the 1980s George W. Mitchell, former Vice Chairman, access and use the network for electronic trans- Board of Governors, and Raymond F. Hodgdon, fers both of funds and securities and of payments Office of Staff Director for Federal Reserve Bank through automated clearinghouses (ACHs). Activities, prepared this article. Thus, the functions of the existing separate communications networks will be consolidated The Federal Reserve System has embarked on a into a single network providing better service at major new program to modernize its communica- less cost.1 Historically, as the need for new data tions network. The upgrading is needed because communications applications emerged, the most the current system and its technology are 10 frequent solution was the implementation of inyears old and are inadequate for the electronic dependent data communications systems taicommunications requirements of the 1980s. The lored to a single application; the result was the project, known as FRCS-80 (Federal Reserve current melange of communications networks. Communications System for the Eighties), is one With FRCS-80, new communications requireof the largest, most complex undertakings of its ments will be satisfied without the development kind that the Federal Reserve System as a whole of another network or the need for major design has ever attempted; the design may well serve as changes. an example for others interested in computer- The expected benefits of the network are as based communications. follows: Planning for FRCS-80 began in late 1975 on the 1. Improve the reliability, efficiency, and assumption that access to Federal Reserve serv- availability of communications services to finanices would broaden during the 1980s and that the cial institutions. volume of electronic payments would increase; 2. Accommodate significant volume increases the new system was designed, therefore, to ac- in the 1980s. commodate all types of depository institutions. 3. Reduce the total cost of System communi- This assumption has been validated by the recent cations. Monetary Control Act (MCA) of 1980 (Public 4. Provide a standard that will be recognized Law 96-221), the growing use of electronic tech- by the industry for connecting financial institunology in the delivery of banking services, and tions to FRCS-80. market forces generally. 5. Offer increased security of data moving The new system will be a general-purpose data within the Federal Reserve System. communications network that will satisfy the 6. Facilitate check truncation or the conver- Federal Reserve's internal communications re- sion of checks into electronic debits by forwardquirement for providing services to the financial ing essential payment information needed for community, the Treasury, and other government collection. agencies. It will be a communications system capable of handling the anticipated volume of 1. The current networks link more than 500 direct-access electronic payments during the next decade. endpoints and include (1) a central "switch" in Culpeper, FRCS-80 will provide a standard method for Virginia; (2) a leased communications service; and (3) 12 transmitting electronic payments to all Federal separate Federal Reserve intra-District systems. The FRCS- 80 is intended to replace a number of these high-overhead Reserve locations and a standard nationwide facilities with one standardized system flexible enough to approach for authorized financial institutions to accomodate present and future needs. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

110 Federal Reserve Bulletin • February 1981 7. Offer financial institutions greater overall among the 12 Federal Reserve Bank headquarflexibility through terminal resource sharing. ters cities, the Treasury Department in Washing- 8. Minimize disruption from converting to the ton, and the Federal Reserve's operations center new network by using transition aids, which will in Culpeper. Distributing communications in this allow current software to be compatible with the manner is expected to improve the reliability of a new network. system now being pressed to its limits with a The new system employs proven state-of-the- volume of 175,000 funds transfers and other art communications software and hardware con- bank-to-bank messages on an average day. figured to permit the Federal Reserve to take full Packet-switching describes the way in which advantage of dedicated and dial-up data trans- messages are broken down into small sets of mission services. The conceptual design of data, or packets, and then are combined with FRCS-80 is that of a distributed "packet- other message fragments in transit in order to switched" network "augmented" by circuit- maximize the efficiency of transmissions through switching facilities. the communications lines. The messages are No single central switching site, such as the reassembled into their original form at the receivcurrent switch in Culpeper, Virginia, will be ing point. Augmented refers to the capability to required to coordinate the operation of the net- acquire additional transmission capacity on dework. Rather than revolve around a computer- mand. Augmentation is required to accommoized hub, as does the current Fed Wire, FRCS- date in a cost effective way the fluctuations that 80's computer power will be distributed initially will occur in transmitting electronic payments. 1. FRCS-80 district office spine network Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve and the Payments System 111 FRCS-80 will consist of 14 interconnected directly or indirectly the currency, coin, and communications processors (nodes). In moving deposit transfer needs of 15,000 commercial from one Federal Reserve Bank city to another, banks and 28,000 thrift institutions. any FRCS-80 message will travel no more than In the Federal Reserve, as in many private and two of the network nodes. Each of the computer- public enterprises, the technological changes in ized nodes reads the message's address and data handling, storage, and telecommunications switches it in the proper direction. If any com- that took place in the 1960s and 1970s have puter is not functioning, the message can be already had a significant effect on operations. rerouted through other Federal Reserve cities For example, as check-sorting machines and without placing a major burden on the system's electronic accounting displaced manually operatspeed or message capacity.2 ed proof machines, productivity in check proc- A possible deployment of nodes and circuits to essing almost doubled—from a little over 800 support the projected 1980 traffic requirements is items per hour in the late 1960s to nearly 1,600 in shown in chart 1. As traffic demands warrant, 1979. More significant productivity changes are additional nodes can be located at Federal Re- likely to take place when income payments, bill serve branch and regional check processing cen- remittances, intercorporate transfers, and in ter offices. some measure payments at the point of sale are In order to understand the role that FRCS-80 initiated and delivered electronically. will play in the transfer of funds, the various The Federal Reserve has long been among payments activities of the Federal Reserve are early users of new computer and telecommunicaexamined for the likely impact of enhanced elec- tion technologies. Technological innovation has tronic capability on performance and efficiency. helped the Federal Reserve to reduce the resource cost of its operations and to increase the certainty and security of its funds transfer activi- FEDERAL RESERVE ROLE IN PA YMENTS ties. The first computers used for check processing were installed in the early 1960s. Its wire Among the several functions delegated to the transfer network, dating back to 1918, was fully Federal Reserve by the Congress are two that automated in the early seventies. In cooperation influence the nation's payments system—the with the commercial banking system, in the early clearing and settlement of transfers of funds 1970s the Federal Reserve initiated in California among deposit accounts at financial institutions the operation of an ACH for handling of electronand the circulation of currency and coin. In 1979 ic transfers in volume. By 1978, ACH service the cost of performing these two functions ac- was available nationwide. counted for well over half of the System's total Prospectively, market and technological expenditures of almost $800 million. forces interacting with the MCA and, to a lesser Federal Reserve payment services are decen- extent, the Electronic Fund Transfer Act (title tralized among the Federal Reserve Banks, XX of Public Law 95-630) will alter the operating branches, and offices. In all, 48 offices serve environment and infrastructure of the U.S. payments system. In consequence, the payment patterns of users and providers of payment ser- 2. The network can expand to meet volume increases, as vices are likely to undergo marked transformawell as to have multiple connections with terminals and/or other communications systems, and can tap additional circuit tion. capacity on demand during peak volume hours. Most impor- The MCA specifies that the Federal Reserve tant, FRCS-80 will reduce restrictions on how and where data must begin to charge fees for its services and to will be processed in the Federal Reserve System, as each node is in direct contact with three others in the network. make these services available to all depository This feature would allow the Federal Reserve Bank of institutions by September 1981. At present, full Chicago, for example, to receive and process communicaservices are provided directly and without cost tions for the Federal Reserve Bank of Cleveland if its computer were inoperative. The need to invoke this kind of only to member banks—all national banks and backup will be determined by a network management center those state-chartered banks that elect to become (NMC) to be located in the Culpeper facility. (The NMC also members of the Federal Reserve System. Howwill be responsible for software testing and billing for the System's use.) ever, member correspondent banks afford non- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

112 Federal Reserve Bulletin • February 1981 members access to the Federal Reserve, and ical movement of checks to at least four different checks drawn on nonmember banks are included locations, excluding return to the check writer in Federal Reserve courier deliveries of items (chart 2): (1) The check is presented or mailed to presented for payment. the payee, who in turn (2) carries or mails it to his The new statute is also phasing out the long- bank. (3) The payee's bank forwards the check to standing policy of insulating depository institu- the bank on which it is drawn, either directly or tions from the competition of market interest through one or more clearing facilities. If the rates and of insulating banks from competition in check is sent to a clearing facility, (4) the clearer providing payment services. As interest earnings must deliver it to the paying bank. Upon such are accrued on consumer transaction accounts delivery or "presentment," value is transferred and as explicit pricing of payment services to from the payer's bank to the payee's bank, consumers becomes prevalent, providers of pay- usually by debiting and crediting accounts mainment services will have a compelling incentive to tained at Federal Reserve Banks or at corresponsearch for more cost-effective methods of servic- dent commercial banks. Moreover, about 1 pering deposit accounts. This incentive should lead cent of the checks handled will probably have to to changes in the payment habits of consumers repeat these movements in reverse because of and businesses. some defect in the instrument or endorsement or because the check was written on a closed account or one with insufficient funds. CHECK-CLEARING SERVICES By a longstanding practice, when a check reaches a Federal Reserve office the amount will At present nearly all deposit transfers are made be credited to the account of the depositing bank by check. The number of transfers executed in on the day received, the following day, or at the 1979 is estimated to total between 33 billion and latest, the day after—depending on the location 35 billion. In 1979 the total processed by the of the bank on which the check is drawn. Avail- Federal Reserve was 15.1 billion checks with a ability is not conditional on the time the Federal value of $8.5 trillion. Most check payments in- Reserve receives the funds from the paying bank, volve significant delays before value is trans- and any processing or delivery delay gives rise to ferred because the instructions to transfer funds Federal Reserve float (credit extended by Federand the actual transfer of funds do not flow al Reserve Banks to paying banks). This schedtogether. The clearing process involves the phys- ule introduces an important element of certainty 2. Typical deposit transfers CHECK ELECTRONIC DEBIT ELECTRONIC CREDIT Authorization to move funds Movement of funds Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve and the Payments System 113 1. Transaction costs and expedited availability1 have availability earnings that justify special couriers or electronic collection. Percent of In the first three quarters of 1980, the Federal FFaaccee vvaalluuee ooff cchheecckkss Check volume Check value Reserve handled check, draft, and other pay- ((ddoollllaarrss)) of 1,187 of $544 billion million items ment orders directed to more than 40,000 deposi- 0-65 (little or no advantage).... 63.3 2.9 0-2.. 1.4 * 2. Check processing volumes at Federal Reserve 2-4 2.5 * 4-8 7.8 1 offices, third quarter 1980 8-16 16.3 .4 16-32 19.4 .9 Value of 32-65 15.9 1.5 Number checks Average Office of checks (billions value 65-8,000 (significant advantage). 36.0 32.4 (millions) of (dollars) dollars) 65-130 12.8 2.4 130-250 10.7 3.9 All offices 3,896.9 1,985.8 510 250-500 6.4 4.6 500-1,000 3.0 4.4 Chicago, Illinois 232.5 143.8 620 1,000-2,000 1.5 4.5 New York, New York .. 200.1 156.2 780 2,000-4,000 1.0 5.5 Minneapolis, Minnesota . 188.4 62.4 330 4,000-8,000 .6 7.1 Philadelphia, Pennsylvania 161.3 64.9 400 Boston, Massachusetts .. 157.3 79.2 500 Over 8,000 (high priority) .7 64.8 Dallas, Texas 139.0 68.4 490 8,000-16,000 .3 8.0 Denver, Colorado 138.7 48.8 350 16,000-32,000 .2 8.6 Jacksonville, Florida 120.0 46.6 390 32,000-65,000 .1 9.0 Over 65,000 .1 39.2 Los Angeles, California . 119.7 77.4 650 Baltimore, Maryland 109.3 46.0 420 St. Louis, Missouri 103.7 48.9 470 1. Availability advantage based on an additional transaction cost Atlanta, Georgia 102.9 76.1 740 for expedited clearing of 4 cents and an interest rate of 10 percent. Based on a survey of check volumes handled in June 1979 by Federal Kansas City, Missouri .. 100.4 40.5 400 Reserve offices. San Francisco, California 100.1 38.7 390 *Less than .05 percent. Windsor Locks, Connecticut 99.7 38.8 390 Miami, Florida 98.7 52.5 530 in the clearing process that is valuable to banks Charlotte, North Carolina 96.7 82.7 860 Detroit, Michigan 96.1 59.3 620 and their customers. It does, however, involve Cranford, New Jersey... 94.0 45.9 490 an extension of Federal Reserve credit to the Cleveland, Ohio 87.8 41.2 470 banking system, and tightly scheduled Federal Milwaukee, Wisconsin .. 81.6 33.9 420 Richmond, Virginia 77.3 33.8 440 Reserve clearing deadlines must be met to avoid Houston, Texas 74.5 46.5 620 Jericho, New York 73.6 28.0 380 excessive levels of float. Cincinnati, Ohio 71.0 31.7 450 The accompanying distribution of check sizes New Orleans, Louisiana. 70.7 33.0 470 (table 1) indicates how the Federal Reserve avail- Des Moines, Iowa 70.2 26.8 380 Pittsburgh, Pennsylvania 67.2 41.7 620 ability schedule may influence clearing practices. Utica, New York 64.7 53.8 830 Birmingham, Alabama .. 55.5 24.0 430 It is typically impossible to gain availability of Seattle, Washington 51.9 36.3 700 more than two days, apart from weekends and Indianapolis, Indianna... 49.6 23.9 480 holidays, by expediting presentment, and for the Nashville, Tennessee ... 48.6 19.0 390 Omaha, Nebraska 48.1 18.2 380 majority of checks the maximum improvement is Portland, Oregon 47.2 19.4 410 Oklahoma City, Oklahoma 46.2 27.6 600 one day. Assuming an interest rate of 10 percent and an additional cost of 4 cents to "out-sort" Columbia, South Carolina 43.8 16.1 370 Buffalo, New York 35.7 23.1 650 and separately deliver the large-value items, the Louisville, Kentucky 34.4 20.7 600 San Antonio, Texas 33.7 17.0 500 table indicates that for nearly two-thirds of the Salt Lake City, Utah.... 33.6 15.3 460 Columbus, Ohio 33.4 15.2 460 items in a typical cash letter the cost of special handling would exceed the earnings from earlier Little Rock, Arkansas... 31.9 15.3 480 Memphis, Tennessee 30.9 14.5 470 availability. Checks with values ranging from Charleston, West Virginia 27.8 8.5 310 Lewiston, Maine 22.8 6.3 280 $65 to $8,000 accounting for 36 percent of vol- Helena, Montana 13.9 8.9 640 ume earn enough from earlier availability to El Paso, Texas 10.9 9.0 830 warrant expedited processing. Items in excess of SOURCE. "1980 PACS Expense Report, Third Quarter" (Board of $8,000, depending on their frequency (only 0.7 Governors of the Federal Reserve System, Division of Federal Reserve Bank Operations, Planning and Control System Sections percent of volume for the nation as a whole), processed). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

114 Federal Reserve Bulletin • February 1981 tory institutions at the annual rate of 61.7 million ties. In the third quarter of 1980, the Federal items per banking day (table 2). Accommodating Reserve processed debit-and-credit transfers at all of the permutations of any two of these its ACH facilities at an annual rate of 233 million. institutions involves a maze of great size and, for In contrast to deposit transfers authorized by paper processing and transport, of great com- check or draft, those made by electronic credit plexity. Two-thirds of Federal Reserve offices and, to a large degree, electronic debit are much handle a million or more checks per banking day. simpler, more direct, and more certain (chart 2). The greater part of the check sorting to convert Credits are initiated by instructions from a payer incoming to outgoing items and to maintain the to his bank to credit the account of the payee at necessary financial controls for funds transfers his bank on a specific date. Such instructions go running to hundreds of millions of dollars takes to automated clearinghouses for delivery to the place between midnight and 6 a.m. Defects in receiving bank; in an automated environment the check instruments and adjustments for errors instructions are initiated and received by cominherent in handling cash letters on a tight time puters and terminals. Payrolls, social security, schedule required the expenditure of nearly $30 and other high-volume, repetitive credit transfers million in 1979. are well suited to this technology. Debit transfers initiated by payees as a result of prior arrangement with payers are becoming common. They ELECTRONIC CLEARING SERVICES are well suited to any periodic bill-paying transaction and especially those involving repetitive Existing Federal Reserve facilities for electronic amounts such as monthly insurance premiums. deposit transfers are the Fed Wire and ACHs. Because many commercial banks and other Fed Wire is used primarily for large-dollar trans- depository institutions do not have the equipfers between financial institutions. In 1979 vol- ment to receive electronic payment messages ume was only 35.1 million transactions, but the from ACHs, electronic transfer is not fully cost value transferred was $64.2 trillion (almost eight effective. In such cases, conversion into paper is times the value transferred by check on only 2 required. As more institutions install terminal percent of the volume). These payments can be equipment and begin to use magnetic tape, this originated by telephone, on paper, or through limitation will become less important. terminals or computers. The service is nationwide and secure; value is transferred on reserve accounts at the time the information is sent. COMPETITION AND COORDINATION The ACH network is a nationwide electronic IN PAYMENT INFRASTRUCTURE clearing and settlement mechanism that offers automated credit and debit transfer services to Payment systems necessarily involve some meaall financial institutions. This network is com- sure of coordination and competition among posed of 38 regional ACHs that have been orga- banks and between the central bank and the nized by the members of the ACH association in banking system. Coordination in the infrastructhe region. The members of ACH associations ture is needed to insure the integrity and quality are depository institutions that have agreed to of a payments service among a large number of abide by the rules and procedures for the initi- depository institutions. Competition in providing ation and delivery of electronic payments. The payments services centers primarily on the qualmembers include 10,500 commercial banks and ity and price of services offered to the customers 2,700 thrift institutions; all receive payments but of depository institutions. The area of competionly about 500 initiate payments for business and tion tends to be complementary to the area of government customers. At present, the Federal coordination, but there are overlaps associated Reserve operates 37 of these ACH clearing and with clearing and settlement services. settlement facilities. The financial institutions in Since the Federal Reserve has no deposit New York operate their own ACH, but use accounts other than those of the federal govern- Federal Reserve delivery and settlement facili- ment, commercial banks, other depository insti- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve and the Payments System 115 tutions, and foreign central banks, its role is Reserve are also competitive. Although the confined to clearing and settlement of transfers schedules used by the Federal Reserve in 1980 between these entities. All transfers between have not changed since 1951, the installation of accounts at any depository institution are cleared improved processing equipment in recent years and settled within that institution; the Federal has made it possible to move forward deadlines Reserve clearing offices do not knowingly handle for delivery of items to the Federal Reserve in such transactions. Banks in the same community order to achieve some given funds availability. commonly exchange checks drawn on each other The practical result has been to reduce fractionand so no clearing facilities, and often no settle- ally the deferrals in the regular schedule. ment facilities, need be provided by the Federal In fixing deadlines and the availability sched- Reserve. All other deposit transfers are cleared ules, the Federal Reserve was attempting to add by the Federal Reserve or correspondent banks; certainty to funds transfer and to make settleoften, nonbank processors are involved. ment as expeditious as possible. To achieve Although the Federal Reserve has offices in 48 these ends, the time required for collection has locations, a bank often finds it more convenient been based on typical processing and delivery to use correspondent clearing services. Corre- experience, but contingencies such as equipment spondents are most active in servicing local or failures and uncommon transportation delays regional institutions, but their clearing activities have deferred some collections. As a result Fedmay also be nationwide. eral Reserve float has been a regular, though Cost, convenience, and the availability of highly variable, characteristic of the clearing funds are elements in the competition in clearing operation. Float has value proportional to the and settlement functions. Competitive alterna- level of interest rates and the size of the checks tives exist at the stage at which checks are being being cleared. The Monetary Control Act of 1980 prepared for clearing. The Federal Reserve sets requires the Federal Reserve to treat float as a standards and conditions for the acceptance of service and to charge for it. items it will clear. If such requirements are not At recent levels of interest rates it has become met, items must be cleared outside the Federal increasingly profitable for banks whose custom- Reserve or "qualified" by a bank or nonbank ers deposit checks for large amounts to speed processor before being accepted for clearing at a availability of funds by arranging for special Federal Reserve office. courier service to paying banks. As the Federal The Federal Reserve determines the form and Reserve now accords the same processing and time for presenting items to paying banks. If it availability treatment to all items regardless of combines checks drawn on the several banks size, many banks provide special handling for whose processing is done by a correspondent, large-value items. The flexibility of FRCS-80 will holding company, or nonbank, those processors also permit more efficient processing: "low-valmust fine-sort the items by bank on which ue" items can be accommodated in off-peak drawn. If the Federal Reserve fine-sorts to the hours so that "high-value" items can realize for bank level or even some intrabank locations, it depositors the earning potential associated with enlarges its competitive service and enhances its earlier availability. competitive posture. At present banks and check processors using Federal Reserve clearing facilities make their * * * own arrangements for delivery of items to Federal Reserve offices in light of deadlines and funds In summary, the upgrading of the Federal Reavailability. According to a recent survey, some serve's electronic payment capabilities for the 4,200 cash letters are sent daily to the Federal 1980s will directly enhance the efficiency of the Reserve. The Federal Reserve makes deliveries nation's payment system. FRCS-80 will indirectof checks to 8,300 paying banks or their proces- ly influence the choice of users primarily because sors. Most of these deliveries are by courier. it can augment the number of payment options The funds availability schedules of the Federal and upgrade the certainty, promptness, and in- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

116 Federal Reserve Bulletin • February 1981 tegrity of payment transactions. The observable economies for the Federal Reserve, its broader cost reduction in clearing among these options influence should be one of making generally may be small but the indirect savings large. For available more efficient payment alternatives. example, the ability to credit wages and salaries Whereas in the past payers had a major role in electronically to employee deposit accounts deciding how a payment would be made—whethyields major savings in transaction costs for the er by cash, by check, or by electronic credit or employer, and depository institutions need not debit—now payees are likely to have more influprovide tellers, machines, or processing capabili- ence on that choice. Collection of checks can be ty for payroll checks. The ability of merchants, accelerated by using electronic clearing, imposutilities, and other vendors to receive consumer ing penalties on late transfers of availability, or payments electronically involves transaction providing discounts for early payment. Thus, the savings, but greater incentives for change come emergence of new electronic payment capability from savings in accounting, billing, and record- with comparative advantages to payers and paykeeping before and after payment. ees differentiated by price has significant impli- Thus, although FRCS-80 can have important cations for the entire payments system. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

117 Cyclical and Secular Developments in the U.S. Steel Industry Richard D. Raddock of the Board's Business production of iron and steel fell much more Conditions Section, Division of Research and sharply than the use of steel. Statistics, prepared this article. In August 1980, a key producer announced that it was restarting some furnaces; its inven- Production by the U.S. steel industry plummeted tories of semifinished steel were so low that more during the sharp contraction in overall economic output was required in order to continue operactivity in the first half of 1980. Output declined ations at certain finishing mills. A rebound in the more rapidly than employment, and unit labor production of consumer durable goods spurred costs increased markedly. Sales, as well as prof- sharp increases in orders, and production of steel its, also dropped sharply. Iron and steel produc- picked up in the fall of 1980. Just as the earlier tion, which had peaked in late 1978, had already shift from accumulation to liquidation of invenfallen substantially during 1979 while total indus- tories had sped up the decline in output, the trial production changed little. The additional 36 ending of the liquidation accentuated the repercent drop in iron and steel output from Janu- bound. ary through July of 1980 accounted for about The recovery in steel production, however, one-eighth of the total decline in the output of the has not been complete. In December 1980, iron nation's manufacturing, mining, and utility in- and steel output was 16 percent below its most dustries during that period. However, steelmak- recent peak of late 1978, a level that was 3 ing made a vigorous recovery in the four months percent below the high in 1973 and only slightly that followed the July trough in industrial production. By November, steel output equaled the level at the beginning of the year, but eased at 1. Output and capacity utilization year's end to a level substantially below its peak Ratio scale, 1967=100 in 1978 (chart 1). The decline in 1980 was associated with disparate developments among steel-using industries. On the one hand, the output of automobiles, appliances, and construction supplies, all heavy users of steel, fell sharply. These cutbacks reflected the drop in sales and the need to reduce excessive stocks. On the other hand, some factors tended to damp the decline in steel output. Because oil drilling and output of defense equipment and of office and computing equipment remained strong throughout the recession, they continued to consume a substantial amount of steel. At the same time, imports of steel were cut back, thereby lessening some of the impact of reduced demand on the domestic steel industry. Steel inventories also were liquidated during the spring and summer of 1980, when the domestic Federal Reserve series; seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

118 Federal Reserve Bulletin • February 1981 above the high in 1969. In fact, at the end of 1980, DIMENSIONS OF THE the output index of the iron and steel industry DECLINE AND RECOVERY was lower than in 1969, whereas total industrial production was more than a third higher. During the year after its peak in December 1978, Steel output in the United States had grown the production of iron and steel declined 15 relatively slowly even before the peaks in 1969 percent. Then from February to May of 1980 new and 1973. From 1955 to 1973, it grew at an orders for iron and steel fell more than 40 peraverage annual rate of 1.3 percent, compared cent; reflecting this weakness, many plants with a rise of 4.5 percent per year for total —particularly older ones—were closed, and outindustrial production. Indeed, the rate of growth put plummeted during the spring and early sumof steel output was much slower than that of steel mer to the lowest level since 1971. This 19-month production abroad. In the mid-1950s, the United drop of nearly 50 percent brought the operating States produced more steel than Germany, Ja- rate for iron and steel producers down from a pan, and the Soviet Union combined. Less than high of almost 95 percent of capacity to a low of 30 years later in 1980, U.S. steel output was less 51.6 percent. In magnitude, it ranks with the than half the production in these three countries severe cyclical declines in iron and steel productogether and significantly less than in the Soviet tion that began in 1957 and 1969 (table 1). Union alone. Between 1956 and 1974—the year in which the rapid worldwide expansion in steel 1. Major declines in iron and steel production1 output peaked—production of raw steel rose Indexes, tenfold in Japan, tripled in the Soviet Union, and PPeerriioodd 1967 = 100 DDeecclliinnee doubled in the European Economic Community ((ppeerrcceenntt)) High Low (EEC); it rose less than one-third in the United July 1953-April 1954 99.9 64.3 35.6 States. The rapid rise in steel output abroad plus August 1957-April 1958 95.3 51.7 45.8 the worldwide slowdown in economic growth November 1969-August 1971 123.0 67.5 45.1 September 1973-July 1975 129.8 87.0 33.0 since 1974 has led to excess capacity and intense December 1978-July 1980 125.3 68.1 45.7 competition in international steel markets—fac- 1. Based on the iron and steel component of the Federal Reserve tors that have adversely affected the U.S. steel index of industrial production, seasonally adjusted. industry. The slow growth in domestic steel output and Associated with, but lagging somewhat becapacity has been related to the use of increas- hind, the cutbacks in production were massive ingly older coke ovens, furnaces, and mills and a layoffs of workers. From June 1979 to August relatively poor productivity performance. The 1980, 170,000 workers lost their jobs in the iron costs of pollution abatement and safety regula- and steel industries as employment dropped 21 tions and the relatively rapid increases in prices percent to 660,000, the lowest level excluding paid by the industry for labor, raw materials, and strike periods since 1939 (table 2). energy have also contributed to the sharpness of Each successive employment peak in the iron the increases in steel costs and prices. Many and steel industry since 1953 has fallen short of domestic users have turned to lower-priced im- the one before, although production continued to ported steel and/or switched from steel to plas- trend up until 1973. Output per employee (protics and other alternative materials. Although ductivity) in the iron and steel industry rose at a 2 major integrated steel producers still account for percent annual rate from the mid-1950s until the bulk of steel shipped by the domestic indus- 1973. But from 1973 to 1978 productivity rose try, "minimills," which use electric furnaces and only slightly—in part because the 1978 output continuous casting to recycle scrap metal into peak remained below the 1973 peak. In the steel mill products, have increased their market share.1 to coke in coke ovens; the production of iron from iron ore, coke, and other materials in a blast furnace; the conversion of 1. Compared with recycling by minimills, the traditional iron into steel in an open hearth or oxygen furnace; and the integrated production of steel involves more extensive proc- formation of products in a rolling mill. The total process is essing activities that typically include the conversion of coal relatively energy- and capital-intensive. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Developments in the U.S. Steel Industry 119 2. Major declines in iron and steel employment1 increase in employment, and total employee productivity rebounded sharply. A large gain in Jumbeir of e mployie es productivity is a phenomenon that is typical of a Period (th ousai ids) Decline cyclical recovery because hours worked usually (percent) High Low Decline are not increased so much as output in the June 1953-October 1954 990.9 833.6 157.3 15.9 recovery. But the productivity gain also is relat- February 1957-May 1958 986.4 756.9 229.5 23.3 ed to the continued mothballing of some of the June 1968-October 1971 902.8 732.1 170.7 18.9 June 1974-November 1975 868.4 742.2 126.2 14.5 less-efficient plants. June 1979-August 1980 833.4 662.3 171.1 20.5 1. Based on U.S. Department of Labor, Bureau of Labor Statistics, data for total employment in blast furnaces, basic steel production, SOURCES OF DECLINE IN 1979-80 and iron and steel foundries, seasonally adjusted. recent curtailment, as is typical in periods of The sharp drop and the subsequent sharp rise in recession, output dropped more sharply than steel output in 1979 and 1980 stemmed largely employment—in fact, the decline was twice as from changes in demand for motor vehicles and much in percentage terms as the decline in for new construction and were greatly intensified employment, while output per employee fell by the excessive accumulation and subsequent about one-third. liquidation of inventories. With the sharp decline in the output of steel in During 1978, steel production had risen rapidly the spring and summer of 1980, profits nose- and by December was about 17 percent above a dived. Income before taxes of corporations year earlier. With this increase, steel output whose major products are iron and steel declined exceeded the apparent use of steel, and invenfrom $1 billion in the first quarter of the year to tories were built up; part of this accumulation $100 million in the third quarter. Steel companies evidently was intended as a hedge against anticiwere forced to cut back spending for plant and pated price increases and increasing backlogs of equipment. orders. Partly because of the excessive inven- The cash-flow problem was exacerbated by tories, production of basic iron and steel fell increases in wage rates. Average hourly earnings more than 10 percent in the first two months of of production workers in blast furnaces and steel 1979, while that of steel mill products declined mills rose at an annual rate of 11 percent during about 18 percent. By March 1979, total inventhe recession. In contrast, according to the Bu- tories of steel mill shapes and forms had been reau of Labor Statistics, producer prices for steel reduced noticeably. mill products rose at a rate of only 5 percent Steel output then increased in March, but a during this period, as officially reported prices strike and a lockout in the trucking industry in eased somewhat at the end of the period. More- April resulted in declines in iron and steel output over, trade reports indicate that even the price and in total industrial production. After activity increases reported by the Bureau of Labor Stat- in the trucking industry was resumed, production istics were not realized in the marketplace be- in most industries recovered in 1979 before concause competitive discounting from list prices tracting in 1980. Steel output, in contrast, failed was substantial during the summer. to regain its late 1978 highs and weakened sub- Following the July low in output, a swift stantially in the second half of 1979. The main rebound ensued. By October, the level of new reason for this weakness was that output of orders was twice as high as in May. The recovery motor vehicles and of construction supplies dein steel production followed the runup in new clined further in the second half of 1979 and even orders, but it was less exuberant. From July to at the end of 1980 were still far below their levels November 1980, the level of production re- in March 1979. These two lagging markets acbounded nearly 60 percent to equal the level in counted for nearly one-third of the use of steel January. By November, the utilization rate for mill products in March 1979, and directly and iron and steel had risen about 30 percentage indirectly accounted for a larger share of the points to around 81 percent. ensuing 45 percent decline in output of steel mill The jump in output far exceeded the 5 percent products. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

120 Federal Reserve Bulletin • February 1981 STEEL FOR CONSUMER DURABLE GOODS2 ances, television sets, and air conditioners was reduced nearly a fourth. Production of steel for In early 1979, approximately one-fifth of the consumer durable goods fell more than 50 peroutput of domestic steel mills was shipped to cent during the 1980 decline. The overall cyclical producers of motor vehicles and appliances. reduction in consumer steel from its 1978 peak Sales of new, North American-produced cars was roughly 70 percent, compared with declines trended down during 1979, and in response to of 40 percent for motor vehicles and parts and 25 this development, production of motor vehicles percent for appliances, TVs, and air conditioners and parts was cut back substantially. By Decem- (chart 2). The exceptionally large decline in ber 1979, motor vehicle output was one-fourth consumer steel was due in part to a shift from below its level a year earlier. This sharp decline inventory accumulation to liquidation, which was a major factor in slowing the growth of total greatly intensified the weakness from the sagging industrial output in 1979 and accounted for more sales of motor vehicles and appliances. than half of the 37 percent fall in the output of steel for consumer durable goods during 1979. That year, demand for less fuel-efficient cars CONSTRUCTION STEEL contracted sharply, largely because of reduced availability of gasoline in the spring, concerns Steel sold directly to the construction industry about future fuel shortages, and extraordinary typically accounts for about one-eighth of shipprice increases for petroleum products. U.S. ments of steel mill products. The market for automobile producers were only partly prepared construction steel can be approximated by total for the shift in demand to smaller cars, and new public and private construction put-in-place, domestic production fell far more than total sales excluding that for new single-family houses and as imports of small, fuel-efficient cars increased additions and alterations. Such construction acsignificantly. tivity contracted briefly in the first quarter of Despite the marked curtailment in the produc- 1979 and then rose in late 1979. tion of cars and trucks in the second half of 1979, Toward the end of the year, interest rates rose stocks of large cars and light-duty trucks were rapidly, and adverse conditions of financing constill excessive relative to sales at the end of the tributed to the weakness in construction in 1980. year, and the reduction in stocks continued into The constant-dollar value of new, steel-using early 1980. The need to reduce dealers' stocks construction peaked in January 1980 and apparalso was stimulated by the rapid acceleration in ently reached a low in August after a fall of 18 inflation; and high interest rates made it more percent—two-thirds as much as in the 1973-75 costly for dealers to finance inventories and for decline. Output of construction steel plummeted buyers to finance purchases. Sales of new U.S.- 50 percent from January to July 1980, far great^ produced cars did pick up in late 1979 and early than the drop in overall construction and greater 1980 with the introduction of the new models, than the decline in construction steel in the 1974^ but then, reflecting other developments in the 75 period (chart 2). economy, they declined sharply further. Consequently, production of motor vehicles was cut a further 25 percent by mid-1980. EQUIPMENT STEEL Sales of other steel-using consumer durable goods also declined in real terms in 1980. From An interesting aspect of the latest recession has the end of 1979 to mid-1980 the output of appli- been the short and relatively mild decline in production of equipment, which consumes about a third of the steel mill output. From a March 2. The five steel mill product components of the industrial production index are based on industry data on shipments 1980 cyclical peak to a June trough, output of from iron and steel producers to user industries. The five equipment edged down only 2.7 percent, onecomponents are consumer durable steel, construction steel, third as much as the drop in total industrial equipment steel, can and closure steel, and miscellaneous steel. production from January to July. Over the recent Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Developments in the U.S. Steel Industry 121 period, demand for defense equipment has con- preceding recessions. In those earlier recessions, tinued strong, and production of business equip- total production of equipment fell an average of ment has been unusually resilient in the face of 17 percent, considerably more than the 2.7 perwidespread contractions in output, sales, and cent in 1980. profits.3 Production of most of the remaining one-third In recessions before 1973, output of business or more of steel mill products fell more than 40 equipment tended to decline more than total percent from its 1978 peak to the 1980 trough. industrial production. But since the energy crisis Output of iron and steel foundries—producers of of 1973, this has not been true. In the 1974-75 castings used for pipe, railroad wheels, furnaces, period, production of business equipment de- and motor vehicles—also fell by a similarly large clined about as much as total industrial produc- amount. tion, and in 1980 less than half as much. The rapid growth in drilling for oil and gas and the major retooling in the auto industry to increase IMPORTS AND EXPORTS OF STEEL car fuel efficiency have been significant in sustaining the demand for capital goods in recent In the 1980 recession, U.S. production of iron years. In addition, output of office and comput- and steel declined far more than can be accounting machines and commercial and military air- ed for by curtailment in the apparent domestic craft have been only mildly affected by this consumption of steel; this difference can reflect recession. increases in imports, declines in exports of steel, Even though the demand for equipment re- or liquidation of inventories. mained quite strong, output of steel used to Imported steel, however, increased its market produce equipment had declined about 40 per- share only slightly during the recession, and this cent by July 1980 from the range maintained for increase reflected the sharp drop in domestic most of the period from late 1978 to March 1980 production rather than a rise in imports. After (chart 2). This decline in output of equipment having risen sharply in the 1960s, imports peaked steel was larger than the reduction in 1974-75, in late 1977 and early 1978. Since then, the but it was somewhat less than in the three annual volume of imports has declined. In fact, the level of imports has fallen in recent months 3. The business equipment market grouping of industrial below the average for the seventies (chart 3). production series includes oil and gas well drilling; it does not include automobiles used by businesses. Nevertheless, imports still supply one-sixth to 2. Output of consumer durables, construction put-in-place, and equipment compared with related types of steel 1977 1978 1979 1980 1977 1978 1979 1980 1977 1978 1979 1980 "Special consumer durable goods" includes motor vehicles and the gross value of products of total equipment less business vehicles parts; appliances, TVs, and air conditioners; and cutlery. "Construe- and truck trailers. tion-put-in-place" in 1972 prices is for total private plus public less SOURCE. Federal Reserve index of industrial production except for single-family houses and additions and alterations. "Equipment" is construction-put-in-place, which is from the Bureau of Census. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

122 Federal Reserve Bulletin • February 1981 3. Imports and exports of steel mill products fluctuated around use during 1979, and fell below use in the spring and summer of 1980 (chart 4). Millions of short tons Between the second half of 1978 and the 1980 trough, the overall decline in new supply was 20 about 50 percent, compared with a decrease in use of about 34 percent. Imports 15 4. Steel mill products tons 10 110 Exports I n. a i J_L EL 90 1954- 1961- 1968- 1975 1976 1977 1978 1979 1980 1960 1967 1974 Annual averages for seven-year periods or annual data. SOURCE. Department of Commerce, Survey of Current Business. 70 one-fifth of domestic consumption—a share that is larger than in other major industrial countries. Imported steel mill products have dropped r^u • • ± • IWWgil figf largely due to (1) higher prices since 1978 when Change in inventories W the trigger price mechanism (TPM) was intro- I 1 I 1977 1978 1979 1980 duced and (2) weaker demand and price dis- Federal Reserve estimates, seasonally adjusted annual rates, based counting in the United States during the period of on American Iron and Steel Institute and Department of Commerce data. Fourth quarter preliminary. decline in 1980. Informal attempts were also made to have foreign sources limit or reduce The change in inventory is equal to the new their exports to the United States. The TPM supply less use. Consequently, in the second half raises the price of imported steel to a minimum of 1978, inventories of steel mill shapes and price based on the production cost in the low- forms held by producers, users (manufacturers cost country, Japan. Although the TPM was only), and service centers rose 3.4 million tons to lifted for several months during 1980 because of 36.6 million tons. After fluctuating moderately in an antidumping suit brought by a major produc- 1979 and early 1980, steel stocks fell 6.2 million er, the TPM was reinstituted in October and has tons from April 1980 to a low of 29.8 million tons contributed to significant increases in import in October (chart 4).4 This liquidation of stocks prices since then. intensified the decline in steel output and em- While imports have fallen since 1978, exports ployment in the recent recession, as similar of steel mill products have increased from very swings have done in the past. low levels. On balance, net imports have had a Largely because of such swings between accurather noticeable decline, which together with mulation and liquidation of stocks, production of the sharp cutbacks in domestic production re- industrial materials—iron and steel, textiles, duced the new supply of steel dramatically rela- chemicals, and nonferrous metals—has historitive to use. cally fluctuated more than use. The inventory- 4. Assuming a $530 average price per ton in 1980 ($243 in SUPPLY, USE, AND INVENTORY CHANGE 1972), the drop of 6.8 million tons from the end of 1978 to October 1980 is worth about $3.6 billion in 1980 prices or $1.7 The new domestic supply of steel mill products billion in 1972 prices. The bulk of the decline occurred in about five months in 1980 and converts to an annual rate of equals production plus net imports. The new inventory liquidation of $7.5 billion in 1980 prices or $3.4 supply exceeded estimated use in late 1978, billion in 1972 prices. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Developments in the U.S. Steel Industry 123 related rebound in the output of such materials grown very slowly—about 1 percent per year helps explain the sharp rebound in industrial since 1967, has not been an important constraint production and employment during the final on output since 1974. The slow growth of U.S. quarter of 1980. output and capacity reflects the erosion of the The cessation of liquidation and the beginning share of steel in the production of industrial of accumulation have particularly accelerated materials. The use of iron and steel has been the rebound in production of iron and steel. In reduced by weakness in areas such as highway the four months from March to July 1980, the construction and by technological changes, inproduction index for iron and steel plunged from cluding downsizing of cars, miniaturization of 106 to 68 (1967 = 100); in the next four months, it electronic equipment, and the substitution of rose to about 107, thereby surpassing the March plastics and aluminum for steel. level. If the share of iron and steel used in production Only a part of this rebound can be explained of durable goods had remained unchanged from by the increase in final use of steel. Just as the the 1971 technological relationships, the conearlier decline in industrial use of steel was sumption of steel would have risen 40 percent smaller than the contraction in supply, the recov- from the cyclical peak in 1969 to that in 1979. ery in use in the latter part of 1980 was smaller Actually, steel supply grew only about 15 peralso—37 percent compared with the 73 percent cent. Thus, in the 1970s changes in technology increase in supply (chart 4). There is some evi- have reduced the use of steel about 2 to 3 percent dence, however, that even this increase in appar- per year. By 1980, this hypothetical reduction ent use is an overestimate. Among major users, amounted to an estimated 30 million tons of steel motor vehicle production has recovered about mill products per year. one-third of its overall cyclical decline, construc- Output of steel has grown more slowly than tion (excluding single-family houses and addi- that of industrial materials in the aggregate (chart tions and alterations) has recovered little, and 5). Between 1967 and 1979, iron and steel proequipment production has increased about 2 per- duction rose 13 percent, about one-fourth as cent after a slight decline (chart 2). much as the increase in output of all industrial In contrast, the inventory liquidation that had materials or of total industrial production. Over been so severe in the summer and fall evidently the same period, the combined output of plastics ended in November 1980 when the new supply of and durable materials other than iron and steel steel mill products had increased to as much as, increased 75 percent (chart 5). Output of plastics or more than, the amount of steel being used. materials, which have replaced steel and wood in Then, in December, production of iron and steel many applications, quadrupled over the same eased, apparently reflecting this development as period. well as declines in new orders for steel in No- Rising imports of steel mill products and devember. Weekly raw steel production, not sea- clining exports also have slowed the growth of sonally adjusted, changed little in the first weeks output of the U.S. steel industry. But in terms of of 1981 at a time of year when output normally lost domestic sales, this slowing was more of a increases. Production of iron and steel still was problem in the sixties than in the seventies. In about one-sixth below its high in 1978. 1950, before the reconstruction of industrial facilities destroyed in World War II, the U.S. steel industry produced almost half of the world's SECULAR STAGNATION AND COMPETITION steel. Over the next quarter-century, this share dropped to one-sixth, as steel industries around From 1967 until the end of 1980, U.S. production of iron and steel increased on average less than 1 5. The use of iron and steel in constant dollars based on percent a year. By year-end 1980, it was nearly a 1971 technological relationships is estimated roughly by fifth below the high in 1973-74 when worldwide combining production indexes for major steel-consuming industries with weights based on the technical coefficients demand for steel was exceptionally strong. Profrom the 1971 input-output table published by the Departductive capacity in the industry, which also has ment of Commerce. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

124 Federal Reserve Bulletin • February 1981 5. Output of materials, fuel, and power in 1979 Plastics materials Manmade fibers Basic chemicals Manmade fabrics Industrial electricity Aluminum Copper Petroleum refining Pulp and paper Coal Cement Logging and lumber Iron and steel Crude oil and natural gas Cotton fabric Wool fabric t i ii 100 200 300 400 Output index, 1967=100 the world were built up. Until 1959, the United States or Western Europe."6 Meanwhile, costs States was a net exporter of steel. In the late of materials to U.S. steel producers have contin- 1950s and the 1960s, however, the world export ued to rise, in part because of a reliance on price of steel fell substantially below the U.S. domestic sources of raw materials which, in the price, and imports increased so much that by case of the Mesabi iron ore mines, were depleted 1971 they were about one-sixth of the apparent of their most easily accessible, high-quality U.S. consumption of steel. During this period ores.7 The cost advantage in producing iron and exports of steel declined. Then, until 1977-78 a steel has shifted from the United States, and variety of factors—a worldwide steel shortage even more from Western Europe to Japan and with foreign prices higher than controlled U.S. developing countries that have much lower labor steel prices, the energy crisis, and a sharp reces- costs. The average production cost advantage sion—kept imports below the 1971 level. The held by Japan over the United States in late 1980 trigger price mechanism and weak demand was roughly $50 per net ton,8 in part because caused imports to decline in 1979-80 to a level not much different from that in 1971-72. 6. Robert W. Crandall, "The Economics of the Current Steel Crisis in OECD Member Countries," Steel in the 80s, U.S. producers began to lose their compara- Paris Symposium, February 1980, p. 140. tive advantage in marketing steel in the late 1950s 7. The iron ore deposits located in the U.S. Lake Superior when ocean transportation costs and world iron district supply four-fifths of the iron ore mined in the United States. Three-fourths of the ore mined in the Lake Superior ore prices began to decline. Major new iron ore district comes from the Mesabi range (Minnesota). Roughly mines were developed in Australia, Brazil, and three-eighths of the iron consumed in producing iron in the elsewhere. "By the 1960s virtually any country United States is imported. Most of the imports come from Canada and to a lesser extent from Venezuela and Brazil. with a deep water port could obtain its basic raw 8. Peter Marcus, World Steel Dynamics, Paine, Webber, materials at costs competitive with the United Mitchell, Hutchins, Inc. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Developments in the U.S. Steel Industry 125 many of the existing plants in the United States tion, U.S. steelmaking capacity has shown little and Europe are older, smaller, and less efficient net growth in recent years. Although new minithan the new ones in other countries. mills, furnaces, rolling mills, and continuous Labor costs in the U.S. steel industry are high casters have been installed, the last totally new, relative not only to those abroad but also to "greenfield," integrated steel mill in the United those in other U.S. manufacturing industries. States was built in 1967. Because older plants are Workers at blast furnaces and steel mills aver- generally less productive than new ones, producaged $12.51 per hour in November 1980, the tivity gains and profit rates tend to be relatively highest in manufacturing and about 65 percent low—about the lowest among manufacturing inhigher than the average for all manufacturing. dustries in the United States. Low productivity Since 1974, this differential has grown from the gains and rapidly rising input costs have pushed range of 25 to 40 percent that had persisted over up unit costs and, in turn, steel prices have risen the preceding 20 years. Since that year, earnings rapidly—at a 12 percent rate since the end of of steelworkers have been determined under the 1973. Such price increases have contributed to experimental negotiating agreement, under the reduction in the quantity of steel purchased which the union agrees not to strike in return for from U.S. producers. automatic annual wage increases of 3 percent Despite this bleak picture, structural change is plus cost-of-living adjustments. This formula has occurring continuously. Whereas some of the old given steelworkers much larger wage increases integrated mills located near the iron ore deposits than workers in most other industries. around Lake Superior and the coal mines in West U.S. imports of steel mill products do not Virginia have been cutting back their capacity, come only from low-cost producers such as others are modernizing. New minimills are ex- Japan. Some imports come from relatively high- panding rapidly in the South and West, reflecting cost producers in Europe that have excess ca- the more rapid growth of population and ecopacity. Many countries developed expansion nomic activity in these areas. plans in the period of rapid growth in world steel Minimills are usually located close to supplies output that culminated in the 1973-74 steel of scrap metal, which is melted and rerefined in boom. Investment based on these plans led to electric furnaces. Most minimills employ a concapacity that turned out to be unneeded because tinuous casting process that saves labor and of the recessions and slower industrial growth energy by converting the metal directly into a that followed. For the years 1975-78, the average limited range of steel mill products. Minimills capacity utilization rate (in percent) for steel now have the capacity to produce about 15 producers was only 65.6 in Japan, 74.1 in the million tons of merchant bar, reinforcing bar, United Kingdom, 61.6 in West Germany, 67.2 in wire, and plate annually, or about one-seventh of France, and 65.7 in the total EEC. Compared the tonnage of all steel mill products. with these low rates the U.S. steel companies U.S. producers have replaced most of the old w^re^dding relatively well with an average oper- open-hearth furnaces with basic oxygen and enating rate of 80.6 percent.9 This excess capacity ergy-saving electric furnaces (chart 6), but they has contributed to the financial problems of steel producers in many countries. 6. Distribution of steel output by type of furnace Percent PERFORMANCE AND CHANGING STRUCTURE Open hearth Bais ic oxygen With the slow growth in the domestic consump- •MHHjjj tion of steel and intense international competi- HHHHI 9. Technology and Steel Industry Competitiveness, Con- 1965 1970 1975 1980 gress of the United States, Office of Technology Assessment, 1980, p. 126. SOURCE. American Iron and Steel Institute. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

126 Federal Reserve Bulletin • February 1981 still rely on open-hearth furnaces for a small part steel industry probably would be able to continue of their output; Japan uses none. More efficient, to compete effectively for the bulk of the domescontinuous casting is being employed more of- tic market in steel. That market may continue to ten, but the U.S. industry lags far behind that in shrink inland and to be supplied less from inte- Japan and the EEC. With continued moderniza- grated mills and more from minimills and specialtion and more moderate wage increases, the U.S. ty producers. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

127 Domestic Financial Developments in the Fourth Quarter of 1980 This report, which was sent to the Joint Econom- the fourth quarter of 1979 to the fourth quarter of ic Committee of the U.S. Congress on February 1980 was about Vi of a percentage point above 6, 1981, highlights the important developments the top of its 1980 target range, despite a marked in domestic financial markets during the fall and fourth-quarter deceleration produced by sharply early winter. reduced expansion of its nontransaction component. Growth of M-3 slowed only slightly in the Growth in the narrow monetary aggregates fourth quarter and was at about the upper end of slowed in the fourth quarter, but remained rapid its target range for the year. by historical standards and in relation to the Credit demands grew substantially in the objectives of the Federal Open Market Commit- fourth quarter, fed by rising economic activity tee (FOMC) for 1980. For the year as a whole, and unabated inflation. Market interest rates M-l A and M-1B expanded at rates close to the reached new highs as the Federal Reserve sought upper ends of the ranges adopted by the Commit- to moderate the expansion of money and credit. tee after adjustment for the unanticipated degree The growth of nonborrowed reserves fell well of shifting of funds into checkable, interest- short of the increase in required reserves during bearing deposits. However, growth of M-2 from the quarter, and borrowing at the discount win- Interest rates Monthly averages except for Federal Reserve discount rate and Housing and Urban Development; Aaa utility bonds, weighted averconventional mortgages (based on quotations for one day each ages of new publicly offered bonds rated Aaa, Aa, and A by Moody's month). Yields: U.S. Treasury bills, market yields on three-month Investors Service and adjusted to Aaa basis; U.S. government bonds, issues; prime commercial paper, dealer offering rates; conventional market yields adjusted to 20-year constant maturity by U.S. Treasury; mortgages, rates on first mortgages in primary markets, unweighted state and local government bonds (20 issues, mixed quality), Bond and rounded to nearest 5 basis points, from U.S. Department of Buyer. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

128 Federal Reserve Bulletin • February 1981 Changes in reserves and monetary aggregates Based on seasonally adjusted data unless otherwise noted, in percent1 1979 1980 IItteemm 11997788 11997799 11998800 Q4 Q1 Q2 Q3 Q4 Member bank reserves2 Total 6.2 2.6 7.1 11.6 4.3 .4 6.7 16.5 Nonborrowed 6.3 .3 7.8 5.1 3.3 7.4 12.4 7.2 Required 6.3 2.4 6.8 10.4 5.1 .7 5.8 15.2 Monetary base3 9.2 7.8 8.5 9.3 7.7 5.2 9.9 10.3 Concepts of money4 M-1A 7.4 5.0 5.0 4.5 4.6 -4.4 11.5 8.2 M-1B 8.2 7.7 7.3 4.9 5.7 -2.5 14.6 10.8 M-2 8.4 9.0 9.9 7.2 7.3 5.6 16.0 9.2 M-3 11.3 9.8 10.0 9.1 8.0 5.8 13.0 11.8 Nontransaction components of M-2 Total (M-2 minus M-1B) 8.5 9.4 10.7 7.9 7.9 8.3 16.4 8.7 Small time deposits 16.2 23.1 15.1 25.8 17.4 23.7 1.0 15.5 Savings deposits -.5 -11.9 -4.3 -21.4 -20.3 -23.3 27.8 .6 Money market mutual fund shares (n.s.a.) 163.9 324.2 90.3 120.0 151.9 82.7 75.7 -15.5 Overnight RPs and overnight Eurodollar deposits (n.s.a.) 25.4 1177..22 2222..99 -33.1 9.0 -57.4 135.6 19.2 MEMO (change in billions of dollars) Managed liabilities at commercial banks 73.5 59.7 n.a. 8.6 10.5 -3.1 -13.2 n.a. Large time deposits, gross 50.4 19.6 22.0 10.7 6.3 6.2 -4.3 13.8 Nondeposit funds 23.1 40.1 n.a. -2.1 4.2 -9.3 -8.9 n.a. Net due to foreign related institutions 6.6 25.2 -24.4 .1 -2.3 -8.6 -11.5 -2.0 Other5 16.5 15.0 n.a. -2.1 6.4 -.4 2.5 n.a. U.S. government deposits at commercial banks 3.3 1.5 .6 -4.0 1.6 -1.6 2.9 -2.3 1. Changes are calculated from the average amounts outstanding in share draft balances, and demand deposits at mutual savings banks). each quarter. M-2 is M-1B plus overnight repurchase agreements (RPs) issued by 2. Annual rates of change in reserve measures have been adjusted commercial banks, overnight Eurodollar deposits held by U.S. nonfor regulatory changes in reserve requirements. bank residents at Caribbean branches of U.S. banks, money market 3. Consists of total reserves (member bank reserve balances in the mutual fund shares, and savings and small time deposits at all current week plus vault cash held two weeks earlier), currency in depository institutions. M-3 is M-2 plus large time deposits at all circulation (currency outside the U.S. Treasury, Federal Reserve depository institutions and term RPs issued by commercial banks and Banks, and the vaults of commercial banks), and vault cash of savings and loan associations. nonmember banks. 5. Consists of borrowings from other than commercial banks 4. M-1A is currency plus private demand deposits net of deposits through federal funds purchased and securities sold under repurchase due to foreign commercial banks and official institutions. M-1B is agreements plus loans sold to affiliates, loans sold under repurchase M-1A plus other checkable deposits (negotiable order of withdrawal agreements, and other borrowings. accounts, accounts subject to automatic transfer service, credit union n.s.a. Not seasonally adjusted. dow rose sharply. The System raised the basic pressures and the rising cost of funds to lending discount rate twice during the quarter, from 11 to institutions, rates on new home mortgage com- 13 percent. In addition, a surcharge of 2 percent mitments rose to around 15 percent in Decemon frequent borrowings by large banks was insti- ber. tuted in November and raised to 3 percent in In the fourth quarter, household borrowing early December. both in the consumer credit and in the mortgage The federal funds rate increased from less than markets exceeded the pace of the third quarter. 11 percent in September to around 20 percent by Nonfinancial businesses also raised a greater year-end. Yields on Treasury bills and other volume of funds than in the third quarter and short-term instruments rose sharply until about continued to rely more heavily on borrowing mid-December—increasing 4 to 6 percentage from commercial banks than on issuance of points—and then fell moderately in the following bonds or commercial paper. But bank credit weeks. The commercial bank prime rate climbed stayed well within the range specified by the to a historical high of 21*/2 percent at the end of FOMC even with a large increase in the fourth the year. Many long-term rates also moved to quarter. Borrowing by the U.S. Treasury renew highs during the quarter. Reflecting these mained near the pace of the preceding quarter, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Developments, Q4 1980 129 but debt financing by state and local govern- 1980, compared with the difference of Vi percentments declined in the face of record borrowing age point that was originally assumed. costs despite a surge in tax-exempt revenue Outflows of savings deposits at commercial bonds to purchase single-family mortgages. banks and thrift institutions—common in periods of high market interest rates—resumed in November and December after unusual strength MONETAR Y AGGREGA TES during the summer and early fall, strength that AND BANK CREDIT appeared to be associated in part with a desire for liquidity in an environment of uncertain pros- The growth of M-1A and M-1B weakened pro- pects for the economy and for interest rates. In gressively in each month of the fourth quarter addition, shares of money market mutual funds —extending the slowdown begun in September (MMMFs) contracted in the fourth quarter. The —and finally turned sharply negative in Decem- reported yields on MMMF shares tend to lag ber. For the quarter as a whole, the growth rates movements in market interest rates, and with the of both M-1A and M-1B declined about 3Vi sharp increases in market rates in the closing percentage points, to rates of 8 percent and 103A months of 1980, some investors shifted away percent respectively. As in the third quarter, from the MMMFs. In contrast, the net inflow to growth in M-1A (after adjustment for shifts to small-denomination time deposits during the interest-bearing checkable accounts) appears to quarter picked up sharply. The bulk of this have retraced some of the substantial second inflow was directed to six-month money market quarter shortfall from historical money demand certificates (MMCs) when yields moved well patterns. Thus, expansion of M-l measures for above the 12 percent "cap" on the maximum the year appears to have been only a little below rate permitted on 2V -year, small-saver certifi- 2 that consistent with their past behavior in rela- cates (SSCs) during the last two months of the tion to prices, economic activity, and interest quarter. The growth of small time deposits only rates. partially offset the weakness in savings deposits Over 1980 M-1B grew considerably more than and MMMFs, however, and growth in nontrans- M-l A owing to the rapid expansion of interest- action balances in M-2 slowed to an annual rate bearing checkable deposits that gained momen- of 83/ percent in the fourth quarter, about half 4 tum following passage in March of the Deposi- the advanced third-quarter pace. As a result, the tory Institutions Deregulation and Monetary reduction in the rate of expansion in M-2 was Control Act of 1980. Among other provisions, more marked than for the narrower aggregates. the act made permanent the then-temporary au- The rate of increase in M-3 fell only slightly in thorization for automatic transfers from savings the quarter as banks issued large-denomination (ATS) and credit union share draft accounts and time deposits to offset the weakening inflows of authorized commercial banks and thrift institu- demand and savings deposits. tions to begin offering negotiable order of with- The strong growth of reservable deposit liabilidrawal (NOW) accounts nationwide at year-end. ties during the summer and early fall raised These features prompted aggressive promotion required reserves of depository institutions well of ATS accounts by commercial banks in antici- above those provided through open market operpation of heightened competition for household ations. As a consequence, borrowing at the distransaction balances. The resultant greater-than- count window began rising from minimal levels expected conversions of demand deposits, sav- in the summer to more than $2 billion in late ings deposits, and other liquid assets to ATS November and early December. The greater accounts depressed M-1A growth about 1 per- tautness in the market for reserves, coupled with centage point and boosted M-1B growth about Vi increases in the discount rate and the application percentage point, relative to targets set earlier in of surcharges to frequent borrowing by large the year. Such shifts produced a difference of institutions, led to record highs in the federal somewhat more than 2 percentage points in funds rate by mid-December. Near the end of the annual growth rates for M-1A and M-1B during year, borrowing at the discount window began to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

130 Federal Reserve Bulletin • February 1981 Components of Major categories of among financial institutions and enhancing the bank credit bank loans effectiveness of the Federal Reserve's control of Change, billions of dollars money and credit. TREASURY BUSINESS As in the early months of the year, business SECURITIES 8 16 credit demands in the fourth quarter were divert- 12 EL JL, o ed from the bond market to short-term markets E K1 as firms avoided incurring long-term indebtedn OTHER SECURIT IEnS ness at record high interest rates. Moreover, the n.n n 1 i credit demands were focused largely on commercial banks as increases in bank lending rates tended to lag changes in market rates, and this boosted bank credit expansion. Real estate lending also picked up sharply in the fourth quarter, while consumer lending expanded in December after nine consecutive months of contraction. Although banks continued to enlarge their holdings of U.S. Treasury securities, the rate of increase slowed from the third quarter. In light of the reduced inflows to core deposits, banks increased their managed liabilities in the fourth quarter, after two quarters of decline, in order to fund their asset expansion. With the cost of Eurodollar funds moving further above rates pn domestic large certificates of deposit (adjusted for reserve requirements), the borrowing was concentrated entirely in domestically issued in- Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 struments; banks reduced net liabilities to their 1979 1980 1979 1980 own foreign branches in the fourth quarter, albeit Seasonally adjusted. Total loans and business loans are adjusted for at a slower rate than in the preceding three transfers between banks and their holding companies, affiliates, subsidiaries, or foreign branches. months. decline gradually in reflection of the weakening of the monetary aggregates, and by early January BUSINESS FINANCE borrowing had moved to $V/4 billion to $V/2 billion. Commercial banks lent firms almost $17 billion in In November, the reserve requirement provi- the fourth quarter, expanding their business loan sions of the Monetary Control Act began to be portfolios at an annual rate of more than 20 implemented. After a phase-in period ending in percent, the highest seen since the fall of 1979. September 1987, virtually all institutions holding Total short- and intermediate-maturity borrowtransaction accounts or nonpersonal time depos- ing by businesses increased at a somewhat its, including branches and agencies of foreign slower rate than bank loans to businesses in the banks, will be subject to a single uniform reserve fourth quarter as the commercial paper liabilities requirement structure. (Reserve requirements of nonfinancial corporations contracted on balagainst the newly authorized NOW accounts are ance over the quarter. The decline in commercial effective immediately, however.) All such insti- paper outstanding, which was very sharp in the tutions holding reserves are also entitled to the first month of the quarter, reflected the relatively same borrowing privileges from the Federal Re- attractive lending rates available at commercial serve as member banks. The reserve provisions banks. The spread between the bank prime rate of the Monetary Control Act are expected to and the commercial paper rate continued to be produce long-run benefits by promoting equity narrow through most of the quarter, but the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Developments, Q4 1980 131 spread widened in December as the prime rate Gross offerings of new security issues reached and remained at its record high while Seasonally adjusted annual rates, in billions of dollars commercial paper rates began to fall from peak 1979 1980 levels. Nonfinancial commercial paper increased TTyyppee ooff sseeccuurriittyy slightly in November for the first time since Q4 QL Q2 Q3 Q4E June, and with bank lending rates trailing de- Domestic corporate 45 66 89 79 53 Publicly offered bonds 23 26 66 47 23 clines in market rates in December, issuance of Nonfinancial 19 22 49 38 16 nonfinancial commercial paper rose more rapid- Financial 4 4 17 9 7 Privately offered bonds 10 21 8 9 10 ly. Stocks 12 19 15 23 20 Foreign 5 2 6 3 3 Yields on corporate bonds moved up to new State and local highs during the fourth quarter before edging off government bonds in the last weeks of the period. In mid-Decem- 48 32 57 57 44 ber, the Federal Reserve index of yields on e. Estimated. newly issued, Aaa-rated utility bonds was above W/2 percent—Vi percentage point above the lev- proportion of the issues that were brought to el reached in the early spring. As long-term market had comparatively short maturities of interest rates rose over the quarter, the volume five to ten years, a typical development during of corporate financing declined sharply. Notes periods of high bond yields when borrowers are and bonds publicly offered by all corporations reluctant to issue high coupon debt with long totaled $23 billion at a seasonally adjusted annual terms to maturity. Many of the public offerings rate in the fourth quarter, about half the level of by industrial corporations were convertible the third quarter. Reduced issuance by nonfinan- bonds with ratings of Baa and below, probably cial business, a total of only $16 billion, account- reflecting both the high level of equity prices and ed for most of the decline. A relatively large the lack of funds available through private placements, which are the usual means of capital market financing for lower-rated firms. Business loans and short- and intermediate-term business credit Private placements of corporate bonds are Seasonally adjusted annual rates of change, in percent1 estimated to have remained relatively small in the fourth quarter, even though the cash flow of Short- and Period Business loans intermediate-term life insurance companies, the major purchasers at banks2 business credit3 of privately placed bonds, was above the unusu- 1974 19.3 23.6 ally low levels earlier in the year. The new 1975 -3.8 -4.0 commitment activity of these investors remained 1976 1.3 4.5 1977 10.5 13.6 depressed, apparently in recognition of the po- 1978 16.3 18.4 1979 17.5 20.0 tential for future contractions of cash flow as 1980 11.2 12.2E additional policy loans might be induced by 1979-Q1 20.5 20.6 rising interest rates. Q2 16.6 19.0 Q3 22.7 27.3 Stock prices generally rose during the fourth Q4 6.0 7.8 quarter, nearly equaling and in some cases sur- 1980-Q1 16.7 22.0 passing previous highs. The major indexes of Q2 -9.6 .6 Q3 14.4 8.0 stock prices increased between 3 and 8 percent. Q4 22.3E 16.5E The elevated level of share prices continued to 1. Growth rates calculated between last months of period. encourage a large volume of issuance, including 2. Based on monthly averages of Wednesday data for domestically chartered banks and an average of current and previous month-end initial public offerings, and the volume of equity data for foreign-related institutions. Adjusted for outstanding amounts issues offered in the fourth quarter was again at a of loans sold to affiliates. Includes holdings of bankers acceptances. record level, well above the high reached the 3. Short- and intermediate-term business credit is business loans at commercial banks plus nonfinancial commercial paper plus finance preceding quarter. For 1980, the volume of new company loans to businesses and bankers acceptances outstanding corporate stock issued was more than one and a outside banks. Commercial paper is a prorated average of Wednesday data. Finance company loans and bankers acceptances outstanding half times that in 1979 and surpassed the preare averages of current and previous month-end data. vious high in 1972. Industrial corporations ace. Estimated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

132 Federal Reserve Bulletin • February 1981 counted for much of the increase in volume of About $29 billion of marketable debt was sold to issuance both for the fourth quarter and for the the public. More than half of this amount was year. raised through sales of bills, including $7 billion in cash management bills scheduled to mature in late April 1981, after the tax date. The volume of GOVERNMENT FINANCE noncompetitive tenders in the Treasury's regular weekly and monthly bill auctions rose in the Municipal bond yields also attained unprecedent- fourth quarter in response to high interest rates, ed levels during the fourth quarter. At the peak, but remained below the highs reached in March. the Bond Buyer index for general obligation Nonmarketable debt declined $1.5 billion during bonds reached 10.56 percent and that for revenue the quarter, mostly reflecting runoffs of the Treabonds reached 11.41 percent. In these circum- sury's foreign series. (However, during the stances, the gross volume of bonds issued by fourth quarter, foreign official institutions instate and local governments declined consider- creased their holdings of marketable Treasury ably in the fourth quarter, $44 billion (seasonally debt by almost $7 billion in custody accounts at adjusted annual rate). This decline occurred de- the New York Federal Reserve Bank.) In addispite a sharp rise in the volume of housing- tion, redemptions of savings bonds accelerated related revenue bond issues induced in part by to about $500 million last quarter as the sharp anticipation of statutory restrictions on such rise in market interest rates apparently issues beginning January 1, 1981. A record vol- outweighed the favorable impact of an increase ume of nonhousing offerings were postponed in the yields on savings bonds effective Novemduring the quarter, as issuers apparently awaited ber 1. more favorable conditions for long-term borrow- Net cash borrowing by federally sponsored ings that could be delayed. agencies totaled $9.1 billion (not seasonally The Treasury's net cash borrowing from the adjusted) for the fourth quarter, considerably public totaled $27.7 billion (not seasonally higher than the $2.2 billion registered in the third adjusted) in the fourth quarter, about the same as quarter, and also above such borrowing in the in the third. The combined budget deficit exceed- fourth quarter of 1979. More than three-fourths ed borrowing by a substantial margin in the of the borrowing was accounted for by the Fedfourth quarter, as the Treasury met nearly $9 eral Home Loan Banks (FHLBs) and the Federal billion of its financing needs by drawing down National Mortgage Association (FNMA), which the cash balance built up in previous quarters. stepped up their support of the residential mort- Federal government borrowing and cash balance Not seasonally adjusted, in billions of dollars 1978 1979 1980 IItteemm Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Treasury financing Budget surplus, or deficit (-) -23.8 -20.4 21.4 -4.4 -24.6 -27.1 8.2 -15.4 -33.6 Off-budget deficit1 -.1 -3.0 -5.2 -4.2 -.9 -3.8 -4.4 -4.9 -2.2 Combined deficit -23.9 -23.4 16.2 -8.6 -25.5 -30.9 3.8 -20.3 -35.8 New cash borrowings, or repayments (-) 15.3 10.62 -4.6 12.4 18.9 19.1 5.4 27.1 27.7 Other means of financing3 2.6 4.2 -1.9 2.9 -1.7 4.1 -3.1 .1 -.6 Change in cash balance -6.1 -8.6 9.8 6.7 -8.3 -7.7 5.9 6.9 -8.7 Federally sponsored credit agencies, net cash borrowings4 55..22 66..33 55..55 44..77 77..33 88..66 55..11 22..22 9.1E 1. Includes outlays of the Pension Benefit Guaranty Corporation, 3. Checks issued less checks paid, accrued items, and other trans- Postal Service Fund, Rural Electrification and Telephone Revolving actions. Fund, Rural Telephone Bank, Housing for the Elderly or Handi- 4. Includes debt of the Federal Home Loan Mortgage Corporation, capped Fund, and Federal Financing Bank. All data have been Federal Home Loan Banks, Federal Land Banks, Federal Intermediadjusted to reflect the return of the Export-Import Bank to the unified ate Credit Banks, Banks for Cooperatives, and Federal National budget. Mortgage Association. 2. Includes $2.6 billion of borrowing from the Federal Reserve on e. Estimated. March 31, which was repaid April 4 following enactment of a new debt-ceiling bill. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Domestic Financial Developments, Q4 1980 133 gage market. The FHLBs made large advances Net change in mortgage debt outstanding to member thrift institutions, and FNMA pur- Seasonally adjusted annual rates, in billions of dollars chased a sizable volume of mortgages. 1979 1980 MMoorrttggaaggee ddeebbtt Q2 Q3 Q4 Q1 Q2 Q3 Q4e MORTGAGE AND CONSUMER FINANCE By type of debt Total 164 161 150 144 73 123 142 Residential 117 115 114 104 44 92 102 Net mortgage formation increased during the Other1 47 46 36 40 29 31 40 By type of holder fourth quarter, and the rate of expansion was Commercial banks 30 34 32 27 6 16 29 Savings and loans 51 44 34 25 * 40 45 nearly double the severely depressed second- Mutual savings banks 4 4 2 2 * -1 1 quarter pace. Mortgage lending for both resi- Life insurance companies 11 14 15 16 12 11 10 FNMA and GNMA 7 3 10 12 8 1 5 dences and other real estate essentially returned GNMA mortgage pools 19 24 27 18 17 19 15 FHLMC and FHLMC pools .... 4 5 3 3 3 5 3 to the rates of growth of the first quarter of the Other2 38 33 27 41 27 32 34 year prior to the contraction in real activity. 1. Includes commercial and other nonresidential as well as farm Among major mortgage lenders, commercial properties. banks substantially increased their mortgage 2. Includes mortgage companies, real estate investment trusts, state and local credit agencies, state and local retirement funds, lending in the fourth quarter; savings and loan noninsured pension funds, credit unions, Farmers Home Administraassociations also increased their rate of mortgage tion and Farmers Home pools, Federal Land Banks, Federal Housing Administration, Veterans Administration, and individuals. acquisitions and remained by far the biggest e. Partially estimated. source of home financing. The $3 billion of * Between $0.5 billion and $-0.5 billion. housing revenue bond issues offered by state and on fixed-rate mortgages. By the end of Decemlocal governments in the fourth quarter was half ber, average interest rates on new commitments again as large as the third-quarter pace. In the for conventional fixed-rate home mortgages at market for existing houses, an additional source savings and loan associations rose to about 15 of mortgage funds was "creative" financing by percent. Near the end of November, the ceiling home sellers who offered such arrangements as rate for mortgages underwritten by the Federal assumptions of first mortgages combined with Housing Administration and the Veterans Adseller takebacks of second mortgages; however, ministration was raised to 13V2 from 13 percent in lender enforcement of due-on-sale clauses in line with market conditions. those states that allow such clauses put a con- Consumer installment credit continued to restraint on assumptions. cover from the sharp decline in the second The fourth-quarter increase in net mortgage quarter and grew at a seasonally adjusted annual lending followed a rapid rise in commitment rate of more than 3 percent in the fourth quarter, activity at major mortgage lenders in earlier somewhat above the third-quarter pace. Automonths when mortgage interest rates were low- mobile credit increased moderately, at an annual er. At savings and loan associations, outstanding rate of about 2 percent during the fourth quarter. mortgage commitments rose almost 50 percent Interest rates on loans for new autos at commerover the summer and early fall, and with the cial banks edged up from the previous quarter usual lags in the mortgage process, a substantial but remained well below the peak reached in volume of these commitments were utilized in May. However, the availability of auto credit the fourth quarter. However, new mortgage was limited by tighter nonrate terms and lending commitments at savings and loan associations standards at some lenders, especially in states fell appreciably in the fourth quarter as market with binding usury ceilings. The largest portion interest rates moved higher. Outstanding com- of the increase in consumer installment credit mitments declined somewhat despite relatively was accounted for by finance companies. At strong deposit flows and aggressive marketing by commercial banks the contraction in net consumsome associations of renegotiable-rate mortgages er installment lending, which had begun in carrying lower interest rates than those offered March, moderated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

