greenbooks · December 16, 1974

Greenbook/Tealbook

Prefatory Note

The attached document represents the most complete and accurate version available based on original copies culled from the files of the FOMC Secretariat at the Board of Governors of the Federal Reserve System. This electronic document was created through a comprehensive digitization process which included identifying the bestpreserved paper copies, scanning those copies, 1 and then making the scanned versions text-searchable. 2 Though a stringent quality assurance process was employed, some imperfections may remain. Please note that some material may have been redacted from this document if that material was received on a confidential basis. Redacted material is indicated by occasional gaps in the text or by gray boxes around non-text content. All redacted passages are exempt from disclosure under applicable provisions of the Freedom of Information Act.

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A two-step process was used. An advanced optical character recognition computer program (OCR) first created electronic text from the document image. Where the OCR results were inconclusive, staff checked and corrected the text as necessary. Please note that the numbers and text in charts and tables were not reliably recognized by the OCR process and were not checked or corrected by staff.

Content last modified 6/05/2009.

CONFIDENTIAL (FR)

SUPPLEMENT CURRENT ECONOMIC AND FINANCIAL CONDITIONS

Prepared for the Federal Open Market Committee

By the Staff Board of Governors of the Federal Reserve System

December 13, 1974

SUPPLEMENTAL NOTES The Domestic Nonfinancial Economy Industrial production declined further by an estimated 2.3 per cent in November.

At 122.0 per cent of the 1967 base, the total

index was 4.3 per cent below a year earlier.

Reductions in output

were widespread among consumer goods, business equipment, and industrial materials. Auto assemblies declined 16 per cent in November to an annual rate of 7.0 million units.

As sales of new domestic cars

continued well below production, further output cutbacks are being made in December.

Production of consumer household goods was reduced

sharply further in November and output of nondurable consumer goods eased off further.

Production of business equipment declined 1.0 per

cent as weaknesses in some equipment industries became apparent.

Out-

put of construction products continued to drop. Production of steel declined in November, in part because of the coal strike, and there were reductions in output of other durable and nondurable industrial materials.

- 2INDUSTRIAL PRODUCTION (Seasonally adjusted)

Month ago

Per cent changes Annual Rate Year QIII QII QI ago

125.6 124,9 122.0

-2.3

-4.3

- 6.6

1.9

- .3

123.7 123,0 121.4

-1.3

-3.1

- 5.8

2.6

Final products Consumer goods Durable goods Nondurable goods Business equipment

122.8 129.4 128.6 129.6 132,3

120.9 126. 120.4 129.0 131.0

-1,4 -1.6 -5.0 - .2 -1.1

-2.2 -5.2 -13.1 -1.9 2.5

3.0 - 6.5 -11.5 2.5 -26.6 14.7 - 5.2 -2.2 .6 7.2

Intermediate products Construction products

126.9 124.4 122.7 127.5 123.7 120.2

-1.4 -2.8

-6.4 -10.1

- 4.6 - 5.1

1.2 -2.7

-4.3 -7.7

128.8 128.0 122.9

-4.0

-6.5

- 6.4

- .3

-1.6

Total Products, total

Materials r/ p/ e/

Indexes 1967=100 1974 Sept. Oct. Nov. (r) (P) (e)

122,6 128.6 126.8 129.3 132.4

2.3 - .6 -5.1 3.1 4.0

Revised. Preliminary. Estimated. The Wholesale price index for November rose 1.2 per cent, seasonally adjusted (not at an annual rate), to a level 23.5 per cent above a year earlier.

The increase was propelled largely by higher

sugar prices and a further large, but decelerating, increase in industrial commodities. The index of farm and food products increased 2.5 per cent seasonally adjusted, chiefly as a result of increases for sugar, milk, fresh fruits and vegetables, and meats.

-3The index of industrial commodities rose 0.9 per cent, seasonally adjusted, paced by increases for machinery and equipment and chemicals.

Also higher were prices for furniture and household

durables, nonmetallic minerals, metals and metal products, and paper products. month.

Lumber and wood products declined for the seventh consecutive

Textile products and hides and skins also declined, and the

fuels and power group was unchanged. WHOLESALE PRICES (Per cent changes at seasonally adjusted compound annual rates)¹ Nov '73 Dec.'72 June '73 Dec.'73 June '74 Sept.'74 Oct.'74 to to to to to to to Nov.'74 June'73 Dec. '73 June'74 Sept.'74 Oct. '74 Nov.'74 All commodities

23.5

20.2

10.9

18.2

35.2

29.4r

14.6

Farm and food products

15.0

45.8

10.4

-11.5

59.2

61.5r

29.9

Industrial commodities Crude materials Intermediate materials Finished goods Producer Consumer, excl.food Nondurable, excl. foods Durable

27.4 31.3 30.7 21.7 22.6 21.3

10.6 23.0 12.2 6.3 5.4 6.7

10.9 40.4 11.7 7.1 5.3 8.1

34.0 44.3 38.0 24.5 20.0 26.8

28.3 29.1 32.2 22.7 31.8 18.5

13.4 -5.2 12.6 23.5 29.1 20.8

10.3 -3.1 9.0 8.8 16.6 4.9

25.6 14.4

8.5 4.5

11.3 2.8

35.6 13.2

19.1 15.6

15.6 37.0

6.2 2.7

42.1 51.Or 29.4 -1.1 18.5 27.0 15.4 Consumer finished foods Note: Farm and food products include farm products and processed foods and feeds. 1/ Not compounded for one-month changes.

