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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,D C.

For Release

2 0549

June 25. 1965

STATISTICAL SERIES
VOLUME AND COMPOSITION CF INDIVIDUALS' SAVING,

release NO.

2<m

JANUARY - MARCH 1965

Individuals saved $7.3 billion in financial form 1/ during the first three
months of 1965 according to estimates made public today by the Securities and
Exchange Commission. This compares with $7.2 billion in the first quarter and
$8.5 billion in the fourth quarter of 1964.
Financial assets of individuals continued to expand during the first
quarter of the year, the largest growth occuring in their time and saving
accounts at banks. Large investments also were made in U. S. Government
marketable issues, and individuals' equity in private insurance and pension
reserves increased at a near-record rate. Currency and demand deposits declined
more than seasonally, while individuals' indebtedness, an offset to saving,
rose slightly more than in the same three months of 1964.
Saving in currency and total bank deposits amounted to $2.3 billion, the
same as the first quarter 1964. However, the composition of individuals' deposits
was quite different this year, with currency and demang deposits decreasing by
over $2 billion and time deposits rising by $4.5 billion, the largest growth
since the first quarter of 1962. As in that period, the shift in funds was
largely due to an increase in interest rates on savings and time deposits. The
sharp decline in currency and demand deposits reflected several factors including the usual first quarter seasonal decrease, greater consumer spending and the
effect of higher interest rates on saving deposits. Investments in savings
shares at saving and loan associations and credit unions amounted to $2.1
billion, in contrast to $3.5 billion in the preceeding quarter and $2.5 billion
in the first three months of last year. While investments in credit union
shares continued to grow, the flow into savings and loan associations was to
some extent affected by the competitive rates at commercial banks.
Ownership of U. S. Government marketable securities by individuals rose by
$1.4 billion during the first quarter, chiefly in response to favorable terms
offered in the Treasury advance refunding in January. Net purchases of U. S.
Savings Bonds, Series E and H, amounted to $300 million, the same as in the
past four quarters. Although the volume of new tax-exempt issues was large,
individuals increased their investments by only $200 million, most of these
issues being absorbed by commercial banks.
Individuals' net acquisitions of mutual fund shares in the first quarter
1/ Individuals' financial saving, in addition to personal holdings, covers
saving of unincorporated business, trust funds, and nonprofit institutions,
and includes saving in the form of securities, currency and bank deposits,
saving and loan association and credit union shares, and insurance and pension
reserves, net of the increase in individuals' debt.



-2-

S-2061

amounted to $700 million, the largest net purchases of these securities since
the first quarter of 1962 and close to the record net purchases of $900
million in the third quarter of 1961. Although new sales of mutual fund shares
were at record levels these sales were offset by large redemptions.
Aside from their acquisitions of investment company shares, a $700 million
reduction occurred in preferred and common stockholdings of individuals (including personal trust funds). This was less than the liquidation in the preceding
quarter, however, when retirements of stock issues were especially large. In
the first quarter of this year new stock issues were enlarged by the $342 million
General Aniline issue, and retirements were not as great as in the preceding
period. It is estimated that financial institutions continued to absorb about
the same amount of stock—approximately one billion dollars—as during recent
quarters. Institutions also bought most of the new corporate debt offerings
during the quarter.
Equity in private insurance and pension reserves increased $3.5 billion
during the quarter with $1.6 billion saving in life insurance equalling the
fourth quarter record figure. Equity in noninsured private pension funds
continued to grow at the high rate shown in 1964, with a first quarter increase
of $1.5 billion. Government insurance and pension reserves rose by $500
million, compared to $300 million ic the first quarter of last year, the
increase this year reflecting the continued growth in the governmental pension
funds and lower unemployment benefit payments.
Individuals' indebtedness increased by $2.8 billion, somewhat more than the
growth in the first three months of 1964. Mortgage debt grew by $3.3 billion as
compared with $3.8 billion in the same period last year, the slackening being
attributed to the lower amount of residual construction this year. Consumer
credit decreased by $400 million in the first quarter reflecting the usual
seasonal repayment of charge account*; however,the decline in consumer credit
this year was less than in the first quarter of 1964, because of an increase in
automobile financing. Securities borrowing by individuals was reduced $100
million during the quarter with a decline in loans on U. S. securities being
partially offset by a rise in loans on other securities.
Other concents of saving
Besides the concept of saving presented here, there are other concepts of
individuals' saving with different degrees of coverage currently in use. The
personal saving estimate of the Department of Commerce is derived as the difference between personal income (after taxes) and expenditures. A complete
reconciliation of the Securities and Exchange Commission and Comnerce Department
series appears annually in the Statistical Bulletin of the Securities and
Exchange Commission and in the Survey of Current Business.
The Federal Reserve Board's flow-of-funds system of accounts includes
capital expenditures as well as financial components of saving and covers
saving of Federal, state and local governments, business, financial institutions
and consumers. While the Federal Reserve Board's estimates are similar to the
Securities and Exchange Commission estimates of individuals' saving, there are
some statistical and conceptual differences in the two sets of data.



