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CONFIDENTIAL R&S 100-2735 July 27, * BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Division of Research and Statistics POSITION OF REPORTING DEALERS IN GOVERNMENT SECURITIES Since the middle of January, when the position of dealers in Government securities amounted to only 100 million dollars (excluding bills), the lowest level since 19U3* their position has risen. Just preceding each of the June 1 and July 1 certificate maturities, it aggregated about 800 million dollars. As of July 22, the last date at this writing, these holdings totalled a little over 500 million dollars, which is just about the average for 19^1-7 • As is usual, much of the fluctuation in the dealers* position results from dealer acquisition of maturing certificates, which afford the right of exchange for the new issue, and of new certificates on a when-issued basis just prior to refunding dates, and from dealer sales of the new issue just after refunding dates. Dealers were slow in ridding themselves of new June and July certificates, but at the moment their holdings of these issues are said not to be excessive. Their aggregate position in certificates and notes, while not large by the standard of other years, amounts to 200 million dollars as compared with 100 million in mid-May and less than 50 million in mid-January. Holdings of restricted bonds have increased since the midJanuary low from 50 million to the neighborhood of 200 million dollars and holdings of bank eligible bonds have increased from nothing to around 150 million dollars. The holdings of bank eligible bonds are approximately evenly divided between taxable and partially tax-exempt issues, and are mostly callable between 1 and 5 years. Neither the position in restricted nor that in eligible bonds is as large as in most recent years, although the recent position in restricted bonds is the largest since July ^6 Much of the increase in the dealers1 bond position consists of restricted bonds which the dealers have had to absorb since the termination in late May of a short period of rising prices. That price rise had followed the May 12 announcement by the Treasury that June and July certificate maturities would be refunded at 1 l/8 per cent. Within less than two weeks after the announcement, dealers' holdings of restricted and bank eligible bonds had each declined about 50 million dollars. However, dealers first sought and obtained a substantial amount of bank eligible bonds, thus contributing to the price rise, and then disposed of an even greater amount, whereas restricted bonds held by dealers declined gradually as prices rose. Between late May and mid"July, dn the other hand, dealers1 holdings of restricted bonds increased by 100 million dollars, more than replacing sales made during the short price rise, and their holdings of bank eligible bonds increased 50 million dollars to about the level held on May 12. Their holdings of both restricted and eligible bonds declined somewhat in the week just past, following the close on July 15 of the special offering of F and G bonds. - 2 - Holdings of Treasury bills oscillate sharply as dealers acquire new bills each Thursday and sell them prior to the next Thursday. There was a tendency, however, for dealers* holdings of bills to increase during May, June and the first half of July# Since the May 12 announcement these holdings have ranged between 1^0 