134 Industrial Production Released for publication February 17 Production of materials advanced 0.7 percent in January, with sizable gains in the durable and Industrial production increased an estimated 0.6 energy groupings. Within durable materials, the percent in January, after increases of 1.9, 1.7, output of consumer durable goods parts and raw and 1.0 percent in October, November, and steel declined, but production of equipment parts December respectively. Gains continued to be and other durable materials advanced sharply. broadly based, except for motor vehicles and Nondurable materials increased 0.5 percent, steel, which declined again in January. The total with a sharp rise in chemicals partially offset by a index in January, at 151.8 percent of the 1967 reduction in paper. Production of energy materiaverage, was 0.6 percent below a year earlier and als was up 0.8 percent. 1.1 percent below the March 1979 high. Seasonally adjusted, ratio scale, 1967= 100 Output of consumer goods in January was TOTAL INDEX - 160 MATERIALS OUTPUT again about unchanged, reflecting a sharp drop in - 140 autos and trucks purchased by consumers but sizable gains in some other major components. Autos were assembled at an annual rate of 5.4 BUSINESS EQUIPMENT,., MATERIALS: million units—almost 15 percent below Decem- Nondurable ber and 10 percent below the depressed rate in January 1980. Production of home goods, after sharp rises last fall, increased moderately again J_ J L in January, and output of nondurable consumer CONSUMER GOODS: BUSINESS SUPPLIES goods increased 0.9 percent. Output of business Durable /V- V Nondurable \ /'N equipment continued at the strong pace of recent months, with sizable advances in building and mining, manufacturing, power, and commercial 1967-70 = 100 Annual rate, millions of units equipment; as a whole it was almost 2 percent 160 r AUTOS: Stocks __ lb 120 12 above its year-earlier level. Output of construc- ^ Sales H/V^' 100 10 V VL v _ tion supplies increased 1.2 percent further; al- 80 8 J Domestic assemblies \f\ A though production in this sector registered large 60 7 i i i i i * 6 gains in recent months, January output was still 1975 1977 1979 1981 1975 1977 1979 1981 5l/ percent below a year earlier. Federal Reserve indexes, seasonally adjusted. Latest figures: Janu- 2 ary. Auto sales and stocks include imports. 1967 == 100 Percentage change from preceding month PPeerrcceennttaaggee cchhaannggee Grouping 1980 1981 1980 1981 JJaann.. 11998800 ttoo Dec." Jan.6 Aug. Sept. Oct. Nov. Dec. Jan. Jan. 1981 Total industrial production. 150.9 151.8 1.0 1.6 1.9 1.7 1.0 .6 -.6 Products, total 149.8 150.5 .7 1.0 1.3 1.0 .7 .5 .4 Final products 148.1 148.6 .3 .8 1.3 1.1 .5 .3 1.1 Consumer goods 147.9 147.8 .5 1.1 1.6 .9 .0 -.1 -.1 Durable 141.1 137.5 .2 3.2 5.2 2.4 -1.3 -2.6 -3.4 Nondurable 150.6 151.9 .6 .4 .3 .3 .5 .9 1.2 Business equipment ... 176.4 178.2 .1 .1 1.1 1.3 1.0 1.0 1.9 Defense and space .... 101.0 101.9 -.3 .5 1.1 1.5 1.0 .9 5.1 Intermediate products ... 156.2 157.5 2.1 2.0 1.2 .8 1.7 .8 -2.1 Construction supplies 145.9 147.7 3.5 3.2 2.3 1.6 2.2 1.2 -5.6 Materials 152.7 153.8 1.5 2.7 2.8 2.7 1.5 .7 -2.0 p Preliminary. e Estimated. NOTE. Indexes are seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

135 Statements to Congress Statement by Paul A. Volcker, Chairman, Board commitment to concrete policies that will, in of Governors of the Federal Reserve System, fact, reduce inflation, even when those policies before the Committee on Appropriations, U.S. entail risks and strains for particular groups or Senate, January 27, 795/. for the economy as a whole in the short run. Given the deeply ingrained patterns of inflation- I am pleased to participate in this hearing and to ary behavior and expectations that now characoutline some of the key issues for economic terize our attitudes and our institutions, we policy in 1981 and beyond. The inauguration of a should not assume that changes in those behavnew President and the installation of a new ior patterns or expectations will come easily. To Congress provide a prime opportunity to reas- underestimate the challenge would be to miss the sess federal budgetary trends and, in particular, opportunity to set the economy in a new directhe role that fiscal policy can play in solving the tion. In the wake of missed opportunity we economic problems that confront us. Coming would only face more prolonged, and ultimately from the Federal Reserve, I will naturally want more painful, adjustments. to focus special attention on the interrelations Conversely, if we truly face up to the job and among fiscal policy, monetary policy, and condi- successfully turn the corner in terms of inflation tions in the capital markets. and inflationary expectations, then I believe that I have spoken often of the importance of progress will come more readily. The baleful breaking the inflationary momentum that grips interactions among inflation, low savings, conour economy. That seems to me the preeminent gested capital markets, low growth, deteriorating objective of economic policy, partly because productivity, and budgetary deficits can potenprospects for sustained growth rest on success in tially give way to a benign process of mutually that effort. reinforcing growth, investment, and a return to As you know, inflationary pressures remain price stability. intense today even though the level of economic As part of that process, the Federal Reserve activity is little higher now than it was in early has been, and will continue to be, guided by the 1979; unemployment has been high for almost a need to maintain a disciplined monetary policy. year; and appreciable excess capacity persists in Our various targets for monetary and credit many important industries. Indeed, the underly- growth are an important means of expressing ing inflation rate today appears at least as high, that intent. and probably higher, than a year ago. Declining At the beginning of last year, we adopted productivity has compounded the effects of objectives for the monetary aggregates that were growing wage increases in pushing up unit labor generally agreed to be broadly appropriate with costs. Moreover, as we look to the months the need to encourage a return to a more stable immediately ahead, the possibility of a renewed economic environment. Over the course of the surge in energy and food prices represents a year, growth of the various measures of money serious source of concern. and credit was—on balance—close to or only I believe that the public is acutely aware of the slightly above the upper ends of the announced dangers of continuously escalating prices and ranges. With the quick and surprisingly strong recognizes that combating inflation must be our recovery in business activity in the latter part of top economic priority. That perception is an the year, the expansion of money and credit was important first step in moving toward price sta- not sufficient to meet all the demands for financbility. But the general perception will be mean- ing the combination of real growth and rising ingless unless it is accompanied by a sustained prices. Even though monetary aggregates for a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

136 Federal Reserve Bulletin • February 1981 time exceeded targeted growth, interest rates spending continue to exceed growth in the inflatreturned to historically high levels, placing heavy ing, nominal gross national product. For inburdens on the more credit-sensitive areas of the stance, the budget submitted by the outgoing economy and threatening the continuation of the administration projected federal spending (inrecovery. cluding off-budget outlays) of more than 24 per- Looking at that immediate situation, the point cent of the GNP during the current fiscal year, can be and has been made that high interest rates fully 1 percentage point higher than last year and and strained capital markets may dim prospects appreciably above any earlier year of the for business expansion and private job creation postwar period. To be sure, a significant part of that would otherwise be desirable. Certainly, this year's higher spending and the enlarged housing, some smaller businesses, and others deficit reflects higher unemployment. But the particularly dependent on credit feel unusually underlying trend reflected in "out year" budget strong pressures. But the problem cannot useful- projections—which have almost always fallen ly be viewed in the single dimension of monetary short of subsequent reality—remains excessive, policy, and our sights must extend beyond the even without taking account of needed tax reducnext few months. tions. I see no alternative to continued restraint of I see no escape from the central proposition excessive growth in money and credit if we are to that to make room for tax reductions and for break the inflationary momentum. If that mo- private credit demands—both required to supmentum is not broken, interest rates will remain port economic growth and productivity gains high indefinitely. In that connection, expecta- —federal expenditures and off-budget credit protional factors can be particularly important. To grams will have to be cut back sharply from the extent that economic trends and public poli- current projections. cies are perceived as consistent with more infla- The problem is not limited to the current fiscal tion rather than less and government financing year. The time has come to take a hard look at needs are expected to remain high, savings are the "built-in" spending programs that are not discouraged and borrowing encouraged. In an readily—or at all—controllable by the annual already inflating economy, the net result of try- appropriations process. This process of spending ing to bridge the gap by excessive creation of control should begin immediately, with the aim money and credit would be to validate the infla- of achieving substantial gains over a period of tionary expectations and inflationary trends that several years. The need is all the more urgent in give rise to the problems in the first place. The light of the broad consensus that defense spendway to get interest rates lower and to keep them ing must rise. there is to deal with inflation first. I know the task is difficult in the best of The events of the past several months demon- circumstances—and those difficulties are multistrate clearly that heavy reliance on monetary plied by the institutional setting in which you policy in that effort focuses the immediate strains work, where the focus has been more on the and risks on financial markets and those most effects of appropriations in the current or next dependent on them. Strong complementary ac- fiscal year than on the longer-term budgetary tions in other areas are essential for a balanced, consequences of the so-called entitlement proeffective program to produce the earliest possible grams. impact on inflationary behavior and to clear the What must justify the effort is its central way for sustained, full, and broad-based expan- importance. I have some sense of what you know sion in real activity. more directly—that every federal program has The first—and perhaps the most important—of some legitimate purpose and a well-entrenched these other instruments is the fiscal posture of constituency; that particular groups—including the federal government. As recently as last those that clearly support reductions in the agspring, a substantial effort was made by the gregate—will argue that their program is the administration and the Congress to reduce the exception; that one man's concept of fluff and fat growth of expenditures and to restore budgetary is another man's perceived sacrifice; that a gendiscipline. In spite of that effort, trends in federal eral consensus on a broad objective can dissolve Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 137 in the process of allocating cuts. I also know that I recognize that some of those programs reflect it is easy (and right!) for me to say that the deci- a conviction that, within our market-oriented sions about what should be cut back are properly system, those experiencing financial and busiyours and the President's, not mine. But I must ness reverses not entirely or primarily of their emphasize that, in the interests of a healthy own making are entitled to an economic "safety economy and moderating tensions in financial mar- net." There is a legitimate view that—at a time of kets, I see no alternative to large spending cuts. economic pressure and strain—the dependence In that connection, I need not linger over the of one sector of the economy on another may at desirability of prudent tax reduction and restruc- times require cushioning pressures of the weakturing. As things stand, federal taxes are absorb- est links in the system so that its problems do not ing a rising share of aggregate personal and infect others. Other programs reflect valid concorporate income, and the sheer size of that tax cerns about the environment, health, and safety. burden adds to costs and impairs incentives. But What is necessary is to achieve a better balance I must convey to you my conviction that deci- between those continuing objectives and the sions for substantial tax reduction must not run requirements of a well-functioning competitive ahead of the harder decisions to achieve large economy, and particularly examination of those cuts in spending programs. If these decisions are regulations and policies that may not even serve not in harness, the potential benefits of tax well their immediate objectives. reduction could all too easily be swamped by Accomplishing these goals will require an inflationary forces and congested credit markets, enormous effort by the Congress and the admindamaging the very incentives and investment istration in the months and years ahead. We are sought. And, appraisals of the beneficial effects talking about changing behavior patterns that are of tax reduction on economic growth, and there- grounded in an assumption that inflation will fore the revenue "feedback," need to be realistic continue—an assumption that has been years in in light of experience. the making. Achieving that change is not a Beyond the budgetary process itself, but often simple process. But neither is it beyond our related to it, are the myriads of government collective capacity, working together with the programs that tend to raise costs or insulate understanding of what is at stake. The result will sectors of the economy from market forces. repay the effort many times over. That under- Indeed, I believe a substantial part of the infla- standing is critical to success and I hope will tionary bias built into our economy over the past underlie your deliberations and actions in the quarter century comes from such programs. weeks and months ahead. • Statement by Henry C. Wallich, Member, Board financial and regulatory actions by the governof Governors of the Federal Reserve System, ment. before the Temporary Subcommittee on Industri- The decline in productivity is a familiar fact. al Growth and Productivity of the Committee on Though all its roots are not fully understood, I the Budget, U.S. Senate, January 27, 1981. believe that in good part they are related to inflation. Inflation hampers business investment, I appreciate this opportunity to discuss with you an important source of productivity, by distortmy personal views on the prospects for increased ing reported profits; such distortion results in growth in productivity in the United States and excessive taxes, thereby reducing the return on particularly on the role that the federal govern- investment. The uncertainty created by inflation ment should take in such an effort. Your outline raises costs, by requiring higher risk premiums, lists an impressive range of issues in this area. I and generally interferes with business planning. hope it is agreeable to the committee if I address One major contribution to increased productivity myself principally to the interaction between would be to lower the rate of inflation. productivity and inflation and to implications of But there is also an important reverse relation, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

138 Federal Reserve Bulletin • February 1981 running from productivity to inflation. This caus- looking at the problem. Wage demands, even al nexus involves a consideration of trends in though stated in current dollars, take into acunit labor costs—defined as the total compensa- count the rate of inflation. In other words, they tion paid to workers divided by the amount they are actually demands for increases in real wages. produce—which most economists believe is the The real increases demanded may be relatively most important determinant of underlying price moderate and not much above gains in productrends. This belief arises from the fact that labor tivity. But it is the difference that is decisive, inputs directly account for about two-thirds of because it can give rise to an upward wage-price the costs of producing the gross national prod- spiral. An increase in rate of growth in productivuct. Any tendency for price increases to fall ity above the level of real wage demands could short of the trend in these costs means that other be converted into a winding down of the inflation unit costs of production, or more likely profit rate. The increase would not have to be large margins, must be reduced. Because some mini- relative to the rate of inflation, since real wage mum level of profit must be maintained for firms demands also tend to be low relative to our to remain in business, the inflation rate cannot present high rate of inflation. remain below the rate of increase in unit labor Those who argue that a 1 or 2 percent gain in costs for any extended period. In the short run, productivity would not make much of a dent in of course, other factors, including shifts in de- our high rate of inflation ignore the dynamic mand, resulting perhaps from business fluctu- aspect of the relationship between the efforts of ations caused by changes in government deficits labor to increase real wages and the productivity or the growth of the money supply or disruption gains that make these increases possible. If the in supplies in industries such as energy and food, trend rate of increase in productivity is larger can pull prices away from unit labor costs. But in than the real wage gains sought by employees the long run, prices will follow unit labor costs. and if the degree of competition does not dimin- Changes in unit labor costs in turn are deter- ish, firms will be able to increase prices by less mined by the difference between wage increases and less while still maintaining profits. If this and the rate of improvement in worker produc- deceleration continues to work over time, the tivity. gains in terms of reducing the inflation rate could In this framework, we can see the serious be substantial. At the same time, the reduced implications of the deteriorating trend in produc- rate of price increase will enable labor to realize tivity. In the earlier postwar period, labor be- the fruits of productivity gains in rising standards came accustomed to increases in real wages on of living. the order of 2l/ percent or so that accompanied A wide range of federal programs have been 2 the productivity gains of that era. These expecta- offered as a means of bolstering productivity. tions have adjusted sluggishly to the slower Many of these would require more government growth of productivity. Thus, efforts are being intervention and regulation in private markets. In made today by workers to increase real wages at my view, most of the regulatory and interventive a rate faster than the advance in output per hour. proposals may do more harm than good with Such efforts, however, only tend to squeeze respect to productivity. The costs of some of businesses. Firms then find that they must in- them are indirect and not readily apparent. Many crease prices at ever-increasing rates to maintain government regulations indeed are plainly adprofitability. The resulting acceleration in prices verse to productivity, a situation that is not likely frustrates labor's original efforts to increase its to be remedied by piling regulation on regulation. standard of living. These efforts run into the hard Some forms of market intervention, including fact that there is not enough additional output to price supports, wage and income supports, immeet these demands. Inflation rates consequent- port restrictions, and a variety of regulations, ly trend up. seek to insulate certain individuals or business This analysis underscores the importance of firms from market pressures. While the purposes improving our productivity performance. But to of such protection may be worthy, one inevitable compare productivity with the rate of inflation or by-product of these policies is to reduce efficiennominal wage demands is not a plausible way of cy. Government actions may lead to a subopti- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 139 mal allocation of resources, thereby limiting the old and perhaps inefficient firms and industries. growth potential of the economy, or they may In that way, activities that the market would simply add to costs, thus contributing to the eliminate would tend to be preserved, and the inflationary bias of the system. These risks are progress of productivity would be impaired. In present whether the market pressures originate general, government intervention in credit alloat home or abroad. cation tends to politicize financial markets as One of the most common types of suggestions decisions would have to be made as to what for government actions to encourage productiv- types of loans are to be favored over other uses ity growth has been a call for intervention in the of funds. Because of these distortions, an expancredit markets to stimulate increased capital in- sion of our governmental presence in credit vestment by business. Programs of this sort markets is more likely to depress the productivinclude interest rate subsidies, direct govern- ity performance of the U.S. economy than to ment loans, or loan guarantees designed to affect improve it. credit allocation to competing groups of borrow- If the Congress were to decide that actions to ers. Such programs seem to imply that funds are stimulate investment are necessary in order to not available from private lenders for credit- boost productivity, I would suggest that changes worthy borrowers. That, however, is likely to be in the federal tax structure would be potentially the case only in small part, given the efficient the most fruitful approach. The logic of this nature of our capital markets. Thus, pushing approach rests in part on the role federal taxation money into some particular sector by means of has played in discouraging investment by reducsubsidies to lenders may result to some extent in ing its profitability. This is an especially imporpushing other money out of that sector. Also, to tant problem during inflationary times if, as is the the extent that borrowers who previously did not case today, tax deductions for depreciation are receive credit now can draw on the limited pool allowed only on a historical cost basis, rather of available savings, other borrowers may be than at a rate that enables the plant and equipcrowded out. That is the ultimate result of the ment to be replaced at current prices. already enormously expanded demands of the On several previous occasions during the federal government on capital markets as repre- postwar period, incentives to and financing of sented by its direct deficit and by the borrowings business capital formation have been increased of off-budget and sponsored agencies, which in through a variety of mechanisms. These include fiscal year 1981 are estimated to total up to $110 accelerated depreciation, an investment tax billion. That amount is of roughly the same order credit, and a reduction in corporate profit tax of magnitude as total personal saving. rates. Not surprisingly, a similar set of proposals The rationing of credit through mechanisms has been advanced in recent years to help imother than the normal adjustment of interest prove capital formation and, hopefully, the prorates to balance supplies and demands for funds ductivity problem. Judging from studies of the would also carry a very expensive price tag in effects of tax incentives to stimulate investment terms of market distortions. For example, man- introduced in the past, these types of incentives agers of firms might be less inclined to produce would probably have their desired effects. their products efficiently if government programs Proposals also have often been made to inensured credit supplies at below market interest crease investment by stimulating personal savrates. Supplies of subsidized credit might exceed ing, and they have indeed been used in various what would strictly be needed to achieve specific countries. Given the adverse treatment that purposes and so might be partly wasted. Given American savers have received through the inthe advantages of doing so, unworthy or nones- teraction of inflation, regulation, and the tax sential purposes would be dressed up as deserv- system, I have considerable sympathy for such ing, creating excessive demands on the program proposals on equity grounds. or depriving some of the deserving. Finally, For example, we must seriously ask ourselves government measures to finance or otherwise whether it makes sense to tax as savers' income subsidize, in the nature of our democratic proc- the inflation premium inherent in present-day ess, are likely to focus on trouble spots, such as high interest rates, thereby driving interest rates Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

140 Federal Reserve Bulletin • February 1981 still higher. By the same token, I would question reduction of inflation, as I noted earlier, should the wisdom of continuing to allow a tax deduc- make an important contribution to productivity. tion to borrowers for the same premium, with the Also, a lower inflation rate is the only feasible same upward effect on interest rates. In this way of reducing interest rates. An easier moneregard, we must also ask ourselves whether it tary policy might reduce interest rates for a short makes sense to subsidize homeowners through period, perhaps on the order of a few weeks or tax deductibility of the inflation premium at a months. But, as soon as the inflationary implicatime when the resulting high mortgage rates tions of this policy became obvious to the market cause a depreciation of old mortgages that cre- —and this would not take long—interest rates ates serious pressures for the financial institu- would move up with expected inflation, as they tions that serve housing. have done before. Thus, the Federal Reserve On efficiency grounds, however, I must ques- really has no option other than to exert restraint tion the merit of subsidies to particular forms of in order to set the stage for the long-run gains in saving. The main effect of subsidies is likely to be employment and productivity that we have every to reshuffle the allocation of savings among sav- right to expect from the American economy. ings instruments, rather than to raise total sav- Since your committee's outline refers to social ing. I feel less certain about this judgment in compacts and other organizational arrangerelation to a device employed in France and ments, I would like to close by mentioning an known as the Monory Law (Law for the Chan- item of personal interest that may not be unfamilneling of Savings to the Financing of Enter- iar to you—the tax-oriented incomes policy usuprises), which allows a tax deduction, within ally referred to as TIP. There are many forms of limits, for investment in equities. Even though TIP that can be broadly classified into proposals this measure may have no great effect in promot- that depend on the "carrot" and on the "stick" ing saving, it seems to raise share prices and thus approach respectively. My preference is for an to reduce the cost of equity capital as well as to approach that levies a tax on firms granting improve the structure of financing. excessive wage increases. This approach would Another way to increase available savings is to be simpler administratively and probably more reduce the demands made by the public sector on effective than the alternative. In my judgment, financial markets. Moving toward budget bal- such a device could be enacted once public ance would free for private sector use far more concern about the persistence of inflation began funds than are likely to result from most schemes to exceed the natural reluctance of business and designed specifically to increase savings. Thus, labor to accept such a proposal. while a tax cut has much to recommend it in On the other hand, I am aware that the carrot terms of changing incentives, it should be ap- approach might be more appealing and easier to proached circumspectly from the point of view of enact than my stick approach. In view of the its budgetary impact. Right now taxes are far too current budgetary problems, however, such a high to permit adequate incentives and savings. TIP would only be appropriate if and when But to increase the deficit would be inflationary, general economic conditions or spending restricand tax reduction must, therefore, be conditional tions justified a reduction in federal taxes, the on progress in reducing government spending. benefits of which could then be withheld from Any tax cut matched by expenditure restraint noncompliers. The Economic Report of the would be helpful, but in light of our need to President by the former Council of Economic stimulate productivity, a cut directed toward Advisers explores various kinds of TIP in detail raising investment, both in tangible and also in and concludes that it would be too late to tie a human capital, would be particularly appealing. TIP to a 1981 tax cut, though it might be consid- For its part, the Federal Reserve is attempting ered on a subsequent occasion. I would just say to foster an environment that should facilitate a that any tax cut proposal should be examined reduction in overall inflation pressures and thus with a view to whether a TIP could be associated promote more vigorous growth and prosperity. A with it. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 141 Statement by Paul A. Volcker, Chairman, Board have tended to decline, reflecting both the abof Governors of the Federal Reserve System, sence of productivity growth and the sharp inbefore the Joint Economic Committee of the creases in the prices of basic items such as food U.S. Congress, February 5, 1981. and energy. Despite some recent improvement in household balance sheets, savings remain rela- I am pleased to be here to review with you the tively low. current economic situation, to share with you my Some important industries—including those views on some critical considerations in the related to energy and defense—have continued shaping of monetary policy, and to explore the to expand vigorously. However, a number of relationship of monetary and other economic basic industries—such as autos, steel, and houspolicies. I have emphasized on a number of ing—came under severe pressures in 1980. Wide occasions that we now have a rare opportunity to swings in consumer spending created uncertainadopt and reinforce policies to bring inflation ties about future sales, and weak markets under control and to set the stage for sustained brought pressures on profits for many corporaexpansion and productivity growth. That sense tions. In addition, many firms had to contend of opportunity stems, in substantial part, from a with high and sharply fluctuating interest rates. conviction that the American people recognize With the slow growth of final sales over the year, that we must decisively turn the corner toward the margin of unused plant and equipment in price stability and reduce the demands on the some industries remains sizable. The contrasting federal government for spending and regulation. movements in different sectors of the economy That will, in turn, lay the groundwork for resto- add to the complexities facing economic policy. ration of vigorous and sustained economic Considerable softening in labor markets has growth. taken place in many areas of the country. But At the same time, there must be understanding there has been little reflection of that developthat reducing inflation will require changes in ment in lower wage settlements or reduced cost behavior patterns that have become deeply in- pressures. With inflation high and real wages grained. In the short run, some sacrifice and pain falling, the effects of unemployment have been are inevitable. The discipline required will be offset by the desire to "keep up" with prices and amply repaid if strong policies are carried to restore real income—a desire that, however through with persistence and resolution. understandable, cannot be met so long as pro- To be successful, the effort must be carried out ductivity fails to rise and higher energy and food over a broad range of policies. Each of the prices must be absorbed. Instead, the self-defeatpolicies will entail difficult choices, which must ing inflationary spiral is perpetuated. be confronted directly. But those choices will be The challenge is to break the insidious pattern made easier to the extent that policies are inte- of rising prices and costs that, itself, underlies so grated in such a way as to avoid excessive much of the problems of high unemployment, burdens or emphasis on one policy instrument or slow growth, and high interest rates. another and do not work at cross purposes. It is Inflation has been building for a long time. in that light that I welcome this chance to discuss There are a number of contributing factors—inthe Federal Reserve's commitment to a mone- sufficient saving and investment, declining protary policy consistent with reducing inflation and ductivity growth, large and persistent budget to consider some of the implications for other deficits, huge increases in oil prices, and adverse policies. events in agricultural markets—accompanied at First, a few words about the current unsatis- times by excessive growth of money and credit. factory economic situation. Last year we exper- But whatever the particular causes of inflation, ienced exceptionally sharp swings in real output we are faced today with circumstances in which and employment, and on balance there was virtu- expectations and behavior patterns tend to keep ally no economic growth. Inflation did not slow. the momentum going, discouraging thrift, en- Productivity performance remained dismal, and couraging speculation, and building in higher unemployment rose. costs for the future. Those attitudes must be Looked at over a longer period, real wages changed. They will not be changed without Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

142 Federal Reserve Bulletin • February 1981 strong and credible policy commitments and, I anced or can move into surplus only when the suspect, visible evidence for a time that inflation economy is operating at reasonably satisfactory is, indeed, subsiding. levels has merit. But the record of the past Firmly disciplined monetary policy has a cen- decades, even by that test, is poor. We have had tral—indeed indispensable—role to play in the only one balanced budget in the last twelve years process of restoring price stability. As you know, and two in the last twenty—periods that included setting specific targets for monetary and credit mostly prosperous years. Furthermore, governgrowth is one aspect of that policy. ment spending continues to consume an ever- Last year's rapidly changing economic condi- increasing share of our national resources, maktions, changing inflationary expectations, the im- ing balance more difficult and requiring a tax load position of credit controls in the spring, and that is itself a drag on the economy. According to other factors resulted in wide swings in the the budget just submitted by the outgoing admindemand for money and credit. After a very sharp istration, federal budget and off-budget spending but very short downturn, the economy rebound- will approach one-quarter of the gross national ed much more strongly than almost anyone ex- product this fiscal year. Federal taxes will be pected last fall and early this winter. After falling equivalent to 21.4 percent of GNP—close to the short for a time, the monetary aggregates tempo- wartime record of 21.9 percent. rarily exceeded their growth targets. There was Against that background, I see no escape from unusual—and undesirable—volatility in financial the proposition that a large cutback from projectmarkets. ed increases in spending in coming years is a On balance, most of the monetary aggregates crucial linchpin in an effective overall economic did finish the year within or very close to our program. I know how difficult that will be to target ranges. But it was also evident that the accomplish in practice. Many people will support expansion of money was not sufficient to meet cutbacks in general, but not in their favorite the demands for financing rising prices, large program—and virtually every program is somedeficits, and faster real growth. body's favorite. Furthermore, any realistic ex- I am well aware that the resulting increase in penditure control program must extend over interest rates has placed a particularly heavy years and include important "uncontrollable" burden on housing, small business, and other items—including entitlement programs. credit-sensitive sectors of the economy. Administration spokesmen have rightly em- The basic point is, however, that we cannot phasized that the purpose of the program should escape that problem by simply creating more not be simply one of aiming toward a balanced money. In the end, that course could only aggra- budget but of making room for large tax reducvate inflation. Indeed, if the Federal Reserve tions. In fact, taxes are rising. Without a cut, were perceived to be validating the inflationary federal receipts will reach the highest level ever process, inflationary expections would surge and in fiscal year 1982 relative to GNP. I do not lead to still higher interest rates. In the end, doubt the proposition that our level and structure lower interest rates are dependent on reducing of taxation reduces incentives, acts as a deterinflation, and restoring price stability will require rent to investment, and distorts economic decilower rates of monetary and credit growth. sionmaking. But it is critically important that tax In pursuing that necessary approach of mone- reduction proceed in harness with spending retary restraint, the pressures converging on finan- straint, and as a practical matter the credibility of cial markets can be relieved by appropriate fiscal that approach will depend on early congressional and other policies aimed toward restoring pro- action to deal with spending. The point is only ductivity, reducing costs, and restoring budget- reinforced by the consensus that one large eleary balance. Events in financial markets last year ment in the budget—defense spending—needs to demonstrated all too clearly the dangerous be increased. strains that arise in credit markets when neces- I would also emphasize the relevance to any sary monetary restraint is accompanied by large attack on inflation of changing or modifying deficits and expanding business activity. other government policies that have tended to The proposition that the budget can be bal- increase costs or reduce competitive pressures. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to Congress 143 Over the years we have established a number of problem will require difficult tradeoffs. But I programs that have the objective of sheltering believe this is an area to which we have paid far different groups from unanticipated economic too little attention in the past and one that I setbacks or from competitive forces. We have would encourage all of us to look at more carefulalso embarked on extensive and expensive new ly in the future, with the intention of seeking the efforts to promote safety, to improve the envi- objectives of these programs with less cost in ronment, and to serve other purposes. Each of real terms or in inflation. these programs has laudable and even necessary I do not want to minimize in any way the objectives. It can also be legitimately pointed out enormous challenge facing the Congress, the that most of them, taken individually, do not administration, and the Federal Reserve. Howhave a decisive impact on inflation. ever, I do believe we may be seeing fundamental However, I believe the effect of many of these changes in public attitudes that should make programs, taken together and operating over a things possible now that have not been possible number of years, has been much more important. in the past. I am confident we can capitalize on Their cumulative impact has been to contribute this newfound opportunity, making whatever significantly to the inflationary bias in our econo- short-term sacrifice is involved in the interest of my. Like cutting the budget, addressing this restoring a stronger and more stable economy. Statement by Nancy H. Teeters, Member, Board encourage the offering of cash discounts, the of Governors of the Federal Reserve System, Congress has repeatedly considered the disbefore the Subcommittee on Consumer Affairs of count-surcharge issue. Testimony has been dethe Committee on Banking, Finance and Urban livered at length. The Federal Reserve, mean- Affairs, U.S. House of Representatives, while, has carefully constructed regulations to February 5, 1981. carry out the statutory provisions regarding availability and notice to consumers of dis- I am pleased to appear before you to present the counts. Despite these congressional and regulaviews of the Board of Governors on the proposed tory efforts, what we have not seen is merchants "Cash Discount Act." Unlike the current law, offering discounts—at least not to any appreciathe proposal provides that a discount—in what- ble degree. If we believe that encouraging merever amount—which is offered by a seller to a chants to reward cash buyers is a goal worthy of customer to induce payment by cash, by check, diligent pursuit, then we must try to identify the or by means other than an open-end credit plan impediments that have, in fact, discouraged the or credit card, is not a disclosable finance charge concept. under the Truth in Lending Act. The bill would Our guess is that the current 5 percent limit on also extend the current ban on the imposition of a the size of the discount is not the culprit. Rather, credit-card surcharge for another two years. it may, once again, be a case of government The Board has testified previously in favor of regulation creating part of the problem—regulaomitting these discounts from the finance charge tion that is grounded on a set of well-intentioned as a way of encouraging them, and I do so again arguments but that introduces such friction into this morning. Also, as I have done previously, I otherwise simple transactions that compliance is must express the Board's uncertainty about the simply not worth the merchant's risk or effort. wisdom of prohibiting surcharges in view of their If this analysis is correct, two features in the economic similarity to discounts. Their permissi- current regulation are probably most important bility might in fact help assure that cash custom- in discouraging the development of cash-paying ers are not forced to subsidize credit-card users. incentive plans. First is the obvious difficulty in In our view, it is time to take a fresh look at the drawing a clear economic distinction between a cash discount issue. During the six years since permitted discount and a prohibited surcharge. It the Truth in Lending Act was first amended to is true that discounts and surcharges may not be Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

144 Federal Reserve Bulletin • February 1981 as identical in practice as, say, a half-empty glass I therefore would recommend for subcommitof water is to a half-full one. Nevertheless, it is tee consideration a very simple rule: that onedifficult to quarrel with the fact that the distinc- time discounts or surcharges offered by the seller tion is, at best, uncertain. for the purpose of inducing payment by cash, Second, the well-intentioned protections in the checks, or means other than use of an open-end statute to insure equitable treatment of consum- credit plan or a credit card shall not constitute a ers have, once again, led to seemingly complicat- finance charge and that the availability of the ed regulatory provisions. The current statute and discount or surcharge be disclosed to customers. the proposed bill specify that any discount must This would leave out the specific requirement be offered to "all prospective buyers." Its avail- that "all" customers be notified and that any ability must be disclosed to all of them "clearly disclosure be "clear and conspicuous"—not, of and conspicuously in accordance with regula- course, because we favor hidden plans but betions of the Board." But who are "all prospec- cause of the uncertainties this standard produces tive buyers"? Those who present credit cards, or with the inevitable need for clarification. all those who enter the merchant's door? What Of course, it is possible that authorizing dissigns meet the test of "clear and conspicuous" counts and surcharges without calling them fidisclosure when there are several store entrances nance charges opens up a potential loophole in and numerous independent cash registers? How the blanket embrace of Truth in Lending. Not do you disclose to customers who purchase by only are discounts essentially equivalent to surphone? May the discount be limited to certain charges, but both are essentially equivalent to types of property or to certain branches of finance charges. They do represent a cost of stores? We have sought to provide answers to using credit. these questions in our regulations. Therefore, if we are right that the 5 percent Unfortunately, by issuing rules beyond the limit has not itself been the impediment to merbasic provision we have again probably made chants offering discounts, this limit might be simple things so complicated that the public retained to insure that the exclusion of discounts throws up its hands in frustration. Although in and surcharges does not become a vehicle that our current proposals to simplify Regulation Z could be used to defeat the basic Truth in Lendwe have proposed trimming back these regula- ing protections. In our view, the best chance of tions, the obvious way for any merchant to avoid accomplishing the goals the Congress began purregulatory burden is simply not to offer dis- suing six years ago would be to retain this limit, counts. And that, apparently, is what has hap- but to allow discounts and surcharges to be used pened. with minimal government interference. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

145 Announcements PROPOSED ACTION For organizations with fiscal years ending between October 1980 and February 1981, the first The Federal Reserve Board on February 3, 1981, reports are to be filed by June 30, 1981. All other requested public comment, through April 15, on foreign banking organizations shall file the rea revision and simplification of its Regulation C ports within four months of the end of their fiscal (Home Mortgage Disclosure). years. The annual report of foreign banking organizations (FR Y-7), like the previous version, will be REPORT FORMS FOR FOREIGN BANKS open to public inspection. The foreign banking organization confidential report of operations The Federal Reserve Board has adopted forms to (FR 2068) will be confidential. be filed by foreign organizations that conduct a The Board also has adopted another form, the banking business in the United States in order to report of intercompany transactions for foreign meet supervisory and regulatory requirements banking organizations and their U.S. bank subunder the Bank Holding Company Act and the sidiaries (FR Y-8f), which will be confidential. International Banking Act of 1978. The FR Y-8f is intended to monitor the effects of The forms [annual report of foreign banking intercompany transactions on the safety and organizations (FR Y-7) and confidential report of soundness of a U.S. subsidiary bank that is operations (FR 2068)] are designed in part to owned by a foreign banking organization. It implement the Board's national treatment con- parallels the report for domestic banking compacept of supervision of foreign banking organiza- nies (FR Y-8) and is to be filed quarterly begintions by requiring financial reporting substantial- ning with the second quarter of 1981. ly equivalent to that required of domestic The forms and instructions may be obtained banking organizations. upon request from the Federal Reserve Board or The reports require submission of financial from the Federal Reserve Banks. statements, which will in part be open to public inspection and in part be held confidential. These reports of foreign banking organizations include REGULATION K: INTERPRETATION financial statements as prepared for use in the home country; discussion of the accounting prac- The Federal Reserve Board on January 19, 1981, tices used in preparing such statements; financial adopted an interpretation of its Regulation K statements concerning material, majority-owned (International Banking Operations) dealing with unconsolidated foreign companies; financial investments by a U.S. banking organization in a statements concerning all related U.S. compa- foreign company (including a foreign bank) that nies 25 percent or more owned by the foreign does business in the United States. banking organization; disclosure of reserves, of The interpretation applies to investments of earnings, and of loan loss experience; descrip- U.S. Edge corporations, member banks, and tion of U.S. activities and U.S. investments bank holding companies. The interpretation peradequate for use in determining compliance with mits them to invest—with the prior consent of the Bank Holding Company Act and the Interna- the Board—in foreign companies that conduct tional Banking Act as well as information on domestic as well as international business in the shareholders, directors, and executive officers of United States. Previously, such investments affected banking institutions. could be made only if the business of the foreign Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

146 Federal Reserve Bulletin • February 1981 company in the United States was exclusively ENFORCEMENT OF ERISA international. The Board said it would normally grant per- The Federal Reserve Board has adopted procemission for such investments if (1) the foreign dures for bringing to the attention of the Departcompany's business is conducted predominantly ment of Labor possible significant violations by abroad, (2) the activities in the United States of state member banks of the Employee Retirement the foreign company are banking or closely relat- Income Security Act (ERISA). ed to banking, and (3) the U.S. banking organiza- The Board acted upon a recommendation to tion does not own 25 percent or more of the federal supervisors of financial institutions by the foreign company's voting stock or does not oth- Federal Financial Institutions Examination erwise control it. Council. ERISA provides that the Secretary of Labor may use the facilities of other agencies, with FEDERAL RESERVE their consent, to help discharge the Depart- REGULATORY SERVICE ment's responsibilities under the act and directs the agencies to cooperate with the Secretary to The Federal Reserve Board has announced that the extent permitted by law. it will begin publication of the first part of a new looseleaf service that will include all Board regulations and related interpretations and docu- CHANGES IN BOARD STAFF ments. The new service, entitled the "Federal Re- The Board of Governors has announced the serve Regulatory Service," will consist of four following official staff actions. publications—a complete service covering all Theodore E. Allison, the Secretary of the Board regulations and related materials, and Board, has been promoted to Staff Director for three separate handbooks pertaining to securities Federal Reserve Bank Activities, effective Janucredit, consumer affairs, and monetary policy. ary 19, 1981. These publications are designed to help those Clyde H. Farnsworth, Jr., Deputy Director, who must refer frequently to the Board's regula- has been named Director of the Division of tory materials. They will be updated at least on a Federal Reserve Bank Operations, effective Janmonthly basis and each will be cross-indexed. uary 19, 1981. The first handbook—the Securities Credit Jared J. Enzler, Deputy Associate Director, Transactions Handbook—is scheduled for publi- has been promoted to Senior Deputy Associate cation in February. It will contain Regulations G, Director, Division of Research and Statistics, T, U, and X dealing with extensions of credit for effective January 12, 1981. the purchase of securities, together with all relat- J. Virgil Mattingly, Jr., Assistant General ed statutes, Board interpretations, rulings, and Counsel, has been promoted to Associate Generstaff opinions. al Counsel, Legal Division, effective February 4, This publication will be followed in March by a 1981. similar handbook on Monetary Policy and Re- Gilbert T. Schwartz, Assistant General Counserve Requirements, containing Regulations A, sel, has been made Associate General Counsel, D, and Q, plus related materials. It will, for Legal Division, effective February 4, 1981. convenient reference, also contain the rules of Michael E. Bleier, Senior Counsel, has been the Depository Institutions Deregulation Com- appointed Assistant General Counsel, Legal Dimittee. vision, effective February 4, 1981. Mr. Bleier, The Consumer and Community Affairs Hand- who joined the Board's staff in 1971, holds a J.D. book, containing Regulations B, C, D, E, Z, AA, from Georgetown University. BB, and associated documents, and the complete Maryellen A. Brown, Senior Counsel, has service, containing all Board regulations and been named Assistant to the General Counsel, related materials, are planned for publication in Legal Division, effective February 4, 1981. Ms. June. Brown joined the Board's staff in 1974. She holds Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 147 J.D. and L.L.M. degrees from the University of Board Members, effective January 25, 1981. Mr. Wisconsin. Stull received a B.S. from the University of Joe M. Cleaver, Chief, Financial Structure Maryland. Since coming to the Board in August Section, has been appointed Assistant Director, 1970, he has served in the Division of Federal Division of Research and Statistics, effective Reserve Bank Operations. January 12, 1981. Mr. Cleaver holds an M.A. from the University of Maryland. He joined the The Board has also announced the resigna- Board's staff in 1967. tions of John J. Mingo, Senior Deputy Associate Anthony F. Cole, Senior Attorney in the Legal Director, Division of Research and Statistics, Division, has been appointed Special Assistant and Jeffrey R. Shafer, Deputy Associate Directo the Board for Congressional Liaison, effective tor, Division of International Finance. February 4, 1981. Mr. Cole holds an A.B. from the College of William and Mary, an M.A. from Rutgers University, and a J.D. from the College ENFORCEMENT PROCEEDINGS SETTLEMENT of William and Mary, Marshall-Wythe School of Law. The Federal Reserve Board announced on Feb- Cornelius K. Hurley, Jr., Senior Counsel, has ruary 9, 1981, the payment of $50,000 each by been appointed Assistant General Counsel, Le- Mid America Bancorporation, Inc., and Irwin L. gal Division, effective February 4, 1981. Mr. Jacobs, both of Minneapolis, Minnesota, in set- Hurley received a J.D. from Georgetown Uni- tlement of enforcement proceedings instituted versity before coming to the Board in 1974. against them by the Board. Donald L. Kohn, Chief, Capital Markets Sec- In October 1980, the Board issued notices of tion, has been appointed Deputy Associate Di- charges and notices of assessment of civil money rector, Division of Research and Statistics, effec- penalty against Mid America, a multibank holdtive January 12, 1981. Mr. Kohn holds a Ph.D. ing company, and Mr. Jacobs, a Minneapolis from the University of Michigan and was with businessman. The notices were issued in connecthe Federal Reserve Bank of Kansas City before tion with charges of submitting false or misleadjoining the Board's staff in 1975. ing information to the Board with respect to a David E. Lindsey, Chief, Banking Section, has stock redemption transaction undertaken in been named Assistant Director, Division of Re- April 1980 and with actions inconsistent with search and Statistics, effective January 12, 1981. commitments made to the Board. Mr. Lindsey has been a member of the Board's The Board alleged in the notices that during staff since 1974. He holds a B.A. degree from the course of a redemption of shares by Mid Earlham College and a Ph.D from the University America—as a result of which Mr. Jacobs would of Chicago. obtain control of the bank holding company William Robert Maloni, Director, Congres- —Mid America and Mr. Jacobs submitted false sional Relations Office, Federal Home Loan or misleading information to the Board to induce Bank Board, has been named Special Assistant the Board to withhold formal supervisory proto the Board for Congressional Liaison, effective ceedings that would have blocked the stock February 4, 1981. Mr. Maloni holds a B.A. from redemption transaction. The Board charged that Duquesne University and has taken graduate Mid America and Mr. Jacobs (1) made commitcourses at George Washington University and ments to the Board that they later purposefully the University of Maryland. invalidated; and (2) made statements to the Lawrence Slifman, Chief, National Income Board that were misleading and, through mis- Section, has been appointed Assistant Director, statements and omissions, failed to describe ade- Division of Research and Statistics, effective quately the true and complete purpose of the January 12, 1981. Mr. Slifman came to the Board stock redemption transaction, which was the in 1970 after earning his Ph.D. from Washington liquidation of the bank holding company. University in St. Louis. The Board's notices said that the material James L. Stull has been made Manager of the omissions and misleading statements, and the Operations Review Program in the Office of invalidation of the commitments, constituted un- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

148 Federal Reserve Bulletin • February 1981 safe or unsound practices in the conduct of the The Board's proceedings against Mid America affairs of Mid America Bancorporation, Inc., and and Mr. Jacobs did not involve, in any manner, violated the Board's Regulation Y (which imple- the activities of Mid America's seven subsidiary ments the Bank Holding Company Act). banks, whose conditions are all reported to be To prevent the liquidation of Mid America satisfactory by their primary federal and state prior to the completion of the administrative supervisory agencies. proceedings started by the notices of charges, the Board issued a temporary cease-and-desist order prohibiting Mid America's sales of its SYSTEM MEMBERSHIP: subsidiary banks and Mr. Jacobs' sale of one ADMISSION OF STATE BANKS bank that he had committed to transfer to Mid America. Mid America and Mr. Jacobs filed a The following banks were admitted to memberlawsuit in the U.S. District Court of Minnesota ship in the Federal Reserve System during the to overturn the temporary cease-and-desist order period December 11, 1980, through February 10, and, in addition, to enjoin the Board's cease-and- 1981: desist and civil-money-penalty assessment proceedings. The U.S. District Court of Minnesota California dismissed this lawsuit on December 18, 1980. Torrance Pacific Heritage Bank The Court held that it was without jurisdiction to Colorado interfere with the ongoing administrative cease- Louisville Louisville State Bank and-desist and penalty proceedings, and that the Oregon Board acted within its authority in issuing the Forest Grove ... Farmers and Merchants Bank temporary cease-and-desist order to prevent the Newport Yaquina Bay Bank serious weakening of the condition of the bank Utah holding company and to maintain the status quo Salt Lake City Guardian State Bank pending the completion of the administrative ... Rocky Mountain State Bank proceedings. Virginia To settle the proceedings instituted against Hillsville Bank of Carroll them, Mid America and Mr. Jacobs, without Urbana Bank of Middlesex admitting liability, paid a penalty of $50,000 Wyoming each, which has been turned over by the Board Laramie Citizens Bank to the U.S. Treasury. In addition, Mr. Jacobs Wheatland American Bank of agreed not to purchase more than 10 percent of Wheatland any shares of any bank or bank holding company Worland First Wyoming Bankfor the next five years, without prior approval of Worland the Federal Reserve Board. Wright First Wyoming Bank-Wright Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

149 Record of Policy Actions of the Federal Open Market Committee Meeting Held starts remained at the annual rate of on December 18-19, 1980 about ll/ million units recorded in 2 September and October. Sales of new homes edged off slightly further 1. Domestic Policy Directive in October, and sales of existing The information reviewed at this houses declined for the first time meeting suggested that real GNP ex- since May. panded more in the fourth quarter Producer prices of finished goods than in the third. Average prices as rose appreciably in October and Nomeasured by the fixed-weight price vember, but the rate of increase over index for gross domestic business the two months was considerably product were continuing to rise at a below the exceptional pace in the rapid pace, close to the average an- third quarter. In October consumer nual rate of about \0l/ percent re- prices continued to rise rapidly; 2 corded in the first three quarters of average prices of energy items fell, the year. but mortgage interest rates rose The dollar value of retail sales sharply after having declined over rose substantially further in Novem- the preceding three months. The rise ber, according to the advance re- in the index of average hourly earnport, after a large increase over the ings of private nonfarm production five preceding months. Sales of new workers accelerated sharply in Octoautomobiles were at an annual rate ber and November; over the first of 9.1 million units in November, eleven months of the year the index marginally above the October rate. rose at an annual rate of about 9V 2 A brisk selling pace of foreign cars percent, compared with an increase sustained total unit sales as sales of of about 8V4 percent during 1979. domestic autos edged down. In foreign exchange markets the The index of industrial production trade-weighted value of the dollar rose an estimated 1.4 percent in No- against major foreign currencies had vember, following substantial gains risen about lx/ percent over the in- 2 in each of the three preceding terval since the Committee's meetmonths. Capacity utilization in man- ing in mid-November. The U.S. forufacturing increased about 1 per- eign trade deficit in October was centage point further in November essentially unchanged from the Auto 78.8 percent, 3.9 percentage gust-September level, which was points above its July trough but well well below the rate in the first half of below earlier peaks. the year. The volume and value of Nonfarm payroll employment ex- oil imports were up somewhat in panded substantially in November October from the sharply reduced for the fourth consecutive month, levels of the third quarter, while the and the unemployment rate was es- value of non-oil imports was little sentially unchanged at lx/ percent. changed. Total exports in October 2 Employment gains were wide- also were close to the third-quarter spread, and the average workweek in level. manufacturing lengthened slightly. At its meeting on November 18, In November private housing the Committee had decided that Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

150 Federal Reserve Bulletin • February 1981 open market operations in the period duction in member bank demands until this meeting should be directed for reserves in relation to the supply toward expansion of reserve aggre- being made available through open gates consistent with growth of market operations. M-1A, M-1B, and M-2 over the peri- In light of uncertainties about the od from September to December at duration and extent of upward presannual rates of about 2L/ percent, 5 sure on the federal funds rate while 2 percent, and 73/ percent respective- markets were adjusting to the dis- 4 ly, or somewhat less, provided that count rate action, the Committee in the period before the next regular decided in the afternoon of Decemmeeting the weekly average federal ber 5 to provide the Manager for funds rate remained within a range Domestic Operations leeway to purof 13 to 17 percent. Shortly after the sue the short-run objectives for the November 18 meeting, incoming reserve aggregates without operdata indicated that the monetary ag- ations being precisely constrained in gregates were growing considerably the current statement week by the 18 faster than the rates consistent with percent upper limit of the intermeetthe Committee's objectives for the ing range for the federal funds rate. September-to-December period. Re- On December 12 the Committee dequired reserves and member bank cided to extend this leeway for operdemands for reserves expanded sub- ations through the period before the stantially in relation to the con- meeting. In the statement weeks of strained supply of reserves being December 10 and 17 the funds rate made available through open market averaged 18.8 percent and 19.8 peroperations. These developments cent. Member bank borrowings rewere associated with additional up- ceded to an average of about $1.6 ward pressures on the federal funds billion in the two statement weeks rate and other short-term interest ending December 17 from an averrates; in the first statement week age of about $2.2 billion in the preafter the meeting, the funds rate was ceding two statement weeks. at about or somewhat above the up- Growth in M-1A and M-1B moderper limit of the range of 13 to 17 ated further in November to annual percent specified by the Committee, rates of about 7 percent and 91/ 4 compared with an average of 14^2 percent respectively, but these percent in mid-November. In a tele- growth rates were still well above phone conference on November 26, those consistent with the Committhe Committee raised the upper limit tee's objectives for the period from of the intermeeting range for the September to December. In early funds rate to 18 percent. December growth in both measures On December 4 the Board of Gov- of money slowed substantially furernors announced an increase from ther. Expansion in M-2 and M-3 con- 12 to 13 percent in basic discount tinued to accelerate in November, rates at Federal Reserve Banks and reflecting a surge in both small- and an increase from 2 to 3 percentage large-denomination time deposits. points in the surcharge on frequent From the fourth quarter of 1979 borrowings of large institutions, through November, growth of M-1A effective December 5. This action was in the upper part of the range set exerted additional upward pressure by the Committee for the year endon the federal funds rate; in trading ing in the fourth quarter of 1980; during the morning of December 5, M-1B and M-2 grew at rates somethe rate generally was well above 18 what above the upper limits of their percent. At the same time, incoming ranges, while M-3 grew at a rate data suggested that M-1A and M-1B slightly above the upper limit of its currently might be growing a little range. less rapidly than projected a week Total credit outstanding at U.S. earlier, which would imply some re- commercial banks continued to ex- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 151 pand in November at about the rapid members expressed the view that pace of the previous three months. underlying expansive forces were Growth in business loans remained strong. It was observed that the staespecially vigorous, but expansion tistical indicators of prospective acin other bank loans was also sizable tivity had not been signaling a nearand banks added further to their term contraction, but that the holdings of securities. Outstanding greater-than-anticipated expansion commercial paper of nonfinancial in GNP in the current quarter had corporations continued to fall in No- itself contributed to developments, vember, extending the decline that including the sharp rise in interest had begun in August. rates, that were likely to produce Pressures on bank reserve posi- some decline in the early part of tions and strong business demands 1981. Later in the year, assuming for credit, along with large Treasury monetary expansion to be consistent financings, were associated with with the Committee's longer-run obsharp further increases in short-term jectives, the recovery was likely to interest rates over the intermeeting be limited unless progress was made period. Rate increases were espe- in reducing inflation. The need to cially pronounced for bank CDs and deal with the deep-seated problem of commercial paper, which rose 3 to 6 inflation was emphasized, as was the percentage points, while Treasury difficulty of doing so without acceptbill rates advanced 1 to 3 percentage ing risks of unsatisfactory economic points. Most long-term bond yields performance in the short run. It was moved up about V to 1 percentage generally recognized that the course 2 point over the interval. The prime of economic activity remained diffirate charged by commercial banks cult to forecast because of the unpreon short-term business loans was dictability of behavior based on inraised from 16V percent to a new flationary expectations and because 4 high of 21 percent. In home mort- of uncertainties about the fiscal and gage markets, average rates on new other economic policies of the new commitments for fixed-rate loans administration to be inaugurated on rose more than V percentage point January 20. 2 further, and new commitment activ- At its meeting in July 1980, the ity was reported to be quite limited Committee had reaffirmed the folat prevailing rates. lowing ranges for monetary growth The staff projections presented at from the fourth quarter of 1979 to the this meeting suggested that the ac- fourth quarter of 1980 that it had celerated growth of real GNP in the established in February: M-1A, 3l/ 2 current quarter was likely to be fol- to 6 percent; M-1B, 4 to 6l/ percent; 2 lowed by some decline in the first M-2, 6 to 9 percent; and M-3, 6l/ to 2 part of 1981 and by sluggish recov- 9l/ percent. The associated range 2 ery later in the year. Accordingly, for the rate of growth in commercial the unemployment rate was expect- bank credit was 6 to 9 percent. For ed to increase during 1981. The rise the period from the fourth quarter of in the fixed-weight price index for 1980 to the fourth quarter of 1981, gross domestic business product was the Committee had looked toward a projected to remain rapid, although reduction in the ranges for growth of not quite so rapid in the second half M-1A, M-1B, and M-2 on the order of the year as in the first half. of V percentage point from the 2 In the Committee's discussion of ranges adopted for 1980, abstracting the economic situation and its impli- from institutional influences affectcations for policy, the members not- ing the behavior of the aggregates. ed the clear possibility of a decline in During the course of 1980, an inconactivity in the early part of the new sistency had become apparent beyear and of a sluggish performance tween the longer-run ranges for over 1981 as a whole, although some M-1A and M-IB as a result of faster- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

152 Federal Reserve Bulletin • February 1981 than-expected growth of ATS and policy for the near term, the mem- NOW accounts, which had been at bers considered rates of monetary the expense partly of demand depos- growth over the first three months of its and partly of savings deposits and 1981 against the background of the other instruments not included in the tentative ranges specified earlier for narrowly defined aggregates. In that growth over the year as a whole, light, the specified range for growth pending the completion of the reof M-1B in 1980 should have been view of those ranges scheduled for somewhat higher than that actually the meeting in early February. The adopted, while the range for M-1A midpoints of the tentative ranges for should have been somewhat lower, 1981, abstracting from the effects of consistent with the intended eco- the introduction of NOW accounts nomic result. on a nationwide basis, were 4l/ per- 4 At this meeting the Committee be- cent for M-1A, 43/ percent for 4 gan a review of the ranges for 1981 in M-1B, and 7 percent for M-2. It was the expectation that at the meeting considered likely that the substantial scheduled for early February it weakening of the demand for cash would complete the review and es- balances evident in recent weeks tablish ranges for the year within the would persist for a time, in response framework of the Full Employment to the sharp increase in interest rates and Balanced Growth Act of 1978 over the past few months and to the (the Humphrey-Hawkins Act). The slackening of economic activity pro- Committee once again faced unusual jected for the months ahead; but uncertainties concerning the forces growth of M-2 was expected to be affecting monetary growth, in part greater in relation to growth of the because of some sizable variations narrowly defined aggregates than evident in the demand for both nar- suggested by the tentative ranges for rowly and broadly defined money in 1981. relation to nominal GNP during Most of the members favored 1980. For the year ahead, moreover, specification of monetary growth the institutional changes expected to rates for the first quarter that were result from the Monetary Control consistent with the tentative ranges Act of 1980 would need to be evalu- for growth over the full year ahead. ated and interpreted. Relationships In view of the excessively rapid among the monetary aggregates will monetary growth in recent months, be affected by the introduction of they were willing to accept a short- NOW accounts on a nationwide ba- fall from those rates for a time, prosis as of December 31, 1980, as au- vided that the shortfall developed thorized by the act. A staff analysis concurrently with some abatement suggested that during 1981 shifts of of pressures in the money market. funds from demand deposits into However, one member favored NOW accounts would be substantial specification of higher rates of monand would significantly retard the etary growth for the first quarter, growth of M-1A. At the same time, and another member favored specifitransfers from savings deposits and cation of lower rates. other interest-bearing assets into A number of members continued NOW accounts would enhance the to express concern about the ecogrowth of M-1B. However, esti- nomic and financial effects of the mates of such shifts varied within high degree of variability of interest wide ranges. Shifts of funds into rates in 1980. In the light of the NOW accounts were not expected to current prospects for economic acaffect growth of M-2 significantly tivity and for the demand for money, because virtually all of the funds these members wished to set a polilikely to be shifted into such ac- cy course for the near term that counts are included in M-2. would tend both to avoid additional In the Committee's discussion of pressures in the money market and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Record of Policy Actions of the FOMC 153 to moderate the expected easing of and related reserve paths, the Manpressures. While the Committee's ager for Domestic Operations was general practice had been to relax promptly to notify the Chairman, the constraint implied by the inter- who would then decide whether the meeting range for the federal funds situation called for supplementary rate when the constraint became instructions from the Committee. binding, some members felt that a The following domestic policy disomewhat narrower range than rective was issued to the Federal specified for most recent intermeet- Reserve Bank of New York: ing periods might be appropriate to The information reviewed at this meetprovide an opportunity for review of ing suggests that real GNP expanded the situation if market interest rates more in the fourth quarter than in the changed by a sizable amount. It was third, and prices on the average continued to rise rapidly. In November retail also suggested that the Committee sales, industrial production, and nonhold a consultation before the next farm payroll employment expanded subscheduled meeting if it appeared that stantially further, and the unemployment the rate might decline quickly to- rate was essentially unchanged at lV 2 ward the lower end of the range. One percent. Housing starts remained at their September-October level. The rise in the member expressed the opinion that index of average hourly earnings has setting 18 percent as the upper end been somewhat more rapid this year than of the range, which would lead to a in 1979. prompt easing in money market con- The weighted average value of the dollar in exchange markets has risen ditions consistent with a decline in considerably further over the past the funds rate to or below that level, month. The U.S. trade deficit was unwould contribute over time to a re- changed in October, remaining well beduction in the volatility of both inter- low the rate in the first half. est rates and monetary growth. Growth in M-1A and M-1B continued to moderate in November but was still At the conclusion of the discusrelatively rapid; growth in M-2 continued sion, the Committee decided to seek to accelerate, reflecting a further pickup behavior of reserve aggregates asso- in expansion of its nontransaction comciated with growth of M-1A, M-1B, ponent. In early December, growth of M-1A and M-1B slowed substantially and M-2 over the first quarter along further. From the fourth quarter of 1979 a path consistent with the ranges for to November, growth of M-l A was in the growth in 1981 contemplated in July upper part of the range set by the Com- 1980, abstracting from the effects of mittee for growth over the year ending in the fourth quarter of 1980; M-1B and M-2 deposit shifts connected with the ingrew at rates somewhat above the upper troduction of NOW accounts on a limits of their respective ranges. Expannationwide basis. The members rec- sion in commercial bank credit was ognized that the spread of NOW about as rapid in November as on the accounts and ATS accounts nation- average in the preceding three months. Short-term market interest rates have ally was likely to widen the differenrisen sharply further in recent weeks. tial between growth of M-1A and Long-term market yields have also risen, M-1B to an unpredictable extent and although considerably less, and average that operational paths for reserves rates on new home mortgage commitwould have to be adjusted in the ments have continued upward. On December 4 the Board of Governors anlight of the developing differential. nounced an increase in Federal Reserve Some shortfall in growth would be discount rates from 12 to 13 percent and acceptable in the near term if that an increase in the surcharge from 2 to 3 developed in the context of reduced percentage points on frequent borrowing of large institutions. pressures in the money market. If it The Federal Open Market Committee appeared during the period before seeks to foster monetary and financial the next regular meeting that fluctu- conditions that will help to reduce inflaations in the federal funds rate, tak- tion, encourage economic recovery, and en over a period of time, within a contribute to a sustainable pattern of range of 15 to 20 percent were likely international transactions. At its meeting in July, the Committee agreed that these to be inconsistent with the monetary objectives would be furthered by growth Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

154 Federal Reserve Bulletin • February 1981 of M-1A, M-1B, M-2, and M-3 from the rate of inflation. Pending completion fourth quarter of 1979 to the fourth quar- of the Committee's review of its ter of 1980 within ranges of 3l/ to 6 2 ranges for growth in 1981, she prepercent, 4 to 6V2 percent, 6 to 9 percent, and 6V to 9l/ percent respectively. The ferred specification of moderately 2 2 associated range for bank credit was 6 to higher rates for monetary growth 9 percent. For the period from the fourth over the first quarter. quarter of 1980 to the fourth quarter of Mr. Wallich dissented from this 1981, the Committee looked toward a action because, given the excessive reduction in the ranges for growth of M-1A, M-1B, and M-2 on the order of V monetary expansion in recent 2 percentage point from the ranges adopt- months, he favored specification of ed for 1980, abstracting from institution- lower monetary growth rates for the al influences affecting the behavior of the first quarter of 1981 than those aggregates. adopted at this meeting along with a In the short-run the Committee seeks behavior of reserve aggregates associat- higher intermeeting range for the ed with growth of M-1A, M-1B, and M-2 federal funds rate. In his view, such over the first quarter along a path consis- a policy stance was appropriate both tent with the ranges for growth in 1981 to restrain monetary growth if ecocontemplated earlier, which will be renomic activity remained strong and viewed in February 1981. Those ranges, abstracting from the effects of deposit to moderate the probable decline in shifts connected with the introduction of interest rates if economic activity NOW accounts on a nationwide basis, weakened. imply growth in these aggregates centered on 4% percent, 43/ percent, and 7 4 percent respectively. It is recognized 2. Authorization for Domestic that the introduction of NOW and ATS Open Market Operations accounts nationwide at the beginning of 1981 is likely to widen the discrepancy On January 23, 1981, the Committee between growth in M-1A and M-1B to an voted to increase from $3 billion to extent that cannot now be accurately $4 billion the limit on changes beestimated, and operational reserve paths tween Committee meetings in Syswill be developed in the light of evaluation of those differences as they emerge. tem Account holdings of U.S. gov- In the light of the rapid growth of mone- ernment and federal agency tary and credit aggregates in recent securities specified in paragraph 1(a) months, some shortfall in growth would of the authorization for domestic be acceptable in the near term if that open market operations, effective developed in the context of reduced pressures in the money market. If it immediately, for the period ending appears during the period before the next with the close of business on Februmeeting that fluctuations in the federal ary 3, 1981. funds rate, taken over a period of time, within a range of 15 to 20 percent are Votes for this action: Messrs. likely to be inconsistent with the mone- Volcker, Gramley, Guflfey, Morris, tary and related reserve paths, the Man- Partee, Rice, Roos, Schultz, Soloager for Domestic Operations is prompt- mon, Mrs. Teeters, Messrs. Wallich, ly to notify the Chairman, who will then and Winn. decide whether the situation calls for supplementary instructions from the This action was taken on recom- Committee. mendation of the Manager for Do- Votes for this action: Messrs. mestic Operations. The Manager Volcker, Gramley, Guffey, Morris, had advised that since the December Partee, Rice, Roos, Schultz, Solomeeting, substantial net sales of semon, and Winn. Votes against this action: Mrs. Teeters and Mr. Wallich. curities had been undertaken to absorb reserves in association with a Mrs. Teeters dissented from this seasonal reduction in currency and action because she believed that the deposits. The leeway for further objectives for monetary growth were sales had been reduced to about $1 unduly restrictive in terms of their billion, and additional sales in excess eventual effects on output and em- of that amount might be required ployment without improving pros- over the rest of the intermeeting pects for significantly tempering the interval. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

155 Legal Developments AMENDMENT TO REGULATION E 1. Section 206.3 of Regulation F is amended by revising the title of the section and by adding paragraph (d) The Board of Governors has amended its Regulation to read as follows: E, Electronic Fund Transfers: to exempt overdraft credit plans from § 913(1) of the Act. That section Section 206.3—Inspection and Publication of prohibits a creditor from conditioning an extension of Information and Safe Harbor from Liability for credit on repayment by means of preauthorized debits. Forward-Looking Statements Filed under the The amendment creates an exception for overdraft Act. credit plans, which have historically included an auto- sfs sfc s§: 5{: sf matic payment feature. (d) Safe harbor from liability for forward-looking Effective January 15, 1981, Regulation E is amended statements. as follows: (1) A statement within the coverage of paragraph Section 205.3 is amended by redesignating footnote (d)(2) of this section which is made by or on behalf 1 as footnote lb and by revising § 205.3(d)(2) and (3) to of a bank filing any statement, report, or document read as follows: under the Act or by an outside reviewer retained by the bank shall be deemed not to be a fraudulent Section 205.3—Exemptions statement (as defined in paragraph (d)(4) of this section), unless it is shown that such statement was made or reaffirmed without a reasonable basis or (d) Certain automatic transfers.*** was disclosed other than in good faith. (2) Into a consumer's account by the financial insti- (2) Paragraph (d)(1) of this section applies to (i) a tution, such as the crediting of interest to a savings forward-looking statement (as defined in paragraph account ;la (d)(3) of this section) made in a document filed with (3) From a consumer's account to an account of the the Board or in an annual report to shareholders financial institution, such as a loan payment;la or meeting the requirements of § 206.5(c) of Regulation F (12 CFR 206.5)(c)); (ii) a statement reaffirming the forward-looking statement referred to in paragraph AMENDMENTS TO REGULATION F (d)(2)(i) of this section subsequent to the date the document was filed or the annual report was made The Board of Governors has amended its Regulation publicly available; or (iii) a forward-looking state- F, Securities of Member State Banks consistent with ment made prior to the date the document was filed recent amendments to regulations of the Securities and or the date the annual report was made publicly Exchange Commission ("SEC"), concerning (a) Safe available if such forward-looking statement is af- Harbor from Liability for Projections, (b) Corporate firmed in a filed document or annual report made Governance, (c) Dividend Reinvestment Plans, and (d) publicly available within a reasonable time after the Tender Offers. The Board has also issued an interpremaking of such forward-looking statement. tation relating to (a) Issuer Tender Offers and (b) (3) For the purpose of this subsection, the term Going Private Transactions. Finally, the Board has "forward-looking statement" shall mean and shall adopted certain technical amendments to Regulation be limited to: F. (i) A statement containing a projection of revenues, income (loss), earnings (loss) per share, l.a The financial institution remains subject to § 913 of the Act capital expenditures, dividends, capital structure regarding compulsory use of electronic fund transfers. A financial or other financial items: institution may, however, require the automatic repayment of credit (ii) A statement of management's plans and obthat is extended under an overdraft credit plan or that is extended to maintain a specified minimum balance in the consumer's account. jectives for future operations; Financial institutions also remain subject to §§ 915 and 916 regarding (iii) A statement of future economic performance civil and criminal liability. contained in management's discussion and analysis of the summary of earnings as called for by Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

156 Federal Reserve Bulletin • February 1981 general instructions (g) and (h) to the Quarterly quired by this paragraph is hereinafter sometimes Report on Form F-4; and referred to as a "Statement". (iv) Disclosed statements of the assumptions underlying or relating to any of the statements (b) Exceptions. The requirements of this § 206.5 shall described in paragraph (d)(3)(i), (ii), or (iii) of this not apply to the following: section. (4) For the purpose of this regulation the term "fraudulent statement" shall mean a statement (5) The furnishing of proxy voting advice by any which is an untrue statement of a material fact, a person (the "advisor") to any other person with statement false or misleading with respect to any whom the advisor has a business relationship, if: material fact, an omission to state a material fact (i) The advisor renders financial advice in the necessary to make a statement not misleading or ordinary course of his business: which constitutes the employment of a manipula- (ii) The advisor discloses to the recipient of the tive, deceptive, or fraudulent device, contrivance, advice any significant relationship with the bank scheme, transaction, act, practice, course of busi- or any of its affiliates, or a shareholder proponent ness, or an artifice to defraud, as those terms are of the matter on which advice is given, as well as used in the Securities Act of 1934 or the regulations any material interest of the advisor in such matter: promulgated thereunder. (iii) The advisor receives no special commission (5) Notwithstanding any of the provisions of para- or remuneration for furnishing the proxy voting graphs (d)(1) through (4) of this section, this rule advice from any person other than a recipient of shall apply only to forward-looking statements made the advice and other persons who receive similar by or on behalf of a bank, if, at the time such advice under this subsection; and statements are made or reaffirmed, the bank is (iv) The proxy voting advice is not furnished on subject to the reporting requirements of the Securi- behalf of any person soliciting proxies or on ties Exchange Act of 1934 and has filed its most behalf of a participant in an election subject to the recent annual report with the Board on Form F-2. provisions of § 206.5(i). 2. Section 206.5 is amended by adding paragraphs NOTE.—The solicitations excepted by paragraphs (b)(1) and (b)(5) (b)(5) and (e)(6) and revising paragraphs (d)(1) and (2); remain subject to the prohibitions against false and misleading statements in § 206.5(h). g(l)(i), (ii); g(2), (ii), (iii); g(3); i(3)(i), (ii), (iii); (h); i and (k) to read as follows: (c) Annual report to security holders to accompany Section 206.5—Proxy Statements and Other Statements. Solicitations under Section 14 of the Act. (1) Any Statement furnished on behalf of the bank that relates to an annual meeting of security holders (a) Requirement of statement. No solicitation of a at which directors are to be elected shall be accomproxy with respect to a security of a bank registered panied or preceded by an annual report to such pursuant to section 12 of the Act shall be made unless security holders containing such financial stateeach person solicited is concurrently furnished, or has ments for the last 2 fiscal years as will, in the opinion previously been furnished, with a written proxy state- of the bank, adequately reflect the financial position ment containing the information required by Form of the bank at the end of each such year and the F-5. If any bank having such a security outstanding results of its operations for each such year. The fails to solicit proxies from the holders of any such financial statements included in the annual report security in such a manner as to require the furnishing may omit details or summarize information if such of such a proxy statement, such bank shall transmit to statements, considered as a whole in the light of all holders of record of such security a statement other information contained in the report and in the containing the information required by Form F-5. The light of the financial statements of the bank filed or "information statement" required by the preceding to be filed with the Board, will not by such procesentence shall be transmitted (1) at least 20 calendar dure omit any material information necessary to a days prior to any annual or other meeting of the fair presentation or to make the financial statements holders of such security at which such holders are not misleading under the circumstances. Subject to entitled to vote, or (2) in the case of corporate action the foregoing requirements with respect to financial taken with the written authorization or consent of statements, the annual report to security holders security holders, at least 20 days prior to the earliest may be in any form deemed suitable by the bank and date on which the corporate action may be taken. A the information required by paragraphs (c)(l)(i) to proxy statement or an "information statement" re- (iv) of this paragraph may be presented in an appen- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 157 dix or other separate section of the report, provided discretionary authority with respect to matters as that the attention of security holders is called to to which a choice is not so specified by the such presentation. security holder if the form of proxy states in boldfaced type how the shares represented by the proxy are intended to be voted in each such case. (2) Bank's Statement, or the report, shall contain an (ii) A form of proxy which provides for the elecundertaking in bold face or otherwise reasonably tion of directors shall set forth the names of prominent type to provide without charge to each persons nominated for election as directors. Such person solicited, on the written request of any such form of proxy shall clearly provide any of the person, a copy of the bank's annual report on Form following means for security holders to withhold F-2 including the financial statements and the sched- authority to vote for each nominee: ules thereto, required to be filed with the Board (A) A box opposite the name of each nominee pursuant to § 206.4 of this Part for the bank's most which may be marked to indicate that authority recent fiscal year, and shall indicate the name and to vote for such nominee is withheld; or address of the person to whom such a written (B) An instruction in bold-face type which indirequest is to be directed. cates that the security holder may withhold authority to vote for any nominee by lining through or otherwise striking out the name of (3) Eight copies of each annual report sent to securi- any nominee; or ty holders pursuant to this paragraph (c) shall be (C) Designated blank spaces in which the sent to the Board not later than (i) the date on which shareholder may enter the names of nominees such report is first sent or given to security holders, with respect to whom the shareholder chooses or (ii) the date on which preliminary copies of the to withhold authority to vote; or bank Statement are filed with the Board pursuant to (D) Any other similar means, provided that paragraph (f), whichever date is later. Such annual clear instructions are furnished indicating how report is not deemed to be "soliciting material" or the shareholder may withhold authority to vote to be "filed" with the Board or otherwise subject to for any nominee. this § 206.5 or the liabilities of section 18 of the Act, (iii) Such form of proxy also may provide a means except to the extent that the bank specifically re- for the security holder to grant authority to vote quests that it be treated as a part of the proxy for the nominees set forth, as a group: Provided, soliciting material or incorporates it in the proxy That there is a similar means for the security statement by reference. holder to withhold authority to vote for such group of nominees. Any such form of proxy which is executed by the security holder in such manner (d) Requirements as to proxy. as not to withhold authority to vote for the (1) the form of proxy (i) shall indicate in bold-face election of any nominee shall be deemed to grant type whether or not the proxy is solicited on behalf such authority: Provided, That the form of proxy of the bank's board of directors or, if provided other so states in bold-face type. than by a majority of the board of directors, shall indicate in bold-face type the identity of the persons Instructions. 1. Paragraph (ii) does not apply in the case of a merger, consolidation or other plan if the election of directors is an integral on whose behalf the solicitation is made, (ii) shall part of the plan. provide a specifically designated blank space for 2. If applicable State law gives legal effect to votes cast against a dating the proxy, and (iii) shall identify clearly and nominee, then in lieu of, or in addition to, providing a means for security holders or withhold authority to vote, the bank should impartially each matter or group of related matters provide a similar means for security holders to vote against each intended to be acted upon whether proposed by the nominee. bank or by security holders. No reference need be made, however, to matters as to which discretionary (e) *** authority is conferred under paragraph (d)(3) of this (6) All proxy statements shall disclose, under an section. appropriate caption, the date by which proposals of (2)(i) Means shall be provided in the form of proxy security holders intended to be presented at the next whereby the person solicited is afforded an oppor- annual meeting must be received by the bank for tunity to specify by boxes a choice between inclusion in the bank's proxy statement and form of approval or disapproval of, or abstention with proxy relating to that meeting, such date to be respect to, each matter or group of related matters calculated in accordance with the provisions of referred to therein as intended to be acted upon, § 206.5(k)(iii)(A). If the date of the next annual other than elections to office. A proxy may confer meeting is subsequently advanced by more than 30 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