-4The surge in sugar prices was a major factor in the sharp rise in the farm and food index and in the increase in the overall WPI last month.

For example, if the sugar and confectionery group were

excluded from the farm and food products index, the index would have declined 0.4 per cent, unadjusted, and would have been about unchanged, seasonally adjusted.

If the sugar and confectionery group were

excluded from the total WPI, the increase would have been 0.3 per cent, unadjusted, and an estimated 0.5 per cent, seasonally adjusted. WHOLESALE PRICES (Percentage changes) October to November, 1974 Seasonally adjusted Not seasonally adjusted Including sugar* Excluding sugar* Including sugar* Excluding sugar* WPI Farm and food products

1.0

0.3

1.2

0.5e

2.1

-0.4

2.5

O.Oe

Processed foods and feeds 3.4 -0.9 3.5 *Sugar and confectionery group in processed foods and feeds.

-0.8e

CORRECTIONS Part I: Table I-8, line 4 from bottom of the table, Housing starts, private, QIII 1974, the figure should be 81.0 (not 16.0) per cent compound annual rate. Part II: Page 4, line 3 from the bottom, the figure should be 3.4 per cent (not 3.2). Part II: Page 6, line 7 of full paragraph, the figure should be 14 per cent (not 15).

-5INTEREST RATES

Highs

Lows

Nov. 18

Dec.

9.34(11/20)

8 .06(12/il)

Short-Term Rates Federal funds (wkly. avg.) 3-month Treasury bills (bid) Comm. paper (90-119 day) Bankers' acceptances Euro-dollars CD's (NYC) 90-119 day Most often quoted new 6-month Treasury bills (bid) Comm. paper (4-6 mo.) Federal agencies CD's (NYC) 180-269 day Most often quoted new

1-year Treasury bills (bid) Federal agencies CD's (NYC) Most often quoted new Prime municipals

13.55(7/3)

8.81(2/27)

7.38 9.00 9.00 10.25

9.74<8/23) 6.93(2/6) 12.25(7/17) 7.75(2/22) 12.50(8/15) 7.75(2/26) 14.38(7/16) 8.25(2/18)

7.52 8.88 8.85 9.88

12.00( 9/4) 7.88(2/20)

8.50(11/20)

8.75(12/11)

9.86(8/23) 6.80(2/19) 12.13(7/10) 7.50(2/22) 10.63(8/28) 7.16(2/19)

7.52 8.63 8.08

7.18 8.75 7.61

11.90(8/21) 7.50(2/27)

8.25(11/20)

8.00(12/11)

9.65(8/23) 6.37(2/15) 10.18(8/26) 7.01(2/19)

7.23 8.05

'6.75 7.65

9.75(7/17) 7.00(2/27) 6.50(7/12) 3.70(2/15)

8.00(11/20) 4.40(11/22)

8.00(12/11) 4.60<12/13)

8.79(8/23) 6.72(2/14) 8.72(8/26) 7.40( 1/4)

7.61 7.94

7.26 7.83

9.40(10/8) 7.73( 1/2) 8.85 10.53(12/2) 8.54( 1/2) 10.50

8.85 10.50

Intermediate and Long-Term Treasury coupon issues 5-years 20-years Corporate Seasoned Aaa Baa New Issue Aaa Utility Municipal Bond Buyer Index Mortgage--average yield in FNMA auction

10.61(10/2) 8.05(2/13)

9.17(11/21)

9.60(12/12)

7.15(12/12)5.16( 2/6)

6.53(11/21)

7.15(12/12)

10.59( 9/9) 8.43(2/25)

9.81(11/18)

9.61(12/2)

SUPPLEMENTAL APPENDIX A DEMAND DEPOSIT OWNERSHIP SURVEY *

Revised data for the demand deposit ownership survey for the third quarter of 1974 indicated slower growth in gross IPC demand deposits (not seasonally adjusted) at all commercial banks.

This slow-

down continues the weakness reflected in the second quarter data, and is also consistent with changes in M1 over the two quarters (Table 1). Although the data are not seasonally adjusted, comparison with third quarter data for earlier survey years, and with the mean change in deposits calculated over the third quarters for the years 1970-74, indicates that changes in demand deposits in each ownership category were weaker than historical experience would have suggested (with the exception of foreign IPC deposits).

Although the third quarter weak-

ness was spread across ownership categories, Table 2 indicates that IPC demand deposit growth of nonfinancial businesses and households were especially weak at non-weekly reporting banks.

1/ Prepared by Steven M. Roberts, Economist, Division of Research and Statistics.

Banking Section,

Table 1

CHANGE IN LEVEL OF GROSS IPC DEPOSITS BY OWNERSHIP CATEGORY, ALL COMMERCIAL BANKS ¹ (Billions of dollars, not seasonally adjusted)

Financial business QII QIII QIV

Nonfinancial business QI QII QIII QIV

Househlds

Year

1970 1971 1972

n.a. 1.0 1.7

n.a. -.2 -2.3

--.2 --

.3 .6 .9

n.a. -6.4 -5.8

n.a. 3.3 5.0

2.7 1.9 4.0

4.6 6.9 8.4

n.a. .8 -3.9

1973 1974

-. 2 -. 2

-. 1 -. 6

.2 -. 3

-7.1 -7.7

3.8 3.7

1.7 2.1

7.8

-.8

-.1

-6.8

4.0

2.5

QIII--Mean 70-74

Foreign QIII

Year

QII

1970 1971 1972 1973 1974

n.a.

n.a. -. 1

QIII--Mean 70-74

QIV

-. 2

-.1

n.a.

