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MONTHLY REVIEW O f Credit and Business Conditions FEDERAL V olum e RESERVE 33 BANK OCTOBER OF NEW YORK 1951 No. 10 MONEY M ARKET IN SEPTEMBER Following the pattern that had pre vailed previously in the third quarter o f this year, the money market was again tight during a large part o f September. Increased seasonal demands for currency and credit and recurrent outflows of funds to other parts of the country com bined to keep the reserve positions of New York City banks almost constantly under pressure. Except for a few days after the middle of the month, rates on Federal funds in New York hovered just below the 1% per cent Federal Reserve discount rate. Banks in other parts of the country were able to reduce their bor rowings from the Federal Reserve Banks and to add substantially to their excess reserves during most of the month, but in the final statement week their money positions also turned tight as the result of an exceptional convergence of large net payments to the Treasury and month-end drains on bank reserves. The Government security market remained relatively in active until near the close of the month. A rather general rise in yields on most maturities developed during the last several days. Bill yields during September were generally steady at or a little below those prevailing at the end of August, returning to the higher August levels at the month end. The Treasury borrowed 200 million dollars in new bills on each of its three offerings of September 13, 20, and 27. Federal Reserve activities over the first three statement weeks were largely confined to marginal operations in shorter-term Government securities, either in the form of repurchase con tracts with dealers or limited purchases of newly issued bills. Toward the close of the fourth statement week relatively large purchases of Treasury bills, certificates, and notes were made for the System Account to relieve the unusually tight situation in the money market. The Treasury books were open from September 4 through September 7 to exchange 11-month V/s per cent certificates of indebtedness for the 755 million dollars o f 3 per cent partially tax-exempt bonds called for redemption on September 15. The books were open again from Sep tember 18 through 21 to exchange simi lar 11-month certificates for the 1.9 bil lion dollars of l lA per cent Treasury notes maturing October 1. Cash redemp tions on these two exchanges were, re spectively, 22.8 and 4.5 per cent of the outstanding amounts. The proportion ately heavier redemptions of the 3 per cent bonds were mainly attributable to the widely scattered distribution of these bonds, many of which were held in relatively small amounts by investors who were not interested in the short term, fully taxable certificates. On Sep tember 26, the Secretary of the Treasury announced that the 11.2 billion dollars of IV4 per cent Treasury notes maturing October 15 and November 1 would be refunded as of October 15 with an offering of 11^-month V/s per cent certificates of indebtedness. M em ber B a n k R ese rve P o sitio n s The September tax payments and seasonal variations in "float” caused sharper fluctuations in total reserve balances and in excess reserves than had occurred in July and August, but conditions for the month as a whole were no less tight. CONTENTS Money Market in September............................ .137 Residential Construction, Mortgage Credit, and Controls .....................................................140 The Index of Basic Commodity Prices............ .144 Marketing of Treasury B ills .............................147 Department Store Trade.....................................150 MONTHLY REVIEW, OCTOBER 1951 138 Large increases in float and such other factors as an increase in the gold stock added about 900 million dollars to bank reserves by the end of the third statement week. However, expanded required reserves, largely reflecting deposit increases generated by sales of Government securities to banks in con nection with corporate tax payments, absorbed over 300 mil lion dollars of these reserves, and increases in currency in circulation accounted for another 100 million dollars. The existence of over a billion dollars in excess reserves at the end of the third statement week did not cause an easier money market, as about one third of this total represented borrowing from the Federal Reserve Banks and a large part (both of the borrowing and the excess reserves) represented funds held temporarily by New York City banks to meet reserve deficits accumulated over the two preceding weeks. Further, the dis tribution of available reserves was such that, while total reserves seemed ample, the New York City banks were under continual pressure during this period. In the last week, reserves were reduced through large "cash” tax collections (tax checks deposited directly in the Treasury’s accounts with the Reserve Banks), Treasury calls on its tax ( “X ” ) and other balances in commercial bank depositories, and a reduction in float. Week-to-week changes during the month are shown in the accompanying table. The increase in currency in circulation during September continued a development that had started earlier this year. In the three-month period ended with the statement week of September 26, currency in circulation increased by approxi mately 540 million dollars. Part of this was a normal seasonal movement, but over the same period in 1950, the period of "post-Korea” inflation, currency circulation increased by only 90 million dollars. The total change in currency in circulation since the low reached on January 24 of this year has been an increase of 1,100 million dollars, while in roughly the same period in 1950 the increase was but 150 million dollars. HowW e e k ly C hanges in Factors T ending to Increase or D ecrease M em ber B ank R eserves, Septem ber 1951 (In m illions of d o llars; ( + ) denotes increase, (— ) decrease in excess reserves) Sept. 19 Sept. 26 Four weeks ended Sept. 26 25 + 7 +339 + 76 +104 + 84 -3 4 0 -3 0 1 + 3 + 67 - 90 -2 4 8 +331 -1 0 3 +228 - 54 +230 +608 -6 6 1 +153 + + 29 83 + + 27 33 +339 -1 4 3 +408 - 62 Statement weeks ended Factor Sept. 5 Sept. +145 + 26 -2 2 8 + 57 - 23 - 60 +267 + 46 - 24 + - 13 35 12 Routine transactions Treasury operations*.............................. Federal Reserve float.............................. Currency in circulation................... .. Gold and foreign account...................... Other deposits, e tc ................................... T o ta l..................................................... - Federal Reserve transactions Government securities............................ Discounts and advances........................ - 22 +112 + 60 +195 +345 Total reserves .................................................... Effect of change in required reserves......... + 46 85 +342 -1 1 8 +668 -2 7 7 -4 6 6 - 21 +498 -3 3 1 Excess reserves................................................. + 39 +224 +391 -4 8 7 +167 T o ta l..................................................... * Includes changes in Treasury currency and cash. N ote: Because of rounding, figures do not necessarily add to totals. ever, the actual rise in holdings of currency by the public and banks does not appear to be markedly out of line with the rise in levels of production and incomes since the third quarter of last year. By comparison with comparable dates a year ago, production has risen about 6 per cent and personal incomes roughly 12 per cent. The expansion in outstanding currency during the year ended September 26 has been 4 per cent. Most of this expansion, however, has been recent, whereas most of the rise in business activity occurred earlier. The dis parity in timing may have been related to a faster rate o f cur rency turnover last year when scare buying was at its peak. Increased currency in circulation this year may, at least to some extent, represent an attempt by consumers to rebuild their cash balances to conform with the rise of incomes and prices over the past year. Gold and foreign account transactions added over 200 mil lion dollars to bank reserves in September bringing to more than 400 million dollars the accretion to bank reserves from this source during the third quarter. The month of July 1951 marked the end of a period of almost two years during which funds had, on balance, flowed out of the United States. In this period, the monetary gold stock of the country declined by about 2.9 billion dollars, and foreign governments and central banks built up their dollar balances with the Federal Reserve Banks by one-half billion dollars, a combined loss to the commercial banking system of 3.4 billion of reserves. The reverse flow which set in during July as a result of shifts in the balance of international payments of this and other coun tries seems to have accelerated over the last two months of the quarter. The net effect of the various factors affecting bank reserves was to maintain tight money market conditions during the third quarter. Routine transactions, including those already discussed, reduced available reserves slightly from the tight position already existing at the end of June, while enlarged deposits created the need for substantial new reserves. The chief causes of the deposit expansion over the quarter as a whole were a rise in business loans for defense and nondefense purposes and the Treasury’s borrowing through new bill issues. Most of the 1.4 billion dollars offered in July and August were absorbed by nonbank investors, but a substantial part of the 600 million dollars of Treasury bills issued in Septem ber appears to have been taken up by the banking system. As a result of the rise in required reserves and the loss of reserve funds, banks were forced to avail themselves of Federal Re serve credit facilities, and there was recurrent resort to bank borrowing from the Reserve Banks. This was particularly true for the New York City banks. One measure of the dispropor tionate pressure on the City banks is shown by the fact that their total deposits declined 375 million dollars from June 27 to September 19, while the total deposits of weekly reporting banks in all other cities rose by 2.1 billion dollars over the same period. FEDERAL RESERVE BANK OF NEW YORK During most of the third quarter Federal Reserve System intervention in the Government security market was largely limited to acquisitions and sales of shorter-term securities under repurchase agreements with dealers. By thus assisting dealers in carrying their positions, the System was able to help materially in evening out the differences in timing of other gains and losses of funds through the market. The exceptions to this general pattern occurred over brief periods at the begin ning and end of the quarter. In the first two statement weeks of July, System holdings of Government securities increased 249 million dollars, largely representing purchases of bills to help New York City banks adjust their reserve positions fol lowing substantial losses of funds attributable to Treasury operations. During the last statement week in September, System holdings of Government securities rose 339 million dollars, representing purchases of shorter-term issues and an increase in repurchase agreements for the purpose of easing severe pressure on the money market at that time. Between these two periods, System holdings of Government securities fluctuated within a narrow range. The net increase in total holdings between June 27 and September 26 amounted to about 630 million dollars. There was virtually no net change in the volume of System discounts and advances from the end of the second quarter to the end of the third. Required reserves rose about 200 million dollars and excess reserves about 70 million, with the remainder of the funds resulting from the increase in System security holdings absorbed by other reserve losses. T r e a s u r y D e b t O p e r a t io n s The Treasury’s borrowing of 600 million dollars through enlarged bill offerings— combined with tight money market conditions that limited buying#by the larger commercial banks and diminished interest by nonbank investors because of the impending tax date— created a somewhat heavy tone in the bill market. Nonetheless, the discount on new bills issued held virtually unchanged at about 1.65 per cent during the month. Yields rose as much as five basis-points on the nearest maturities of outstanding issues, but were steady for the longer maturities until the end of the month. Federal Reserve acquisi tions of bills under repurchase agreements exerted a stabiliz ing influence on the market. Treasury refunding operations during the month were also a factor tending to make for somewhat higher yields on short term Treasury securities, and