158 Federal Reserve Bulletin • February 1981 calendar days or delayed by more than 90 calendar an annual meeting, such material need not be days from the date of the annual meeting to which mailed prior to the first day on which solicitation the proxy statement relates, the bank shall, in a is made on behalf of the bank; timely manner, inform security holders of such (iii) The bank shall be responsible for such proxy change, and the date by which proposals of security statement, form of proxy, or other communicaholders must be received, by any means reasonably tion. calculated to so inform them. (3) In lieu of performing the acts specified above, the bank may, at its option, furnish promptly to such security holder a reasonably current list of the (g) Mailing communications for security holders. If names and addresses of such of the holders of the bank has made or intends to make any proxy record specified in paragraph (g)(l)(i) of this section solicitation subject to this § 206.5, the bank shall as the security holder shall designate, and a list of perform such of the following acts as may be requested the names and addresses of the bankers, brokers, or in writing with respect to the same subject matter or other persons specified in paragraph (g)(l)(ii) of this meeting by any security holder who is entitled to vote section as the security holder shall designate togethon such matter or to vote at such meeting and who er with a statement of the approximate number of shall first defray the reasonable expenses to be in- beneficial owners solicited or to be solicited through curred by the bank in the performance of the act or each such banker, broker, or other person and a acts requested: schedule of the handling and mailing costs of each (1) The bank shall mail or otherwise furnish to such such banker, broker, or other person, if such schedsecurity holder the following information as prompt- ule has been supplied to the bank. ly as practicable after the receipt of such request: The foregoing information shall be furnished (i) A statement of the approximate number of promptly upon the request of the security holder or holders of record of any class of securities, any of at daily or other reasonable intervals as it becomes the holders of which have been or are to be available to the bank. solicited on behalf of the bank, or any group of such holders that the security holder shall desig- (h) False or misleading statements. nate; (1) No solicitation or communication subject to this (ii) If the bank has made or intends to make, section shall be made by means of any Statement, through bankers, brokers, or other persons, any form of proxy, notice of meeting, or other communisolicitation of the beneficial owners of securities cation, written or oral containing any statement of any class, a statement of the approximate that, at the time and in the light of the circumstances number of such beneficial owners, or any group of under which it is made, is false or misleading with such owners that the security holder shall desig- respect to any material fact, or that omits to state nate; any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier commu- (2)(i) *** nication with respect to the solicitation of a proxy (ii) Any such material that is furnished by the for the same meeting or subject matter that has security holder shall be mailed with reasonable become false or misleading. Depending upon parpromptness by the bank after receipt of a tender ticular circumstances, the following may be misleadof the material to be mailed, of envelopes or other ing within the meaning of this paragraph: prediccontainers therefor, of postage or payment for tions as to specific future market values; material postage, and of evidence that such material has that directly or indirectly impugns character, inbeen filed with the Board pursuant to paragraph tegrity, or personal reputation, or directly or in- (f). The bank need not, however, mail any such directly makes charges concerning improper, ilmaterial that relates to any matter to be acted legal, or immoral conduct or associations, without upon at an annual meeting of security holders factual foundation; failure so to identify a Stateprior to the earlier of (a) a day corresponding to ment, form of proxy, and other soliciting material the first date on which the bank's proxy soliciting as clearly to distinguish it from the soliciting mamaterial was released to security holders in con- terial of any other person or persons soliciting for nection with the last annual meeting of security the same meeting or subject matter; claims made holders, or (b) the first day on which solicitation is prior to a meeting regarding the results of a solicimade on behalf of management. With respect to tation. any such material that relates to any matter to be acted upon by security holders otherwise than at Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 159 (i) Special provisions applicable to election contests. forthcoming meeting of the bank's security holders, the bank shall set forth the proposal in its proxy statement and identify it in its form of proxy and (3) Filing of information required by Form F-6. provide means by which security holders can make (i) No solicitation subject to this paragraph (i) the specification required by § 206.5(d)(2). If the shall be made by any person other than the bank issues an information statement pursuant to bank unless at least five business days prior paragraph (a) of this section, it shall identify the thereto, or such shorter period as the Board proposal and indicate the disposition proposed to be may authorize upon a showing of good cause made of the proposal by the management at the therefor, there has been filed with the Board meeting. The bank, however, need not include a and with each exchange upon which any securi- proposal in its information statement if such proposty of the bank is listed, by or on behalf of each al is submitted less than 60 days in advance of a day participant in such solicitation, a statement in corresponding to the date of mailing a proxy stateduplicate containing the information specified ment or information statement in connection with by Form F-6. the last annual meeting of security holders. Notwith- (ii) Within five business days after a solicitation standing the foregoing, the bank shall not be resubject to this paragraph (i) is made by the quired to include the proposal in its proxy statement bank, or such longer period as the Board may or form of proxy unless the security holder (hereinauthorize upon a showing of good cause there- after, the "proponent") has complied with the refor, there shall be filed with the Board and with quirements of this paragraph and paragraphs (k)(2) each exchange upon which any security of the and (3) of this section: bank is listed, by or on behalf of each partici- (i) Eligibility. At the time he submits the propospant in such solicitation, other than the bank, a al, the proponent shall be a record or beneficial statement in duplicate containing the informa- owner of a security entitled to be voted at the tion specified by Form F-6. meeting on his proposal, and he shall continue to (iii) If any solicitation on behalf of the bank or own such security through the date on which the any other person has been made, or if proxy meeting is held. If the bank requests documentary material is ready for distribution, prior to a support for a proponent's claim that he is a solicitation subject to this paragraph (i) in oppo- beneficial owner of a voting security of the issuer, sition thereto, a statement in duplicate contain- the proponent shall furnish appropriate documening the information specified in Form F-6 shall tation within 10 business days after receiving the be filed by or on behalf of each participant in request. In the event the bank includes the proposuch prior solicitation, other than the bank, as nent's proposal in its proxy soliciting materials for soon as reasonably practicable after the com- the meeting and the proponent fails to comply mencement of the solicitation in opposition with the requirement that he continuously be a thereto, with the Board and with each exchange voting security holder through the meeting date, on which any security of the bank is listed. the bank shall not be required to include any proposal submitted by the proponent in its proxy soliciting materials for any meeting held in the (6) Application of this paragraph to annual report. following two calendar years. Notwithstanding the provisions of § 206.5(c), three (ii) Notice. The proponent shall notify the bank in copies of any portion of the annual report referred to writing of his intention to appear personally at the in that paragraph that comments upon or refers to meeting to present his proposal for action. The any solicitation subject to this paragraph (i), or to proponent shall furnish the requisite notice at the any participant in any such solicitation, other than time he submits the proposal, except that if he the solicitation by the bank shall be filed with the was unaware of the notice requirement at that Board as proxy material subject to this § 206.5. time he shall comply with it within 10 business Such portion of the annual report shall be filed with days after being informed of it by the bank. If the the Board in preliminary form at least five business proponent, after furnishing in good faith the nodays prior to the date copies of the report are first tice required by this provision, subsequently desent or given to security holders. termines that he will be unable to appear personally at the meeting, he shall arrange to have another security holder of the issuer present his proposal (k) Proposals of security holders. on his behalf at the meeting. In the event the (1) If any security holder of a bank notifies the bank proponent or his proxy fails, without good cause, of his intention to present a proposal for action at a to present the proposal for action at the meeting, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

160 Federal Reserve Bulletin • February 1981 the bank shall not be required to include any person, orally or in writing as requested, promptly proposals submitted by the proponent in its proxy upon the receipt of any oral or written request soliciting materials for any meeting held in the therefor. If the name and address of the proponent following two calendar years, are omitted from the proxy statement, they shall be (iii) Timeliness. The proponent shall submit his furnished to the Board at the time of filing the bank's proposal sufficiently far in advance of the meeting preliminary proxy material pursuant to § 206.5(f)(1). so that it is received by the bank within the (3) The bank may omit a proposal and any statefollowing time periods: ment in support thereof from its proxy statement (A) Annual Meetings. A proposal to be pre- and form of proxy under any of the following sented at an annual meeting shall be received by circumstances: the management at the issuer's principal execu- (i) If the proposal is, under the laws of the issutive offices not less than 90 days in advance of a er's domicile, not a proper subject for action by date corresponding to the date set forth on the security holders; bank's proxy statement released to security holders in connection with the previous year's NOTE: A proposal that may be improper under the applicable State annual meeting of security holders, except that law when framed as a mandate or directive may be proper when framed as a recommendation or request. no annual meeting was held in the previous year or the date of the annual meeting has been changed by more than 30 calendar days from (ii) If the proposal would, if implemented, require the date of the previous year's annual meeting a the issuer to violate any State law or Federal law proposal shall be received by the bank in rea- of the United States, or any law of any foreign sonable time before the solicitation is made. jurisdiction, to which the issuer is subject, except (B) Other Meetings. A proposal to be present that this provision shall not apply with respect to at any meeting other than an annual meeting any foreign law compliance with which would be shall be received at a reasonable time before the violative of any State law or Federal law of the solicitation is made. United States; (iii) If the proposal or the supporting statement is NOTE: In order to curtail controversy as to the date on which a contrary to any of the Board's proxy rules and proposal was received by the bank, it is suggested that proponents regulations, including § 206.5(h) which prohibits submit their proposals by Certified Mail-Return Receipt Requested. false or misleading statements in proxy soliciting materials; (iv) Number and length of proposals. The propo- (iv) If the proposal relates to the enforcement of a nent may submit a maximum of two proposals of personal claim or the redress of a personal grievnot more than 300 words each for inclusions in the ance against the bank, or any other person; management's proxy materials for a meeting of (v) If the proposal deals with a matter that is not security holders. If the proponent fails to comply significantly related to the bank's business; with either of these requirements, or if he fails to (vi) If the proposal deals with a matter that is comply with the 200-word limit on supporting beyond the bank's power to effectuate; statements mentioned in paragraph (k)(2) of this (vii) If the proposal deals with a matter relating to section, he shall be provided the opportunity by the conduct of the ordinary business operations of the bank to reduce, within 10 business days, the the bank; items submitted by him to the limits required by (viii) If the proposal relates to an election to this rule. office; (2) If the bank opposes any proposal received from (ix) If the proposal is counter to a proposal to be a proponent, it shall also, at the request of the submitted by the bank at the meeting; proponent, include in its proxy statement a state- (x) If the proposal has been rendered moot; ment of the proponent of not more than 200 words in (xi) If the proposal is substantially duplicative of support of the proposal, which statement shall not a proposal previously submitted to the manageinclude the name and address of the proponent. The ment by another proponent, which proposal will statement and request of the proponent shall be be included in the bank's proxy materials for the furnished to the bank at the time that the proposal is meeting; furnished, and the bank shall not be responsible for (xii) If substantially the same proposal has presuch statement. The proxy statement shall also viously been submitted to security holders in the include either the name and address of the propo- bank's proxy statement and form of proxy relating nent or a statement that such information will be to any annual or special meeting of security furnished by the issuer or by the Board to any holders held within the preceding five calendar Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 161 years, it may be omitted from the bank's proxy (j) Exemption for acquisitions under dividend reinvestmaterials relating to any meeting of security hold- ment plans. Any acquisition of securities resulting ers held within three calendar years after the from reinvestment of dividends or interest shall be latest such previous submission; Provided, That: exempt from section 16 if it is made pursuant to a plan (A) If the proposal was submitted at only one providing for the regular reinvestment in such securimeeting during such preceding period, it re- ties of dividends payable thereon or of dividends or ceived less than 3 per cent of the total number interest payable on other securities of the same bank: of votes cast in regard thereto; or Provided, That the plan is made available on the same (B) If the proposal was submitted at only two terms to all holders of securities of the class on which meetings during such preceding period, it re- the reinvested dividends or interest are being paid. ceived at the time of its second submission less than 6 per cent of the total number of votes cast in regard thereto; or 5. A new section, § 206.8, is added to Part 206 to read (C) If the proposal was submitted at three or as follows: more meetings during such preceding period, it received at the time of its latest submission less Section 206.8—Tender Offers. than 10 per cent of the total number of votes cast in regard thereto; and (a) Scope of and definitions applicable to this section (xiii) If the proposal relates to specific amounts of (1) Scope, (i) No person, directly or indirectly by cash or stock dividends. use of the mails or any means or instrumentality (4) Whenever the bank asserts, for any reason, that of interstate commerce or any facility of a national a proposal and any statement in support thereof securities exchange or otherwise, shall make a received from a proponent may properly be omitted tender offer for, or a request or invitation for from its proxy statement and form of proxy, it shall tenders of, any class of equity security which is file with the Board, not later than 50 days prior to registered pursuant to Section 12 of the Act, of a the date the preliminary copies of the proxy state- State member bank if, after consummation therement and form of proxy are filed pursuant to of, such person would, directly or indirectly, be § 206.5(f)(1), or such shorter period prior to such the beneficial owner of more than 5 per cent of date as the Board or its staff may permit, five copies such class, unless on the date of the commenceof the following items: (i) The proposal; (ii) any ment of the tender offer such person has complied statement in support thereof as received from the with the requirements of paragraph (c)(1) of this proponent; (iii) a statement of the reasons why the section. The definition of beneficial owner set bank deems such omission to be proper in the forth in § 206.4(h)(5)(i) for the purposes of Section particular case; and (iv) where such reasons are 13(d)(1) of the Act shall apply also for purposes of based on matters of law, a supporting opinion of Section 14(d)(1) of the Act. counsel. The bank shall at the same time, if it has (2) Definitions. Unless the context otherwise renot already done so, notify the proponent of its quires, all terms used in this section have the intention to omit the proposal from its proxy state- same meaning as in the Act and in § 206.2 promulment and form of proxy and shall forward to him a gated thereunder. In addition, for purposes of copy of the statement of reasons why the bank sections 14(d) and 14(e) of the Act and this section deems the omission of the proposal to be proper and the following definitions apply: a copy of such supporting opinion of counsel. (i) The term "bidder" means any person who makes a tender offer or on whose behalf a tender offer is made; 3. Section 206.5 is amended by deleting paragraphs (1) (ii) The term "subject bank" means any State memand (m). The paragraph designations are being re- ber bank which is the issuer of securities which served. are sought by a bidder pursuant to a tender offer; 4. Section 206.6 is amended by adding a new para- (iii) The term "security holders" means holders graph (j) and present paragraphs (j) through (u) are of record and beneficial owners of securities redesignated as paragraphs (k) through (v). which are the subject of a tender offer; (iv) The term "beneficial owner" shall have the same meaning as that set forth in § 206.4(h)(5)(i): Section 206.6—"Insiders" Securities Provided, however, That, except with respect to Transaction and Reports under Section 16 of paragraphs (c) and (i)(4) of this section and Item 6 the Act. of the Form F-13, the term shall not include a person who does not have or share investment Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

162 Federal Reserve Bulletin • February 1981 power or who may be deemed to be a beneficial Act of 1933, are first published or sent or given by owner by virtue of his right to acquire beneficial the bidder to security holders; or ownership as set forth in § 206.4(h)(5)(i) (v) The tender offer is first published or sent or (v) The term "tender offer material" means: given to security holders by the bidder by any (A) The bidder's formal offer, concluding all means not otherwise referred to in subparagraphs the material terms and conditions of the tender (l)(i) through (l)(iv) of this paragraph. offer and all amendments thereto; (2) Public announcement. A public announcement (B) The related transmittal letter (whereby se- by a bidder through a press release, newspaper curities of the subject bank which are sought in advertisement or public statement which includes the tender offer may be transmitted to the the information at subparagraph (3) of this parabidder or its depository) and all amendments graph with respect to a tender offer in which the thereto; and consideration consists solely of cash and/or securi- (C) Press releases, advertisements, letters and ties exempt from registration under section 3 of the other documents published by the bidder or Securities Act of 1933 shall be deemed to constitute sent or given by the bidder to security holders the commencement of a tender offer under subparawhich, directly or indirectly, solicit, invite or graph (l)(v) of this paragraph except that such request tenders of the securities being sought in tender offer shall not be deemed to be first published the tender offer; or sent or given to security holders by the bidder (vi) The term "business day" means any day, under subparagraph (l)(v) or this paragraph on the other than Saturday, Sunday or a Federal holiday, date of such public announcement if within five and shall consist of the time period from 12:01 business days of such public announcement, the a.m. through 12:00 midnight Eastern time. In bidder either: computing any time period under section 14(d)(5) (i) Makes a subsequent public announcement or section 14(d)(6) of the Act or under CFR Part stating that the bidder has determined not to 206 the date of the event which begins the running continue with such tender offer, in which event of such time period shall be included except that if subparagraph (l)(v) of this paragraph shall not such event occurs in other than a business day apply to the initial public announcement; or such period shall begin to run on and shall include (ii) Complies with paragraph (c)(1) of this section the first business day thereafter; and and contemporaneously disseminates the disclo- (vii) The term "security position listing" means, sure required by paragraph (f) of this section to with respect to securities of any issuer held by a security holders pursuant to paragraph (d) of this registered clearing agency in the name of the section or otherwise in which event: clearing agency or its nominee, a list of those (A) The date of commencement of such tender participants in the clearing agency on whose be- offer under subparagraph (1) of this paragraph half the clearing agency holds the bank's securi- will be determined by the date the information ties and of the participants' respective positions in required by paragraph (f) of this section is first such securities as of a specified date. published or sent or given to security holders pursuant to paragraph (d) of this section or (b) Date of commencement of a tender offer. otherwise; and (1) Commencement. A tender offer shall commence (B) Notwithstanding subparagraph (2)(ii)(A) of for the purposes of section 14(d) of the Act and the this paragraph, section 14(d)(7) of the Act shall rules promulgated thereunder at 12:01 a.m. on the be deemed to apply to such tender offer from date when the first of the following events occurs: the date of such public announcement. (i) The long-form publication of the tender offer is (3) Information. The information referred to in subfirst published by the bidder pursuant to para- paragraph (2) of this paragraph is as follows: graph (d)(l)(i) of this section. (i) The identity of the bidder. (ii) The summary advertisement of the tender (ii) The identity of the subject company ; and offer is first published by the bidder pursuant to (iii) The amount and class of securities being paragraph (d)(l)(i) of this section. sought and the price or range of prices being (iii) The summary advertisement or the long-form offered therefor. publication of the tender offer is first published by (4) Announcements not resulting in commencement. the bidder pursuant to paragraph (d)(l)(i) of this A public announcement by a bidder through a press section. release, newspaper advertisement or public state- (iv) Definitive copies of a tender offer, in which ment which only discloses the information in subthe consideration offered by the bidder consists of paragraphs (4)(i) through (4)(iii) of this paragraph securities registered pursuant to the Securities concerning a tender offer in which the consideration Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 163 consists solely of cash and/or securities exempt copy of such Form F-13, including all exhibits from registration under section 3 of the Securities thereto: Act of 1933 shall not be deemed to constitute the (A) To each national securities exchange where commencement of a tender offer under subpara- such class of the subject bank's securities is graph (l)(v) of this paragraph. registered and listed for trading (which may be (i) The identity of the bidder. based upon information contained in the subject (ii) The identity of the subject company; and bank's most recent Annual Report on Form F-2 (iii) A statement that the bidder intends to make a (12 CFR 206.42) filed with the Board unless the tender offer in the future for a class of equity bidder has reason to believe that such informasecurities of the subject bank which statement tion is not current) which telephonic notice does not specify the amount of securities of such shall be made when practicable prior to the class to be sought or the consideration to be opening of each such exchange; and offered therefor. (B) To the National Association of Securities (5) Public Announcement. A public announcement Dealers, Inc. ("NASD") if such class of the concerning a tender offer by a bidder through a press subject bank's securities are authorized for release, newspaper advertisement or public state- quotation in the NASDAQ interdealer quotament which states that the offering will be made only tion system. by means of a prospectus and discloses the name of (2) Additional materials. The bidder shall file with the bank and the title of the securities to be surren- the Board six copies of any additional tender offer dered in exchange for the securities to be offered materials as an exhibit to the Form F-13 required by and the basis upon which the exchange may be made this section, and if a material change occurs in the where the consideration consists solely or in part of information set forth in such Form F-13, six copies securities to be registered under the Securities Act of an amendment to Form F-13 each of which shall of 1933 shall not be deemed to constitute the com- include all exhibits other than those required by mencement of a tender offer under subparagraph Item 11(a) of Form F-13 disclosing such change and (l)(v) of this paragraph: Provided. That such bidder shall send a copy of such additional tender offer files a registration statement with respect to such material or such amendment to the subject bank and securities promptly after such public announce- to any exchange and/or the NASD, as required by ment. subparagraph (1) of this paragraph, promptly but not later than the date such additional tender offer (c) Filing and transmission of tender offer statement. material or such change is first published, sent or (1) Filing and transmittal. No bidder shall make a given to security holders. tender offer if, after consummation thereof, such (3) Certain announcements. Notwithstanding the bidder would be the beneficial owner of more than 5 provisions of subparagraph (2) of this paragraph, if percent of the class of the subject bank securities for the additional tender offer material or an amendment which the tender offer is made, unless as soon as to Form F-13 discloses only the number of shares practicable on the date of the commencement of the deposited to date, and/or announces an extension of tender offer such bidder: the time during which shares may be tendered, then (i) Files with the Board six copies of a Tender the bidder may file such tender offer material or Offer Statement on Form F-13 (12 CFR 206.82) amendment and send a copy of such tender offer including all exhibits thereto; material or amendment to the subject bank, any (ii) Hand delivers a copy of such Form F-13, exchange and/or the NASD, as required by subparaincluding all exhibits thereto; graph (1) of this paragraph, promptly after the date (A) To the subject bank at its principal execu- such tender offer material is first published or sent tive office; and or given to security holders. (B) To any other bidder, which has filed a Form F-13 with the Board relating to a tender offer (d) Dissemination of certain tender offers that has not yet terminated for the same class of (1) Materials deemed published or sent or given. A securities of the subject bank, at such bidder's tender offer in which the consideration consists principal executive office or at the address of solely of cash and/or securities exempt from registhe person authorized to receive notices and tration under section 3 of the Securities Act of 1933 communications (which is disclosed on the cov- shall be deemed "published or sent or given to er sheet of such other bidder's Form F-13); security holders" within the meaning of section (iii) Gives telephonic notice of the information 14(d)(1) of the Act if the bidder complies with all of required by paragraphs (f)(5)(ii) (A) and (B) of this the requirements of any one of the following subparsection and mails by means of first class mail a agraphs: Provided, however, That any such tender Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

164 Federal Reserve Bulletin • February 1981 offer may be published or sent or given to security of paragraph (e)(5) of this section, the subject shall holders by other methods, but with respect to sum- comply with the following: mary publication, and the use of stockholder lists (i) The subject bank shall notify promptly transfer and security position listings pursuant to paragraph agents and any other person who will assist the (e), paragraphs (d)(l)(ii) and (iii) are exclusive. subject in complying with the requirements of this (i) Long-form publication. The bidder makes ade- paragraph of the receipt by the subject bank of a quate publication in a newspaper of long-form request by a bidder pursuant to this paragraph. publication of the tender offer. (ii) The subject bank shall promptly ascertain (ii) Summary publication. whether the most recently prepared stockholder (A) The bidder makes adequate publication in a list, written or otherwise, within the access of the newspaper or newspapers of a summary adver- subject bank was prepared as of a date earlier than tisement of the tender offer; and ten business days before the date of the bidder's (B) Mails by first class mail or otherwise fur- request and, if so, the subject bank shall promptly nishes with reasonable promptness the bidder's prepare or cause to be prepared a stockholder list tender offer materials to any security holder as of the most recent practicable date which shall who requests such tender offer materials pursu- not be more than ten business days before the ant to the summary advertisement or otherwise. date of the bidder's request. (iii) Use of stockholder lists and security position (iii) The subject bank shall make an election to listings. Any bidder using stockholder lists and comply and shall comply with all of the provisions security position listings pursuant to paragraph (e) of either subparagraph (2) or subparagraph (3) of of this section shall comply with subparagraphs this paragraph. The subject's bank's election, (l)(i) or (l)(ii) of this paragraph on or prior to the once made, shall not be modified or revoked date of the bidder's request for such lists or listing during the bidder's tender offer and extensions pursuant to paragraph (e)(1) of this section. thereof. (2) Adequate publication. Depending on the facts (iv) No later than the second business day after and circumstances involved, adequate publication the date of the bidder's request, the subject bank of a tender offer pursuant to this section may require shall orally notify the bidder, which notification publication in a newspaper with a national circula- shall be confirmed in writing, of the subject tion or may only require publication in a newspaper bank's election made pursuant to subparagraph with metropolitan or regional circulation or may (l)(iii) of this paragraph. Such notification shall require publication in a combination thereof: Pro- indicate (A) the approximate number of security vided, however, That publication in all editions of a holders of the class of securities being sought by daily newspaper with a national circulation shall be the bidder and, (B) if the subject bank elects to deemed to constitute adequate publication. comply with subparagraph (2) of this paragraph, (3) Publication of changes. If a tender offer had been appropriate information concerning the location published or sent or given to security holders by one for delivery of the bidder's tender offer materials or more of the methods enumerated in subparagraph and the approximate direct costs incidental to the (1) of this paragraph a material change in the infor- mailing to security holders of the bidder's tender mation published, sent or given to security holders offer materials computed in accordance with subshall be promptly disseminated to security holders paragraph (7)(ii) of this paragraph. in a manner reasonably designed to inform security (2) Mailing of tender offer materials by the subject holders of such change: Provided, however, That if bank. A subject bank which elects pursuant to the bidder has elected pursuant to paragraph (e)(6)(i) subparagraph (l)(iii) of this paragraph to comply of this section to require the subject company to dis- with the provisions of this paragraph shall perform seminate amendments disclosing material changes the acts prescribed by the following subparagraphs. to the tender offer materials pursuant to paragraph (i) The subject bank shall promptly contact each (e) of this section the bidder shall disseminate mate- participant named on the most recent security rial changes in the information published or sent or position listing of any clearing agency within the given to security holders at least pursuant to para- access of the subject bank and make inquiry of graph (e) of this section. each such participant as to the approximate number of beneficial owners of the subject bank (e) Dissemination of certain tender offers by the use securities being sought in the tender offer held by of stockholder lists. each such participant. (1) Obligations of the subject bank. Upon receipt by (ii) No later than the third business day after a subject bank at its principal executive offices of a delivery of the bidder's tender offer materials bidder's written request, meeting the requirements pursuant to subparagraph (7)(i) of this paragraph, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 165 the subject bank shall begin to mail or cause to be paragraphs (l)(ii) and (2)(v) of this paragraph and mailed by means of first class mail a copy of the shall transmit or cause to be transmitted sufficient bidder's tender offer materials to each person copies of such amendment to each participant whose name appears as a record holder of the named on security position listings who received class of securities for which the offer is made on sets of the bidder's tender offer materials pursuant the most recent stockholder list referred to in to subparagraph (2)(iii) of this paragraph. subparagraph (l)(ii) of this paragraph. The subject (vii) The subject bank shall not include any combank shall use its best efforts to complete the munication other than the bidder's tender offer mailing in a timely manner but in no event shall materials or amendments thereto in the envelopes such mailings be completed in a substantially or other containers furnished by the bidder. greater period of time than the subject bank would (viii) Promptly following the termination of the complete a mailing to security holders of its own tender offer, the subject bank shall reimburse the materials relating to the tender offer. bidder the excess, if any, of the amounts ad- (iii) No later than the third business day after the vanced pursuant to subparagraph (6)(iii)(C) over delivery of the bidder's tender offer materials the direct costs incidental to compliance by the pursuant to subparagraph (7)(i) of this paragraph, subject bank and its agents in performing the acts the subject bank shall begin to transmit or cause required by this paragraph computed in accorto be transmitted a sufficient number of sets of the dance with subparagraph (7)(ii) of this paragraph. bidder's tender offer materials to the participants (3) Delivery of stockholder lists and security posinamed on the security position listings described tion listings. A subject bank which elects pursuant in subparagraph (2)(i) of this paragraph. The sub- to subparagraph (l)(iii) of this paragraph to comply ject bank shall use its best efforts to complete the with the provisions of this paragraph shall perform transmittal in a timely manner but in no event the acts prescribed by the following: shall such transmittal be completed in a substan- (i) No later than the third business day after the tially greater period of time than the subject bank date of the bidder's request, the subject bank shall would complete a transmittal to such participants furnish to the bidder at the subject bank's principursuant to security position listings or clearing pal executive office a copy of the names and agencies of its own material relating to the tender addresses of the record holders on the most recent offer. stockholder list referred to in subparagraph (l)(ii) (iv) The subject bank shall promptly give oral of this paragraph and a copy of the names and notification to the bidder, which notification shall addresses of participants identified on the most be confirmed in writing, of the commencement of recent security position listing of any clearing the mailing pursuant to subparagraph (2)(ii) of this agency which is within the access of the subject paragraph and of" the transmittal pursuant to sub- bank. paragraph (2)(iii) of this paragraph. (ii) If the bidder has elected pursuant to subpara- (v) During the tender offer and any extension graph (6)(i) of this paragraph to require the subject thereof the subject bank shall use reasonable bank to disseminate amendments disclosing mateefforts to update the stockholder list and shall mail rial changes to the tender offer materials, the or cause to be mailed promptly following each subject bank shall update the stockholder list by update a copy of the bidder's tender offer materi- furnishing the bidder with the name and address als (to the extent sufficient sets of such materials of each record holder named on the stockholder have been furnished by the bidder) to each person list, and not previously furnished to the bidder, who has become a record holder since the later of promptly after such information becomes avail- (A) the date of preparation of the most recent able to the subject bank during the tender offer stockholder list referred to in subparagraph and any extensions thereof. (e)(l)(ii) of this section or (B) the last preceding (4) Liability of subject bank and others. Neither the update. subject bank nor any affiliate or agent of the subject (vi) If the bidder has elected pursuant to subpara- bank nor any clearing agency shall be: graph (6)(i) of this paragraph to require the subject (i) Deemed to have made a solicitation or recombank to disseminate amendments disclosing mate- mendation respecting the tender offer within the rials changes to the tender offer materials pursu- meaning of section 14(d)(4) based solely upon the ant to this paragraph, the subject bank, promptly compliance by the subject bank or any affiliate or following delivery of each such amendment, shall agent of the subject bank with one or more mail or cause to be mailed a copy of each such requirements of this section; amendment to each record holder whose name (ii) Liable under any provision of the Federal appears on the shareholder list described in sub- securities laws to the bidder or to any security Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

166 Federal Reserve Bulletin • February 1981 holder based solely upon the inaccuracy of the and shall not be revocable by the bidder during current names or addresses on the stockholder list the tender offer and extensions thereof. or security position listing, unless such inaccura- (ii) With respect to a tender offer subject to cy results from a lack of reasonable care on the section 14(d)(1) of the Act in which the considerpart of the subject bank or any affiliate or agent of ation consists solely of cash and/or securities the subject bank. exempt from registration under section 3 of the (iii) Deemed to be an "underwriter'' within the Securities Act of 1933, the bidder shall comply meaning of section (2)(11) of the Securities Act of with the requirements of paragraph (d)(l)(iii) of 1933 for any purpose of that Act or any rule or this section. regulation promulgated thereunder based solely (iii) If the subject bank elects to comply with upon the compliance or noncompliance by the subparagraph (2) of this paragraph, subject bank or any affiliate or agent of the subject (A) The bidder shall promptly deliver the tender bank with one or more of the requirements of this offer materials after receipt of the notification paragraph; from the subject bank, as provided in subpara- (iv) Liable under any provision of the federal graph (l)(iv) of this paragraph; securities laws for the disclosure in the bidder's (B) The bidder shall promptly notify the subject tender offer materials, including any amendment bank of any amendment to the bidder's tender thereto, based solely upon the compliance or offer materials requiring compliance by the subnoncompliance by the subject bank or any affiliate ject bank with subparagraph (2)(vi) of this paraor agent of the subject bank with one or more of graph and shall promptly deliver such amendthe requirements of this paragraph. ment to the subject bank pursuant to subpara- (5) Content of the bidder's request. The bidder's graph (7)(i) of this paragraph; written request referred to in subparagraph (1) of (C) The bidder shall advance to the subject this paragraph shall include the following: bank an amount equal to the approximate cost (i) The identity of the bidder; of conducting mailings to security holders com- (ii) The title of the class of securities which is the puted in accordance with subparagraph (7)(ii) of subject of the bidder's tender offer; this paragraph; (iii) A statement that the bidder is making a (D) The bidder shall promptly reimburse the request to the subject bank pursuant to subpara- subject bank for the direct costs incidental to graph (1) of this paragraph for the use of the compliance by the subject bank and its agents in stockholder list and security position listings for performing the act required by this section the purpose of disseminating a tender offer to computed in accordance with subparagraph security holders; (7)(ii) of this paragraph which are in excess of (iv) A statement that the bidder is aware of and the amount advanced pursuant to subparagraph will comply with the provisions of subparagraph (6)(iii)(C) of this paragraph, and (6) of this paragraph; (E) The bidder shall mail by means of first class (v) A statement as to whether or not it has elected mail or otherwise furnish with reasonable pursuant to subparagraph (6)(i) of this paragraph promptness the tender offer materials to any to disseminate amendments disclosing material security holder who requests such materials. changes to the tender offer materials pursuant to (iv) If the subject bank elects to comply with this paragraph; and subparagraph (3) of this paragraph: (vi) The name, address and telephone number of (A) The subject bank shall use the stockholder the person whom the subject bank shall contact and security position listings furnished to the pursuant to subparagraph (l)(iv) of this para- bidder pursuant to subparagraph (3) of this graph. paragraph exclusively in the dissemination of (6) Obligations of the bidder. Any bidder who re- tender offer materials to security holders in quires that a subject bank comply with the provi- connection with the bidder's tender offer and sions of subparagraph (1) of this paragraph, shall extensions thereof; comply with the following: (B) The bidder shall return the stockholder lists (i) The bidder shall make an election whether or and security position listings furnished to the not to require the subject bank to disseminate bidder pursuant to subparagraph (3) of this amendments disclosing material changes to the paragraph promptly after the termination of the tender offer materials pursuant to this paragraph, bidder's tender offer; which election shall be included in the request (C) The bidder shall accept, handle and return referred to in subparagraph (1) of this paragraph the stockholder lists and security position list- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 167 ings furnished to the bidder pursuant to subpar- (ii) The approximate direct cost of mailing the agraph (3) of this paragraph to the subject bank bidder's tender offer materials shall be computed on a confidential basis; by adding (A) the direct cost incidental to the (D) The bidder shall not retain any stockholder mailing of the subject bank's last annual report to list or security position listing furnished by the shareholders (excluding employee time), less the subject bank pursuant to subparagraph (3) of costs of preparation and printing of the report, this paragraph, or any copy thereof, nor retain and postage, plus (B) the amount of first class any information derived from any such list or postage required to mail the bidder's tender offer listing or copy thereof after the termination of materials. The approximate direct costs incidental the bidder's tender offer; to the mailing of the amendments to the bidder's (E) The bidder shall mail by means of first class tender offer materials shall be computed by addmail, at its own expense, a copy of its tender ing (C) the estimated direct costs of preparing offer materials to each person whose identity mailing labels, or updating shareholder lists and of appears on the stockholder list as furnished and third party handling charges plus (D) the amount updated by the subject bank pursuant to sub- of first class postage required to mail the bidder's paragraphs (3)(i) and (3)(ii) of this paragraph; amendment. Direct costs incidental to the mailing (F) The bidder shall contact the participants of the bidder's tender offer materials thereto when named on the security position listing of any finally computed may include all reasonable clearing agency, make inquiry of each partici- charges paid by the subject bank to third parties pant as to the appropriate number of sets of for supplies or services, including costs attendant tender offer materials required by each such to preparing shareholder lists, mailing labels, hanparticipant, and furnish, at its own expense, dling the bidder's materials, contacting particisufficient sets of tender offer materials and any pants named on security position listings and for amendment thereto to each such participant for postage, but shall exclude indirect costs, such as subsequent transmission to the beneficial own- employee time which is devoted to either contesters of the securities being sought by the bidder; ing or supporting the tender offer on behalf of the (G) The bidder shall mail by means of first class subject bank. The final billing for direct costs shall mail or otherwise furnish with reasonable be accompanied by an appropriate accounting in promptness the tender offer materials to any reasonable detail. security holder who requests such materials; and (f) Disclosure requirements with respect to tender (H) The bidder shall promptly reimburse the offers. subject bank for direct costs incidental to com- (1) Information required on date of commencement pliance by the subject bank and its agents in (i) Long-form publication. If a tender offer is performing the acts required by this section published, sent or given to security holders on the computed in accordance with subparagraph date of commencement by means or long-form (7)(ii) of this paragraph. publication pursuant to paragraph (d)(l)(i) of this (7) Delivery of materials, computation of direct section such long-form publication shall include costs. the information required by subparagraph (5)(i) of (i) Whenever the bidder is required to deliver this paragraph. tender offer materials or amendments to tender (ii) Summary publication. If a tender offer is offer materials, the bidder shall deliver to the published, sent or given to security holders on the subject bank at the location specified by the date of commencement by means of summary subject bank in its notice given pursuant to sub- publication pursuant to paragraph (d)(l)(ii) of this paragraph (l)(iv) of this paragraph a number of section: sets of the materials or of the amendment, as the (A) The summary advertisement shall contain case may be, at least equal to the approximate and shall be limited to, the information required number of security holders specified by the sub- by subparagraph (5)(ii) of this paragraph; and ject bank in such notice, together with appropriate (B) The tender offer materials furnished by the envelopes or other containers therefor: Provided, bidder upon the request of any security holder however, That such delivery shall be deemed not shall include the information required by subto have been made unless the bidder has complied paragraph (5)(i) of this paragraph. with subparagraph (6)(iii)(C) of this paragraph at (iii) Use of stockholder lists and security position the time the materials or amendments, as the case listings. If a tender offer is published or sent or may be, are delivered. given to security holders on the date of com- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

168 Federal Reserve Bulletin • February 1981 mencement by the use of stockholder lists and sought and the type and amount of considersecurity position listings pursuant to paragraph ation being offered therefor; (d)(l)(iii). (D) The scheduled expiration date of the tender (A) Either (1) the summary advertisement shall offer, whether the tender offer may be extended contain, and shall be limited to the information and, if so, the procedures for extension of the required by subparagraph (5)(ii) of this para- tender offer; graph, or (2) if long-form publication of the (E) The exact dates prior to which, and after tender offer is made, such long-form publication which, security holders who deposit their secushall include the information required by sub- rities will have the right to withdraw their paragraph (5)(i) of this paragraph, and securities pursuant to section 14(d)(5) of the Act (B) The tender offer materials transmitted to and paragraph (g) of this section and the manner security holders pursuant to such lists and in which shares will be accepted for payment security position listings and furnished by the and in which withdrawal may be effected; bidder upon the request of any security holder (F) If the tender offer is for less than all the shall include the information required by sub- outstanding securities of a class of equity securparagraph (5)(i) of this paragraph. ities and the bidder is not obligated to purchase (iv) Other tender offers. If a tender offer is pub- all of the securities tendered, the period or lished or sent or given to security holders other periods, and in the case of the period from the than pursuant to paragraph (d)(1) of this section commencement of the offer, the date of the the tender offer materials that are published or expiration of such period during which the sent or given to security holders on the date of securities will be taken up pro rata pursuant to commencement of such offer shall include the Section 14(d)(6) of the Act or paragraph (h) and information required by subparagraph (5)(i) of this the present intention or plan of the bidder with paragraph. respect to the tender offer in the event of an (2) Information required in summary advertisement oversubscription by security holders; made after commencement. A summary advertise- (G) The disclosure required by Items 1(c); 2 ment published subsequent to the date of com- (with respect to persons other than the bidder, mencement of the tender offer shall include at least excluding sub-items (b) and (d)); 3; 4; 5; 6; 7; 8; the information specified in subparagraphs (5)(i)(A)- and 10 of Form F-13 (12 CFR 206.82) or a fair (D) and (5)(ii)(D) of this paragraph. and adequate summary thereof; Provided, how- (3) Information required in other tender offer mate- ever, That negative responses to any such item rials published after commencement. Except for or sub-item of Form F-13 need not be included; summary advertisements described in subparagraph and (2) of this paragraph and tender offer materials (H) The disclosure required by Item 9 of Form described in subparagraphs (l)(ii)(B) and (l)(iii)(B) F-13 or a fair and adequate summary thereof. If of this paragraph, additional tender offer materials the information required by Item 9 is summapublished, sent or given to security holders subse- rized, appropriate instructions shall be included quent to the date of commencement shall include the stating how complete financial information can information required by subparagraphs (5)(i) of this be obtained. paragraph and may omit any of the information (ii) Summary publication. The information rerequired by subparagraphs (5)(i)(E-H) of this para- quired to be disclosed by subparagraphs (l)(ii)(A) graph which has been previously furnished by the and (l)(iii)(A)(a) of this paragraph in a summary bidder in connection with the tender offer. advertisement is as follows: (4) Material changes. A material change in the infor- (A) The information required by subparagraph mation published or sent or given to security holders (5)(i)(A) through (F) of this paragraph; shall be promptly disclosed to security holders in (B) If the tender offer is for less than all the additional tender offer materials. outstanding securities of a class of equity secu- (5) Information to be included rities, a statement as to whether the purpose or (i) Long-form publication and tender offer materi- one of the purposes of the tender offer is to als. The information required to be disclosed by acquire or influence control of the business of subparagraphs (l)(i), (l)(ii)(B), (l)(iii)(A)(b) and the subject bank; (l)(iv) of this paragraph shall include the follow- (C) A statement that the information required ing: by subparagraph (5)(i)(G) of this paragraph is (A) The identity of the holder; incorporated by reference into the summary (B) The identity of the subject bank; advertisement; (C) The amount of class of securities being (D) Appropriate instructions as to how security Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 169 holders may obtain promptly, at the bidder's (12 CFR 206.82) pursuant to paragraph (c) of this expense, the bidder's tender offer materials; section from such other bidder. and (4) Notice of withdrawal. Notice of withdrawal pur- (E) In a tender offer published or sent or given suant to this paragraph shall be deemed to be timely to security holders by the use of stockholder upon the receipt by the bidder's depository of a lists and security position listings pursuant to written notice of withdrawal specifying the name(s) paragraph (d)(l)(iii) of this section a statement of the tendering stockholder(s), the number or that a request is being made for such lists and amount of the securities to be withdrawn and the listings and that tender offer materials will be name(s) in which the certificate(s) is (are) registered, mailed to record holders and will be furnished if different from that of the tendering security holdto brokers, banks and similar persons whose ers). A bidder may impose other reasonable rename appears or whose nominee appears on the quirements, including certificate numbers and a list of stockholders or, if applicable, who are signed request for withdrawal accompanied by a listed as participants in a clearing agency's signature guarantee, as conditions precedent to the security position listing for subsequent trans- physical release of withdrawn securities. mittal to beneficial owners of such securities, (iii) No transmittal letter. Neither the initial sum- (h) Exemption from statutory pro rata requirements. mary advertisement nor any subsequent summary The limited pro rata provisions of section 14(d)(6) of advertisement shall include a transmittal letter the Act shall not apply to any tender offer for less than (whereby securities of the subject bank which are all the outstanding securities of the class for which the sought in the tender offer may be transmitted to tender offer is made to the extent that the bidder the bidder or its depository) or any amendment provides in the tender offer materials disseminated to thereto. security holders on the date of commencement of the tender offer that in the event more securities are deposited during the period(s) described in subpara- (g) Additional withdrawal rights, graphs (1) and/or (2) of this paragraph than the bidder (1) Rights. In addition to the provisions of section is bound or willing to accept for payment, all securities 14(d)(5) of the Act, any person who has deposited deposited during such period(s) will be accepted for securities pursuant to a tender offer has the right to payment as nearly as practicable on a pro rata basis, withdraw any such securities during the following disregarding fractions, according to the number of periods: securities deposited by each depositor. (i) At any time until the expiration of fifteen (1) Any period which exceeds ten days from the business days from the date of commencement of date of commencement of the tender offer. such tender offer; and (2) Any period which exceeds ten days from the (ii) On the date and until the expiration of ten date that notice of an increase in the consideration business days following the date of commence- offered is first published, sent or given to security ment of another bidder's tender offer other than holders. pursuant to paragraph (b)(2) of this section for securities of the same class: Provided, That the (i) Solicitation!recommendations statements with bidder has received notice or otherwise has respect to certain tender offers. knowledge of the commencement of such other (1) Filing and transmittal of recommendation statetender offer: And, provided further, That with- ment. No solicitation or recommendation to security drawal may only be effected with respect to holders shall be made by recommendation to securisecurities which have not been accepted for pay- ty holders shall be made by any person described in ment in the manner set forth in the bidder's tender subparagraph (4) of this paragraph with respect to a offer prior to the date such other tender offer is tender offer for such securities unless as soon as first published, sent or given to security holders. practicable on the earliest date such solicitation or (2) Computation of time periods. The time periods recommendation is first published or sent or given to for withdrawal rights pursuant to this section shall security holders such person complies with the be computed on a concurrent, as opposed to a following subparagraphs. consecutive, basis. (i) Such persons shall file with the Board six (3) Knowledge of competing offer. For the purposes copies of a Tender Offer Solicitation/Recommenof this section, a bidder shall be presumed to have dation Statement on Form F-12 (12 CFR 206.81) knowledge of another tender offer, as described in including all exhibits thereto; and subparagraph (l)(ii) of this paragraph, on the date (ii) If such person is either the subject bank or an such bidder receives a copy of the Form F-13 affiliate of the subject bank, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

170 Federal Reserve Bulletin • February 1981 (A) Such person shall deliver a copy of the class of securities by such person with respect to Form F-12 to the bidder at its principal office or such tender offer. at the address of the person authorized to (4) Applicability. receive notices and communications (which is (i) Except as is provided in subparagraphs (4)(ii) set forth on the cover sheet of the bidder's and (5) of this paragraph, paragraph (i) shall only Form F-13 (12 CFR 206.82) filed with the Com- apply to the following persons: mission; and (A) The subject bank, any director, officer, (B) Such person shall give telephonic notice employee, affiliate or subsidiary of the subject (which notice to the extent possible shall be bank; given prior to the opening of the market) of the (B) Any record holder or beneficial owner of information required by Items 2 and 4(a) of any security issued by the subject bank, by the Form F-12 and shall mail a copy of the Form to bidder, or by any affiliate of either the subject each national securities exchange where the bank or the bidder; and class of securities is registered and listed for (C) Any person who makes a solicitation or trading and, if the class is authorized for quota- recommendation to security holders on behalf tion in the NASDAQ interdealer quotation sys- of any of the foregoing or on behalf of the tem, to the National Association of Securities bidder other than by means of a solicitation or Dealers, Inc. ("NASD"). recommendation to security holders which has (iii) If such person is neither the subject bank nor been filed with the board pursuant to this paraan affiliate of the subject bank, graph or paragraph (c) of this section. (A) Such person shall mail a copy of the sched- (ii) Notwithstanding paragraph (4)(i) of this paraule to the bidder at its principal office or at the graph, paragraph (i) shall not apply to the followaddress of the person authorized to receive ing persons: notices and communications (which is set forth (A) A bidder who has filed a Form F-13 pursuon the cover sheet of the bidder's Form F-13 ant to paragraph (c) of this section; filed with the Board), and (B) Attorneys, banks, brokers, fiduciaries or (B) Such person shall mail a copy of the Form investment advisers who are not participating in to the subject bank at its principal office. a tender offer in more than a ministerial capac- (2) Amendments. If any material change occurs in ity and who furnish information and/or advice the information set forth in the Form F-12 required regarding such tender offer to their customers by this section, the person who filed such Form F-12 or clients on the unsolicited request and such shall: customers or clients or solely pursuant to a (i) File with the Board six copies of an amend- contract or a relationship providing for advice ment on Form F-12 disclosing such change to the customer or client to whom the informapromptly, but not later than the date such materi- tion and/or advice is given. als is first published, sent or given to security (5) Stop-look-and-listen communication. Paragraph holders; and (i) shall not apply to the subject bank with respect to (ii) Promptly deliver copies and give notice of the a communication by the subject bank to its security amendment in the same manner as that specified holders which only ; in subparagraph (l)(ii) or subparagraph (l)(iii) of (i) Identifies the tender offer by the bidder; this paragraph, whichever is applicable; and (ii) States that such tender offer is under consid- (iii) Promptly disclose and disseminate such eration by the subject bank's board of directors change in a manner reasonably designed to inform and/or management; security holders of such change. (iii) States that on or before a specified date (3) Information required in solicitation or recom- (which shall be no later than 10 business days mendation. Any solicitation or recommendation to from the date of commencement of such tender holders of a class of securities referred to in section offer) the subject bank will advise such security 14(d)(1) of the Act with respect to a tender offer for holders of (A) whether the subject bank recomsuch securities shall include the name of the person mends acceptance or rejection of such tender making such solicitation or recommendation and the offer; expresses no opinion and remains neutral information required by Items 1, 2, 3(b), 4, 6, 7 and 8 toward such tender offer; or is unable to take a of Form F-12 or a fair and adequate summary position with respect to such tender offer and (B) thereof; Provided, however, That such solicitation the reason(s) for the position taken by the subject or recommendation may omit any such information bank with respect to the tender offer (including previously furnished to security holders of such the inability to take a position); and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 171 (iv) Requests such security holders to deter mak- (ii) Expresses no opinion and is remaining neutral ing a determination whether to accept or reject toward the bidder's tender offer; or such tender offer until they have been advised of (iii) Is unable to take a position with respect to the subject bank's position with respect thereto the bidder's tender offer. Such statement shall pursuant to subparagraph (5)(iii) of this para- also include the reason(s) for the position (includgraph. ing the inability to take a position) disclosed (6) Statement of management's positon. A state- therein. ment by the subject bank of its position with respect (6) Material change. If any material change occurs to a tender offer which is required to be published or in the disclosure required by this section, the subject sent or given to security holders pursuant to para- bank shall promptly publish, send or give a stategraph (m) of this section shall be deemed to consti- ment disclosing such material change to security tute a solicitation or recommendation within the holders. meaning of this section and section 14(d)(4) of the Act. (n) Material change. If any material change occurs in the facts set forth in the statement required by para- (j)-(l) Reserved. graph (c)(1) of this section, the person who filed such statement shall promptly file with the Board an amend- (m) Unlawful tender offer practices. No person who ment disclosing such change. makes a tender offer shall: (1) Hold such tender offer open for less than twenty business days from the date such offer is first (o) Restrictions on control persons: When a person published or sent or given to security holders. makes a tender offer for, or a request or invitation for (2) Increase the offered consideration or the deal- tenders of, any class of equity securities of a bank er's soliciting fee to be given in tender offer unless registered pursuant to section 12 of the Act, and such such tender offer remains open for at least ten person has filed a statement with the Board pursuant business days from the date that notice of such to this section, any other person controlling, or conincrease is first published, sent or given to security trolled by or under common control with ("control holders. person"), the issuing bank shall not thereafter, during (3) Fail to pay the consideration offered or return the period such tender offer, request or invitation the securities deposited by or on behalf of security continues, purchase any class of equity securities of holders promptly after the termination or withdraw- the issuing bank unless: al of a tender offer. (1) The control person has filed with the Board a (4) Extend the length of a tender offer without statement containing the information specified beissuing a notice of such extension by press release or low with respect to any proposed purchases: other public announcement, which notice shall in- (i) The title and amount of equity securities to be clude disclosure of the approximate number of secur- purchased, the names of the persons or classes or ities deposited to date and shall be issued no later persons from whom, and the market in which, the than the earlier of (i) 9:00 a.m. Eastern time, on the securities are to be purchased, including the name next business day after the scheduled expiration of any exchange on which the purchase is to be date of the offer or (ii), if the class of securities made: which is the subject of the tender offer is registered (ii) The purpose for which the purchase is to be on one or more national securities exchanges, the made and any plan or proposal for the disposition first opening of any one of such exchanges on the of such securities; and next business day after the scheduled expiration (iii) The source and amount of funds or other date of the offer. consideration used or to be used in making the (5) Position of subject bank. As a means reasonably purchases, and if any part of the purchase price or designed to prevent fraudulent, deceptive or manip- proposed purchase price is represented by funds ulative acts or practices within the meaning of or other consideration borrowed or otherwise section 14(e) of the Act, the subject bank, no later obtained for the purpose of acquiring, holding, or than 10 business days from the date the tender offer trading the securities, a description of the transacis first published or sent or given, shall publish, send tion and the names of the parties thereto. or give to security holders a statement disclosing (2) The control person has at any time within the that the subject bank: past 6 months sent or given to the equity security (i) Recommends acceptance or rejection of the holders of the issuing bank the substance of the bidder's tender offer; information contained in the statement required by Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

172 Federal Reserve Bulletin • February 1981 paragraph (o)(l) of this section and a copy has been withholding authority to vote in the election of filed with the Board. directors; and (2) disclose in tabular format, following such introductory paragraph, the percentage of 6. Section 206.41 (Form F-l) is amended by removing total shares cast for and withhold from the vote for (b) of Item 10 in its entirety. or, where applicable, cast against, each nominee, 7. Section 206.42 (Form F-2) is corrected by (a) which respectively, were voted for and withheld changing the word "appropriate" in paragraph (g) of from the vote for, or voted against, such nominee. Item 3 to "approximate" and; (b) adding the phrase When groups of classes or series of classes vote "per share" between the words "and" and "divi- together in the election of a director of directors, dends" in the first sentence of instruction (2) to Item 4. they shall be treated as a single class for the purpose 8. Section 206.44 (Form F-4) is corrected by: (a) of the preceding sentence. removing footnote (1) from Part B; (b) changing the references in Part C to footnote 2 to footnote 1. Instructions. 9. Section 206.51 (Form F-5) is amended by (a) re- (1) Calculate the percentage of shares present at the moving the phrase "the management of" in Item 3, meeting and voting or withholding authority to vote in paragraphs (1) and (2); (b) removing the word "man- the election of directors, referred to in paragraph g(l), agement" in Item 3(a), paragraph 1, Item 4(a), para- by dividing the total shares cast for and withheld from graphs (1) and (2), Item 6 and adding the word "bank" the vote for or, where applicable, voted against, the and; (c) removing the phrase "of management" in director in respect of whom the highest aggregate Item 8. number of shares was cast by the total number of 10. Section 206.51 is amended by revising the title of shares outstanding which were eligible to vote as of the section and the Form F-5; paragraph (C) of Item 5 the record date for the meeting. and paragraph (i) of Item 6 is redesignated as para- (2) No information need be given in response to Item graph (j) and a new paragraph (i) of Item 6 is added, all 6(g) unless, with respect to any class of voting stock to read as follows: (or group of classes which voted together), 5 percent or more of the total shares cast for and withheld from Section 2106.51—Form for Proxy Statement or the vote for or, where applicable, cast against any Statement Where the Bank Does Not Solicit nominee were withheld from the vote for or cast Proxies (Form F-5). against such nominee. (3) If a bank elects less than the entire board of Board of Governors of the Federal Reserve directors annually, disclosure is required as to all System directors if 5 per cent or more of the total shares cast for and withheld from, the vote for, or where applica- Form F-5.—Proxy Statement or Statement ble, cast against any incumbent director were withheld Where Management Does Not Solicit Proxies from, or cast against the vote for such director at the meeting at which he was most recently elected. (4) No information need be given in response to Item Item 5. *** 6(g) if the bank has previously furnished to its security (C) If action is to be taken with respect to the election holders a report of the results of the most recent of directors and if the persons solicited have cumula- meeting of security holders at which directors were tive voting rights, (1) make a statement that they have elected which includes: (1) A description of each such rights, (2) briefly describe such rights, (3) state matter voted upon at the meeting and a statement of briefly the conditions precedent to the exercise there- the percentage of the shares voting which were voted of, and (4) if discretionary authority to cumulate votes for and against each such matter; and (2) the informais solicited, so indicate. tion which would be called for by this Item 6(g). If a bank has previously furnished such results to its security holders, this fact should be set forth in the Item 6. Directors and Principal Officers. bank's cover letter accompanying the filing of preliminary proxy materials with the Board. (i) Shares voted at last meeting. With respect to those classes of voting stock which participated in the elec- Section 206.53—[Redesignated as § 206.81 and tion of directors at the most recent meeting at which Revised] directors were elected: 11. Section 206.53 (Form F-12) is redesignated as (1) State in an introductory paragraph the percent- § 206.81 (Form F-12) and is revised to read as follows: age of shares present at the meeting and voting or Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 173 Section 206.81—Form for Statement to be Filed principal executive offices or, if the bidder is a natural Pursuant to Section 13(d)(4) of the Securities person, the bidder's residence or business address and Exchange Act of 1934 (Form F-12) (which may be based on the bidder's Form F-13 (12 CFR 206.82) filed with the Board). Board of Governors of the Federal Reserve System Item 3. Identity and Background (a) State the name and business address of the person filing this statement. Form F-12.—Solicitation/Recommendation Statement (b) If material, describe any contract, agreement, ar- Pursuant to Section 14(d)(4) of the Securities Exrangement or understanding and any actual or potenchange Act of 1934 tial conflict of interest between the person filing this (Amendment No.) statement or its affiliates and: (1) The subject bank, its executive officers, directors or affiliates; or (2) the (Name of Subject Bank) bidder, its executive officers, directors or affiliates. (Name of Person(s) Filing Statement) Instruction: If the person filing this statement is the (Title of Class of Securities) subject bank and if the materiality requirement of Item (CUSIP Number of Class of Securities) 3(b) if applicable to any contract, agreement, arrangement or understanding between the subject bank or (Name, address and telephone number of person authorized to receive any affiliate of the subject bank and any executive notice and communications on behalf of the person(s) filing statement) officer or director of the subject bank, it shall not be necessary to include a description thereof in this Instructions: Six copies of this statement, including all statement, or in any solicitation or recommendation exhibits, should be filed with the Board. published, sent or given to security holders if such information, or information which does not differ General Instructions: materially from such information, has been disclosed (A) The items numbers and captions of the items shall in any proxy statement, report or other communicabe included but the text of the items is to be omitted. tion sent within one year of the filing date of this The answers to the items shall be so prepared as to statement by the subject bank to the then holders of indicate clearly the coverage of the items without the securities and has been filed with the Board: referring to the text of the items. Answer every item. If Provided, That this statement and the solicitation or an item is inapplicable or the answer is in the negative recommendation published, sent or given to security so state. holders shall contain specific reference to such proxy (B) Information contained in exhibits to the statement statement, report or other communication and that a may be incorporated by reference in answer or partial copy of the pertinent portion(s) thereof is filed as an answer to any item or sub-item of the statement unless exhibit to this statement. it would render such answer misleading, incomplete, unclear or confusing. Material incorporated by refer- Item 4. The Solicitation or Recommendation ence shall be clearly identified in the reference by (a) State the nature of the solicitation or the recompage, paragraph, caption or otherwise. An express mendation. If this statement relates to a recommendastatement that the specified matter is incorporated by tion, state whether the person filing this statement is reference shall be made at the particular place in the advising security holders of the securities being sought statement where the information is required. A copy of by the bidder to accept or reject the tender offer or to any information or a copy of the pertinent pages of a take other action with respect to the tender offer and, document containing such information which is incorif so, furnish a description of such other action being porated by reference shall be submitted with this recommended. If the person filing this statement is the statement as an exhibit and shall be deemed to be filed subject bank and a recommendation is not being made, with the Board for all purposes of the Act. state whether the subject bank is either expressing no Item 1. Security and Subject Company opinion and is remaining neutral toward the tender offer or is unable to take a position with respect to the State the title of the class of equity, securities to which tender offer. this statement relates and the name and the address of the principal executive offices of the subject bank. (b) State the reason(s) for the position (including the inability to take a position) stated in (a) of this Item. Item 2. Tender Offer of the Bidder Identify the tender offer to which this statement re- Instruction: Conclusory statements such as "The lates, the name of the bidder and the address of its tender offer is in the best interest of shareholders," Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

174 Federal Reserve Bulletin • February 1981 will not be considered sufficient disclosure in response Item 3(b) of this statement, which relates to or would to Item 4(b). result in one or more of the matters referred to in Item 7(a) (1), (2), (3) or (4). Item 5. Persons Retained, Employed or to be Compensated Item 8. Additional Information to be Furnished Identify any person or class of persons employed, Furnish such additional information, if any, as may be retained or to be compensated by the person filing this necessary to make the required statements, in light of statement or by any person on its behalf, to make the circumstances under which they are made, not solicitations or recommendations to security holders materially misleading. and describe briefly the terms of such employment, retainer or arrangement for compensation. Item 9. Material to be Filed as Exhibits Furnish a copy of: Item 6. Recent Transactions and Intent With Respect (a) Any written solicitation or recommendation which to Securities is published or sent or given to security holders in (a) Describe any transaction in the securities referred connection with the solicitation or recommendation to in Item 1 which was affected during the past 60 days referred to in Item 4. by the person(s) named in response to Item 3(a) and by (b) If any oral solicitation or recommendation to securany executive officer, director, affiliate or subsidiary ity holders is to be made by or on behalf of the person of such person(s). filing this statement, any written instruction, or other (b) To the extent known by the person filing this material which is furnished to the persons making the statement, state whether the persons referred to in actual oral solicitation or recommendation for their Item 6(a) presently intend to tender to the bidder, sell use, directly or indirectly, in connection with the or hold securities of the class of securities being sought solicitation or recommendation. by the bidder which are held of record or beneficially (c) Any contract, agreement, arrangement or underowned by such person. standing described in Item 3(b) or the pertinent portion^) of any proxy statement, report or other commu- Item 7. Certain Negotiations and Transactions by the nication referred to in Item 3(b). Subject Bank (a) If the person filing this statement is the subject Signature. After reasonable inquiry and to the best of bank, state whether or not any negotiation is' being my knowledge and belief, I certify that the information undertaken or is underway by the subject bank in set forth in this statement is true, complete and response to the tender offer which relates to or would correct. result in: (1) An extraordinary transaction such as a merger or reorganization, involving the subject bank, or any subsidiary of the subject bank; (Date) (2) A purchase, sale or transfer of a material amount (Signature) of assets by the subject bank or any subsidiary of the (Name and Title) subject bank; (3) A tender offer for or other acquisition of securities by or of the subject bank; or Instruction. The original statement shall be signed by (4) Any material change in the present capitaliza- each person on whose behalf the statement is filed or tion or dividend policy of the subject bank. his authorized representative. If the statement is signed on behalf of a person by his authorized repre- Instruction. If no agreement in principle has yet been sentative (other than an executive officer of a corporareached, the possible terms of any transaction or the tion or bank or a general partner of a partnership), parties thereto need not be disclosed if in the opinion evidence of the representative's authority to sign on of the Board of Directors of the subject bank such behalf of such person shall be filed with the statement. disclosure would jeopardize continuation of such ne- The name and any title of each person who signs the gotiations. In such event, disclosure that negotiations statement shall be typed or printed beneath his signaare being undertaken or are underway and are in the ture. preliminary stages will be sufficient. Section 206.54—[Redesignated as § 206.82 and (b) Describe any transaction, board resolution, agree- Amended] ment in principle, or a signed contract in response to 12. Section 206.54 (Form F-13) is redesignated the tender offer, other than one described pursuant to § 206.82 and the title. General Instructions B and C Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 175 and Instruction No. 2 of Item 6 is revised as to read as Instructions. 1. * * * follows: 2. If the information required by Item 6(b) of this Form is available to the bidder at the time this state- Section 206.82—Statement to be Filed Pursuant ment is initially filed with the Board pursuant to to Section 14(d)(1) of the Securities Exchange paragraph (d)(l)(i) of this section, such information Act of 1934 (Form F-13). should be included in such initial filing. However, if such information is not available to the bidder at the time of such initial filing, it shall be filed with the Board promptly but in no event later than two business days after the date of such filing and, if material, shall General Instructions. A. be disclosed in a manner reasonably designed to inform security holders. The procedure specified by * * * ** this instruction is provided for the purpose of maintaining the confidentiality of the tender offer in order B. Information in exhibits to the statement may be to avoid possible misuse of inside information. incorporated by reference in answer or partial answer to any item or sub-item of the statement unless it would render such answer misleading, incomplete, unclear or confusing. Material incorporated by refer- 13. Section 206.104 is added to read as follows: ence shall be clearly identified in the reference by page, paragraph, caption or otherwise. An express 206.104—Board Policy Regarding Issuer Tender statement that the specified matter is incorporated by Offer and Going Private Transactions reference shall be made at the particular place in the statement where the information is required. A copy of The Board is not proposing to amend Regulation F to any information or a copy of the pertinent pages of a conform it to the Securities and Exchange Commisdocument containing such information which is incor- sion's "issuer tender offer" regulation. The Board porated by reference shall be submitted with this must approve any reduction in the amount, or the statement as an exhibit and shall be deemed to be filed retirement of any part of a member bank's common or with the Comptroller for all purposes of the Act. preferred capital stock pursuant to section 9 of the C. If the statement is filed by a partnership, limited Federal Reserve Act. 12 U.S.C. 324(i) (1970). The partnership, syndicate or other group, the information Board also notes that issuer tender offers are very rare called for by Items 2-7, inclusive, shall be given with among member banks. Therefore, instead of adopting respect to; (i) Each partner of such partnership; (ii) substantially similar regulations to Rule 13E-4 and each partner who is denominated as a general partner Schedule 13E-101, the Board will withhold its approvor who functions as a general partner of such limited al to the reduction in the amount of the retirement of partnership; (iii) each member of such syndicate or any part of a member bank's equity securities regisgroup; and (iv) each person controlling such partner or tered under Section 12 of the Act unless the requiremember. If the statement is filed by a bank or corpora- ments of rules 13e-4 and 13e—101 are met in all tion, or if a person referred to in (i), (ii), (iii) or (iv) of material respects. this instruction is a bank or corporation, the informa- Also, the Board is not proposing to amend Regution called for by the above mentioned items shall be lation F to conform it to the Commission's "going given with respect to: (a) Each executive officer and private" regulations. The Board notes that its supervidirector of such bank or corporation: (b) each person sory powers under the Federal Reserve Act make controlling such bank or corporation: and (c) each those member bank issuers with classes of equity executive officer and director of any bank or corpora- securities registered pursuant to Section 12 subject to tion ultimately in control of such bank or corporation. more extensive regulatory oversight than most issuers A response to an item in the statement is required with subject to Commission's jurisdiction. Pursuant to Secrespect to the bidder and to all other persons referred tion 9 of the Federal Reserve Act, the Board must to in this instruction unless such item specifies to the approve substantially all of the corporate transactions contrary. involving member banks subject to Rule 13e-3. Instead of adopting the Commission's "going private" regulations the Board will withhold its approval to any Rule 13e-3 type corporate transaction unless the re- Item 6. Interest in Securities of the Subject Bank. quirements of rules 13e-3 and 13e-100 are met in all material respects. See, 45 Federal Register 71575 (Oct. 29, 1980). * * * ** Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

176 Federal Reserve Bulletin • February 1981 AMENDMENTS TO REGULATION Q drawn at the rate being paid on the deposit. If the amount withdrawn has remained on deposit The Board of Governors has amended its Regulation Q for less than three months, all interest on the (Interest on Deposits) to incorporate the rules of the amount withdrawn shall be forfeited. Depository Institutions Deregulation Committee, (B) Where a time deposit with an original maadopted pursuant to the Depository Institutions turity or required notice period of more than Deregulation Act of 1980. The amendments to Regula- one year, or any portion thereof, is paid before tion Q are technical in nature. maturity or before the expiration of the required Effective January 15, 1981 Regulation Q is amended notice period, a deposit shall forfeit at least six as follows: months of interest on the amount withdrawn at the rate being paid on the deposit. If the amount 1. Section 217.3(f) of Regulation Q (12 CFR Part has remained on deposit for less than six 217.3(f)) is amended by adding the following: months, all interest on the amount withdrawn shall be forfeited. (The provisions of this sub- (f) No interest after maturity or expiration of no- paragraph (ii) may be applied, with the consent tice. *** of the depositor, to time deposits specified in subparagraph (i) above.) Provided, however, that a member bank may provide (iii) For time deposit contracts entered into, rein any time deposit contract that if the deposit, or any newed, or extended on or after June 2, 1980, the portion thereof, is withdrawn not more than seven following minimum early withdrawal penalty shall days after a maturity date, interest will be paid thereon apply: at the originally specified contract rate. A member (A) Where a time deposit with an original mabank may specify in the time deposit contract that turity or required notice period of less than three interest will be paid at any other lower rate. However, months, or any portion thereof, is paid before in no event may the rate specified be less than the maturity, a depositor shall forfeit an amount at current rate paid on savings deposits by the member least equal to the amount of interest that could bank. have been earned on the amount withdrawn at the nominal (simple interest) rate being paid on 2. Section 217.4(d) (12 CFR Part 217.4(d)) is revised to the deposit had the funds remained on deposit read as follows: until maturity. (B) Where a time deposit with an original ma- (d) Penalty for early withdrawals. turity or required notice period of three months (l)(i) For time deposit contracts entered into before or more to one year, or any portion thereof, is July 1, 1979, that have not been renewed or paid before maturity, a depositor shall forfeit an extended on or after July 1, 1979, the following amount at least equal to three months of interminimum early withdrawal penalty shall apply. est earned, or that could have been earned, on Where a time deposit, or any portion thereof, is the amount withdrawn at the nominal (simple paid before maturity, a member bank may pay interest) rate being paid on the deposit, regardinterest on the amount withdrawn at a rate not to less of the length of time the funds withdrawn exceed that prescribed in § 217.7 for a savings have remained on deposit. deposit and, in addition, the depositor shall forfeit (C) Where a time deposit with an original mathree months of interest payable at such rate. If, turity or required notice period of more than one however, the amount withdrawn has remained on year, or any portion thereof, is paid before deposit for three months or less, all interest shall maturity, a depositor shall forfeit an amount at be forfeited. least equal to six months of interest earned, or (ii) For time deposit contracts entered into, re- that could have been earned, on the amount newed, or extended on or after July 1, 1979, but withdrawn at the nominal (simple interest) rate prior to June 2, 1980, that have not been renewed being paid bn the deposit, regardless of the or extended on or after June 2, 1980, the following length of time the funds withdrawn have reminimum early withdrawal penalty shall apply: mained on deposit. (A) Where a time deposit with an original ma- (2) Notwithstanding the provisions of paragraph turity or required notice period of one year or (d)(1), where a time deposit, or any portion thereof, less, or any portion thereof, is paid before maintained in an Individual Retirement Account maturity or before the expiration of the required established in accordance with 26 U.S.C. § 408 is notice period, a depositor shall forfeit at least paid before maturity within seven days after the three months of interest on the amount with- establishment of the Individual Retirement Account Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 177 pursuant to the provisions of 26 CFR § 1.408- a time deposit representing funds contributed to (l)(d)(4), or where a time deposit, or any portion an Individual Retirement Account or a Keogh thereof, maintained in a Keogh (H.R. 10) Plan (H.R. 10) Plan established pursuant to 26 U.S.C. account established in accordance with 26 U.S.C. (IRC 1954) §§ 408, 401 when the individual for § 401 is paid before maturity within seven days after whose benefit the account is maintained attains the establishment of the Keogh (H.R. 10) Plan, a age 59-V or is disabled (as defined in 26 U.S.C. 2 depositor shall forfeit an amount at least equal to the (IRC 1954) § 72(m)(7)) or thereafter; or interest earned on the amount withdrawn at the (ii) Where a member bank pays that portion of a nominal (simple interest) rate being paid on the time deposit on which Federal deposit insurance deposit. has been lost as the result of the merger of two or (3) A member bank, with the depositor's consent, more Federally insured banks in which the demay compute the minimum penalty required to be positor previously maintained separate time deimposed on withdrawals from time deposits opened posits, for a period of one year from the date of prior to June 2, 1980, on the basis of the nominal the merger. (simple interest) rate. (9) A time deposit, or the portion thereof requested, (4) Where necessary to comply with the require- must be paid before maturity without a forfeiture of ments of this paragraph, any interest already paid to interest as prescribed by this paragraph in the folor for the account of the depositor shall be deducted lowing circumstances: from the amount requested to be withdrawn. (i) Where requested, upon the death of any own- (5) Any amendment of a time deposit contract that er11 of the time deposit funds; or results in an increase in the rate of interest paid or in (ii) Where requested, when the owner11 of the a reduction in the maturity of the deposit constitutes time deposit is determined to be legally incompea payment of the time deposit before maturity. tent by a court or other administrative body of (6) For purposes of computing the penalty required competent jurisdiction. to be imposed under this paragraph, under a time deposit agreement that provides that subsequent 3. Section 217.6 of Regulation Q (12 CFR Part 217.6) deposits reset the maturity of the entire account, is amended by deleting paragraph (i) and redesignating each deposit maintained in the account for at least a paragraph (j) as paragraph (i). period equal to the original maturity of the deposit 4. Section 217.7 of Regulation Q (12 CFR Part 217.7) may be regarded as having matured individually and is amended by revising paragraphs (c), (f) and (g) to been redeposited at intervals equal to such period. read as follows: When a time deposit is payable only after notice, for funds on deposit for at least the notice period, the Section 217.7—Maximum Rates of Interest penalty for early withdrawal shall be imposed for at Payable by Member Banks on Time and least the notice period. Savings Deposits (7) A member bank may permit a depositor to withdraw interest credited to a time deposit during any term at any time during such term without (c) Savings deposits. No member bank shall pay interpenalty. If the deposit or account is automatically est at a rate in excess of 5-!/ per cent on any savings renewed on the same terms (including at the same 4 deposit. No member bank shall pay interest at a rate in rate of interest), interest credited during the precedexcess of 5-!/ per cent on any savings deposit that is ing term or terms as well as the renewal term may be 4 subject to negotiable orders of withdrawal, the issupaid at any time during the renewal term without ance of which is authorized by Federal law. penalty, unless the deposit agreement specifically provides otherwise. If the rate of interest paid during the renewal term or the maturity period of the (f) 26-week money market time deposits of less than renewal term is different, interest in the account at $100,000. Except as provided in paragraphs (a), (b) the commencement of the renewal term shall be and (d), a member bank may pay interest on any treated as principal, and only interest for the renewal term may be paid at any time without penalty during such term. 11. For the purposes of this provision, an "owner" of time deposit (8) A time deposit, or a portion thereof, may be paid funds is any individual who died or was determined to be incompetent on or after August 1, 1979, and who at the time of his or her death or before maturity without a forfeiture of interest as determination of incompetence had full legal and beneficial title to all prescribed by this paragraph in the following cir- or a portion of such funds or, at the time of his or her death or determination of incompetence, had beneficial title to all or a portion cumstances: of such funds and full power of disposition and alienation with respect (i) Where a member bank pays all or a portion of thereto. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

