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THE BUSINESS REVIEW
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in
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r-m.
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FEDERAL RESERVE BANK
OF PHILADELPHIA
MSmBB
APRIL, 1948
WHO IS DOING THE LENDING?
Public and private credit agencies
play a significant role in inflation
Ever since the war, lending institutions have been extending larger and larger
amounts of credit to a wide variety of borrowers. A substantial portion of this lending
activity has been inflationary. Some people single out commercial banks as the cause
of inflation. Others single out governmental lending agencies. Inflation will not be
stopped by dissipating energies in argument over who is responsible for it. It can
be stopped only through cooperative effort on all fronts, including all institutions that
extend or use credit. Presentation and analysis of the facts with respect to lending
agencies may contribute to constructive action in restraining inflation.
How Lending Can Be Inflationary
Banks have been in the spotlight because they
are an instrument of inflation and because some
people have confused the instrument with the
cause of inflation. Since bank deposits make up
the bulk of this country’s money supply, fluctua
tions in such deposits directly affect the spending
power of individuals, business and Government.
Bank deposits move up and down primarily as
commercial banks increase or decrease their earn
ing assets. During the war, for example, our
money supply was expanded rapidly as commer
cial banks were called upon to buy Government
securities. The use of the deposits thus created
has since played a large part in bidding up prices.
Banks were the instrument of inflation, war
financing the cause.
Since the war, the volume of private deposits
has risen even further as banks have made loans
to individuals and to private industry. Viewed as
individual transactions, few of these loans have
been for speculative or “non-productive” pur
poses. Yet our economy is running in high gear
and our resources are being almost fully utilized.
Under these circumstances, total production can
not be increased significantly. An expansion of
loans enables additional buyers to enter what is
already a seller’s market. Hence, the important
over-all effect is a rise in prices rather than an
increase in product.
Page 35
Loans made by other private institutions—sav
ings banks, insurance companies, and the like—
also can be inflationary. Recently, insurance
companies and others have been selling Govern
ment securities in order to make loans to private
industry and individuals. In order to maintain
existing yields, it was necessary for the Federal
Reserve System to buy a large volume of these
securities. In doing so, however, it created bank
reserves, enabling the commercial banking system
to expand the total volume of deposits. Although
insurance companies and savings institutions,
unlike commercial banks, cannot create bank
deposits, they have, in a very real sense, had an
influence on the volume of money.
and other private lenders through easy credit
terms and guarantees.
Direct Lending
So much for the theory of loan expansion. The
facts of the situation are that: (1) Government
lending agencies have directly accounted for a
very small proportion of private credit outstand
ing since the war; (2) their importance has been
declining in the past two years; (3) commercial
banks have been by far the largest single source
of private credit; and (4) their share has been
increasing relatively not only to Government
agencies but to other private lenders as well.
These facts are made strikingly apparent in the
chart.
Loans of private institutions may also be infla
tionary by another process. Institutions such as
But the picture varies widely, depending on
these take in savings, funds which individuals
refrain from spending, and lend them out to busi what type of credit is being considered—from
nesses or individuals who want to spend them. To business credit, where commercial banks have the
the extent they lend funds which otherwise would field largely to themselves, to non-real estate farm
have remained idle, the velocity of money is in loans, where Government agencies account for
creased. Similarly, when an individual buys a more than half the outstanding volume.
corporate bond out of his idle savings the effect
Urban real-estate loans constitute the largest
may be inflationary by the same process. Of major type of credit outstanding. In this field,
course, if any of these institutional lenders more than any other, commercial banks come up
obtains funds from a commercial bank, either by against competition from other private lenders.
getting a loan or selling an investment, the infla The market is predominantly localized, and indi
tionary effect is the same as though the bank it viduals extend a larger amount than any single
self had made the loan.
type of institutional lender. Savings and loan
associations, insurance companies, and savings
Loans made by Government lending agencies banks are also extremely active. Yet in the past
are no different, as far as inflation is concerned, two years, commercial banks have been rapidly
from those of any individual, business, or savings increasing their share of the business.
institution. They cannot, in themselves, create
deposits and expand the money supply. If, how
Government agencies, on the other hand, hold
ever, the funds which the Government lends were a negligible proportion of urban real-estate loans.
obtained originally from banks, the effect is the The Home Owners Loan Corporation, formed in
same as if banks had made the loan directly. 1933 to grant long-term loans to distressed home
Thus, if any of the funds loaned by Government owners and to help stabilize real-estate and mort
credit agencies are obtained either through the gage values, accounts for only a little over 1 per
sale of their own obligations or from the Treasury cent of the total volume. Now in liquidation, it
through the sale of its securities, directly or in has reduced its holdings by nearly one-half during
directly, to the commercial banks, deposits are the past two years. The Reconstruction Finance
created in the process. If, however, the Govern Corporation and affiliates, on the other hand, in
ment raises funds by taxes or by the sale of its creased their real-estate loans, which consist
securities to non-bank investors and then makes largely of mortgages bought in providing a sec
loans, an inflationary effect can arise through the ondary market for mortgages guaranteed by the
two processes already described in the case of Veterans Administration and the Federal Housing
savings institutions: first, if the securities which Administration. The institutions comprising the
the Treasury sells are transferred by the non Housing and Home Finance Agency, which was
bank investors to the Federal Reserve Banks, created in July, 1947 to replace the National
reserves are created which enable banks to ex Housing Agency, also have expanded their loan
pand the money supply; and, second, if the pur volume somewhat, although the amount is still a
chase of securities by non-bank investors is made small proportion of all real-estate loans.
by using funds which otherwise would have re
mained idle, money becomes activated. Finally,
Business loans are the largest single type of
and perhaps the most important, Government bank loan, and for every $1 loaned to business by
policy can have a strong inflationary influence by Government agencies commercial banks lend $36.
encouraging the expansion of lending by banks During 1946 and 1947, commercial bank loans to
Page 36
WHO IS DOING THE LENDING?
BILLIONS
BILLIONS
LOANS OF MAJOR LENDING GROUPS-UNITED STATES
TOTAL*
URBAN REAL
ESTATE LOANS
BUSINESS LOANS
CONSUMER CREDIT
FARM MORTGAGES
NON-REAL ESTATE FARM LOANS
JUNE
'A 6
DEC.
JUNE
CHI
^EXCLUDING FOREIGN LOANS
OTHER PRIVATE LENDERS
EZ3 COMMERCIAL BANKS
■I GOVERNMENT
Page 37
DIRECT LENDING*
% distribution
Dec.
1945
Urban real estate loans:
Individuals and others............... —
Savings and loans associations.....
Commercial banks... .......................
Insurance companies-----------------Mutual savings banks......... ...........
Total private lenders........... ......
Home Owners Loan
Corporation .... ...... ...... ......-.....-...
Reconstruction Finance
Corporation and affiliates.........