million and 300 million dollars for the most part, whereas during most of the December-April period bill holdings ranged from 100 million to 200 million dollars. c Confidential O POSITION OF REPORTING DEALERS IN GOVERNMENT SECURITIES BILLIONS OF DOLLARS BILLIONS OF DOLLARS DAILY 1.2 1.2 1-0 1.0 TOTAL NET POSITION 8 8 (EXCLUDING TREASURY BILLS) .2 TREASURY BONDS TREASURY BONDS (BANK ELIGIBLE) (RESTRICTED) JULY AUG. SEPT. 1947 OCT. NOV. DEC. JAN. FEB. MAR. APR. MAY JUNE 1948 JULY POSITION OF REPORTING DEALERS IN GOVERNMENT SECURITIES BILLIONS OF DOLLARS BILLIONS OF DOLLARS DAILY 2 1.2 TOTAL NET POSITION 1.0 8 •4 JULY AUG. OCT. SEPT. 1947 NOV. DEC JAN FEB. MAR. APR. MAY JUNE 1948 JULY INTEREST-BEARING DIRECT SECURITIES, ISSUES BY U. S. GOVERNMENT (In m i l l i o n s of d o l l a r s ) Total outstanding Issue 13.360 Treasury b i l l s System Account holdings Total Change from July 28 7,735 July 21 -229 Mayl2 -210 Yield or price V Change from July 28 July 21 2 / .995 -.005 Certificates: 7/fe l9l+8-June 7/8 7/8 7/8 July July July H H ,I Oct. " j " Oct. "K" 1,1*67 / i9l+9-^ a n u a r y 2,592 l/B> 2,189 February 1/8 5,555 March 1,055 /6 April U,301 1/3 June 1/8 July 6,078 22,588 Total Treasury notes: 1 1/2 Sept. 15, I9J48 3,7148 1 Oct. 1, I9I48 14,092 1 1/8 Jan. 1, 191+9 5,555 Total T r e a s u r y bonds: Partially tax-exempt bank eligibles 2 1/2 Sept. I9U8 2 Dec. 3 1/fe Dec. 191+9-52 2 1/2 Dec. 19^9-55 2 1/2 Sept 1950-52 2 3A June 1951-5U Sept 1951-55 2 l/k Dec. 1951-55 2 June 1955-55 2 l/h June 1951+-56 2 7/fe Mar. 1955-60 2 3 A Sept, 1956-59 2 3/1+ June 1958-63 A Dec. 1960-65 Total l/ -275 1 -503 -679 11,575 160 258 175 171 700 + 2 - • k mum - 10 6 •1+9 87 h/125 • 5 + 11 + 2 •725 +2*682 +792 1,035 176 - 3 2 * 7 - 1+ - 7 1.953 - 5 - 1+ 2.632 !+,957 Ih2 - 1+51 571 1,786 1,186 1,627 755 1,118 725 681 2,611 982 919 1,1*85 15,588 32 78 71 86 20 hk 16 3 28 21 67 3 6 559 - 12 93 .93 .93 1.00 1.03 1.03 1.02 1.10 1*10 +.01 +.01 .93 .93 1.00 +.01 +.01 -.09 -.09 -•0? . 100*06 100.14 102.28 102.00 102.28 IOU.13 105.16 103.H+ 103.06 1QM6 107.27 108,X6 108.28 108.30 -.01 -.01 -.02 ••01 .11 .07 •13 .10 .11+ .15 .12 .09 .18 .22 .23 .18 .12 .11+ +.01 «•»•• -.01 ..ok -.02 -.02 -.02 •.02 ..06 -.09 -•08 -.08 »ao -.09 -!o9 -.06 -.07 -.07 Treasury b i l l s , certificates and notes quoted on a yield basis, corresponding .to the mean of the bid and ask quotation. 2 / Average rate of discount on new issue of Treasury b i l l s . - 2- Issue Treasury bonds Taxable: Bank eligibles 1 3/2+ June 191+8 2 June 191+9-51 2 S e p t . 191+9-51 2 Dec. I9I+9-5I 2 Mar. I95O-52 2 S e p t . 1950-52 1 1/2 Dec. 1950 2 S e p t . 1951-53 2 Dec. 1951-55 2 1/2 Mar. 1952-51+ 2 June 1952-51+ 2 1/1+ June 1952-55 2 Dec. 1952-51+ 2 l/2 Mar. 1956-58 2 1/1+ Sept. 1956-59 2 1/2 Sept. I967-72 Total Re--4• r i c t e d bonds :• able 2 1/4+ June I959-62 2 1/1+ Dec. 1959-62 2 1/2 June 1962-67 2 1/2 Dec. 1963-66 2 l/2 June I96I+-69 2 1/2 Dec. I96U-69 2 l / 2 Mar, I965-7O 2 1/2 Mar. 1966-71 2 1/2 June 1967-72 2 1/2 Dec. 1967-72 Total outstanding IYice System Account holdings Support . priced/ Total Change from Change from May 12 July 21 |May 12 July 28 Julv 26 Julv 28 Julv 211 — 1,011+ 1,292 2,098 1,963 i+,939 2,635 7,966 510 1,021+ « 102 5,825 306 78 8,662 351 85 1,501 1,1+1+9 3,823 2,716 — mm 239 I69 135 399 — 5l+9 10 55 — — — — •MB - - mm — — — — - 3 mm •Mi 169 •Mi - 11 - 12 2,981+ 5,281+ 3,1+70 2,118 2,831 3,761 3,838 5,197 3,1+81 7,967 11,669 1+38 + 13 531+ 117 162 • "| Mi — + 1+5 •1+7 — — — • 10 • 18 • 16 + 38 1+20 9I4.I • 19 •110 •12!