-. 1

.3 1.6

.1 -. 1

-. 5

-. 2

.3 -. 1

-. 1

.1 .2

-1.4 0

All other QIII QI n. a.

QIV

QIII

QIV

n.a. 1.8 5.7

2.4 1.2 2.6

2.2 1.2 2.4

-. 3 .6

2.2 .8

1.8 .7

-.7

2.6

1.7

QII

Total QIII

n. a.

n.a.

QII

4.9

-4.2 -6.3 -8.0 -8.9

7.1 6.3 3.8

5.3 2.1 7.0 4.0 2.2

-. 3

-6.8

5.5

4.1

-1.3

Changes are based on daily averages of last-month-in-quarter to last-month-in-quarter, not annualized. Data are before deduction for cash items in process of collection. Figures may not add to totals due to rounding. 1/

QIV 7.3 9.7 12.6 9.7

Table 2 THIRD QUARTER CHANGE IN LEVEL OF GROSS IPC DEMAND DEPOSITS BY OWNERSHIP CATEGORY, AT WEEKLY REPORTING BANKS VS. NON-WEEKLY REPORTING BANKS ¹ (Billions of dollars, not seasonally adjusted)

Financial business

Households

Nonfinancial business

Year

WRB

Non-WRB

TOTAL

WRB

Non-WRB

TOTAL

WRB

Non-WRB

TOTAL

1970 1971 1972 1973 1974

-. 1 -. 3 -. 4 .3 -. 2

.1 .1 .4 -. 1 -. 1

0 -. 2 0 .2 -. 3

.9 .4 1.8 -. 1 1.1

1.8 1.5 2.2 1.8 1.0

2.7 1.9 4.0 1.7 2.1

.9 .2 .5 .1 .3

1.6 1.1 2.1 1.7 .4

2.4 1.2 2.6 1.8 .7

Year

WRB

Foreign Non-WRB

TOTAL

WRB

All other Non-WRB

TOTAL

WRB

Total Non-WRB

TOTAL

1970 1971

-. 2 -. 1

0 0

-. 2 -. 1

.2 -. 5

.2 -. 3

.4 -. 8

1.7 -. 2

3.7 2.4

5.3 2.1

1972

2.0

5.0

7.0

1973 1974

.1 0

0 -.1

.1 -.1

.3 0

-. 1 -.1

.2 -.1

.7 1.2

3.3 1.1

4.0 2.3

Changes are based on daily averages of last-month-in-quarter to last-month-in-quarter, not annualized. Data are before deduction for cash items in process of collection. Only data for total and weekly reporting banks are reported; thus figures for non-weekly reporting banks are residuals. Figures may not add to totals due to rounding. /

SUPPLEMENTAL APPENDIX B LENDING PRACTICES SURVEY, NOVEMBER 15,

1974

Loan demand was reported to be weaker or unchanged from three months earlier at the large majority of respondents to the Quarterly Survey of Changes in Bank Lending Practices taken November 15. Only 8 of the 124 responding banks predicted that loan demand would be stronger in the coming three months, while 53 banks were predicting moderation in loan demand. The weakening in demand that was being experienced and is expected for the coming quarter contrasts with the two previous surveys in which most banks had reported that credit demands from business customers were stronger and expected to intensify. The strengthening of loan demand anticipated in the May survey was borne out by subsequent loan growth, but following the August survey, growth of business loans has slackened sharply relative to the pace earlier in the year. The moderation in the intense pressure for credit led to some easing in their practices relating to interest rates charged at onethird of the respondents. Much of the easing occurred at the smaller banks (under $1 billion in deposits) on the panel, with 40 per cent of such banks reporting easing of rates. Three-quarters of the large banks on the panel indicated firmer or unchanged interest rate policies. Since the prime rate at major banks fell well over 100 basis points between the survey taken in September and the most recent survey, the unchanged or firmer policies reported must be interpreted relative to other short-term rates, particularly the commercial paper rate, which fell much more than the prime rate in the interval between surveys. Apparently, the banks reporting firmer interest rate policies--25 in all--are not lowering their rates as rapidly as market rates have dropped. In the nonprice terms of business lending, there was essentially no easing, and in some indicators of nonprice terms, further tightening had occurred at many of the respondents. Such tightening was reported by over 30 per cent of the respondents on compensating balance requirements, over 40 per cent on standards of credit worthiness in the evaluation of loan applications, and more than half on policies regarding use of the proceeds of the loan, particularly with respect to loans for speculative and "non-productive" uses. The tightening of the terms of lending follow severe tightening indicated in the May and August surveys. Nonprice terms of lending to financial businesses also have become more firm in the last three months. The tightening was most obvious in policies concerning new or larger commitments, with more than 40 per cent of the respondents reporting firmer policies in this area.

- B2 There was virtually no easing in the restrictive policies toward mortgages adopted earlier in the year, and a substantial minority of the banks became more restrictive in limiting mortgages in their portfolios.

Prepared by Paul W. Boltz, Economist, Banking Section, Division of Research and Statistics.