Housing and Home Finance
Agency ......... ................... -...........
Other Government agencies.........
Total Government agencies......
Grand total— ................ ...-... .
Business loans*:
Commercial banks.™........... ...... .....
Reconstruction Finance
Corporation ......... ....... .................
Federal Reserve Banks.™.................
Other Government agencies.........
Total Government agencies.....
Grand total*....... ........................
Consumer credit:
Commercial banks...........................
Other private lenders.™............. .....
Grand total________ _________
Farm mortgages:
Individuals.........................................
Life insurance companies.............
Commercial banks..........................
Joint Stock Land Banks...............
Total private lenders.................. .
Federal Land Banks*.....................
Farmers’ Home Administration...
Federal Farm Mortgage
Corporation ............................. ... .
Total Government agencies_
_
Grand total...____________ ____
Non-real estate farm loans*:
Commercial banks8™ _________
Rural Electrification
Administration.......................... ™.
Farmers’ Home Administration__
Production Credit
Associations6 __________ ____
Banks for Cooperatives........... .....
Commodity Credit Corporation...
Federal Intermediate Credit
Banks ............................................
Other Government agencies.™.......
Total Government agencies......
Grand total........... ..... ..................
All loans.... ........ ...................... .
Per cent
change
1945-1947
Dec.
1947
*
10.37
10.25
19.76
9.67
7.64
10.66
7.55
55.28
51.97
+ 45
1.53
.57
— 43
.11
.16
+134
.04
#
1.68
56.96
.08
.01
.81
52.79
17.01
21.03
.95
.55
+ 66
+107
__
+195
+ 150t
— 26
+ 43
+ 91
11
50t
66
20
85
#
.18
1.13
18.14
.04
.59
21.71
3.96
7.98
11.93
6.04
9.55
15.59
3.21
1.59
.91
.01
5.72
1.94
.33
2.33
1.05
.93
4.31
1.05
.23
+
+
+
—
+
—
+
.43
2.70
8.42
.13
1.41
5.71
— 54
— 20
+ 5
2.12
2.00
.70
.76
.83
.44
+ 82
— 10
.36
.35
.18
.34
.32
.21
+ 46
+ 40
+ 81
.05
.02
2.43
4.54
.05
.01
2.21
4.21
100.00
+135
+ 85
+ 102
#
+
—
+
+
+
12
2
57
67t
16
17
8
68
44t
40
43
54
1 Excluding foreign. Data for December, 1947 are preliminary.
“Excluding loans to financial institutions.
8 Excludes miscellaneous private lenders.
4 Federal Land Banks became entirely privately owned in June 1947.
8 Includes loans to cooperatives. Excludes loans made by merchants,
dealers, finance companies, etc.
6 Includes loans guaranteed by the Commodity Credit Corporation.
* Not available.
# Less than .005 per cent.
t Percentage changes are misleading because of small figures.
business almost doubled. At the same time, loans
by Government agencies declined somewhat.
The Reconstruction Finance Corporation is the
most important of the Government lending agen
Page 38
Consumer credit is extended solely by private
lenders. Despite the fact that banks are compar
atively new in this field, they are the largest single
institutional lender, accounting for two-fifths of
the total. Competition is severe but banks have
been obtaining an increasing share of the busi
ness.
+ 46
100.00
#
--—
—
—
+
cies in this field. Formed in 1932 and since utilized
for numerous credit purposes, the RFC now
makes loans to small business almost exclusively.
In 1946 and 1947, its loans decreased by about
one-tenth. Industrial loans of the Federal Reserve
Banks constitute a negligible share of total busi
ness loans. These loans, begun in 1934 under
authority of section 13b of the Federal Reserve
Act, are made only to deserving borrowers unable
to obtain credit from other sources. In all cases,
they are designed to help develop the business
concern to the point where it will be a good bank
risk. These loans have never bulked large in the
total business credit picture and have been re
duced to practically nothing in the past two years.
Farm mortgages, like urban mortgages, are made
extensively by individuals. Commercial banks
account for about one-sixth of the total outstand
ing debt, competing with insurance companies as
the only other major institutional lender. Again,
banks are increasing their share relatively to
other private lenders and Government lending
agencies. Although Government agencies held
one-third of the total farm mortgage debt at the
end of the war, their loans have since been declin
ing constantly to the point where they now com
prise one-fourth of the total.
The Federal Land Banks, entirely privately
owned since June, 1947, were the oldest of the
public lending agencies and the most important
public lenders in the farm mortgage field. Mort
gages held by the Land Banks have been declin
ing, as have those held by the Federal Farm Mort
gage Corporation. The Farmers’ Home Adminis
tration is a comparatively new agency formed in
1946 to perform functions previously carried out
by certain other governmental agencies. The vol
ume of mortgages which it holds under its farm
ownership program constitutes only 4 per cent of
the total of farm mortgages and has remained
relatively constant since the war.
Roughly half of the non-real estate farm loans
are made by commercial banks and half by Gov
ernment agencies or Government-sponsored insti
tutions. In this field of credit, banks are the only
important private lenders. But also in this field
there is a larger variety of Government lending
institutions occupying a more prominent position
than in any other.
The Production Credit Associations are the
most important of all Government agencies mak
ing the kinds of non-real estate loans to farmers
which banks usually handle. Created in 1933,
these associations expanded their loan volume
constantly for many years, accounting for an in
creasing share of total non-real estate farm loans.
The only loans of the Farmers’ Home Administra
tion which are increasing are the “production and
subsistence” loans to low-income farmers who
are unable to qualify for credit elsewhere. The
Administration also is supervising and liquidating
rural rehabilitation loans which it took over from
the Farm Security Administration in 1946, and
emergency crop and feed loans which it inherited
from the Farm Credit Administration at the same
time.
The Federal Intermediate Credit Banks discount
agricultural paper for other lending institutions,
both public and private. Most of the credit they
provide is thus accounted for by other lenders
described above, but they also are responsible for
a small amount of loans which they have dis
counted for private lending institutions. The
Regional Agricultural Credit Corporation, which
was created in 1932 to meet emergency needs for
short-term credit, is now in process of liquidation
and its loan volume is very small.
The Commodity Credit Corporation makes
loans of quite a different nature. Its loans are on
a non-recourse basis, which means that the Cor
poration must look solely to the commodity
pledged as collateral if the loan is not repaid.
This device is thus, in effect, an indirect method
of offering to buy specified commodities and sup
porting their price. The volume of loans held by
the Corporation declined during the war, as prices
of farm commodities rose above support levels,
but has been increasing recently as some prices
declined.
On the whole, these Government agencies mak
ing non-real estate loans directly to farmers have
experienced little expansion in their loans since
the war. As in other fields of credit, the relative
position of commercial banks has been improving.