178 Federal Reserve Bulletin • February 1981 nonnegotiable time deposit of $10,000 or more, with a States Department of the Treasury immediately prior maturity of 26 weeks at a rate not to exceed the rates to such Thursday, or 9.25 per cent. The average 2-1/ 2 set forth below: year yield will be rounded by the United States Department of the Treasury to the nearest 5 basis points. Except as provided below, in no event shall the rate of interest paid exceed 11.75 per cent. A member Rate established (auction average on a discount basis) for U.S. Treasury bank may offer this category of time deposit to all bills with maturities of 26 weeks depositors. However, a member bank may pay interissued on or immediately prior to the date of deposit ("Bill Rate") Maximum percent est on any nonnegotiable time deposit with a maturity of 2-V years or more which consists of funds deposit- 2 7.50 percent or below 7.75 ed to the credit of, or in which the entire beneficial Above 7.50 percent Bill Rate plus one-quarter interest is held by: of one percent (1) the United States, any State of the United States, or any county, municipality or political subdivision thereof, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Rounding rates to the next higher rate is not permitted American Samoa, Guam, or political subdivision and interest may not be compounded during the term thereof; or of this deposit. A member bank may offer this category (2) an individual pursuant to an Individual Retireof time deposit to all depositors. However, a member ment Account agreement or Keogh (H.R. 10) Plan bank may pay interest on any nonnegotiable time established pursuant to 26 U.S.C. (I.R.C. 1954) deposit of $10,000 or more with a maturity of 26 weeks §§ 408, 401, which consists of funds deposited to the credit of, or in at a rate not to exceed the ceiling rate payable on the which the entire beneficial interest is held by: same category of deposit by any Federally insured (1) the United States, any State of the United savings and loan association or mutual savings bank.4 States, or any county, municipality or political subdivision thereof, the District of Columbia, the Com- * * * ** 5. Section 217.147 of Regulation Q (12 CFR Part monwealth of Puerto Rico, the Virgin Islands, 217.147) is amended to read as follows: American Samoa, Guam, or political subdivision thereof; or Premiums, Finders Fees, Prepayment of Interest and (2) an individual pursuant to an Individual Retire- Payment of Interest in Merchandise. ment Account agreement or Keogh (H.R. 10) Plan established pursuant to 26 U.S.C. (IRC 1954) For the regulatory text relating to premiums, finders §§ 408,401, fees, prepayment of interest and payment of interest in at a rate not to exceed the ceiling rate payable on the merchandise, see 12 CFR §§ 1204.109, 1204.110, same category of deposit by any Federally insured 1204.111 and 1204.114. savings and loan association or mutual savings bank.3 6. Sections 217.149 and 217.154 of Regulation Q (12 CFR §§ 217.149 and 217.154) are hereby rescinded. (g) Time deposits of less than $100,000 with maturities of 2-l/ years or more. Except as provided in para- 2 graphs (a), (b), (d) and (e), a member bank may pay AMENDMENTS TO RULES REGARDING interest on any nonnegotiable time deposit with a DELEGATION OF AUTHORITY maturity of 2-V years or more that is issued on or 2 Thursday of every other week at a rate not to exceed 1. In order to expedite and facilitate the performance the higher of one-quarter of one per cent below the of certain of its functions with respect to applications average 2-V years yield for United States Treasury 2 and notices under the Bank Holding Company Act, securities as determined and announced by the United Bank Merger Act, Federal Reserve Act, International Banking Act, Federal Reserve Act, and Change of Bank Control Act, the Board of Governors has dele- 3. The ceiling rate of interest payable for this category of deposit by gated to the Director of the Division of Banking Federally insured savings and loan associations and mutual savings Supervision and Regulation the authority to grant or banks is 7.75 per cent when the Bill Rate is 7.25 per cent or lower, onehalf of one per cent above the Bill Rate when the Bill Rate is above 7.25 per cent but below 8.50 per cent, 9.00 per cent when the Bill Rate 4. The ceiling rate of interest payable for this category of deposit by is 8.50 per cent or above but below 8.75 per cent, and one-quarter of Federally insured savings and loan associations and mutual savings one per cent above the Bill Rate when the Bill Rate is 8.75 per cent or banks is one-quarter of one per cent above the rate that may be paid above. by member banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 179 deny requests for modification, including extension of diate or expeditious action is required to avert time, to fulfill commitments or conditions relied on by failure of a bank or because of an emergency. the Board in acting on such applications. Effective January 21, 1981, Section 265.2(c) is amended by adding subparagraph (29) to read as follows: 3. Section 8 of the Securities Exchange Act of 1934 Section 265.2—Specific Functions Delegated to requires nonmember banks wishing to extend credit in Board Employees and to Federal Reserve connection with securities transactions to enter into an Banks agreement with the Board to comply with the provisions of law and the Board's rules in connection with such extensions of credit. The Board has delegated to (c) *** the Federal Reserve Banks authority to receive such agreements. Effective January 21, 1981, Section 265.2(f) is (29) To grant or deny requests for modification, amended by adding subparagraph (53) to read as including extension of time, for the performance of a follows: commitment or condition relied on by the Board or its delegee in taking any action under the provisions Section 265.2—Specific Functions Delegated to of the Bank Holding Company Act, the Bank Merg- Board Employees and to Federal Reserve er Act, the Change in Bank Control Act of 1978, the Banks Federal Reserve Act or the International Banking Act. In acting on requests hereunder, the Director ^ * * * may take into account changed circumstances and good faith efforts to fulfill the commitments or conditions, and shall consult with the Directors of other interested divisions, where appropriate. The (53) Under the provisions of section 8(a) of the Director may not take any action hereunder that Securities Exchange Act of 1934 (15 U.S.C. 78h(a)) would be inconsistent with or result in an evasion of concerning extensions of credit to finance securities the provisions of the Board's original action. transactions, to accept agreements on behalf of the Board from nonmember banks in the form prescribed by the Board. 2. This amendment to the Board's Rules Regarding Delegation of Authority permits the Director of the Board's Division of Banking and Supervision and Regulation to approve applications by a company to 4. Section 265.2(f) of the Board's Rules Regarding acquire a bank and to permit an individual to acquire a Delegation of Authority is hereby amended to elimibank when immediate or expeditious action is neces- nate the requirement that Federal Reserve Banks may sary. approve the application of a State member bank to Effective January 21, 1981, section 265.2(c) is establish a branch only if the proposed branch has amended by adding subparagraph (30) to read as already been approved by the appropriate State superfollows: visory authority. Effective January 21, 1981, paragraph (f)(1) of sec- Section 265.2—Specific Functions Delegated to tion 265.2 is revised to read as follows: Board Employees and to Federal Reserve Banks Section 265.2—Specific Functions Delegated to Board Employees and Federal Reserve Banks (c) * * * ^ * * * (30) Under the provisions of § 3(a) of the Bank (1) Under the provisions of the third paragraph of Holding Company Act (12 U.S.C. § 1842(a)) and the section 9 of the Federal Reserve Act (12 U.S.C. Change In Bank Control Act (12 U.S.C. § 1817(j)) to § 321), section 5155 of the Revised Statutes take actions the Reserve Bank could take under (12 U.S.C. § 36), and § 208.8 of this chapter (Reguparagraphs (f)(22) and (f)(30) of this section if imme- lation H), to approve the establishment by a State Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

180 Federal Reserve Bulletin • February 1981 member bank of a domestic branch if the Reserve BANK HOLDING COMPANY AND BANK MERGER Bank is satisfied that approval is warranted after ORDERS ISSUED BY THE BOARD OF GOVERNORS giving consideration to: (i) the bank's capitalization in relation to the character and condition of its assets and to its Orders Under Section 3 of deposit liabilities and other corporate responsibil- Bank Holding Company Act ities, including the volume of its risk assets and of its marginal and inferior quality assets, all consid- Batavia Banc Corporation, ered in relation to the strength of its management ; Chicago, Illinois (ii) the ability of bank's management to cope successfully with existing or foreseeable prob- Order Denying Formation of a Bank Holding lems, and to staff the proposed branch without Company any significant deterioration in the overall management situation; Batavia Banc Corporation, Chicago, Illinois, has ap- (iii) the convenience and needs of the communi- plied for the Board's approval under section 3(a)(1) of ty; the Bank Holding Company Act (12 U.S.C. (iv) the competitive situation (either actual or § 1842(a)(1)) of formation of a bank holding company potential); by acquiring 100 percent of the voting shares of (v) the prospects for profitable operations of the Batavia Bank, Batavia, Illinois ("Bank"). proposed branch within a reasonable time, and Notice of the application, affording an opportunity the ability of the bank to sustain the operational for interested persons to submit comments and views, losses of the proposed branch until it becomes has been given in accordance with section 3(b) of the profitable; and Act. The time for filing comments and views has (vi) the reasonableness of bank's investment in expired, and the Board has considered the application bank premises after the expenditure for the pro- and all comments received in light of the factors set posed branch. forth in section 3(c) of the Act (12 U.S.C. § 1842(c)). Applicant, a nonoperating Illinois corporation with no subsidiaries, was organized for the purpose of * * * ** becoming a bank holding company by acquiring Bank, AMENDMENTS TO RULES OF PROCEDURE which holds deposits of $32.5 million.1 Upon acquisition of Bank, Applicant would control the 427th largest bank in Illinois and would hold approximately 0.04 The Board of Governors has amended its Rules of percent of the total deposits of commercial banks in Procedure to permit waiver of public notice and other the state. procedural rules for applications that require immedi- Bank is the 8th largest of 24 commercial banks in the ate or expeditious action. Aurora banking market, and holds approximately 4.3 Effective January 21, 1981, Rules of Procedure is percent of the total deposits in commercial banks in amended by adding the following paragraph (1): the market.2 While Applicant's principals are principals of two other one-bank holding companies, the Section 262.3—Applications banking subsidiaries of these holding companies do not compete in the relevant banking market. It appears from the facts of record that consummation of the * * * ** proposal would not result in any adverse effects upon competition or increase the concentration of banking (1) Waiver. The Board, or the officer or Reserve Bank resources in any relevant area. Accordingly, the Board authorized to approve an application, may waive or concludes that competitive considerations are consismodify any procedural requirements for that applica- tent with approval of the application. tion prescribed or cited in this section and may excuse The Board has indicated on previous occasions that any failure to comply with them upon a finding that a holding company should serve as a source of finanimmediate action on the application is necessary to prevent the probable failure of a bank or company or that an emergency exists requiring expeditious action. 1. All banking data are as of December 31, 1979. 2. The Aurora banking market is approximated by the southern two-thirds of Kane County and the northern one-third of Kendall County, including the city of Yorkville, in Illinois. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 181 cial and managerial strength to its subsidiary bank(s), By order of the Board of Governors, effective and that the Board would closely examine the condi- January 30, 1981. tion of an applicant in each case with this consideration in mind. In this case, the Board concludes that Voting for this action: Vice Chairman Schultz and Goverthe record in this application presents adverse consid- nors Wallich, Partee, Teeters, Rice, and Gramley. Absent erations that warrant denial of the proposal to form a and not voting: Chairman Volcker. bank holding company. With regard to financial considerations, the Board (Signed) JAMES MCAFEE, notes that in connection with this proposal, Applicant [SEAL] Assistant Secretary of the Board. would incur a sizeable debt that includes an equity capital injection of $672,000 into Bank. Applicant proposes to service this debt over a 25-year period, Citicorp, and projects reaching a debt-to-equity ratio of less New York, New York than 30 percent by the end of the 12th year. Applicant anticipates that this capital injection and projected Order Approving Acquisition of Bank improvements in Bank's earnings will allow Applicant to service its acquisition debt while maintaining an Citicorp, New York, New York, a bank holding comadequate capital level in Bank. However, in light of pany within the meaning of the Bank Holding Com- Bank's historical performance and the performance of pany Act, has applied for the Board's approval under the two banks with which Applicant's principals are section 3(a)(3) of the Act (12 U.S.C. § 1842(a)(3)) to affiliated, Applicant's overall projections are unrealis- acquire all of the voting shares of Citibank (South tic; for example, its projections of Bank's earnings are Dakota), N.A., Sioux Falls, South Dakota ("Bank"), overly optimistic, while its projections of growth are a proposed new bank. low. Thus, based on the record in this case, it is the Notice of the application, affording opportunity for Board's view that Bank is unlikely to generate suffi- interested persons to submit comments and views, has cient earnings to enable Applicant to service its debt been given in accordance with section 3(b) of the Act. while maintaining adequate capital in Bank, as well as The time for filing comments and views has expired, affording Applicant the flexibility to meet any unfore- and the Board has considered the application and all seen problems that might arise at Bank. In light of comments received in light of the factors set forth in these facts and other facts of record, the Board section 3(c) of the Act (12 U.S.C. § 1842(c)). concludes that considerations relating to Applicant's Citicorp, the largest banking organization in the financial resources and future prospects weigh against state of New York, with total consolidated assets of approval of this application. While managerial consid- $111 billion,1 operates through its two banking subsiderations are generally satisfactory, it is the Board's iaries, Citibank, N.A., New York, New York ("Citijudgment that Applicant's principals have not estab- bank"), and Citibank (New York State), N.A., Buffalished a sufficient record of performance to mitigate lo, New York ("Citibank-Buffalo"), 309 banking the adverse financial considerations of the application. offices in New York state and 209 banking offices No significant changes in Bank's operations or abroad. Citicorp also engages in a wide variety of services are expected to be made as a result of this nonbanking activities in 40 states. proposal. Accordingly, convenience and needs factors Bank is a newly established bank organized by lend no weight toward approval of this application. Citicorp to engage principally in nationwide consumer credit card lending activities currently conducted by On the basis of all of the facts of record, the Board Citibank-Buffalo. In addition, Bank will engage in concludes that the banking considerations involved in limited deposit-taking and commercial lending activithis proposal present adverse factors bearing upon the ties. Citicorp proposes to relocate its credit card financial resources and future prospects of Applicant activities to South Dakota in light of the absence of and Bank. Such adverse factors are not outweighed by that state of usury ceilings on consumer loan receivany procompetitive effects or by benefits that would ables.2 result in better serving the convenience and needs of the community. Accordingly, it is the Board's judg- 1. Banking data are as of June 30, 1980. ment that approval of the application would not be in 2. South Dakota law permits commercial banks to charge rates of interest on consumer loan receivables as agreed by contract. Until the public interest and the application should be de- recently, New York law imposed usury ceilings on commercial bank nied. credit card lending. The Supreme Court, in Marquette National Bank v. First of Omaha Serv. Corp., 439 U.S. 249 (1978), affirmed the right On the basis of the facts of record, the application is of a national bank to charge interest rates to out-of-state credit card denied for the reasons summarized above. customers at the rate permitted by the law of its home state. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

182 Federal Reserve Bulletin • February 1981 Section 3(d) of the Act (12 U.S.C. § 1842(d)) prohib- and, furthermore, that the South Dakota statute speits the Board from approving any application by a bank cifically authorizes the acquisition of a bank chartered holding company to acquire any bank located outside in South Dakota by an out-of-state bank holding of the state in which the operations of the bank holding company as required by section 3(d) of the Act. company's banking subsidiaries are principally con- In view of the limitations imposed upon the operducted unless such acquisition is "specifically autho- ations of banks acquired under the above-referenced rized by the statute laws of the state in which such South Dakota statute and the limited commercial bank is located, by language to that effect and not lending and demand deposit-taking activities that Citimerely by implication." On March 12, 1980, South corp proposes for Bank, the Board has considered Dakota amended its banking laws to permit an out-of- whether Bank will operate as a "bank" within the state bank holding company to acquire a single new meaning of section 2(c) of the Act (12 U.S.C. bank located in the state.3 The statute provides that § 1841(c)). Section 2(c) defines "bank" to mean any such bank may have only a single banking office and institution that (1) accepts deposits that the depositor that "such single banking office shall be operated in a has a legal right to withdraw on demand, and (2) manner and at a location which is not likely to attract engages in the business of making commercial loans. customers from the general public in the state to the The preliminary national bank charter granted to Bank substantial detriment of existing banks in the state."4 authorizes Bank to engage in the full range of lending The South Dakota statute further provides that any and deposit-taking activities permitted to national acquisition under this provision must be approved by banks. the South Dakota Banking Commission after consider- Citicorp has stated, both as part of its application ation of the following factors: (1) whether the conve- and in hearings before the South Dakota Banking nience and benefit to the public outweigh any adverse Commission and the Office of the Comptroller of the competitive effects; (2) whether the acquisition may Currency, that Bank will accept demand deposits from result in undue concentration of resources or substan- credit card merchants, Citicorp subsidiaries, corretial lessening of competition; and (3) whether the spondent banks, and accounts resulting from Bank's location or proposed location of the banking office of overline lending activity. It appears to the Board that the bank to be acquired is likely to attract the general Bank's operations will satisfy the demand depositpublic to the substantial detriment of existing banks. taking requirement of section 2(c). Citicorp has asserted that Bank, in order to comply With respect to whether Bank will be deemed to be with South Dakota law, will not solicit or encourage engaged in the business of making commercial loans, personal or commercial deposits or loans from cus- Citicorp states that Bank will purchase on a continuing tomers in South Dakota; however, Bank will not basis participations in commercial loans made by refuse such deposits or loans on an unsolicited basis. Citibank, other bank and nonbank lenders, and also Bank will not have facilities to accept savings ac- will make direct commercial loans in states other than counts, although it will have one teller primarily for South Dakota. Bank also will participate in overline the convenience of its employees. Moreover, Bank's loans offered by bank and nonbank financial instituproposed location is not designed to attract customers tions in South Dakota in accordance with the decision from the general public. The South Dakota Banking of the South Dakota Banking Commission approving Commission, after a hearing on this matter, approved Citicorp's application which sought to encourage the application of Citicorp to acquire Bank and found Bank's participation in such loans.5 In light of the facts that the acquisition met the statutory requirements for in this case and the Board's earlier rulings on this approval under South Dakota law. In reviewing the issue, the Board has determined that Bank's commerabove facts, the Board has determined that the pro- cial lending activities warrant it being considered as posed acquisition is in accord with South Dakota law engaged in the "business of making commercial loans" within the meaning of section 2(c) of the Act. In view of the purpose of the Bank Holding Company Act 3. Chapter 331 (House Bill No. 1370), 1980 South Dakota Session Laws. to "restrain undue concentration of commercial bank- 4. The Supreme Court's decision in Lewis v. BT Investment ing resources and to prevent possible abuses related to Managers, Inc., — U.S. —, 100 S. Ct. 2009 (1980), creates some the control of commercial credit,"6 the Board believes uncertainty as to the ability of states to limit bank holding company activities under section 3(d) of the Act. The Court stated that it is that the inclusion of Bank as a "bank" within the "doubtful" that section 3(d) gives states authority to impose restric- meaning of section 2(c) is in furtherance of the Act's tions on bank holding company activities since the only authority conferred by that section is authority to permit expansion into a state. The Court's holding striking state restrictions on bank holding com- 5. Loan participation purchases are considered by the Board to be pany activities, however, applies only to activities conducted pursu- commercial loans made by the purchasing bank if the loans made by ant to section 4(c)(8) of the Act, as opposed to section 3 of the Act, the originating bank are in fact commercial loans. which is applicable here. Accordingly, for purposes of this applica- 6. S. Rep. No. 91-1084 (U.S. Code Cong. & Admin. News 5519, tion, the South Dakota statute is presumed valid on its face. 5541 (1970)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 183 purposes. Accordingly, the Board is of the opinion tion would be in the public interest and that the that Bank should be regarded as a "bank" for pur- application should be approved. On the basis of the poses of the Act. record, the application is approved for the reasons The proposed acquisition represents a transfer of summarized above. The transaction shall not be made Citicorp's existing credit card activities from Citibank- before the thirtieth calendar day following the effective Buffalo to Bank. The proposal is thus essentially an date of this Order or later than three months after the internal reorganization that will not alter the number of effective date of this Order, unless such period is firms or the structure of the national market for bank extended for good cause by the Board or by the credit card services. To the extent that Bank will Federal Reserve Bank of New York pursuant to purchase participations in commercial loans made by delegated authority. Citibank, the proposal may further be viewed as an By order of the Board of Governors, effective internal reorganization of Citicorp's business without January 19, 1981. competitive effect. Because of the limitations imposed Voting for this action: Chairman Volcker and Governors on Bank's operations by South Dakota law, Bank will Wallich, Partee, Teeters, Rice, and Gramley. Absent and not not generally be in direct competition with local com- voting: Governor Schultz. mercial banks in the state; however, Bank will engage de novo in providing some needed banking services in (Signed) JAMES MCAFEE, South Dakota, including overline banking services to [SEAL] Assistant Secretary of the Board. other South Dakota banks, consistent with South Dakota law. To the extent that Bank will offer banking services as a new competitor in the market, the effect of the proposal will be procompetitive. Accordingly, Florida Coast Banks, Inc., the overall competitive effects of the proposal are Pompano Beach, Florida consistent with approval. The financial and managerial resources and future Order Approving Acquisition of Bank prospects of Citicorp, its subsidiaries and Bank are regarded as satisfactory. Bank's proposed overline Florida Coast Banks, Inc., Pompano Beach, Florida, a lending activities should increase the availability of bank holding company within the meaning of the Bank credit for South Dakota businesses and enhance the Holding Company Act, has applied for the Board's state's capital resources and access to out-of-state approval under section 3(a)(3) of the Bank Holding financing sources. Testimony at the administrative Company Act (12 U.S.C. § 1842(a)(3)) to acquire 51 hearings on this matter by both South Dakota bankers percent of the outstanding voting shares of First Bank and the Governor of South Dakota indicates that and Trust Company of Palm Beach County ("Bank"), South Dakota is in need of capital; that need may in Boynton Beach, Florida. part be alleviated by Bank. Based upon the above facts Notice of the application, affording opportunity for and all the evidence of record in this matter, the Board interested persons to submit comments and views, has finds that convenience and needs factors are positive been given in accordance with section 3(b) of the Act. and lend weight toward approval of the proposal. The time for filing comments and views has expired, On the basis of all the facts of record in this matter,7 and the application and all comments received, includit is the Board's judgment that approval of the applica- ing those from the Florida Comptroller, have been considered in light of the factors set forth in section 7. The facts of record in this application include the written 3(c) of the Act (12 U.S.C. § 1842 (c)). transcripts of hearings held by the South Dakota Banking Commission Applicant, the 22nd largest banking organization in on June 10, 1980, and by the Comptroller of the Currency on July 15 Florida, controls two banks with aggregate deposits of and 17, 1980. The Board has received a request for a hearing on the application by Option Advisory Services, Inc., New York, New York $211.4 million, representing 0.6 percent of total depos- ("Protestant"), asserting that a hearing is required to examine the its in commercial banks in the state.1 Acquisition of legality of the proposal under the McFadden Act and alleged deficien- Bank, the 61st largest banking organization in the state cies in Citicorp's filings with the Securities and Exchange Commission. The Board has determined that Protestant's comments are with deposits of $113.7 million, would increase Appliwithout merit and do not present material facts in dispute such as to cant's share of commercial bank deposits in Florida by warrant a hearing under the Board's Rules of Procedure (12 C.F.R. § 262.3(e)). Under section 3(b) of the Act, a hearing is required only if three-tenths of one percent and would not have an the primary supervisory agency of the bank to be acquired recom- appreciable effect upon the concentration of banking mends disapproval. The primary supervisory agency in this case, the resources in the state. Comptroller of the Currency, has approved the application. Moreover, Protestant's comments and hearing request were not received by the Board within the 30 day comment period following publication of notice of the application in the Federal Register and, under the Board's Rules of Procedure, the Board is not required to consider them. 1. All banking data are as of June 30, 1979. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

184 Federal Reserve Bulletin • February 1981 Bank is the tenth largest of 27 banking organizations months after the effective date of this Order, unless in the relevant banking market,2 with 5.14 percent of such period is extended for good cause by the Board or deposits in commercial banks in that market. Appli- by the Federal Reserve Bank of Atlanta pursuant to cant is currently represented in the relevant banking delegated authority. market through its recently opened de novo subsidiary By order of the Board of Governors, effective ($6.8 million in deposits), the 22nd largest banking January 19, 1981. organization in the market, controlling 0.3 percent of deposits in commercial banks in the market. Acquisi- Voting for this action: Chairman Volcker and Governors tion of Bank would increase Applicant's share of Wallich, Partee, Teeters, Rice, and Gramley. Absent and not market deposits by 5.1 percent and Applicant would voting: Governor Schultz. become the tenth largest banking organization in the (Signed) JAMES MCAFEE, market. Although consummation of the proposal [SEAL] Assistant Secretary of the Board. would eliminate some existing competition between Bank and Applicant's banking subsidiary, in view of the relative size of these organizations, their market Heritage Racine Corporation, shares, and the number of remaining banking alterna- Racine Wisconsin tives in the market, it appears that consummation of this proposal would not have seriously adverse effects Order Approving Formation of a Bank Holding upon competition in the relevant market. Accordingly, Company in light of the above and other facts of record, the Board concludes that consummation of the proposed Heritage Racine Corporation, Racine, Wisconsin, has transaction would have only a slightly adverse effect applied for the Board's approval under section 3(a)(1) on competition in the relevant market. of the Act (12 U.S.C. § 1842(a)(1)) of formation of a The financial and managerial resources and future bank holding company by acquiring 80 percent or prospects of Applicant, its subsidiaries, and Bank are more of the voting shares of Heritage Bank and Trust regarded as satisfactory. Although Applicant will incur ("Wind Point Bank"), Heritage National Bank of debt in connection with the proposed acquisition, it Racine ("Racine Bank"), and Heritage Bank-Mt. appears that Applicant will continue to serve as a Pleasant ("Mt. Pleasant Bank"), all located in Racine, source of strength for its subsidiary banks. In addition, Wisconsin (collectively referred to as "Banks").1 upon consummation of the proposed transaction Ap- Notice of the application, affording opportunity for plicant will inject capital into Bank, thereby strength- interested persons to submit comments, has been ening Bank's financial position. Thus, the Board con- given in accordance with section 3(b) of the Act. The cludes that banking factors are consistent with time for filing comments has expired, and the Board approval of the application. Upon consummation of has considered the application and all comments rethe proposed transaction, Applicant would assist Bank ceived, including those of Bank of Elmwood, Racine, in expanding its services to include specialized lending Wisconsin ("Protestant"), in light of the factors set services such as accounts receivable financing and forth in section 3(c) of the Act (12 U.S.C. § 1842(c)). term credits, and provide assistance in developing new Applicant is a nonoperating corporation with no programs such as NOW accounts and automatic teller subsidiaries, organized for the purpose of becoming a machines, which Bank is currently unprepared to bank holding company through the acquisition of offer. Accordingly, the Board concludes that consider- Banks, which have aggregate deposits of $107.6 milations relating to the convenience and needs of the lion,2 representing 0.5 percent of total deposits in community to be served lend weight toward approval commercial banks in Wisconsin, and 19.8 percent of and outweigh any adverse competitive effects associ- the total deposits in commercial banks in the Racine ated with this application. Accordingly, it is the banking market.3 Upon consummation of this propos- Board's judgment that the proposed acquisition would al, Applicant would be the 18th largest banking organibe in the public interest and that the application should be approved. On the basis of the record, the application is ap- 1. Applicant proposes to acquire 82.2 percent of Wind Point Bank; 94.2 percent of Racine Bank; and 84.0 percent of Mt. Pleasant Bank. proved for the reasons summarized above. The trans- 2. Banking data are as of December 31, 1979, except as otherwise action shall not be made before the thirtieth calendar noted. day following the effective date of this Order or three 3. Banks are all located in the Racine banking market, which is approximated by the Racine Ranally Metro Area (RMA). See Heritage Racine Corporation, 66 FEDERAL RESERVE BULLETIN 419 (1980). On April 21, 1980, the Board denied a proposal by Applicant to 2. The relevant banking market, the eastern Palm Beach banking acquire, in addition to the three banks now proposed to be acquired, a market, is approximated by all of Palm Beach County excluding the fourth bank, also located in the Racine market, not controlled by Belle Glade area. Applicant's principals. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 185 zation the state and the second largest banking organi- of Racine Bank in 1976 by Applicant's principals, zation in the Racine market. including the size of the banks involved and the This proposal involves a restructuring of Banks' number of banks remaining as attractive entry vehicles ownership from individuals to a corporation owned for holding companies not represented in the market, substantially by those same individuals. Applicant's the Board concludes that the acquisition of Racine principals, Mr. Samuel C. Johnson and members of his Bank by Applicant's principals had only a slightly immediate family, currently control each of Banks. adverse effect on existing competition at the time.7 Wind Point Bank controls deposits of $68.0 million, The seriousness of this adverse effect is even further representing 12.4 percent of total market deposits ; Mt. mitigated, in the Board's view, by the fact that the Pleasant Bank controls deposits of $21.3 million, re- entry and initial expansion in the Racine market by presenting 3.9 percent of market deposits; and, Racine Applicant's principals were accomplished by the orga- Bank controls deposits of $21.9 million, representing nization of de novo banks, thereby increasing competi- 4.0 percent of market deposits. Applicant's principals tion in the market at the time. organized Wind Point Bank as a new bank in 1970, and The financial and managerial resources and future in 1974 organized Mt. Pleasant Bank, also as a new prospects of Applicant and Banks appear to be generbank. In 1976, Applicant's principals acquired Racine ally satisfactory. In view of certain commitments Bank, an existing bank. The Johnson family currently made by Applicant to increase Banks' capital and controls 70 percent or more of the outstanding shares certain other commitments made by Mr. Johnson, of each of the three banks, and there are numerous banking factors lend some weight toward approval.8 In director and officer interlocks between these banks. In reaching this conclusion, the Board has considered view of these relationships, it appears that no mean- Protestant's allegations that Banks are controlled by ingful competition currently exists between Banks S. C. Johnson & Son, Inc. ("Johnson Wax"), Racine, and, accordingly, that consummation of the proposal Wisconsin, a producer of industrial and household would not eliminate any existing competition between chemicals privately owned by the Johnson family, in the three banks. violation of the Act. Protestant has requested that the In analyzing the competitive effects of an applica- Board order a hearing to investigate the relationships tion to form a bank holding company where an individ- between Johnson Wax and Banks. The Board has ual or group of individuals, controlling in a personal previously determined that a violation of law, in some capacity more than one bank in a relevant banking circumstances, may reflect so adversely upon managemarket, seeks to transfer control of one or more of the rial factors as to warrant denial of an application under banks to a holding company, the Board takes into section 3 of the Act.9 consideration the competitive effects of the transac- Protestant's allegation that Johnson Wax controls tion whereby common ownership was established be- Banks is based in large part on the fact that a majority tween the banks in the market.4 At the time of their of the directors of Wind Point Bank and Mt. Pleasant acquisition of Racine Bank in 1976, Applicant's princi- Bank are officers of Johnson Wax, as are three of the pals also controlled Wind Point Bank and Mt. Pleasant nine directors of Racine Bank. It appears that Protes- Bank, both of which had been organized de novo a few years earlier. Viewed as a single banking organization 7. Protestant alleges that the acquisition of Racine Bank by Applibecause of substantial common control, Wind Point cant's principals eliminated substantial competition and that consum- Bank and Mt. Pleasant Bank together held aggregate mation of this proposal would further an anticompetitive arrangement. Protestants rely on the Board's decision in Eicher Bancorporation, 64 deposits of $56.3 million, representing 12.9 percent of FEDERAL RESERVE BULLETIN 399 (1978). However, the Board finds total market deposits.5 Racine Bank then controlled that the proposal in that case differs significantly from the proposal here. Contrary to the proposal here, the increase in share of total deposits of $11.9 million, representing 2.7 percent of market deposits resulting from the acquisition by the Applicant's total market deposits. The acquisition of Racine Bank principal in Eicher of another bank in the relevant market exceeded by Applicant's principals only modestly increased the the Justice Department Merger Guidelines. In addition, the relevant market involved in Eicher contained fewer and smaller banks than the share of total market deposits then held by Applicant's Racine market. Thus, the anticompetitive effects of the acquisition of principals and would not have exceeded the Depart- another bank by the applicant's principal in Eicher was likely to be ment of Justice Merger Guidelines.6 On the basis of all more serious. Finally, in Eicher, the Board found, in addition to anticompetitive effects, that considerations relating to financial and of the facts of record concerning competition in the managerial resources weighed against approval of the application. relevant banking market at the time of the acquisition 8. In the Board's denial of Applicant's previous application to become a bank holding company (see supra, n.3), the Board found that considerations relating to banking factors weighed against ap- 4. E.g., Mid-Nebraska Banc shares, Inc., 64 FEDERAL RESERVE proval of the application. This finding relates only to the previous BULLETIN 589 (1978), aflfd sub nom. Mid-Nebraska Bancshares, Inc. proposal to acquire four banks, while Applicant now proposes to v. Board of Governors, 627 F.2d. 266 (D.C. Cir. 1980). acquire only three banks. 5. Deposit data relating to Banks at the time Racine Bank was 9. E.g., Florida National Banks of Florida, Inc. (Citizens Bank of acquired by the Johnson family are as of December 31, 1975. Bunnell), 62 FEDERAL RESERVE BULLETIN 696, 698 (1976); Seilon, 6. 1 CCH Trade Reg. Rep. 11 4510. Inc., 63 FEDERAL RESERVE BULLETIN 156, 157-158 (1977). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

186 Federal Reserve Bulletin • February 1981 tant's allegations, even if accepted as true, would not Order, unless such period is extended for good cause reflect so adversely on the integrity of Applicant's by the Board or by the Federal Reserve Bank of managment as to warrant denial of the application for Chicago pursuant to delegated authority. adverse managerial resources. The record indicates By order of the Board of Governors, effective that Johnson Wax owns no shares of any of Banks, January 29, 1981. and that Mr. Johnson and his immediate family own and control both Johnson Wax and Banks in their Voting for this action: Chairman Volcker and Governors personal capacities. Thus it seems clear from the Wallich, Partee, Teeters, Rice, and Gramley. Absent and not voting: Governor Schultz. record that Applicant's principals, by reason of their personal stock ownership, control the election of the (Signed) JAMES MCAFEE, directors of Banks. The Bank Holding Company Act [SEAL] Assistant Secretary of the Board. restricts control of banks and nonbanks by a company; the Act does not prohibit an individual from control- Union De Inversion Mobiliaria, S.A., ling in his or her personal capacity both a bank and a nonbank company.10 Madrid, Spain Protestant also alleges that Banks are used to benefit Banco Occidental, S.A., Johnson Wax. For example, Protestant claims that Madrid, Spain Banks give preferential treatment to employees of Johnson Wax. After a review of the record, the Board TBK-Inversiones, S.A., finds that there is no evidence of substance to support Madrid, Spain these allegations. Since Banks' primary supervisory authorities have Compagnie de Gestion Belgonot requested a hearing on the application, the Board is not required to conduct one.11 For the reasons Luxembourgeoise, S.A., Luxembourg stated above, the Board does not believe that a hearing would resolve issues of fact material to this application. Accordingly, Protestant's request for a hearing is Order Approving Formation of Bank Holding denied. Companies It appears that affiliation of Banks with Applicant would allow Banks to be operated more efficiently and Union de Inversion Mobiliaria, S.A., Banco Occidentwould afford them additional managerial and financial al, S.A., and TBK-Inversiones, S.A., all of Madrid, flexibility, thereby allowing Banks to better serve their Spain, and Compagnie de Gestion Belgo-Luxembourcommercial and other customers. It is the Board's geoise, S.A. ("Cogebel"), Luxembourg, have applied judgment that convenience and needs considerations for the Board's approval under section 3(a)(1) of the lend weight toward approval, and together with bank- Bank Holding Company Act (12 U.S.C. § 1842(a)(1)) ing factors, are sufficient to outweigh the slightly of formation of bank holding companies by the acquisiadverse competitive effects associated with this pro- tion of 64.1 percent of the voting shares of Banco posal. Comercial de Mayaguez ("Bank"), Mayaguez, Puerto Based on the foregoing and other considerations Rico. Most of these shares would be held by Cogebel, reflected in the record, it is the Board's judgment that which is a direct or an indirect subsidiary of each of the proposed acquisitions are in the public interest and the other applicants. that the application should be approved. Notice of the applications, affording opportunity for On the basis of the record, the application is ap- interested persons to comment, has been given in proved for the reasons summarized above. The trans- accordance with section 3(b) of the Act, and the time actions shall not be made before the thirtieth calendar for filing comments has expired. The Board has conday following the effective date of this Order or later sidered the applications and all comments received in than three months after the effective date of this light of the factors set forth in section 3(c) of the Act. Applicants belong to the Occidental group of com- 10. Protestant's other allegations in this regard do not warrant panies that is based in Spain and controlled by Gredenial of this proposal. The incidental services allegedly provided by gorio Diego Jimenez. Their combined assets approxi- Johnson Wax to Banks would not permit Johnson Wax to exercise such a significant influence over the management and operations of mate $1.2 billion.1 Except for Banco Occidental the Banks as to result in control of the institutions. In addition, to the Applicants are nonoperating holding companies. extent that the granting to Mr. Johnson of a right of first refusal with Banco Occidental is the 20th largest of 38 privately respect to Applicant's shares evidences any control over Applicant, such control would be exercised by Mr. Johnson, not by Johnson owned "national banks" in Spain and is the 11th Wax. 11. E.g., Farmers and Merchants Bank of Las Cruces v. Board of Governors, 567 F.2d 1082 (D.C. Cir. 1977). 1. Banking data are as of September 30, 1978. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 187 largest of 24 national banks classified as "industrial employees and former employees of Banco Occidental banks." As an industrial bank Banco Occidental and Banco Comercial Occidental. serves individuals and small- to medium-size busi- In several respects the 1977 acquisition of Bank's nesses through 37 offices in Spain. Banco Occidental shares superficially resembled transactions the Board also conducts a commercial banking business through has considered violations of the Act by companies its indirect subsidiary, Banco Comercial Occidental, acquiring bank shares indirectly or through individuals S.A. Combined these two institutions operate 96 of- without the Board's prior approval.4 However, befices in Spain and rank 19th of 109 Spanish commercial cause of the unusual circumstances and the very and industrial banking organizations.2 Banco Occi- compelling public interest in the consummation of this dental holds interests in a variety of other companies, transaction, even if the Board concluded that Applimost of which are located in Spain. None of the cants had violated the Act in 1977, it would not be Applicants engages in any business activity in the compelled to deny these applications on that account. United States directly or indirectly, and under rules In the first place, upon inquiry Applicants were led to the Board recently adopted (45 Federal Register believe, and continue to believe, that the Board's 81,537 (1980)), to be codified as (12 C.F.R. § 211.23), if approval was not required for Mr. Ruedas' acquisithe proposed transaction is consummated Applicants tion. It is Applicants' contention that Mr. Ruedas' would be qualified foreign banking organizations eligi- acquisition was made for Mr. Diego personally and not ble for the exemptions prescribed by those rules. on behalf of any of the Occidental companies. More- Bank is the 12th largest of 16 banking organizations over, Applicants cooperated with Bank's primary suin Puerto Rico and the 8th largest of 11 banks domi- pervisors and have cooperated with the Board's staff, ciled there. Bank operates five offices, serving primar- and they have established an internal management ily a retail clientele, and holds deposits of $88 million, compliance and reporting system and submitted to the representing 8.1 percent of the deposits in commercial Board thorough undertakings designed to insure that banks in Puerto Rico.3 Banco Occidental maintains a they will remain aware of and in compliance with laws representative office in San Juan, Puerto Rico, con- and regulations applicable to them as bank holding ducting a wholesale internationally oriented business, companies and as a result of their operations in Puerto but it appears that consummation of this proposal Rico. would not have any substantial adverse effects on It is also clear from Applicants' conduct both before competition or concentration in any relevant area. and after the 1977 acquisition that their intention at all Competitive considerations are therefore consistent times has been to adhere to applicable rules and with approval of these applications. appropriate standards of conduct. Finally, the assist- Applicants have been associated with Bank since ance Applicants have extended to Bank has been of 1974 when members of the Occidental group bought a value in preserving Bank as a viable competitor in minority interest in Bank, as permitted by the Act, and Puerto Rico, and the consequences of requiring a they have been represented on Bank's board of direc- divestiture of Bank could be particularly damaging in tors since 1975. In December 1977, however, the that respect. This combination of circumstances pernature of Applicants' association with Bank changed suades the Board that even if Applicants were found to dramatically. At that time members of the Occidental have violated the Act, that factor would not by itself group of companies provided Bank capital funds the require denial of the applications. Federal Deposit Insurance Corporation and the Secre- If any of these circumstances had been different, the tary of the Treasury of the Commonwealth of Puerto Board would be disposed to go forward and adjudicate Rico considered necessary to alleviate financial diffi- the question whether Applicants, acting through Mr. culties Bank was then experiencing. As a result of the Ruedas, acquired control of Bank in violation of the increase in Bank's capital, Applicants' voting interest Act. A bare claim of ignorance would obviously have in Bank increased to 23 percent, and an additional 47 been an unsatisfactory explanation of a violation of the percent of Bank's shares were issued to Patricio Act. The Board expects companies to ascertain and Ruedas, a friend of Mr. Diego. On the basis of this meet their legal responsibilities under the Act with the ownership interest Mr. Diego assumed effective con- greatest care and will hold them answerable for a trol of Bank and exercised that control chiefly through failure to do so. An adjudication of the question in these circumstances, however, will not have a material bearing on the disposition of these applications or 2. It is Banco Occidental's intention formally to absorb this subsidother regulatory actions by the Board. iary, the operations of which have already been largely integrated with Banco Occidental's. In furtherance of this plan, all but three of Banco Comercial Occidental's offices were transferred to Banco Occidental on December 29, 1980. 3. Since the date of these data, Bank has received approval to 4. See, e.g., First National Holding Corp., 63 FEDERAL RESERVE establish a sixth office. BULLETIN 929 (1977). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

188 Federal Reserve Bulletin • February 1981 Applicants' financial and managerial resources and Bank's directors, and whether the majority shareholdfuture prospects are regarded as satisfactory, and ers are obliged to do more than that, as the minority since 1977 Bank's condition has improved steadily group contends, is a question of contract interpretaunder Mr. Diego's direction. Applicants and Mr. tion that should appropriately be resolved in another Diego have shown a willingness to supply to Bank forum. It is not established, based on the record in this capital and managerial support as needed and the case, that the existence of this dispute with several of Board has reason to believe that Applicants will con- Bank's minority shareholders reflects adversely on tinue to serve as a source of strength to Bank in the Applicants' intentions or their managerial resources. future.5 The support Bank has received from Mr. On the basis of the record, the applications are Diego and Applicants has preserved the institution as a approved for the reasons summarized above.7 The competitor in Puerto Rico and enabled it to expand its transaction shall not be made before the thirtieth service to its community. Banking factors and consid- calendar day following the effective date of this Order erations relating to the convenience and needs of the or later than three months after the effective date of communities Bank serves therefore lend weight to- this Order unless such period is extended for good ward approval of these applications, and it is the cause by the Board or by the Federal Reserve Bank of Board's judgment that consummation of the proposal New York pursuant to delegated authority. would be in the public interest. By order of the Board of Governors, effective In reaching this conclusion the Board has given due January 27, 1981. consideration to comments received from a group of Bank's minority shareholders which chiefly is dissatis- Voting for this action: Chairman Volcker and Governors fied with the method by which directors of Bank are Wallich, Partee, Teeters, Rice, and Gramley. Absent and not chosen.6 The protestants concede that the majority voting: Vice Chairman Schultz. shareholders have afforded minority shareholders ap- (Signed) JAMES MCAFEE, propriate representation in every annual election of [SEAL] Assistant Secretary of the Board. ORDERS APPROVED UNDER BANK HOLDING COMPANY ACT By the Board of Governors During January 1981, the Board of Governors approved the applications listed below. Copies are available upon request to Publications Services, Division of Support Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Board action Applicant Bank(s) (effective date) Cameron Investment Company, Inc. Bank of Cameron, January 16, 1981 Park Falls, Wisconsin Cameron, Wisconsin First American Corporation, The First National Bank of Alger County, January 30, 1981 Kalamazoo, Michigan Munising, Michigan First City Bancorporation of Texas, Inc., Valley View Bank, January 26, 1981 Houston, Texas Dallas, Texas First City Bancorporation of Texas, Inc., The Bank of South Texas, January 29, 1981 Houston, Texas Alice, Texas Willmar Bancorporation, Inc., Citizens National Bank of Willmar, January 30, 1981 Willmar, Minnesota Willmar, Minnesota 5. Applicants will not consummate this proposal before Cogebel's Board might conclude that the Board's action on these applications capital has been increased to 310 million Luxembourg francs (approxi- could affect Mr. Royo or his interests or the litigation to which he is a mately $10 million). party. 6. Horacio M. Royo also made the Board aware of litigation he 7. As part of these applications, Applicants have agreed to continue instituted against Bank, which has no apparent bearing on the merits to provide information the Board considers necessary for the proper of these applications. There are no facts in the record from which the discharge of its supervisory responsibilities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 189 Sections 3 and 4 Nonbanking Reserve Effective AApppplliiccaanntt BBaannkk((ss)) company (or BBaannkk ddaattee activity) Financial Bancshares Company, Santiago State Bank, to engage in general Minneapolis 1/15/81 Becker, Minnesota Santiago, Minnesota insurance activities in three communities with populations not exceeding 5,000 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 Applicant Bank(s) Reserve Effective Bank date Anadarko Bancshares, Inc., Anadarko Bank and Trust Kansas City December 24, 1980 Anadarko, Oklahoma Company, Anadarko, Oklahoma Anchor Bancorporation Inc., Anchor State Bank, Chicago January 14, 1981 Farmer City, Illinois Anchor, Illinois Anchor Banshares, Inc., The Anchor Bank, Kansas City December 26, 1980 Alliance, Nebraska Merriman, Nebraska Borresen Investments, Inc., Westbrook State Bank, Minneapolis January 26, 1981 Westbrook, Minnesota Westbrook, Minnesota Burr Oak Banco, Inc., The Burr Oak State Bank, Kansas City December 26, 1980 Burr Oak, Kansas Burr Oak, Kansas Childress Bancshares, Inc., The First National Bank in Dallas January 2, 1981 Childress, Texas Childress, Childress, Texas Choctaw Bancorp, Inc., Choctaw State Bank, Kansas City January 22, 1981 Choctaw, Oklahoma Choctaw, Oklahoma Colorado National Bankshares, Arvada State Bank, Kansas City December 30, 1980 Inc., Arvada, Colorado Denver, Colorado Commerce Southwest Inc., Central National Bank of Dallas January 20, 1981 Dallas, Texas McKinney, McKinney, Texas White Rock Bank of Dallas, Dallas, Texas Connecticut River Bancorp, Inc., Peoples National Bank of Boston January 14, 1981 Charlestown, New Littleton, Hampshire Littleton, New Hampshire Denver City Bancshares, Inc., Yoakum County Bancshares, Dallas January 8, 1981 Denver City, Texas Inc., Denver City, Texas Echo Bancshares, Inc., Citizens State Bank of Echo, Minneapolis January 14, 1981 Echo, Minnesota Echo, Minnesota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

190 Federal Reserve Bulletin • February 1981 Section 3—continued Applicant Bank(s) Reserve Effective date Bank Elgin Bancshares, Inc., Union National Bank and Trust Chicago January 9, 1981 Kansas City, Missouri Company of Elgin, Elgin, Illinois Elston Corporation, Elston Bank & Trust Company Chicago January 14, 1981 Crawfordsville, Indiana Crawfordsville, Indiana Etowah Bancing Company, Southern United Bank of Atlanta January 9, 1981 Etowah, Tennessee McMinn County, Etowah, Tennessee Everly Bancorporation, Everly State Bank, Chicago January 13, 1981 Everly, Iowa Everly, Iowa F & M Holding Company, Farmers and Merchants Bank of Richmond January 14, 1981 Summersville, West Virginia Summersville, Summersville, West Virginia Federated Bancshares, Inc., The Bank of Otterville, Kansas City December 22, 1980 Otterville, Missouri Otterville, Missouri Fifth Third Bancorp, The Farmers Bank, Cleveland January 19, 1981 Cincinnati, Ohio West Union, Ohio First Citizens Bancshares, Inc., Citizens National Bank in Dallas January 16, 1981 Waxahachie, Texas Waxahachie, Waxahachie, Texas FIRST NATIONAL First National Bank in New Chicago January 16, 1981 BANCORP., Castle, New Castle, Indiana New Castle, Indiana First Southern Bancshares, Inc., Bank of Mount Juliet, Atlanta January 23, 1981 Mount Juliet, Tennessee Mount Juliet, Tennessee First State Holding Company of Bank of Prescott, St. Louis December 29, 1980 Pre scott, Prescott, Arkansas Prescott, Arkansas First United, Inc., First National Bank of Central St. Louis January 12, 1981 Central City, Kentucky City, Central City, Kentucky First United Bancorporation, The Southwest State Bank, Dallas December 30, 1980 Inc., Brown wood, Texas Fort Worth, Texas Georgia Bancshares, Inc., The Farmers National Bank of Atlanta January 27, 1981 Macon, Georgia Monticello, Monticello, Georgia Golden Summit Corporation, Santa Rosa State Bank, Atlanta December 29, 1980 Milton, Florida Milton, Florida Hardin County Bancorporation, Hardin County Savings Bank of Chicago January 16, 1981 Eldora, Iowa Eldora Iowa, Eldora, Iowa, The Highland Ban-Corp., Inc., The Cleveland Bank, Kansas City January 13, 1981 Cleveland, Oklahoma Cleveland, Oklahoma Independent Bank Corporation, The Peoples Bank of Leslie, Chicago January 16, 1981 Ionia, Michigan Leslie, Michigan Jersey Village Bancshares, Inc., Jersey Village Bank, Dallas January 12, 1981 Houston, Texas Houston, Texas Mercantile Bancorporation Inc., Peoples Bank of Kansas City St. Louis January 13, 1981 St. Louis, Missouri Kansas City, Missouri Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 191 Section 3—continued Applicant Bank(s) Reserve Effective date Bank Metro BancShares, Inc., Alvarado State Bank, Dallas January 15, 1981 Alvarado, Texas Alvarado, Texas Metropolitan Bancorporation, First Bank and Trust Company, Atlanta January 27, 1981 Tampa, Florida Belleair Bluffs, Florida Michigan National Corporation, Michigan National Chicago January 15, 1981 Bloomfield Hills, Michigan Bank—Grosse Pointe, Grosse Pointe Woods, Michigan Middle River Bancshares, Inc., First National Bank of Middle Minneapolis December 30, 1980 Middle River, Minnesota River, Middle River, Minnesota New Salem Bancorporation, Inc. Security State Bank of New Minneapolis December 30, 1980 New Salem, North Dakota Salem, New Salem, North Dakota Mulvane Bankshares, Inc., The Mulvane State Bank, Kansas City January 19, 1981 Mulvane, Kansas Mulvane, Kansas Northern Bancshares, Inc., The First National Bank of Dallas December 31, 1980 Chillicothe, Texas Chillicothe, Chillicothe, Texas Orient Bancorporation, Bank of the Orient, San January 14, 1981 San Francisco, California San Francisco, California Francisco PTD Bancorp., Inc., Potosi State Bank, Chicago January 2, 1981 Potosi, Wisconsin Potosi, Wisconsin Pike Bancshares, Inc., The First National Bank of St. Louis January 13, 1981 Petersburg, Indiana Petersburg, Petersburg, Indiana Planters Holding Company, Planters Bank & Trust St. Louis January 8, 1981 Indianola, Mississippi Company, Ruleville, Mississippi Republic of Texas Corporation, Houston National Bank- Dallas January 9, 1981 Dallas, Texas Kingwood, Kingwood, Texas Houston National Bank West, Houston, Texas Sahara Bancorp, Inc., First State Bank of New Minneapolis January 23, 1981 New Brighton, Minnesota Brighton, New Brighton, Minnesota Savannah Bancshares, Inc., First Community State Bank of Kansas City January 9, 1981 Savannah, Missouri Savannah, Savannah, Missouri Schertz Bancshares Corporation, Schertz Bank & Trust, Dallas January 9, 1981 Shertz, Texas Schertz, Texas Security State Holding Company, Security State Bank of Minneapolis January 15, 1981 Lindstrom, Minnesota Lindstrom, Lindstrom, Minnesota South Georgia Bankshares Corp., The Peoples Bank of Lyons, Atlanta December 31, 1980 Lyons, Georgia Lyons, Georgia South Dakota Bancshares, Inc., Sully County Bank, Minneapolis January 7, 1981 Pierre, South Dakota Onida, South Dakota Strong City Banco, Inc., Strong City State Bank, Kansas City December 19, 1980 Lincoln, Nebraska Strong City, Kansas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