NOT FOR QUOTATION OR PUBLICATION

TABLE 1

QUARTERLY SURVEY OF CHANGES IN BANK LENDING PRACTICES AT SELECTED LARGE BANKS IN THE U.S.¹ COMPARED TO THREE MONTHS NOVEMBER 15, 1974 (STATUS OF POLICY ON (NUMBER OF BANKS & PERCENT OF TOTAL BANKS REPORTING) MUCH

TOTAL BANKS

STRONGER PCT

BANKS

PCT

EARLIER)

MODERATELY STRONGER

ESSENTIALLY UNCHANGED

MODERATELY WEAKER

BANKS

PCT

MUCH WEAKER BANKS

PCT

STRENGTH OF DEMAND FOR COMMERCIAL AND INDUSTRIAL LOANS (AFTER ALLOWANCE FOR BANK'S USUAL SEASONAL VARIATION) COMPARED TO THREE MONTHS AGO

124

100.0

12.9

53.2

33.1

ANTICIPATED

124

100.0

6.5

50.8

42.7

DEMAND IN

NEXT 3 MONTHS

ANSWERING QUESTION BANKS LENDING TERMS

PCT

MUCH FIRMER POLICY BANKS

PCT

MODERATELY FIRMER POLICY

ESSENTIALLY UNCHANGED POLICY

MODERATELY EASIER POLICY

BANKS

PCT

TO NONFINANCIAL BUSINESSES

AND CONDITIONS:

INTEREST RATES CHARGED

100.0

3.2

16.9

46.0

COMPENSATING OR SUPPORTING BALANCES

100.0

5.6

26.6

67.8

0.0

STANDARDS

100.0

15.3

28.2

56.5

0.0

100.0

7.3

21.0

70.9

0.8

100.0

1.6

24.2

70.2

NEW CUSTOMERS

106.0

25.0

23.4

44.3

LOCAL

100.0

2.4

18.7

74.0

100.0

19.5

25.2

51.2

OF CREDIT WORTHINESS

MATURITY OF

TERM LOANS

REVIEWING CREDIT LINES OR ESTABLISHED

33.9

LOAN APPLICATIONS

CUSTOMERS

SERVICE AREA CUSTOMERS

NONLOCAL SERVICE AREA. CUSTOMERS

1/ SURVEY OF LENDING PRACTICES AS OF NOVEMBER 15, 1974.

AT 125 LARGE BANKS REPORTING

IN THE FEDERAL

RESERVE QUARTERLY INTEREST RATE SURVEY

MUCH EASIER POLICY BANKS

PCT

NOT FOR

QUOTATION OR PUBLICATION

TABLE

ANSWERING QUESTION BANKS

PCT

(CONTINUED)

MUCH FIRMER POLICY BANKS

PCT

MODERATELY FIRMER POLICY

ESSENTIALLY UNCHANGED POLICY

MODERATELY EASIER POLICY

BANKS

PCT

MUCH EASIER POLICY BANKS

PCT

FACTORS RELATING TO APPLICANT ² VALUE AS DEPOSITOR OR SOURCE OF COLLATERAL BUSINESS

124

100.0

12.1

22.6

65.3

INTENDED USE OF THE LOAN

124

100.0

19.4

29.8

49.2

LENDING TO

"NONCAPTIVE" FINANCE

COMPANIES

TERMS AND CONDITIONS: INTEREST RATES

CHARGED

COMPENSATING OR

SUPPORTING BALANCES

100.0

1.6

12.9

68.6

16.9

100.0

4.8

12.9

82.3

0.0

ENFORCEMENT OF BALANCE REQUIREMENTS

100.0

10.5

16.9

72.6

0.0

ESTABLISHING NEW OR LARGER CREDIT LINES

100.0

21.0

22.6

54.0

2.4

ANSWERING QUESTION BANKS WILLINGNESS TO MAKE

PCT

CONSIDERABLY LESS WILLING BANKS

PCT

MODERATELY LESS WILLING

ESSENTIALLY UNCHANGED

MODERATELY MORE WILLING

BANKS

PCT

BANKS

16.9

69.4

PCT

OTHER TYPES OF LOANS

100.0

TERM LOANS TO BUSINESSES

12.1

100.0

4.1

16.3

75.5

SINGLE FAMILY MORTGAGE LOANS

100.0

15.7

16.5

66.1

MULTI-FAMILY MORTGAGE LOANS

100.0

21.7

16.7

61.6

ALL OTHER MORTGAGE LOANS

100.0

18.9

21.3

59.8

CONSUMER

INSTALMENT LOANS

PARTICIPATION LOANS WITH CORRESPONDENT BANKS

123

100.0

8.1

11.4

73.2

LOANS TO BROKERS

123

100.0

8.1

13.0

77.3

2/ FOR THESE FACTORS, FIRMER MEANS THE FACTORS WERE CONSIDERED MORE IMPORTANT CREDIT REQUESTS, AND EASIER MEANS THEY WERE LESS IMPORTANT.