Where the bulk of the expansion in Government
lending of this type has taken place is in loans to
farm cooperatives which comprise one-fourth of
all non-real estate farm credit. The Rural Electri
fication Administration, particularly, has been
making an increasing volume of credit available
to construct electric systems and for wiring and
making appliances and plumbing available to
farmsteads.
Loan Terms and Guarantees
Government agencies have contributed to infla
tion not primarily through their direct lending
activity but through the effect of guarantees on
loan terms. For a variety of reasons, it has been
a policy of Government to make credit available
to certain sectors of the economy regardless of
inflationary consequences.
Government policy affects both the demand for
and the supply of credit. Through easy credit
terms—low interest rates, small down payments
for home purchases, long maturities, and the like
—the Government makes it possible for many
borrowers, who otherwise would be excluded from
the credit market, to seek loans. Demand is
stimulated. Guarantees enter the picture on the
supply side also. For without some sort of guar
antee against losses, lenders would be unwilling
and unable to make credit available on such easy
terms and often to such marginal borrowers.
It is in the field of housing that Government
credit agencies have exerted the most serious
inflationary influence. As the chart shows, hous
ing accounts for the great bulk of all guarantees
and insurance outstanding. One-third of the
mortgages outstanding on small homes are now
insured.
The Federal Housing Administration has issued
two-thirds of all guarantees and insurance on
housing loans. It was formed in 1934 to encour
age mortgage credit on easier terms and to set
certain standards for mortgage lending. Most of
its outstanding guarantees are on Title II loans
which may run up to 90 per cent of value as
appraised by the FHA. Maturities cannot exceed
LOAN GUARANTEES AND INSURANCE*
UNITED STATES
BILLIONS S
BILLIONS S
FARM
BUSINESS
HOUSING
JUNE
JUNE
OEC.
•excludes GUARANTEES on foreign loans.
SOURCE BUREAU OF THE BUDGET.______________
Page 39
twenty-five years, and the interest rate is 4 y2 per
cent (plus y2 per cent for insurance premium).
The FHA also guarantees loans for rental projects
and insures loans for the repair and moderniza
tion of homes.
For many years the FHA has commanded a
good deal of respect in the mortgage market. It
has consistently endeavored to keep its appraisals
from reflecting inflationary conditions, and
largely for this reason the volume of guarantees
on homes (under Title II, Section 203) has de
clined since the war.
In fields other than housing, Government guar
antees play a much less important part. Guaran
tees on business loans, for example, comprise only
5 per cent of all guarantees and are a very small
proportion of all business loans. Three-fourths of
the guarantees on business loans are made by
the Reconstruction Finance Corporation. These
take the form of deferred participations in loans
made by private institutions, the largest amount
outstanding consisting of guarantees made under
blanket participation agreements between March
1945 and January 1947. Under this provision, the
RFC agreed with participating banks to take over
automatically when requested as much as 75 per
cent of all loans meeting certain general specifica
tions. Since the discontinuance of this program,
participations have been arranged for each indi
vidual loan. They average 75 to 80 per cent of
the principal and are predominantly on small
loans for non-defense purposes.
However, a considerable post-war expansion in
FHA guarantee activity has taken place in the socalled Title VI loans for rental housing, particu
larly for veterans. Easy terms have helped to
expand the volume of such loans to the point
where the authorized limit has had to be raised.
In order that such housing may be expedited at to
The Veterans’ Administration accounts for
day’s inflated prices, the law provides that “neces almost one-fourth of all guarantees on business
sary cost” rather than appraised value shall be loans and has been increasing its volume con
used in determining mortgage eligibility under stantly. The guarantee provisions are similar to
Title VI. Recent proposals of the President would those on mortgages except that they are limited
restore the appraised value basis for Title VI loans to a maximum of $2,000. The amendments to the
for sales housing, but would provide for somewhat law in 1946 liberalized the provisions in several
more liberal terms under Title II and Title I.
respects, allowing loans for working capital in
addition to equipment or the purchase of a busi
The Veterans’ Administration, which has been ness, basing appraisals on “reasonable value”
in existence as a loan guarantor for only three rather than “reasonable normal value,” and ex
years, has accounted for a rapidly growing pro tending the maximum maturity.
portion of all guarantees on housing loans. It
makes guarantees, not exceeding $4,000, up to 50
LOAN GUARANTEES AND INSURANCE*
per cent of the loan or insures losses up to 15 per
cent of a lender’s total loan volume. Down pay
Per cent distribution
Per cent
ments generally are much less than on ordinary
change
Dec.
Dec.
mortgages, although more and more lenders are
1945-1947
1945
1947
getting away from 100 per cent loans by requiring
down payments of 10 or 15 per cent. Maturities Housing:
Federal Housing Administration:
may run as long as twenty-five years, although
Title II..
52.71
32.32
— 10
again many lenders are becoming more conserva
Title VI
29.09
24.03
4- 21
Title I
1.68
1.50
+ 31
tive by shortening maturities.
Total
The greatest element of inflation in G. I. loans
is in appraisals. Despite attempts to maintain
conservative policies, loans are often made on
properties priced far above their “normal” values.
The original legal requirement was that apprais
als should reflect the “reasonable normal value”
of properties. But when it became apparent that
few loans could be made on such a basis under
existing inflationary circumstances, the law was
changed to allow appraisals based on “reasonable
values.” For a time, abuses also arose from the
fact that some local appraisers were pursuing
policies inconsistent with the Veterans' Adminis
tration standards; consequently, the VA returned
to a policy of more careful selection of appraisers.
Page 40
Veterans' Administration... ..........
Grand Total
83.49
1.43
84.92
57.85
34.89
92.74
+
1
+3,563t
+ 60
Business:
Reconstruction Finance
Corporation:
Blanket guarantees........... ...........
Other..__
Total
Veterans’ Administration______
Federal Reserve Banks._________
V and T loans_________________
Grand total
.69
2.18
2.87
.08
.04
8.31
11.30
2.05
1.78
3.83
1.19
.09
.03
5.13
+ 336
+ 19
+ 95
+2,175t
+ 250t
— 99
— 34
Farm:
Commodity Credit Corporation...
Veterans’ Administration
Grand total
All guarantees and insurance.__
3.77
.02
3.78
100.00
1.28
.85
2.13
100.00
— 50
+6,400t
— 18
+ 46
1 Excluding foreign.
t Percentage changes are misleading because of small figures.
A small proportion of total guarantees on busi
ness loans are made by the Federal Reserve Banks
in the form of commitments to take over 13b
loans made by private institutions. These were
fairly important during the 1930’s but now consti
tute a negligible part of all guarantees. Similarly,
V and T loans guaranteed by the Army, Navy, and
Maritime Commission are no longer large. During
the war, V loan guarantees made up the bulk of
all guarantees on business loans but most of these
have since been paid off, and few T loans ever
were made to facilitate termination of war con
tracts.
supply rests ultimately with monetary policy.