SAVINGS BY INDIVIDUALS IN THE UNITED STATES U
1962 — 1965
( B i l l i o n s of d o l l a r s )

1962

1963

1964
Jan.r
Mar.

1964
Apr.JulyJune
Sept.

Oct.Dec.

1965
' Jan.Mar.

Type of Saving
1.

18.0

2.

Currency and desiand deposits
Time and savings deposits

Savings shares 2/

3.
a.

U. S. savings bonds
(1) Series B&H

b.

Other U. S. Government 3/......

d,

Corporate and other
(2) Investment company shares 4/
(3) Othev preferred and common stock......

4.

Private insurance and pension reserves....
a.

Insurance reserves

19.8

2.3

3.6

5.7

8.2

2.3

3.1
14.9

6.6
10.9

7.4
12.4

- .7
3.0

.5
3.2

2.7
3.0

4.9
3.3

-2.2
4.5

10.0

11.8

11.3

2.5

3.3

2.1

3.5

2.1

- .9

a.
b.

17.5

.5

4.4

1.6

1.3

1.4

.1

1.7

.9
- .5
.6
.3
-2.2
- .2
1.8
-3.8

1.6
- .4
.5
1.5
-2.8
.2
1.2
-4.1

1.2
- .3
2.4
1.7
- .6
.3
1.8
-2.7

.3
- .1
1.4
.2
- .2
- .2
.3
- .4

.3
- .1
- .1
1.0
.2

.3
- .1
1.1
.4
- .3

.3
- .1

.3
- .1
1.4
.2

.4
- .2

10.8

11.2

12.9

3.1

5.0
1.4
4.4

4.9
1.7
4.7

5.6
2.0
5.4

1.4
.5
1.2

*

.5
- .7

.1
- .3
.5
.6
-1.4

.7
~ .7

3.2

3.0

3.6

3.5

1.3
.5
1.4

1.3
.5
1.2

1.6
.5
1.5

1.6
.5
1.5

*

*

*
*

5.

Government insurance and pension
3.0

4.4

5.4

.3

3.2

1.9

*

.5

6.

Increase in individuals' debts

19.6

23.2

22.1

2.6

7.0

5.6

6.9

2.8

c.

13.4
5.0
1.1

15.9
6.3
.9

15.6
6.5
.1

3.8
- .7
- .6

3.8
2.6
.6

3.8
1.6
.3

4.2
3.0
- .3

3.3
- .4
- .1

21.2

22.3

31.8

7.2

7.7

8.5

8.5

7.3

17.9

18.9

18.8

4.8

4.1

4.6

5.2

4.5

7.

Securities loans 9/

Met financial saving (1+2+3+4+5-6)

8.
9.

Construction and equipment of nonprofit
3.5

3.7

4.1

.9

1.0

1.1

1.1

.9

10.

Consumer durable goods

48.4

52.1

56.9

12.6

14.2

13.1

16.9

14.1

11.

Gross saving (7+8*9+10)

91.1

96.3

111.6

25.6

27.0

27.4

31.6

26.8

* Indicates less than $50 million.
1/ Includes unincorporated business saving of the types specified. Figures are rounded and will not necessarily add to totals.
The foregoing data have been compiled by the Commission from many different sources. Because of the nature of the figures,
current data are necessarily estimates, and, therefore are subject to revisions.
2/ Includes shares in savings and loan associations and shares and deposits in credit unions.
3/ Includes nonguaranteed Federal agency securities.
4/ Includes closed-end investment companies as well as mutual funds.
5/ In addition to corporate funds, includes reserves of nonprofit organisation and multi-eiq>loyer plans.
6/ Includes Social Security, unemployment, civil service, railroad retirement and state and local retirement funds.
7/ Mortgage debt to institutions on one-to-four-family nonfarm dwellings.
8/ Consumer debt owed to corporations, largely attributable to purchase of automobiles and other durable consumer goods,
although including some debt arising from purchases of consumption goods. Policy loans on government and private life
insurance have been deducted from those items of saving.
9/ Change in bank loans to brokers and dealers and others made for the purpose of purchasing or carrying securities.
10/ Construction of one-to-four-family nonfarm dwellings.