IN MAKING DECISIONS FOR APPROVING

PCT

CONSIDERABLY MORE WILLING BANKS

PCT

SUPPLEMENTARY APPENDIX C MONTHLY LOAN COMMITMENT SURVEY OCTOBER 31, 1974 *

The most recent Monthly Loan Commitment Survey taken at 137 large banks at the end of October indicates that total unused commitments increased substantially during October, but not enough to compensate for the decline in September; in October unused commitments remained below the year's peak reached in August. However, it is apparent from the twelve months of data now available in the monthly commitments survey that unused commitments, while large, have not been growing as rapidly as loans made under commitments. Total unused commitments to commercial and industrial firms, nonbank financial institutions, and for mortgages grew at a not seasonally adjusted annual rate of 3.7 per cent between November 1973 and October 1974, while loans made under commitments in such categories Commitments to nonbank financial institutions grew 20.5 per cent. at the 137 responding banks were essentially unchanged in the period, and commitments for mortgages fell at almost a 30 per cent annual rate. Thus, the 8.2 per cent growth of C&I unused commitments accounted for all the growth in unused commitments. With the relatively slow growth of unused commitments, the utilization ratios (the proportion of loans outstanding under commitment to total commitments) have risen steadily in nearly all categories of loans reported on the survey. However, with a current ratio of 50 per cent, the potential for takedowns at these banks is substantial. Though not keeping pace with loans made under commitments, the stock of unused commitments at major banks continues to be very large--despite the evidence from the Lending Practices Surveys and discussions with bankers that commitments policies became extremely In the present atmosphere restrictive in the spring and remain so. in financial markets, corporate borrowers place a high value on formal commitments for credit from major banks, and the banks are reported to be raising fees for commitments in response to the demand. However, the data thus far available do not provide an adequate basis for The weakening in evaluating the effectiveness of these policies. economic activity that is expected to continue for some time will likely act as a brake on the pace of takedowns in the short-term, but as economic activity picks up, the stock of unused commitments will likely again place a heavy burden on banks to meet the credit

needs of their business customers.

Prepared by Paul W. Boltz, Economist, Banking Section, Division of Research and Statistics.

NOT FOR QUOTATION OR PUBLICATION

MONTHLY SURVEY OF BANK LOAN COMMITMENTS AT SELECTED LARGE U.S. BANKS ¹ (AS OF OCT. 31, 1974) TABLE 1 - UNUSED

COMMITMENTS

(DOLLAR AMOUNTS IN BILLIONS)

I I I

(1) FIRMS TOTAL

CHG I

NOVEMBER 30

83.81

DECEMBER 31

83.21 -( ).71

0.01 I1

FEBRUARY 28

85.21

2.51 0.91

I MARCH 31

I 85.41

MAY 31

I1 86.81 I1

JUNE 30

86.71 88.31

1.61

3.71

5.31 -4.61 4.91

5.51

4.51

10.31

I AUGUST 31

90.81

2.91

6.71

OCTOBER

88.61

90.71

- 2.51

2.41

OCT 74

86.71

0.71

6.41 -4.51

I I 5.71-10.41

I NOV 73 -

54.71

1 18.21 -1.31

23.51

18.51

24.01

I 0.01

I 4.51

I 0.01

I1 56.91

1.31.

2.11

-0.51 4.11

18.41 -0.41

24.21

0.71

25.01

3.41

(8)

4.51 -1.71 4.81

7.11

4.91

1.711

-1.6

5.01

2.51

I 27.81

I 27.11 -2.71 I I1 28.11 3.91 I 28.41 1.11 I 28.11 -1.31

8.91

0.41

-2.41 122.01

18.61 18.81

1.11

25.11

I 19.21 20.31

26.11

6.21 4.11I1

21.21 I1 2.01 21.61 I 23.31 7.81

0.21 I 3.91

27.91

2.41 I 4.51

28.01

0.41

26.71

3.61 29.011

19.61

1.91

55.41 -1.31

5.01 -0.21

27.01 -3.91

1.11

25.61

1.71

56.91 2.71 I 56.21 -1.31 I 56.91 1.21 58.31

57.41

56.41 56.41

4.81 -4.11

27.01 I1

4.51 -6.41

0.31

0.31 120.71 -0.8

8.21 -1.21

122.01

8.11 -1.91

120.91 -0.9

I1 4.71 4.71

5.71

26.41

0.81 1

4.71 -0.81 4.51 -4.11

27.11

2.81 I 26.51 -2.31

122.51 1 7.21 -8.31 125.11 7.91 -2.61

6.81 -5.6

I 2.31 I I

4.31 -4.31 .7

27.41

0.41

4.71 -0.41

27.21

3.41

6.51

-4.81 -2.8

1 -0.11

8.01

-2.81

LOAN COMMITMENT SURVEY ARE SELECTED WEEKLY REPORTING BANKS WITH TOTAL DEPOSITS NOTE:

1.0

26.11 -3.31

2.41 I 56.11 -3.71

8.31

NUMBER OF BANKS

119.11 -1.0

2.4 1 -0.81 123.01 0.8 I 8.61I 8.31 8.31 -3.71 121.71 -1.0 8.71

AVERAGE

1/ BANKS PARTICIPATING IN THE MONTHLY OF $100 MILLION OR MORE.

(9)

TOTAL I REAL ESTATE I COMMITMENTS MORTGAGES I AMT It CHG AMT % % CHG CHG AMT % CHG AMT I I I 0.0 0.01 120.4 0.0O 8.91

I. 0 6.01 0.91

57.11

I 5.91

I SEPTEMBER 30

-1.01

I -8.21

6.31

24.01

I 1.81

55.01

I -2.31

6.91

0.01

I 10.61

6.31

24.3)

5.81 6.41

18.91 0.01 I 18.51 -2.31

(61 I (7) I C I I NON-BANK I OTHER I FINANCIAL INSTITUTIONS COMMITMENTS AMT % CHG AMT % CHG I

I -( 0.11

(3) (5) I (4) I C C I I I C I I REVOLVING TERM LOANS & CONFIRMED CREDITS REV. CREDITS LINES AMT I% CHG AMT % CHG AMT % CHG % CHG % CHG AMT AMT