The figures show, too, that direct loans of Gov
ernment agencies are a minor part of total credit
and have been declining since the war. In gen
eral, they have not had a great inflationary effect.
Yet their very smallness suggests a need for re
appraising the functions of Government lending
agencies in times quite different from those when
most of these institutions were originally estab
lished.
The facts indicate that the Government policy
of fostering easy credit terms on certain types of
Guarantees of farm loans amount to only 2 per loans and of guaranteeing lenders against loss has
cent of all guarantees. Government activity in stimulated lending activity and inflationary pres
this field of credit takes the form of direct lending. sures. This problem is essentially a problem of
The Commodity Credit Corporation, as already choices. If we choose to make credit easily avail
described, guarantees loans made by private able to certain groups for non-economic as well
lenders as part of its program of supporting prices as economic reasons, we should recognize the
of farm commodities. The Veterans’ Administra inflationary consequences of this decision. But
tion is the only other agency guaranteeing farm we must also consider longer-run implications.
loans.
Easy credit terms can boomerang. Small down
payments, long maturities, and inflated apprais
als on G. I. mortgages, for example, may in some
Conclusions
cases endanger the future financial position of
veterans. Guarantees provide no fundamental
Facts are useful only if they can help us under solution. Lenders making unsound loans and
stand and solve our problems. The facts that have placing excessive reliance on guarantees are apt
been cited tell us how lending activity influences to be held accountable for the financial difficulties
inflation and suggest what we might do about it. of their borrowers even though the lenders them
selves are free from the loss. And it is a serious
The figures show that commercial banks are the problem for all to ponder whether the policy
largest single institutional lenders and that their of the Government in guaranteeing a larger
share of all loans has been increasing. Commer amount of the loans of private institutions is en
cial banks are the only institutions in our econ tirely consistent with the type of economic system
omy which can directly expand the money supply. which we want to have and to maintain.
Over thirty years ago Congress, in recognition of
this unique function of commercial banks estab
Finally, and most important, the data suggest
lished the Federal Reserve System to effect, a need for consistency of policy toward the lend
among other things, an over-all control over the ing activities of both public and private institu
quantity of bank reserves and the ability of banks tions. Inflation is a difficult problem under any
to increase their deposits. Much can be achieved circumstances. But it is even harder to stop by
by voluntary efforts of individual bankers, but imposing lending restraints on the one hand,
responsibility for restraining a growing money while encouraging loan expansion on the other.
TRENDS IN THE VOLUME AND OWNERSHIP
OF DEPOSITS
Total bank deposits turned upward in the latter
part of 1947. This marks a resumption of the rise
which began before the war and which was inter
rupted temporarily by the drastic decrease in Gov
ernment deposits which accompanied the Treas
ury’s debt retirement program initiated in March
1946. Private deposits have continued to increase
during the post-war period. Deposit balances of
all of the major types of holders increased in 1947,
according to information supplied in the latest
Federal Reserve survey conducted as of January
30, 1948. Personal deposits increased, but at a
slower rate, reflecting the decrease in personal
savings and an increase in expenditures.
Page 41
The level and the distribution of deposits among
areas and ownership groups are determined
mainly by income-expenditure relationships in the
economy. During the war, Government expendi
tures were substantially larger than receipts from
taxes and non-bank purchases of Treasury secur
ities, and the gap was filled by bank purchases.
In other words, public deficit financing through
the banking system was the primary source of
the tremendous wartime growth in bank deposits.
During the last two years, the income-expendi
ture relationships in the public and private sectors
of the economy have been exerting opposing pres
sures on the level of deposits. The contraction of
public credit which has accompanied the Treas
ury’s debt retirement program has tended to de
crease total deposits. However, in the private
sector of the economy, total expenditures of many
individuals and business firms exceeded their in
come and the resulting expansion in bank loans
was a major force tending to push up deposits.
During 1946 and the first part of 1947, the con
traction of public credit was the dominant force,
and total deposits declined. In the latter part of
1947, private credit expansion more than offset
the decrease in public credit and deposits turned
upward.
Income-expenditure relationships also deter
mine the distribution of deposits among areas
and among holders. Income tends to build up
deposits and expenditures, including Investments,
tend to draw them down. Thus shifts in the in
come-expenditure relationships of the various
groups and segments within the economy tend to
be reflected in shifts in the ownership of deposits.
If one area or group of owners has an excess of
income over expenditures, with another area or
group, the tendency is for the former to gain
deposits at the expense of the latter. For example,
the above-average increase in farm income dur
ing the war and post-war periods, together with
shortages of durable goods and farm equipment,
which held down farm expenditures, resulted in a
large increase in farm deposits. Another factor
was that farmers are less likely to invest surplus
funds in securities.
Volume of Deposits
Total deposits of Third District member banks
reached nearly $6.5 billion at the end of 1947, as
compared to the peak of $6.8 billion at the end of
1945. Private deposits both in the Third District
and nationally have continued to increase in the
post-war period, but the rate of growth diminished
in 1947. Demand deposits of individuals and busi
ness firms were up $133 million in Third District
Banks in 1947, an increase about one-half that of
the preceding year. Time deposits increased only
Page 42
TOTAL DEPOSITS OF MEMBER BANKS BY
FEDERAL RESERVE DISTRICTS
Federal Reserve
District
Dec. 31
1947
Mil
lions
Dec. 31
1947
Dec. 31
1946
June 30
1945
Dec. 31
1939
Boston____________
New York..................
Philadelphia ............
Cleveland ..... .... ........
Richmond......... ........
Atlanta ........... .... .....
Chicago ............ .........
St. Louis....................
Minneapolis ..............
Kansas City ........... .
Dallas ........................
San Francisco_____
$ 5,674
33,570
6,445
9,684
5,647
5,756
18,976
4,897
3,552
5,898
5,941
16,488
4.6%
27.4
5.3
7.9
4.6
4.7
15.5
4.0
2.9
4.8
4.8
13.5
4.8%
27.8
5.3
7.8
4.7
4.8
15.0
3.9
2.8
4.7
4.6
13.8
5.3%
30.6
5.3
7.8
4.5
4.4
15.1
3.7
2.5
4.4
4.2
12.2
5.6%
35.8
6.5
7.8
4.0
3.5
14.1
3.5
2.3
3.8
3.2
9.9
Total ...............
$122,528
100.0%
100.0%
100.0%
100.0%
Percentage Distribution
$70 million, as compared to $229 million in 1946.
There was a slight decrease in time deposits in the
latter part of 1947, the first for a semi-annual
period since 1942. Government deposits dropped
from $157 million at the end of 1946 to $66 million
at the end of 1947, a level slightly below that of
1939.