192 Federal Reserve Bulletin • February 1981 Section 3—continued Applicant Bank(s) Reserve Effective Bank date The Summitt Bancorporation, The Maplewood Bank and Trust New York January 8, 1981 Summit, New Jersey Company, Maplewood, New Jersey Sweet Springs Bancshares, Inc., Chemical Bank, Kansas City January 23, 1981 Sweet Springs, Missouri Sweet Springs, Missouri Tri-County Bancorp., Tri-County Bank & Trust Chicago January 20, 1981 Roachdale, Indiana Company, Roachdale, Indiana Union Bancshares, Incorporated, Union State Bank, Dallas January 2, 1981 San Antonio, Texas San Antonio, Texas Union Bank Corporation, Union State Bank, Kansas City December 26, 1980 Upton, Wyoming Upton, Wyoming United Mercantile Bancshares, United Mercantile Bank, Dallas January 26, 1981 Inc., Shreveport, Louisiana Shreveport, Louisiana United Banks of Colorado, Inc., Bank of Durango, Kansas City January 20, 1981 Denver, Colorado Durango, Colorado United Banks of Colorado, Inc., Bank of Ignacio Kansas City January 20, 1981 Denver, Colorado, Ignacio, Colorado West Brook Bancshares, Inc., West Brook Bank, Chicago January 26, 1981 Westchester, Illinois Westchester, Illinois PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits Independent Insurance Agents of America and Indeagainst the Federal Reserve Banks in which the Board pendent Insurance Agents of Missouri v. Board of of Governors is not named a party. Governors, filed September 1980, U.S.C.A. for the Eighth Circuit. Wilshire Oil Company of Texas v. Board of Gover- Independent Insurance Agents of America and Indenors, et al., filed U.S.D.C. for New Jersey. pendent Insurance Agents of Virginia v. Board of 9 to 5 Organization for Women Office Workers v. Governors, filed September 1980, U.S.C.A. for the Board of Governors, filed December 1980, Fourth Circuit. U.S.D.C. for the District of Massachusetts. Nebraska Bankers Association, et al. v. Board of Wilshire Oil Company of Texas v. Board of Gover- Governors, et al., filed September 1980, U.S.D.C. nors, filed December 1980, U.S.C.A. for the District for the District of Nebraska. of Columbia. Republic of Texas Corporation v. Board of Governors, Securities Industry Association v. Board of Gover- filed September 1980, U.S.C.A. for the Fifth Cirnors, et al., filed October 1980, U.S.D.C. for the cuit. District of Columbia. Consumers Union of the United States, Inc., v. Board Securities Industry Association v. Board of Gover- of Governors, et al., filed August 1980, U.S.D.C. nors, et al., filed October 1980, U.S.C.A. for the for the District of Columbia. District of Columbia. A. G. Becker Inc., v. Board of Governors, et al., filed A. G. Becker, Inc. v. Board of Governors, et al., filed August 1980, U.S.D.C. for the District of Columbia. October 1980, U.S.D.C. for the District of Colum- Otero Savings and Loan Association v. Board of bia. Governors, filed August 1980, U.S.D.C. for the A. G. Becker, Inc. v. Board of Governors, et al., filed District of Columbia. October 1980, U.S.C.A. for the District of Colum- Edwin F. Gordon v. Board of Governors, et al., filed bia. August 1980, U.S.C.A. for the Fifth Circuit. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 193 Martin-Trigona v. Board of Governors, filed July Connecticut Bankers Association, et al., v. Board of 1980, U.S.C.A. for the District of Columbia. Governors, filed May 1979, U.S.C.A. for the Dis- U.S. League of Savings Associations v. Depository trict of Columbia. Institutions Deregulation Committee, et al., filed Independent Insurance Agents of America, et al., v. June 1980, U.S.D.C. for the District of Columbia. Board of Governors, filed May 1979, U.S.C.A. for Berkovitz, et al. v. Government of Iran, et al., filed the District of Columbia. June 1980, U.S.D.C. for the Northern District of Independent Insurance Agents of America, et al., v. California. Board of Governors, filed April 1979, U.S.C.A. for Mercantile Texas Corporation v. Board of Governors, the District of Columbia. filed May 1980, U.S.C.A. for the Fifth Circuit. Independent Insurance Agents of America, et al., v. Corbin, Trustee v. United States, filed May 1980, Board of Governors, filed March 1979, U.S.C.A. for United States Court of Claims. the District of Columbia. Louis J. Roussel v. Board of Governors, filed April Security Bancorp and Security National Bank v. 1980, U.S.D.C. for the District of Columbia. Board of Governors, filed March 1978, U.S.C.A. for Ulyssess S. Crockett v. United States, et al., filed the Ninth Circuit. April 1980, U.S.D.C. for the Eastern District of Investment Company Institute v. Board of Governors, North Carolina. filed September 1977, U.S.D.C. for the District of County National Bancorporation and TGB Co. v. Columbia. Board of Governors, filed September 1979, Roberts Farms, Inc., v. Comptroller of the Currency, U.S.C.A. for the Eighth Circuit. et al., filed November 1975, U.S.D.C. for the South- Gregory v. Board of Governors, filed July 1979, ern District of California. U.S.D.C. for the District of Columbia. David Merrill, et al. v. Federal Open Market Commit- Donald W. Riegel, Jr. v. Federal Open Market Com- tee, filed May 1975, U.S.D.C. for the District of mittee, filed July 1979, U.S.D.C. for the District of Columbia. 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 All 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 • February 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 A67 Guide to Tabular Presentation, A50 Gross national product and income Statistical Releases, and Special Tables A51 Personal income and saving Special Tables International Statistics A68 Commercial bank assets and liabilities, A52 U.S. international transactions—Summary September 30, 1980 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 1980 1980 Item Ql' Q2' Q3' Q4 Aug. Sept. Oct. Nov. Dec. Monetary and credit aggregates (annual rates of change, seasonally adjusted in percent)1 Reserves of depository institutions 1 Total * 4.3 0.4 6.7 16.5 15.3 21.3 5.2 35.9 1.6 2 Required 5.1 0.7 5.8 15.2 14.9 22.9 6.8 27.0 0.0 3 Nonborrowed 3.3 7.4 12.4 7.2 7.0 0.7 5.4 13.2 13.4 4 Monetary base2 7.8 5.2 9.9 11.2 15.0' 9.7 10.1 15.0' 4.9 Concepts of money and liquid assets3 5 M-1A 4.6 -4.4 11.5 8.1 19.3 12.3' 9.1' 6.5' -11.1 6 M-1B 5.8 -2.6 14.6 10.8 21.8' 15.8 11.8' 8.7' -9.0 7 M-2 7.3 5.6 16.0 9.1 14.9' 8.7' 8.8 10.4 2.0 8 M-3 8.0 5.8 13.0 11.6 14.0' 9.6' 10.8' 15.2' 7.4 9 L 8.6 7.8 9.7 n.a. 13.0' 12.5' 6.4' 14.3 n.a. Time and savings deposits Commercial banks 10 Total 8.2 10.0 4.9 15.0 8.0' 12.5' 11.7' 23.2' 18.3 11 Savings4 -19.8 -21.7 27.5 1.7 26.4' 8.8' 10.0' -8.7' -40.0 12 Small-denomination time5 28.9 33.1 0.7 17.1 0.9' 6.6' 11.3' 31.6' 39.6 13 Large-denomination time6 11.1 10.6 -7.2 23.4 2.1' 22.5' 14.1' 38.2' 39.5 14 Thrift institutions7 2.6 4.8 9.9 11.6 11.5' 10.2' 11.7' 12.7' 11.1 15 Total loans and securities at commercial banks8 9.5 -.5 7.0 14.8 17.9 14.1 13.3 16.6 12.6 1980 1980 1981 Q1 Q2 Q3 04 Sept. Oct. Nov. Dec. Jan. Interest rates (levels, percent per annum) Short-term rates 16 Federal funds9 15.05 12.69 9.83 15.85 10.87 12.81 15.85 18.90 19.08 17 Discount window borrowing10 12.51 12.45 10.35 11.78 10.17 11.00 11.47 12.87 13.00 18 Treasury bills (3-month market yield)11 13.35 9.62 9.15 13.61 10.27 11.62 13.73 15.49 15.02 19 Commercial paper (3-month)1112 14.54 11.18 9.65 15.26 10.97 12.52 15.18 18.07 16.58 Long-term rates Bonds 20 U.S. government13 11.78 10.58 10.95 12.23 11.47 11.75 12.44 12.49 12.29 21 State and local government14 8.23 7.95 8.58 n.a. 8.94 9.11 9.56 10.11 9.66 22 Aaa utility (new issue)15 13.22 11.77 12.20 13.49 12.74 13.18 13.85 14.51 14.12 23 Conventional mortgages16 14.32 12.70 13.12 14.62 13.65 14.10 14.70 15.05 n.a 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 Nonfinancial Statistics • February 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 Dec. 17 Dec. 24 Dec. 31 Jan. 7 Jan. 14 Jan. 21 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 142,984 143,250 142,819 143,982 144,173 145,857 146,082 143,691 143,002 2 U.S. government securities1 120,656 119,074 119.362 121,322 119,337 117,608 121,449 120,543 119,952 3 Bought outright 119,094 118,548 118,795 120,724 119,071 117,098 119,139 120,543 119,753 4 Held under repurchase agreements 1,562 526 567 598 266 510 2,310 199 5 Federal agency securities 9,087 8,821 8,812 8,881 8,749 8,837 9,050 8,739 8.754 6 Bought outright 8.761 8,743 8,734 8,739 8,739 8,739 8,739 8,739 8,739 7 Held under repurchase agreements 326 78 73 142 10 98 311 15 8 Acceptances 397 124 68 112 30 191 268 32 9 Loans 2,156 1,617 1,405 1,505 1,649 1,627 1,117 1,332 1,419 10 Float 4,288 5.797 4,161 4,221 6,038 9,049 5,699 4,489 3,650 11 Other Federal Reserve assets 6,400 7,817 9,011 7,941 8,370 8,544 8,498 8,587 9,195 12 Gold stock 11,163 11,161 11,160 11,161 11,161 11,161 11,161 11,161 11,160 13 Special drawing rights certificate account . . 3,325 3,313 2,518 3,368 3,368 3,125 2,518 2,518 2,518 14 Treasury currency outstanding 13,439 13,422 13,437 13,408 13,410 13,485 13,427 13,431 13,438 ABSORBING RESERVE FUNDS 15 Currency in circulation 132,787 135,676 133,416 135,365 135,960 136,971 136,121 134,479 132,811 16 Treasury cash holdings 458 446 439 445 446 445 436 440 437 Deposits, other than member bank reserves, with Federal Reserve Banks 17 Treasury 2,964 2,722 3,172 2,784 2,287 3,286 2,979 3,085 3,109 18 Foreign 314 353 380 386 395 375 373 530 304 19 Other 401 403 541 391 392 416 651 395 672 20 Other Federal Reserve liabilities and capital 4,772 4,881 4,872 4,977 4,974 4.857 4,909 4,971 4,973 21 Reserve accounts2 29,215 26,664 27,114 21,572 27,659 27,277 27,718 26.900 27,809 End-of-month figures Wednesday figures 1981 Nov. Dec. Jan. Dec. 17 Dec. 24 Jan. 7 Jan. 14 SUPPLYING RESERVE FUNDS 22 Reserve bank credit outstanding 146,115 146,383 139,328 148,364 147,075 146,382 142,271 145,550 137,992 23 U.S. government securities1 120,812 121.328 117,169 122,123 118,308 121,328 117,331 121.571 113,812 24 Bought outright 118.936 119,299 117,169 120,069 118,308 119,299 117,331 121.571 113,812 25 Held under repurchase agreements 1,876 2,029 2.054 2,029 26 Federal agency securities 9,165 9.264 8.739 9,128 8,739 9,264 8.739 8,739 8,739 27 Bought outright 8.761 8.739 8,739 8,739 8,739 8,739 8,739 8,739 8.739 28 Held under repurchase agreements 404 525 389 525 29 Acceptances 523 776 327 776 30 Loans 2.284 1,809 1,304 1,616 1,388 1,809 854 2,539 1,349 31 Float 6,792 4.467 2,280 6,561 9,673 4,467 6,521 3,863 4,894 32 Other Federal Reserve assets 6,539 8.739 9,836 8,609 8,967 8,738 8.826 8,838 9,198 33 Gold stock 11,162 11,160 11,159 11,161 11,161 11,161 11,161 11,160 11,159 34 Special drawing rights certificate account . . 3,368 2,518 2,518 3,368 3,368 2,518 2,518 2,518 2,518 35 Treasury currency outstanding 13,779 13,838 13,450 13,408 13,423 13,838 13,427 13.437 13,444 ABSORBING RESERVE FUNDS 36 Currency in circulation 134,104 137,244 130,688 135,904 136,771 137.244 135,552 134,042 132,325 37 Treasury cash holdings 449 437 441 441 447 437 437 440 440 Deposits, other than member bank reserves with Federal Reserve Banks 38 Treasury 2,435 3.062 3,038 2,653 2,540 3,062 3,217 2.814 3,013 39 Foreign 368 411 573 287 413 411 257 301 248 40 Other 478 617 515 403 379 617 529 370 536 41 Other Federal Reserve liabilities and capital 5.061 4,671 4,579 5,009 4,741 4,671 4,878 4,891 4,701 42 Reserve accounts2 31.528 27.456 26,621 31,604 29,735 27,456 24,507 29,807 23,850 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 1981 Dec. May June July Aug. Sept. Oct. Nov. Dec. Jan .P 1 Reserve balances with Reserve Banks' 32,473 32,755 32,125 31,384 28,923 29,164 29,976 29,215 26,664 27,114 15.311 1188,,114499 1199,,229933 3 Vault cash at institutions with required reserve balances2 11,344 10,999 1J' ,141 11,287 11,262 11,811 11,678 11,876 12,602 13,587 4 Vault cash equal to required reserves at other institutions n. a. n,. a. n., a. n. a. n. a. n., a. n. a. 439 704 700 5 Surplus vault cash at other institutions3 . n. a. n.. a. n. a. n. a. n. a. n. a. n.a. 2,996 4,843 5,006 6 Reserve balances + total vault cash4 43,972 43,968 43,479 42,859 40,373 41,164 41,815 44,674 44,940 46,520 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. 41,678 40.097 41,514 8 Required reserves (estimated) 43,578 43,785 43,268 42,575 40,071 40,908 41,498 40,723 40,067 41,022 9 Excess reserve balances at Reserve Banks4-6 394 183 211 284 302 256 317 955 30 492 10 Total borrowings at Reserve Banks 1,473 1,028 380 395 659 1,311 1,335 2,156 1,617 1,405 11 Seasonal borrowings at Reserve Banks 82 63 12 7 10 26 67 99 116 120 Large commercial banks 12 Reserves held 24,940 26,267 13 Required 25,819 26,600 14 Excess -879 -333 Small commercial banks 15 Reserves held 13,719 13,935 16 Required 13,523 13,691 17 Excess n. a. n .a. n. a. n. a. n. a. n. a. n. a. n., a. 196 244 U.S. agencies and branches 18 Reserves held 260 253 19 Required 230 230 20 Excess 30 23 All other institutions 21 Reserves held 494 513 22 Required 495 501 23 Excess -1 12 Weekly averages of daily figures for week ending Nov. 26 Dec. 3 Dec. 10 Dec. 17 Dec. 24 Dec. 31 Jan. 1P Jan. 14P Jan. 21 P Jan. 28P 24 Reserve balances with Reserve Banks1 .... 28,068 27,510 26,096 27,572 27,659 27,277 27,718 26,900 27,809 26,508 25 Total vault cash (estimated) 16,937 18,317 18,064 18,317 17,663 18,482 17,841 20,390 20,244 18,827 26 Vault cash at institutions with required reserve balances2 1111,,338855 1122,,441133 1122,,553311 1122,,666600 1122,,334455 1122,,995544 1122,,449988 1144,,226688 1144,,006666 1133,,773366 27 Vault cash equal to required reserves at other institutions 730 740 700 700 700 700 700 700 700 700 28 Surplus vault cash at other institutions3 . 4,822 5,164 4,833 4,957 4,618 4,828 4,643 5,422 5,478 4,391 29 Reserve balances + total vault cash4 45,134 45,955 44,288 46,013 45,456 45,882 45,681 47,403 48,165 45,442 30 Reserve balances + total vault cash used to satisfy reserve requirements4-5 40,312 40,791 39,455 41,056 40,838 41,054 41,038 41,981 42,687 41,051 31 Required reserves (estimated) 39,995 39,910 39,193 40,554 40,029 40,558 40,374 41,240 42,180 40,651 32 Excess reserve balances at Reserve Banks4-6 317 881 262 502 809 496 664 741 507 400 33 Total borrowings at Reserve Banks 2,215 2,142 1,786 1,505 1,649 1,627 1.117 1,332 1,419 1,793 34 Seasonal borrowings at Reserve Banks 115 110 111 124 119 116 112 105 123 137 Large commercial banks 35 Reserves held 25,354 25,698 24,495 25,584 25,757 25,700 25,897 26,698 27,380 25,881 36 Required 25,724 25,631 25,171 26,248 25,773 26,163 26,050 26,797 27,629 26,222 37 Excess -370 67 -676 -664 -16 -463 -153 -99 -249 -341 Small commercial banks 38 Reserves held 13,618 13,880 13.517 13,706 13,828 13,955 13,832 13,889 14,185 13,929 39 Required 13,574 13,547 13,324 13,566 13,551 13,643 13,598 13,693 13,825 13,698 40 Excess :... 44 333 193 140 277 312 234 196 360 231 U.S. agencies and branches 41 Reserves held 235 237 244 274 261 262 271 264 252 244 42 Required 228 244 230 223 221 234 242 221 223 231 43 Excess 7 -7 14 51 40 28 29 43 29 13 All other institutions 44 Reserves held 487 500 454 535 463 527 565 529 496 473 45 Required 469 488 468 517 484 518 484 529 503 500 46 Excess 18 12 -14 18 -21 9 81 0 -7 -27 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 Nonfinancial Statistics • February 1981 1.13 FEDERAL FUNDS AND REPURCHASE AGREEMENTS Large Member Banks' Averages of daily figures, in millions of dollars 1980 and 1981, week ending Wednesday By maturity and source Dec. 3 Dec. 10' Dec. 17 Dec. 24' Dec. 31' Jan. 7 Jan. 14 Jan. 21 Jan. 28 One day and continuing contract 1 Commercial banks in United States 51,213 52,762 51,140 46,737 45,865 50,819 52,180 48,688 44,424 2 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies 14,205 14,384 14,076 13,898 13,846 14,516 15,309 14,602 14,227 3 Nonbank securities dealers 2,581 2,355 2,864 2,682 2,242 2,784 2,937 2,899 2,768 4 Allother 15,484 17,964 17,847 16,656 14,598 16,120 17,728 17,817 17,326 All other maturities 5 Commercial banks in United States 4,501 4,001 4.070 4,324 5,266 4,606 4,181 3,993 4,196 6 Other depository institutions, foreign banks and foreign official institutions, and U.S. government agencies 7,225 7,300 7,534 7,750 7,738 7,112 7,138 7,058 7,303 7 Nonbank securities dealers 4,494 4,139 4,136 4,495 4,491 4,150 4,085 4,652 4,916 8 Allother 12,147 10,304 9,981 10,820 13,847 12,062 11,356 11,864 12,377 MEMO: Federal funds and resale agreement loans in maturities of one day or continuing contract 9 Commercial banks in United States 14,697 14,141 14,411 13,385 15,531 18,124 17,016 13,879 11,356 10 Nonbank securities dealers 2,721 2,976 2,950 3,254 2,772 3,614 3,726 3,032 2,547 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 1/31/81 date rate 1/31/81 date rate 1/31/81 date rate 1/31/81 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 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 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 514 514 1974— Apr. 25 714-8 1978— July 10 71/4 7V4 1971— Jan. 8 51/4-5 Vi 51/4 30 8 Aug. 21 73/4 73/4 15 5V4 51/4 Dec. 9 73/V8 7733//4 4 Sept. 22 8 19 5-51/4 51/4 16 73/4 Oct. 16 8-8 ¥2 814 22 5-51/4 5 7V4 20 SVi m 29 5 5 1975— Jan. 6 71/4 Nov. 1 814-914 914 Feb. 13 43/4-5 5 10 IVA 71/4 3 9Vz 9Vi 19 43/4 43/4 24 71/4 71/4 JJuullyy 16 43/4-5 5 Feb. 5 63/4-7V4 63/4 1979— July 20 10 10 23 5 5 7 63/4 63/4 Aug. 17 10-1014 10 14 Nov. 11 43/4-5 5 Mar. 10 61/4-63/4 61/4 20 10V2 10V5 19 43/4 43/4 14 61/4 61/4 Sept. 19 1014-11 11 Dec. 13 4^-43/4 43/4 May 16 6-61/4 6 21 11 11 17 41/2-43/4 414 Oct. 8 11-12 12 24 4 Yi 4 Vi 1976— Jan. 19 514-6 5Vz 10 12 12 23 5Vz 5Vi 1973— F Ja e n b . . 2 1 6 5 5 5 -5 1/2 5 5 l4 Nov. 2 2 2 6 5V54V-514/2 5 51 V /4 4 1980— Feb. 1 1 5 9 1 1 2 3 - 13 1 1 3 3 Mar. 2 5Vi 5 Vi May 29 12-13 13 Apr. 23 514-53/4 5 Vi 1977— Aug. 30 51/4-53/4 51/4 30 12 12 May 4 53/4 53/4 31 51/4-53/4 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 July 28 10-11 10 J J u u l n y e 1 1 2 5 1 6 1 6 -6 Y VI 1 > 1 6 6 V P2 1 1978— Jan. 2 9 0 6 6 Vz 661^4 N Se o p v t . . 2 2 1 6 9 7 1 1 1 0 1 2 1 1 1 0 1 2 AAuugg.. 14 1-lVi iVi May 11 6VS-7 7 Dec. 5 12-13 13 23 IVZ lYi 12 7 7 8 13 13 July 3 7-7V4 71/4 In effect Jan. 31, 1981 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 • February 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 Acts iinn mmiilllliioonnss ooff ddoollllaarrss ddeeppoossiitt iinntteerrvvaall Percent Effective date Percent Effective date Net demand2 Net transaction accounts6 0-2 7 12/30/76 $0—$25 million 3 11/13/80 2-10 9'/: 12/30/76 Over $25 million 12 1111//1133//8800 KM 00 IP/4 12/30/76 100-400 12v4 12/30/76 Nonpersonal time deposits1 Over 400 16»/4 12/30/76 By original maturity Less than 4 years 3 11/13/80 Time and savings2-3 4 years or more 0 11/13/80 SSaavviinnggss 3 3/16/67 Eurocurrency liabilities Time4 All types 3 11/13/80 0-5. by maturity 30-179 days 3 3/16/67 180 davs to 4 years 2'/: 1/8/76 4 years or more 1 10/30/75 Over 5, bv maturity 30-179 days 6 12/12/74 180 davs to 4 years 2'/: 1/8/76 4 years or more 1 10/30/75 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, federal 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) and 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 c F o e n d s e t r i a tu l t R ed e s d er e v s e ig n B a a t n io k n s o o r f b th ra a n t c p h l e a s c e w e as re a a l r s e o s e r r e v s e e r c v i e t y c . it C ie it s i . e s A n in y w ba h n ic k h s t h h a e v r i e n g w n e e r t e e M n a d y i n 2 g 9 . M 1 a 9 r 8 . 0 1 . 2 t . h e 1 9 b 8 a 0 s . e w w h a i s c h in e c v r e e r a w se a d s g by re 7 a t !/ e 2 r . p F er o c r e t n h t e a c b o o m ve p u th ta e ti b o a n s e p u e s ri e o d d to b e c g a i l n c n ul i a n t g e 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 that 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 of $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. ^ NOIL. 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 Jan. 31, 1981 Previous maximum In effect Jan. 31, 1981 Previous maximum Effective Effective Effective Percent date date date 2 1 N Sa e v g i o n t g ia s ble order of withdrawal accounts 2 5 5 V ^4 4 12 7 /3 /1 1 / / 7 8 9 0 7 1 / / 1 1 / / 7 7 3 4 5 5W V i 12 7 /3 /1 1 / / 7 8 9 0 5 5V 4 Time accounts 3 Fixed ceiling rates by maturity 4 3 14-89 days * SVA 8/1/79 5 7/1/73 (6) (6) 4 6 5 9 2 1 0 t t o o d a 2 2 y ¥ y s i e t y a o e r s a 1 r s ' y e 7 ar 6 6 5 3 1 / / 4 2 7 1 / / 1 1 / / 7 8 3 0 5 5 5 ¥ 3 1 i / / 4 2 1 1 7 / / 2 2 /1 1 1 / / / 7 7 7 3 0 0 6 6 '/2 1 ( /1 ') / 80 53/4 1 1 7 8 9 0 1 6 4 8 Is t s y t o o u e t e a o 8 6 d r s y y 4 t e e o o y a a r e r r g s s a m o r 8 8 s v o e r 7 e r n 8 m ental units (all maturities) 10 .... I 7 l 3 V ¥ /4 i a 1 1 2 6 6 7 / 1 2 / / / / 1 1 1 3 1 / / / / / 7 7 7 7 7 8 8 3 4 3 ( (6 ^ 9 )V ) 5 7 . 3 / 7 /4 4 ^ 4 ' 12 1 1 / / 1 2 2 / 3 1 1 / / / 7 7 7 4 0 3 6 7 7 V 3 3 / / 4 4 2 12 1 6 6 / 1 2 0 / / / 1 1 3 1 / / / ) / 7 7 7 7 8 8 4 3 I l ¥i 12 Individual retirement accounts and Keogh (H.R. 10) 73/4 plans (3 years or more) 1011 6/1/78 73/4 7/6/77 6/1/78 73/4 Special variable ceiling rates by maturity 13 6-month money market time deposits 12 14 2¥i 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 January for commercial banks and and New Hampshire were first permitted to offer negotiable order of withdrawal thrift institutions were as follows: Jan. 1, 13.661; Jan. 8, 13.432; Jan. 15, 14.478; (NOW) accounts on Jan. 1, 1974. Authorization to issue NOW accounts was ex- Jan. 22, 14.721; Jan. 29, 14.371. Effective for all six-month money market certiftended to similar institutions throughout New England on Feb. 27, 1976, and in icates issued beginning June 5, 1980, the interest rate ceilings will be determined New York State on Nov. 10, 1978, and in New Jersey on Dec. 28, 1979. Author- by the discount rate (auction average) of most recently issued six-month U.S. ization to issue NOW accounts was extended to similar institutions nationwide Treasury bills as 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 + ¥4 percent bill rate -I- V4 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 + ¥4 percent bill rate + ¥1 percent 4. Effective Nov. 10, 1980, the minimum notice period for public unit accounts 7.25 to 7.50 7.75 bill rate + ¥2 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 2¥i years 5. Effective Oct. 30, 1980, the minimum maturity or notice period for time or more. The maximum rate for commercial banks is 3/4 percentage point below deposits was decreased from 30 days to 14 days for commercial banks. the yield on 2V2-year U.S. Treasury securities; the ceiling rate for thrift institutions 6 7 . . N N o o s m ep in a i r m at u e m a c d c e o n u o n m t i c n a a te ti g o o n r . y . U ntil July 1, 1979, a minimum of $1,000 was i 1 s 9 8 ¥ 0 4 , p a e t r e c m en p t o ag ra e r y p o c i e n i t l in h g ig o h f e r ll th3/ a 4 n p th e a r t c e f n o t r w co a m s m pl e a r c c e i d a l o b n a n th k e s s . e E a f c fe c c o t u iv n e ts M at a r c . om 1, required 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 2^2 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 — ¥4 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 January for commercial banks were as follows: Jan. 8, 11.75; Jan. 22, 11.75. of its total time and savings deposits. Sales in excess of that amount, as well as The maximum allowable rates in January for thrift institutions were as follows: certificates of less than $1,000, were limited to the 6V1 percent ceiling on time Jan. 8, 12.00; Jan. 22, 12.00. deposits maturing in 2¥1 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 1V4 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 ¥4 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 2h-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 ¥4 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 y4-percentage-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 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 Nonfinancial Statistics • February 1981 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS Millions of dollars 1980 TTyyppee ooff ttrraannssaaccttiioonn 11997788 11997799 11998800 June July Aug. Sept. Oct. Nov. Dec. U.S. GOVERNMENT SECURITIES Outright transactions (excluding matched salepurchase transactions) Treasury bills 11 Gross purchases 16,628 15,998 7,668 322 0 0 200 991 0 1,331 22 Gross sales 13,725 6,855 7,331 0 2,264 47 237 531 600 0 3 Exchange 0 0 0 0' 0 0 0 0 0 0 4 Redemptions 2,033 2,900 3,389 0 950 0 0 700 500 49 Others within 1 year1 5 Gross purchases 1,184 3,203 912 121 0 137 0 0 0 100 6 Gross sales 0 0 0 0 0 0 0 0 0 0 7 Maturity shift -5,170 17,339 12,427 412 311 2,423 589 596 2,368 754 8 Exchange -11,308 -18,251 -1,479 -788 -3,134 -1,459 -420 -879 -967 9 Redemptions 0 2,600 0 0 0 0 0 0 0 0 I to 5 years 10 Gross purchases 4,188 2,148 2,138 465 0 541 0 0 0 0 11 Gross sales 0 0 0 0 0 0 0 0 0 0 12 Maturity shift -12,693 -8,909 -412 -311 -720 -589 -596 -2,368 -754 13 Exchange 7,508 13,412 1,479 788 1,750 1,459 420 500 967 5 to 10 years 14 Gross purchases 1,526 523 703 164 0 236 0 0 0 0 lb Gross sales 0 0 0 0 0 0 0 0 0 0 1 1 6 7 M Ex a c t h u a ri n t g y e s hift 2 803 -4 2 , , 6 1 4 8 6 1 -3 2 , , 0 9 9 7 2 0 0 0 0 0 -1 1 ,7 ,0 0 0 3 0 0 0 0 0 220 0 0 0 Over 10 years 18 Gross purchases 1,063 454 811 129 0 320 0 0 0 0 19 Gross sales 0 0 0 0 0 0 0 0 0 0 2 2 0 1 M Ex a c t h u a ri n ty g e s hift 2 545 1,619 0 - 1 4 ,8 2 6 6 9 0 0 0 0 38 0 4 0 0 0 0 15 0 9 0 0 All maturities1 22 Gross purchases 24,591 22,325 12,232 1,200 0 1,234 200 991 0 1,431 23 Gross sales 13,725 6,855 7,331 0 2,264 47 237 531 600 0 24 Redemptions 2,033 5,500 3,389 0 950 0 0 700 500 49 Matched transactions 25 Gross sales 511,126 627,350 674,000 50,590 48,370 72,315 55,766 55,787 40,944 79,754 26 Gross purchases 510,854 624,192 675,496 52,076 46,023 71,645 56,207 56,462 41,129 78,734 Repurchase agreements 2277 Gross purchases 151,618 107,051 113,902 12,810 10,719 2,783 3,203 20,145 24,169 11,534 28 Gross sales 152,436 106,968 113,040 15,258 10,110 3,016 2,743 19,808 23,924 11,381 29 Net change in U.S. government securities 7,743 6,896 3,869 238 -4,952 284 863 771 -670 516 FEDERAL AGENCY OBLIGATIONS Outright transactions 30 Gross purchases 301 853 668 0 0 0 0 0 0 0 31 Gross sales 173 399 0 0 0 0 0 0 0 0 32 Redemptions 235 134 145 2 2 * 91 21 0 22 Repurchase agreements 3333 Gross purchases 40,567 37,321 28,895 3,035 1,737 1,082 977 5.922 4,825 1,889 34 Gross sales 40,885 36,960 28,863 3,351 1,242 1,132 1,188 5,734 4,880 1,767 35 Net change in federal agency obligations -426 681 555 -318 492 -50 -302 167 -55 99 BANKERS ACCEPTANCES 36 Outright transactions, net 0 0 0 0 0 0 0 0 0 0 37 Repurchase agreements, net -366 116 73 7 -64 -33 222 67 -43 253 38 Net change in bankers acceptances -366 116 73 7 -64 -33 222 67 -43 253 39 Total net change in System Open Market Account 6,951 7,693 4,497 -73 -4,523 202 784 1,005 -768 868 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): 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 AAAccccccooouuunnnttt 1980 1981 1980 1981 Dec. 31 Jan. 7 Jan. 14 Jan. 21 Jan. 28 Nov. Dec. Jan. Consolidated condition statement ASSETS 1 Gold certificate account 11,161 11,161 11,160 11,159 11,159 11,162 11,161 11,159 2 Special drawing rights certificate account 2,518 2,518 2,518 2,518 2,518 3.368 2,518 2,518 3 Coin 397 389 399 425 447 416 397 468 Loans 4 To depository institutions 1,809 854 2,539 1,349 1,553 2,284 1.809 1,304 5 Other 0 0 0 0 0 0 0 0 Acceptances 6 Held under repurchase agreements 776 0 0 0 0 523 776 0 Federal agency obligations / Bought outright 8,739 8,739 8,739 8,739 8,739 8,761 8,739 8,739 8 Held under repurchase agreements 525 0 0 0 0 404 525 0 U.S. government securities Bought outright 9 Bills 43,688 41,720 45,960 38,201 39,527 43,425 43,688 41,558 10 Notes 58.718 58,718 58,718 58,718 58,718 58,618 58,718 58,718 11 Bonds 16,893 16,893 16.893 16,893 16,893 16,893 16,893 16,893 12 Total1 119,299 117,331 121,571 113,812 115,138 118,936 119,299 117,169 13 Held under repurchase agreements 2,029 0 0 0 0 1,876 2,029 0 14 Total U.S. government securities 121,328 117,331 121,571 113,812 115,138 120,812 121,328 117,169 15 Total loans and securities 133,177 126,924 132,849 123,900 125,430 132,784 133,177 127,212 16 Cash items in process of collection 12,554 13,657 10,521 11,702 8,654 12,831 12,554 7,865 17 Bank premises 457 456 459 458 458 457 457 458 Other assets 18 Denominated in foreign currencies2 5,104 5,043 5,232 5,414 5,974 3,631 5,104 5,993 19 Allother 3,177 3,327 3,147 3,326 3,448 2,451 3,177 3,385 20 Total assets 168,545 163,475 166,285 158,902 158,088 167,100 168,545 159,058 LIABILITIES 21 Federal Reserve notes 124,241 122,951 121,444 119,746 118,808 121.191 124,241 118,147 Deposits 22 Depository institutions 27,456 24,507 29,807 23,850 25,323 31,528 27,456 26,621 23 U.S. Treasury—General account 3,062 3,217 2,814 3,013 2,974 2,435 3,062 3,038 24 Foreign—Official accounts 411 257 301 248 302 368 411 573 25 Other 617 529 370 536 439 478 617 515 26 Total deposits 31,546 28,510 33,292 27,647 29,038 34,809 31,546 30,747 27 Deferred availability cash items 8,087 7,136 6,658 6,808 5,593 6,039 8,087 5,585 28 Other liabilities and accrued dividends3 2,265 2,209 2,222 2,058 2,017 2,317 2,265 1,957 29 Total liabilities 166,139 160,806 163,616 156,259 155,456 164,356 166,139 156,436 CAPITAL ACCOUNTS 30 Capital paid in 1,203 1,203 1,203 1,204 1,208 1,199 1,203 1,208 31 Surplus 1,203 1,203 1,203 1,203 1,203 1,145 1,203 1,203 32 Other capital accounts 0 263 263 236 221 400 0 211 33 Total liabilities and capital accounts 168,545 163,475 166,285 158,902 158,088 167,100 168,545 159,058 34 MEMO: Marketable U.S. government securities held in custody for foreign and international account 91,795 92,871 92,983 92,520 93,027 90,529 91,795 92,756 Federal Reserve note statement 35 Federal Reserve notes outstanding (issued to bank) ... 140,184 140,256 140,467 140,599 140,843 138,699 140,184 140,717 36 Less-held by bank4 15,943 17,305 19,023 20,853 22,035 17,508 15,943 22,570 37 Federal Reserve notes, net 124,241 122,951 121,444 119,746 118,808 121,191 124,241 118,147 Collateral for Federal Reserve notes 38 Gold certificate account 11,161 11,161 11,160 11,159 11,159 11,162 11,161 11,159 39 Special drawing rights certificate account 2,518 2,518 2,518 2,518 2,518 3,368 2,518 2,518 40 Other eligible assets 0 0 0 0 0 0 0 0 41 U.S. government and agency securities 110,562 109,272 107,766 106,069 105,131 106,661 110,562 104,470 42 Total collateral 124,241 122,951 121,444 119,746 118,808 121,191 124,241 118,147 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 the 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 Nonfinancial Statistics • February 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 1981 1980 1981 Dec. 31 Jan. 7 Jan. 14 Jan. 21 Jan. 28 Nov. 30 Dec. 31 Jan. 31 1 Loans—Total 1,809 854 2,539 1,349 1,553 2,283 1,809 1,304 2 Within 15 davs 1.757 768 2,464 1,310 1,505 2,272 1,757 1,255 3 16 days to 90 days 52 86 75 39 48 11 52 49 4 91 days to 1 year 0 0 0 0 0 0 0 0 5 Acceptances—Total 776 0 0 0 0 523 776 0 6 Within 15 days 776 0 0 0 0 523 776 0 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 121,328 117.331 121,571 113,812 115,138 120,812 121,328 117,169 10 Within 15 days1 4,780 1.931 4,244 3,547 4,385 5,494 4,780 2,125 11 16 days to 90 days 23,499 21,652 23,635 16,769 19,948 23,086 23,499 24,904 12 91 days to 1 year 30,187 30.886 30,831 30,634 27,943 28,934 30,187 27,279 13 Over 1 year to 5 years 34.505 34,505 34,505 34,505 34,505 34,942 34,505 34,505 14 Over 5 years to 10 years 13,355 13,355 13,354 13,355 13,355 13.354 13,355 13,354 15 Over 10 years 15,002 15,002 15.002 15,002 15,002 15,002 15,002 15,002 16 Federal agency obligations—Total 9,264 8,739 8,739 8,739 8,739 9,165 9,264 8,739 17 Within 15 days1 705 31 31 73 73 556 705 73 18 16 days to 90 days 426 582 604 550 550 467 426 550 19 91 days to 1 year 1,519 1,508 1,586 1,750 1.750 1,495 1,519 1,749 20 Over 1 year to 5 years 4,837 4,862 4,762 4,597 4,597 4.870 4,837 4,597 21 Over 5 years to 10 years 1.092 1.071 1,071 1,085 1,085 1.092 1.092 1,085 22 Over 10 years 685 685 685 684 684 685 685 685 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) 11 AAllll ccoommmmeerrcciiaall bbaannkkss 34,322.8 40.297.8 49,750.7 63,088.5 65,385.9 65,111.5 65.645.5 67.780.0 22 MMaajjoorr NNeeww YYoorrkk CCiittyy bbaannkkss 13,860.6 15.008.7 18.512.2 25,538.8 26,705.7 26,103.5 26,034.2 26.822.1 33 OOtthheerr bbaannkkss 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) 4 ATS/NOW3 5.5 17.1 83.3 161.6 145.2 175.0 193.0 172.8 5 Business4 21.7 56.7 77.4 85.1 84.9 91.4 98.6 94.2 6 Others5 152.3 359.7 557.6 633.7 631.1 719.2 775.5 570.2 7 All accounts 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 SMSAs, 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 Item DD 1199 ee 77 cc 77 .. DD 1199 ee 77 cc 88 .. DD 1199 ee 77 cc 99 ..'' DD 1199 ee 88 cc 00 .. July Aug/ Sept.' Oct/ Nov/ Dec. Seasonally adjusted MEASURES1 1 M-1A 328.4 351.6 369.8 384.8 373.5 379.5 383.4 386.3 388.4 384.8 2 M-1B 332.6' 360.1' 386.9 411.9 395.5 402.7 408.0 412.0 415.0 411.9 3 M-2 1,294.1 1,401.5 1,526.0 1,673.6 1,612.5 1,632.5 1,644.4 1,656.5 1,670.8 1,673.6 4 M-3 1,460.3 1,623.6 1,775.5 1,958.1 1,867.7 1,889.5 1,904.6 1,921.8 1,946.1 1,958.1 5 L2 1,720.2' 1,934.9' 2,151.8 n.a. 2,258.2 2,282.7 2,306.5 2,318.8 2,346.,5 n.a. COMPONENTS 6 Currency 88.7 97.6 106.3 116.4 112.1 113.5 113.9 115.1 115.8 116.4 7 Demand deposits 239.7 253.9 263.5 268.4 261.4 266.0 269.5 271.2 272.6 268.4 8 Savings deposits 486.4' 475.8' 417.0 394.2 398.0 408.1 412.1 414.2 407.9 394.2 9 Small-denomination time deposits3 .... 454.9 533.8 656.2 762.8 712.4 712.6 716.4 723.6 741.6 762.8 10 Large-denomination time deposits4 .... 145.2 194.7 219.0 247.9 224.0 223.3 226.8 229.8 238.8 247.9 Not seasonally adjusted MEASURES1 11 M-1A 337.2 360.9 379.4 394.7 375.5 377.3 382.6 388.0 391.1 394.7 12 M-1B 341.4' 369.5' 396.4 421.8 397.5 400.5 407.2 413.7 417.7 421.8 13 M-2 1,295.9 1,403.6' 1,527.7 1,675.0 1,618.0 1,629.5 1,642.3 1,656.9 1,665.7 1,675.0 14 M-3 1,464.5 1,629.2 1,780.8 1,963.0 1,870.8 1,886.6 1,902.3 1,923.0 1,942.1 1,963.0 15 L2 1,723.2' 1,938.3' 2,154.3 n.a. 2,259.6 2,278.6 2,296.1 2,317.6 2,344.7 n.a. COMPONENTS 16 Currency 90.3 99.4 108.3 118.5 112.7 113.7 113.7 114.9 116.6 118.5 17 Demand deposits 247.0 261.5 271.1 276.2 262.7 263.6 268.9 273.1 274.5 276.2 18 Other checkable deposits5 4.2' 8.6' 17.0 27.1 22.0 23.2 24.6 25.7 26.6 27.1 19 Overnight RPs and Eurodollars6 18.6 23.9 25.3 32.2 29.1 31.6 32.9 32.5 32.6 32.2 20 Money market mutual funds 3.8 10.3 43.6 75.8 80.6 80.7 78.2 77.4 77.0 75.8 21 Savings deposits 483.1' 472.6' 414.1 391.5 401.0 408.8 412.4 412.9 405.8 391.5 22 Small-denomination time deposits3 .... 451.3 529.8 651.2 757.0 712.9 711.1 714.9 723.7 735.9 757.0 23 Large-denomination time deposits4 .... 147.7 198.2 222.6 251.4 221.7 223.3 226.5 230.6 240.0 251.4 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 other than those due to domestic banks, the U.S. government, and foreign banks liquid Treasury securities, and U.S. savings bonds. and official institutions less cash items in the process of collection and Federal 3. Small-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. the 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 banlks 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-1B 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 Nonfinancial Statistics • February 1981 1.22 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS! AND MEMBER BANK DEPOSITS Billions of dollars, averages of daily figures 1980 Item 1978 1979 1980 Dec. Dec .' Dec. June July Aug. Sept. Oct. Nov.2' Dec. Seasonally adjusted 1 Total reserves3 41.16 43.46 40.13 43.96 42.78 40.75 41.52 41.73 41.23 40.13 2 Nonborrowed reserves 40.29 41.98 38.44 43.58 42.39 40.09 40.21 40.42 39.17 38.44 3 Required reserves 40.93 43.13 39.58 43.76 42.50 40.45 41.26 41.52 40.73 39.58 4 Monetary base4 142.2 153.7 159.8 159.0' 158.8 158.2 159.5 160.9 160.7 159.8 5 Member bank deposits subject to reserve requirements5 616.1 644.5 701.8 658.0 658.5 667.8 678.2 684.7 694.3 701.8 6 Time and savings 428.7 451.2 504.0 467.9 467.0 474.2 482.0 486.7 494.0 504.0 Demand 7 Private 185.1 191.5 196.0 188.4 189.1 191.5 194.5 195.6 198.1 196.0 8 U.S. government 2.2 1.8 1.9 1.7 2.5 2.1 1.8 2.4 2.2 1.9 Not seasonally adjusted 9 Monetary base4 144.6 156.2 162.5 158.6 159.6 158.0 159.0' 160.6 161.5 162.5 10 Member bank deposits subject to reserve requirements5 624.0 652.7 710.3 656.9 658.2 662.5 675.6 684.2 694.6 710.3 11 Time and savings 429.6 452.1 505.0 467.4 466.0 471.8 479.6 485.7' 493.0 505.0 Demand 12 Private 191.9 198.6 203.2 187.2 190.0 189.0 193.9 196.4 199.6 203.2 13 U.S. government 2.5 2.0 2.1 2.3 2.2 1.7 2.1 2.1 1.9 2.1 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 lead 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 CCaatteeggoorryy D 1199 e 77 c 77 . 11997788 11997799 D 19 e 7 c 7 . D 19 e 7 c 8 . D 19 e 7 c 9 . Nov. Dec. Nov. Dec. Seasonally adjusted Not seasonally adjusted 1 Total loans and securities2 891.1 1,014.33 1,132.54 1,221.2 1,234.1 899.1 1,023.8* 1,143.04 1,223.3 1,245.7 2 U.S. Treasury securities 99.5 93.4 93.8 109.3 109.6 100.7 94.6 95.0 108.2 111.0 3 Other securities 159.6 173.P 191.5 212.5 214.3 160.2 173.93 192.3 212.7 215.2 4 Total loans and leases2 632.1 747.83 847.24 899.4 910.1 638.3 755.43 855.74 902.4 919.5 5 Commercial and industrial loans 211.2 s 246.56 290.54 318.4 323.1 212.6 s 248.2^ 292.44 318.4 325.3 6 Real estate loans 175.2s 210.5 242.44 258.3 260.9 175.5s 210.9 242.94 259.6 261.4 7 Loans to individuals 138.2 163.9' 185.0' 174.8' 175.2 139.0 164.8' 186.2' 176.2' 176.2 8 Security loans 20.6 19.4 18.3 16.9 17.9 22.0 20.7 19.6 17.2 19.1 9 Loans to nonbank financial institutions . 25.85 27.17 30.34 30.2 30.7 26.3 s 27.67 30.84 30.3 31.3 10 Agricultural loans 25.8 28.2 31.0 33.9 34.2 25.7 28.1 30.8 34.0 34.1 11 Lease financing receivables 5.8 7.4 9.5 11.0 11.1 5.8 7.4 9.5 11.0 11.1 12 All other loans 29.5 44.93' 40.2' 56. 0' 56.9 31.5 47.63' 43.5' 55.8' 61.0 MEMO: 13 Total loans and securities plus loans sold2-9 895.9 1,018.13 1,135.34* 1,223.9 1,236.8 903.9 1,027.63 1,145.748 1,226.0 1,248.4 14 Total loans plus loans sold2-9 636.9 751.63 850.OO4-8 902.1 912.8 643.0 759.23 858.44-8 905.1 922.2 15 Total loans sold to affiliates9 4.8 3.8 2.8* 2.6 2.7 4.8 3.8 2.8s 2.6 2.7 16 Commercial and industrial loans plus loans sold9 213.95 248.56-10 292.34-8 320.1 324.9 215.3s 250.16-10 294 24-8 320.1 327.1 17 Commercial and industrial loans sold9 .. 2.7 1.910 1.8s 1.7 1.8 2.7 1.910 " L88 1.7 1.8 18 Acceptances held 7.5 6.8 8.5 8.7 7.8 8.6 7.5 9.4 9.1 8.5 19 Other commercial and industrial loans .. 203.7s 239.7 282.0 309.7 315.3 203.9s 240.9 283.1 309.3 316.8 20 To U.S. addressees11 193.8 s 226.6 263.2 287.6 293.5 193.7s 226.5 263.2 287.1 293.5 21 To non-U.S. addressees 9.9 s 13.1 18.8 22.1 21.8 10.3 s 14.4 19.8 22.2 23.3 22 Loans to foreign banks 13.5 21.2 18.7 24.6 24.0 14.6 23.0 20.1 23.9 25.8 23 Loans to commercial banks in the United States 54.1 57.3 77.8 n.a. n.a. 56.9 60.3 81.9 n.a. 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 montn-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 Nonfinancial Statistics • February 1981 1.24 MAJOR NONDEPOSIT FUNDS OF COMMERCIAL BANKS' Monthly averages, billions of dollars December outstanding Outstanding in 1980 SSoouurrccee 1977 1978 1979 Apr. May June July Aug. Sept. Oct. Nov. Dec. Total nondeposit funds 1 Seasonally adjusted2 61.8 85.4 118.8 124.2 119.9 114.1 112.2 107.3 112.0 118.6 n.a. n.a. 2 Not seasonally adjusted 60.4 84.4 117.4 121.1 123.0 114.2 116.4 110.3 112.5 119.6 n.a. n.a. Federal funds, RPs, and other borrowings from non- 3 Seasonally adjusted3 58.4 74.8 88.0 94.7 94.2 96.7 98.5 94.0 100.2 104.4 n.a. n.a. 4 Not seasonally adjusted 57.0 73.8 86.5 91.7 97.4 96.8 102.7 97.1 100.8 105.4 n.a. n.a. 5 Net Eurodollar borrowings, not seasonally adjusted -1.3 6.8 28.1 26.9 23.0 14.6 10.9 10.3 8.9 11.5 7.5 7.0 6 Loans sold to affiliates, not seasonally adjusted4-5 . 4.8 3.8 2.8 2.6 2.6 2.8 2.8 2.9 2.9 2.8 2.6 2.7 MEMO 7 Domestic chartered banks net positions with own foreign branches, not seasonally adjusted6 .... -12.5 -10.2 6.5 5.9 2.6 -5.4 -8.4 -10.3 -14.5 -12.9 -14.2 -14.7 8 Gross due from balances 21.1 24.9 22.8 24.4 27.3 30.1 32.7 35.8 38.2 38.3 37.2 37.5 9 Gross due to balances 8.6 14.7 29.3 30.4 30.0 24.7 24.3 25.5 23.7 25.5 23.0 22.7 10 Foreign-related institutions net positions with directly related institutions, not seasonally adjusted7 11.1 17.0 21.6 20.9 20.5 19.9 19.3 20.6 23.3 24.4 21.7 21.7 11 Gross due from balances 10.3 14.2 28.9 28.4 28.4 28.5 30.8 30.9 30.3 30.8 32.3 33.7 12 Gross due to balances 21.4 31.2 50.5 49.4 48.8 48.4 50.1 51.6 53.6 55.2 54.1 55.4 13 Security RP borrowings, seasonally adjusted8 36.3 44.8 49.2 45.3 43.7 49.0 55.0 57.5 56.2 59.7 58.8 63.4 14 Not seasonally adjusted 35.1 43.6 47.9 44.3 46.0 48.8 54.7 59.1 58.7 59.5 60.9 61.7 15 U.S. Treasury demand balances, seasonally adjusted* 4.4 8.7 8.1 8.6 9.5 8.6 10.9 11.8 12.6 14.0 6.9 7.6 16 Not seasonally adjusted 5.1 10.3 9.7 9.0 8.5 10.0 9.3 9.3 14.2 12.7 6.6 9.0 17 Time deposits, $100,000 or more, seasonally adjusted10 162.0 213.0 227.6 240.2 242.1 237.6 234.0 234.4 238.8 241.6 249.3 257.5 18 Not seasonally adjusted 165.4 217.9 232.8 238.3 240.2 235.5 230.0 232.1 236.7 241.1 250.8 263.4 1. Commercial banks are those in the 50 states and the District of Columbia with 6. Includes averages of daily figures for member banks and quarterly call report national or state charters plus U.S. branches, agencies, and New York investment figures for nonmember banks. company subsidiaries of foreign banks and Edge Act corporations. 7. Includes averages of current and previous month-end data until August 1979; 2. Includes seasonally adjusted federal funds, RPs, and other borrowings from beginning September 1979 averages of daily data. nonbanks and not seasonally adjusted net Eurodollars and loans to affiliates. In- 8. Based on daily average data reported by 122 large banks beginning February cludes averages of Wednesday data for domestic chartered banks and averages of 1980 and 46 banks before February 1980. current and previous month-end data for foreign-related institutions. 9. Includes U.S. Treasury demand deposits and Treasury tax-and-loan notes at 3. Other borrowings are borrowings on any instrument, such as a promissory commercial banks. Averages of daily data. note or due bill, given for the purpose of borrowing money for the banking business. 10. Averages of Wednesday figures. This includes borrowings from Federal Reserve Banks and from foreign banks, NOTE: Security RP borrowings, U.S. Treasury demand balances, and time determ federal funds, overdrawn due from bank balances, loan RPs, and participa- posits in denomination of $100,000 or more have revised to reflect benchmark tions in pooled loans. Includes averages of daily figures for member banks and adjustments to call reports. averages of current and previous month-end data for foreign-related institutions. 4. Loans initially booked by the bank and later sold to affiliates that are still held by affiliates. Averages of Wednesday data. 5. As of Dec. 1, 1979, loans sold to affiliates were reduced $800 million due to corrections of two New York City banks. 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 1981 AAccccoouunntt Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. DOMESTICALLY CHARTERED COMMERCIAL BANKS1 1 Loans and investments, excluding interbank 1,087.2 1.089.5 1.083.1 1.086.6 1.091.5 1.104.7 1.115.1 11..113322..33 1.148.0 1. 117744..55 1.163.5 2 Loans, excluding interbank 799.0 798.8 789.7 790.4 790.6 799.1 806.9 819.5 830.5 849.3 838.2 3 Commercial and industrial 258.3 259.2 256.0 256.8 256.4 258.7 262.9 268.2 274.8 280.7 276.9 4 Other 540.7 539.6 533.7 533.6 534.1 540.3 543.9 551.3 555.7 568.6 561.3 5 U.S. Treasury securities 93.5 93.9 95.2 97.6 100.3 102.1 103.3 106.0 1 10.0 110.8 1 10.8 6 Other securities 193.9 197.2 199.5 201.0 203.3 205.3 206.1 209.4 211.5 215.1 214.4 7 Cash assets, total 153.8 168.2 172.4 150.4 154.1 148.7 156.6 156.0 175.7 194.4 159.4 8 Currency and coin 16.8 16.8 17.8 17.4 17.7 18.4 18.0 18.5 17.1 20.2 18.9 9 Reserves with Federal Reserve Banks 34.2 33.2 37.9 29.5 32.1 28.9 31.2 31.6 30.3 28.2 25.1 10 Balances with depository institutions 43.1 49.7 47.9 45.4 44.7 45.6 46.6 47.0 56.2 63.0 54.9 11 Cash items in process of collection .. 59.8 68.6 68.9 58.0 59.6 55.8 60.9 58.8 72.2 83.0 60.5 12 Other assets2 121.7 135.7 140.1 144.0 143.8 150.4 154.6 154.9 15 1.5 166.8 1. 52.2 13 Total assets/total liabilities and capital .. 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 1,475.1 14 Deposits 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 1.127.1 15 Demand 354.5 377.4 370.2 358.0 363.6 363.4 370.0 376.3 393.4 432.7 351.7 16 Savings 196.5 189.3 192.3 197.8 205.7 208.7 209.4 211.4 201.8 212.4 17 Time 481.1 493.4 494.8 488.9 480.8 487.4 495.5 503.5 520.9 550.9 563.0 18 Borrowings 142.1 147.0 154.1 152.5 158.6 160.1 165.3 163.4 159.0 156.8 158.2 19 Other liabilities 84.2 81.2 78.5 76.6 74.8 76.2 76.4 75.6 79.0 80.0 77.6 20 Residual (assets less liabilities) 104.2 105.2 105.7 107.1 106.0 108.0 109.6 113.1 112.9 113.5 112.3 MEMO: 21 U.S. Treasury note balances included in borrowing 9.4 14.3 5.1 13.1 7.6 8.7 15.2 11.5 4.4 9.5 8.6 22 Number of banks 14.626 14.629 14.639 14.646 14.658 14.666 14.678 14.760 14.692 14.693 14.689 ALL COMMERCIAL BANKING INSTITUTIONS3 23 Loans and investments, excluding interbank 1.156.6 1.158.8 1.151.2 1.157.1 1.192.4 24 Loans, excluding interbank 865.0 864.7 854.4 857.4 877.0 25 Commercial and industrial 301.7 302.0 298.1 297.8 307.1 26 Other 563.4 562.7 556.2 559.6 573.1 27 U.S. Treasury securities 96.2 95.5 95.9 97.2 104.5 28 Other securities 195.4 198.6 201.0 202.4 207.7 29 Cash assets, total 174.0 187.3 190.7 172.0 179.8 30 Currency and coin 16.8 16.8 17.8 17.4 18.0 31 Reserves with Federal Reserve Banks 35.0 33.9 38.7 30.3 31.7 32 Balances with depository institutions 61.1 66.6 63.8 64.6 n .a. n.;n . 67.6 n.a. n. a. n., a. n. a. 33 Cash items in process of collection .. 61.2 69.9 70.4 59.7 62.5 34 Other assets2 166.8 181.1 186.1 190.3 204.4 35 Total assets/total liabilities and capital . . 1,497.5 1,527.2 1,528.0 1,519.4 1,576.6 36 Deposits 1.073.5 1.101.1 1.097.1 1.088.7 1.122.2 37 Demand 373.6 396.6 387.7 379.1 391.2 38 Savings 196.7 189.5 192.6 198.2 209.8 39 Time 503.2 515.0 516.9 511.4 521.2 40 Borrowings 186.5 190.8 196.3 197.9 212.6 41 Other liabilities 130.9 127.8 126.6 124.1 130.6 42 Residual (assets less liabilities) 106.5 107.4 108.1 108.7 111.2 MEMO: 43 U.S. Treasury note balances included in borrowing 9.4 14.3 5.1 13.1 15.2 44 Number of banks 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 Nonfinancial Statistics • February 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 1981 Account bank, Dec. 3 Dec. 10 Dec. 17 Dec. 24 Dec. 31 P Jan. IP Jan. 14 P Jan. 21P Jan. 28P 1980 1 Cash items in process of collection 57,523 53,041 59.847 58,349 66,135 56,771 56,394 52,111 49,658 33 2 Demand deposits due from banks in the United States 19,552 18,350 19,445 19.693 21,616 21,679 19,508 20,194 20,352 90 3 All other cash and due from depository institutions 24,939 28,822 36,903 34,051 34,259 31,220 35,746 29,750 30.958 -239 4 Total loans and securities 554,114 553,537 556,070 555,851 564,173 567,897 561,445 557,275 553,178 1,435 Securities 5 U.S. Treasury securities 39,409 39.556 39,179 37,984 39,605 40,667 40,457 40,333 39,777 148 6 Trading account 4,987 5,175 4,788 3,883 4,363 6,399 6,616 6,552 6,339 7 Investment account, by maturity 34,422 34,381 34,391 34,101 35,242 34,268 33,841 33,780 33,438 148 8 One year or less 9,161 9,201 9,166 9,096 10,269 9,591 9,353 9,331 9,178 71 9 Over one through five years 21,947 21,846 21,821 21,691 21,616 21,274 20,990 20,950 20,790 76 10 Over five years 3,314 3,334 3,404 3,313 3,357 3,403 3,498 3,500 3,469 1 11 Other securities 77,106 77,755 77,302 77,806 78,443 78,630 77,734 77,384 77,560 106 12 Trading account 3,132 3,781 3,018 3,067 3,315 3,327 2,531 2,308 2,510 13 Investment account 73,974 73,974 74,284 74,739 75,128 75,303 75,203 75,076 75,051 106 14 U.S. government agencies 15,813 15,801 16,025 16,220 16,229 16.348 16,214 16,132 16,124 50 15 States and political subdivision, by maturity . . 55,363 55,393 55,505 55,726 56,062 56,137 56,130 56,101 56,063 58 16 One year or less 7,398 7,380 7,403 7,415 7,394 7.273 7,201 7,202 7,244 11 17 Over one year 47,965 48,013 48,102 48,311 48,668 48,864 48,929 48,899 48,819 48 18 Other bonds, corporate stocks and securities . 2,798 2,780 2,754 2,792 2,837 2,818 2,858 2,843 2,864 -3 Loans 19 Federal funds sold1 30,173 29,109 28,057 27,484 27,873 33,997 30,181 29,019 26,781 38 20 To commercial banks 22,110 20,201 20,644 19,401 19,468 24,103 21,822 19,072 18,171 38 21 To nonbank brokers and dealers in securities .. . 5,621 6,092 5,540 6,054 6,414 7,854 6,059 7,359 6,366 22 To others 2,442 2,816 1,873 2,028 1,990 2,040 2,300 2,588 2,244 23 Other loans, gross 420,241 419,975 424,377 425,361 430,569 427,039 425,570 423,054 421,559 1,192 24 Commercial and industrial 172,262 172,758 174,015 172,637 174,862 173,230 173,116 171,922 171,414 354 25 Bankers acceptances and commercial paper .. 4,104 3.952 3,709 3,696 4,206 4,218 4,632 3,957 4,191 26 Allother 168,158 168,806 170,306 168,941 170,656 169,012 168,484 167,965 167,223 354 27 U.S. addressees 161,191 161,944 163,213 161,871 163,373 161,773 161,194 160,597 159,818 354 28 Non-U.S. addressees 6,968 6,862 7,093 7,069 7,283 7,238 7,290 7,368 7,405 29 Real estate 110,734 111,023 111,304 111,480 111,754 112,212 112,534 112,631 112,866 448 30 To individuals for personal expenditures 71,295 71,481 71,824 72,380 72,308 72,625 72.389 72,132 71,954 377 To financial institutions 31 Commercial banks in the United States 4,142 3.568 4,245 4,937 5,310 4,538 4,674 4,094 4,220 -6 32 Banks in foreign countries 8,600 8.638 8,812 9,541 9,702 9,442 9,434 9,701 8,952 7 33 Sales finance, personal finance companies, etc 9,276 9,597 10,446 9,977 10,076 10,231 9,999 9,966 9,934 1 34 Other financial institutions 15,566 15,513 15,883 15,638 15,921 15,591 15,390 15,267 15,291 2 35 To nonbank brokers and dealers in securities ... 6,795 6,251 6,471 6,144 7,842 6,928 6,404 5,748 5,548 36 To others for purchasing and carrying securities2 2,155 2,185 2,198 2,168 2,154 2,103 2,170 2,140 2,198 37 To finance agricultural production 5,331 5.282 5,284 5,300 5,413 5,358 5,332 5,306 5,335 6 38 All other 14,083 13,678 13,894 15,158 15,227 14,781 14,126 14,147 13,845 3 39 LESS: Unearned income 7,004 7,040 7,040 7,033 6,659 6,696 6,767 6,772 6,752 37 40 Loan loss reserve 5,811 5,818 5,806 5,750 5,658 5.740 5,731 5,743 5,748 11 41 Other loans, net 407,426 407.117 411,531 412,578 418,252 414,603 413,072 410,539 409,060 1,143 42 Lease financing receivables 9,094 9,091 9,103 9,143 9,323 9.309 9,500 9,518 9,595 43 All other assets 83,118 82,808 83,298 84,340 87,679 83,686 85,436 82,347 82,035 155 44 Total assets 748,341 745,650 764,666 761,427 783,186 770,563 768,029 751,195 745,778 1,475 Deposits 45 Demand deposits 208,807 200,310 208,365 208,168 228,294 207,061 202.528 191,408 185,619 391 46 Mutual savings banks 718 602 619 700 838 744 713 611 574 47 Individuals, partnerships, and corporations 144,843 141,117 145,550 145,234 158,403 142,451 140,643 132,416 127,993 325 48 States and political subdivisions 4,804 4,641 4,804 4,885 5,835 5.126 4,817 5,178 4,846 17 49 U.S. government 2,963 2,077 1,248 1,457 1,107 1,609 1,835 1,465 1,676 2 50 Commercial banks in the United States 36,783 33,160 37,400 37,607 41,431 39,132 37,146 34,091 34,045 9 51 Banks in foreign countries 7,661 8,797 7,931 8,884 8,994 7,820 7,560 8,349 8,047 11 52 Foreign governments and official institutions .. . 2,149 1,870 1,477 2,020 2,459 1,658 1,475 1,822 1,457 53 Certified and officers' checks 8,884 8,046 9,335 7,381 9,227 8,519 8,338 7,474 6,980 26 54 Time and savings deposits 300,957 302,872 305,889 311,016 313,979 316,497 316,514 318,849 320,888 861 55 Savings 74,976 74,344 73,406 71,643 72,557 75,211 75,171 75,244 74,301 296 56 Individuals and nonprofit organizations 70,287 69,744 69,000 67,416 68,303 70,964 70,920 71,132 70.166 271 57 Partnerships and corporations operated for profit 4,021 3,983 3,781 3,633 3,596 3,538 3,556 3,452 3,482 19 58 Domestic governmental units 649 598 605 567 636 689 673 637 631 5 59 All other 19 20 21 26 23 20 22 23 21 60 Time 225,981 228,527 232,483 239,373 241,422 241,286 241,343 243,605 246,587 565 61 Individuals, partnerships, and corporations ... 193,223 195,394 198,484 203,867 205,830 206,273 206,392 208,209 210,739 479 62 States and political subdivisions 19,872 19,817 19,897 20,434 20,185 19,967 20,008 20,239 20,750 79 63 U.S. government 291 292 270 301 300 301 314 297 309 5 64 Commercial banks in the United States 6,285 6,614 7,454 8,135 8,421 8,175 8,233 8,558 8,448 2 65 Foreign governments, official institutions, and banks 6,309 6,411 6,377 6,636 6,686 6,569 6,396 6,302 6,340 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks 740 1,322 725 656 1,055 316 1,950 582 467 67 Treasury tax-and-loan notes 432 168 5,590 7,022 6,696 2,803 2,408 4,385 5,987 68 All other liabilities for borrowed money3 126,742 128,838 129,342 122,448 119,826 133,397 134,613 125,522 121,101 29 69 Other liabilities and subordinated notes and debentures 60,784 62,387 65,126 62,570 63,120 60.192 59,774 60,213 61,289 74 70 Total liabilities 698,462 695,898 715,038 711,880 732,970 720,266 717,786 700,959 695,351 1,354 71 Residual (total assets minus total liabilities)4 49,878 49,752 49,628 49.547 50,216 50,297 50,243 50,236 50,426 120 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 FRoAr SmoEreR o n 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 bank, Dec. 3 Dec. 10 Dec. 17 Dec. 24 Dec. 31 P Jan. IP Jan. 14 P Jan. 21 P Jan. 28P 1980 1 Cash items in process of collection 54,702 50,479 57,025 55,348 62,721 54,006 53,483 49,135 47,182 33 2 Demand deposits due from banks in the United States ... 18,959 17,797 18,844 18,858 20,871 20,849 18,840 19,538 19,689 -19 3 All other cash and due from depository institutions 23,151 26,935 34,599 31,626 31,837 29,210 33,559 27,536 28,738 -241 4 Total loans and securities 517,051 516,512 518,945 518,739 526,062 529,603 523,956 520,108 516,504 1,368 Securities 5 U.S. Treasury securities 36,618 36,784 36,403 35,190 36,650 37,812 37,671 37,502 36,981 146 6 Trading account 4,926 5,140 4,747 3,842 4,314 6,349 6,555 6,473 6,267 7 Investment account, by maturity 31,692 31,644 31,655 31,348 32,337 31,463 31,115 31,029 30,715 146 8 One year or less 8,491 8,516 8,484 8,410 9,475 8,852 8,704 8,678 8,524 69 9 Over one through five years 20,240 20,152 20,125 19,996 19,886 19,588 19,294 19,228 19,097 76 10 Over five years 2,960 2,976 3,046 2,941 2,976 3,022 3,117 3,124 3,094 1 11 Other securities 70,725 71,334 70,827 71,289 71,897 72,033 71,182 70,869 71,036 103 12 Trading account 3,075 3,714 2,939 2,999 3,233 3,226 2,461 2,239 2,426 13 Investment account 67,650 67,621 67,888 68,290 68,664 68,806 68,722 68,630 68,610 103 14 U.S. government agencies 14,585 14,547 14,745 14,895 14,903 14,988 14,868 14,829 14,822 50 15 States and political subdivision, by maturity 50,440 50,466 50,562 50,777 51,097 51,189 51,183 51,145 51,096 56 16 One year or less 6,607 6,597 6,610 6,622 6,584 6,489 6,407 6,404 6,442 8 17 Over one year 43,833 43,869 43,952 44,155 44,514 44,700 44,776 44,741 44,654 48 18 Other bonds, corporate stocks and securities 2,625 2,607 2,580 2,618 2,663 2,629 2,671 2,656 2,692 -3 Loans 19 Federal funds sold1 26,768 25,802 24,895 24,593 24,361 30,163 26,912 25,950 24,058 37 20 To commercial banks 19,228 17,317 17,937 17,046 16,485 20,919 19,033 16,711 15,998 37 21 To nonbank brokers and dealers in securities 5,143 5,705 5,131 5,550 5,917 7,233 5,606 6,677 5,839 22 To others 2,398 2,780 1,827 1,996 1,959 2,011 2,273 2,563 2,221 23 Other loans, gross 394,780 394,472 398,688 399,480 404,506 401,055 399,711 397,322 395,953 1,128 24 Commercial and industrial 163,502 164,025 165,193 163,810 165,920 164,350 164,253 163,142 162,702 339 25 Bankers acceptances and commercial paper 3,885 3,754 3,504 3,495 4,006 4,015 4,435 3,767 4,008 26 All other 159,617 160,271 161,689 160,315 161,913 160,334 159,818 159,375 158,694 339 27 U.S. addressees 152,718 153,477 154,666 153,316 154,701 153,167 152,600 152,080 151,362 339 28 Non-U.S. addressees 6,898 6,794 7,023 6,998 7,212 7,167 7,218 7,295 7,332 29 Real estate 104,408 104,676 104,931 105,106 105,381 105,777 106,111 106,194 106,432 418 30 To individuals for personal expenditures 62,865 63,013 63,318 63,791 63,646 63,937 63,727 63,492 63,376 362 To financial institutions 31 Commercial banks in the United States 4,018 3,437 4,126 4,782 5,179 4,420 4,556 3,990 4,103 -6 32 Banks in foreign countries 8,523 8,557 8,722 9,454 9,624 9,339 9,362 9,629 8,880 7 33 Sales finance, personal finance companies, etc 9,092 9,413 10,274 9,796 9,910 10,069 9,836 9,806 9,777 1 34 Other financial institutions 15,158 15,112 15,471 15,233 15,519 15,190 15,007 14,888 14,921 2 35 To nonbank brokers and dealers in securities 6,724 6,175 6,380 6,058 7,701 6,830 6,306 5,662 5,456 36 To others for purchasing and carrying securities2 1,910 1,937 1,955 1,922 1,909 1,866 1,944 1,902 1,965 37 To finance agricultural production 5,175 5,128 5,130 5,143 5,259 5,209 5,185 5,163 5,192 6 38 Allother 13,405 12,999 13,188 14,384 14,457 14,069 13,424 13,454 13,148 -1 39 LESS: Unearned income 6,365 6,399 6,396 6,395 6,029 6,062 6,132 6,130 6,115 35 40 Loan loss reserve 5,475 5,481 5,472 5,417 5,323 5,398 5,387 5,406 5,410 11 41 Other loans, net 382,940 382,591 386,820 387,667 393,154 389,595 388,191 385,786 384,427 1,081 42 Lease financing receivables 8,827 8,824 8,836 8,876 9,050 9,038 9,230 9,246 9,324 43 All other assets 80,884 80,727 81,116 82,145 85,190 81,493 83,233 80,099 79,787 153 44 Total assets 703,574 701,274 719,365 715,591 735,731 724,200 722,302 705,663 701,223 1,295 Deposits 45 Demand deposits 196,054 188,074 195,692 195,178 213,896 194,105 190,014 179,115 174,276 302 46 Mutual savings banks 687 574 596 671 806 712 688 581 551 47 Individuals, partnerships, and corporations 134,851 131,275 135,427 134,785 147,094 132,200 130,831 122,959 119,131 240 48 States and political subdivisions 4,283 4,145 4,265 4,251 5,192 4,560 4,190 4,437 4,227 15 49 U.S. government 2,723 1,929 1,098 1,330 990 1,424 1,579 1,114 1,477 2 50 Commercial banks in the United States 35,247 31,862 36,002 36,280 39,774 37,638 35,768 32,743 32,772 9 51 Banks in foreign countries 7,573 8,706 7,819 8,801 8,879 7,743 7,481 8,272 7,954 11 52 Foreign governments and official institutions 2,119 1,854 1,472 2,003 2,454 1,657 1,474 1,821 1,454 53 Certified and officers' checks 8,571 7,729 9,013 7,055 8,706 8,170 8,002 7,188 6,709 26 54 Time and savings deposits 280,511 282,393 285,320 290,213 293,037 295,181 295,220 297,578 299,661 774 55 Savings 69,328 68,740 67,870 66,241 67,120 69,484 69,387 69,511 68,635 238 56 Individuals and nonprofit organizations 65,002 64,503 63,819 62,347 63,213 65,574 65,465 65,726 64,841 214 57 Partnerships and corporations operated for profit ... 3,712 3,669 3,486 3,351 3,311 3,267 3,288 3,184 3,208 19 58 Domestic governmental units 595 547 544 517 573 622 611 577 565 5 59 Allother 19 20 21 26 23 20 22 23 21 60 Time 211,183 213,653 217,449 223,971 225,917 225,697 225,834 228,067 231,026 536 61 Individuals, partnerships, and corporations 180,603 182,696 185,621 190,702 192,601 192,965 193,103 194,930 197,460 451 62 States and political subdivisions 17,975 17,929 18,026 18,525 18,249 18,027 18,118 18,318 18,814 79 63 U.S. government 276 277 255 2°-6 284 285 298 282 294 5 64 Commercial banks in the United States 6,020 6,340 7,170 7,823 8,096 7,852 7,918 8,235 8,118 2 65 Foreign governments, official institutions, and banks 6,309 6,411 6,377 6,636 6,686 6,569 6,396 6,302 6,340 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks 603 1,298 640 543 972 211 1,816 540 368 67 Treasury tax-and-loan notes 360 128 5,223 6,527 6,225 2,555 2,185 3,997 5,516 68 All other liabilities for borrowed money3 120,033 121,931 122,403 115,692 113,098 126,525 127,826 118,666 114,383 27 69 Other liabilities and subordinated notes and debentures 59,386 60,966 63,725 61,155 61,558 58,621 58,294 58,816 59,899 73 70 Total liabilities 656,948 654,790 673,002 669,307 688,786 677,199 675,355 658,711 654,102 1,176 71 Residual (total assets minus total liabilities)4 46,625 46,484 46,364 46,284 46,945 47,001 46,946 46,951 47,121 118 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 Nonfinancial Statistics • February 1981 1.28 LARGE WEEKLY REPORTING COMMERCIAL BANKS IN NEW YORK CITY Assets and Liabilities Millions of dollars, Wednesday figures 1980 1981 AAccccoouunntt Dec. 3 Dec. 10 Dec. 17 Dec. 24 Dec. 31 P Jan. 1P Jan. 14 P Jan. 21 P Jan. 28P 1 Cash items in process of collection 21,348 20,636 23,140 19,879 24,782 20,614 21,628 18,696 18,644 2 Demand deposits due from banks in the United States ... 13,340 12,850 13,237 12,343 14,724 15,101 13,387 14,305 14,527 3 All other cash and due from depository institutions 6,480 7,223 11,737 8,528 7,742 8,286 11,388 5,904 7,178 4 Total loans and securities1 125,853 124,994 125,774 126,070 129,586 129,279 126,775 125,235 123,296 Securities 5 U.S. Treasury securities2 6 Trading account2 7 Investment account, by maturity 8,440 8,446 8,474 8,320 8,418 8,238 7,990 7,990 7,985 8 One year or less 1,402 1,437 1,442 1,438 1,454 1,585 1,619 1,593 1,614 y Over one through five years 6,500 6,471 6,494 6,343 6,412 6,113 5,817 5,848 5,834 1U Over five years 538 538 539 539 551 539 555544 554499 553377 11 Other securities2 17 Trading account2 13 Investment account 13,803 13,809 13,802 13,859 13,676 13,752 13,698 13,702 13,765 14 U.S. government agencies 2,312 2,307 2,302 2,301 2,305 2,319 2,303 2,298 2,296 15 States and political subdivision, by maturity 10,885 10,894 10,890 10,946 10,750 10,797 10,753 10,776 10,757 16 One year or less 1,835 1,822 1,809 1,825 1,664 1,668 1,562 1,562 1,554 17 Over one year 9,050 9,072 9,081 9,121 9,087 9,129 9,190 9,214 9,203 18 Other bonds, corporate stocks and securities 606 608 611 613 620 636 642 627 622 Loans 19 Federal funds sold3 8,831 7,889 6,790 7,189 7,284 9,819 7,994 7,780 7,254 20 To commercial banks 5,399 4,044 3,292 3,555 3,461 5,414 4,210 3,914 3,836 21 To nonbank brokers and dealers in securities 2,317 2,888 2,747 2,676 3,061 3,605 2,678 2,890 2,545 22 Toothers 1,116 957 751 957 762 801 1,105 976 872 23 Other loans, gross 97,737 97,824 99,672 99,667 103,141 100,435 100,084 98,762 97,385 24 Commercial and industrial 51,105 51,780 51,864 50,754 51,836 51,243 51,551 51,082 50,680 25 Bankers acceptances and commercial paper 894 832 594 537 767 790 1,183 942 1,056 2b Allother 50,211 50,948 51,269 50,217 51,068 50,453 50,368 50,140 49,624 27 U.S. addressees 47,976 48,682 48,884 47,854 48,558 47,995 47,784 47,528 47,010 28 Non-U.S. addressees 2,235 2,266 2,385 2,364 2,510 2,458 2,584 2,612 2,614 29 Real estate 14,573 14,611 14,651 14,741 14,826 14,816 14,890 14,891 14,941 30 To individuals for personal expenditures 9,148 9,187 9,242 9,318 9,369 9,446 9,392 99,,440033 99,,339966 31 To financial institutions Commercial banks in the United States 1,413 1,218 1,607 2,043 2,081 1,502 1,660 1,268 1,280 32 Banks in foreign countries 4,110 4,056 4,221 4,780 4,990 4,689 4,686 4,918 4,260 33 Sales finance, personal finance companies, etc 3,836 4,141 4,718 4,371 4,395 4,547 4,342 4,238 4,181 34 Other financial institutions 4,453 4,486 4,668 4,690 4,848 4,703 4,621 4,562 4,454 35 To nonbank brokers and dealers in securities 3,932 3,478 3,628 3,394 4,838 3,960 3,602 3,055 3,024 36 To others for purchasing and carrying securities4 413 428 460 420 405 395 431 424 472 37 To finance agricultural production 506 492 481 461 435 439 444 447 422 38 Allother 4,247 3,948 4,132 4,694 5,117 4,695 4,465 4,474 4,274 39 LESS: Unearned income 1,134 1,139 1,140 1,164 1,149 1,157 1,187 1,190 1,198 40 Loan loss reserve 1,825 1,836 1,824 1,801 1,783 1,809 1,804 1,808 1,804 41 Other loans, net 94,778 94,848 96,708 96,702 100,208 97,470 97,093 95,764 94,382 42 Lease financing receivables 1,705 1.705 1,710 1,711 1,758 1,768 1,966 1,966 1,973 43 All other assets5 33,346 33,746 33,707 33,741 37,241 36,975 38,782 34,272 34,615 44 Total assets 202,072 201,153 209,305 202,273 215,832 212,022 213,926 200,380 200,234 Deposits 45 Demand deposits 68,558 66,066 69,820 67,066 77,180 69,113 69,240 64,510 64,199 46 Mutual savings banks 339 285 290 350 436 383 363 307 285 47 Individuals, partnerships, and corporations 34,564 33,358 35,004 33,694 38,646 33,926 35,087 32,596 32,274 48 States and political subdivisions 414 353 330 421 578 366 467 528 525 49 U.S. government 694 484 294 333 173 350 401 291 352 50 Commercial banks in the United States 20,534 19,248 21,818 20,592 24,145 23,240 22,373 19,279 20,231 51 Banks in foreign countries 5,947 6,949 6,080 6,868 7,045 5,832 5,680 6,607 6,184 52 Foreign governments and official institutions 1,836 1,487 1,186 1,645 2,073 1,355 1,139 1,523 1,160 53 Certified and officers' checks 4,230 3,900 4,818 3,162 4,083 3,662 3,731 3,379 3,186 54 Time and savings deposits 54,851 54,910 55,866 56,994 57,318 57,961 57,590 57,962 58,096 55 Savings 9,858 9,788 9,666 9,480 9,547 9,558 9,476 9,330 9,150 56 Individuals and nonprofit organizations 9,379 9,325 9,239 9,063 9,124 9,131 9,059 8,928 8,746 57 Partnerships and corporations operated for profit ... 350 341 320 311 308 305 297 290 289 58 Domestic governmental units 124 117 99 98 107 115 113 104 111 59 Allother 5 6 7 8 8 6 7 7 4 60 Time 44,992 45,122 46,201 47,514 47,770 48,403 48,114 48,633 48,946 61 Individuals, partnerships, and corporations 38,381 38,500 39,570 40,761 41,064 41,882 41,575 42,044 42,395 62 States and political subdivisions 1,781 1,763 1,703 1,600 1,436 1,384 1,339 1,413 1,508 63 U.S. government 22 21 21 14 14 14 22 25 24 64 Commercial banks in the United States 1,992 1,993 2,149 2,278 2,370 2,305 2,460 2,515 2,347 65 Foreign governments, official institutions, and banks 2,817 2,845 2,758 2,860 2,886 2,818 2,719 22,,663366 22,,667722 Liabilities for borrowed money 66 Borrowings from Federal Reserve Banks 881155 475 11,,449900 67 Treasury tax-and-loan notes 31 1,703 1,941 1,833 95 11 I 1 68 All other liabilities for borrowed money6 39,706 39,391 40,165 37,392 37',976 45,713 47,020 39,535 38,223 69 Other liabilities and subordinated notes and debentures .. 23,346 24,435 26,201 23,538 25,296 23,402 22,958 22,816 24,175 70 Total liabilities 186,492 185,617 193,755 186,931 200,077 196,283 198,300 184,825 184,695 71 Residual (total assets minus total liabilities)4 15,580 15,536 15,550 15,341 15,755 15,738 15,627 15,555 15,539 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. 7. 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 1981 Dec. 3 Dec. 10 Dec. 17 Dec. 24 Dec. 31p Jan. IP Jan. 14P Jan. 21 P Jan. 28P BANKS WITH ASSETS OF $750 MILLION OR MORE 1 Total loans (gross^ and securities adjusted1 540,677 542,626 544,026 544,295 551,712 551,692 547,446 546,623 543,287 2 Total loans (gross) adjusted1 424,162 425,315 427,545 428,506 433,664 432,395 429,255 428,907 425,949 3 Demand deposits adjusted2 111,537 112,032 109,870 100,755 119,621 109,548 107,153 103,740 100,240 4 Time deposits in accounts of $100,000 or more 147,881 150,077 152,991 158,511 159,440 158,366 158,214 160,217 162,382 5 Negotiable CDs 107,404 109,046 111,327 115,608 116,374 114,836 114,303 115,893 117,670 6 Other time deposits 40,477 41,030 41,664 42,903 43,066 43,530 43,912 44,324 44,712 7 Loans sold outright to affiliates3 2,657 2,668 2,712 2,736 2,748 2,773 2,778 2,753 2,760 8 Commercial and industrial 1,742 1,768 1,767 1,791 1,800 1,862 1,865 1,833 1,850 9 Other 915 900 945 946 947 911 913 920 910 BANKS WITH ASSETS OF $1 BILLION OR MORE 10 Total loans (gross^ and securities adjusted1 505,646 507,638 508,750 508,723 515,750 515,724 511,887 510,943 507,928 11 Total loans (gross) adjusted1 398,303 399,519 401,520 402,244 407,202 405,879 403,034 402,572 399,910 12 Demand deposits adjusted2 103,383 103,803 101,567 102,219 110,410 101,036 99,183 96,122 92,845 13 Time deposits in accounts of $100,000 or more 139,268 141,426 144,234 149,499 150,394 149,315 149,236 151,266 153,475 14 Negotiable CDs 101,224 102,866 105,092 109,197 109,936 108,428 107,974 109,622 111,453 15 Other time deposits 38,043 38,559 39,143 40,302 40,458 40,888 41,262 41,645 42,022 16 Loans sold outright to affiliates3 2,614 2,630 2,669 2,693 2,711 2,733 2,738 2,708 2,725 17 Commercial and industrial 1,719 1,746 1,744 1,768 1,783 1,839 1,838 1,801 1,825 18 Other 895 884 925 925 928 893 900 907 900 BANKS IN NEW YORK CITY 19 Total loans (gross) and securities adjusted1-4 122,000 122,706 123,839 123,437 126,976 125,329 123,896 123,052 121,183 20 Total loans (gross) adjusted1 99,756 100,451 101,563 101,258 104,883 103,338 102,208 101,360 99,522 21 Demand deposits adjusted2 25,982 25,697 24,568 26,261 28,081 24,909 24,838 26,244 24,972 22 Time deposits in accounts of $100,000 or more 35,549 35,632 36,529 37,720 37,701 38,263 38,033 38,579 38,826 23 Negotiable CDs 26,655 26,657 27,457 28,583 28,649 29,154 28,877 29,294 29,595 24 Other time deposits 8,894 8,975 9,072 9,137 9,052 9,109 9,156 9,285 9,232 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 Nonfinancial Statistics • February 1981 1.30 LARGE WEEKLY REPORTING COMMERCIAL BANKS Domestic Classified Commercial and Industrial Loans Millions of dollars Outstanding Net change during Adjust- Industry classification 1981 1980 ment bank1 Sept. 24 Oct. 29 Jan. 28p Q3' 04 Dec. Jan.? 1 Durable goods manufacturing 23,512 23,335 24,088 24,675 24,378 783 1,163 754 587 -299 2 Nondurable goods manufacturing ... 19,533 20,273 20,804 20,503 19,359 1,195 970 530 -301 -1,142 -1 3 Food, liquor, and tobacco 4,350 4,584 4,921 5,384 4,915 649 1,033 337 463 -466 -3 4 5 T Pe ex tr t o il l e e s u , m a p r p e a fi r n e i l n , g a nd leather 2 5 , , 6 2 8 0 6 4 5 3 , , 0 1 7 5 0 3 4 3 , , 9 12 0 9 6 4 3, , 6 1 3 5 3 0 4 3, , 1 0 8 9 5 6 -22689 -1,0 9 5 4 4 7 -1 -2 6 4 4 -7 5 5 0 6 4 -4 -5 4 4 8 6 Chemicals and rubber 3,733 3,846 4,158 3,917 3,782 30 184 312 -241 -135 7 Other nondurable goods 3,559 3,620 3,690 3,419 3,381 275 -140 70 -271 -39 8 Mining (including crude petroleum and natural gas) 13,956 14,716 15,338 16,421 16,251 199 2,464 622 1,083 -170 9 Trade 24,950 26,270 27,050 26,247 25,543 350 1,298 781 -803 -704 10 Commodity dealers 2,118 2,470 2,402 2,563 2,116 588 444 -69 161 -447 1 1 2 1 R O e th ta e i r l wholesale 1 1 1 1 , , 2 5 4 8 5 6 1 1 1 1 , , 9 8 2 7 3 6 1 1 2 2 , ,4 1 6 82 7 1 11 2 , , 3 3 8 0 1 3 1 1 2 1 , , 0 3 5 6 8 8 -1 -9 4 4 4 7 1 1 3 7 6 5 3 4 0 4 6 -1,0; 1 22 -2-1442 13 Transportation, communication, and other public utilities 19,223 19,316 20,099 21,316 20,747 478 2.093 783 1,217 -567 -2 1 1 5 4 T C r o a m n m sp u o n r i t c a a ti t o io n n 2 7 , ,7 9 3 9 5 3 7 3, , 0 7 9 8 4 8 8 3 , , 0 1 1 6 9 1 8 3 , , 3 3 7 1 4 9 8 3, , 1 2 8 6 4 0 1 1 5 3 4 6 6 3 3 2 8 6 2 6 3 7 1 3 1 5 5 4 8 - -1 11 3 2 6 -2 16 Other public utilities 8,495 8,434 8,919 9,623 9,303 188 1,128 484 704 -320 17 Construction 6,030 5,924 5,992 5,993 5,950 60 -37 69 1 -42 -2 18 Services 21,311 21,530 22,160 22,853 23,250 1,014 1,542 630 693 397 19 All other2 15,402 15,634 16,146 16,692 15,883 403 1,290 511 546 -1,150 ' 34l" 20 Total domestic loans 143,917 146,998 151,678 154,701 151,362 4,483 10,784 4,679 3,024 -3,678 339 21 MEMO: Term loans (original maturity more than 1 year) included in domestic loans 76,536 76,912 78,956 81,736 81,779 2,241 5,200 2,044 2,780 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.. Sept. Dec. Mar. June Sept. Dec. 1 All holders—Individuals, partnerships, and corporations 236.9 250.1 274.4 294.6 292.4 302.2 288.4 288.6 302.0 316.8 2 Financial business 20.1 22.3 25.0 27.8 26.7 27.1 28.4 27.7 29.6 29.8 3 Nonfinancial business 125.1 130.2 142.9 152.7 148.8 157.7 144.9 145.3 151.9 162.3 4 Consumer 78.0 82.6 91.0 97.4 99.2 99.2 97.6 97.9 101.8 104.0 5 Foreign 2.4 2.7 2.5 2.7 2.8 3.1 3.1 3.3 3.2 3.3 6 Other 11.3 12.4 12.9 14.1 14.9 15.1 14.4 14.4 15.5 17.4 Weekly reporting banks 19793 1980 11997755 11997766 11997777 11997788 DDeecc.. DDeecc.. DDeecc.. DDeecc.. Sept. Dec. Mar. June Sept. Dec. 7 All holders—Individuals, partnerships, and corporations 124.4 128.5 139.1 147.0 132.7 139.3 133.6 133.9 140.6 147.4 8 Financial business 15.6 17.5 18.5 19.8 19.7 20.1 20.1 20.2 21.2 21.6 9 Nonfinancial business 69.9 69.7 76.3 79.0 69.1 74.1 69.1 69.2 72.4 77.7 10 Consumer 29.9 31.7 34.6 38.2 33.7 34.3 34.2 33.9 36.0 36.3 11 Foreign 2.3 2.6 2.4 2.5 2.8 3.0 3.0 3.1 3.1 3.1 12 Other 6.6 7.1 7.4 7.5 7.4 7.8 7.2 7.5 7.9 8.7 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 1977 1978 19791 1980 Dec. Dec. Dec. Dec. June July Aug. Sept. Oct. Nov. Dec. Commercial paper (seasonally adjusted) 1 All issuers 65.036 83,420 112,803 125,068 123,937 122,259 122,607 123,460 122,383 124,776 125,068 Financial companies2 Dealer-placed paper3 2 Total 8,888 12,300 17,579 19,847 19,100 18,207 19,092 19,509 18,992 19,556 19,847 3 Bank-related 2,132 3,521 2,874 3,561 3,188 3,198 3,313 3,370 3,442 3,436 3.561 Directly placed paper4 4 Total 40,612 51,755 64,931 68,083 62,623 63,777 64,550 65,542 66,628 67,345 68,083 5 Bank-related 7,102 12,314 17.598 22,382 19,436 19,239 19,909 19,692 21,146 21,939 22,382 6 Nonfinancial companies5 15,536 19,365 30,293 37,138 42,214 40,275 38,965 38,409 36,763 37,875 37,138 Bankers dollar acceptances (not seasonally adjusted) 7 Total 25,450 33,700 45,321 54,744 54,356 54,334 54,486 55,774 56,610 55,226 Holder 8 Accepting banks 10,434 8,579 9,865 10,564 10,051 9,764 9,644 10,275 11,317 10,236 9 Own bills 8,915 7,653 8,327 8,963 9,113 8,603 8,544 9,004 9,808 8,837 10 Bills bought 1,519 927 1,538 1,601 939 1,161 1,100 1,270 1,509 1,399 Federal Reserve Banks 1 11 Own account 954 704 776 373 310 277 499 566 523 12 Foreign correspondents . 362 664 1,382 1,791 1,784 1,899 1,841 1,820 1,915 1,852 13 Others 13,700 24,456 33,370 41,614 42,147 42,361 42,724 43,179 42,813 42,616 Basis 14. Imports into United States 6,378 8,574 10,270 11,776 11,536 12,109 11,861 11,731 12,254 11,774 15 Exports from United States 5,863 7,586 9,640 12,712 11,339 12,401 12,582 12,991 13,445 13,670 16 Allother 13,209 17,540 25,411 30,257 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 com- Digitized for FfaRctAorSinEg, Rfin ance leasing, ana other business lending; insurance underwriting; and munications, construction, manufacturing, mining, wholesale and retail trade, other investment activities. transportation, and reserves. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Nonfinancial Statistics • February 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 1980—Jan. 15.25 1980—Aug 26 13.00 5 19.00 Feb. 15.63 Sept Oct. 1 13.50 10 20.00 Mar. 18.31 Oct 17 14.00 16 21.00 Apr. 19.77 Nov 29 14.50 19 21.50 May 16.57 Dec Nov. 6 15.50 June 12.63 17 16.25 1981—Jan. 2 20.50 July 11.48 1981—Jan 21 17.00 9 20.00 26 17.75 1.34 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, November 3-8, 1980 Size of loan (in thousands of dollars) All IItteemm 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 25.0 27.9 40.7 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 3399..33 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 44.4 22.7 8.8 4455..66 47.9 7744..77 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 Multifamily 8.2 2.2 10.0 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 1155..0099 1144..9933 1155..2233 1155..7799 1166..3322 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; weekly and monthly figures are averages of business day data unless otherwise noted. 1980 1981 1981, week ending T .. . Oct. Nov. Dec. Jan. Jan. 2 Jan. 9 Jan. 16 Jan. 23 Jan. 30 Money market rates 1 Federal funds1 7.93 11.19 13.36 12.81 15.85 18.90 19.08 18.45 20.06 19.64 19.35 18.12 Commercial paper2-3 2 1-month 7.76 10.86 12.76 12.59 15.23 18.95 17.73 17.89 17.45 18.23 18.16 17.07 3 3-month 7.94 10.97 12.66 12.52 15.18 18.07 16.58 16.34 15.87 16.95 17.23 16.38 4 6-month 7.99 10.91 12.29 12.32 14.73 16.49 15.10 15.05 14.66 15.35 15.40 15.02 Finance paper, directly placed2-3 5 1-month 7.73 10.78 12.44 12.32 14.87 17.87 16.97 16.66 16.70 17.11 17.43 16.71 6 3-month 7.80 10.47 11.49 11.24 13.14 15.00 14.49 14.63 14.03 14.33 14.80 14.80 7 6-month 7.78 10.25 11.28 11.15 13.07 14.78 14.09 14.53 13.81 13.94 14.31 14.24 8 Bankers acceptances, 3-month3-4 8.11 11.04 12.78 12.69 15.34 17.96 16.62 16.21' 15.96 17.01 17.30 16.32 Certificates of deposit, secondary market5 9 1-month 7.88 11.03 12.91 12.69 15.39 19.24 17.99 17.87 17.67 18.44 18.54 17.43 10 3-month 8.22 11.22 13.07 12.94 15.68 18.65 17.19 16.99 16.55 17.42 17.82 17.03 11 6-month 8.61 11.44 12.99 12.99 15.36 17.10 15.92 15.76 15.50 15.92 16.34 15.92 12 Eurodollar deposits, 3-month6 8.78' 11.96 14.00 13.55 16.46 19.47 18.07 17.79 17.06 18.06 18.60 18.56 U.S. Treasury bills3-7 Secondary market 13 3-month 7.19 10.07 11.43 11.62 13.73 15.49 15.02 14.31 14.31 15.19 15.65 15.01 14 6-month 7.58 10.06 11.37 11.63 13.50 14.64 14.08 13.73 13.69 14.06 14.59 14.01 15 1-year 7.74 9.75 10.89 11.30 12.66 13.23 12.62 12.38 12.26 12.50 13.03 12.68 Auction average8 16 3-month 7.221 10.041 11.506 11.580 13.888 15.661 14.724 13.908 13.601 15.318 15.595 15.199 17 6-month 7.572 10.017 11.374 11.566 13.612 14.770 13.883 13.411 13.182 14.228 14.471 14.121 1188 1-year 77..667788 99..881177 1100..774488 1111..113366 1122..221199 1133,,226611 1122..555544 1122..007744 1133..003333 Capital market rates U.S. TREASURY NOTES AND BONDS Constant maturities9 19 1-year 8.34 10.67 12.05 12.49 14.15 14.88 14.08 13.86 13.68 13.91 14.52 14.24 20 2-year 8.34 10.12 11.77 12.09 13.51 14.08 13.26 13.00 12.85 13.15 13.69 13.39 21 2V^-year10 12.75 13.10 13.25 22 3-year 8.29 9.71 11.55 12.01 13.31 13.65 13.01 12.81 12.72 12.91 13.32 13.13 23 5-year 8.32 9.52 11.48 11.86 12.83 13.25 12.77 12.54 12.53 12.69 13.01 12.89 24 7-year 8.36 9.48 11.43 11.79 12.71 13.00 12.66 12.43 12.40 12.62 12.85 12.78 25 10-year 8.41 9.44 11.46 11.75 12.68 12.84 12.57 12.36 12.31 12.53 12.72 12.74 26 20-year 8.48 9.33 11.39 11.75 12.44 12.49 12.29 12.05 11.98 12.27 12.48 12.48 27 30-year 8.49 9.29 11.30 11.59 12.37 12.40 12.14 11.95 11.85 12.12 12.31 12.32 Composite11 28 Over 10 years (long-term) 7.89 8.74 10.81 11.20 11.83 11.89 11.65 11.49 11.39 11.62 11.79 11.80 STATE AND LOCAL NOTES AND BONDS Moody's series12 29 5.52 5.92 7.85 8.38 8.71 9.44 8.98 9.00 8.80 8.80 9.00 9.30 30 Baa 6.27 6.73 9.01 9.41 9.74 10.64 9.90 10.20 9.90 9.90 9.90 9.90 31 Bond Buyer series13 6.03 6.52 8.59 9.11 9.56 10.11 9.66 9.76 9.49 9.57 9.68 9.91 CORPORATE BONDS 32 Seasoned issues, all industries14 9.07 10.12 12.75 13.07 13.64 14.04 13.80 13.82 13.65 13.74 13.88 13.93 By rating group 33 Aaa 8.73 9.63 11.94 12.31 12.97 13.21 12.81 12.83 12.59 12.76 12.91 12.98 34 Aa 8.92 9.94 12.50 12.68 13.34 13.78 13.52 13.54 13.34 13.51 13.60 13.62 35 A 9.12 10.20 12.89 13.05 13.59 14.03 13.83 13.82 13.72 13.72 13.90 13.97 36 Baa 9.45 10.69 13.67 14.23 14.64 15.14 15.03 15.09 14.93 14.96 15.08 15.15 Aaa utility bonds15 37 New issue .... ... 8.96 10.03 12.74 13.18 13.85 14.51 14.12 14.05 14.07 14.29 14.06 38 Recently offered issues 8.97 10.02 12.70 13.13 13.91 14.38 14.17 14.15 14.10 14.17 14.33 14.08 MEMO: Dividend/price ratio16 39 Preferred stocks 8.25 9.07 10.57 10.64 11.35 11.94 11.64? 12.09 11.55 11.47 11.53 11.54 40 Common stocks 5.28 5.46 5.25 4.80 4.63 4.74 4.76 4.67 4.70 4.76 4.83 4.84 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. Dealer closing offered rates for domestic issues (top-rated banks). Investors Service. 5. Five-day average of rates quoted by five dealers. 13. Twenty issues of mixed quality. 6. Averages of daily quotations for the week ending Wednesday. 14. Averages of daily figures from Moody's Investors Service. 7. Except for auction averages, yields are computed from daily closing bid prices. 15. Compilation of tne Federal Reserve. Issues included are long-term (20 years 8. Rates are recorded in the week in which bills are issued. or more). New-issue yields are based on quotations on date of offering; those on 9. Yield on the more actively traded issues adjusted to constant maturities by recently offered issues (included only for first 4 weeks after termination of underthe U.S. Treasury, based on daily closing bid prices. writer price restrictions), on Friday close-of-business quotations. 10. Each monthly figure is an average of only five business days near the end 16. Standard and Poor's corporate series. Preferred stock ratio based on a sample of ten issues: four public utilities, four industrials, one financial, and one transportation. 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 • February 1981 1.36 STOCK MARKET Selected Statistics 1980 1981 Indicator 1978 1979 1980 July Aug. Sept. Oct. Nov. Dec. Jan. Prices and trading (averages of daily figures) Common stock prices 1 New York Stock Exchange (Dec. 31, 1965 = 50) 53.76 55.67 68.06 68.56 70.87 73.12 75.17 78.15 76.69 76.24 2 Industrial 58.30 61.82 78.64 78.67 82.15 84.92 88.00 92.32 90.37 89.23 3 Transportation 43.25 45.20 60.52 59.14 62.48 65.89 70.76 77.22 75.74 74.43 4 Utility 39.23 36.46 37.35 38.77 38.18 38.77 38.44 38.35 37.84 38.53 5 Finance 56.74 58.65 64.28 66.76 67.22 69.33 68.29 67.21 67.46 70.04 6 Standard & Poor's Corporation (1941-43 = 10)1 . 96.11 98.34 118.71 119.83 123.50 126.49 130.22 135.65 133.48 132.97 7 American Stock Exchange (Aug. 31, 1973 = 100) 144.56 186.56 300.94 310.29 321.87 337.01 350.08 349.97 347.56 344.21 Volume of trading (thousands of shares) 8 New York Stock Exchange 28,591 32,233 44,867 46,444 45,984 50,397 44,860 54,895 46,620 45,500 9 American Stock Exchange 3,622 4,182 6,377 6,195 6,452 7,880 7,087 7,852 6,410 6,024 Customer financing (end-of-period balances, in millions of dollars) 10 Regulated margin credit at brokers/dealers2 11,035 11,619 14,271 11,522 12,007 12,731 13,293 14,363 14,721 11 Margin stock3 10,830 11,450 14,500 11,320 11,800 12,520 13,080 14,140 14,500 12 Convertible bonds 205 167 219 198 204 208 211 220 219 13 Subscription issues 1 2 2 4 3 3 2 3 2 n. a. Free credit balances at brokers4 14 Margin-account 835 1,105 2,120 1,665 1,695 1,850 1,950' 2,120' 2,105 15 Cash-account 2,510 4,060 5,590 4.905 4,925 5,680 5,500' 5,590' 5,970 Margin-account debt at brokers (percentage distribution, end of period) 16 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 By equity class (in percent)5 17 Under 40 33.0 16.0 14.0 12.0 11.0 13.0 13.0 13.0 14.0 18 40-49 28.0 29.0 30.0 27.0 25.0 28.0 29.0 18.0 30.0 19 50-59 18.0 27.0 25.0 28.0 30.0 26.0 25.0 31.0 25.0 nn ..aa.. 20 60-69 10.0 14.0 14.0 16.0 16.0 15.0 15.0 18.0 14.0 11 21 70-79 6.0 8.0 9.0 9.0 10.0 10.0 10.0 11.0 9.0 I 22 80 or more 55..00 77..00 8.0 8.0 8.0 8.0 8.0 9.0 8.0 T Special miscellaneous-account balances at brokers (end of period) 23 Total balances (millions of dollars)6 . 13,092 16,150 21,690 17,886 18,350 19,283 19,929 21,600 21,690 Distribution by equity status (percent) 24 Net credit status 41.3 44.2 47.8 48.7 48.2 49.0 46.8 46.5 47.8 Debt status, equity of 25 60 percent or more 45.1 47.0 44.4 43.8 44.6 43.4 46.2 46.8 44.4 26 Less than 60 percent 13.6 8.8 7.7 8.0 7.0 7.6 7.0 6.7 7.7 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 All 1.37 SAVINGS INSTITUTIONS Selected Assets and Liabilities Millions of dollars, end of period 1980 AAccccoouunntt 1978 1979 Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Savings and loan associations 1 Assets 523,542 578,962 589,120 590,725 592,931 594,397 596,620 603,295 609,320 617,773 623,939 629,676 2 Mortgages 432,808 475,688 478,952 480,032 479,956 481,042 482,839 487,036 491,895 496,495 499,973 502,718 3 Cash and investment securities1 44,884 46,341 50,702 50,373 52,466 52,408 52,165 53,336 53,435 56,146 57,302 57,562 4 Other 45,850 56,933 59,466 60,320 60,509 60,947 61,616 62,923 63,990 65,132 66,664 69,396 S Liabilities and net worth 523,542 578,962 589,120 590,725 592,931 594,397 596,620 603,295 609,320 617,773 623,939 629,676 6 Savings capital 430,953 470,004 478,075 478,400 481,411 486,680 488,896 497,403 496,991 500,861 503,365 511,024 7 Borrowed money 42,907 55,232 57,193 57,253 55,199 54,796 41,239 55,396 58,418 60,727 62,067 64,464 8 FHLBB 31,990 40,441 42,413 42,724 41,529 40,613 39,882 41,005 42,547 44,325 45,505 47,074 9 Other 10,917 14,791 14,780 14,529 13,670 14,183 13,579 14,391 15,871 16,402 16,562 17,390 10 Loans in process 10,721 9,582 8,149 7,725 7,185 7,031 7,112 7,540 8,243 8,654 8,853 8,732 11 Other 9,904 11,506 12,566 14,143 16,141 12,966 14,364 16,190 12,776 14,502 16,433 12,131 12 Net worth2 29,057 32,638 33,137 33,204 32,995 32,924 32,787 32,766 32,892 33,029 33,221 33,325 13 MEMO: Mortgage loan commitments outstanding3 18,911 16,007 15,843 14,195 13,931 15,368 18,020 20,278 20,311 19,077 17,979 16,184 Mutual savings banks4 14 Assets 158,174 163,405 165,107 165,366 166,340 166,982 167,959 168,752 169,409 170,432 171,126 Loans 15 Mortgage 95,157 98,908 99,151 99,045 99,163 99,176 99,301 99,289 99,306 99,523 99,677 16 Other 7,195 9,253 10,131 10,187 10,543 11,148 11,390 11,122 11,415 11,382 11,477 Securities 17 U.S. government5 4,959 7,658 7,629 7,548 7,527 7,483 7,796 8,079 8,434 8,622 8,715 18 State and local government 3,333 2,930 2,824 2,791 2,727 2,706 2,702 2,709 2,728 2,754 2,736 19 Corporate and other6 39,732 37,086 37,493 37,801 38,246 38,276 38,863 39,327 39,609 39,720 39,888 20 Cash 3,665 3,156 3,361 3,405 3,588 3,561 3,260 3,456 3,153 3,592 3,717 21 Other assets 4,131 4,412 4,518 4,588 4,547 4,631 4,648 4,770 4,764 4,839 4,916 n.a. 22 Liabilities 158,174 163,405 165,107 165,366 166,340 166,982 167,959 168,752 169,409 170,432 171,126 23 Deposits 142,701 146,006 146,328 145,821 146,637 148,606 149,580 150,187 151,765 151,998 152,133 24 Regular7 141,170 144,070 144,214 143,765 144,646 146,416 147,408 148,018 149,395 149,797 150,109 25 Ordinary savings 71,816 61,123 56,948 54,247 54,669 56,388 57,737 58,191 58,658 57,651 56,256 26 Time and other 69,354 82,947 87,266 89,517 89,977 90,028 89,671 89,827 90,736 92,146 93,853 27 Other 1,531 1,936 2,115 2,056 1,990 2,190 2,172 2,169 2,370 2,200 2,024 28 Other liabilities 4,565 5,873 7,135 7,916 8,161 6,898 6,964 7,211 6,299 7,117 7,644 29 General reserve accounts 10,907 11,525 11,643 11,629 11,542 11,478 11,416 11,353 11,344 11,317 11,349 30 MEMO: Mortgage loan commitments outstanding8 4,400 3,182 2,397 2,097 1,883 1,898 1,939 1,849 1,883 1,817 1,682 Life insurance companies 31 Assets 389,924 432,282 439,733 442,932 447,020 450,858 455,759 459,362 464,483 468,057 473,529 Securities 32 Government 20,009 0,338 20,545 20,470 20,529 20,395 20,736 20,833 20,853 20,942 21,204 33 United States9 4,822 4,888 5,004 5,059 5,107 4,990 5,325 5,386 5,361 5,390 5,568 34 State and local 6,402 6,428 6,454 6,351 6,352 6,349 6,361 6,421 6,474 6,484 6,568 35 Foreign10 8,785 9,022 9,087 9,060 9,070 9,056 9,050 9,026 9,018 9,068 9,068 36 Business 198,105 222,332 221,214 222,175 223,556 224,874 228,645 230,477 233,652 236,115 239,150 n.a. 37 Bonds 162,587 178,371 182,536 182,750 183,356 184,329 186,385 187,839 189,586 191,229 191,753 38 Stocks 35,518 39,757 38,678 39,425 40,200 40,545 42,260 42,638 44,066 44,886 47,397 39 Mortgages 106,167 118,421 122,314 123,587 124,563 125,455 126,461 127,357 128,089 128,977 129,878 40 Real estate 11,764 13,007 13,512 13,696 13,981 14,085 14,164 14,184 14,460 14,702 15,183 41 Policy loans 30,146 34,825 36,901 38,166 38,890 39,354 39,649 39,925 40,258 40,548 40,878 42 Other assets 23,733 27,563 25,247 24,838 25,501 26,695 26,104 26,586 27,171 26,765 27,236 Credit unions 43 Total assets/liabilities and capital 62,348 65,854 65,678 65,190 66,103 68,102 68,429 69,553 70,515 70,702 71,335 71,709 44 Federal 34,760 35,934 36,091 35,834 36,341 37,555 37,573 38,168 39,219 39,155 39,428 39,801 45 State 27,588 29,920 29,587 29,356 29,762 30,547 30,856 31,385 31,296 31,547 31,907 31,908 46 Loans outstanding 50,269 53,125 51,337 50,344 49,469 48,172 47,829 47,884 47,211 47,221 47,299 47,774 47 Federal 27,687 28,698 27,685 27,119 26,550 25,773 25,435 25,401 25,381 25,288 25,273 25,627 48 State 22,582 24,426 23,652 23,225 22,919 22,399 22,394 22,483 21,830 21,933 22,026 22,147 49 Savings 53,517 56,232 56,743 56,338 57,197 59,310 60,574 61,403 63,728 63,957 64,304 64,399 50 Federal (shares) 29,802 35,530 30,948 30,851 31,403 32,764 33,472 33,964 35,961 36,030 36,183 36,348 51 State (shares and deposits) 23,715 25,702 25,795 25,487 25,794 26,546 27,102 27,439 27,767 27,927 28,121 28,051 For notes see bottom of page A28. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Nonfinancial Statistics • February 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 H2 HI H2 Oct. Nov. Dec. U.S. budget 1 Receipts1 401,997 465,940 520,050 233,952 270,864 262,152 38,923 39,175 48,903 2 Outlays12 450,804' 493,635' 579,613' 263,004' 289,905' 310,972 56,304 48,049 56,202 3 Surplus, or deficit( -) -48,807' -27,694' -59,563' -29,052' -19,041' -48,821 -17,382 -8,874 -7,299 4 Trust funds 12,693 18,335 8,791 9,679 4,383 -2,551 -7,452 -3,049 5,661 5 Federal funds3 -61,532 -46,069 -67,752 -38,773 -23,418 -46,306 -9,929 -5,825 -12,960 OOffff--bbuuddggeett eennttiittiieess ((ssuurrpplluuss,, oorr ddeeffiicciitt 66 FFeeddeerraall FFiinnaanncciinngg BBaannkk oouuttllaayyss -10,661 -13,261 -14,549 -5,909 -7,735 -7,552 -1,157 -1,358 -1,033 77 OOtthheerr44 302' 793r 303' 765' -522' 376 1,403 -466 463 U.S. budget plus off-budget, including Federal Financing Bank 8 Surplus, or deficit (-) -59,166 -40,162 -73,808' -34,197 -27,298 -55,998 -17,136 -10,698 -7,869 Source or financing 9 Borrowing from the public 59,106 33,641 70,515 31,320 24,435 54,764 4,758 9,231 13,667 10 Cash and monetary assets (decrease, or increase (- ))' -3,023 -408 -355 3,059 -3,482 -6,730 8,488 4,077 -10,485 11 Other6 3,083 6,929 3,648' -182 6,345 7,964 3,890 -2,610 4,686 MEMO: 12 Treasury operating balance (level, end of period) 22,444 24,176 20,990 15,924 14,092 12,305 12,678 7,226 12,305 13 Federal Reserve Banks 16,647 6,489 4,102 4,075 3,199 3,062 1,864 2,435 3,062 14 Tax and loan accounts 5,797 17,687 16,888 11,849 10,893 9,243 10,814 4,791 9,243 1. Effective June 1978, earned income credit payments in excess of an indi- 6. 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. Effective Oct. 1, 1980, the Pension Benefit Guaranty Corporation was re- valuation adjustment; net gain/loss for IMF valuation adjustment; and profit on classified from an off-budget agency to an on-budget agency in the Department of the sale of gold. Labor. 3. Half-year figures are calculated as a residual (total surplus/deficit less trust SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S. fund surplus/deficit). Government," Treasury Bulletin, and the Budget of the United States Government, 4. Includes Postal Service Fund; Rural Electrification and Telephone Revolving Fiscal Year 1981. Fund; and Rural Telephone Bank. 5. Includes U.S. Treasury operating cash accounts; special drawing rights; gold tranche drawing rights; loans to International Monetary Fund; and other cash and 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' H2 HI H2 Oct. Nov. Dec. RECEIPTS 1 All sources1 401,997 465,940 520,050 233,952 270,864 262,152 38,923 39,175 48,903 ? Individual income taxes, net 180,988 217,841 244,069 115,488 119,988 131,962 21,150 20,851 23,725 3 Withheld 165,215 195,295 223,763 105,764 110,394 120,924 20,237 20,379 22,844 4 Presidential Election Campaign Fund .. 39 36 39 3 34 4 0 0 0 Nonwithheld 47,804 56,215 63,746 12,355 49,707 14,592 1,454 673 1,150 6 Refunds1 32,070 33,705 43,479 2,634 40,147 3,559 540 201 269 Corporation income taxes 7 Gross receipts 65,380 71,448 72,380 29,169 43,434 28,579 2,598 1,774 10,155 8 Refunds 5,428 5,771 7,790 3,306 4,064 4,518 1,314 771 768 9 Social insurance taxes and contributions, net 123,410 141,591 160,747 71,031 86,597 77,262 11,283 13,242 11,078 10 Payroll employment taxes and contributions2 99,626 115,041 133,042 60,562 69,077 66,831 9,645 11,189 1100,,226688 11 Self-employment taxes and contributions3 4,267 5,034 5,723 417 5,535 188 00 00 00 12 Unemployment insurance 13,850 15,387 15,336 6,899 8,690 6,742 1,068 1,499 224 13 Other net receipts4 5,668 6,130 6,646 3,149 3,294 3,502 570 554 586 14 Excise taxes 18,376 18,745 24,329 9,675 11,383 15,332 2,778 2,080 2,391 15 Customs deposits 6,573 7,439 7,174 3,741 3,443 3,717 654 546 632 16 Estate and gift taxes 5,285 5,411 6,389 2,900 3,091 3,499 610 543 517 17 Miscellaneous receipts5 7,413 9,237 12,741 5,254 6,993 6,318 1,163 909 1,174 OUTLAYS 18 AH types16 450,804r 493,635r 579,613 263,004r 289,905' 310,972 56,304 48,049 56,202 19 National defense 105,186 117,681 135,856 62,002 69,132 72,457 13,040 11,812 12,605 20 International affairs 5,922 6,091 10,733 4,617 4,602 5,430 984 674 1,249 21 General science, space, and technology .. 4,742 5,041 5,722 3,299 3,150 3,205 588 549 618 22 Energy 5,861 6,856 6,313 3,281 3,126 3,997 631 627 845 23 Natural resources and environment 10,925 12,091 13,812 7,350 6,668 7,722 1,406 1,086 1,325 24 Agriculture 7,731 6,238 4,762 1,709 3,193 1,892 221 878 1,355 25 Commerce and housing credit 3,324 2,565 7,782 3,002 3,878 3,163 1,626 -357 1,051 26 Transportation 15,445 17,459 21,120 10,298 9,582 11,547 2,066 1,808 1,870 27 Community and regional development ... 11,039 9,482 10,068 4,855 5,302 5,370 989 847 872 28 Education, training, employment, social services 26,463 29,685 30,767 14,579 16,686 15,221 22,,994477 22,,222233 22,,446611 29 Health 43,676 49,614 58,165 26,492 29,299 31,263 5,432 4,891 5,716 30 Income security1-6 146,180'" 160,159' 193,100 85,967r 94,605' 107,912 18,361 17,216 18,944 31 Veterans benefits and services 18,974 19,928 21,183 10,113 9,758 11,731 2,859 719 3,032 32 Administration of justice 3,802 4,153 4,570 2,174 2,291 2,299 466 348 382 33 General government 3,737 4,153 4,505 2,103 2,422 2,432 39 464 446 34 General-purpose fiscal assistance 9,601 8,372 8,584 4,286 3,940 4,191 1,929 210 26 35 Interest7 43,966 52,556 64,504 29,045 32,658 35,909 5,349 5,338 10,805 36 Undistributed offsetting receipts7-8 -15,772 -18,489 -21,933 -12,164 -10,387 -14,769 -2,630 -1,285 -7,400 1. Effective June 1978, earned income credit payments in excess of an individual's classified from an off-budget agency to an on-budget agency in the Department of tax liability, formerly treated as income tax refunds, are classified as outlays ret- Labor. roactive to January 1976. 7. Effective September 1976, "Interest" and "Undistributed offsetting receipts" 2. Old-age, disability, and hospital insurance, and railroad retirement accounts. reflect the accounting conversion from an accrual basis to a cash basis for the 3. Old-age, disability, and hospital insurance. interest on special issues for U.S. government accounts. 4. Supplementary medical insurance premiums, federal employee retirement 8. Consists of interest received by trust funds, rents and royalties on the Outer contributions, and Civil Service retirement and disability fund. Continental Shelf, and U.S. government contributions for employee retirement. 5. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts. SOURCE. "Monthly Treasury Statement of Receipts and Outlays of the U.S. 6. Effective Oct. 1, 1980, the Pension Benefit Guaranty Corporation was re- Government" and the Budget of the U.S. Government, Fiscal Year 1981. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A30 Domestic Nonfinancial Statistics • February 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 debti 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 1981 Type and holder 11997766 11997777 11997788 11997799 Sept. Oct. Nov. Dec. Jan. 1 Total gross public debt 653.5 718.9 789.2 845.1 907.7 908.2 913.8 930.2 934.1 By type 2 Interest-bearing debt 652.5 715.2 782.4 844.0 906.4 906.9 909.4 928.9 929.8 3 Marketable 421.3' 459.9 487.5 530.7 594.5 599.4 605.4 623.2 628.5 4 Bills 164.0 161.1 161.7 172.6 199.8 202.3 208.7 216.1 220.4 5 Notes 216.7 251.8 265.8 283.4 310.9 311.9 311.1 321.6 321.2 6 Bonds 40.6 47.0 60.0 74.7 83.8 85.2 85.5 85.4 86.9 7 Nonmarketable 1 231.2 255.3 294.8 313.2 311.9 307.5 304.0 305.7 301.3 8 Convertible bonds2 2.3 2.2 2.2 2.2 9 State and local government series 4.5 13.9 24.3 24.6 23.6 23.9 24.0 23.8 23.7 10 Foreign issues 3 22.3 22.2 29.6 28.8 25.2 24.8 24.5 24.0 23.8 11 Government 22.3 22.2 28.0 23.6 18.7 18.4 18.1 17.6 17.4 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 73.0 73.0 72.8 72.5 71.4 14 Government account series 4 129.7 139.8 157.5 177.5 189.8 185.7 182.4 185.1 182.2 15 Non-interest-bearing debt 1.1 3.7 6.8 1.2 1.3 1.3 4.4 1.3 4.2 By holder 5 16 U.S. government agencies and trust funds 147.1 154.8 170.0 187.1 197.7 193.4 189.7 17 Federal Reserve Banks 97.0 102.5 109.6 117.5 120.7 121.5 120.4 18 Private investors 409.5 461.3 508.6 540.5 589.2 593.3 603.2 19 Commercial banks 103.8 101.4 93.1 97.0 100.9 103.4 101.8 20 Mutual savings banks 5.9 5.9 5.0 4.7 5.3 5.5 5.6 21 Insurance companies 12.7 15.5 14.9 14.4 14.4 15.3 15.4 22 Other companies 27.7 22.7 21.2 23.9 25.5 25.3 24.8 n.a. n.a. 23 State and local governments 41.6 54.8 64.4 67.4 73.4 73.1 74.6 Individuals 24 Savings bonds 72.0 76.7 80.7 79.9 72.7 73.0 72.5 25 Other securities 28.8 28.6 33.3 34.2 50.0 49.9 52.5 26 Foreign and international 6 78.1 109.6 137.8 123.8 126.0 127.6 132.6 27 Other miscellaneous investors 7 38.9 46.0 58.2 97.6 120.7 120.2 123.4 r 1. Includes (not shown separately): Securities issued to the Rural Electrification 6. Consists of investments of foreign balances and international accounts in the Administration, depository bonds, retirement plan bonds, and individual retire- United States. Beginning with July 1974, the figures exclude non-interest-bearing ment bonds. 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 1 Vi 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 Type of holder 1978 1979 11997788 11997799 Oct. Nov. Oct. Nov. All maturities 1 to 5 years 1 All holders 487,546 530,731 599,406 605,381 162,886 164,198 196,129 191,614 2 U.S. government agencies and trust funds 12,695 11,047 10,078 9,569 3,310 2,555 2,255 1,990 3 Federal Reserve Banks 109,616 117,458 121,482 120,447 31,283 28,469 37,162 35,190 4 Private investors 365,235 402,226 467,845 475,365 128,293 133,173 156,712 154,434 5 Commercial banks 68,890 69,076 76,921 75,691 38,390 38,346 45,571 43,659 6 Mutual savings banks 3,499 3,204 3,746 3,803 1,918 1,668 1,943 1,912 7 Insurance companies 11,635 11,496 12,026 12,095 4,664 4,518 4,679 4,693 8 Nonfinancial corporations 8,272 8,433 8,085 7,880 3,635 2,844 2,741 2,705 9 Savings and loan associations 3,835 3,209 3,994 4,061 2,255 1,763 2,183 2,147 10 State and local governments 18,815 15,735 20,410 21,203 3,997 3,487 4,642 5,286 11 All others 250,288 291,072 342,665 350,633 73,433 80,546 94,952 94,032 Total, within 1 year 5 to 10 years 12 All holders 228,516 255,252 279,673 288,481 50,400 50,440 53,337 52,893 13 U.S. government agencies and trust funds 1,488 1,629 1,084 834 1,989 871 1,398 1,404 14 Federal Reserve Banks 52,801 63,219 56,243 56,660 14,809 12,977 13,192 13,468 15 Private investors 174,227 190,403 230,987 230,987 33,601 36,592 38,747 38,021 16 Commercial banks 20,608 20,171 22,713 23,614 7,490 8,086 5,841 5,915 17 Mutual savings banks 817 836 1,057 1,172 496 459 459 437 18 Insurance companies 1,838 2,016 1,833 1,949 2,899 2,815 3,043 3,000 19 Nonfinancial corporations 4,048 4,933 4,123 3,916 369 308 367 382 20 Savings and loan associations 1,414 1,301 1,656 1,769 89 69 88 75 21 State and local governments 8,194 5,607 7,067 7,218 1,588 1,540 2,076 1,999 22 All others 137,309 155,539 183,896 191,350 20,671 23,314 26,875 26,212 Bills, within 1 year 10 to 20 years 23 All holders 161,747 172,644 202,309 208,721 19,800 27,588 36,926 36,893 24 U.S. government agencies and trust funds 2 0 1 3,876 4,520 3,686 3,686 25 Federal Reserve Banks 42,397 45,337 44,650 44,057 2,088 3,272 5,903 5,941 26 Private investors 119,348 127,306 157,658 164,663 13,836 19,796 27,338 27,266 27 Commercial banks 5,707 5,938 9,455 8,651 956 993 1,425 1,122 28 Mutual savings banks 150 262 340 337 143 127 186 181 29 Insurance companies 753 473 498 549 1,460 1,305 1,740 1,744 30 Nonfinancial corporations 12 2,793 1,891 1,812 86 218 429 428 31 Savings and loan associations 262 219 801 822 60 58 54 57 32 State and local governments 5,524 3,100 4,912 5,126 1,420 1,762 3,574 3,651 33 All others 105,161 114,522 139,761 147,366 9,711 15,332 19,930 20,083 Other, within 1 year Over 20 years 34 All holders 66,769 82,608 77,364 79,760 25,944 33,254 33,340 35,500 35 U.S. government agencies and trust funds 1,487 1,629 1,083 834 1,031 1,472 1,656 1,656 36 Federal Reserve Banks 10,404 17,882 11,593 12,602 8,635 9,520 8,982 9,188 37 Private investors 54,879 63,097 64,688 66,324 15,278 22,262 22,702 24,657 38 Commercial banks 14,901 14,233 13,258 14,963 1,446 1,470 1,371 1,382 39 Mutual savings banks 667 574 717 834 126 113 100 100 40 Insurance companies 1,084 1,543 1,336 1,401 774 842 730 708 41 Nonfinancial corporations 2,256 2,140 2,232 2,104 135 130 425 449 42 Savings and loan associations 1,152 1,081 855 947 17 19 13 13 43 State and local governments 2,670 2,508 2,155 2,091 3,616 3,339 3,051 3,049 44 All others 32,149 41,017 44,135 43,984 9,164 16,340 17,011 18,956 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) 491 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 Nov. 30, 1980: (1) 5,353 commercial banks, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic NonfinancialS tatistics • February 1981 1.43 U.S. GOVERNMENT SECURITIES DEALERS Transactions Par value; averages of daily figures, in millions of dollars 1980 1980, week ending Wednesday IItteemm 11997777 11997788 11997799 Sept. Oct. Nov. Sept. 24 Oct. 1 Oct. 8 Oct. 15 Oct. 22 Oct. 29 1 U.S. government securities 10,838 10,285 13,183 17,608 17,464 21,716 19,832 18,413 17,836 17,905 16,068 16,823 By maturity 2 Bills 6,746 6,173 7,915 10,789 11,543 13,768 11,730 10,818 11,269 12,586 11,155 10,515 3 Other within 1 year 237 392 454 325 350 442 290 465 304 266 430 373 4 1-5 years 2,320 1,889 2,417 3,377 2,745 3,699 4,754 3,777 2,926 2,108 2,256 3,339 5 5-10 years 1,148 965 1,121 1,611 1,060 1,640 1,686 1,281 1,372 1,022 798 988 6 Over 10 years 388 867 1,276 1,506 1,766 2,167 1,372 2,071 1,966 1,922 1,428 1,608 By type of customer 7 U.S. government securities dealers 1,268 1,135 1,448 1,503 1,296 1,745 1,902 2,093 1,251 1,339 992 1,066 8 U.S. government securities brokers 3,709 3,838 5,170 7,220 7,664 9,536 8,179 7,342 7,732 7,274 7,298 7,998 9 Commercial banks 2,294 1,804 1,904 2,228 2,019 2,366 2,371 2,169 2,127 2,115 1,708 1,969 10 All others1 3,567 3,508 4,660 6,657 6,485 8,069 7,381 6,808 6,726 7,178 6,070 5,790 11 Federal agency securities 1,729 1,894 2,723 2,666 3,277 3,074 3,392 2,822 3,348 3,414 2,947 3,194 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 Sept. Oct. Nov. Aug. 27 Sept. 3 Sept. 10 Sept. 17 Sept. 24 Oct. 1 Positions1 1 U.S. government securities 5,172 2,656 3,223 3,338 2,701 3,279 4,351 4,500 3,784 3,656 2,921 2,164 2 Bills 4,772 2,452 3,813 3,753 2,557 3,132 4,300 4,330 4,063 4,467 3,184 2,683 3 Other within 1 year 99 260 -325 -1,685 -1,082 -792 -1,510 -1,603 -1,727 -1,741 -1,788 -1,425 4 1-5 years 60 -92 -455 620 755 -123 939 648 544 118 970 908 5 5-10 years 92 40 160 122 -221 -13 172 674 439 183 -69 -359 6 Over 10 years 149 -4 30 529 692 1,075 450 451 465 629 624 356 7 Federal agency securities . 693 606 1,471 320 979 357 428 269 183 259 435 486 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 • February 1981 1.46 NEW SECURITY ISSUES of State and Local Governments Millions of dollars 1980 TTyyppee ooff ii oo ss rr ss uu uu ee ss ee oo rr iissssuueerr,, 11997777 11997788 11997799 Apr.'' Mayr June' July' Aug/ Sept. 1 All issues, new and refunding1 46,769 48,607 43,490 4,947 4,713 6,063 4,907 3,809 4,255 Type of issue 2 General obligation 18,042 17,854 12,109 1,695 1,580 1.924 1,396 804 1,344 3 Revenue 28,655 30,658 31,256 3,251 3,129 4,136 3,506 2,995 2,902 4 Housing Assistance Administration2 5 U.S. government loans 72 95 125 1 4 3 5 10 9 Tvpe of issuer 6 State 6,354 6,632 4.314 466 749 897 185 304 640 7 Special district and statutory authority 21,717 24,156 23,434 2,221 2,326 3,440 3,157 2,212 2,603 8 Municipalities, counties, townships, school districts 18,623 17,718 15.617 2,259 1,633 1,724 1,558 1,283 1,003 9 Issues for new capital, total 36,189 37,629 41,505 4,806 4,645 5,986 4,539 3,783 3,639 Use of proceeds 10 Education 5,076 5,003 5.130 491 310 753 631 266 422 11 Transportation 2.951 3,460 2,441 302 197 344 151 95 425 12 Utilities and conservation 8,119 9,026 8,594 625 721 585 1,260 1,176 716 13 Social welfare 8,274 10,494 15,968 2.071 1,831 3,007 1,695 1,424 1,198' 14 Industrial aid 4,676 3,526 3,836 373 526 367 188 341 331 15 Other purposes 7,093 6,120 5.536 944 1,060 930 614 481 547 1. Par amounts of long-term issues based on date of sale. SOURCE. Public Securities Association. 