5.51

JULY 31

I 0.11

I I I I

0.01

85.41 -( 0.71

APRIL 30

I 5.31

I 86.01

TERM LOANS CHG AMT %

JANUARY 31

(2) C &I

MINOR INCONSISTENCIES MAY OCCUR DUE TO ROUNDING. **

121.81 124.51

1.2 2.1 -2.6 2.2

1 122.01

0.3

NOT FOR QUOTATION OR PUBLICATION

MONTHLY SURVEY OF BANK LOAN COMMITMENTS AT SELECTED LARGE U.S. BANKS ¹ (AS OF OCT. 31, 1974) TABLE 2 - LOANS UNDER COMMITMENTS ²

(DOLLAR AMOUNTS IN BILLIONS)

NOVEMBEk 30 DECEMBER 31 JANUARY 31 FEBRUARY 28 MARCH 31 APRIL 30

(1) I (21 I (3) I (4) (5) I (6) I (7) I (8) I (9) c I I C I I C I CC I I C & I C S NON-BANK I REAL TOTAL I FIRMS I TERM I REVOLVING ITERM LOANS IE CON FIRMED I OTHER IFINANCIAL ESTATE I COMMITMENTS TOTAL I LOANS I CREDITS IREV. CREDITSI LINES ICOMMITMENTS IINSTITUTIONSI MORTGAGES I ANT 12 CHtr ANT il CNCi AMT I r c I AMT It runr. ~W" i i V . AMT Ma l 1I CHGI AMT IZ CHGI AMT I1 CHG AMT AMT IZ CHGI CHGI AMT .11 CMH 12 I I 195 I I I I I I I I 70.31 0.01 18.51 0.01 0.01 38.01 0.01 25.81 0.01I 6.51 0.01 18.11 0.01 18.01 0.01 106.41 0.0 19.51 1 1 I I I1 I 71.91 2.31 19.01 2.81 19.51 -0.11 38.51 1.31 26.61 3.41 6.71 3.01 19.81 9.71 18.21 1.31 109.91 3.3 I I -7.11 I I 70.81 -1.41 18.91 -0.51 19.61 0.51 38.41 -0.31 25.51 -4.21 6.81 1.41 18.41 18.21 0.01 107.51 -2.2 I 1 1 I1 I I 1 10.2 72.31 2.11 19.11 1.21 20.11 2.51 39.21 2.11 26.51 3.71 6.61 -2.81 18.31 -0.41 18.31 1.3 0.21 108.9) I I1 I I 1 77.01 6.51 19.41 1.31 21.01 4.71 40.41 3.01 29.81 12.51 6.81 3.51 19.31 5.61 5.3 18.41 0.61 114.81 I1 1 I1 I 79.21 2.81 20.51 5.61 21.31 1.01 41.71 3.21 30.91 6.61 -3.11 18.41 -0.21 118.21 20.61 6.51 2.9 I1

MAY 31 JUNE 30 JULY 31

79.81 82.11 I 83.71

0.81 20.61 I1 I 2.91 20.91

1 1.91

21.51

0.91

21.61

1.81

42.31

1.01

22.11

84.61

1.11

SEPTEMBER 30

86.91

2.71

23.01

OCTOBER 31

85.01 -2.11

NOV 73 - OCT 74 AVERAGE

79I 79.41

1.8

2.21

23.31

1.81

24.61

22.4121.5I 1 -4.011

24.81

1.41

21.91

22.01I

20.51

7.21

7.91

20.51 -0.61

2.31

43.01

1.71

32.11

5.51

7.11 -1.31

22.21

8.71

3.71

44.51

3.41

32.21 32.21

0.41

22.41

0.81

0.01

7.01 7.11 -0.31 7.01 0.71

AUGUST 31

30.41 -1.51

18.41

0.01 118.71

0.4

I1 I1

3.11

1.41 1.41

1.51

45.31

1.81

32.21

5.41

47.01

3.71

0.91

46.31 -1.41

32.91 2.21 I 31.61 -3.71

2.21

42.41

1.68

30.01

2.01

22.11 -1.81

6.91

0.91 1

18.31 -0.21 122.71 3.4 I 1 19.51 6.21 125.61 2.3 I 19.01 -2.51 125.61 0.0 I 19.11 0.61 128.41 2.2 1 19.31 1.11 126.41 -1.5

6.91

0.81

20.71

18.6 18.61

22.01 -1.9|

7.11 -1.01

22.51

2.11

2.01

. 0.71 118.81

NUMBER OF BANKS

1/ BANKS PARTICIPATING IN THE MONTHLY LOAN COMMITMENT SURVEY ARE SELECTED WEEKLY REPORTING BANKS WITH TOTAL DEPOSITS OF $100 MILLION OR MORE. 2/ LOANS UNDER COMMITMENTS ARE DEFINED AS ALL LOANS UNDER COMMITMENTS CURRENTLY OR PREVIOUSLY IN FORCE, LESS REPAYMENTS OF THE PRINCIPAL. THE REPORTED DATA ARE DISTORTED BY TAKEDOWNS OF LOAN COMMITMENTS BY OVERSEAS BRANCHES OF US BANKS AND LOAN SALES.