Total deposits of member banks in each Federal
Reserve district showed some increase during
1947. Below average increases resulted in a slight
decrease in the proportion of total member bank
deposits held in the New York, San Francisco,
Boston, Richmond and Atlanta districts. Member
banks in the New York district experienced only
a slight relative loss of deposits last year in con
trast to the war and early post-war periods when
Treasury financing resulted in a substantial loss
of funds to other districts. The San Francisco
district also had a below-average increase in
deposits, its member banks holding 13.5 per cent
of the total at the end of 1947 as compared to 13.8
per cent a year earlier. This is not surprising in
view of the great expansion in war manufacturing
and military expenditures in this area during the
war. The combination of war manufacturing,
military expenditures, a large increase in popula
tion, and a high level of agricultural income re
sulted in San Francisco ranking third among the
Federal Reserve districts in deposit growth during
the war period.
The most important increase, both in absolute
amount and proportionately, was in the Chicago
district—its member banks holding 15.5 per cent
of total member bank deposits, as compared to 15
per cent at the end of 1946. High levels of indus
trial activity and agricultural income were the
principal forces tending to draw deposits into the
Chicago district. Because of a concentration of
heavy goods industries in this area, the Seventh
district frequently has an inflow of deposits during
prosperity and an outflow during periods of de
pression. Member banks in the Seventh district
experienced a slight loss in deposits during the
early post-war reconversion period. The high
level of agricultural income was the major factor
continuing to draw deposits into the Dallas, Kan
sas City, and Minneapolis districts.
The shift in deposits from the agricultural and
war-expanded industrial areas to the older indus
trial and financial centers, which was expected to
take place after the war, has not yet occurred—
at least in any noticeable volume. An important
reason is that rising prices and good crops have
maintained agricultural income at peak levels.
This continues to draw deposits into the agri
cultural districts. On the other hand, shortages
have tended to hold down durable goods expendi
tures which were expected to transfer some of
these deposits to the industrial centers. The
relatively large volume of funds being raised from
the sale of municipal and corporate securities also
probably tends to take more funds out of financial
centers, such as New York, than is returned
through disbursement of the proceeds. A final
factor which may be of some significance is that
the war-swollen deposits must be held by some
one, and farmers and deposit holders in small
towns who are not familiar with securities and
not in the habit of making such investments are
more likely to hold idle balances than individuals
and business firms in the larger industrial and
financial centers.
Ownership of Demand Deposits*
Demand balances of individuals and business
firms in the Third District increased from $4.1
billion on February 26, 1947 to $4.3 billion at the
end of January 1948. Of this total, individuals
(including farmers) held approximately $1.6 bil
lion, or 37 per cent; manufacturing and mining
concerns held $931 million, or 22 per cent; and
trading establishments held $570 million, or 13
per cent.
OWNERSHIP OF DEMAND DEPOSITS
Third District Banks, January 30, 1948
(Dollar figures in millions)
Manufacturing and mining............
Other nonfinancial.................. . . .
Total nonfinancial business._
_
Total ................. ....... -_...._______
Jan. 30,
1948
Per cent
distri
bution
Per cent
change
from
Feb. 26,
1947
$ 931
240
570
215
$1,956
103
238
228
168
1,586
3
21.7%
5.6
13.3
5.0
45.7%
2.4
5.6
5.3
3.9
37.0
0.1
+ 5.2%
+11.1
+ 3.8
+ 8.0
+ 5.8%
+17.0
— 3.3
+ 4.1
+ 7.0
+ 3.9
$4,282
100.0%
for 72 per cent of the total on January 30, 1948.
Manufacturing and mining companies were the
only one of the three to register an above-average
gain, an increase of 5.2 per cent as compared to
the average of 4.7 per cent. The deposit balances
of manufacturing and mining concerns increased
slowly but consistently during the war period.
The end of the war brought a drop as deposits
were drawn down to meet reconversion costs and
large expenditures for inventories and plant and
equipment. With the completion of reconversion,
manufacturing and mining companies built up
their deposit balances.
Demand deposits of individuals and trading
establishments, which gained substantially more
than the average during the war, increased only
3.9 per cent and 3.8 per cent, respectively, during
the 11-month period ending January 30, 1948.
Trade deposits rose substantially during the war,
as the depletion of inventories pushed up receipts
OWNERSHIP OF DEMAND DEPOSITS
THIRD DISTRICT BANKS
OTHER
Insurance companies, although holding a small
proportion of the total, registered the largest
percentage gain during the period, reflecting in
part an increase in liquidity probably induced by
the drop in bond prices near the close of 1947.
Deposit balances of public utility companies were
also up considerably, registering an increase of
11 per cent, as compared to 4.7 per cent for all
demand deposits.
80
"
60
-
-
MINING
40
-
20
Three deposit ownership groups — personal,
manufacturing and mining, and trade—accounted
80
-
TRADE
PERSONAL
Unless otherwise noted, demand deposits in the remainder of this
article refer to demand deposits of individuals, partnerships, and
corporations.
Page 43
relative to expenditures. The building up of in
ventories after the war had to wait until goods
became available. It was not until then that
expenditures boosted by heavy inventory accumu
lation brought a drop in wholesale and retail trade
deposits. As inventories were replenished the
rate of inventory accumulation slowed down,
receipts increased relative to expenditures, and
trade deposits again increased.
for 63 per cent of the total in banks with total
deposits of less than $1 million, the proportion
gradually decreasing as the size of bank increases
to only 25 per cent in banks with total deposits in
excess of $100 million. Trade deposits show a
similar trend, ranging from 16 per cent of the
total in the group of smallest banks to less than
10 per cent of the total in the largest size group.
Manufacturing and mining deposits accounted for
nearly 30 per cent of the total in banks with total
Personal deposits, which experienced the sharp deposits in excess of $100 million, in contrast to
est gains during the war period, were up only $60 less than 8 per cent of the total in the small-size
million, or 3.9 per cent during the last reporting group with deposits under $1 million.
period. The refilling of civilian goods pipe lines,
naturally, was accomplished first by manufac
turers, then by wholesale and retail trade, and The Outlook
finally by consumers. As consumers’ goods be
came available in increasing quantities, consumer
The forces tending
deposits are
expenditures increased relative to incomes and likely to outweigh thoseto increasedecrease them
tending to
the rate of personal deposit growth slowed down.
during the remainder of 1948. The demand for
credit continues strong and private borrowing
The pattern of demand deposit ownership varies from the banks is likely to be a potent force push
considerably according to the size of the bank. ing deposits upward. Business plans for 1948
In part, it reflects the economic structure of our call for a continued high level of expenditure for
country. A large part of the deposit balances in plant and equipment which, together with high
small banks in rural areas is held by individuals operating costs and expanding accounts receiv
and small business. On the other hand, the able, will mean a strong demand for business
concentration of financial businesses and the loans. The large volume of new construction and
heavy goods industries in the larger metropolitan the big demand for housing and for other con
areas results in a corresponding concentration of sumers’ goods will probably result in a further
deposit balances of these concerns in the larger expansion in real-estate and consumer loans. An
metropolitan banks. Personal deposits accounted inflow of gold and foreign funds will also tend to
increase deposits.
