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For Release l a MORNING Newspapers of Tuesday, April 5, 1949 SECURITIES AND EXCHANtE COMMISSION Washington, D.C. STATISTICAL SERIES Release No# 856 VOLUME AND COMPOSITION OF INDIVIDUALS' SAVING IN 1948 During the year 1948 individuals saved $4*9 b i l l i o n in liquid form, according to estimates of saving by individuals in the United States made public today by the Securities and Exchange Commission# 1 / This was $3*4 billion less than in 1947 and approximated the 1940 level* In addition to saving in liquid form, individuals purchased $7.7 b i l l i o n of new homes and there was also a considerable amount of new physical investment and expansion of inventories by farmers and unincorporated business* Including these nonliquid forms of saving, individuals added more to their t o t a l assets in 1948 than in 1947* As of the end of 1948 individuals held about $130 billion in cash and >»gnif deposits and about $70 billion of U. S. Government securities. Of the t o t a l of cash and deposits, $24 billion was in the form of currency, $56 b i l l i o n was in time and savings deposits, and $50 billion was in checking accounts* U. S. Government securities held by individuals were mainly U. S. savings bonds, $34 b i l l i o n of Series A-B bonds and $14 b i l l i o n of Series F and G bonds, with other U. S. Government securities amounting to $21 billion.2/ In addition, individuals had an equity of about $54 b i l l i o n in private insurance and about $36 b i l l i o n in government insurance and pension reserves. Equity in savings and loan associations amounted to about $11 b i l l i o n at the end of 1948* During 1948 individuals' holdings of U. S. Government securities increased by about $1*4 b i l l i o n while their holdings of securities other than U. S. Government increased by $2.8 billion# Individuals also added about $3*5 billion to t h e i r equity in government insurance and pension reserves, $3*4 billion to their equity in private insurance, and $1.1 billion to their equity in savings and loan associations. During the same period individuals increased their mortgage indebtedness by $3*7 billion and other consumer indebtedness by $2#3 b i l l i o n , and reduced their holdings of cash and bank deposits by $1.4 billion* While the increase in individuals' holdings of securities during 1948 was about the same as in 1947, a larger proportion was in the form of securities other than U. S. Government. Holdings of U. S. savings bonds increased by about $2.1 b i l l i o n with Series A-E bonds accounting for $700 million, more than twice the amount for 1947. There was a decline in individuals' equity in U. S. Government securities other than savings bonds reflecting redemptions of Armed Forces Leave Bonds of $300 million and an increase in security loans by banks of about $400 million. 1 / In this analysis individuals' saving includes unincorporated business saving "" of the types specified in the attached table. Corporate and government saving are not included. The change in individuals equity in government insurance i s , however, considered as part of individuals' saving* 2/ Loans by banks to individuals (including brokers) for the purchasing or ~~ carrying of these government securities amounted to $1*0 b i l l i o n a t the end of 1948. During 1948 saving in the form of securities other than U. S. Government amounted to $2.8 billion compared with $1.4 b i l l i o n in 1947. New securities issued by state and local governments reached a record level, largely because of flotations to pay veterans' bonuses, and individuals' holdings increased by $1.2 billion. This may be compared with a $400 million increase in the preceding year. In 1948 there was a record $5.0 b i l l i o n increase in the net issues of corporate and other bonds* Of this t o t a l , $400 million was taken by individuals while $4*6 billion was bought by institutions. Almost a l l the net increase in corporate stock of $1*2 billion, however, was absorbed by individuals. Individuals* equity i n insurance and pension reserves increased in 1948 by about $6.9 b i l l i o n as compared with an increase of $7.1 billion in 1947. Individuals' saving in private l i f e insurance, one of the more stable forms of savings, amounted to $3.5 billion, maintaining the rate of increase shown since 1945# Equity in government insurance reserves increased $3.4 b i l l i o n , almost half in social security funds# One of the more significant developments in the composition of saving in 1948 was the decline in individuals' holdings of cash and bank deposits. This decline r e f l e c t s to some extent the expansion of farm and other inventories, Individuals' checking accounts declined by $1.8 b i l l i o n in contrast to an increase of $1.1 billion the preceding year. The rate of accumulation of time and saving deposits continued to slow down so that, in 1948, only $900 mill Ion was saved in this form compared with $2.2 billion the previous year. Mortgage debt in 1948 showed an increase of $3.7 b i l l i o