1.6 1.6

MONTHLY SURVEY OF BANK LOAN COMMITMENTS AT SELECTED LARGE U.S. BANKS ¹ (AS OF OCT. 31, 1974)

NOT FOR QUOTATION OR PUBLICATION

TABLE 3 - UTILIZATION RATIO ²

(PERCENTAGES)

(1) I

FIRMS TOTAL

(2) C c I TERM LOANS

(3) I C REVOLVING CREDITS

(71 (6) I 1 (5) I (4) I NON-BANK C c I I I C c I CCI OTHER I FINANCIAL ITERM + REV.I CONFIRMED I INSTS. ICOMMITMENTSI I LINES I

(8) REAL

ESTATE MORTGAGES

I I

(9) TOTAL

110) SHORT -TERM TOTAL3/

I 47.0

39.7

67.2 67°2

48.0

41.0

39.6

67.7

46.8

39.4

39.2

68.0

47.0

39.6

57.9

40.8

68.9

48.5

41.7

35.8

57.2

43.3

68.8

49.5

42.8

62.8

34.8

S 60.1

43.1

69.0

49.3

42.5

53.6

62.3

36.3

61.3

46.0

69.4

50.4

44.1

77.3

53.0

62.5

36.1

59.9

46.0

71.2

50.6

43.9

48.2

76.6

52.4

61.9

35.6

60.3

44.8

72.5

50.1

43.2

SEPTEMBER 30

49.5

77.8

53.2

62.7

37.0

S 61.0

45.9

73.7

51.3

44.5

OCTOBER 31

48.4

79.0

51.6

61.5

35.5

62.3

44.7

74.9

50.4

43.3

47.5

77.2

52.5

62.1

34.4

69.9

49.1

42.1

45.6

77.6

50.8

61.0

31.9

59.0

DECEMBER 31

46.4

77.4

51.4

61.6

32.8

JANUARY 31

45.4

78.2

51.8

61.9

FEBRUARY

45.7

77.6

52.1

MARCH 31

47.4

77.0

APRIL 30

48.1

MAY 31

39.4

67.7

60.1

42.3

31.0

58.8

62.0

31.7

57.7

53.3

62.6

34.6

76.2

53.3

62.5

47.9

76.8

53.5

JUNE 30

48.6

75.2

JULY 31

48.7

AUGUST 31

NOVEMBER

NOV 73 - OCT AVERAGE

596

42.9

59.6

42.9

NUMBER OF BANKS

1/ 2/ 3/

BANKS PARTICIPATING IN THE MONTHLY LOAN COMMITMENT SURVEY ARE SELECTED WEEKLY REPORTING BANKS WITH TOTAL DEPOSITS OF $106 MILLION OR MORE. THE UTILIZATION RATIO IS THE RATIO, EXPRESSED AS A PERCENTAGE, OF LOANS UNDER COMMITMENTS TO THE SUM OF UNUSED COMMITMENTS AND LOANS UNDER COMMITMENTS EXCLUDES REAL ESTATE LOANS AND TERM LOANS.

NOT FOR QUOTATION OR PUBLICATION

MONTHLY SURVEY OF BANK LOAN COMMITMENTS AT SELECTED LARGE U.S. BANKS ¹ (AS OF OCT. 31, 1974) TABLE 4

- NEW COMMITMENTS

(DOLLAR AMOUNTS IN BILLIONS)

(8) (9) (7) I I (5) I (6) I (4) 1 (3) (1) I (2) 1 TOTAL NON-BANK I REAL I CCI I C C I I C I I C I C e I I I ESTATE I COMMITMENTS FINANCIAL I OTHER FIRMS TERM I REVOLVING ITERM LOANS SI CONFIRMED I MORTGAGES I TOTAL I LINES ICOMMITMENTS INSTITUTIONS! LOANS I IREV. CREDITSI CREDITS It CG AMT I r CGI AMT It CHGI AMT IZ CHGL AMT 12 CHGI AMLT AMT It CHGI AMT CLHG!. AMT 12 CtE I1 CHGt AMT