DISTRIBUTION OF DEMAND DEPOSITS
THIRD DISTRICT BANKS-JANUARY 30^ 1948
OTHER
MFG- AND
MINING
40
-
TRADE
20
-
PERSONAL
OVER
SI00 MILLION
410-4100
MILLION
MILLION
MILLION
----BANKS WITH DEPOSITS OF----------
Page 44
DISTRICT
TOTAL
There are few significant indications pointing
toward a decrease in deposits. A depression
which has supposedly been “just around the cor
ner” for two years would, of course, initiate de
flationary forces—falling prices, a contraction of
credit, and a decrease in deposits. But tax reduc
tion and the heavy expenditures called for in the
new defense and European recovery programs
now appear more than adequate to counteract for
the remainder of this year, at least, any deflation
ary forces and weaknesses which may be develop
ing. It appears that the contemplated decrease in
receipts and increase in expenditures will greatly
reduce the Treasury budget surplus expected for
the fiscal year 1949 and slow down the contrac
tion of public credit, which was the most potent
force tending to pull down deposits in 1947. Thus
the prospects for the remainder of 1948, are for
continued inflationary pressure and a further ex
pansion of bank loans and deposits.
~
BUSINESS STATISTICS
Production
Philadelphia Federal Reserve District
Adjusted for Seasonal Variation
Not Adjusted
Production Workers in Pennsylvania
Factories
Per cent ch.ange
Indexes: 1923-25 = 100
INDUSTRIAL PRODUCTION
MANUFACTURING..............
Durable Goods.......................
Consumers’ Goods................
Metal products....................
Textile products..................
Transportation equipment
Food products.......................
Tobacco and products....
Building materials.............
Chemicals and products. .
Leather and products.........
Paper and printing...........
Individual Lines
Pig Iron..................................
Steel.......................................
Iron castings.........................
'
Steel castings.......................
Electrical apparatus.........
Motor vehicles....................
Automobile parts & bodies
Locomotives and cars....
Shipbuilding.......................
Silk and rayon.....................
Woolens and worsteds. . .
Cotton products..................
Carpets and rugs................
Hosiery..................................
Underwear...........................
Cement..................................
Brick.....................................
Lumber and products....
Bread & bakery products
Slaughtering, meat pack.
Sugar refining....................
Canning and preserving.
Cigars....................................
Paper and wood pulp....
Printing and publishing. .
Shoes....................................
Leather, goat and kid...
Explosives...........................
Paints and varnishes.........
Petroleum products...........
Coke, by-product................
COAL MINING
Anthracite...........................
Bituminous.........................
CRUDE OIL .......................
ELECTRIC P’W’R—OUTPUT
Sales, total...........................
Sales, to industries..............
BUILDING CONTRACTS
TOTAL AWARDS+...........
Residential-!-.......................
Nonresidential 4-................
Public works & utilities-f
Feb. Jan. Feb.
1948 1948 1947
Feb.1948
from
Month
ago
112p 112 108
- 1
113p 114 110
- 1
124p 125 116r
- 1
103p 102 102
+1
140 148r 136
- 5
72p 72
70
0
128p 125 122r
+ 3
121p 121 125
0
141 147 145
- 4
64p 63
57
+ 2
181p 169 154r
+ 7
92p 96
84
- 5
120 120 118
0
101
108
92
88
221
38
121
57
100
119
92
83
227r
44
135r
61r
104
104
94
93
216
51r
120r
67
—
86
_81 _
_ 84
75p 77
73
38p 40
47
99p 103
85
80
78
75
139 151r 131
122p 114 103
62
64
60
30
32
28
—
102
66
193p
141
101
124
97
87p
102
120
247p
177p
75
74
82
285
470
487
372
|
165
177
139
269
......
104
15r
209
148
102
124r
102
91
98r
116
224
175
72r
70
86
294
475
490
348
103
66
203
146
93
124
89
80r
84
107
205r
161
71
67
100
281
445
464
344
1948
Jan.
from Feb. 1948 Feb.
1948
1947
2
Year mos.
ago 1947
+ 4 + 2 HIP 109 107r
+ 3 + 2 113p 111 109
+ 7 + 5
+ 1 - 1
+ 3 + 2 141 142r 137
76p 73
+ 3 + 2
74
+ 5 - 1 131p 123 125r
— 3 - 5 116p 119 120
— 3 - 4 118 121 122
52p 51
+ 12 +10
47
+ 17 +11 179p 164 153r
98p 100
90r
+ 9 +14
+ 1
0 120 120r 118
+ 1 — 4
- 9 + 4
0 — 2
4- 6 — 6
- 3 + 2
-15 —26
-10 + i
- 5 —15
+23 +25
+ 6 + 2
- 2 + 3
- 5 —19
- 4 + 16
+ 3 + 8
- 8
+ 7 + 19
- 3 + 2
- 5 + 6
+ 4 — 1
- 2 — 1
+334
0
- 8 — 5
- 4 — 3
- 1 + 9
0
0
- 5 + 9
- 4
- 3 +21
- 3 + 12
-10 +20
- 1 + 10
- 4 + 6
- 6 + 10
- 4 —18
- 3 + 2
— 1 + 6
- 1 + 5
+ 7 + 8
0
+ 5
- 6
-16
+ 1
-25
+ 3
-14
+ 7
- 1
+ 4
-20
+19
+ 7
+ 5
+17
+ 2
+ 7
- 4
- 5
—33
- 3
- 6
+ 9
- 1
- 7
-25
-10
- 7
-14
-- 9
0
+ 2
-14
-1
+ 9
+ 8
+ 7
104
114
93
98
212
38
131
58
97
117
84
88
213r
39
134r
59r
108
109
96
104
207
52r
130r
68
91
78p
41p
lOlp
84
151
86p
59
29
110
101
86
179p
119
101
124
102
94p
102
118
242p
186p
76
74
90
285
498
526
368
83
78
41
99
81
148r
80
59
29
106
111
Hr
203
121
101
124r
104
96
98r
105
220
175
73r
70
98r
282
503
505
338
89
76
50
86
78
142
72
58
27
111
102
86
188
123
93
124
93
86
84
105
202r
169
72
67
109
281
472
501
341
130
84
+27 +96 +85 163 144
146 in
+21 +59 +53 125 118
125
+ H +44 + 51
96
140 135
185
52
+45 +4191+293 322 237
* Unadjusted for seasonal variation.
p Preliminary
+ 3-month moving daily average centered at 3rd month.
r Revised.
'
** Increase of 1000% or more.
83
79
97
62
Local Business Conditions*
Percentage
change—
February
1948 from
month and
year ago
Allentown.........
Altoona.............
Harrisburg.........
