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F E K R A l RESERVE BOARl
LIBRARY

For Release

UNITED S T A T E S
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,D C. 2 0549

J U L - a 1966
June 3 0 .

1966

STATISTICAL SERIES

release NO.

2136

VOLUME AND COMPOSITION OF INDIVIDUALS' SAVING, JANUARY - MARCH, 1966
Individuals saved $6 billion in financial form during the first quarter of
1966 according to estimates made public today by the Securities and Exchange
Commission. This was about the same amount of saving as in the first and second
quarters of last year. Although personal income after taxes has increased substantially over this period, the rise was offset by increased consumer expenditures.
While the amount of saving was unchanged from a year ago, a marked change
occurred in the composition of individuals' financial saving. There was a slowing down in the growth of savings deposits at banks and savings and loan associations, and a sharp reduction in holdings of currency and demand deposits.
In contrast, individuals acquired the largest amount of U.S. Government and
agency issues in any quarter of the post-war period, reflecting the highest
yields available in many years. Individuals also made record net purchases of
investment company issues, but continued their sizeable liquidation of other
common and preferred stockholdings.
Individuals' ownership of U.S. Government and Federal agency issues rose
by $3.9 billion during the first quarter. An advance refunding offering in
February by the Treasury Department, involving the exchange of new issues
carrying interest rates of 4 7/8 and 5 percent, met with favorable response and
several issues by Federal Land Banks and the Federal National Mortgage Association also attracted investors. During the period there was a liquidation in
holdings of U.S. Government obligations by commercial banks about equalling
the increase in individuals' net acquisitions. Individuals' net purchases of
U.S. Savings Bonds totaled $200 million, $100 million lower than in the first
and fourth quarters of 1965.
While there was no increase in individuals' portfolio holdings of state
and local issues during the first quarter, $500 million was added to their
holdings of corporate bonds, higher than the amount acquired during the same
period of last year. These larger acquisitions reflected the fact that a
record amount of bonds and notes were marketed during the period and, in addition, an exchange of $630 million U.S. Steel preferred stock for new debentures
was completed. The effect of this transaction as well as substantial acquisitions of stock by financial institutions resulted in a $1.8 billion reduction
in individuals' stockholdings, other than investment company issues. Sales of
the latter issues reached a record volume, substantially offsetting redemptions
which were also at a record rate.
Time deposits of individuals at commercial and mutual savings banks rose
by $3.9 billion as compared to $4.6 billion in the first quarter of 1965. The




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S-2136

growth of $1.4 billion in savings shares at savings and loan associations
trailed the first quarter of last year by 30 percent, with new savings inflow
increasing over the 1965 rate but withdrawals rising sharply. A reduction in
individuals' currency and demand deposits totaled $4.2 billion, an amount greater
than the usual seasonal decline.
Saving by individuals in the form of private insurance and pension reserves
increased an estimated $2.9 billion during the first quarter as compared to
$3.1 billion in the first quarter of 1965. Government insurance and pension
reserves grew by $1.2 billion, a somewhat larger increase than in the same
period last year.
Individuals' mortgage debt increased $4.4 billion in the first three months
of this year. During this period, sales of new homes totaled $1.9 billion.
Consumer credit declined $400 million as the seasonal reduction in charge
accounts more than offset increased installment borrowing. During the quarter
individuals' borrowing on securities, chiefly corporate issues, declined $400
million, compared with a decline of $100 million in the first quarter of last
year.
Definition of saving
Estimates^ of individuals' saving as compiled in this report are derived
as the difference between the increase in individuals' financial assets and the
increase in their indebtedness during a period. The estimates do not reflect
changes in market values as the series excludes capital gains and losses. In
the report covering annual saving, however, market values are presented of the
accumulated financial assets and liabilities of individuals as of the end of
each year. The classification "individuals" includes households, unincorporated
businesses, trust funds, and nonprofit institutions.
There are other series on individuals' saving with different degrees of
coverage. The personal saving estimate of the Department of Commerce is derived as the difference between personal income (after taxes) and expenditures.
The Federal Reserve Board's flow-of-funds system of accounts includes estimates
of gross saving and net financial investment of households. A comparison of
the Securities and Exchange Commission estimates and the Department of Commerce
series will appear in the July Survey of Current Business and the Commission's
Statistical Bulletin.




SAVING BY INDIVIDUALS IN THE UNITED STATES 1 /
1963 - 1966
(Billions of dollars)
1963

1964

19<>5

1965
Jan. Mar.

Apr. June

JulySept.

Oct.Dec.

1966
Jan. Mar.

Type of Saving
1.

Currency and demand deposits

2.

Time and savings deposits

Insurance reserves

1.9

3.8

7.1

-4.2

11.6

12.3

15.3

4.6

3.1

4.2

3.4

3.9

11.3

9.3

2.1

2.5

1.4

3.3

1.4

7.0

4.9

1.3

1.9

1.0

.6

4.4

1.6
-.4
.7
1.8
-2.1
.5
1.6
-4.3

1.2
-.3
3.3
2.4
.4
.9
2.0
-2.5

.9
-.2
1.8
2.4
.1
2.3
2.1
-4.4

.3
-.1
1.0
-.1
.2
.3
.1
-.2

.2
-.1
.3
.9
.6
1.2
.7
-1.3

.1
-.1
.7
.5
-.2
.7
.7
-1.6

.3
-.2
1.1
-.5
.2
.6
-1.3

.2
-.1
3.9
.4
.5
1.7
-1.8

11.7

13.0

3.1

2.8

3.2

3.9

2.9

4.5

4.8

5.3

1.2

1.0

1.4

1.7

1.1

1.7

a.

-2.7

10.7

b.
c.
d.

10.0

1.6
U.S. savings bonds
(1) Series E & H
(2) Other
Other U.S. Government
State and local government
Corporate and other
(1) Bonds and notes
(2) Investment company shares !t/
(3) Other preferred and common stock...

7.0

11.7

a.

6.8

2.0

2.1

.5

.5

.5

.5

.5

Increase in debt (8+9+10)

11.
*
1/
2/
3/
4/
5/
6/
7/
8/
9/




Net financial saving (1+2+3+4+5+6-7)

5.6

1.4

1.3

1.3

1.7

1.2

4.6

5.0

1.1

1.3

1.3

1.3

1.2

22.1

22.2

24.4

3.3

7.6

4.4

9.2

3.6

15.6

15.4

3.7

3.3

4.0

4.4

4.4

6.5

9.0

-.3

3.5

2.4

3.4

-.4

.9

7.

4.9

4.0

6.3

Noninsured pension reserves —/

Government insurance and pension reserves —

4.5

14.9

c.
6.

.1

*

-.1

.7

-2.0

1.5

-.4

24.3

31.7

33.1

6.1

6.0

10.6

10.3

6.1

Indicates less than $50 million.
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 revision.
Includes shares in savings and loan associations and shares and deposits in credit unions.
Includes nonguaranteed Federal agency securities.
Includes closed-end investment companies as well as mutual funds.
In addition to corporate funds, includes reserves of nonprofit organization and multi-employer plans.
Includes civil service, railroad retirement and state and local retirement funds.
Mortgage debt to institutions on one-to-four-family nonfarm dwellings.
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.
Change in bank loans to brokers and dealers and others made for the purpose of purchasing or carrying securities.