2. Only bonds sold pursuant to the 1949 Housing Act, which are secured by contract requiring the Housing Assistance Administration to make annual contributions to tne local authority. 1.47 NEW SECURITY ISSUES of Corporations Millions of dollars 1980 Type of issue or issuer, 11997777 11997788 11997799 or use May June July Aug. Sept. Oct. Nov. 1 All issues1 53,792 47,230 51,464 9,067 9,511 7,941 5,371 4,922 5,728 3,827 2 Bonds 42,015 36,872 40,139 7,335 8,148 6,567 4,147 2,813 3,275 2,055 Tvpe of offering 3 Public 24,072 19.815 25.814 6.810 7,548 5,354 3,843 2,421 2,756 1,405 4 Private placement 17,943 17,057 14,325 525 600 1,213 304 392 519 650 Industry group 5 Manufacturing 12,204 9.572 9,667 2.400 2.318 2,851 1,499 509 614 88 6 Commercial and miscellaneous 6,234 5,246 3,941 560 1.629 999 203 357 312 432 7 Transportation 1,996 2.007 3,102 364 385 329 338 401 236 86 8 Public utility 8,262 7,092 8,118 723 1.412 316 971 555 754 565 9 Communication 3,063 3.373 4,219 1.171 209 787 580 517 791 163 10 Real estate and financial 10,258 9.586 11,095 2.116 2,195 1,284 556 472 568 722 11 Stocks 11,777 10,358 11,325 1,732 1,363 1,374 1,224 2,109 2,453 1,772 Tvpe 12 Preferred 3.916 2,832 3,574 202 382 360 101 392 535 256 13 Common 7,861 7,526 7,751 1.530 981 1,014 1,123 1,717 1,918 1,516 Industry group 14 Manufacturing 1,189 1.241 1,679 215 127 165 293 502 848 418 15 Commercial and miscellaneous 1.834 1.816 2,623 512 202 390 238 569 321 509 16 Transportation 456 263 255 27 9 32 54 117 53 17 Public utility 5,865 5,140 5,171 615 494 714 463 633 526 227 18 Communication 1,379 264 303 25 126 46 6 67 113 19 Real estate and financial 1,049 1.631 1,293 338 406 104 152 345 574 452 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 11997799 11998800 May June July Aug. Sept. Oct. Nov. Dec. INVESTMENT COMPANIES1 1 Sales of own shares2 7,495 15,293 1,175 1,772 1,890 1,507 1,405 1,523 1,289 1,269 2 Redemptions of own shares3 8,393 12,012 647 775 863 1,019 1,228 1,362 1,086 1,720 3 Net sales -898 3,281 528 997 1,027 488 177 161 203 -451 4 Assets4 49,277' 58,400 50,539 52,946 54,406 54,941 55,779 56,156 60,329' 58,400 5 Cash position5 4,983 5,321 6,209 6,495 5,629 5,619 5,481 5,460 5,467' 5,321 6 Other 44,294' 53,079 44,330 46,451 48,777 49,322 50,298 50,696 54,862' 53,079 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'' Q1 Q2 Q3 Q4 Q1 Q2 Q3 1 Profits before tax 192.6 223.3 255.4 253.1 250.9 262.0 255.4 277.1 217.9 237.6 2 Profits tax liability 72.6 83.0 87.6 88.5 86.4 88.4 87.2 94.2 71.5 78.5 3 Profits after tax 120.0 140.3 167.7 164.6 164.5 173.6 168.2 182.9 146.4 159.1 4 Dividends 38.7 43.1 48.6 47.5 48.3 48.6 50.1 52.4 54.2 55.1 5 Undistributed profits 81.3 97.2 119.1 117.1 116.2 125.0 118.1 130.5 92.2 104.0 6 Capital consumption allowances 110.4 122.9 139.5 131.9 137.2 142.6 146.4 151.7 155.4 160.5 7 Net cash flow 191.7 220.1 258.6 249.0 253.4 267.6 264.5 282.2 247.6 264.5 SOURCE. Survey of Current Business (U.S. Department of Commerce). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Nonfinancial Statistics • February 1981 1.50 NONFINANCIAL CORPORATIONS Current Assets and Liabilities Billions of dollars, except for ratio 1979 1980 AAccccoouunntt 11997755 11997766 11997777 11997788 02 03 04 Q1 02 03 1 Current assets 759.0 826.8 902.1 1,030.0 1,108.2 1,169.5 1,200.9 1,235.2 1,233.8 1,255.8 2 Cash 82.1 88.2 95.8 104.5 100.1 103.7 116.1 110.2 111.5' 113.2 3 U.S. government securities 19.0 23.4 17.6 16.3 18.6 15.8 15.6 15.1 13.8' 16.3 4 Notes and accounts receivable 272.1 292.8 324.7 383.8 421.1 453.0 456.8 471.2 464.2 479.2 5 Inventories 315.9 342.4 374.8 426.9 465.2 489.4 501.7 519.5 525.7 525.1 6 Other 69.9 80.1 89.2 98.5 103.2 107.7 110.8 119.3 118.7 122.0 7 Current liabilities 451.6 494.7 549.4 665.5 724.7 777.8 809.1 838.3 828.1 852.1 8 Notes and accounts payable 264.2 281.9 313.2 373.7 406.4 438.8 456.3 467.9 463.1 477.3 9 Other 187.4 212.8 236.2 291.7 318.3 339.0 352.8 370.4 364.9 374.8 10 Net working capital 307.4 332.2 352.7 364.6 383.5 391.7 391.8 397.0 405.7 403.7 11 MEMO: Current ratio 1 1.681 1.672 1.642 1.548 1.529 1.504 1.484 1.474 1.490 1.474 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 03 04 Q1 02 03 Q42 Ol2 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 1111..4400 11.86 11.89 12.81 1133..8866 15.25 16.07 18.02 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 Q1 02 Q3 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 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 AAAccccccooouuunnntttsss receivable rrreeeccceeeiiivvvaaabbbllleee TTTyyypppeee ooouuu OOO tttsss ccc ttt ttt aaa ... nnn 333 ddd 111 iiinnn ,,, ggg 1980 1980 1980 111999888000111 Aug. Sept. Oct. Aug. Sept. Oct. Aug. Sept. Oct. 1 Total 68,901 -412 -321 647 15,545 14,808 16,781 15,957 15,129 16,134 2 Retail automotive (commercial vehicles) 12,758 -232 -221 -128 883 889 969 1,115 1,110 1,097 3 Wholesale automotive 10,584 -101 -333 62 4,710 4,125 5,223 4,811 4,458 5,161 4 Retail paper on business, industrial and farm equipment 22,212 155 586 16 1,601 1,595 1,460 1,446 1,009 1,444 5 Loans on commercial accounts receivable and factored commercial accounts receivable . 6,265 -358 -827 408 6,349 5,938 6,756 6,707 6,765 6,348 6 All other business credit 17,082 124 474 289 2,002 2,261 2,373 1,878 1,787 2,084 1. Not seasonally adjusted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Nonfinancial Statistics • February 1981 1.54 MORTGAGE MARKETS Millions of dollars; exceptions noted. 1980 Item 1978 1979 1980 June July Aug. Sept. Oct. Nov. Dec. Terms and yields in primary and secondary markets PRIMARY MARKETS Conventional mortgages on new homes Terms1 1 Purchase price (thousands of dollars) 62.6 74.4 83.5 81.3 89.0 88.6 83.7 84.0 77.1 90.1 2 Amount of loan (thousands of dollars) 45.9 53.3 59.3 58.0 63.7 61.5 58.7 61.3 56.1 63.9 3 Loan/price ratio (percent) 75.3 73.9 73.3 74.1 73.5 71.2 72.2 75.0 75.2 72.9 4 Maturity (years) 28.0 28.5 28.2 28.4 28.9 27.7 27.6 28.2 27.6 28.2 5 Fees and charges (percent of loan amount)2 1.39 1.66 2.10 2.21 2.13 2.12 2.10 2.16 2.15 2.15 6 Contract rate (percent per annum) 9.30 10.48 12.25 12.24 12.11 11.84 11.95 12.20 12.62 12.86 Yield (percentper annum) 7 FHLBB series3 9.54 10.77 12.65 12.66 12.51 12.25 12.35 12.60 13.04 13.28 8 HUD series4 9.68 11.15 13.95 12.45 12.45 13.25 13.70 14.10 14.70 15.05 SECONDARY MARKETS Yield (percent per annum) 9 FHA mortgages (HUD series)5 9.70 10.87 13.42 11.85 12.39 13.54 14.26 14.38 14.47 14.08 10 GNMA securities6 8.98 10.22 12.55 11.04 11.53 12.34 12.84 12.91 13.55 13.62 FNMA auctions7 11 Government-underwritten loans 9.77 11.17 14.11 12.35 12.65 13.92 14.77 14.94 15.53 15.21 12 Conventional loans 10.01 11.77 14.43 12.93 12.80 13.66 14.45 14.70 15.30 15.54 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 13 Total 43,311 51,091 51,327 55,419 55,362 55,361 55,632 56,188 56,619 57,327 14 FHA-insured 15,511' 18,886 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 15 VA-guaranteed 10,544 10,496 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 16 Conventional 11,524 16,106 18,358 18,001 18,034 18,049 18,074 18,148 18,239 18,358 Mortgage transactions (during period) 17 Purchases 12,303 10,805 8,100 206 100 167 500 771 579 840 18 Sales gr 0 0 0 0 0 0 0 0 0 Mortgage commitments8 19 Contracted (during period) 18,959' 10,179 8,044 441 734 1,180 1,070 514 472 403 20 Outstanding (end of period) 9,185' 6,409 3,278 4,215 4,230 4,545 4,789 4,399 3,963 3,278 Auction of 4-month commitments to buy Government-underwritten loans 21 Offered9 12,978 8,860 8,605 602.5 1,055.6 1,063.3 907.0 427.8 252.0 242.1 22 Accepted 6,747.2 3,921 4,002 266.5 430.3 628.10 538.0 257.7 135.6 110.8 Conventional loans 23 Offered9 9,933.0 4,495 3,639 169.7 228.7 430.4 347.7 107.6 81.6 84.8 24 Accepted 5,111' 2,344 1,749 76.0 140.9 218.8 209.8 93.9 68.8 54.1 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)1® 25 Total 3,064 4,035 n.a. 4,014 4,151 4,295 4,543 4,727 4,843 n.a. 26 FHA/VA 1,243 1,102 n.a. 1,072 1,066 1,058 1,050 1,044 1,038 n.a. 27 Conventional 1,165' 1,957 n.a. 2,942 3,085 3.237 3,492 3,629 3,715 n.a. Mortgage transactions (during period) 28 Purchases 6,525' 5,717 n.a. 225 440 495 521 398 231 n.a. 29 Sales 6,211 4,544 n.a. 232 288 320 275 187 93.7 n.a. Mortgage commitments11 30 Contracted (during period) 7,451 5,542 n.a. 577 708 476 218 222 180 n.a. 31 Outstanding (end of period) 1,410 797 n.a. 1,246 1,386 1,300 934 726 653 n.a. 1. Weighted averages based on sample surveys of mortgages originated by major securities, assuming prepayment in 12 years on pools of 30-year FHA/VA 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 11997788 11997799 11998800 04 Q1 Q2 Q3 04 1 All holders 1,168,486' 1,324,856' 1,449,633 1,333,550 1,355,402' 1,378,414' 1,412,515' 1,449,633 7 764,246' 875,874' 956,475 872,068 894,980' 908,119' 931,232' 956,475 3 121,285' 129,261' 137,859 130,713 130,800' 132,430' 134,856' 137,859 4 Commercial 211,749' 237,205' 258,799 238,412 242,709' 246,861' 252,783' 258,799 5 71,206' 82,516' 96,500 92,357 86,913' 91,004' 93,644' 96,500 6 Major financial institutions 848,177' 938,676' 998,025 939,487 951,402' 958,892' 977,454' 998,025 7 Commercial banks1 214,045' 245,187' 264,602 245,998 250,702' 253,103' 258,003' 264,602 8 1- to 4-family 129,167' 149,460' 160,746 145,975 152,553' 153,753' 156,737' 160,746 9 Multifamily 10,266' 11,180' 12,304 12,546 11,557' 11,764' 11,997' 12,304 Ifl Commercial 66,115' 75,957' 82,688 77,096 77,993' 79,110' 80,626' 82,688 11 Farm 8,497' 8,590' 8,864 10,381 8,599' 8,476' 8,643' 8,864 1? Mutual savings banks 95,157 98,908 99,827 98,908 99,151 99,150 99,306 99,827 13 1- to 4-family 62,252 64,706 65,307 64,706 64,865 64,864 64,966 65,307 14 Multifamily 16,529 17,180 17,340 17,180 17,223 17,223 17,249 17,340 15 Commercial 16,319 16,963 17,120 16,963 17,004 17,004 17,031 17,120 16 Farm 57 59 60 59 59 59 60 60 17 Savings and loan associations 432,808 475,797 502,718 475,797 479,078 481,184 492,068 502,718 18 1- to 4-family 356,114 394,436 417,759 394,436 398,114 398,864 408,908 417,759 19 Multifamily 36,053 37,588 39,011 37,588 37,224 37,340 38,185 39,011 20 Commercial 40,641 43,773 45,948 43,773 43,740 43,980 44,975 45,948 71 Life insurance companies 106,167 118,784 130,878 118,784 122,471 125,455 128,077 130,878 77 1- to 4-family 14,436 16,193 18,420 16,193 16,850 17,796 17,996 18,420 73 Multifamily 19,000 19,274 19,813 19,274 19,590 19,284 19,357 19,813 74 Commercial 62,232 71,137 79,843 71,137 73,618 75,693 77,995 79,843 25 Farm 10,499 12,180 12,802 12,180 12,413 12,682 12,729 12,802 26 Federal and related agencies 81,853 97,293 114,325 97,293 104,133 108,742 110,695 114,325 27 Government National Mortgage Association 3,509 3,852 4,453 3,852 3,919 4,466 4,389 4,453 28 1- to 4-family 877 763 709 763 749 736 719 709 29 Multifamily 2,632 3,089 3,744 3,089 3,170 3,730 3,670 3,744 30 Farmers Home Administration 926 1,274 3,725 1,274 2,845 3,375 3,525 3,725 31 1- to 4-family 288 417 1,033 417 1,139 1,383 978 1,033 32 Multifamily 320 71 818 71 408 636 774 818 33 Commercial 101 174 391 174 409 402 370 391 34 Farm 217 612 1,483 612 889 954 1,403 1,483 35 Federal Housing and Veterans Administration 5,419 5,764 5,824 5,764 5,833 5,894 5,769 5,824 36 1- to 4-family 1,641 1,863 1,879 1,863 1,908 1,953 1,826 1,879 37 Multifamily 3,778 3,901 3,945 3,901 3,925 3,941 3,943 3,945 38 Federal National Mortgage Association 43,311 51,091 57,327 51,091 53,990 55,419 55,632 57,327 39 1- to 4-family 37,579 45,488 51,775 45,488 48,394 49,837 50,071 51,775 40 Multifamily 5,732 5,603 5,552 5,603 5,596 5,582 5,561 5,552 41 Federal Land Banks 25,624 31,277 38,131 31,277 33,311 35,574 36,837 38,131 42 1- to 4-family 927 1,552 2,099 1,552 1,708 1,893 1,985 2,099 43 Farm 24,697 29,725 36,032 29,725 31,603 33,681 34,852 36,032 44 Federal Home Loan Mortgage Corporation 3,064 4,035 4,865 4,035 4,235 4,014 4,543 4,865 45 1- to 4-family 2,407 3,059 3,710 3,059 3,210 3,037 3,459 3,710 46 Multifamily 657 976 1,155 976 1,025 977 1,084 1,155 47 Mortgage pools or trusts2 88,633 119,278 142,498 119,278 124,632 129,647 136,583' 142,498 48 Government National Mortgage Association 54,347 76,401 93,874 76,401 80,843 84,282 89,452 93,874 49 1- to 4-family 52,732 74,546 91,602 74,546 78,872 82,208 87,276 91,602 50 Multifamily 1,615 1,855 2,272 1,855 1,971 2,074 2,176 2,272 51 Federal Home Loan Mortgage Corporation 11,892 15,180 16,952 15,180 15,454 16,120 16,659 16,952 52 1- to 4-family 9,657 12,149 13,397 12,149 12,359 12,886 13,318 13,397 53 Multifamily 2,235 3,031 3,555 3,031 3,095 3,234 3,341 3,555 54 Farmers Home Administration 22,394 27,697 31,672 27,697 28,335 29,245 30,472' 31,672 55 1- to 4-family 13,400 14,884 16,865 14,884 14,926 15,224 16,226' 16,865 56 1,116 2,163 2,323 2,163 2,159 2,159 2,235' 2,323 57 Commercial 3,560 4,328 5,258 4,328 4,495 4,763 5,059' 5,258 58 4,318 6,322 7,226 6,322 6,755 7,099 6,952' 7,226 59 Individual and others3 149,823' 169,609' 194,785 177,492 175,235' 181,133' 187,783' 194,785 60 1- to 4-family 82,769' 96,358' 111,174 96,037 99,333' 102,685' 106,767' 111,174 61 Multifamily 21,352' 23,350' 26,027 23,436 23,857' 24,486' 25,284' 26,027 62 Commercial 22,781' 24,873' 27,551 24,941 25,450' 25,909' 26,727' 27,551 63 Farm 22,921' 25,028' 30,033 33,078 26,595' 28,053' 29,005' 30,033 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 Nonfinancial Statistics • February 1981 1.56 CONSUMER INSTALLMENT CREDIT' Total Outstanding, and Net Change Millions of dollars 1980 Holder, and type of credit 1977 1978 1979 June July Aug. Sept. Oct. Nov. Dec. Amounts outstanding (end of period) 1 Total 230,564 273,645 312,024 304,399 303,853 305,763 306,926 307,222 308,051 313,435 By major holder 2 Commercial banks 112,373 136,016 154,177 147,883 146,555 146,548 146,362 145,895 145,147 145,765 3 Finance companies 44,868 54,298 68,318 73,118 73,909 74,433 74,823 74,985 75,690 76,756 4 Credit unions 37,605 44,334 46,517 42,995 42,644 43.347 43,562 43,518 43,606 44,041 5 Retailers2 23,490 25,987 28,119 24,786 24,620 24,918 25,301 25,703 26,469 29,410 6 Savings and loans 7,089 7,097 8,424 8,823 8,991 9,141 9,266 9,611 9,687 9,911 / Gasoline companies 2,963 3,220 3,729 4,175 4,500 4,710 4,872 4,736 4,662 4,717 8 Mutual savings banks 2,176 2,693 2,740 2,619 2,634 2,666 2,740 2,774 2,790 2,835 By major type of credit 9 Automobile 82,911 101,647 116,362 116,456 116,125 116,868 116,781 116,657 116,517 116,327 10 Commercial banks 49,577 60,510 67,367 64,224 63,344 63,177 62,734 62,350 61,848 61,025 n Indirect paper 27,379 33,850 38,338 36,948 36,233 36,047 35,768 35,572 35,284 34,857 12 Direct loans 22,198 26,660 29,029 27,276 27,111 27,130 26,966 26,778 26,564 26,168 13 Credit unions 18,099 21,200 22,244 20,558 20,392 20,728 20,831 20,810 20,852 21,060 14 Finance companies 15,235 19,937 26,751 31,674 32,389 32,963 33,216 33,497 33,817 34,242 15 Revolving 39,274 48,309 56,937 53,042 53,036 53,771 54,406 54,598 55,304 59,862 16 Commercial banks 18,374 24,341 29,862 28,280 28,073 28,305 28,403 28,331 28,360 30,001 1/ Retailers 17,937 20,748 23.346 20,587 20,463 20,756 21,131 21,531 22,282 25,144 18 Gasoline companies 2,963 3,220 3,729 4,175 4,500 4,710 4,872 4,736 4,662 4,717 19 Mobile home 14,945 15,235 16,838 16,988 17,004 17,068 17,113 17,276 17,293 17,327 20 Commercial banks 9,124 9,545 10,647 10,593 10,568 10,564 10,538 10,502 10,452 10,376 21 Finance companies 3,077 3,152 3,390 3,544 3,546 3,566 3,601 3,657 3,702 3,745 22 Savings and loans 2,342 2,067 2,307 2,391 2,437 2,477 2,511 2,654 2,675 2,737 23 Credit unions 402 471 494 460 453 461 463 463 464 469 24 Other 93,434 108,454 121,887 117,913 117,688 118,056 118,626 118,691 118,937 119,919 25 Commercial banks 35,298 41,620 46,301 44,786 44,570 44,502 44,687 44,712 44,487 44,363 26 Finance companies 26,556 31,209 38,177 37,900 37,974 37,904 38,006 37,831 38,171 38,769 27 Credit unions 19,104 22,663 23,779 21,977 21,799 22,158 22,268 22,245 22,290 22,512 28 Retailers 5,553 5,239 4,773 4,199 4,157 4,162 4,170 4,172 4,187 4,266 29 Savings and loans 4,747 5,030 6,117 6,432 6,554 6,664 6,755 6,957 7,012 7,174 30 Mutual savings banks 2,176 2,693 2,740 2,619 2,634 2,666 2,740 2,774 2,790 2,835 Net change (during period)3 31 Total 35,462 43,079 38,381 -2,045 -1,199 489 1,055 702 839 1,619 By major holder 32 Commercial banks 18,645 23,641 18,161 -1.783 -1,749 -682 -265 -336 -120 -276 33 Finance companies 5,949 9,430 14,020 744 439 387 613 454 594 860 34 Credit unions 6,436 6,729 2,185 -1,298 -270 465 36 63 218 378 35 Retailers2 2,654 2,497 2,132 68 89 160 456 134 52 316 36 Savings and loans 1,309 7 1,327 96 155 5 93 246 -14 190 37 Gasoline companies 132 257 509 124 132 136 90 98 72 83 38 Mutual savings banks 337 518 47 4 5 18 32 43 37 68 By major type of credit 3399 Automobile 15,204 18,736 14,715 -1,026 -717 355 84 201 245 302 40 Commercial banks 9,956 10,933 6,857 -1,007 -1,083 -344 -362 -348 -138 -491 41 Indirect paper 5,307 6,471 4,488 -601 -784 -286 -282 -170 -44 -181 42 Direct loans 4,649 4,462 2,369 -406 -299 -58 -80 -178 -94 -310 43 Credit unions 2,861 3,101 1,044 -636 -108 215 10 18 101 174 44 Finance companies 2,387 4,702 6,814 617 474 484 436 531 282 619 45 Revolving 6,248 9,035 8,628 -95 38 281 478 273 265 616 46 Commercial banks 4,015 5,967 5,521 -338 -259 -24 -81 -19 121 211 47 Retailers 2,101 2,811 2,598 119 165 169 469 194 72 322 48 Gasoline companies 132 257 509 124 132 136 90 98 72 83 49 Mobile home 371 286 1,603 58 14 33 43 141 24 66 50 Commercial banks 387 419 1,102 26 -23 -8 -22 -21 -33 -34 51 Finance companies -187 74 238 12 -2 14 30 42 44 48 52 Savings and loans 101 -276 240 29 45 21 35 120 11 47 53 Credit unions 70 69 23 -9 -6 6 0 0 2 5 54 Other 13,639 15,022 13,435 -982 -534 -180 450 87 305 635 55 Commercial banks 4,287 6,322 4,681 -464 -384 -306 200 52 -70 38 56 Finance companies 3,749 4,654 6,968 115 -33 -111 147 -119 268 193 57 Credit unions 3,505 3,559 1,118 -653 -156 244 26 45 115 199 58 Retailers 553 -314 -466 -51 -76 -9 -13 -60 -20 -6 59 Savings and loans 1,208 283 1,087 67 110 -16 58 126 -25 143 60 Mutual savings banks 337 518 47 4 5 18 32 43 37 68 1. The Board's series cover most short- and intermediate-term credit extended 2. Includes auto dealers and excludes 30-day charge credit held by travel and to individuals through regular business channels, usually to finance the purchase entertainment companies. of consumer goods and services or to refinance debts incurred for such purposes, 3. Net change equals extensions minus liquidations (repayments, charge-offs, and scheduled to be repaid (or with the option of repayment) in two or more and other credit); figures for all months are seasonally adjusted. installments. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Consumer Debt A41 1.57 CONSUMER INSTALLMENT CREDIT Extensions and Liquidations Millions of dollars; monthly data are seasonally adjusted. 1980 HHoollddeerr,, aanndd ttyyppee ooff ccrreeddiitt 1977 1978 1979 June July Aug. Sept. Oct. Nov. Dec. Extensions 1 Total 257,600 297,668 324,777 22,349 23,997 26,176 27,064 27,365 25,991 27,149 By major holder 2 Commercial banks 117,896 142,433 154,733 9,892 10,098 11,107 11,671 11,977 11,432 11,484 3 Finance companies 41,989 50,505 61,518 4,439 4,809 5,155 5,355 5,323 4,852 5,185 4 Credit unions 34,028 38,111 34,926 1.318 2,305 3,085 2,752 2,872 2,795 3,035 5 Retailers1 42,183 44,571 47,676 4,186 4,148 4,263 4,596 4,291 4,250 4,497 6 Savings and loans 4,978 3,724 5,901 518 582 454 539 695 444 658 7 Gasoline companies 14,617 16,017 18,005 1,847 1,902 1,941 1,965 2,009 2,024 2,061 8 Mutual savings banks 1,909 2,307 2,018 149 153 171 186 198 194 229 By major type of credit 9 Automobile 75,641 87,981 93,901 5.550 6,068 7,400 7,518 77,,554444 77,,111177 77,,223344 10 Commercial banks 46,363 52,969 53,554 2,815 2,771 3,606 3,713 3,791 3,552 3,271 11 Indirect paper 25,149 29,342 29,623 1.490 1,329 1,866 2,035 2,135 1,962 1,857 12 Direct loans 21,214 23,627 23,931 1,325 1,442 1,740 1,678 1.656 1,590 1,414 13 Credit unions 16,616 18,539 17,397 707 1,197 1,570 1,455 1,457 1,402 1,538 14 Finance companies 12,662 16,473 22,950 2.028 2,100 2,224 2,350 2,296 2,163 2,425 15 Revolving 87,596 105,125 120,174 10.341 10,679 10,700 11,143 11,124 10,953 11,614 16 Commercial banks 38,256 51,333 61,048 4.771 5,059 4,989 5,067 5,264 5,155 5,554 17 Retailers 34,723 37,775 41,121 3.723 3,718 3,770 4,111 3,851 3,774 3,999 18 Gasoline companies 14,617 16,017 18,005 1,847 1,902 1,941 1,965 2,009 2,024 2,061 19 Mobile home 5,712 5,412 6,471 424 377 415 442 513 424 479 20 Commercial banks 3,466 3,697 4,542 281 226 263 250 257 243 254 21 Finance companies 644 886 797 54 52 56 84 89 93 89 22 Savings and loans 1,406 609 948 87 95 78 95 159 74 119 23 Credit unions 196 220 184 2 4 18 13 8 14 17 24 Other 88,651 99,150 104,231 6,034 6,873 7,661 7,961 8,184 7,497 7,822 25 Commercial banks 29,811 34,434 35,589 2,025 2,042 2,249 2,641 2,665 2,482 2,405 26 Finance companies 28,683 33,146 37,771 2,357 2,657 2,875 2,921 2,938 2,596 2,671 27 Credit unions 17,216 19,352 17,345 609 1,104 1,497 1,284 1,407 1,379 1,480 28 Retailers 7,460 6,796 6,555 463 430 493 485 440 476 498 29 Savings and loans 3,572 3,115 4,953 431 487 376 444 536 370 539 30 Mutual savings banks 1,909 2,307 2,018 149 153 171 186 198 194 229 Liquidations 31 Total 222,138 254,589 286,396 24,394 25,196 25,687 26,009 26,663 25,152 25,530 By major holder 32 Commercial banks 99,251 118,792 136,572 11,675 11,847 11,789 11,936 12,313 11,552 11,760 33 Finance companies 36,040 41,075 47,498 3,695 4,370 4,768 4,742 4,869 4,258 4,325 34 Credit unions 27,592 31,382 32,741 2,616 2,575 2,620 2,716 2,809 2,577 2,657 35 Retailers1 39,529 42,074 45,544 4,118 4,059 4,103 4,140 4,157 4,198 4,181 36 Savings and loans 3,669 3,717 4,574 422 427 449 446 449 458 468 37 Gasoline companies 14,485 15,760 17,496 1,723 1,770 1,805 1,875 1,911 1,952 1,978 38 Mutual savings banks 1,572 1,789 1,971 145 148 153 154 155 157 161 By major type of credit 39 Automobile 60.437 69,245 79,186 6,576 6,785 7,045 77,,443344 77,,334433 66,,887722 66,,993322 40 Commercial banks 36,407 42,036 46,697 3,822 3,854 3,950 4,075 4,139 3,690 3,762 41 Indirect paper 19,842 22,871 25,135 2,091 2,113 2,152 2,317 2,305 2,006 2,038 42 Direct loans 16,565 19,165 21,562 1,731 1,741 1,798 1,758 1,834 1,684 1,724 43 Credit unions 13,755 15,438 16,353 1,343 1,305 1,355 1,445 1,439 1,301 1,364 44 Finance companies 10,275 11,771 16,136 1.411 1,626 1,740 1,914 1,765 1,881 1,806 45 Revolving 81,348 96,090 111,546 10,436 10,641 10,419 10,665 10,851 10,688 10,998 46 Commercial banks 34,241 45,366 55,527 5,109 5,318 5,013 5,148 5,283 5,034 5,343 47 Retailers 32,622 34,964 38,523 3,604 3,553 3,601 3,642 3,657 3,702 3,677 48 Gasoline companies 14,485 15,760 17,496 1.723 1,770 1,805 1,875 1,911 1,952 1,978 49 Mobile home 5,341 5,126 4,868 366 363 382 399 372 400 413 50 Commercial banks 3,079 3,278 3,440 255 249 271 272 278 276 288 51 Finance companies 831 812 559 42 54 42 54 47 49 41 52 Savings and loans 1,305 885 708 58 50 57 60 39 63 72 53 Credit unions 126 151 161 11 10 12 13 8 12 12 54 Other 75,012 84,128 90,796 7,016 7,407 7,841 7,511 8,097 7,192 7,187 55 Commercial banks 25,524 28,112 30,908 2,489 2,426 2,555 2,441 2,613 2,552 2,367 56 Finance companies 24,934 28,492 30,803 2,242 2,690 2,986 2,774 3,057 2,328 2,478 57 Credit unions 13,711 15,793 16,227 1,262 1,260 1,253 1,258 1,362 1,264 1,281 58 Retailers 6,907 7,110 7,021 514 506 502 498 500 496 504 59 Savings and loans 2,364 2,832 3,866 364 377 392 386 410 395 396 60 Mutual savings banks 1,572 1,789 1,971 145 148 153 154 155 157 161 1. Includes auto dealers and excludes 30-day charge credit held by travel and entertainment companies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic NonfinancialS tatistics • February 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 11.*0 1.8 7.4 10.2 8.9 8.4 9.3 11.2 8.1 9.7 7.2 17 Commercial 15.1 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 4 4 1 0 M Lo o a r n tg s a f g r e o m p o U ol . S s . e c g u o r v it e i r e n s m ent 5. . 8 7 10. . 3 9 1 - 5 .4 .7 - 2 1 0 . . 2 5 18.3 0 28.1 0 23.1 0 16.6 0 20.1 0 24.2 0 32.00 20.7 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 11..11 22..22 99..66 1144..66 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 47.6 112.5 104.7 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 32.2 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 156.8 169.7 225.4 276.5 330.0 362.9 299.6 322.8 337.1 375.9 348.8 257.7 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 1181..90 26.8 22.1 22.3 10.9 26.8 -.1 46 Demand deposits 1.9 6.4 8.8 17.8 12.9 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 11.9 4.0 33..77 55..55 5.9 -.4 77..99 5.5 55..44 17.0 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. A42. 31. Mainly retained earnings and net miscellaneous liabilities. 2. Sum of lines 3-6 or 7-10. 32. Line 12 less line 19 plus line 26. 6. Includes farm and commercial mortgages. 33-37. Lines 13-17 less amounts acquired by private finance. Line 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 • February 1981 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures 1967 = 100; monthly and quarterly data are seasonally adjusted. Exceptions noted. 1980 1981 MMeeaassuurree 11997788 11997799 11998800 May June July Aug. Sept. Oct. Nov. Dec.? Jan/ 1 Industrial production1 146.1 152.5 147.1 144.0 141.5 140.4 141.8 141.1 146.9' 149.4' 150.9 151.8 Market groupings 2 Products, total 144.8 150.0 146.7 143.7 142.5 142.8 143.8 145.3 147.2' 148.7 149.8 150.5 3 Final, total 135.9 147.2 145.3 142.3 142.4 142.8 143.9 143.9 145.8' 147.4' 148.1 148.6 4 Consumer goods 149.1 150.8 145.5 142.4 142.1 142.0 142.7 144.3 146.6 147.9' 147.9 147.8 5 Equipment 132.8 142.2 145.1 144.0 142.6 142.9 142.9 143.2 144.8' 146.8' 148.3 149.7 6 Intermediate 154.1 160.5 151.9 146.2 143.5 144.4 147.6 150.6 152.4 153.6' 156.2 157.5 7 Materials 148.3 156.4 147.7 144.3 140.0 136.5 138.6 142.4 146.4 150.4' 152.7 153.8 Industry groupings 8 Manufacturing 146.8 153.6 146.6 143.4 140.3 139.1 140.6 143.4 146.4 149.1' 150.4 151.1 Capacity utilization (percent)1-2 9 Manufacturing 84.4 85.7 79.0 77.6 75.7 74.9 75.5 76.7 78.2' 79.4' 79.8 80.0 10 Industrial materials industries 85.6 87.4 79.8 78.3 75.7 73.7 74.6 76.4 78.4 80.3' 81.3 81.7 11 Construction contracts (1972 = 100)3 174.1'' 185.6' 161.8 125.0 145.0 148.0 192.0 163.0 167.0 210.0 193.0 n.a. 12 Nonagricultural employment, total4 131.8' 136.6' 137.8 137.5 136.8 136.6 137.0 137.4 137.9 138.2 139.2 139.0 13 Goods-producing, total 109.8 113.7' 110.9 110.5 109.1 108.0 108.6 109.3 110.0 110.7 111.1 111.8 14 Manufacturing, total 105.4' 108.3' 104.7 104.3 102.9 102.0 102.5 103.1 103.7 104.3 104.6 104.7 15 Manufacturing, production-worker 103.0' 105.4' n.a. 99.1 97.4 96.2 97.0 97.7 100.7 99.1 99.3 99.€ 16 Service-producing 143.8' 149.2' 152.5 152.3 152.1 152.3 152.6 152.7 153.1 153.3' 153.5 154.0 17 Personal income, total 273.3' 308.5' 342.9 335.6' 337.6' 343.0' 345.9' 350.1' 354.8' 358.8 362.1 n.a. 18 Wages and salary disbursements 258.8' 289.5' 314.7 309.2' 309.9' 310.6' 314.4' 317.8' 323.6' 327.9 330.9 n.a. 19 Manufacturing 223.1' 248.6' 261.5 255.5' 254.2' 254.3' 258.5' 262.9' 267.6' 273.1 277 n.a. 20 Disposable personal income5 268.7 301.5 334.5 327.7 338.0 348.8 21 Retail sales6 253.8 281.6 299.3 285.0 290.4 299.1 301.0 306.0 308.0 313.1 308.9 321.0 Prices7 22 Consumer 195.4 217.4 n.a. 244.9 247.6 247.8 249.4 251.7 253.9 256.2 258.4 n.a. 23 Producer finished goods 194.6 216.1 n.a. 241.6 243.0 246.6 249.0 248.9 252.2 235.2 254.7 n.a. 1. The industrial production and capacity utilization series have been revised 6. Based on Bureau of Census data published in Survey of Current Business. back to January 1979. 7. Data without seasonal adjustment, as published in Monthly Labor Review. 2. Ratios of indexes of production to indexes of capacity. Based on data from Seasonally adjusted data for changes in the price indexes may be obtained from Federal Reserve, McGraw-Hill Economics Department, and Department of Com- the Bureau of Labor Statistics, U.S. Department of Labor. merce. 3. Index of dollar value of total construction contracts, including residential, NOTE. Basic data (not index numbers) for series mentioned in notes 4, 5, and nonresidential, and heavy engineering, from McGraw-Hill Information Systems 6, and indexes for series mentioned in notes 3 and 7 may also be found in the Company, F. W. Dodge Division. Survey of Current Business. 4. Based on data in Employment and Earnings (U.S. Department of Labor). Figures for industrial production for the last two months are preliminary and Series covers employees only, excluding personnel in the Armed Forces. estimated, respectively. 5. Based on data in Survey of Current Business (U.S. Department of Commerce). Series for disposable income is quarterly. 2.11 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION Seasonally adjusted 1980 1980 1980 Series Q1 Q2 Q3 04' 01 02 03 Q4 01 02 Q3 Q4' Output (1967 = 100) Capacity (percent of 1967 output) Utilization rate (percent) 1 Manufacturing 152.8 143.9 141.0 148.6 183.3 184.8 186.3 187.8 83.4 77.9 75.7 79.1 2 Primary processing 160.5 145.0 139.6 153.1 188.5 190.0 191.5 193.0 85.1 76.3 72.9 79.3 3 Advanced processing 148.8 143.3 141.8 146.4 180.5 182.0 183.5 185.0 82.5 78.7 77.3 79.1 4 Materials 156.3 145.1 139.2 149.8 182.8 184.3 185.8 187.2 85.5 78.7 74.9 80.0 5 Durable goods 155.0 140.6 131.5 145.1 187.2 188.6 190.0 191.5 82.8 74.6 69.2 75.8 6 Metal materials 117.1 100.6 86.6 109.9 140.7 140.8 140.9 141.0 83.2 71.4 61.5 77.9 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 84.8 8 Textile, paper, and chemical 187.5 171.9 165.6 182.4 208.3 211.0 213.7 216.2 90.0 81.5 77.5 84.4 9 Textile 120.6 116.4 113.4 113.9 138.8 139.2 139.6 140.0 86.9 83.7 81.2 81.3 10 Paper 146.1 142.1 142.9 149.3 154.7 156.0 157.4 158.8 94.5 91.0 90.7 94.0 11 Chemical 233.6 208.3 197.9 226.1 260.4 264.6 268.7 272.9 89.7 78.7 73.6 8822..99 12 Energy materials 130.8 130.0 129.6 129.9 151.1 151.8 152.6 153.1 86.6 85.6 85.0 8844..88 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Labor Market A45 2.11 Continued Previous cycle1 Latest cycle2 1980 1980 1981 Series High Low High Low Jan. July Aug. Sept. Oct. Nov.' Dec.' Jan. Capacity utilization rate (percent) 13 Manufacturing 88.0 69.0 87.2 74.9 83.9 74.9 75.5 76.7 78.2' 79.4 79.8 80.0 14 Primary processing 93.8 68.2 90.1 70.9 86.4 70.9 72.5 75.2 77.6 79.7 80.7 80.9 15 Advanced processing 85.5 69.4 86.2 77.1 82.7 77.1 77.1 77.7 78.5 79.2 79.5 79.7 16 Materials 92.6 69.4 88.8 73.7 86.1 73.7 74.6 76.4 78.4 80.3 81.3 81.7 17 Durable goods 91.5 63.6 88.4 68.0 83.6 68.0 69.1 70.4 73.5' 76.5 77.4 77.9 18 Metal materials 98.3 68.6 96.0 58.4 84.1 58.4 62.2 63.9 71.5 81.2 81.2 80.1 19 Nondurable goods 94.5 67.2 90.9 76.8 90.9 76.8 78.2 82.7 84.4 84.4 85.6 85.7 20 Textile, paper, and chemical 95.1 65.3 91.4 74.5 91.2 74.5 76.4 81.6 83.8 83.9 85.5 85.5 21 Textile 92.6 57.9 90.1 79.5 86.6 82.0 79.5 82.0 82.1' 81.4 80.4 80.6 22 Paper 99.4 72.4 97.6 88.1 96.0 88.1 90.2 93.9 93.0' 93.8 95.1 91.8 23 Chemical 95.5 64.2 91.2 69.6 91.2 69.6 72.5 78.7 82.1 82.1 84.4 85.1 24 Energy materials 94.6 84.8 88.3' 83.1' 86.2 85.6 85.2 84.1 83.1' 85.2 86.0 86.5 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 1981 CCaatteeggoorryy 11997788 11997799 11998800 July Aug. Sept. Oct. Nov.' Dec.' Jan. HOUSEHOLD SURVEY DATA 1 Noninstitutional population1 161,058 163,620 166,246 166,391 166,578 166,789 167,005 167,201 167,396 167,585 2 Labor force (including Armed Forces)1 .. 102,537 104,996 106,821 107,119' 107,059' 107,101' 107,288' 107,404 107,191 107.668 3 Civilian labor force 100,420 102,908 104,719 105,020' 104,945' 104,980' 105,167' 105,285 105,067 105,543 Employment 4 Nonagricultural industries2 91,031 93,648 93,960 93,732' 93,793' 93,781' 93,887' 93,999 93,888 94,294 5 Agriculture 3,342 3,297 3,310 3,267' 3,210' 3,399' 3,319' 3,340 3,394 3,403 Unemployment 6 Number 6,047 5,963 7,448 8,021' 7,942' 7,800' 7,961' 7,946 7,785 7,847 7 Rate (percent of civilian labor force) 6.0 5.8 7.1 7.6' 7.6 7.4' 7.6 7.5 7.4 7.4 8 Not in labor force 58,521 58,623 59,425 59,273' 59,519' 59,687' 59,717' 59,797 60,205 59,917 ESTABLISHMENT SURVEY DATA 9 Nonagricultural payroll employment3 86,697' 89,886' 90,652 89,867 90,142 90,384 90,710 90,961 91,116 91,490 10 Manufacturing 20,505' 21,062' 20,365 19,828 19,940 20,044 20,157 20,282 20,328 20,357 11 Mining 851 960' 1,025 1,013 1,013 1,028 1,037 1,054 1,069 1,082 12 Contract construction 4,229' 4,483' 4,468 4,322 4,359 4,404 4,442 4,475 4,507 4,612 13 Transportation and public utilities 4,923' 5,141' 5,155 5,114 5,129 5,124 5,147 5,132 5,130 5,149 14 Trade 19,542' 20,269' 20,571 20,506 20,589 20,620 20,641 20,660 20,638 20,757 15 Finance 4,724' 4,974' 5,162 5,167 5,180 5,194 5,214 5,225 5,243 5,265 16 Service 16,252' 17,078' 17,736 17,760 17,788 17,861 17,913 17,969 18,052 18,123 17 Government 15,672' 15,920' 16,171 16,157 16,144 16,109 16,159 16,164 16,149 16,145 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 • February 1981 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value' Monthly data are seasonally adjusted. Grouping 1 p p 9 o ro 6 r- - 7 A 1 v 98 e 0 r- 1981 tion Jan. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec .P Index (1967 = 100) MAJOR MARKET 1 Total index 147.1 152.7 152.1 144.0 141.5 140.4 141.8 144.1 146.9 149.4 2 Products 146.7 149.9 150.0 146.6 143.7 142.5 142.8 143.8 145.3 147.2 148.7 3 Final products 145.3 147.0 147.7 145.4 143.1 142.3 142.4 142.8 143.9 145.8 147.4 4 Consumer goods 145.5 147.9 148.6 145.3 142.4 142.1 142.0 142.7 144.3 146.6 147.9 5 Equipment 145.1 145.8 146.6 145.6 144.0 142.6 142.9 142.9 143.2 144.8 146.8 6 Intermediate products 151.9 160.8 158.3 150.8 146.2 143.5 144.5 147.6 150.6 152.4 153.6 7 Materials 147.7 157.0 155.3 151.0 144.3 140.0 136.5 138.6 142.4 146.4 150.4 Consumer goods 8 Durable consumer goods 136.5 142.3 144.1 136.3 128.8 128.2 128.3 128.6 132.7 139.6 142.9 9 Automotive products 132.6 131.3 141.0 126.3 118.5 121.6 129.2 121.5 130.6 141.8 145.3 10 Autos and utility vehicles 109.9 108.7 122.0 102.3 92.6 97.1 106.4 94.1 105.5 120.2 124.3 11 Autos 103.4 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 190.3 188.5 189.1 187.2 184.0 183.7 186.9 191.1 194.2 196.8 198.6 13 Home goods 138.7 148.5 145.8 142.0 134.6 132.0 127.7 132.6 134.0 138.3 141.5 14 Appliances, A/C, and TV 117.3 128.9 122.1 114.8 102.8 105.6 102.3 114.2 116.3 123.5 128.4 15 Appliances and TV 119.6 130.0 125.0 117.5 106.0 108.5 103.4 114.2 117.6 125.6 131.0 16 Carpeting and furniture 154.9 170.9 169.1 165.8 154.2 146.7 136.1 141.1 146.1 150.2 154.9 17 Miscellaneous home goods 143.6 149.8 149.0 146.8 143.8 140.2 138.1 139.1 138.6 141.5 143.0 18 Nondurable consumer goods 149.2 150.1 150.3 148.8 147.7 147.6 147.4 148.3 148.9 149.4 149.9 19 Clothing 126.8 130.2 131.8 128.7 127.9 126.7 122.5 123.6 122.1 125.1 127.0 20 Consumer staples 155.3 155.6 155.5 154.5 153.2 153.4 154.3 155.1 156.3 156.1 156.3 21 Consumer foods and tobacco 146.9 146.9 147.3 146.2 146.1 146.2 146.4 146.0 147.0 147.7 147.4 22 Nonfood staples 165.1 165.8 165.0 164.0 161.5 161.7 163.6 165.7 167.1 165.9 166.5 23 Consumer chemical products 208.8 210.5 208.9 206.9 203.0 202.6 204.3 209.3 213.0 210.2 210.0 24 Consumer paper products 122.9 124.1 121.6 120.4 120.2 120.6 121.5 122.0 122.3 124.8 127.3 25 Consumer energy products 152.3 151.5 152.7 152.8 150.1 150.9 153.5 153.9 154.0 151.5 151.7 26 Residential utilities 171.7 161.9 169.6 172.5 169.8 170.1 176.5 178.6 178.3 175.0 171.8 Equipment 27 Business 173.2 174.9 176.1 174.2 171.9 169.8 170.1 170.3 170.5 172.3 174.6 28 Industrial 156.9 157.2 159.3 159.3 157.8 155.2 154.8 154.5 154.2 154.4 157.2 29 Building and mining 241.0 222.1 235.6 239.5 242.2 241.0 244.4 243.6 243.4 244.3 250.1 30 Manufacturing 128.2 132.6 133.1 131.9 129.5 126.1 126.0 124.4 123.9 123.9 126.0 31 Power 149.3 157.9 153.2 152.3 149.1 147.1 142.0 145.9 146.1 146.1 147.8 32 Commercial transit, farm 192.0 195.2 195.5 191.5 188.2 186.7 187.8 188.4 189.4 192.8 194.7 33 Commercial 237.3 238.2 240.4 235.6 232.0 228.8 229.0 233.6 237.2 242.0 244.0 34 Transit 139.4 142.8 142.5 143.0 136.3 138.0 140.9 138.4 133.8 135.0 136.6 35 Farm 123.3 137.1 129.7 116.4 124.6 121.6 122.5 112.7 116.8 120.2 121.9 36 Defense and space 97.8 97.0 97.1 97.6 97.2 96.8 97.2 96.9 97.4 '8.5 100.0 Intermediate products 37 Construction supplies 140.8 156.4 152.3 139.4 133.0 128.5 128.6 133.1 137.4 140.5 142.8 38 Business supplies 162.8 165.1 164.3 162.0 159.4 158.4 160.4 161.9 163.6 164.3 164.3 39 Commercial energy products 173.4 172.4 174.1 174.8 172.0 168.7 172.1 173.7 175.2 174.6 174.6 Materials 40 Durable goods materials 143.1 156.0 154.2 148.2 139.8 133.8 129.0 131.3 134.2 140.4 146.4 41 Durable consumer parts 109.1 120.8 120.3 110.6 100.1 96.0 93.9 98.1 104.2 110.8 115.5 42 Equipment parts 187.3 199.8 199.2 195.8 190.8 182.5 177.6 176.3 176.0 178.5 184.0 43 Durable materials n.e.c 135.0 148.5 145.5 139.8 130.5 125.0 118.9 122.4 125.4 133.4 140.4 44 Basic metal materials 104.6 118.8 116.6 109.3 100.0 95.9 84.7 89.4 91.7 102.0 114.0 45 Nondurable goods materials 170.6 181.0 177.0 173.2 165.2 159.6 156.2 159.8 169.7 173.7 174.3 4 4 7 6 Te T x e ti x le ti , l e p a m p a e t r e , ri a a n l d s chemical materials . 1 1 1 7 6 6 . .9 2 1 1 2 8 0 9 . .3 1 1 1 2 8 0 5 . . 7 2 1 1 1 8 7 0 . . 7 7 1 11 7 7 1 . . 6 5 1 1 1 6 4 3 . . 0 4 1 1 1 5 4 8 . . 4 5 116131..20 1 11 7 4 5 . . 7 1 1 1 1 8 4 0 . . 9 5 1 1 1 8 4 1 . . 0 3 48 Paper materials 145.2 148.2 144.2 141.2 141.7 143.4 138.4 142.0 148.2 147.3 149.0 49 Chemical materials 216.5 236.3 230.1 224.3 207.3 193.3 186.1 194.9 212.6 222.9 224.0 50 Containers, nondurable 165.0 172.7 167.1 166.8 155.8 157.7 159.0 158.8 167.2 168.6 166.9 51 Nondurable materials n.e.c 136.8 137.5 137.4 133.0 136.4 136.8 136.6 137.9 137.2 135.7 138.2 52 Energy materials 130.2 130.0 130.9 130.1 129.6 130.4 130.4 130.0 128.4 127.2 130.4 53 Primary energy 115.1 114.4 115.6 116.4 116.2 117.3 115.6 114.0 114.3 113.7 114.0 54 Converted fuel materials 148.5 149.0 149.6 146.9 145.8 146.4 148.4 149.4 145.4 143.6 150.5 Supplementary groups 55 Home goods and clothing 133.2 140.1 139.4 135.9 131.5 129.5 125.3 128.5 128.5 132.2 134.8 56 Energy, total 138.9 138.6 139.6 139.1 137.9 138.4 139.2 139.2 138.2 136.8 139.1 57 Products 158.7 157.8 159.1 159.5 156.7 156.3 159.1 159.9 160.5 158.5 158.6 58 Materials 130.2 130.0 130.9 130.1 129.6 130.4 130.4 130.0 128.4 127.2 130.4 For notes see opposite page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Output A47 2.13 Continued 1967 11998800 1981 Grouping SIC p p o ro r- - A 1199 v 88 g 00 . code tion Jan. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.P Jan/ Index (1967 = 100) MAJOR INDUSTRY 1 Mining and utilities 12.05 150.5 148.2 151.4 150.1 149.6 150.1 150.1 150.5 150.5 150.2 152.3 154.7 156.4 2 Mining 6.36 132.7 133.5 133.0 133.1 133.4 132.9 130.6 129.6 130.5 132.1 135.4 137.7 139.4 3 Utilities 5.69 170.3 164.8 172.0 169.1 167.7 169.3 171.8 173.8 172.7 170.4 171.3 173.6 175.3 4 Electric 3.88 190.2 183.4 192.4 187.9 186.0 188.7 192.4 195.4 193.9 190.3 191.4 5 Manufacturing 87.95 146.6 153.4 152.1 147.9 143.4 140.3 139.2 140.6 143.4 146.4 149.1 150.4 151.1 6 Nondurable 35.97 161.1 166.0 164.7 161.6 158.0 155.3 154.7 156.9 160.3 161.8 163.3 164.9 165.7 7 Durable 51.98 136.6 144.7 143.4 138.4 133.3 129.9 128.3 129.4 131.7 135.8 139.3 140.4 141.1 Mining 8 Metal 10 .51 108.6 137.6 132.7 123.5 120.8 120.0 83.1 71.2 73.1 90.8 107.2 115.0 9 Coal 11.12 .69 146.7 141.0 137.2 143.4 145.0 150.0 149.8 154.9 148.9 145.7 151.6 158.3 153.8 10 Oil and gas extraction 13 4.40 133.6 129.9 131.8 132.5 133.9 133.2 134.3 133.6 134.7 135.4 136.8 137.5 140.0 11 Stone and earth minerals 14 .75 131.4 144.6 136.0 133.1 128.1 123.9 123.7 123.5 128.2 129.0 131.5 135.5 Nondurable manufactures 12 Foods 20 8.75 149.1 148.5 149.3 147.8 149.5 149.0 148.9 148.3 148.6 149.4 149.5 149.7 13 Tobacco products 21 .67 120.1 118.7 122.2 121.9 116.2 113.9 119.6 117.4 119.1 123.1 124.7 14 Textile mill products 22 2.68 136.8 143.4 142.0 139.9 137.1 133.6 132.5 132.6 133.0 133.8 135.0 134.0 15 Apparel products 23 3.31 129.0 131.5 136.1 131.3 128.6 127.2 121.5 123.8 126.7 127.5 129.9 16 Paper and products 26 3.21 151.0 157.4 152.7 148.2 145.7 146.2 143.6 147.1 152.3 153.0 154.3 156.8 153.8 17 Printing and publishing 27 4.72 139.6 138.9 139.2 136.5 135.5 135.4 138.6 140.3 140.3 141.5 142.7 144.8 146.2 18 Chemicals and products 28 7.74 206.6 218.0 213.6 209.1 199.2 191.1 190.3 197.8 206.8 209.1 212.1 217.3 19 Petroleum products 29 1.79 135.0 147.5 140.7 137.4 133.0 131.3 130.5 126.7 130.5 130.1 132.8 136.9 137.7 20 Rubber and plastic products ... 30 2.24 255.8 265.5 264.4 261.8 248.1 242.9 242.5 245.9 253.1 259.2 259.6 259.7 21 Leather and products 31 .86 70.1 74.2 72.8 69.9 70.1 68.5 67.8 67.7 67.2 70.2 71.2 68.3 Durable manufactures 22 Ordnance, private and government 19.91 3.64 78.0 77.1 76.9 77.5 77.9 77.5 77.1 77.2 77.1 79.1 80.0 80.1 80.3 23 Lumber and products 24 1.64 119.5 131.6 25.3 105.2 104.5 109.7 112.8 121.7 122.6 122.2 124.9 124.7 24 Furniture and fixtures 25 1.37 150.0 160.8 159.5 157.1 149.5 143.1 138.6 141.1 144.8 147.2 147.2 148.8 25 Clay, glass, stone products 32 2.74 146.5 165.0 156.4 148.8 140.8 134.5 134.2 135.7 141.4 145.2 147.8 151.2 26 Primary metals 33 6.57 101.7 116.4 113.7 106.4 96.1 90.4 81.7 86.0 90.1 100.6 113.5 113.3 112.7 27 Iron and steel 331.2 4.21 91.8 107.2 105.9 97.4 84.4 75.4 68.1 75.3 79.8 93.3 107.2 104.7 28 Fabricated metal products 34 5.93 134.9 145.0 145.5 141.4 133.2 126.1 123.8 125.8 129.0 132.8 133.9 136.3 137.6 29 Nonelectrical machinery 35 9.15 162.6 167.1 166.5 163.2 162.1 158.3 158.5 158.8 159.1 161.1 163.4 165.2 167.8 30 Electrical machinery 36 8.05 172.8 181.7 179.2 177.0 171.4 166.6 165.0 166.7 167.5 170.0 173.3 175.3 177.3 31 Transportation equipment 37 9.27 116.7 122.1 123.8 115.1 109.8 110.0 110.7 108.3 112.9 118.8 121.7 120.5 117.5 32 Motor vehicles and parts 371 4.50 118.8 126.2 130.1 114.7 105.9 106.7 107.9 104.4 113.4 124.2 129.0 126.7 119.4 33 Aerospace and miscellaneous transportation equipment 372-9 4.77 114.8 118.3 117.8 115.5 113.5 113.1 113.4 111.9 112.3 113.6 114.8 114.7 115.8 34 Instruments 38 2.11 171.0 175.9 173.5 173.8 171.0 169.2 167.5 167.6 167.4 169.6 169.9 172.1 175.0 35 Miscellaneous manufactures ... 39 1.51 147.8 153.8 152.8 151.2 147.3 43.7 144.7 144.2 142.8 145.0 147.5 149.3 150.6 Gross value (billions of 1972 dollars, annual rates) MAJOR MARKET 36 Products, total 507.4 601.8 615.8 619.0 599.5 588.6 585.0 586.7 585.9 593.3 604.7 609.7 614.1 614.0 37 Final 390.92 465.2 471.2 475.9 464.5 457.3 455.6 456.9 453.0 458.0 467.7 471.8 474.2 472.6 38 Consumer goods 277.52 313.3 317.6 321.3 312.5 306.3 305.8 307.7 305.1 309.0 316.6 318.7 319.5 317.5 39 Equipment 113.42 151.9 153.6 154.6 152.0 151.0 149.8 149.2 147.9 149.0 151.1 153.1 154.7 155.2 40 Intermediate 116.62 136.7 144.6 143.1 135.0 131.3 129.4 129.9 132.9 135.3 137.1 138.0 139.9 141.3 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 • February 1981 2.14 HOUSING AND CONSTRUCTION Monthly figures are at seasonally adjusted annual rates except as noted. 1980 Item 1978 1979 1980 May June July Aug. Sept. Oct.' Nov.' Dec. Private residential real estate activity (thousands of units) NEW UNITS 1 Permits authorized 1,801 1,552 1,171 825 1,078 1,2236 1,361 1,564 1,333 1,355 1,233 2 1-family 1,183 981 703 495 628 781 857 914 819 812 732 3 2-or-more-family 618 570 468 330 450 455 504 650 514 543 501 4 Started 2,020 1,745 1,291 906 1,223 1,265 1,429 1,541 1,557 1,563 1,548 5 1-family 1,433 1,194 850 628 757 869 1,003 1,059 1,030 1,012 947 6 2-or-more-family 587 551 441 278 466 396 426 482 527 551 601 7 Under construction, end of period1 .... 1,310 1,140 n.a. 911 871 851 843' 868' 888 913 n.a. 8 1-family 765 639 n.a. 495 474 473 474' 500' 516 533 n.a. 9 2-or-more-family 546 501 n.a. 416 397 378 369' 368 372 380 n.a. 10 Completed 1,868 1,855 n.a. 1,536 1,469 1,502 1,405' 1,256' 1,285 1,259 n.a. 11 1-family 1,369 1,286 n.a. 970 886 876 917' 753' 818 811 n.a. 12 2-or-more-family 499 570 n.a. 566 583 626 488' 503' 467 448 n.a. 13 Mobile homes shipped 276 277 n.a. 162 163 215 206 238 246 235 n.a. Merchant builder activity in 1-family units 14 Number sold 818 709 531 458 544 646 632 571' 540 564 545 15 Number for sale, end of period1 419 402 343 351 340 333 330 335' 334 338 333388 Price (thousands of dollars)2 MEDIAN 16 Units sold 55.8 62.7 64.9 63.2 65.4 64.4 63.2 68.5' 66.0 67.3 67.9 Average 17 Units sold 62.7 71.9 76.7 73.1 76.3 76.8 76.5 80.3' 77.5 82.2 83.5 EXISTING UNITS (1-family) 18 Number sold 3,905 3,742 2,881 2,310 2,480 2,920 3,030 33,,338800 33,,330000 33,,002200 22,,996600 Price of units sold (thous. of dollars)2 19 Median 48.7 55.5 61.2 61.2 63.4 64.1 64.9 64.2 62.7 64.3 63.0 20 Average 55.1 64.0 72.9 71.2 75.7 75.7 76.2 75.5 73.4 74.9 74.0 Value of new construction3 (millions of dollars) CONSTRUCTION 21 Total put in place 205,457 228,948 227,719 218,909 215,021 214,315 215,149 223,660 226,132 231,576 241,559 22 Private 159,555 179,948 172,654 164,791 161,349 158,593 162,057 167,882 171,053 177,827 184,453 23 Residential 93,423 99,029 86,287 76,957 73,360 74,277 78,632 84,378 87,375 93,659 96,992 24 Nonresidential, total 66,132 80,919 86,367 87,834 87,989 84,316 83,425 8833,,550044 8833,,667788 8844,,116688 8877,,446611 Buildings 2255 Industrial 10,993 14,953 13,987 14,197 15,022 13,267 13,046 13,102 12,996 13,392 14,672 26 Commercial 18,568 24,924 29,314 30,149 29,609 28,063 27,993 27,425 28,417 28,888 30,030 27 Other 6,739 7,427 8,530 8,571 8,256 8,115 8,095 8,447 8,760 8,799 9,036 28 Public utilities and other 29,832 33,615 34,536 34,917 35,102 34,871 34,291 34,530 33,505 33,089 33,723 29 Public 45,901 49,001 55,065 54,118 53,672 55,721 53,092 55,778 55,078 53,749 57,107 30 Military 1,501 1,641 1,882 1,671 1,748 2,041 2,315 1,717 2,144 1,912 1,848 31 Highway 10,713 11,915 13,450 13,230 14,012 13,758 11,334' 13,804 13,550 12,427 13,347 32 Conservation and development 4,457 4,586 5,081 5,285 4,241 5,896' 4,353' 5,091 4,763 5,109 5,607 33 Other 29,230 30,859 34,652 33,932 33,671 34,026' 35,090' 35,166 34,621 34,301 36,305 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 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 Index level Dec. Item 1980 1980 1980 1979 1980 (1967 Dec. Dec. = 100)1 Mar. June Sept. Dec. Aug. Sept. Oct. Nov. Dec. CONSUMER PRICES2 1 13.3 12.4 18.1 11.6 7.0 12.8 .7 1.0 1.0 1.0 1.1 258.4 2 Commodities 13.0 11.1 16.1 5.0 12.8 10.6 1.2 1.2 .8 1.0 .7 243.8 3 Food 10.2 10.2 3.8 5.6 18.9 12.5 1.8 1.6 .8 1.1 1.1 266.4 4 Commodities less food 14.3 11.5 22.1 4.7 10.6 9.5 .9 1.1 .8 .9 .6 231.0 5 Durable 10.3 10.7 7.6 6.8 15.7 13.1 1.6 1.6 1.2 1.3 .5 221.1 6 Nondurable 19.6 12.5 39.8 3.5 4.0 6.4 .4 .2 .1 .5 1.0 242.0 7 Services 13.7 14.2 20.9 21.6 -.6 16.1 -.1 .7 1.2 1.0 1.5 284.7 g Rent 7.9 9.1 8.3 10.0 8.6 9.6 .6 1.0 1.0 .6 .7 199.6 9 Services less rent 14.6 14.9 22.8 23.3 1.8 17.0 -.2 .7 1.2 1.1 1.7 300.7 Other groupings 10 All items less food 14.0 12.9 21.7 13.0 4.6 12.8 .4 .9 1.0 .9 1.1 255.5 1111 All items less food and energy 11.3 12.1 15.7 13.5 5.1 14.4 .5 .9 1.2 1.1 1.1 244.5 1122 Homeownership 19.8 16.5 24.1 26.6 -5.6 24.5 -.2 .6 2.1 1.7 1.7 334.2 PRODUCER PRICES 1111133333 Finished goods 12.6 11.7 19.3 6.7 12.2 8.8 1.5 -.2 .8 .6 .6 254.7 1111144444 Consumer ... 14.3 11.7 21.6 4.9 13.8 7.2 1.6 -.2 .6 .7 .5 255.9 1111155555 Foods 7.6 6.5 -1.2 -7.8 36.9 2.8 4.3 -.2 .5 .5 -.4 247.2 1111166666 Excluding foods 1188..00 14.3 34.8 11.3 4.4 9.2 .4 -.2 .6 .7 .9 257.6 1111177777 Capital equipment 88..88 11.5 13.4 11.3 8.5 12.6 .7 -.1 1.4 .6 1.0 251.1 1188 Intermediate materials3 16.5 12.3 24.0 5.2 6.4 14.7 .7 .1 .6 .9 1.9 292.6 Crude materials 1199 Nonfood 26.0 19.2 21.9 -3.9 39.1 23.6 2.8 2.2 2.5 1.8 1.0 457.8 2200 Food 1111..11 8.7 -16.7 10.5 96.4 -5.3 9.0 -.4 1.5 .6 -3.3 271.3 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 • February 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 11997788 11997799 11998800 Q4 Q1 02 Q3 Q4 GROSS NATIONAL PRODUCT 1 Total 2,156.1 2,413.9 2,628.8 2,496.3 2,571.7 2,564.8 2,637.3 2,741.4 By source 2 Personal consumption expenditures 1,348.7 1,510.9 1,671.1 1,582.3 1,631.0 1,626.8 11,,668822..22 1,744.4 3 Durable goods 199.3 212.3 211.6 216.1 220.9 194.4 220088..88 222.1 4 Nondurable goods 529.8 602.2 674.3 639.2 661.1 664.0 674.2 697.8 Services 619.6 696.3 785.3 727.0 749.0 768.4 799.2 824.5 6 Gross private domestic investment 375.3 415.8 396.8 410.0 415.6 390.9 377.1 403.7 7 Fixed investment 353.2 398.3 399.8 410.8 413.1 383.5 393.2 409.4 8 Nonresidential 242.0 279.7 294.7 290.2 297.8 289.8 294.0 297.3 9 Structures 78.7 96.3 108.3 105.1 108.2 108.4 107.3 109.3 10 Producers' durable equipment 163.3 183.4 186.5 185.1 189.7 181.4 186.8 188.0 11 Residential structures 111.2 118.6 105.1 120.6 115.2 93.6 99.2 112.2 12 Nonfarm 106.9 113.9 100.1 115.4 110.1 88.9 94.5 106.9 13 Change in business inventories 22.2 17.5 -3.0 -0.8 2.5 7.4 -16.4 -5.7 14 Nonfarm 21.8 13.4 -1.7 -4.4 1.5 6.1 -12.3 -2.0 15 Net exports of goods and services -0.6 13.4 26.1 7.6 8.2 17.1 44.5 34.5 16 Exports 219.8 281.3 340.6 306.3 337.3 333.3 342.4 349.2 17 Imports 220.4 267.9 314.5 298.7 329.1 316.2 297.9 314.7 18 Government purchases of goods and services 432.6 473.8 534.8 496.4 516.8 530.0 533.5 558.8 19 Federal 153.4 167.9 199.2 178.1 190.0 198.7 194.9 213.3 20 State and local 279.2 305.9 335.6 318.3 326.8 331.3 338.6 345.5 By major type of product 21 Final sales, total 2,133.9 2,396.4 2,631.8 2,497.1 2,569.1 2,557.4 2,653.4 2,747.1 22 Goods 946.6 1,055.9 1,132.7 1,078.4 1,116.9 1,106.4 1,129.4 1,178.2 23 Durable 409.8 451.2 459.5 448.1 456.4 444.6 456.5 480.5 24 Nondurable 536.8 604.7 673.2 630.3 660.5 661.8 672.9 697.7 25 Services 976.3 1,097.2 1,230.9 1,142.8 1,178.6 1,205.6 1,249.0 1,290.2 26 Structures 233.2 260.8 265.2 275.1 276.2 252.8 258.9 273.0 27 Change in business inventories 22.2 17.5 -3.0 -0.8 2.5 7.4 -16.0 -5.7 28 Durable goods 17.8 11.5 -4.1 -0.4 -11.8 3.3 -8.4 .3 29 Nondurable goods 4.4 6.0 1.2 -0.5 14.3 4.1 -7.7 -6.1 30 MEMO: Total GNP in 1972 dollars 1,436.9 1,483.0 1,481.8 1,490.6 1,501.9 1,463.3 1,471.9 1,490.1 NATIONAL INCOME 31 Total 1,745.4 1,963.3 2,121.4 2,031.3 2,088.5 2,070.0 2,122.4 n.a. 32 Compensation of employees 1,299.7 1,460.9 1,596.7 1,518.1 1,558.0 1,569.0 1,597.4 1,662.4 33 Wages and salaries 1,105.4 1,235.9 1,343.8 1,282.4 1,314.5 1,320.4 1,342.3 1,397.8 34 Government and government enterprises 219.6 235.9 253.6 243.3 246.7 250.5 253.9 263.2 35 Other 885.7 1,000.0 1,090.2 1,039.1 1,067.9 1,069.9 1,088.4 1,134.6 36 Supplement to wages and salaries 194.3 225.0 252.9 235.7 243.5 248.6 255.0 264.6 37 Employer contributions for social insurance 92.1 106.4 115.8 109.8 112.6 113.6 116.0 121.1 38 Other labor income 102.2 118.6 137.1 126.0 130.9 135.1 139.1 143.5 39 Proprietors' income1 117.1 131.6 130.6 136.3 133.7 124.9 129.7 134.2 4 4 0 1 F B a u r s m in 1 e ss and professional1 2 91 6 . . 0 1 1 3 0 0 0 . . 8 7 1 2 0 3 7 . . 4 2 1 2 0 9 6 . . 5 8 1 2 0 5 7 . . 7 9 1 2 0 3 1 . . 3 6 1 2 0 2 7. . 6 1 1 2 1 2 1 . . 5 7 42 Rental income of persons2 27.4 30.5 31.9 31.0 31.2 31.5 32.0 32.6 43 Corporate profits1 199.0 196.8 182.1 189.4 200.2 169.3 177.9 n.a. 44 Profits before tax3 223.3 255.4 242.7 255.4 277.1 217.9 237.6 n.a. 45 Inventory valuation adjustment -24.3 -42.6 -43.3 -50.8 -61.4 -31.1 -41.7 -38.9 46 Capital consumption adjustment -13.5 -15.9 -17.2 -15.1 -15.4 -17.6 -17.9 -18.1 47 Net interest 115.8 143.4 180.1 156.5 165.4 175.3 185.3 194.3 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. 1979 1980 AAccccoouunntt 11997788 11997799 11998800 Q4 Q1 Q2 03 04 PERSONAL INCOME AND SAVING 1 Total personal income 1,721.8 1,943.8 2,161.0 2,032.0 2,088.2 2,114.5 2,182.1 2,259.1 2 Wage and salary disbursements 1,105.2 1,236.1 1,343.8 1,282.2 1,314.7 1,320.4 1,341.8 1,398.3 3 Commodity-producing industries 389.1 437.9 465.5 450.4 461.7 456.0 460.1 484.3 4 Manufacturing 299.2 333.4 350.8 340.4 347.9 343.2 346.7 365.5 5 Distributive industries 270.5 303.0 329.0 315.0 322.6 323.2 329.2 340.9 6 Service industries 226.1 259.2 295.7 273.7 283.6 290.8 298.7 309.9 7 Government and government enterprises 219.4 236.1 253.6 243.1 246.8 250.5 253.9 263.2 8 Other labor income 102.2 118.6 137.1 126.0 130.9 135.1 139.1 143.5 9 Proprietors' income1 117.2 131.6 130.6 136.3 133.7 124.9 129.7 134.2 10 Business and professional1 91.0 100.8 107.2 106.8 107.9 101.6 107.6 111.7 11 Farm1 26.1 30.8 23.4 29.5 25.7 23.3 22.1 22.5 12 Rental income of persons2 27.4 30.5 31.9 31.0 31.2 31.5 32.0 32.6 13 Dividends 43.1 48.6 54.4 50.1 52.4 54.2 55.1 56.1 14 Personal interest income 173.2 209.6 286.6 225.7 239.9 253.6 261.8 271.3 15 Transfer payments 223.3 249.4 294.4 263.1 271.7 280.7 310.7 314.4 16 Old-age survivors, disability, and health insurance benefits .... 116.2 131.8 153.7 139.3 142.0 144.7 163.2 165.1 17 LESS: Personal contributions for social insurance 69.6 80.6 87.9 82.4 86.2 85.9 88.1 91.3 18 EQUALS: Personal income 1,721.8 1,943.8 2,161.0 2,032.0 2,088.2 2,114.5 2,182.1 2,259.1 19 LESS: Personal tax and nontax payments 258.8 302.0 338.7 321.8 323.1 330.3 341.5 360.0 20 EQUALS: Disposable personal income 1,462.9 1,641.7 1,822.2 1,710.1 1,765.1 1,784.1 1,840.6 1,899.1 21 LESS: Personal outlays 1,386.6 1,555.5 1,718.7 1,629.4 1,678.7 1,674.1 1,729.2 1,792.5 22 EQUALS: Personal saving 76.3 86.2 103.6 80.7 86.4 110.0 111.4 106.6 MEMO: Per capita (1972 dollars) 23 Gross national product 6,568 6,721 6,651 6,730 6,768 6,580 6,597 6,661 24 Personal consumption expenditures 4,136 4,219 4,193 4,251 4,251 4,134 4,172 4,215 25 Disposable personal income 4,487 4,584 4,571 4,596 4,600 4,532 4,565 4,589 26 Saving rate (percent) 5.2 5.2 5.7 4.7 4.9 6.2 6.1 5.6 GROSS SAVING 27 Gross saving 355.2 412.0 404.2 402.0 404.5 394.5 402.0 n.a. 28 Gross private saving 355.4 398.9 436.4 396.4 413.0 435.9 446.5 n.a. 29 Personal saving 76.3 86.2 103.6 80.7 86.4 110.0 111.4 106.6 30 Undistributed corporate profits1 5577..99 5599..11 4455..33 50.6 52.1 42.1 42.8 n.a. 31 Corporate inventory valuation adjustment --2244..33 --4422..66 --4433..33 -50.8 -61.4 -31.1 -41.7 -38.9 Capital consumption allowances 32 Corporate 136.4 155.4 175.5 161.5 167.1 173.0 178.4 183.4 33 Noncorporate 84.8 98.2 112.0 103.6 107.4 110.7 113.4 116.4 34 Wage accruals less disbursements .0 .0 .0 .0 .0 .0 .5 -.5 35 Government surplus, or deficit (-), national income and product accounts -0.2 11.9 -33.3 4.4 1.7 -29.6 -45.6' n.a. 36 Federal -29.2 -14.8 -61.6 -24.5 -36.3 -66.5 -74.2 n.a. 37 State and local 29.0 26.7 28.2 28.9 26.6 23.9 28.6 n.a. 38 Capital grants received by the United States, net ..00 1.1 1.1 1.1 1.1 1.1 1.1 1.1 39 Gross investment 361.6 414.1 406.0 401.3 407.3 392.5 405.0 419.0 40 Gross private domestic 375.3 415.8 396.8 410.0 415.6 390.9 377.1 403.7 41 Net foreign --1133..88 -1.7 9.1 -8.7 -8.3 1.7 27.8 15.3 42 Statistical discrepancy 66..44 2.2 1.7 -0.7 2.8 -1.9 3.0 n.a. 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 • February 1981 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data are seasonally adjusted except as noted.1 1979 1980 Item credits or debits 1979 Q2 Q3 Q4 Q1 Q3 P 1 Balance on current account -14,259 -788 1,099 -1.802 -2,610 -2,431 4,900 2 Not seasonally adjusted -2,909 486 -2,426 -680 480 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 2,7790 -649 -3,2680 5020 -1,1090 1 1 4 5 G Sp o e l c d i al drawing rights (SDRs) - -1 1 2 1 1 8 1 - ,2 6 4 5 9 -1, - 1 6 3 5 6 0 -650 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-reportecfclaims -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 534 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 0 0 0 0 0 35 Allocation of SDRs 1,139 1,152 36 Discrepancy 11,354 22,848 -825 11,269 6,975 20,194 4,293 37 Owing to seasonal adjustments -3,641 2,400 -99 1,460 -4,022 38 Statistical discrepancy in recorded data before seasonal adjustment 11,354 23,848 2,816 8,869 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) 204 236 305 139 144 155 110 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 11997788 11997799'' 11998800 June July Aug. Sept. Oct. Nov. Dec. 1 EXPORTS of domestic and foreign merchandise excluding grant-aid shipments 143,578 181,651 220,549 18,642 18,075 19.103 18.701 19,088 18,634 19,118 2 GENERAL IMPORTS including merchandise for immediate consumption plus entries into bonded warehouses 171,978 206,256 240,834 19,893 18,995 19,236 19.465 20,060 19,422 21,174 3 Trade balance -28,400 -24,605 -20,286 -1,251 -920 -132 -764 -972 -788 -2,056 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 1977 1978 1979 July Aug. Sept. Oct. Nov. Dec. Jan .P 1 Total1 19,312 18,650 18,956 21,845 22,691 22,994 23,967 25,673 26,756 28,316 2 Gold stock, including Exchange Stabilization Fund1 11,719 11,671 11,172 11,172 11,172 11,168 11,163 11,162 11,160 11,159 3 Special drawing rights2-3 2,629 1,558 2,724 3,842 4,009 4,007 3,939 3,954 2,610 3,628 4 Reserve position in International Monetary Fund2 4,946 1,047 1,253 1,410 1,564 1,665 1,671 1,822 2,852 2,867 5 Foreign currencies4-5 18 4,374 3,807 5,421 5,946 6.154 7.194 8,735 10,134 10,662 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; $1,152 million on Jan. 1. 1980; and $1,093 2. Beginning July 1974, the IMF adopted a technique for valuing the SDR based million on Jan. 1, 1981; plus net transactions in SDRs. on a weighted average of exchange rates for the currencies of member countries. 4. Beginning November 1978, valued at current market exchange rates. From July 1974 through December 1980, 16 currencies were used; from January 5. Includes U.S. government securities held under repurchase agreement against 1981, 5 currencies have been used. The U.S. SDR holdings and reserve position receipt of foreign currencies, if any. in the IMF also are valued on this basis beginning July 1974. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics • February 1981 3.13 FOREIGN BRANCHES OF U.S. BANKS Balance Sheet Data Millions of dollars, end of period 1980 Asset account 1977 19781 1979 May June July Aug. Sept. Oct. NOV.P All foreign countries 1 Total, all currencies 258,897 306,795 364,233 378,899 376,722 377,813 386,200 385,011 381,764 389,086 2 Claims on United States 11,623 17,340 32,302 35,606 29,069 29,053 36,821 29,308' 30,448 30,580 3 Parent bank 7,806 12,811 25,929 26,139 18,565 17,525 26,684 19,676 21,447 22,214 4 Other 3,817 4,529 6,373 9,467 10,504 11,528 10.137 9,632' 9,001 8,366 5 Claims on foreigners 238,848 278,135 317,175 326,340 330,171 331,301 332,317 338,400' 334,149 340,797 6 Other branches of parent bank 55,772 70,338 79,661 76,317 76,061 75,196 72,417 73,638 72,266 74,058 7 Banks 91,883 103,111 123,395 130,313 132,587 134,624 136,484 139,604 137,668 140,005 8 Public borrowers2 14,634 23,737 26,072 25,438 25,632 25,474 26,112 26,492 26,376 26,910 9 Nonbank foreigners 76,560 80,949 88,047 94,272 95,891 96,007 97,304 98,666' 97,839 99,824 10 Other assets 8,425 11,320 14,756 16,953 17,482 17,459 17,062 17,303 17,167 17,709 11 Total payable in U.S. dollars 193,764 224,940 267,711 277,542 275,232 275,719 283,707 281,444 278,415 284,500 12 Claims on United States 11,049 16,382 31,171 34,314 27,867 27,688 35,508 28,105' 29,031 29,136 13 Parent bank 7,692 12,625 25,632 25,778 18.254 17,209 26,363 19,405 21,050 21,813 14 Other 3,357 3,757 5,539 8,536 9,613 10,479 9,145 8,700' 7,981 7,323 15 Claims on foreigners 178,896 203,498 229,118 234,159 238,213 239,271 239,356 244,922' 240,825 246,489 16 Other branches of parent bank 44,256 55,408 61,525 58,908 58,456 57,813 54,965 56,445 55,054 57,233 17 Banks 70,786 78,686 96,243 102,693 104,902 106,313 107,976 111,651 108,868 110,891 18 Public borrowers2 12,632 19,567 21,629 21,221 21,382 21,233 21,785 22,059 22,406 22,831 19 Nonbank foreigners 51,222 49,837 49,721 51,337 53,473 53,912 54,630 54,767' 54,497 55,534 20 Other assets 3,820 5,060 7,422 9,069 9,152 8,760 8,843 8,417 8,559 8,875 United Kingdom 21 Total, all currencies 90,933 106,593 130,873 138,930 139,066 135,669 136,467 136,872 137,096 140,715 22 Claims on United States 4,341 5,370 11,117 11,399 9,157 8,366 8,465 8,022 8,206 8,771 23 Parent bank 3,518 4,448 9,338 9,140 6,870 5,705 6,023 5,788 5,969 6,552 24 Other 823 922 1,779 2,259 2,287 2,661 2,442 2,234 2,237 2,219 25 Claims on foreigners 84,016 98,137 115,123 121,851 124,059 120,914 121,805 122,825 122,890 125,859 26 Other branches of parent bank 22,017 27,830 34,291 34,305 34,824 32,231 31,607 30,792 31,399 32,267 27 Banks 39,899 45,013 51,343 54,076 54,855 54,824 55,530 56,911 56,396 57,423 28 Public borrowers2 2,206 4,522 4,919 5,591 5,897 5,710 5,865 6,005 5,943 6,405 29 Nonbank foreigners 19,895 20,772 24,570 27,879 28,483 28.149 28,803 29,117 29,152 29,764 30 Other assets 2,576 3,086 4,633 5,680 5,850 6,389 6,197 6,025 6,000 6,085 31 Total payable in U.S. dollars 66,635 75,860 94,287 98,809 98,013 93,158 93,720 94,355 94,365 97,246 32 Claims on United States 4,100 5,113 10,746 10,988 8,790 7,831 7,954 7,656 7,637 8,233 33 Parent bank 3,431 4,386 9,297 9,059 6,810 5,629 5,960 5,744 5,817 6,410 34 Other 669 727 1,449 1,929 1,980 2,202 1,994 1,912 1,820 1,823 35 Claims on foreigners 61,408 69,416 81,294 85,013 86,404 82,434 82,705 83,933 83,961 86,246 36 Other branches of parent bank 18,947 22,838 28,928 28,466 28,692 26,083 25,565 24,907 25,577 26,710 37 Banks 28,530 31,482 36,760 38,594 39,050 38,471 39,070 40,817 39,988 40,542 38 Public borrowers2 1,669 3,317 3,319 4,277 4,396 4,280 4,327 4,419 4,381 4,706 39 Nonbank foreigners 12,263 11,779 12,287 13,676 14,266 13,600 13,743 13,790 14,015 14,288 40 Other assets 1,126 1,331 2,247 2,808 2,819 2,893 3,061 2,766 2,767 2,767 Bahamas and Caymans 41 Total, all currencies 79,052 91,735 108,977 116,538 115,276 120,243 128,429 123,076 119,379 119,597 42 Claims on United States 5,782 9,635 19,124 21,406 17,682 18.240 25,846 18,281' 19,651 18,283 43 Parent bank 3,051 6,429 15,196 15,334 10,660 10,497 19,129 11,839 13,857 13,026 44 Other 2,731 3,206 3,928 6,072 7,022 7,743 6,717 6,442' 5,794 5,257 45 Claims on foreigners 71,671 79,774 86,718 90,995 93,432 98,001 98,463 100,844' 95,845 97,078 46 Other branches of parent bank 11,120 12,904 9,689 12,454 12,977 14,362 13,160 14,724 13,093 13,169 47 Banks 27,939 33,677 43,171 46,782 48,012 50,780 51,712 52,622 49,664 50,737 48 Public borrowers2 9,109 11,514 12,905 11,636 11,554 11,627 12,054 12,076 12,439 12,207 49 Nonbank foreigners 23,503 21,679 20,953 20,123 20,889 21,232 21,537 21,422' 20,649 20,965 50 Other assets 1,599 2,326 3,135 4,137 4,162 4,002 4,120 3,951 3,883 4,236 51 Total payable in U.S. dollars 73,987 85,417 102,368 110,872 109,715 114,474 122,581 117,142 113,538 113,802 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 May June July Aug. Sept. Oct. NOV.P All foreign countries 52 Total, all currencies 258,897 306,795 364,233 378,899 376,722 377,813 386,200 385,011 381,764 389,086 53 To United States 44,154 57,948 66,618 73,263 76,120' 83,151 87,492 83,922' 84,072 86,564 54 Parent bank 24,542 28,590 24,462 26,603 30,918 35,357 37,400 38.398 37,139 36.822 5 5 5 6 O No th n e b r a b n a k n s ks in United States 19,613 1 1 2 7 , , 2 1 1 4 2 6 2 1 8 3 , , 1 9 8 6 8 8 3 1 3 3 , , 5 0 7 9 0 0 3 1 2 2 , , 9 2 4 5 7 5 ' 3 1 6 1 . . 3 4 7 1 9 5 3 1 5 4 , , 3 7 6 2 7 5 3 1 2 2 , , 9 5 4 8 3 1 ' 3 1 4 2 , , 1 8 0 2 5 8 3 1 6 3 , , 3 4 4 0 2 0 57 To foreigners 206,579 238.912 283.344 289,754 284,716' 279,567 283.924 287,048' 283,835 288,110 58 Other branches of parent bank 53,244 67,496 77,601 72,530 72,061 72,067 69.158 70,258 69,522 71,487 59 Banks 94,140 97,711 122,849 130,805 127,813' 122,708 130,344 130,989' 131,359 132,180 60 Official institutions 28,110 31,936 35,664 34,910 34.141 33.073 33,080 33.079 30,678 31,046 61 Nonbank foreigners 31,085 41,769 47,230 51.509 50,701 51.719 51.342 52,722' 52,276 53,397 62 Other liabilities 8.163 9,935 14.271 15,882 15,886 15,095 14.784 14,041' 13,857 14,412 63 Total payable in U.S. dollars 198,572 230,810 273,819 285,131 282,578 283,026 291,606 288,436 285,903 292,688 64 To United States 42,881 55,811 64,530 70,826 73,527' 80,630 84,650 81,045' 81,239 83,802 65 Parent bank 24,213 27,519 23,403 25,279 29,547 33,977 35,906 36,799 35,447 35,160 6 6 6 7 O No th n e b r a b n a k n s ks in United States 18,669 1 16 1 , . 3 9 3 5 4 8 2 1 7 3 . . 3 7 5 7 6 1 3 1 2 2 . . 7 8 2 2 1 6 3 1 1 1 . . 9 9 9 8 5 5 ' 3 1 5 1 , , 4 1 9 5 8 5 3 1 4 4 , , 3 4 2 1 5 9 3 1 1 2 , , 8 3 9 5 0 6 ' ' 3 1 3 2 , , 2 5 4 4 3 9 3 1 5 3 , , 5 1 3 0 8 4 68 To foreigners 151,363 169.927 201.476 205,263 200.049' 194,322 198,754 199,644' 197,317 200,817 69 Other branches of parent bank 43,268 53,396 60,513 56,577 56,247 56,206 53,335 54,753 53,576 55,530 70 Banks 64,872 63,000 80,691 87,029 84,467' 78,911 86.404 85,355' 86,188 86,550 71 Official institutions 23,972 26,404 29,048 28.360 26.961 26,177 26,165 25,659 23,329 23,760 72 Nonbank foreigners 19,251 27,127 31,224 33,297 32,374 33,028 32,850 33,877' 34,224 34,977 73 Other liabilities 4,328 5,072 7,813 9,042 9.002 8.074 8,202 7.747' 7,347 8,069 United Kingdom 74 Total, all currencies 90,933 106,593 130,873 138,930 139,066 135,669 136,467 136,872 137,096 140,715 75 To United States 7,753 9,730 20,986 19,877 20,012' 21,404 20.608 19,343 19,125 20,594 76 Parent bank 1,451 1,887 3,104 2,118 2,410 3,275 2,542 2,951 2,712 3,198 7 7 7 8 O No 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 1 , . 2 4 6 9 5 4 1 6 1 , ,4 1 7 2 3 9 ' 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 , , 7 6 6 4 8 5 1 5 1 , , 7 6 3 6 2 4 79 To foreigners 80,736 93,202 104.032 111,769 112,055' 107,739 109,604 111.866 112,536 114,813 80 Other branches of parent bank 9,376 12,786 12,567 13.824 13.767 12.694 13.343 13,295 13,790 13,951 81 Banks 37,893 39,917 47,620 54,309 54.927' 51,203 51.452 53,749 56,008 58,127 82 Official institutions 18,318 20.963 24,202 23,628 22,577 21,088 22.600 22,437 19,807 20,437 83 Nonbank foreigners 15,149 19,536 19,643 20,008 20.784 22,754 22,209 22.385 22,931 22,298 84 Other liabilities 2,445 3,661 5,855 7,284 6.999 6,526 6.255 5,663 5,435 5,308 85 Total payable in U.S. dollars 67,573 77,030 95,449 101,170 100,117 95,314 96,453 96,403 96,133 99,135 86 To United States 7,480 9,328 20.552 19,284 19,321' 20,843 20,007 18.687 18,519 19,978 87 Parent bank 1,416 1,836 3,054 2.060 2,315 3,238 2.496 2.892 2,634 3,101 8 8 8 9 O No th n e b r a n ba k n s ks in United States 6,064 3 4, , 1 3 4 4 4 8 9 7 , , 8 6 4 5 7 1 1 6 1 , , 2 0 1 1 0 4 1 6 0 , ,9 0 5 5 0 6 ' 1 5 2 . , 4 1 8 1 6 9 1 5 1 . , 8 7 0 02 9 1 5 0 . , 2 5 5 3 9 6 1 5 0 , , 6 2 8 0 2 3 1 5 1 , , 6 2 1 6 6 1 90 To foreigners 58,977 66,216 72,397 78,278 77,322' 71.489 73,431 75,001 75,250 76,696 91 Other branches of parent bank 7,505 9,635 8,446 10,021 9.758 8,672 9,128 9,215 9,791 9.770 92 Banks 25,608 25.287 29,424 34,488 35.394' 31.352 31,726 32,865 34,741 35,998 93 Official institutions 15,482 17.091 20,192 19,558 18,300 16,846 18,253 18,046 15,338 15,989 94 Nonbank foreigners 10,382 14,203 14,335 14,211 13,870 14.619 14,324 14,875 15,380 14,939 95 Other liabilities 1,116 1,486 2,500 3,608 3,474 2.982 3,015 2,715 2,364 2,461 Bahamas and Caymans 96 Total, all currencies 79,052 91,735 108,977 116,538 115,276 120,243 128,429 123,076 119,379 119,597 97 To United States 32,176 39,431 37,719 45.618 48,431 54,190 58,877 56.237' 56,139 56,862 98 Parent bank 20,95_6 20,482 15,267 19,170 22,748 26,589 29,189 29.329 27,694 26,752 1 9 0 9 0 O N t o h n e b r a b n a k n s ks in United States 11,220 1 6 2 , , 0 8 7 7 3 6 1 5 7 , , 2 2 0 4 4 8 20 5. , 7 7 2 2 1 7 2 5 0 , . 2 4 0 8 0 3 2 4 2 , , 8 7 2 8 1 0 22 7 . , 2 4 2 6 8 0 20 6 . . 8 0 8 2 7 1 ' 22 5 , , 5 94 0 5 0 23 6 , , 6 5 0 0 2 8 101 To foreigners 45,292 50,447 68,598 67,971 63,935 63,171 66,593 63,944' 60,438 59,492 102 Other branches of parent bank 12,816 16,094 20,875 20,009 20,102 20,409 18,081 17,079 16,719 15,878 103 Banks 24,717 23,104 33,631 32.174 28.917 27.126 34,086 32,181' 29,193 28,949 104 Official institutions 3,000 4,208 4,866 5,461 5.096 5.525 4.119 4,250 4,575 4,333 105 Nonbank foreigners 4,759 7,041 9,226 10,327 9,820 10,111 10,307 10,434 9.951 10,332 106 Other liabilities 1,584 1,857 2,660 2,949 2,910 2,882 2.959 2,895 2.802 3,243 107 Total payable in U.S. dollars 74,463 87,014 103,460 112,509 111,494 116,182 124,017 118,473 115,021 115,351 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 • February 1981 3.14 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1980 IItteemm 11997777 11997788 11997799 June' July' Aug.' Sept.' Oct. NOV.p Dec.P 1 Total1 131,097 162,589 149,48 lr 149,151 153,088 154,674 156,899 157,385 163,196 164,434 By type 2 Liabilities reported by banks in the United States2 18,003 23,290 30.475 28,912 29,211 29,449 30,918 28,815 29,601 30,483 3 U.S. Treasury bills and certificates3 47,820 67,671 47.666 45,907 47,982 49.811 49,361 50,392 55,104 56,243 U.S. Treasury bonds and notes 4 Marketable 32,164 35,894 37.590 39,784 40,546 39,801 40,799 41.463 41,764 41,431 5 Nonmarketable4 20,443 20,970 17,387 15,954 15.954 15,654 15.254 15,254 15,254 14,654 6 U.S. securities other than U.S. Treasury securities5 12,667 14,764 16,363' 18,594 19.395 19,959 20,567 21,461 21,473 21,623 By area 7 Western Europe1 70.748 93.089 85.602 75,271 78,141 78,424 76,942 76,004 80,899 81,713 8 Canada 2,334 2.486 1.898 2,157 1.907 2,156 1,901 1,736 1,433 1,563 9 Latin America and Caribbean 4,649 5.046 6.291 5,943 6,308 6,050 6,610 6,008 5,722 5,667 10 Asia 50,693 58.817 52,793' 62,215 63,086 64,287 67,696 69,042 70,025 70,536 11 Africa 1,742 2.408 2,412 2,694 2,930 3,281 3,232 3,520 3,867 4,128 12 Other countries6 931 743 485 871 716 476 518 1,075 1,250 827 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 2.358 2,693 2,688 2 Banks' own claims1 2,356 3,671 3.013 2.419 2.772 2,955 3.161 3 Deposits 941 1,795 1,376 994 1,212 1,048 1,120 4 Other claims 1,415 1,876 1,637 1,425 1.560 1,908 2,040 5 Claims of banks' domestic customers2 335588 660099 558800 11,,005588 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 1977 1978 1979 June July Aug. Sept. Oct. Nov. Dec.P 1 All foreigners 126,168 166,877' 187,492' 186,922' 188,295r 201,402' 191,683' 195,827' 204,802 205,609 2 Banks' own liabilities 78,730' 117,211' 116,625' 116,497' 128,171' 118,663 121,240' 125,058 125,112 3 Demand deposits 18,996 19,218 23,325 25,870' 22,046' 22,511 22,474 22,457' 22,847 23,859 4 Time deposits1 11,521 12,431 13,627 12,780' 12,995' 13,208' 13,824 14,157' 14,773 15,172 5 Other2 9,704' 16,419' 16,801' 18,700' 18,785' 18,046' 17,222' 17,101 17,427 6 Own foreign offices3 37,376 63,839 61,174' 62,757' 73,667' 64,319' 67,405' 70,336 68,654 7 Banks' custody liabilities4 88,147' 70,281' 70,297' 71,797' 73,231' 73,020' 74,587' 79,743 80,497 8 U.S. Treasury bills and certificates5 48,906 68,202 48,573 48,193 49,627 51,505 50,731 51,990 56,484 57,595 9 Other negotiable and readily transferable instruments6 17,446' 19,359' 19,522' 19,438' 19,141' 19,778' 19,967 20,624 20,070 10 Other 2,499 2,350 2,582' 2,732 2,586' 2,511 2,630 2,635 2,832 11 Nonmonetary international and regional organizations7 3,274 2,607 2,356r 3,509r 2,903 2,820 2,549 2,734 2,476 2,283 12 Banks' own liabilities 906 714' 852' 607 501 476 352 383 383 13 Demand deposits 231 330 260 99 214 171 141 115 187 146 14 Time deposits1 139 84 151 92 93 101 100 95 92 85 15 Other2 492 303' 662' 299 229 235 143 104 152 16 Banks' custody liabilities4 1,701 1,643 2,657 2,296 2,319 2,073 2,382 2,093 1,900 17 U.S. Treasury bills and certificates 706 201 102 1,106 604 644 316 581 337 254 18 Other negotiable and readily transferable instruments6 1,499 1,538 1,551 1,692 1,675 1,757 1,800 1,756 1,646 19 Other 1 2 0 0 0 0 0 0 0 20 Official institutions8 65,822 90,706 78,142 74,819r 77,193' 79,260 80,279 79,207' 84,706 86,726 21 Banks' own liabilities 12,129 18,228 16,313' 17,071' 17,591 18,548 16,182' 16,897 17,938 22 Demand deposits 3,528 3,390 4,704 5,009' 4,218 3,898 4,348 3,406 3,553 3,962 23 Time deposits1 1,797 2,550 3.041 2,670 2,705' 3,006' 3,477 3,390 3,623 3,633 24 Other2 6,189 10,483 8,633' 10,148 10,688' 10,724 9,387' 9,721 10,342 25 Banks' custody liabilities4 78,577 59,914 58,507 60,122 61,669 61,731 63,025' 67,808 68,788 26 U.S. Treasury bills and certificates5 47,820 67,415 47,666 45,907 47,982 49,811 49,361 50,392 55,104 56,243 27 Other negotiable and readily transferable instruments6 10,992 12.196 12,554 12,092 11,805' 12,307 12,542' 12,648 12,491 28 Other 170 52 45 48 54' 63 90 56 54 29 Banks9 42,335 57,495' 88,352' 89,479' 90,111' 100,788' 89,979' 95,012' 97,679 96,431 30 Banks' own liabilities 52,705' 83,352' 84,080' 84,629' 95,475' 84,737' 89,653' 91,799 90,477 31 Unaffiliated foreign banks 15,329' 19,512' 22,907' 21,872' 21,808 20,419 22,249' 21,463 21,822 32 Demand deposits 10,933 11,257 13,274 14,926' 12,882' 13,427 12,995 13,843' 13,714 14,116 33 Time deposits1 2,040 1,443 1,680 1,479 1,626' 1,514 1,412 1,724 1,786 1,809 34 Other2 2,629' 4,558' 6,502' 7,364 6,867 6,012 6,681' 5,963 5,897 35 Own foreign offices3 37,376 63,839 61,174' 62,757' 73,667' 64,319' 67,405 70,336 68,654 36 Banks' custody liabilities4 4,790 5,000 5,399' 5,482 5,313 5,241 5,359 5,880 5,954 37 U.S. Treasury and certificates 300 422 594 557 577 361 515 529 623 38 Other negotiable and readily transferable instruments6 2,425 2,405 2,522 2,395 2,435 2,533 2,417 2,883 2,743 39 Other 2,065 2,173 2,283' 2,530 2,301 2,347 2,427 2,467 2,588 40 Other foreigners 14,736 16,070' 18,642' 19,115' 18,088' 18,533' 18,876' 18,874' 19,941 20,169 41 Banks' own liabilities 12,990 14,918' 15,380' 14,190' 14,604' 14,901' 15,052' 15,979 16,315 42 Demand deposits 4,304 4,242 5,087 5,836' 4,732 5,014 4,991 5,093 5,393 5,635 43 Time deposits 7,546 8,353 8,755 8,539' 8,570' 8,588' 8,836 8,948' 9,272 9,644 44 Other2 394 1.075' 1,004' 888' 1,002' 1,075' 1,011' 1,315 1,036 45 Banks' custody liabilities4 3,080' 3,725' 3,735' 3,898' 3,930' 3.975' 3,822 3,962 3,855 46 U.S. Treasury bills and certificates 240 285 382 586 484 473 693 502 513 474 47 Other negotiable and readily transferable instruments6 2,531' 3,220' 2,895' 3,259' 3,226' 3,181' 3,208 3,337 3,191 48 Other 264 123 254 154 231 100 112 112 190 49 MEMO: Negotiable time certificates of deposit in custody for foreigners 11,007 10,974 11,773 10,500 10,433 10,704 10,799' 10,553 10,735 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 • February 1981 3.16 LIABILITIES TO FOREIGNERS Continued 1980 AArreeaa aanndd ccoouunnttrryy 11997777 11997788 11997799 June July Aug. Sept. Oct. Nov. Dec .P 1 Total 126,168 166,877' 187,492' 186,922' 188,295' 201,402' 191,683' 195,827' 204,802 205,609 2 Foreign countries 122,893 164,270' 185,136' 183,413' 185,392' 198,582' 189,134' 193,093' 202,325 203,326 3 Europe 60,295 85.169' 90.935 82,894' 83,848' 86,077' 83,476 83.990' 90,813 91,305 4 Austria 318 513 413 383 432 390 432 460 519 523 5 Belgium-Luxembourg 2,531 2,550 2,375 3,988' 3,837 3.673 3,696 3.322 3,696 4,019 6 Denmark 770 1.946 1.092 553 534 525 528 493 586 497 / Finland 323 346 398 438 433 403 311 307 363 455 8 France 5,269 9.214' 10.433 11,272 12.178 12.596 12,332 11.654 12,380 12,127 9 Germany 7,239 17,286 12,935 6,954 7.626 9.121 7,854 7.557 9,171 9,968 10 Greece 603 826 635 626 567 642 591 643 710 667 11 Italy 6,857 7,739 7,782 5,778 7.138 6.530 5.969 6.796 7,308 7,572 12 Netherlands 2,869 2.402 2.327 2,676 2.830 2,491 2.540 2,555 2,794 2,441 13 Norway 944 1,271 1,267 1.282 1.140 1.040 1.074 1,381 1,444 1,344 14 Portugal 273 330 557 391 398 506 571 491 437 374 15 Spain 619 870 1.259 1,366 1.371 1,491 1.321 1,520 1,379 1,500 16 Sweden 2,712 3,121 2,005 1,999 1.795 1,861 1,826 1.813 1,811 1,737 17 Switzerland 12,343 18,225 17.954 14,732' 14,359 14.252 13,524 13,695' 16.574 16,654 18 Turkey 130 157 120 153 156 147 237 171 257 292 19 United Kingdom 14,125 14,265 24.694 24,175' 22,556' 22,925 22,818 23.797' 24.518 23,061 20 Yugoslavia 232 254 266 254 190 139 169 203 225 681 21 Other Western Europe1 1,804 3,440 4.070 5.473' 6.006 7,002 7,250 6.880' 6.161 6,949 22 U.S.S.R 98 82 52 49 36 70 39 33 64 69 23 Other Eastern Europe2 236 330' 302 351' 267 271 392 220 416 376 24 Canada 4,607 6,969 7.379 9.157 9,228 9,187 10,234 9,992 9,871 10,025 25 Latin America and Caribbean 23,670 31,677' 49.665' 46,946' 49,233' 58,282' 48.781' 52.501' 53,175 53,178 26 Argentina 1,416 1,484 1,582 1,705 1,841 1,880 1.875 1.996 1,996 2,132 2/ Bahamas 3,596 6.752 15.255 12,886' 13,172' 21,179 13.924 17.567' 16,783 16,372 28 Bermuda 321 428 430 576 464 559 677 595 555 670 29 Brazil 1,396 1.125 1,005 1.420' 1,434' 1,378 1,168 1.342 1,248 1.221 30 British West Indies 3,998 6.014 11.117 10,285' 11,957' 13,309' 11,410 12.040' 12,493 12,738 31 Chile 360 398 468 450 459' 475 431 448' 456 460 32 Colombia 1,221 1.756 2.617 2,854 2,954' 2,893 2,916 3.037 2,962 3,077 33 Cuba 6 13 13 6 6 7 5 5 6 6 34 Ecuador 330 322 425 455 346 818 381 387 437 371 35 Guatemala3 416 414 360 373 372 373 365 359 367 36 Jamaica3 52 76 91 137 100 101 85 79 97 37 Mexico 2,876 3,467' 4.185' 4,007' 4,268' 4,291' 4,226' 4.575 4,583 4,549 38 Netherlands Antilles 196 308 499 250 332 314 360 393 568 413 39 Panama 2,331 2,967 4.483 4,179' 4,685 4,617 3.894 3.595 4,575 4,718 40 Peru 287 363 383 346 350 401 355 380 345 403 41 Uruguay 243 231 202 231' 232' 241' 199 220 244 254 42 Venezuela 2,929 3,821 4,192 4,709' 4,350 3,692 4,405 3.659 3,667 3,170 43 Other Latin America and Caribbean 2.167 1,760 2,318 2,138' 1,874' 1,755 2,080 1.811 1,817 2,161 44 30,488 36,492 33,013' 39.432' 38,048 39,880' 41,847 4400,,888800'' 4411,,999966 4422,,337766 China 45 Mainland 53 67 49 44 38 37 38 46 62 49 46 Taiwan 1,013 502 1,393 1,524 1,438 1.552 1.595 1.610 1,636 1,662 47 Hong Kong 1,094 1,256 1,672 2.270 2.186 1,994' 2.204 2,150' 2,410 2,550 48 India 961 790 527 633 494 631 529 485 438 416 49 Indonesia 410 449 504 807 849 649' 827 811 715 730 50 Israel 559 688 707 •584 488 569 534 530 548 883 51 Japan 14,616 21,927 8.907 12,430 12,547 14,059 15,414 15,354 15,720 16,246 52 Korea 602 795 993 1,087 1,482 1,473 1,994 1,809 1,764 1,528 53 Philippines 687 644 795' 848' 935 778 814 838 800 917 54 Thailand 264 427 277 405 405 304 517 403 440 464 55 Middle-East oil-exporting countries4 8,979 7,534 15.309' 16,804' 15.378' 15.801' 15,409 14.611 15,214 14,454 56 Other Asia 1,250 1.414 1,879 1.997' 1,808 2,033 1.972 2.232 2,250 2,477 57 Africa 2,535 2.886 3,239 3,695' 3,796' 4,221' 3.902 4,246' 4,725 5,195 58 Egypt 404 404 475 326' 451' 350' 322 269 374 493 59 Morocco 66 32 33 35 33 47 32 57 38 33 60 South Africa 174 168 184 325 360 404 354 288 332 293 61 Zaire 39 43 110 107 78 38 42 36 34 57 62 Oil-exporting countries5 1,155 1,525 1,635 2.107' 2,094 2,685 2,459 2,911 3,211 3,540 63 Other Africa 698 715 804 796 779 697 694 685 735 778 64 Other countries 1,297 1,076 904 1,290 1,239 936 894 1.484 1,746 1,247 65 Australia 1,140 838 684 1,019 959 692 613 1,190 1,413 950 66 Allother 158 239 220 271 281 243 281 294 333 297 67 Nonmonetary international and regional organizations 3,274 2,607 2,356' 3.509' 2.903 2,820 2,549 2.734 2,476 2,283 68 International 2,752 1,485 1,238 2.394 1,804 1,736 1.389 1,586 1,366 1,156 69 Latin American regional 278 808 806 807 785 800 837 841 801 832 70 Other regional6 245 314 313' 307' 314 285 323 307 309 296 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 June July Aug. Sept. Oct. Nov. Dec.P 1 Total 90,206 115,603 133,919' 149,513' 151,218' 163,401' 161,518 162,658' 167,365 173,662 2 Foreign countries 90,163 115,547 133,887' 149,479' 151,187' 163,363' 161,484 162,618' 167,331 173,592 3 Europe 18,114 24,232 28.429' 29,440' 28,439 29,411' 29,722' 29,259' 32,498 32,075 4 Austria 65 140 284 305 309 280 264 196 250 236 5 Belgium-Luxembourg 561 1,200 1,339 1,866 1,622 1,881 1,954 1.680 1,946 1,619 6 Denmark 173 254 147 167 149 164 180 132 165 127 7 Finland 172 305 202 307 223 215 184 253 248 460 8 France 2,082 3,735 3,322' 2,687' 2,582 3,288 3,232 2.551 3,301 2,962 9 Germany 644 845 1,179 1,143' 1.004 1,131 1.018 987 1,506 946 10 Greece 206 164 154 346 279 265 221 278 265 256 11 Italy 1,334 1,523 1,631 1.940 2,295 2,433 2.560 2,842' 3,062 3,363 12 Netherlands 338 677 514 590 492 632 546 557 749 575 13 Norway 162 299 276 219 270 231 248 335 138 227 14 Portugal 175 171 330 300 346 335 330 341 393 331 15 Spain 722 1,120 1,051 1,189 1,011 1,139 1,106 1,113 1,094 993 16 Sweden 218 537 542 677 534 558 716 763' 633 783 17 Switzerland 564 1,283 1,165 1,237 1,319 1,581 1,337 1,564' 1,932 1,446 18 Turkey 360 300 149 144 143 137 144 123' 149 145 19 United Kingdom 8,964 10,172 13,814' 13,762' 13.175 12,651' 13,080' 12,950' 13,885 14,835 20 Yugoslavia 311 363 611 658 648 647 682 684 689 852 21 Other Western Europe1 86 122 175 203 170 172 245 226 234 179 22 U.S.S.R 413 366 290 289 531 232 241 257 271 281 23 Other Eastern Europe2 566 657 1,254 1,412' 1,336 1,438 1,434 1,427 1,389 1,460 24 Canada 3,355 5,152 4,143 5,272 4,654 4,775 5,255 4,614 4,542 4,810 25 Latin America and Caribbean 45,850 57,567 68,011 74.090' 78,690' 89,253' 85,768' 87,665' 89,263 93,769 26 Argentina 1,478 2,281 4,389 5,226 5,234 5,393 5,629 5,859 6,270 5,692 27 Bahamas 19,858 21,555 18,918 25,101' 28,710 31,866 30,269' 30,275' 29,679 29,349 28 Bermuda 232 184 496 175 194 256 216 399 260 243 29 Brazil 4,629 6,251 7,720 8.294' 8,989' 9,251' 9,639 10,135 9,989 10,474 30 British West Indies 6,481 9,692 9,822 8.689' 8,637 14.570 11,980 12,630' 13,651 15,628 31 Chile 675 970 1,441 1,368' 1,359 1,487 1,627 1,721 1,730 1,939 32 Colombia 671 1,012 1,614 1,435 1,448 1,490 1.493 1.575 1,582 1,768 33 Cuba 10 0 4 4 4 3 6 3 3 3 34 Ecuador 517 705 1,025 1,058 1,051 1,136 1,111 1.157 1,157 1,186 35 Guatemala3 94 134 120 153 102 105 112 114 137 36 Jamaica3 40 47 36 31 31 33 35 40 36 37 Mexico 4,909 5.479 9,099 10,197' 10,660 10,785' 11,123 11,745 12,014 12,590 38 Netherlands Antilles 224 273 248 728 760 725' 710 799 816 820 39 Panama 1,410 3.098 6.031 4,952 4,552 4,931 4,461 3.972 4,367 5,853 40 Peru 962 918 652 711 647 687 671 719 749 891 41 Uruguay 80 52 105 103 91 105 100 100 105 137 42 Venezuela 2,318 3,474 4,669 4,317' 4,469 4.737 4,879 4,710' 5,113 5,438 43 Other Latin America and Caribbean 1,394 1,490 1,598 1,576 1,700 1,697 1,715 1.721' 1,625 1,584 44 Asia 19,236 25,386 30,652' 37,604' 36,282' 36,927' 37,620 37,806' 37,952 39,398 China 45 Mainland 10 4 35 75 68 50 117 126 187 195 46 Taiwan 1,719 1,499 1,821 2,105' 2,224 2,284 2,492 2,332 2,382 2,469 47 Hong Kong 543 1.479 1,804 2,271' 2,174 2,063 2,099 1,980 2,093 2,193 48 India 53 54 92 83 97 118 84 103 125 196 49 Indonesia 232 143 131 155 205 245 208 214 248 245 50 Israel 584 888 990 1.028 950 1,012 918 1.055 1,127 1,172 51 Japan 9,839 12,671 16,946' 21.902' 20,595' 21,205' 20,663 20,607' 20,320 21,608 52 Korea 2,336 2,282 3.798' 5.420' 5,523' 5,464' 5,574 5,885 5,842 5,620 53 Philippines 594 680 737 780 881 1,019 1,169 1,081 1,120 986 54 Thailand 633 758 935 927' 939 947 947 925 969 876 55 Middle East oil-exporting countries4 1,746 3,125 1.548 1.261' 1,120 1,040 1.471 1.258' 1,538 1,555 56 Other Asia 947 1,804 1,813 1.597' 1,506 1.480 1,876 2.240 1,999 2,284 57 Africa 2,518 2,221 1,797 2.016 2,179' 1,977 2,029 2,090 1,933 2.375 58 Egypt 119 107 114 95 112 135 123 159 165 150 59 Morocco 43 82 103 121 134 180 166 119 146 223 60 South Africa 1,066 860 445 616 691 469 535 440 375 370 61 Zaire 98 164 144 107 107 98 101 123 98 94 62 Oil-exporting countries5 510 452 391 364 378' 349 374 469 402 805 63 Other 682 556 600 714 757 746 729 780 747 733 64 Other countries 1,090 988 855 1,056 943 1,021 1,091 1,185 1,143 1,165 65 Australia 905 877 673 860 743 793 879 942 915 859 66 Allother 186 111 182 196 200 228 213 243 228 306 67 Nonmonetary international and regional organizations6 43 56 32 34 31 38 34 40 34 70 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 • February 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 June' July Aug. Sept.' Oct. Nov. Dec/' 1 Total 9900,,220066 111111122222226666666,,,,,,,888888855555551111111 111111155555554444444,,,,,,,000000011111117777777''''''' 111111177777774444444,,,,,,,666666699999993333333 111111188888887777777,,,,,,,000000000000008888888 2 Banks' own claims on foreigners 111111111111115555555,,,,,,,666666600000003333333 111111133333333333333,,,,,,,999999911111119999999''''''' 111111144444449999999,,,,,,,555555511111113333333 151,218' 163,401' 111111166666661111111,,,,,,,555555511111118888888 162.658' 167,365 173,662 3 Foreign public borrowers 11111110000000,,,,,,,333333311111112222222''''''' 11111115555555,,,,,,,555555588888880000000''''''' 11111115555555,,,,,,,888888844444444444444 16,659' 17,419' 11111118888888,,,,,,,999999966666669999999 19,046' 20,603 20,472 4 Own foreign offices1 44444441111111,,,,,,,666666622222228888888 44444447777777,,,,,,,444444477777775555555''''''' 55555556666666.......333333322222228888888 58,520' 64,051' 66666661111111,,,,,,,888888877777779999999 61,613' 62,389 66,072 5 Unaffiliated foreign banks 44444440000000,,,,,,,444444499999996666666''''''' 44444440000000,,,,,,,999999966666669999999''''''' 44444443333333,,,,,,,777777766666668888888 42,007 47,500' 44444446666666,,,,,,,000000000000008888888 46,574' 48,902 50,151 6 Deposits 5555555,,,,,,,444444422222228888888 6666666,,,,,,,222222255555553333333''''''' 6666666,,,,,,,555555511111111111111 6,165' 7,250' 7777777,,,,,,,222222211111116666666 7,136' 7,579 8,286 7 Other 33333335555555,,,,,,,000000066666667777777''''''' 33333334444444,,,,,,,777777711111116666666''''''' 33333337777777,,,,,,,222222255555558888888 35,842' 40,250' 33333338888888,,,,,,,777777799999992222222 39,438' 41,323 41,865 8 All other foreigners 22222223333333,,,,,,,111111166666667777777 22222229999999,,,,,,,888888899999996666666''''''' 33333333333333,,,,,,,555555577777773333333 34,032' 34,431' 33333334444444,,,,,,,666666666666661111111 35,425' 35,472 36,967 9 Claims of banks' domestic customers2 11111111111111,,,,,,,222222244444448888888 22222220000000,,,,,,,000000099999998888888 22222225555555,,,,,,,111111188888881111111 22222225555555,,,,,,,444444499999990000000 10 Deposits 444444488888880000000 999999955555555555555 999999911111110000000 1111111,,,,,,,000000088888881111111 1111 NNeeggoottiiaabbllee aanndd rreeaaddiillyy ttrraannssffeerraabbllee iinnssttrruummeennttss33 .... 5555555,,,,,,,444444411111114444444 11111113333333,,,,,,,111111122222224444444 11111117777777,,,,,,,444444477777770000000 11111115555555,,,,,,,222222266666660000000 1122 OOuuttssttaannddiinngg ccoolllleeccttiioonnss aanndd ootthheerr ccllaaiimmss44 66,,117766 5555555,,,,,,,333333355555553333333 6666666,,,,,,,000000011111119999999 6666666,,,,,,,888888800000000000000 9999999,,,,,,,111111144444448888888 13 MEMO: Customer liability on acceptances 11111114444444,,,,,,,999999966666669999999 11111118888888,,,,,,,000000055555558888888 22222222222222,,,,,,,222222288888884444444 22222223333333,,,,,,,555555533333333333333 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States5 13,162' 21,578' 23,216 25,416' 24,140' 21,964 22,617 24,399 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 Sept. 1 Total 73,771 77,740' 87,580 92,748 By borrower 2 Maturity of 1 year or less1 58,481 60,076' 68,404 65,251' 63,868' 71,368' 3 Foreign public borrowers .... 4,583 4,658' 6,142' 7,127' 6,778' 7,089' 4 All other foreigners 53,898 55,418' 62,262' 58,125' 57,090' 64,279' 5 Maturity of over 1 year1 15,289 17,664 19,176 21,009 21,359 21,380 6 Foreign public borrowers .... 5,361 6,433 7,652 8,114 8,430 8,515' 7 All other foreigners 9,928 11,231 11,524 12,895 12.929 12,865' By area Maturity of 1 year or less1 8 Europe 15,176 14.033 16,799 15,254' 13,844 17,141' 9 Canada 2,670 2,703 2,471 1,777 1,818 2,013 10 Latin America and Caribbean 20,990 23,148 25,690 24,974 23.178 24,417' 11 Asia 17.579 18,191 21,519 21,673' 23,358' 25.753' 12 Africa 1.496 1,438 1,401 1,080 1.043 1.320 13 All other2 569 565 524 493 627 724 Maturity of over 1 year1 14 Europe 3.142 3,483 3,653 4.140 4.248 4.033 15 Canada 1,426 1,221 1,364 1,317 1,214 1.199 16 Latin America and Caribbean 8,464 10,279 11,771 12,821 13,397 13.902 17 Asia 1,407 1.884 1,578 1,911 1,728 1,524 18 Africa 637 614 623 652 620 576 19 All other2 214 183 188 169 152 146 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.CI 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 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 .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 35 Colombia 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 .7 .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 52 Eastern Europe 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 (2) foreign subsidiaries of U.S. banks. To minimize duplication, the data are ad- individually, 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. in this table include only banks' own claims payable in dollars. For earlier dates Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 International Statistics • February 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.- Dec. June July Aug. Sept. Oct. Nov. Dec .P Holdings (end of period)1 1 Estimated total2 44,946 51,344' 54,195' 54,884' 54,120' 55,869' 56,553' 57,217 57,416 2 Foreign countries2 39,817 45.915' 49,795' 50,590' 49,992' 51,173' 52,075' 52,867 52,828 3 Europe2 17,072 24,824' 25,479' 25,259' 24,643' 25,016' 24.783' 24,708 24,334 4 Belgium-Luxembourg 19 60 28 45 89 91 78 74 77 5 Germany2 8,705 14,056' 14,095' 13,697' 13,097' 13,110 12,823' 12,758 12,335 6 Netherlands 1,358 1,466 1,437 1,547 1.522 1,640 1,658 1,777 1,884 7 Sweden 285 647 647 650 640 611 607 614 595 8 Switzerland2 977 1,868 1,731 1,675 1,675 1,566 1.517 1,489 1,485 9 United Kingdom 5,373 6,236 6,984' 7,074' 7,089' 7,456 7,538' 7,411 7,180 10 Other Western Europe 354 491 556 571 531 542 562 584 777 11 Eastern Europe 0 0 0 0 0 0 0 0 12 Canada 152 232 423 481 469 480 503 532 449 13 Latin America and Caribbean 416 466 616 690 706 768 768 942 999 14 Venezuela 144 103 200 248 261 302 292 292 292 15 Other Latin America and Caribbean 110 200 215 242 240 241 255 278 285 16 Netherlands Antilles 162 163 200 200 205 225 221 372 421 17 Asia 21,488 19,805 22,791' 23,575' 23,585' 24,292' 25,331' 25,966 26,110 18 Japan 11,528 11.175 9,545 9,614 9,465 9,444 9,503 9,547 9,479 19 Africa 691 591 492 592 592 617 685 715 922 20 All other -3 -3 -6 -6 -5 0 5 4 14 21 Nonmonetary international and regional organizations 5,129 5,429 4,400' 4,294 4.128' 4,696 4,478' 4,350 4,588 22 International 5,089 5,388 4.338 4,234 4,066 4,632 4,430 4,302 4,548 23 Latin American regional 41 37 60 60 60 65 44 44 36 Transactions (net purchases, or sales ( -) during period) 24 Total2 6,305 6,397' 6,072 1,757 692 -767 1,752 681 665 199 25 Foreign countries2 5,921 6,099' 6,913 1,820 795 -598 1.181 903 792 -39 26 Official institutions 3,729 1.697 3,841 1.716 762 -745 998 664 302 -334 27 Other foreign2 2,193 4,403' 3,073 104 33 146 183 240 490 295 28 Nonmonetary international and regional organizations 383 301 -844 -63 -104 -168 571 -222 -127 237 MEMO; Oil-exporting countries 29 Middle East3 -1,785 -1,014 7,672 1.427 598 140 601 990 561 335588 30 Africa4 329 -100 330 -100 100 0 25 68 30 207 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 1981 AAsssseettss 11997777 11997788 11997799 July Aug. Sept. Oct. Nov. Dec. Jan.P 1 Deposits 424 367 429 436 336 460 368 368 411 573 Assets held in custody 2 U.S. Treasury securities1 91,962 117,126 95,075 95,525 96,504 96.227 98,121 102,786 102,417 104,490 3 Earmarked gold2 15,988 15,463 15,169 15,034 15,025 14,987 14,986 14,968 14,965 14,893 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 11-RA Jan.- Dec. June July Aug. Sept. Oct. Nov. Dec.A> U.S. corporate securities STOCKS 1 Foreign purchases 20,145 22,781' 40,320 2,559' 3,110' 3.505 3,569 4,438 4,457 4,345 2 Foreign sales 17,723 21,123' 35,044 2,400' 2,800' 3,301 3,329 3,920 3,588 3,783 3 Net purchases, or sales (-) 2,423 1,658' 5,276 159' 310' 203 241 519 869 562 4 Foreign countries 2,469 1,642' 5,258 161' 308' 205 246 524 867 540 5 Europe 1,283 217 3,036 56 115 42 -83 300 633 222 6 France 47 122 479 9 62 30 -33 53 109 57 7 Germany 620 -221 184 -5 -13 -21 -18 35 121 7 8 Netherlands -22 -71 -328 -25 -27 -26 -38 -29 -58 -17 9 Switzerland -585 -519 308 -19 -82 -127 -122 83 265 -88 10 United Kingdom 1,230 964 2,502 99 188 216 153 172 251 299 11 Canada 74 552 847 24 81 13 -22 -66 263 230 12 Latin America and Caribbean 151 -19 143 27 -25 -32 -83 132 57 -12 13 Middle East1 781 688' 1,209 19' 141' 183 410 126 -109 181 14 Other Asia 189 211 -7 28 -5 -22 19 33 18 -72 15 Africa -13 -14 -1 _2 -1 0 2 2 0 -2 16 Other countries 3 7 30 8 2 21 4 -3 5 -6 17 Nonmonetary international and regional organizations -46 17 18 -2 2 -2 -5 -6 2 22 BONDS2 18 Foreign purchases 7,897' 8,803' 15,356 1,834 1,695 1,087 645 1,612 1,181 946 19 Foreign sales 5,679' 7,608' 9,968 1,152 898 589 481 739 902 826 20 Net purchases, or sales (-) 2,218' 1,195' 5,387 682 797 498 165 873f 278 121 21 Foreign countries 1,878 1,330 5,454 625 769 475 214 918 283 108 22 Europe 736 626 1,585 105 129 27 -23 284 151 -26 23 France 30 11 143 12 8 6 -2 16 12 12 24 Germany -2 58 213 - 14 -50 -11 4 30 13 22 25 Netherlands 12 -202 -65 6 -26 -7 7 8 -7 17 26 Switzerland -202 -118 54 -10 -16 -9 0 1 8 14 27 United Kingdom 930 814 1,252 110 196 53 -5 235 154 -113 28 Canada 102 80 135 5 -2 25 12 9 21 -7 29 Latin America and Caribbean 98 109 186 23 29 32 18 7 11 -4 30 Middle East1 810 424 3,416 483 600 382 194 594 105 113 31 Other Asia 131 88 117 5 13 9 14 24 -3 32 32 Africa -1 1 5 0 0 0 0 0 0 0 33 Other countries 1 1 10 4 1 0 -2 0 -1 0 34 Nonmonetary international and regional organizations 341' -134' -66 57 28 23 -49 -45 -4 13 Foreign securities 35 Stocks, net purchases, or sales (-) 527 -786 -2,239 -174' -76 -201 -558 -335 129 -68 36 Foreign purchases 3,666 4.615 7,870 495' 654 605 694 788 927 721 37 Foreign sales 3,139 5.401 10,108 669' 731 805 1,253 1,143 798 788 38 Bonds, net purchases, or sales (-) -4,185 -3,855' -835 -620' 374 -259 -84 -206 91 274 39 Foreign purchases 11,098 12,672' 17,062 1,638' 1.725 1.374 1,231 1,651 1,252 1,786 40 Foreign sales 15,283 16,527' 17,898 2,258' 1,351 1,634 1,316 1,857 1,161 1,512 41 Net purchases, or sales (-), of stocks and bonds .. -3,658 -4,641' -3,074 -794' 298 -460 -643 -561 219 206 42 Foreign countries -3,471 -3,891' -3,950 -813' -32 -384 -680 -576 196 -177 43 Europe -61 -1,646 -958 -481' 10 -176 -110 113 -30 -86 44 Canada -3,229 -2.601 -2,094 -288' -29 42 -344 -651 327 24 45 Latin America and Caribbean 221 347' 126 -25' 34 -14 7 -35 -24 -11 46 Asia 186 44' -1,131 -66' -55 -313 -223 -16 -73 -84 47 Africa -441 -61' 24 5' 1 0 -4 29 -1 -13 48 Other countries -146 25 81 44 7 76 -6 -16 -3 -7 49 Nonmonetary international and regional organizations -187 -750 876 19 330 -76 37 15 23 383 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 • February 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 June Sept. Dec. Mar. June. Sept .P 1 Total 14,879 16,950 15,519 15,700 16,950 17,373 18,472 18,406 2 Payable in dollars 11.516 13,932 12,631 12,692 13.932 14.437 15,105 15,203 3 Payable in foreign currencies2 3.363 3,018 2,888 3,008 3,018 2,936 3,366 3,203 By type 4 Financial liabilities 6.305 7,311 6,049 6,131 7,311 7,802 8,307 8,125 5 Payable in dollars 3,841 5,101 3,876 3,877 5,101 5,618 5,751 5,707 6 Payable in foreign currencies 2,464 2,210 2,173 2,254 2,210 2,184 2,556 2,418 7 Commercial liabilities 8,574 9,639 9,470 9,568 9,639 9,571 10,165 10,281 8 Trade payables 4,008 4,380 4,302 4,051 4,380 4,138 4,265 4,370 9 Advance receipts and other liabilities 4,566 5,258 5,168 5,518 5,258 5,433 5,899 5,911 10 Payable in dollars 7,675 8,830 8,755 8,815 8,830 8,819 9,355 9,496 11 Payable in foreign currencies 899 808 715 754 808 752 810 785 By area or country Financial liabilities 12 Europe 3,903 4,579 3,582 3,713 4,579 4,813 5,392 5,214 13 Belgium-Luxembourg 289 345 355 317 345 360 422 404 14 France 167 168 134 126 168 188 341 327 15 Germany 366 497 283 381 497 520 657 557 16 Netherlands 390 834 401 542 834 801 783 766 17 Switzerland 248 168 235 190 168 172 238 224 18 United Kingdom 2,110 2,372 1,955 1,957 2,372 2,568 2,783 2,761 19 Canada 244 445 290 304 445 383 482 456 20 Latin America and Caribbean 1,357 1,483 1,395 1,347 1.483 1,764 1,633 1,718 21 Bahamas 478 375 477 390 375 459 434 412 22 Bermuda 4 81 2 2 81 83 2 1 23 Brazil 10 18 19 14 18 22 25 20 24 British West Indies 194 514 189 198 514 694 700 685 25 Mexico 102 121 131 122 121 101 101 108 26 Venezuela 49 72 68 71 72 70 72 74 27 791 795 772 757 795 821 775 705 28 Japan 714 723 706 700 723 737 680 615 29 Middle East oil-exporting countries3 32 31 25 19 31 26 31 37 30 Africa 5 4 6 5 4 11 1100 11 31 Oil-exporting countries4 2 1 2 1 1 1 11 1 32 Allother5 5 4 5 5 4 10 15 21 Commercial liabilities 33 Europe 3,033 3,621 3,303 3,393 3.621 3,682 4,008 4,010 34 Belgium-Luxembourg 75 137 81 103 137 117 132 107 35 France 321 467 353 394 467 503 485 486 36 Germany 529 534 471 539 534 533 714 670 37 Netherlands 246 227 230 206 227 288 245 272 38 Switzerland 302 310 439 348 310 382 462 451 39 United Kingdom 824 1,073 997 1,015 1.073 994 1,120 1,024 40 Canada 667 868 663 717 868 720 591 590 41 Latin America 997 1,323 1.335 1,401 1,323 1,253 1,271 1,361 42 Bahamas 25 69 65 89 69 4 26 8 43 Bermuda 97 32 82 48 32 47 107 114 44 Brazil 74 203 165 186 203 228 151 156 45 British West Indies 53 21 121 21 21 20 37 12 46 Mexico 106 257 216 270 257 235 272 324 47 Venezuela 303 301 323 359 301 211 210 293 48 2,932 2,865 3,034 2,996 2,865 2,912 3,053 2,889 49 Japan 448 488 516 517 488 578 411 492 50 Middle East oil-exporting countries3 1,523 1,017 1,225 1,070 1,017 901 1,019 937 51 Africa 743 728 891 775 728 742 875 1,036 52 Oil-exporting countries4 312 384 410 370 384 382 498 633 53 Allother5 203 233 243 287 233 263 367 396 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 Statesi Millions of dollars, end of period 1979 1980 TTyyppee,, aanndd aarreeaa oorr ccoouunnttrryy 11997788 11997799 June Sept. Dec. Mar. June' Sept .P 1 Total 27,859 30,859 30,296 30,949 30,859 31,953 31,850 31,374 2 Payable in dollars 24.861 27.703 27,394 28,280 27,703 28,956 28,808 28,240 3 Payable in foreign currencies2 2.998 3.156 2,902 2,668 3.156 2,997 3,042 3,134 Bv type 4 Financial claims 16,522 18.107 19,303 19,176 18,107 19,237 18,499 18,164 5 Deposits 11,062 12.461 13,643 13,730 12,461 13,563 12,658 12,099 6 Payable in dollars 10.000 11,572 12,706 12,830 11,572 12.601 11,778 11,018 7 Payable in foreign currencies 1.061 889 938 901 889 963 879 1,081 8 Other financial claims 5.461 5,646 5,660 5,446 5,646 5.673 5,841 6,065 9 Payable in dollars 3,855 3,792 4,059 4,030 3,792 4.046 4,103 4,395 10 Payable in foreign currencies 1,606 1,854 1.601 1,416 1,854 1.627 1,737 1,670 11 Commercial claims 11.337 12,752 10,993 11.773 12,752 12,716 13,352 13,210 12 Trade receivables 10.778 12,064 10,364 11.061 12,064 12,071 12,656 12,521 13 Advance payments and other claims 559 688 628 712 688 645 695 689 14 Payable in dollars 11,006 12,339 10,629 11.421 12,339 12,309 12,926 12,827 15 Payable in foreign currencies 331 413 363 352 413 407 425 383 Bv area or countrv Financial claims 16 Europe 5.218 6,115 5,638 6,562 6,115 5,826 5,835 5,576 17 Belgium-Luxembourg 48 32 54 33 32 19 23 14 18 France 178 177 183 191 177 290 307 381 19 Germany 510 407 361 393 407 298 190 168 20 Netherlands 103 53 62 51 53 39 37 30 21 Switzerland 98 73 81 85 73 89 96 41 22 United Kingdom 4,023 5,053 4,650 5,522 5,053 4,778 4,855 4,546 23 Canada 4,482 4,812 5,146 4,767 4,812 4,882 4,778 4,798 24 Latin America and Caribbean 5,665 6,190 7,433 6,682 6,190 7,512 6,807 6,671 25 Bahamas 2,959 2,680 3,637 3,284 2,680 3,448 2,962 2.757 26 Bermuda 80 30 57 31 30 34 25 65 27 Brazil 151 163 141 133 163 128 120 116 28 British West Indies 1,288 2,001 2,407 1.838 2,001 2,591 2,393 2,283 29 Mexico 163 158 159 156 158 169 178 192 30 Venezuela 150 133 151 139 133 132 139 128 31 Asia 922 693 800 818 693 708 758 792 32 Japan 307 190 217 222 190 226 253 269 33 Middle East oil-exporting countries3 18 16 17 21 16 18 16 20 34 Africa 181 253 227 277 253 265 256 260 35 Oil-exporting countries4 10 49 23 41 49 40 35 29 36 All other5 55 44 61 69 44 43 65 68 Commercial claims 37 Europe 3,985 4,895 3,833 4,127 4.895 4,751 4,820 4,610 38 Belgium-Luxembourg 144 203 170 179 203 208 255 227 39 France 609 727 470 518 727 703 662 698 40 Germany 399 584 421 448 584 515 504 561 41 Netherlands 267 298 307 262 298 347 297 287 42 Switzerland 198 269 232 224 269 349 429 332 43 United Kingdom 827 905 731 818 905 924 908 979 44 Canada 1.096 843 1.106 1.164 843 862 895 926 45 Latin America and Caribbean 2.547 2,853 2,406 2.595 2.853 2,990 3,281 3,351 46 Bahamas 109 21 98 16 21 19 19 53 47 Bermuda 215 197 118 154 197 135 133 81 48 Brazil 629 647 503 568 647 656 697 709 49 British West Indies 9 16 25 13 16 11 9 17 50 Mexico 506 698 584 648 698 833 921 973 51 Venezuela 292 342 296 346 342 349 394 384 52 Asia 3.082 3,365 2.967 3.116 3,365 3,370 3,540 3,361 53 Japan 976 1,127 1.005 1.128 1,127 1,209 1,130 1,065 54 Middle East oil-exporting countries3 717 766 685 701 766 718 829 829 55 Africa 447 556 487 549 556 518 567 699 56 Oil-exporting countries4 136 133 139 140 133 , 114 115 135 57 All other5 179 240 194 220 240 225 249 264 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 • February 1981 3.26 DISCOUNT RATES OF FOREIGN CENTRAL BANKS Percent per annum Rate on Jan. 31, 1981 Rate on Jan. 31, 1981 Rate on Jan. 31, 1981 Country Country Country Per- Month Per- Month Per- Month cent effective cent effective cent effective Argentina 137.01 Dec. 1980 France 9.5 Aug. 1977 Sweden 12.0 Jan. 1981 Austria .. 6.75 Mar. 1980 Germany, Fed. Rep. of 7.5 May 1980 Switzerland 3.5 Feb. 1981 Belgium .. 12.0 July 1980 Italy 16.5 Sept. 1980 United Kingdom 14.0 Nov. 1980 Brazil 40.0 June 1980 Japan 7.25 Nov. 1980 Venezuela 10.0 July 1980 C D a e n n a m d a a r k .. . 1171..0110 J O a c n t . . 1 1 9 9 8 8 1 0 N No et r h w e a r y la nds 9 8 . . 0 0 O No ct v . . 1 1 9 9 8 7 0 9 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 wl hich 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 1981 CCoouunnttrryy,, oorr ttyyppee 11997788 11997799 11998800 July Aug. Sept. Oct. Nov. Dec. Jan. 1 Eurodollars 8.74 11.96 14.00 9.33 10.82 12.07 13.55 16.46 19.47 18.07 2 United Kingdom 9.18 13.60 16.59 15.82 16.45 15.89 15.87 15.84 14.64 14.20 3 Canada 8.52 11.91 13.12 10.91 10.47 10.73 11.71 12.96 16.83 16.98 4 Germany 3.67 6.64 9.45 9.59 8.93 8.90 8.99 9.37 10.11 9.41 5 Switzerland 0.74 2.04 5.79 5.29 5.52 5.57 5.40 5.53 6.61 5.68 6 Netherlands 6.53 9.33 10.60 10.06 9.97 10.31 9.63 9.59 9.69 9.36 7 France 8.10 9.44 12.18 11.87 11.20 11.81 11.69 11.26 11.52 11.38 8 Italy 11.40 11.85 17.50 17.49 17.30 17.50 18.16 17.51 17.47 17.34 9 Belgium 7.14 10.48 14.06 13.30 12.52 12.35 12.24 12.40 12.75 12.41 10 Japan 4.75 6.10 11.45 12.89 12.04 11.46 10.98 9.74 9.60 9.00 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 1981 CCoouunnttrryy//ccuurrrreennccyy 11997788 11997799 11998800 July Aug. Sept. Oct. Nov. Dec. Jan. 1 Australia/dollar 114.41 111.77 114.00 115.85 115.77 117.04 117.43 116.75 116.86 118.19 2 Austria/schilling 6.8958 7.4799 7.7349 8.0578 7.8840 7.8916 7.6714 7.3433 7.1549 7.0297 3 Belgium/franc 3.1809 3.4098 3.4247 3.5766 3.4883 3.4844 3.3875 3.2457 3.1543 3.0962 4 Canada/dollar 87.729 85.386 85.530 86.783 86.263 85.861 85.538 84.286 83.560 83.974 5 Denmark/krone 18.156 19.010 17.766 18.487 18.070 18.068 17.639 16.962 16.573 16.181 6 Finland/markka 24.337 27.732 26.892 27.699 27.353 27.428 27.122 26.452 25.903 25.752 7 France/franc 22.218 23.504 23.694 24.657 24.106 24.056 23.489 22.515 21.925 21.539 8 Germany/deutsche mark 49.867 54.561 55.089 57.245 55.867 55.883 54.280 52.113 50.769 49.771 9 India/rupee 12.207 12.265 12.686 12.875 12.849 12.903 12.932 12.868 12.608 12.567 10 Ireland/pound 191.84 204.65 205.77 214.74 210.62 210.34 203.88 194.59 189.01 185.54 11 Italy/lira .11782 .12035 .11694 .12026 .11801 .11742 .11441 .11000 .10704 .10478 12 Japan/yen .47981 .45834 .44311 .45232 .44666 .46644 .47777 .46928 .47747 .49419 13 Malaysia/ringgit 43.210 45.720 45.967 46.658 46.484 47.127 46.902 46.187 45.406 44.994 14 Mexico/peso 4.3896 4.3826 4.3535 4.3511 4.3389 4.3443 4.3324 4.3166 4.3071 4.2792 15 Netherlands/guilder 46.284 49.843 50.369 52.337 51.305 51.398 50.052 48.102 46.730 45.810 16 New Zealand/dollar 103.64 102.23 97.337 98.643 97.738 98.309 98.069 96.770 95.404 96.137 17 Norway/krone 19.079 19.747 20.261 20.762 20.555 20.676 20.421 19.938 19.370 19.087 18 Portugal/escudo 2.2782 2.0437 1.9980 2.0466 2.0163 2.0096 1.9756 1.9178 1.8773 1.8591 19 South Africa/rand 115.01 118.72 128.54 130.79 131.55 132.73 133.13 133.20 132.83 133.69 20 Spain/peseta 1.3073 1.4896 1.3958 1.4122 1.3810 1.3639 1.3423 1.3085 1.2653 1.2409 21 Sri Lanka/rupee 6.3834 6.4226 6.1947 6.3288 6.2980 6.3196 5.9707 5.8139 5.7379 5.9525 22 Sweden/krona 22.139 23.323 23.647 24.238 23.953 24.072 23.845 23.240 22.722 22.490 23 Switzerland/franc 56.283 60.121 59.697 62.203 60.527 61.012 60.185 57.942 56.022 54.907 24 United Kingdom/pound 191.84 212.24 232.58 237.32 237.04 240.12 241.64 239.41 234.59 240.29 MEMO: 25 United States/dollar1 92.39 88.09 87.39 84.65 86.09 85.50 86.59 89.31 90.99 91.38 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