Johnstown.........
Lancaster...........
Philadelphia. . .
Reading.............
Scranton...........
Trenton..............
Wilkes-Barre. .
Williamsport. . .
Wilmington. . .
York..................
Employment
Pay Rolls
3
1
1
1
0
0
0
+ 1
Feb.
1947
0
—11
— 2
+ 6
+ 1
0
— 6
+ 4
Jan.
1948
+ 3
0
— 1
— 3
0
0
+ 1
+ 2
Feb.
1947
+ 15
+ 10
+ 14
+27
+ 15
+ 9
+15
+21
—_
1
0
0
— 3
—_
9
—11
0
— 6
0
_
+_
4
+ 2
+ 8
+ 4
Jan.
1948
+
—
—
+
0
0
— 1
Building
permits
value
Jan. Feb.
1948 1947
+323 +120
— 72 + 36
+658 +484
**
**
— 31 — 63
+ 14 + 141
+ 23 + 12
+ 15 — 92
— 34 + 36
+ 15 +150
— 35 — 57
+ 12 +188
— 31 — 2
Retail
sales
Jan.
1948
+11
- 5
- 7
-17
- 3
- 1
- 5
-10
-- 6
-- 5
+ 8
+13
Feb. Jan. | Feb.
1947 1948 1947
+ 4 —12 +36
— 6 —12 + 7
+25 —15 + 12
+35 — 8 +18
+ 15 —12 —18
+ 9 —12 + 12
+ 9 —17 + 6
+ 10 —15 — 1
+10 — 3 + 14
+12 —28 + 10
—13 + 12
+16 —17 + 24
+21 —13 + 8
* Area not restricted to the corporate limits of cities given here.
** Increase of 1000% or more.
Debits
Summary Estimates—February 1948
Weekly
Employ Weekly Man-Hours
ment
Pay Rolls
Worked
All manufacturing......... 1,113.800 $55,043,000
44.403.000
Durable goods industries
629,200 34.030.000
25.225.000
Nondurable goods
industries .......................
484,700 21.013.000
19.178.000
Changes in Major Industry Groups
Pay Rolls
Employment
Indexes
(1939 average = 100)
Feb.
1948
In
dex
All manufacturing...........
Durable goods industries.
Nondurable goods
industries...........................
Food.........................................
Tobacco..................................
Textiles..................................
Apparel..................................
Lumber..................................
Furniture and lumber
products..............................
Paper.......................................
Printing and publishing. . .
Chemicals..............................
Petroleum and coal
products..............................
Rubber.....................................
Leather..................................
Stone, clay and glass.........
Iron and steel.......................
Nonferrous metals..............
Machinery (excl. elect.). .
Electrical machinery.........
Transportation equip.
(excl. auto).......................
Automobiles and
equipment.........................
Other manufacturing.........
130
156
Per cent
change
from
Jan. Feb.
1948 1947
0
0
0 — 1
Per cent
Feb. change
1948
from
In
dex Jan.i Feb.
19481 1947
0 +14
286
324 —1 +15
107
122
104
89
95
93
0
—3
0
+2
0
+1
+1
— 2
+1
+ 4
+ 1
+ 1
241
231
222
222
247
197
+1
+1
—4
+4
+2
0
+11
+ 9
0
+ 17
+13
+19
104
120
139
121
+1
—1
0
—1
— 1
0
+ 4
— 2
244
262
271
248
0
0
0
+1
+13
+ 15
+n
+ 6
148
162
98
132
138
150
211
233
0
0
+1
—1
—1
+2
0
+1
+ 6
—13
+ 1
0
— 1
—12
+ 10
— 2
283
304
204
276
283
312
442
478
+3
—4
—2
—2
—3
+2
0
—2
+17
—20
+ 6
+15
+ 18
+ 1
+25
+ 15
217
+2
—13 412
+4
— 5
178
135
—2
0
— 6 367
— 6 262
—2
0
+ 3
+1
Average Earnings and Working Time
February 1948
Per cent change
from year ago
Weekly
Earnings
Hourly
Earnings
Aver-|
age 1 Oh’ge
%T\C^
Weekly
Hours
Aver Ch’ge
age
All manufacturing.... $49.42 +14 1.240 +12 S9.9 + 2
Durable goods indus.. 54.09 +16 1.349 + 12 40.1 + 3
Nondurable goods
industries.................... 43.36 + 10 1.096 +11 39.6
0
Food.................................. 42.04 + 11 1.033 +12 40.7 — 1
Tobacco........................... 28.01
0 .750 + 1 37.4 — 2
Textiles........................... 44.60 + 13 1.125 +13 39.7 + 1
Apparel............................ 36.79 + 11 .931 + 9 39.5 + 2
Lumber........................... 39.58 +18 .984 + 12 40.2 + 5
Furniture and lumber
products....................... 43.47 +15 .996 + 11 43.6 + 3
Paper................................ 47.00 +15 1.055 +12 44.6 + 3
Printing and pub........... 55.31 + 7 1.453 +12 38.1 — 4
Chemicals....................... 48.85 + 8 1.204 + 9 40.6 — 1
Petroleum and coal
products....................... 58.24 +10 1.476 +10 39.5
0
Rubber............................. 46.55 — 8 1.301 + 4 35.8 —12
Leather........................... 35.51 + 5 .967 + 8 36.7 — 3
Stone, clay and glass. . 47.85 +15 1.176 +12 40.7 4- 3
Iron and steel................ 55.23 +19 1.406 + 14 39.3 + 4
Nonferrous metals. . . . 54.27 +14 1.322 +12 41.1 + 2
Machinery (excl.
electrical)..................
53.15 +14 1.304 + 9 40.8 + 5
Electrical machinery. . 57.33 +17 1.428 +12 40.2 + 4
Transportation equip.
(excl. auto)................ 57.80 + 9 1.446 + 7 40.0 + 3
Automobiles and equip. 56.56 + 9 1.367 + 13 41.4 — 3
Other manufacturing
40.61 + 8 1.072 + 9 37.9 — 2
Page 45
i
Distribution and Prices
Per cent change
1948
Feb. 1948
from
from
2
Month Year mos.
ago 1947
ago
Wholesale trade
unadjusted for seasonal
variation
Sales
Total of all lines..................
Dry goods ...........................
Electrical supplies ...........
Groceries ..............................
Hardware ..............................
Jewelry ................................
Paper ....................................
Inventories
Total of all lines ................
Dry goods ..............................
Electrical supplies ...........
Groceries ..............................
Hardware ...........................
— 3
+26
+16
—26
+27
+ 11
+37
+ 3
+ 17
— 1
+ 3
+ 3
0
—10
—10
+ 4
+ 3
—10
+ 6
— 3
—12
—10
—ii
+ 4
—13
+30
+ 14
+ 7
+ 12
— 1
+34
—
_
_
Per cent change from
Feb.