+ 1+9,636 3,021 +115 •360 Total bonds 112,1+61 6,561+ +115 •283 Total issues 159,781+ 21,209 -116 -861 Total Fote; 3/ 206 100,23 100.28 101,00 — 100,23 100,26 101,00 101.01+ 101.03 101.07 101.07 100.00 101.12 101.12 100.11 101.12 101.13 102.31 103.02 101.06 101.10 102.01* 102.01+ 101.01+ 101.10 102.21+ 103.16 101.08 101.31 101,00 101.16 — — — — •.01 — -.01 -.03 -.03 -.03 -.Qlj. -.05 -.05 -.08 mm -*o!+ -.05 -.05 -.oE+ -,QU +.01 -.03 -.02 -.10 -.06 -.07 -.05 -.16 -.09 -.12 -.09 - 1 5 -85 1+7,1+37 95 — - 9 337 76 3-II9 • 2 • 2 + 2 + 27 + 36 — 31 100,00 100,00 101.06 101,00 100.21+ 100,21+ 100.21+ 100.16 100.08 100.08 100,00 100.00 101.12 101.00 100.21+ 100.21+ 100.21+ 100.16 100.06 100.06 -.03 -.13 -.01* -.07 -.03 -.06 -.01 -.oi* mm — — — -.01 mm — -.03 -.01 -.06 -.03 -.03 Figures do not necessarily add exactly, due to rounding. Necessary adjustments in the support prices of shorter-tern issues v/ith the passage of time are made by the New York Reserve Bank. The support prices for issues callable after December 1950, "which were established December £l+, 19l+7» are unchanged^Nand are no longer consistent vdth the pattern of yields established at that time>s except for the 2 l / 2 per cent March 1952-$+ issue which ( |119.01i+,000 of 1 3 A Per c e n 0 - ^ ? ^ $1$ D > ?n 5 ^e t ?e 1 e^c # n^|?d^o 1 r / ?*l/fc por cent June 191+9 certificates. http://fraser.stlouisfed.org/ GOVERNMENT FINANCE SECTION, Federal Reserve Bank of St. Louis BOAKD OF GOVERNORS CHANGE IN HOLDINGS: SYSTEM AND TREASURY ACCOUNTS July 29, 1948 (In millions of dollars) System Account treasury Accounts Total System Total Bonds Bonds Certificates Notes In Redemp- In Period Eligible Restricted In Redemp- Change in Eligible Restricted Treasury In Redempin mkt. mkt. tions holdings in mkt* tions mkt« in, mkt. in mkt* mkt. tions in mkt. £/140 + 92 + 11 • 91 May 27 - June 2 + 77 Mi + 20 1 June 3 - 9 - 334 - 338 - 15 •334 Bil 10 - 16 17 - 23 24-30 July 1 - 7 8-14 15 - 21 22-28 + 306 • 155 + 181 + 12 - 77 - 2148 - 129 +106 +108 - riP-H — +111 + 53 • 7 + - 10 • 3 6 - 3 - 100 100 +263 + 53 - 100 100 + 24 + 2 Dtfe 24, 1947 -5,512 -1,300 May 12, I9I48 Dec, 24# 1947 July 28, 1948 19i|8 - January February March April S —— —— -306 -2*405 - 5 +456 2/+2,246 -2,321 -1,700 24B7 -2,405 -1.424 - 300 -515 - 400 +123 -1,614 - 98 - 400 500 •375 - 285 + 140 - 781 - 100 -140 - 106 + 272 ••»•» Mi76 + 331 + 1 + 356 .. + 2 + 117 +270 - 100 + I69 + 87 - 100 - 14 „, — + 1 + 131 + 115 - 9 6 - 100 - 17 - 100 - •MM •MM - 37 +290 - 61 +298 2 +1*01 +261 24 +356 +2,609 ^52 2/+2,lii9 +2,969 + 66 +1,359 • 579 +192 + 628 +149 2 / - 115 • 99 + 79 + 497 - 5 7 my + 22 • 10 -Junjjj / - rounding* 13«5 Notes Figures do not necessarily add exactly, due2 to ¥ + 1 + 400 + 261 5 •»«•< mm 195 116 -3,880 -1,385 *3,756 -4,260 + 65 - 700 n.u4 -2,014 +6ljB - 765 -345 - 206 +322 • + +704 521 635 901 137 547 323 IQk mm* iM -14 - 35 + 1 — *175 +1C4 + 11 * 7 Excludes purchase of 1 million dollars of certificates on May 5, Includes exchange of 119 million dollars of June 15, I9I48 bonds far June 1, 1949 certificates* All in market except for redemptions of 175 million dollars of bonds on March 15, 194® and exchange of 119 million dollars of bonds for certificates on June 1, GOVERNMENT FINANCE SECTION, BOARD OF GOVERNORS + 1 i/+253 +175 +io4 - 13 - 28 + 1
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