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For Release in HORNING Newspapers of Wednesday, November 24, 1943

Philadelph ia
Release No. 736
In the
individuals, including non-corporate business enterprises, aiid corporations continued to augment their large holdings
of liquid assets at the extremely high rate of the past year, according to the
quarterly report on the volume and composition of saving released today by the
Securities and Exchange Commission.
Even mo re than in the prior quarter, investment in U. S* Government securities accounted for the predominant part of
the increase in liquid saving and assets.
The rate of individuals' liquid saving 1/ in this quarter reached a new
high for the year, amounting to $9.9 billion? 2/ The increase of $700 million
over the second quarter saving reflects a normal seasonal rise in the rate of
saving as well as an increase in income after payment of taxes.
In the three
months, July through September, individuals added
$2.7 billion to their cash
and deposits j5/, $5* 5 billion to their holdings of U. S. Government boncls and
$700 million to their equity in private insurance, mostly life insurance.
They also paid oft somewhat less than $200 million o f consumer indebtedness
other than mortgages. At the same time they reduced their holdings of corporate securities by $300 million.
As in the previous quarter but to a greater extent, individuals' investment in rJ. £ » Government securities exceeded their accumulation of cash on
hand and in banks, due largely to the Third War Loan Drive.
Saving of individuals in the form of U. S, Government securities reached a new high in this
While additions to currency and deposits were again substantial, they
were less than in the preceding quarter and showed the smallest rate of increase since the second quarter o f 1942.
Because of the magnitude of accumulations of cash and deposits since the
beginning of the War, they have received considerable emphasis in recent discussions of the public's saving. It may, there fore, be well to note again
that additions to individuals' cash on hand and in checking accounts, amounting
roughly to $7.0 billion and $9•5 billion respectively since the end of 1941 4/,
do not constitute saving in the same sense as increases in holdings of securT—
ties and life insurance, or debt liquidation, but represent in considerable
part only a temporary accumulation of funds not ear—marked for investment that
may at any time be diverted into consumption and other channels.
In view of
the differences between the various forms of saving, it is important to consider not only the volume but also the components of saving and the significant shifts among; them In order to determine the effects of saving on the
economy during the war as well as in the post-war period.
As previously noted in these releases, a substantial proportion of the
Increase in individuals' saving is attributable to unincorporated businesses
such as tradesmen, farmers, professionals, etc/ With respect to demand deposits (a^ form of saving in which unincorporated business might,be expected to
hold a relatively larger share than in other forms) there is some reason to
l/ Includes unincorporated business saving of types specified in the attached
2/ This includes saving in Government insurance, mostly Social Security funds,
amounting to $1,0 billion.
\f Includes currency, deposits in checking accounts, and deposits in savings
4/ It is estimated that additions to individuals' savings (and time) deposits
amounted to $4.$ billion during this period.

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S - 736"

believe that unincorporated businesses accounted for as much of such saving in
the past year as other individuals. 5/
The attached table presents in detail the estimates on which the above
analysis is based.

In addition to the estimates of saving by individuals the Commission
again made public estimates of corporate saving, excluding banks and insurance
companies, in the form of increases in cash and deposits, Government securities and inventories, and the offsetting increases in Federal income tax
liabilities for the third quarter of 1945 and prior periods. 6/
1940 1941 1942

Jan.- Apr,- July' Mar.
June Sept.
(Billions of dollars)

Currency and bank deposits
U, S. Government securities
Federal income tax liabilities

+ 2.2
- .3
+ 1.3

+ .7

+3.3 +3.0 7/
+6.3 + .5"
+ 1 . 6 - .5
+4.7 + .1

+ .5
- •4
+ .7

- .7

19.9 §/

+3.7 9/ 16.9 9/
+ .6" 26.7
+ .7

This table shows that while during the third quarter there was a decrease
of $700 mi H i on in the cash and deposits of non-financial corporations, holdings of U. S. Government securities increased by $3* 7 billion, the highest increase on record. The net increase in cash, deposits and U. S. Government
securi ties combined, amounting to $3*0 billion, was at about the same rate as
in the fir st and second quarters of the year. Inventories increased $600
million in contrast to a decrease of approximately $500 million in each of the
prior quar ters of the year. The increase of $700 million in Federal income
tax liabil ities was about the same as in the second quarter.
In subsequent releases it is planned to present estimates of corporate
saving in considerably more detail. The addition of these other forms of
saving will, of course, give a much more adequate picture of the financial
condition of corporations and their liquid position. In this way the volume
and most significant components of the saving of all important segments of
the national economy will be available.