A67 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 30, 1980 December 1980 A68 Commercial bank assets and liabilities, September 30, 1980 February 1981 A68 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 Special Tables • February 1981 4.20 DOMESTIC AND FOREIGN OFFICES, Commercial Banks with Assets of $100 Million or over'p Consolidated Report of Condition; Sept. 30, 1980 Millions of dollars Banks with foreign offices2 BBaannkkss wwiitthhoouutt Item IInnssuurreedd ffoorreeiiggnn Total F o o ff r i e c i e g s n 3 D o o f m fi e c s e t s i c ooffffiicceess 1 Total assets 1,403,268 1,048,133 343,261 735,105 355,134 2 Cash and due from depository institutions 282,330 242,842 126,383 116,459 39,488 3 Currency and coin (U.S. and foreign) 12,424 7,235 277 6,958 5,189 4 Balances with Federal Reserve Banks 25,567 18,577 330 18,247 6,991 5 Balances with other central banks 2,637 2,637 2,573 64 N.A. 6 Demand balances with commercial banks in United States 38,395 27.393 4,405 22,988 11,001 7 All other balances with depository institutions in United States and with banks in foreign countries 126,471 121,724 116,789 4.935 4,747 8 Time and savings balances with commercial banks in United States 5,506 2,759 1,503 1,256 2,748 9 Balances with other depository institutions in United States 395 250 113 137 145 10 Balances with banks in foreign countries 120,570 118,715 115,173 3,542 1,855 11 Foreign branches of other U.S. banks N.A. 26,749 25,668 1,081 N.A. 12 Other banks in foreign countries N.A. 91,966 89,506 2,460 N.A. 13 Cash items in process of collection 76,835 65,276 2,008 63,268 11,559 14 Total securities, loans, and lease financing receivables 1,027,612 725,675 192,942 532,733 301,937 15 Total securities, book value 214,048 123,146 10,305 112,841 90,902 16 U.S. Treasury 63,077 33,868 387 33,482 29,209 17 Obligations of other U.S. government agencies and corporations 31,931 15,914 25 15,890 16,017 18 Obligations of states and political subdivisions in United States 97,377 54,487 651 53,836 42,890 19 All other securities 21,662 18,876 9,243 9,633 2,786 20 Other bonds, notes, and debentures 11,594 9,621 8,005 l,6i5 1,973 21 Federal Reserve and corporate stock 1,642 1,200 149 1,051 422 22 Trading account securities 8,427 8,056 1,089 6,967 371 23 Federal funds sold and securities purchased under agreements to resell 45,568 24,599 260 24,339 20,969 24 Total loans, gross 777,241 580,303 182,006 398,2^7 196,938 25 LESS: Unearned income on loans 14,328 7,987 1,642 6,345 6,341 26 Allowance for possible loan loss 7,889 5,770 226 5,544 2,119 27 EQUALS: Loans, net 755,024 566,546 180,138 386,409 188,477 Total loans, gross, by category 28 Real estate loans .. 184,935 111,741 6,224 105,516 73,194 29 Construction and land development N.A. N.A. N.A. 22,031 8,002 30 Secured by farmland N.A. N.A. N.A. 772 1,161 31 Secured by residential properties N.A. N.A. N.A. 61,698 41,220 32 l-to4-family N.A. N.A. N.A. 58,396 39,246 33 FHA-insured or VA-guaranteed N.A. N.A. N.A. 4,094 2,094 34 Conventional N.A. N.A. N.A. 54,302 37,152 35 Multifamily N.A. N.A. N.A. 3,302 1,974 36 FHA-insured N.A. N.A. N.A. 220 111 37 Conventional N.A. N.A. N.A. 3,082 1,863 38 Secured by nonfarm nonresidential properties N.A. N.A. N.A. 21,016 22,812 39 Loans to financial institutions 73,515 70,600 33,858 36,742 2,915 40 REITs and mortgage companies in United States 6,215 5,478 126 5,351 738 41 Commercial banks in United States 5.989 5,413 746 4,667 575 42 U.S. branches and agencies of foreign banks N.A. 2,203 360 1,842 N.A. 43 Other commercial banks N.A. 3,211 386 2,825 N.A. 44 Banks in foreign countries 33.860 33,616 25,718 7,897 244 45 Foreign branches of other U.S. banks N.A. 401 229 173 N.A. 46 Other N.A. 33,214 25,490 7,725 N.A. 47 Finance companies in United States 9,519 9,080 349 8,730 440 48 Other financial institutions 17,932 17,014 6,919 10,096 918 49 Loans for purchasing or carrying securities 11,178 9,454 1,399 8,055 1,724 50 Brokers and dealers in securities 7,259 6,967 1,040 5,927 292 51 Other 3,919 2,488 359 2,128 1,432 52 Loans to finance agricultural production and other loans to farmers 9,917 5,880 677 5,203 4,037 53 Commercial and industrial loans 326,699 270,960 106,627 164,333 55,739 54 U.S. addressees (domicile) N.A. 163,074 7.098 155,977 N.A. 55 Non-U.S. addressees (domicile) N.A. 107,885 99,529 8,356 N.A. 56 Loans to individuals for household, family, and other personal expenditures 128,392 72,374 6,585 65.789 56,017 57 Installment loans N.A. N.A. N.A. 55,695 47,455 58 Passenger automobiles N.A. N.A. N.A. 18,021 20,617 59 Credit cards and related plans N.A. N.A. N.A. 18,521 8,718 60 Retail (charge account) credit card N.A. N.A. N.A. 14,979 7,388 61 Check and revolving credit N.A. N.A. N.A. 3,542 1,329 62 Mobile homes N.A. N.A. N.A. 3,456 3,412 63 Other installment loans N.A. N.A. N.A. 15,697 14,709 64 Other retail consumer goods N.A. N.A. N.A. 4,361 3,461 65 Residential property repair and modernization N.A. N.A. N.A. 3.751 3,606 66 Other installment loans for household, family, and other personal expenditures N.A. N.A. N.A. 7,585 7,642 67 Single-payment loans N.A. N.A. N.A. 10.094 8,562 68 All other loans 42,605 39,294 26,635 12,659 3,311 69 Loans to foreign governments and official institutions N.A. 25,661 23.530 2,131 N.A. 70 Other N.A. 13,633 3,105 10,528 N.A. 71 Lease financing receivables 12,973 11,384 2,239 9,145 1,589 72 Bank premises, furniture and fixtures, and other assets representing bank premises 18,159 11,096 1.027 10,069 7,062 73 Real estate owned other than bank premises 1,660 1,177 135 1,042 483 74 All other assets 73,508 67,343 22,775 74,801 6,165 75 Investment in unconsolidated subsidiaries and associated companies 1,496 1,458 956 502 38 76 Customers' liability on acceptances outstanding 39,612 39,298 8,241 31,057 314 77 U.S. addressees (domicile) N.A. 13,713 N.A. N.A. N.A. 78 Non-U.S. addressees (domicile) N.A. 25,585 N.A. N.A. N.A. 79 Net due from foreign branches, foreign subsidiaries. Edge and agreement subsidiaries .. N.A. N.A. 3,863 26,370 N.A. 80 Other 32,400 25,587 9,714 16,872 5,813 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A69 4.20 Continued Banks with foreign offices2 BBaannkkss IInnssuurreedd Total F o o ff r i e c i e g s n 3 D o o f m fi e c s e t s i c ww ff oo oo ii ff rr tt ff hh ee iicc ii oo gg ee uu nn ss tt 81 Total liabilities and equity capital4 1,403,268 1,048,133 N.A. N.A. 355,134 82 Total liabilities excluding subordinated debt 1,324,114 996,054 342,969 683,318 328,060 83 Total deposits 1,071,469 777,481 285,741 491,740 293,988 84 Individuals, partnerships, and corporations 749,859 493,254 100,662 392,592 256,605 85 U.S. government 2,364 1,652 226 1,427 712 86 States and political subdivisions in United States 49,811 24,906 547 24,359 24,905 87 Allother 254,710 246,277 182,048 64,229 8,433 88 Foreign governments and official institutions 41,600 41,418 33,491 7,927 182 89 Commercial banks in United States 69,886 61,975 15,448 46,527 7,911 90 U.S. branches and agencies of foreign banks N.A. 11,365 3,613 7,752 N.A. 91 Other commercial banks in United States N.A. 50,610 11,835 38,775 N.A. 92 Banks in foreign countries 143,225 142,884 133,109 9,775 341 93 Foreign branches of other U.S. banks N.A. 26,792 26,746 46 N.A. 94 Other banks in foreign countries N.A. 116,093 106,363 9,729 N.A. 95 Certified and officers' checks, travelers checks, and letters of credit sold for cash 14,724 11,392 2,259 9,133 3,332 % Federal funds purchased and securities sold under agreements to repurchase in domestic offices and Edge and agreement subsidiaries 129,551 106,084 394 105,690 23,467 97 Interest-bearing demand notes issued to U.S. Treasury and other liabilities for borrowed money 46,353 41,730 14,278 27,452 4,623 98 Interest-bearing demand notes (note balances) issued to U.S. Treasury 16,059 12,528 N.A. 12,528 3,531 99 Other liabilities for borrowed money 30,294 29,202 14,278 14,924 1,093 100 Mortgage indebtedness and liability for capitalized leases 1,805 1,224 13 1,211 581 101 All other liabilities 74,936 69,534 42,542 57,225 5,402 102 Acceptances executed and outstanding 39,728 39,414 6,580 32,834 314 103 Net due to foreign branches, foreign subsidiaries. Edge and agreement subsidiaries N.A. N.A. 26,370 3,863 N.A. 104 Other 35,208 30,120 9,592 20,528 5,087 105 Subordinated notes and debentures 5,778 4,094 292 3,802 1,684 106 Total equity capital4 73,375 47,985 N.A. N.A. 25,390 107 Preferred stock 95 10 N.A. N.A. 85 108 Common stock 14,589 9,532 N.A. N.A. 5,057 109 Surplus 25,861 16,325 N.A. N.A. 9,536 110 Undivided profits and reserve for contingencies and other capital reserves 32,830 22,118 N.A. N.A. 10,712 111 Undivided profits 31,966 21,703 N.A. N.A. 10,263 112 Reserve for contingencies and other capital reserves 864 415 N.A. N.A. 449 MEMO Deposits in domestic offices 113 Total demand 312,252 213,994 0 213,994 98,258 114 Total savings 139,609 73,078 0 73,078 66,531 115 Total time 333,867 204,668 0 204,668 129,199 116 Time deposits of $100,000 or more 183,241 133,488 0 133,488 49,753 117 Certificates of deposit (CDs) in denominations of $100,000 or more 167,788 121,903 0 121,903 45,885 118 Other 15,453 11,584 0 11,584 3,869 119 Savings deposits authorized for automatic transfer and NOW accounts 15,217 9,072 0 9,072 6,145 120 Money market time certificates of $10,000 and less than $100,000 with original maturities of 26 weeks 84,552 41,087 0 41,087 43,466 121 Demand deposits adjusted5 188,386 108,950 0 108,950 79,437 122 Standby letters of credit, total 42,544 39,759 9,104 30,655 2,785 123 U.S. addressees (domicile) N.A. 25,708 N.A. N.A. N.A. 124 Non-U.S. addressees (domicile) N.A. 14,052 N.A. N.A. N.A. 125 Standby letters of credit conveyed to others through participations (included in total standby letters of credit) 2,138 2,008 265 1,743 130 126 Holdings of commercial paper included in total gross loans N.A. N.A. N.A. 212 425 Average for 30 calendar days (or calendar month) ending with report date 127 Total assets 1,377,849 1,027,036 316,014 711,022 350,813 128 Cash and due from depository institutions 269,262 233,422 123,663 109,758 35,840 129 Federal funds sold and securities purchased under agreements to resell 45,602 23,463 485 22,978 22,139 130 Total loans 754,090 564,292 179,364 384,927 189,798 131 Total deposits 1,048,951 758,934 284,592 474,342 290,017 132 Time CDs in denominations of $100,000 or more in domestic offices 165,775 N.A. N.A. 119,997 45,778 133 Federal funds purchased and securities sold under agreements to repurchase 133,995 110,066 359 109,707 23,929 134 Other liabilities for borrowed money 29,178 28,105 13,297 14,808 1,073 135 Number of banks 1,427 177 177 177 1,250 For notes see page A73. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 Special Tables • February 1981 4.21 DOMESTIC OFFICES, Insured Commercial Banks with Assets of $100 Million or over'-*>P Consolidated Report of Condition; Sept. 30, 1980 Millions of dollars Member banks NNoonn-- IInnssuurreedd mmeemmbbeerr Total National State iinnssuurreedd 1 Total assets 1,090,240 934,284 703,094 231,190 155,956 2 Cash and due from depository institutions 155,947 141,960 94,880 47.080 13,987 3 Currency and coin (U.S. and foreign) 12,147 10,419 8,150 2,268 1,728 4 Balances with Federal Reserve Banks 25,238 25,061 18,329 6,733 176 5 Balances with other central banks 64 64 64 * * 6 Demand balances with commercial banks in United States 33,989 27,089 15,041 12,048 6,900 7 All other balances with depository institutions in United States and with banks in foreign countries 9,682 6,398 5,041 1,357 3,284 8 Time and savings balances with commercial banks in United States 4,003 2,346 2.125 221 1,657 9 Balances with other depository institutions in United States 282 104 86 18 178 10 Balances with banks in foreign countries 5,397 3,947 2,829 1,118 1,449 11 Cash items in process of collection 74,827 72,928 48,255 24,674 1,899 12 Total securities, loans, and lease financing receivables 834,670 700,610 540,683 159,927 134,060 13 Total securities, book value 203,742 163,241 123,356 39,885 40,501 14 U.S. Treasury 62,690 48,955 36,593 12,362 13,735 15 Obligations of other U.S. government agencies and corporations 31,907 24,524 19,456 5,067 7,383 16 Obligations of states and political subdivisions in United States 96,726 78,997 59,784 19,213 17,729 17 All other securities 12,419 10,765 7,523 3,242 1,654 18 Other bonds, notes, and debentures 3,588 2,262 1,705 557 1,326 19 Federal Reserve and corporate stock 1,493 1,317 973 344 176 20 Trading account securities 7,338 7,186 4.845 2,342 152 21 Federal funds sold and securities purchased under agreements to resell 45,308 38,919 30,861 8,058 6,389 22 Total loans, gross 595,308 505,229 392.237 112,993 90,005 23 LESS: Unearned income on loans 12,686 9,968 8,054 1,914 2,718 24 Allowance for possible loan loss 7,663 6,723 5.054 1,669 940 25 EQUALS: Loans, net 574,886 488,538 379,128 109,409 86,348 Total loans, gross, by category 26 Real estate loans ...' 178,711 143,602 117,708 25,895 35,108 27 Construction and land development 30,032 25,504 19,862 5,642 4,528 28 Secured by farmland 1,932 1,461 1,330 131 472 29 Secured by residential properties 102,917 83,437 69.614 13,823 19,480 30 1-to 4-family 97,641 79,260 66.502 12,758 18,381 31 FHA-insured or VA-guaranteed 6,188 5,525 4,662 863 663 32 Conventional 91,453 73,735 61,840 11,895 17,718 33 Multifamily 5.276 4.177 3,112 1,065 1,099 34 FHA-insured 331 260 138 122 71 35 Conventional 4.945 3.917 2.974 943 1,028 36 Secured by nonfarm nonresidential properties 43,829 33,200 26.901 6,299 10,629 37 Loans to financial institutions 39,657 37,734 24.119 13,615 1,923 38 REITs and mortgage companies in United States 6,089 5,753 4,408 1,344 337 39 Commercial banks in United States 5,243 4,557 2,722 1,835 686 40 Banks in foreign countries 8,142 7,908 4,244 3,664 234 41 Finance companies in United States 9.170 8,919 5.758 3,162 251 42 Other financial institutions 11.013 10,597 6.987 3,609 417 43 Loans for purchasing or carrying securities 9,779 9,230 5.606 3,624 549 44 Brokers and dealers in securities 6,219 5,994 3.034 2,960 225 45 Other 3,560 3,235 2,571 664 324 46 Loans to finance agricultural production and other loans to farmers 9,240 8,350 7,686 664 890 47 Commercial and industrial loans 220,072 194,026 146,755 47,271 26,046 48 Loans to individuals for household, family, and other personal expenditures 121.807 97,820 80,170 17,651 23,986 49 Installment loans 103.150 82,618 68,169 14.450 20,532 50 Passenger automobiles 38,637 29,553 24,377 5,175 9,085 51 Credit cards and related plans 27,239 24,425 20,105 4,320 2,814 52 Retail (charge account) credit card 22,367 20,230 16,898 3,332 2,137 53 Check and revolving credit 4.872 4,195 3,207 988 677 54 Mobile homes 6.868 5,572 5,073 499 1,295 55 Other installment loans 30,406 23,068 18,614 4.455 7,338 56 Other retail consumer goods 7,822 6,247 5,383 864 1,575 57 Residential property repair and modernization 7,357 5,420 4,438 982 1,937 58 Other installment loans for household, family, and other personal expenditures 15,227 11.401 8,792 2,609 3,826 59 Single-payment loans 18,656 15,202 12,001 3,201 3,455 60 All other loans 15,970 14,467 10,194 4.273 1.503 61 Lease financing receivables 10.734 9,912 7.338 2,574 822 63 Bank premises, furniture and fixtures, and other assets representing bank premises 17.132 14,060 11.479 2,581 3,071 63 Real estate owned other than bank premises 1,524 1,321 1,043 278 203 64 All other assets 80,966 76,333 55,009 21,324 4,634 65 Investment in unconsolidated subsidiaries and associated companies 539 512 439 73 27 66 Customers' liability on acceptances outstanding 31,371 30,726 21.374 9,352 645 67 Net due from foreign branches, foreign subsidiaries, Edge and agreement subsidiaries .. 26,370 25,119 18,695 6,424 1,251 68 Other 22,686 19,976 14.501 5,475 2,710 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A71 4.21 Continued Member banks NNoonn-- IInnssuurreedd mmeemmbbeerr Total National State iinnssuurreedd 69 Total liabilities and equity capital7 1,090,240 934,284 703,094 231,190 155,956 70 Total liabilities excluding subordinated debt 1,011,378 867,144 652,140 215,004 144,235 71 Total deposits 785,728 653,803 495,553 158,250 131,925 72 Individuals, partnerships, and corporations 649,197 533,850 417,884 115,966 115,347 73 U.S. government 2,139 1,812 1,366 446 327 74 States and political subdivisions in United States 49,265 37,361 30,486 6,875 11,904 75 Allother 72,662 70,087 39,539 30,548 2,576 76 Foreign governments and official institutions 8,108 7,860 4,853 3,007 248 77 Commercial banks in United States 54,438 52,528 30,238 22,291 1,910 78 Banks in foreign countries 10,116 9,698 4,448 5,250 417 79 Certified and officers' checks, travelers checks, and letters of credit sold for cash 12,466 10,694 6,278 4,416 1,772 80 Demand deposits 312,252 271,064 190,398 80,666 41,188 81 Mutual savings banks 1,130 963 533 430 167 82 Other individuals, partnerships, and corporations 227,699 192,153 144,922 47,230 35,546 83 U.S. government 1,558 1,347 1,064 283 211 84 States and political subdivisions in United States 10,555 8,588 6,840 1,748 1,967 85 Allother 58,844 57,320 30,760 26,559 1,525 86 Foreign governments and official institutions 2,301 2,201 917 1,284 100 87 Commercial banks in United States 47,481 46,278 25,966 20,312 1,203 88 Banks in foreign countries 9,063 8,841 3,877 4,963 222 89 Certified and officers' checks, travelers checks, and letters of credit sold for cash 12,466 10,694 6,278 4,416 1,772 90 Time deposits 333,867 272,356 216,822 55,534 61,512 91 Mutual savings banks 360 334 242 93 26 92 Other individuals, partnerships, and corporations 282,135 231,339 184,844 46,495 50,796 93 U.S. government 513 404 243 160 109 94 States and political subdivisions in United States 37,059 27,529 22,730 4,798 9,530 95 Allother 13,800 12,750 8,763 3,987 1,050 96 Foreign governments and official institutions 5,795 5,647 3,925 1,722 148 97 Commercial banks in United States 6,952 6,246 4,266 1,979 707 98 Banks in foreign countries 1,052 857 571 286 195 99 Savings deposits 139,609 110,384 88,334 22,050 29,225 100 Mutual savings banks * * * 0 0 101 Other individuals, partnerships, and corporations 137,872 109,060 87,343 21,717 28,812 102 Individuals and nonprofit organizations 130,329 103,436 82,856 20,580 26,893 103 Corporations and other profit organizations 7,543 5,624 4,487 1,138 1,919 104 U.S. government 68 61 59 2 7 105 States and political subdivisions in United States 1,651 1,245 916 329 406 106 Allother 18 17 16 2 1 107 Foreign governments and official institutions 13 12 11 1 * 108 Commercial banks in United States 5 5 5 1 109 Banks in foreign countries 110 Federal funds purchased and securities sold under agreements to repurchase 129,157 122,062 91,569 30,493 7,095 111 Interest-bearing demand notes issued to U.S. Treasury and other liabilities for borrowed money 32,075 30,308 20,205 10,103 1,767 112 Interest-bearing demand notes (note balances) issued to U.S. Treasury 16,059 14,885 11,110 3,775 1,174 113 Other liabilities for borrowed money 16,016 15,423 9,095 6,328 593 114 Mortgage indebtedness and liability for capitalized leases 1,792 1,488 1,211 277 304 115 All other liabilities 62,627 59,482 43,601 15,882 3,145 116 Acceptances executed and outstanding 33,148 32,503 23,091 9,412 645 117 Net aue to foreign branches, foreign subsidiaries, Edge and agreement subsidiaries 3,863 3,714 2,977 737 149 118 Other 25,616 23,265 17,533 5,733 2,350 119 Subordinated notes and debentures 5,486 4,408 3,225 1,182 1,078 120 Total equity capital7 73,375 62,732 47,729 15,003 10,643 MEMO: 121 Time deposits of $ 100,000 or more 183,241 155,263 119,561 35,702 27,978 122 Certificates of deposit (CDs) in denominations of $100,000 or more 167,788 141,288 108,752 32,536 26,500 123 Other 15,453 13,975 10,809 3,166 1,477 124 Savings deposits authorized for automatic transfer and NOW accounts 15,217 12,341 9,444 2,896 2,876 125 Money market time certificates of $10,000 and less than $100,000 with original maturities of 26 weeks 84,552 66,199 55,475 10,724 18,353 126 Demand deposits adjusted5 188,386 150,511 115,113 35,398 37,876 127 Total standby letters of credit 33,440 31,883 21,764 10,119 1,557 128 Conveyed to others through participation (included in standby letters of credit 1,872 1,761 1,498 262 112 129 Holdings of commercial paper included in total gross loans 637 389 280 109 248 Average for 30 calendar days (or calendar month) ending with report date 130 Total assets 1,061,835 907,918 684,258 223,660 153,917 131 Cash and due from depository institutions 145,599 132,868 88,723 44,145 12,730 132 Federal funds sold and securities purchased under agreements to resell 45,117 38,501 30,630 7,870 6,616 133 Total loans 574,726 487,719 379,216 108,503 87,006 134 Total deposits 764,359 634,265 483,555 150,709 130,094 135 Time CDs in denominations of $100,000 or more in domestic offices 165,775 139,534 107,737 31,797 26,241 136 Federal funds purchased and securities sold under agreements to repurchase 133,636 126,434 95,110 31,323 7,203 137 Other liabilities for borrowed money 15,881 15,367 8,695 6,672 514 138 Number of banks 1,427 928 769 159 499 For notes see page A73. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 Special Tables • February 1981 4.22 DOMESTIC OFFICES, Insured Commercial Bank Assets and Liabilities'? Consolidated Report of Condition; Sept. 30, 1980 Millions of dollars Member banks NNoonn-- IItteemm IInnssuurreedd mmeemmbbeerr Total National State iinnssuurreedd 1 Total assets 1,462,155 1,089,346 833,811 255,535 372,809 7 Cash and due from depository institutions 187.014 156,715 107,417 49,298 30,299 3 Currency and coin (U.S. and foreign) 17,294 12,800 10,163 2,636 4,494 4 Balances with Federal Reserve Banks 29,923 29,647 22,237 7,410 276 5 Balances with other central banks 64 64 64 * * 6 Demand balances with commercial banks in United States 48,608 31,710 19,024 12,686 16,898 7 All other balances with depository institutions in United States and banks in foreign countries 13,592 7,722 6,178 1,544 5,870 8 Cash items in process of collection 77,533 74,771 49,750 25,021 2,762 9 Total securities, loans, and lease financing receivables 1,161,898 835,335 654,112 181,223 326,564 in Total securities, book value 309,737 207,139 160,503 46,636 102,597 n U.S. Treasury 97,524 63,089 48,327 14,762 34,435 12 Obligations of other U.S. government agencies and corporations 55,490 33,849 27,378 6,471 21,641 13 Obligations of states and political subdivisions in United States 142,387 98,612 76,586 22,026 43,775 14 All other securities 14,335 11,589 8,212 3,378 2,746 15 Federal funds sold and securities purchased under agreements to resell 69,020 48,754 39,110 9,644 20,266 16 Total loans, gross 801,445 589,821 463,311 126,509 211,624 17 LESS: Unearned income on loans 19,787 12,917 10,556 2,362 6,870 18 Allowance for possible loan loss 9,593 7,555 5,764 1,791 2,038 19 EQUALS: Loans, net 772,065 569,349 446,992 122,357 202,716 Total loans, gross, by category 20 Real estate loans 255,770 175,409 144,065 31,344 80,361 21 Construction and land development 35,166 27,261 21,375 5,887 7,904 22 Secured by farmland 8,488 3,671 3,090 581 4,817 23 Secured by residential properties 149,413 103,554 86,185 17,368 45,859 24 l-to4-family 142,904 98,913 82,689 16,224 43,991 25 Multifamily 6,509 4,641 3,497 1,144 1,868 26 Secured by nonfarm nonresidential properties 62,703 40,923 33,415 7,508 21,780 27 Loans to financial institutions 40,455 38,025 24,376 13,649 2,430 28 Loans for purchasing or carrying securities 10,345 9,412 5,762 3,650 934 29 Loans to finance agricultural production and other loans to farmers 31,596 17,018 14,772 2,247 14,578 30 Commercial and industrial loans 265,526 212,694 162,707 49,987 52,832 31 Loans to individuals for household, family, and other personal expenditures 178,631 121,469 100,298 21,171 57,162 32 Installment loans 147,619 101,230 84,052 17,178 46,388 33 Passenger automobiles 63,114 39,755 33,101 6,653 23,360 34 Credit cards and related plans 28,451 25,001 20,615 4,386 3,449 35 Mobile homes 10,508 7,220 6,489 731 3,288 36 All other installment loans for household, family, and other personal expenditures 45,546 29,255 23,847 5,408 16,291 37 Single-payment loans 31,012 20,238 16,246 3,992 10,774 38 All other loans 19,122 15,794 11,332 4,462 3,328 39 Lease financing receivables 11,077 10,093 7,507 2,586 984 40 Bank premises, furniture and fixtures, and other assets representing bank premises 24,546 17,138 14,087 3,052 7,408 41 Real estate owned other than bank premises 2,052 1,505 1,192 313 547 42 All other assets 86,644 78,653 57,003 21,650 7,991 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A73 4.22 Continued Member banks Item Total National 43 Total liabilities and equity capital7 1,089,346 833,811 255,535 44 Total liabilities excluding subordinated debt 1,350,749 1,008,836 771,634 237,202 45 Total deposits 1,114,581 790,453 610,771 179,682 46 Individuals, partnerships, and corporations 944,626 657,229 521,782 135,447 47 U.S. government 2,952 2,134 1,646 488 48 States and political subdivisions in United States 77,453 48,437 39,921 8,516 49 Allother 73,774 70,594 39,976 30,618 50 Certified and officers' checks, travelers checks, and letters of credit sold for cash 15,776 12,060 7,446 4,613 51 Demand deposits 409,792 311,909 225,334 86,575 52 Individuals, partnerships, and corporations 315,616 229,325 176,455 52,870 53 U.S. government 2,148 1,583 1,265 318 54 States and political subdivisions in United States 16,634 11,223 9,071 2,152 55 Allother 59,617 57,719 31,097 26,622 56 Certified and officers' checks, travelers checks, and letters of credit sold for cash 15,776 12,060 7,446 4,613 57 Time deposits 493,307 337,157 271,334 65,823 58 Other individuals, partnerships, and corporations 421,226 288,674 232,918 55,756 59 U.S. government 713 479 313 166 60 States and political subdivisions in United States 57,257 35,161 29,254 5,907 61 Allother 14,112 12,842 8,848 3,995 62 Savings deposits 211,482 141,388 114,104 27,284 63 Corporations and other profit organizations 10,761 6,921 5,584 1,337 64 Other individuals, partnerships, and corporations 197,023 132,309 106.825 25,484 65 U.S. government 90 71 67 4 66 States and political subdivisions in United States 3,562 2,053 1,596 457 67 Allother 45 33 30 2 68 Federal funds purchased and securities sold under agreements to repurchase 133,437 124,344 93,503 30,841 69 Interest-bearing demand notes (note balances) issued to U.S. Treasury and other liabilities for borrowed money 33,426 31,032 20,827 10,205 70 Mortgage indebtedness and liability for capitalized leases 2,128 1,617 1,313 305 71 All other liabilities 67,176 61,389 45,220 16,169 72 Subordinated notes and debentures 6,271 4,733 3,516 1,217 73 Total equity capital7 105,135 75,778 58,661 17,117 MEMO 74 Time deposits of $100,000 or more 219,729 169,337 131,678 37,659 75 Certificates of deposit (CDs) in denominations of $100,000 or more 200,677 153,972 119,664 34,309 76 Other 19.052 15,365 12,014 3,351 77 Savings deposits authorized for automatic transfer and NOW accounts 19,026 14,120 10,968 3,153 78 Money niarket time certificates of $10,000 and less than $100,000 with original maturities of 26 weeks 150,598 93,382 78.281 15,101 79 Demand deposits adjusted5 281,860 188,878 148.016 40,862 80 Total standby letters of credit 34,462 22,091 Average for 30 calendar days (or calendar month) ending with report date 81 Total deposits 1,091,098 770,059 598,063 171,996 82 Number of banks 14,416 5,411 4,425 986 1. Effective December 31, 1978, the report of condition was substantially revised 4. Equity capital is not allocated between the domestic and foreign offices of for commercial banks. Commercial banks with assets less than $100 million and banks with foreign offices. with domestic offices only were given the option to complete either the abbreviated 5. Demand deposits adjusted equal demand deposits other than domestic comor the standard set of reports. Banks with foreign offices began reporting in greater mercial interbank and U.S. government less cash items in process of collection. detail on a consolidated domestic and foreign basis. These tables reflect the varying 6. Domestic offices exclude branches in foreign countries and in U.S. territories levels of reporting detail. and possessions, subsidiaries in foreign countries, and all offices of Edge Act and 2. All transactions between domestic and foreign offices of a bank are reported agreement corporations wherever located. in "Net due from" and "Net due to" (lines 79 and 103). All other lines represent 7. This item contains the capital accounts of U.S. banks that have no Edge or transactions with parties other than the domestic and foreign offices of each bank. foreign operations and reflects the difference between domestic office assets and Since these intra-office transactions are erased by consolidation, total assets and liabilities of U.S. banks with Edge or foreign operations excluding the capital liabilities are the sum of all except intra-office balances. accounts of their Edge or foreign subsidiaries. 3. Foreign offices include branches in foreign countries and in U.S. territories N.A. This item is unavailable for all or some of the banks because of the lesser and possessions, subsidiaries in foreign countries, and all offices of Edge Act and detail available from banks without foreign offices, the inapplicability of certain agreement corporations wherever located. items to banks that have only domestic offices, and the absence of detail on a fully consolidated basis for banks with foreign offices. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 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 STEPHEN H. AXILROD, Staff Director ANTHONY F. COLE, Special Assistant to the Board EDWARD C. ETTIN, Deputy Staff Director WILLIAM R. MALONI, Special Assistant to the Board MURRAY ALTMANN, Assistant to the Board FRANK O'BRIEN, JR., Special Assistant to the Board PETER M. KEIR, Assistant to the Board JOSEPH S. SIMS, Special Assistant to the Board STANLEY J. SIGEL, Assistant to the Board JAMES L. STULL, Manager, Operations Review Program NORM AND R. V. BERNARD, Special Assistant to the Board LEGAL DIVISION DIVISION OF RESEARCH AND STATISTICS NEAL L. PETERSEN, General Counsel JAMES L. KICHLINE, Director ROBERT E. MANNION, Deputy General Counsel JOSEPH S. ZEISEL, Deputy Director J. VIRGIL MATTINGLY, JR., Associate General Counsel MICHAEL J. PRELL, Associate Director GILBERT T. SCHWARTZ, Associate General Counsel ROBERT A. EISENBEIS, Senior Deputy Associate Director MARYELLEN A. BROWN, Assistant to the General Counsel JARED J. ENZLER, Senior Deputy Associate Director CHARLES R. MCNEILL, Assistant to the General Counsel ELEANOR J. STOCKWELL, Senior Deputy Associate Director C M O IC R H N A E E L L I US E . K B . L H E U IE R R L , E A Y s , s i J s R ta ., n t A ss G is e t n an er t al Ge C n o e u r n al s el Counsel* J D . O C N O A R L T D L A L. N D K O G. H N P , E R D E ep T, u t D y ep A u s t s y o c A ia s t s e o cia D te ir ect D or ir ector HELMUT F. WENDEL, Deputy Associate Director MARTHA BETHEA, Assistant Director OFFICE OF THE SECRETARY JOE M. CLEAVER, Assistant Director BARBARA R. LOWREY, Assistant Secretary R D O A B V E ID R T E . M . L I F N I D SH SE E Y R , , A A s s s s i i s s t t a a n n t t D D i i r r e e c c t t o o r r JAMES MCAFEE, Assistant Secretary LAWRENCE SLIFMAN, Assistant Director * JEFFERSON A. WALKER, Assistant Secretary FREDERICK M. STRUBLE, Assistant Director STEPHEN P. TAYLOR, Assistant Director DIVISION OF CONSUMER LEVON H. GARABEDIAN, Assistant Director (Administration) AND COMMUNITY AFFAIRS DIVISION OF INTERNATIONAL FINANCE JANET O. HART, Director GRIFFITH L. GARWOOD, Deputy Director EDWIN M. TRUMAN, Director JERAULD C. KLUCKMAN, Associate Director ROBERT F. GEMMILL, Associate Director GLENN E. LONEY, Assistant Director GEORGE B. HENRY, Associate Director DELORES S. SMITH, Assistant Director CHARLES J. SIEGMAN, Associate Director SAMUEL PIZER, Staff Adviser DALE W. HENDERSON, Assistant Director DIVISION OF BANKING LARRY J. PROMISEL, Assistant Director SUPERVISION AND REGULATION RALPH W. SMITH, JR., Assistant Director JOHN E. RYAN, 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