4.91

0.01

1.21

1.11

0.01

5.01

1.11

1.31

22.61

I NOVEMBER 30 DECEMBER 31 JANUARY 31

4.81 -3.01

0.81-39.61

FEBRUARY 28

I I 4.51 -6.41 I I

0.81

MARCH 31

6.21

1.31

59.71

38.11

6.91 11.01

APRIL 30 MAY 31

I JUNE 30 JULY 31 AUGUST 31 SEPTEMBER 30 OCTOBER 31 NOV 73 -

OCT 74

2.41

1.21 -8.81 I I 1.31 6.21

6.21 -5.81 I I 7.21 15.81 I I 6.61 -9.11 I I 6.31 -4.51 I I 6.11 -2.71 6.0 2. I I 6.01 2.71

1.21

-5.71

2.31

0.01

1.81

0.01

I 1.11 -5.81 I I 0.91-21.91 I I 0.91 5.91 I I

2.41

8.01

1.71-31.71 I I 1.71 3.91 I I

0.01

1.81 -0.91 2.11

0.81

22.11

1.11 22.11

0.81

I 1 0.91-11.11 I I

22.61

2.11 -3.01

0.61-30.21

2.61 50.41

2.71 31.21

0.61 10.61

1.61 28.51

I 2.81

3.01

8.41

0.61 -0.51

1.51 -5.91 I 1 5.51 1.61

1.21

0.81

2.6) 58.11

1.01-15.81

I I 2.41 -5.31

1.01 -5.71

I I 2.31 -5.01

I 0.81-13.4|

2.21

I 1 I I I 1.11 0.21

1.61

I 1.61

I -5.91

I 8.11

I I 2.81 -0.41

I 2.81 I 3.81 f 3.51 I 3.31 I 3.01

0.31 I 33.51 1 -8.51 I -5.21 I -8.11

4.1

2.71

2.81 -5.41

0.71

9.71

2.61 -5.91

0.61 -8.31

4.71

I 0.01 I

0.71-13.31

1.31 41.31

I 9.11

I 0.91 I

1.41 27.41 I I 1.21-12.21

2.71

0.91

0.61 -2.71

1.11 -6.31

2.41 -9.41

0.51-13.91

1.21

0.61 11.51

I I 0.81 -34.2'1 I I

2.41 -1.51 2.41 -0.91

0.71-24.31 I I 0.91 27.71 I I 1.11 18.71

0.71

19.91

1.11 29.71

I I

2.41

3.21

0.71

0.51

9.11

1.0L

I I

4.21

0.81

0.01

1.01 34.31 I I 0.91-13.21

0.81 -8.21 I I 0.91 11.41 I I 0.91 1.71 I I

0.91 -1.71 I I 0.91 -4.11

I I 0.71-22.01 I I 4.81 0.71 I I

0.51-24.11 0.51 -6.41

8.11 33.2 1 8.91 10.7 8.91 -0.2 8.31 -6.6 9.01 8.6 I 8.51 -5.6 7.71

-9.4

7.71

0.5

7.81

2.2

0.81 -2.51

NUMBER OF BANKS

1/ BANKS PARTICIPATING IN THE MONTHLY LOAN COMMITMENT SURVEY ARE SELECTED WEEKLY REPORTING BANKS WITH TOTAL DEPOSITS OF $100 MILLION OR MORE. MINOR INCONSISTENCIES MAY OCCUR DUE TO ROUNDING. **

7.11 7.7 I 6.71 -5.6 1 6.11 -9.1

-2.51

AVERAGE

** NOTE:

0.0

I 0.8

6.61

SUPPLEMENTAL APPENDIX D GERMmAN POLICY ANNOUNCEMENT OF DECEMBER 12,

1974*

Following two days of Cabinet deliberations, on December 12 the German government announced measures to restimulate the faltering domestic economy. In a joint press conference of the Ministers of Economics, Finance and Labor the government presented a package which includes substantial investment incentives, increased assistance to the unemployed, and use of part of the countercyclical funds held on deposit with the Bundesbank. As described by the Ministers, the main features of the new program are summarized below: 1) Investment Incentives. A bonus of 7.5 per cent will be paid to enterprises ordering investment goods or commencing projects for the seven months between December 1, 1974 and June 30, 1975. In order to assure swift impact on the economy, goods so ordered must be delivered by July 1, 1976, and qualifying construction projects must be completed by July 1, 1977. An exception will apply to delivery of goods on major energy projects, where delivery will be permitted as late as July 1, 1978. The investment bonus method is reported to have been chosen in preference to tax credits, since the latter might have little incentive effect for enterprises currently losing money and having little if any tax liability.

This measure will require special legislation. 2) Government Investment.

The Federal Government, using a

portion of the countercyclical funds to be drawn from special deposits held with the Bundesbank, will spend DM 1.13 billion in priority sectors such as construction and energy. Projects will be chosen for their immediate impact and low followup costs. This portion of the program will supplement the DM 950 million in sectoral assistance, primarily to construction, announced in September. 3) Labor Assistance. A further DM 600 million will be spent by the Federal Labor Office to combat rapidly rising unemployment, which in November reached almost 800,000 out of a labor force of 23 million. Seasonally adjusted, the German unemployment rate has climbed steadily this year, from 1.6 per cent in January to a level of 3.8 per cent in November; and the number of workers on short-time reached 461,000 in the same month. Under the new program, employers who hire the unemployed

prior to

May 1, 1975, will receive special incentive payments over a six

month period. In addition, the Federal Labor Office will provide relocation incentives to unemployed workers and make available supplementary

benefits to workers on short-time for a period of two years, as against the one year period presently in effect.

Prepared by John F. Wilson, Economist, World Payments and Economic Activity Section, Division of International Finance.

D -2

The estimated cost during 1975 of the programs outlined above

is DM 1.73 billion, which will be met by the government's drawing DM 3.5 billion of the countercyclical funds raised through the now-expired temporary stability surcharges on investment expenditures and on personal income taxes. The drawing represents about one-third of the DM 10 billion in such funds. The difference between the drawing and cost of the December 12 program will reportedly be applied to the budget deficit for 1975, which for the Federal and State Governments is now estimated to total some DM 50 billion. With the measures announced on December 12, overall German policy has clearly shifted toward combating the recessionary influences which have deepened throughout 1974. The stimulus provided by the package is meant to take effect quickly, and will supplement previously announced tax reform measures going into effect in January, 1975, and the recent easing of monetary policy, as described in the December 11

Greenbook. In early December the Bundesbank Central Council also announced, for the first time, a target of 8 per cent growth for the monetary base during 1975.

Cite this document

APA

Federal Reserve (1974, December 16). Greenbook/Tealbook. Greenbooks, Federal Reserve. https://whenthefedspeaks.com/doc/greenbook_19741217_part2

BibTeX

@misc{wtfs_greenbook_19741217_part2,
  author = {Federal Reserve},
  title = {Greenbook/Tealbook},
  year = {1974},
  month = {Dec},
  howpublished = {Greenbooks, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/greenbook_19741217_part2},
  note = {Retrieved via When the Fed Speaks corpus}
}