5/ It should be noted that part of the increase in cash and deposits of unincorporated business reflects liquidation of inventories and receivables
of unincorporated trade (net of retirement of notes and accounts payable) .
Although the amount of this increase is not known, it is believed to have
been not more than $1.0 billion since the beginning of 1942.
6/ These estimates are based on Securities and Exchange Commission, Treasury
* Department, and Department of Commerce data.
2/ Somewhat less than $500 million of this amount represented Victory Taxes
~ withheld by corporations (other than banks and insurance companies) but
not paid to the Treasury Department until the next quarter.
8/ Somewhat over $500 million of this amount represented withholding taxes
~ not paid to the Treasury Department until next quarter.
<2/ Does not include purchases financed by bank loans, estimated at somewhat
over $300 million.

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S - 736

Gross Saving by Individuals In the United States l/
1940 - 1943
(Billions of dollars)



Jan. •

Gross Saving
Liquid Saving 2/
Gross Saving by Type
1, Currency and bank deposits
2, Savings and loan associations
3, Insurance and pension reserves
a. Private insurance
b. Government insurance
c» Total
4* Securities 3/
a. U.S. Savings bonds
b. Other U.S. Government
c. State and local governments
d. Corporate and other
e# Total
5» Non-farm dwellings
a. purchases' 4/
b. Change in debt
c. Saving (a, minus b. )
6, Automobiles and other durable
consumers1 goods J>/
7. Liquidation of debt, not
elsewhere classified 6/








+ 3»0 + 5.0 +11.5
+ .2 + *4 + .3

+ 3.8

+ .1

+ 3.0
+ .2

+ 2.7

+ 1,7 + 2.1 + 2.4
+ 1,2 + 1.8 + 2.4
+2*9 + 3.8 + 4.9


+ .8

+ .8
+ 1.1
+ 1,3

+ ,7
+ 1.0
+ 1.7

,9 + 2.8 + 8.0
,4 + ,8 + 1.9
.1 - . - .1
.5 - .5 * .3
,1 + 2.9 +10.1

+ 2.6

+ 3.0

+ 3.4

+ 2,6

+ 4.0

+ 2.5 + 3.0 + 1,6
+ .9 + ,9 + .1
+ 1.7
2.1 + 1.5

+ .2





+ 9.3

+11.4 + 7,6

+ 1.6

+ 1.9

+ 1.8

- 1,1









+ 2.8



+ 1.7




+ 1.2

- .


+ .

+ 21

+ .
- .3
+ 5.2




Includes unincorporated business saving of the types specified* Does not inelude corporate or government saving.
2/ Gross saving precluding purchases of hones as well as of automobiles and other
durable consumers1 goods»
2/ Does not include net purchases by brokers and dealers or by other individuals
financed by bank loans# In the third quarter of 1943 it is estimated that such
purchases of U.S. Government securities amounted to approximately J1.0 billion
for brokers and dealers and $300 million for other individua Is*
Mew construction of one- to four-family nonfar<n homes less net acquisition of
properties by non-individuals.
5/ purchases* Based on Department of Commerce data, on commodity flow currently
being revised. The figures shown above include all new passenger cars sold
in the United States.
6/ Largely attributable to purchases of automobiles and other durable consumers1
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* viz*, saving in savings and loan associations, insurance,
securities and homes* Changes in the commercial indebtedness of unincorporated
business and in consumers1 indebtedness to unincorporated business are not included in these figures. The reduction in consumers* indebtedness to unincorporated business is estimated at about $50 million in the third quarter of 1943»
Note: The foregoing data have bemn compiled by the Commission from many different
sources» Because of the nature of the figures, current data necessarily
estimates and, therefore, are subject to revision. Figures are rounded and
will not necessarily add to totals*