A75 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 THEODORE E. ALLISON, 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 CLYDE H. FARNSWORTH, JR., Director BRUCE M. BEARDSLEY, Associate Director WALTER ALTHAUSEN, Assistant Director UYLESS D. BLACK, Assistant Director CHARLES W. BENNETT, Assistant Director GLENN L. CUMMINS, Assistant Director LORIN S. MEEDER, Assistant Director ROBERT J. ZEMEL, Assistant Director P. D. RING, Assistant Director DAVID L. ROBINSON, Assistant Director RAYMOND L. TEED, Assistant Director DIVISION OF PERSONNEL DAVID L. SHANNON, Director JOHN R. WEIS, Assistant Director CHARLES W. WOOD, Assistant Director OFFICE OF THE CONTROLLER JOHN KAKALEC, Controller GEORGE E. LIVINGSTON, Assistant Controller DIVISION OF SUPPORT SERVICES DONALD E. ANDERSON, Director ROBERT E. FRAZIER, Assistant Director WALTER W. KREIMANN, Associate Director *On loan from the Federal Reserve Bank of Richmond. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

76 Federal Reserve Bulletin • February 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 ROGERGUFFEY EMMETTJ.RICE HENRYC. WALLICH FRANK E. MORRIS LAWRENCE K. Roos WILLIS J. WINN FREDERICK H. SCHULTZ MURRAY ALTMANN, Secretary RICHARD G. DAVIS, Associate Economist NORMAND R. V. BERNARD, Assistant Secretary THOMAS DAVIS, Associate Economist NEAL L. PETERSEN, General Counsel ROBERT EISENMENGER, Associate Economist JAMES H. OLTMAN, Deputy General Counsel EDWARD C. ETTIN, Associate Economist ROBERT E. MANNION, Assistant General Counsel GEORGE B. HENRY, Associate Economist STEPHEN H. AXILROD, Economist PETER M. KEIR, Associate Economist ALAN R. HOLMES, Adviser for Market Operations JAMES L. KICHLINE, Associate Economist ANATOL BALBACH, Associate Economist EDWIN M. TRUMAN, Associate Economist JOHN DAVIS, Associate Economist JOSEPH S. ZEISEL, Associate Economist PETER D. STERNLIGHT, Manager for Domestic Operations, System Open Market Account SCOTT E. PARDEE, Manager for Foreign Operations, System Open Market Account FEDERAL ADVISORY COUNCIL 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. HENLEY, 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

A77 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 Sister Eileen M. Egan Donald L. Henry Memphis 38101 Patricia W. Shaw 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 Josefina A. Salas-Porras Joel L. Koonce, Jr. Houston 77001 Jerome L. Howard J. Z. Rowe San Antonio 78295 Lawrence L. Crum 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 John C. Hampton Angelo S. Carella Salt Lake City 84125 Wendell J. Ashton A. Grant Holman Seattle 98124 George H. Weyerhaeuser Gerald R. Kelly * Additional offices of these Banks are located at Lewiston, Maine 04240; Windsor Locks, Connecticut 06096; Cranford, New Jersey 07016; Jericho, New York 11753; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; and Milwaukee, Wisconsin 53202. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 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, Cana- each. 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; o 10 r o $ r .3 5 m o e r a e c h o . f E sa ls m ew e h is e s r u e e , t $ o 2 0 o . n 0 e 0 a p d e d r r y e e s a s, r $ o 1 r 3 . $ 5 . 0 5 0 p e e r a c y h e . a r FEDE a U R d T A d I L L r e I R Z ss E A , S T $ E I 1 R O . V N 5 E . 0 1 M e 9 a E 7 c 8 A h . S . 4 U 0 R p ES p . O $ F 1 . C 7 A 5 P e A a C ch IT ; Y 1 0 A N o D r m C o A r P e A t C o I T o Y n e THE FEDERAL RESERVE ACT, as amended through December 1976, with an appendix containing provisions of certain THE BANK HOLDING COMPANY MOVEMENT TO 1978: A other statutes affecting the Federal Reserve System. 307 COMPENDIUM. 1978. 289 pp. $2.50 each; 10 or more to 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

A79 CONSUMER EDUCATION PAMPHLETS THE GNMA-GUARANTEED PASSTHROUGH SECURITY: MAR- Short pamphlets suitable for classroom use. Multiple cop- KET DEVELOPMENT AND IMPLICATIONS FOR THE ies available without charge. GROWTH AND STABILITY OF HOME MORTGAGE LEND- ING, by David F. Seiders. Dec. 1979. 65 pp. Alice in Debitland FOREIGN OWNERSHIP AND THE PERFORMANCE OF U.S. The Board of Governors of the Federal Reserve System BANKS, by James V. Houpt. July 1980. 27 pp. Consumer Handbook To Credit Protection Laws PERFORMANCE AND CHARACTERISTICS OF EDGE CORPORA- The Equal Credit Opportunity Act and . . . Age TIONS, by James V. Houpt. Feb. 1981. 54 pp. The Equal Credit Opportunity Act and . . . Credit Rights in Printed in Full in the Bulletin Housing The Equal Credit Opportunity Act and . . . Doctors, Lawyers, Small Retailers, and Others Who May Provide In- AN ASSESSMENT OF BANK HOLDING COMPANIES, by Robert cidental Credit J. Lawrence and Samuel H. Talley. January 1976. The Equal Credit Opportunity Act and . . . Women Fair Credit Billing The Federal Open Market Committee REPRINTS Federal Reserve Bank Board of Directors Most of the articles reprinted do not exceed 12 pages. Federal Reserve Banks Federal Reserve Glossary Measures of Security Credit. 12/70. How to File A Consumer Credit Complaint Revision of Bank Credit Series. 12/71. If You Borrow To Buy Stock Assets and Liabilities of Foreign Branches of U.S. Banks. If You Use A Credit Card 2/72. Truth in Leasing Bank Debits, Deposits, and Deposit Turnover—Revised Se- U.S. Currency ries. 7/72. What Truth in Lending Means to You Rates on Consumer Instalment Loans. 9/73. New Series for Large Manufacturing Corporations. 10/73. The Structure of Margin Credit. 4/75. STAFF STUDIES Industrial Electric Power Use. 1/76. Studies and papers on economic and financial subjects that Revised Series for Member Bank Deposits and Aggregate Reare of general interest. serves. 4/76. Industrial Production—1976 Revision. 6/76. Summaries Only Printed in the Bulletin Federal Reserve Operations in Payment Mechanisms: A Requests to obtain single copies of the full text or to be Summary. 6/76. added to the mailing list for the series may be sent to Pub- The Commercial Paper Market. 6/77. lications Services. The Federal Budget in the 1970's. 9/78. Redefining the Monetary Aggregates. 1/79. TIE-INS BETWEEN THE GRANTING OF CREDIT AND SALES OF Implementation of the International Banking Act. 10/79. INSURANCE BY BANK HOLDING COMPANIES AND OTHER U.S. International Transactions in 1979: Another Round of LENDERS, by Robert A. Eisenbeis and Paul R. Schweit- Oil Price Increases. 4/80. zer. Feb. 1979. 75 pp. Perspectives on Personal Saving. 8/80. INNOVATIONS IN BANK LOAN CONTRACTING: RECENT EVI- The Impact of Rising Oil Prices on the Major Foreign Indus- DENCE by Paul W. Boltz and Tim S. Campbell. May trial Countries. 10/80. 1979. 40 pp. MEASUREMENT OF CAPACITY UTILIZATION: PROBLEMS AND TASKS, by Frank de Leeuw, Lawrence R. Forest, Jr., Richard D. Raddock, and Zoltan E. Kenessey. July 1979. 264 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A80 Index to Statistical Tables References are to pages A-3 through A-73 al the 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, 27,68-73 Deposits (See also specific types) Domestic finance companies, 37 Banks, by classes, 3, 17, 18-21, 27, 69, 71, 73 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, 68, 70, 72 Dividends, corporate, 35 (See also Foreigners) Banks for Cooperatives, 33 EMPLOYMENT, 44, 45 Bonds (See also U.S. government securities) Eurodollars, 25 New issues, 34 Yields, 3 FARM mortgage loans, 39 Branch banks, 15,21,54 Farmers Home Administration, 39 Business activity, nonfinancial, 44 Federal agency obligations, 4, 10, 11, 12, 32 Business expenditures on new plant and equipment, 36 Federal and federally sponsored credit agencies, 33 Business loans (See Commercial and industrial loans) 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, 69,71, 73 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, 68-73 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, 69, 71, 73 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, 17,68,70,72 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, 69, 71, 73 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

A81 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 agreements and federal funds, 6, 18, 19, 20 Interbank loans and deposits, 17 Reserve requirements, member banks, 8 Interest rates Reserves Bonds, 3 Commercial banks, 17, 68,70, 72 Business loans of banks, 24 Federal Reserve Banks, 11 Federal Reserve Banks, 3,7 Member banks, 3, 4, 5, 14,17 Foreign countries, 66 U.S. reserve assets, 53 Money and capital markets, 3, 25 Residential mortgage loans, 38 Mortgages, 3, 38 Retail credit and retail sales, 40, 41, 44 Prime rate, commercial banks, 24 Time and savings deposits, 9 SAVING International capital transactions of the Flow of funds, 42, 43 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, 18-20,68,70, 72 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, 68,70, 72 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, 17,18-21,69,71,73 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, 68, 70, 72 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

A82 The Federal Reserve System Boundaries of Federal Reserve Districts and Their Branch Territories Helena Minneapolis Detroit Chicago \Salt^kea 'r°»C!SCo t} Denver Kansas City t. Louts Charlotte, Nashvilk Attle Rock Birminghai*A®lant2 Dallas® Houston t tan Antonio MB ALASKA 0 LEGEND ~mm 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