1948 Month Year Aug.
1939
ago
Basic commodities
(Aug. 1939 = 100) . 326
Wholesale (1926 —
100) ................................... 161
Farm ...................... 185
Food ....................... 172
Other .................... 147
Living costs (1935
1939
100)
United States . . . . 168
Philadelphia ......... 167
Food .................. 199
Clothing ............. 192
Rent .................... 117
Fuels .................. 135
Housefumishings 194
Other .................. 142
+4
+226
+11
+114
+204
+ 157
+ 84
+2
+ 6
+ 15
70
70
114
+ 93
14
40
+ 93
+ 41
+9
— 1 --10
— 3 --12
— 1
8
+2
9
--
......
Indexes: 1935-1939 = 100
RETAIL TRADE
Sales
Department stores—District...........
Philadelphia
Women’s apparel .............................
Men’s apparel....................................
Shoe ....................................................
Furniture ...........................................
Department stores—District.........
Philadelphia .
Women’s apparel .............................
Source: U. S. Department of Commerce.
Prices
Adjusted for seasonal variation
8
8
+2
0 +7
Furniture
...........................................
FREIGHT-CAR LOADINGS
Total ......................................................
Merchandise and miscellaneous. .
Merchandise—lc.1................................
Forest products ................................
Grain and products .........................
Livestock.............................................
MISCELLANEOUS
Life insurance sales .......................
Business liquidations
Number ...........................................
Amount of liabilities..................
Check payments .............................
Not adjusted
Per cent change
1948
Feb.1948
from
Feb. Jan. Feb.
from
2
1948 1948 1947
Month Year mos.
ago
1947
ago
Feb. Jan. Feb.
1948 1948 1947
204
192
204
189
161
—
211
191
208
123
—
189r
177
197
187
162
—
212r
197
245
115
— 6
— 5
—16
— 8
+ 4
+ 4
—16
—20
—31
123
121
77
140
65
192
71
102
68
125
120
73
148
58
199
70
125
86
129
124
88
154
53
187
82
132
101
— 1
205
210
219
21
17
250
40
64
241
9
8
224
231r
211
221
240r
222
_
218r
203
250
112
--
— 2
— 3
— 6
+32
+ 1
— 3*
134
133
82
135
171
179
88
116
74
132
129
77
132
153
173
87
129
85
140
136
93
148
140
175
101
150
in
+ 2
+ 3
+ 6
+ 2
+12
+ 4
+ 1
—10
—13
— 4
— 3
—12
+ 9
+22
+ 3
—14
—22
—33
190
221
202
—14
— 6
23 i
—48* -132* + 141*
—74* -114* + 69*
+ 6 h 11 + 7
258
•Computed from unadjusted data.
243
+ 14
+10
+ 6
0
- 6
+ 7*
216
195
208
188p
152p
—
242p
221p
243
140p
~~
268
240
249
182
206
_
249p 243
228p 214
248 248
136p 142
~~
264
232
234
241p
208p
+ii
+ 9
+ 5
+ 5
— 4
—
+ 3 +14
+ 6 +12
0 — 1
— 4 +21
+ 3* + H*
p Preliminary.
_
......
_
r Revised.
Source: U. S. Bureau of Labor Statistics.
BANKING STATISTICS
MEMBER BANK RESERVES AND RELATED FACTORS
Reporting member
banks
(Millions $)
Mar. 31
1948
five
wks.
Assets
Commercial loans ...........
Loans to brokers, etc. .
Other loans to carry secur.
Loans on real estate....
Loans to banks ..............
Other loans ....................
505
15
13
72
15
244
One
year
—13 +
— 3 —
—
— 1 —
+ « +
+
55
5
6
1
13
47
..............................
864 — 9 +103
Government securities .
Other securities..............
1342 —49 —186
256 — 5 + i
Total investments . . .
1598 —54 —185
Total
Total loans & invest.
Reserve with F. R. Bank
Cash in vault ................
Balances with other bks.
Other assets—net...........
Liabilities
Demand dep. adjusted. .
Time deposits..................
U.S. Gov. Deposits ...
Interbank deposits ....
Borrowings ....................
Other liabilities ..............
Capital account ..............
Page 46
Changes In weeks ended
Changes
in —
2462
466
41
146
60
—63
—29
— 2
+41
+ 4
—94
+22
+22
+ 4
— 9
31 + 5
_
301 + 1
2017
421
64
341
—
+
+
+
+
+
—
—
+
—
+
+
82
10
2
39
7
14
10
24
1
10
3
2
Third Federal Reserve District
(Millions of dollars)
Sources of funds:
Reserve Bank credit extended in district.
Commercial transfers (chiefly interdistrict)
Treasury operations ...........................................
Total
Mar.
3
+26
— 7
—13
+
....................................................................
Uses of funds:
Currency demand ................................................
Member bank reserve deposits.........................
"Other deposits” at Reserve Bank................
Other Federal Reserve accounts....................
Total
Ratio
of
Excess
to Re
quired
Held
Phila. banks
1947 Mar. 1-15.
1948 Feb.1-15___
Feb. 16-29 .
Mar. 1-15 . .
$406
429
431
427
$398
426
420
420
$ 8
3
ii
7
2%
1
3
2
Country banks
1947 Mar. 1-15 .
1948 Feb.1-15 . .
Feb. 16-29
Mar. 1-15 . .
$383
387
380
380
$330
344
344
341
$ 53
43
36
39
16%
13
11
11
Re Ex
quir'd cess
Mar. Mar. Mar.
31
24
17
—11 [ —12 | + 6
—14
+ 5
+49
— 3
+43
—84
-20
+34
-35
Ch’ges
in five
weeks
—57
+ 13
+113
—152
11
— 26
+4
+42
---1------
+10
+6
—20
— 5
+39
— 16
—20 | +34
+4
—to
—11
+1
— 4
....................................................................
Member bank
reserves
(Daily averages;
dollar figures in
millions)
6
Mar.
10
+ 1
—35
—11 | — 26
—
11
Changes in—
Federal Reserve
Mar. 31 five
Bank of Phila.
One
1948
(Dollar figures in
weeks
year
millions)
Discounts & advances $ 17.1 $— 1.2 $— 6.7
.6
Industrial loans . . .
1,492.0 — 10.5 —139.9
U.S. securities.........
Total
..................... $1,509.6 $— 12.0 $—147.1
Fed. Res. notes . . . $1,625.6 $— 20.2 $— 24.7
Member bank dep..
799.9 — 11.1 + 16.9
171.6 + 23.9 +120.7
U. S. general acct..
35.2 + 4.8 — 6.4
Foreign deposits ..
.6 — 2.2
1.9 - ■
Other deposits ....
1,118.7 — .9 +253.8
Gold cert, reserves
— %
+8.3%
42.5%
Reserve ratio .........
@FedFRASER