n as compared with $3.8 b i l l i o n in 1947. Other consumer debt increased in 1948, but a t a smaller rate than in 1947, largely reflecting the credit restrictions Imposed in September of 1948. The increase in consumer debt amounted to $2.3 billion as compared with an increase of $3.1 billion in the previous year* During the fourth quarter of 1948 individuals' liquid saving amounted to about $1.8 billion, a lower rate than in the third quarter* During l a s t quarter, individuals added $800 million to their holdings of cash and deposits, $1.9 billion to their equity in insurance and pension reserves, $700 million to their investment in securities, and $400 million to their equity in savings and loan associations. Individuals' indebtedness arising from the purchase of consumer goods increased by $1.1 billion in the quarter, while mortgage debt rose by about $900 million. The $700 million increase in security investments was accounted f o r by net purchases of $300 million ° savings bonds, $300 million of state and local government bonds, and $400 million of corporate and other securities, counteracted in part by a decline of $300 million in U. S. Government securities other than savings bondso The above discussion of individuals' saving is based on data presented in the following table and chart* Saving by Individuals i n the United States 1 / 1940 - 1948 (Billions of dollars) Jan.March 1948 | Apr.July— Oct.June , Sept. Dec. 1940 1941 1942 1943 1944 1945 1946 1947 1948 1947 Oct,— Dec. 1# Currency and bank deposits + 2.9 + 4.9 *10.9 +16.1 +17.5 +18.9 +11.9 + 3.0 — 1.4 + 1.7 - 4*3 + 0.3 + 1.9 : + 0.8 2. Savings and loan associations + 0.2 + 0,4 + 0.3 + 0.6 + 0.8 + 1.1 + 1,2 + 1,2 + 1.1 ' • 0.3 • 0.3 + 0.3 + 0.2 + 0.4 3. Insurance and pension reserves a. Private insurance b. Government insurance + 3.1 • 1,8 • 1,3 + 4.0 + 2.1 + 1.9 4 5.0 + 2.5 + 2.5 • 6.8 + 2.9 • 3.9 • 8.2 + 3.2 + 5.0 • 8,6 + 3.5 + 5.1 + 7.0 + 3.4 + 3.5 + 7.1 + 3.7 + 3.4 + 6.9 • 3.5 • 3.4 + 1.8 • 1.0 • 0.9 + 1.6 • 0,9 + 0.7 + 1.8 + 0.9 + 0.9 + 1.6 + 0.8 • 0.9 + 1.9 + 1.0 + 0.9 4# Securities 2 / a. U.S. savings bonds b. Other U.S. Government 2 / c. State and l o c a l government d. Corporate and other + - + • + - +10.4 + 8.0 • 2.4 — 0.2 + 0.2 +15.1 +13.8 +11.1 +11.8 + 3.0 + 3.9 - 0.1 — 0.1 — *0.2 — 0.6 + 9.8 • 6.9 + 3.6 — 0.2 — 0.5 + 1.1 + 0.9 (*) — 0.4 • 0.6 + 4.0 4 1.8 + 0.8 + 0.4 + 1.0 + + • • 4.2 2,1 0,7 1.2 1.7 • 0.5 • 0.3 - 0.5 (*) + 0.6 • • + • + • 0.2 • 0.2 — 0.7 • 0.2 + 0.5 • + + + • + • • 5. Liquidation of mortgage debt l j - 0.9 - 0.9 - 0.1 + 0,3 • 0.1 — 0.2 - 3*3 - 3.8 - 3.7 - 1.0 - 0.8 - 1.0 — 1,0 - 0.9 6, Liquidation of debt not e l s e where c l a s s i f i e d 5 / - 1.2 — 1.0 + 3.3 + 1.3 — 0*2 - 0.8 — 3.3 - 3.1 - 2.3 -1.7 — 0.1 - 0.7 - 0.4 - 1.1 7. Total Liquid Saving • 4*2 +10.3 +29.8 +38.9 +41.5 +37.3 +14.5 + 8.3 • 4.9 + 1,7 - 0.6 • 0,8 + 2.8 + 1.8 + 3.1 • 3.6 • 1.8 + 1.1 + 1.0 • 1.1 + 3.9 • 5.8 + 7.7 + 1.9 + 1.5 + 1.9 + 2.3 • 2.1 + 7.9 • 9.7 + 6.8 • 6.5 • 6.9 + 8.3 +16,2 +21.0 +22.7 + 6,5 • 4.9 • 5.5 • 5.6 + 6.7 •15.1 +23.6 +38.5 +46.5 +49.3 •46.6 +34.7 +35.0 +35.3 +10.2 • 5.7 • 8#2 +10.8 +10,6 Type of Saving 8 . Nonfara dwellings 6 / 1 9# Other durable consumers goods 2/ 10# Total Gross Saving (7+8+9) (*) 0,9 0.3 0,5 0.1 2.9 2.8 0.7 0.3 0.3 1 / Includes unincorporated business saving of the types specified. made i n some of the series* Does not include corporate or government saving. 2.7 0.8 0.9 0.5 0.6 0.6 0.8 0,6 0.1 0,2 0.7 0.3 0.3 0.3 0.4 v Considerable revisions have been 2 / Does not include net purchases by brokers and. dealers or other individuals financed by bank loans* 2 / Includes Armed Forces Leave bonds# j j Mortgage debt t o i n s t i t u t i o n s on one-to-four family nonfarm dwellings, 5 / Largely attributable to purchases of automobiles and other durable consumers' goods, although including some debt arising from purchases of consumption goods# The other segments of individuals' debt have been allocated to the assets to which they pertain, v i z . , saving in savings and loan associations,9 insurance and securities# 6 / Construction of one-to-four f a n i l y nonfam dwellings l e s s net acquisition of properties by non-individuals. tion by nonprofit institutions# Also includes a aaount of construc- 2 / Consumer expenditures on durable goods as estimated by the Department of Commerce. NOTEi Figures are rounded and till not necessarily add to t o t a l s . Asterisk ( • ) indicates l e s s than $50 million. The foregoing data have been compiled subject W e £ 2 0 £ ° a '™ny d i f f 6 r e n t s o u r c e s * B e c a u s e o f t h e n^ure of the figures, current data are necessarily estimates and, t h e r e f o r e / s r e - 4- COMPONENTS OF INDIVIDUALS' LIQUID SAVING 1940-1948 DOLLARS BILLIONS DOLLARS BILLIONS OTHER LIQUID SAVING U.S. 1/ GOVERNMENT SECURITIES CURRENCY BANK 1940 AND DEPOSITS 1941 1942 1943 1944 1945 1946 1947 1948 PRIVATE AND GOVERNMENT INSURANCE; STATE, LOCAL AND CORPORATE S E C U R I T I E S ; AND LIQUIDATION OF MORTGAGE DEBT AND DEBT NOT ELSEWHERE C L A S S I F I E D . OS-3082
@FedFRASER