certificate yields rose slightly. The high cash redemption on September 15 was largely attributable to the partially tax-exempt character of the bonds called on that date and the wide distribution of relatively small holdings previously mentioned. Holders of a partially tax-exempt issue frequently seek the tax exemption feature in their reinvestment and, in many cases, could not be expected to accept exchange into certificates. The proportion of cash redemptions of the short-term note issue maturing October 1 compared more favorably with the August experience when there was a 2.5 per cent attrition on the exchange of a similar 139 l7 / s per cent 11-month certificate for maturing 1lA per cent notes. One result of the September 15 refunding operation was to create some temporary strength in longer maturities of par tially tax-exempt issues during the second week of the month when prices of medium and long-term taxable Treasury bonds generally were falling. The sharp declines which occurred in taxable bonds on professional trading toward the close of the month were attributed partly to the large volume of new corporation and other financing coming onto the market, and partly to Senate approval of a provision of the pending tax bill which would levy a tax on a portion of savings bank earnings. Over the month through September 26, prices of longer maturity Treasury bonds were down roughly two thirds of a point to one point. Like the increase in prices of the pre ceding two months, the decline in September occurred in a thin market. The market was characterized more by lack of demand than any large-scale selling. B u s in e s s L o a n s Commercial, industrial, and agricultural loans of weekly re porting member banks in 94 cities reached an all-time high on September 19 at 19-9 billion dollars. New York City bank loans on that date were 7.2 billion dollars, also a peak. Cur rent loan trends represent a continuation of the loan expan sion growing out of the Korean war and Government defense preparations, upon which customary seasonal requirements have been superimposed in the past few weeks. Loan growth in the third quarter of this year, through September 19, amounted to 718 million dollars and, while substantial, this increase was but 37 per cent of the increase during the same period in 1950. Part of the difference in the Net Changes in Large Com mercial and Industrial Loans of Selected W eekly Reporting M em ber Banks* By Purpose (Cumulated weekly from May 30, 1951#) * Changes in loans were obtained from about 200 banks in June and about 220 banks in July, August, and September. # Latest date shown is September 12, 140 MONTHLY REVIEW, OCTOBER 1951 rates of growth for the two periods may be attributed to the far more rapid expansion of physical output and the sharp rise of prices in the summer of 1950, but another important factor has been the successful efforts o f the Voluntary Credit Restraint Committee and cooperating banks to restrict credit. Also important has been the effort this summer by nondefense industries to liquidate top-heavy inventories in the face of sluggish sales. This may have been at least partly responsible for the sharp drop in nondefense loans during July which is shown in the accompanying chart. The chart shows the cumulative distribution of changes in the larger loans, classified by purpose, of about 220 weekly reporting banks in the principal cities for the period May 30 to September 12. Credit extended to defense and defensesupporting industries over this period totaled over 725 million dollars, while the increase in nondefense loans amounted to only 206 million dollars. A substantial portion of the loans for defense and most of the nondefense loans earlier in the third quarter were for financing capital equipment and proba bly represented in a number of cases temporary borrowing pending sale of securities in the capital markets. The figures for August and September indicate a pickup in expansion of loans to nondefense industries. These mainly represent sea sonal borrowings by food processors, tobacco manufacturers, and commodity dealers, and will probably continue to grow through the next few months. RESIDENTIAL CONSTRUCTION, MORTGAGE CREDIT, AND CONTROLS In 1951, despite restraints on real estate credit and the use of critical metals, scattered materials shortages, and the strin gency in mortgage credit induced by price declines in the Government bond market, the homebuilding industry is head ing for one of the biggest years in its history. In fact, by the end of September the number of units started virtually equaled the goal of 800,000 to 850,000 new dwelling units considered at the time mortgage credit controls were announced to be a desirable maximum for the entire year 1951. Even if the number of units begun in the fourth quarter is relatively small, the total number of nonfarm dwellings started during 1951 will be close to the 1949 level of around one million units, a total topped by the peak year of 1950, but ranking ahead of 1948 and the best years of the housing boom of the twenties. In terms of completions instead of starts, and taking into account both the large backlog of uncompleted dwellings at the beginning of 1951 and the construction of farm houses, it appears that well over a million new units will be added to the nation’s housing supply this year. This development is in strong contrast to the predictions of sharply curtailed activities which were prevalent in the construction industry at the begin ning of this year. Even so, home construction in 1951 will be considerably below the extraordinarily high rate of activity which prevailed in 1950. In that year, a large volume of scare-buying of homes following the outbreak of war in Korea was superimposed on a level of activity already far above any previous records. To a considerable extent, this expansion in activity was facilitated by the liberal credit terms available for Government-insured or guaranteed mortgages. During 1950, mortgage loans made on one to four-family homes reached a record total of 16 billion dollars, while the net increase in mortgage debt outstanding was nearly 8 billion dollars. Because of the inflationary impact of this rapid expansion in credit, terms were tightened on Government-aided mortgages in July 1950. Later, on October 12, 1950, the Board of Governors of the Federal Reserve System and the Housing and Home Finance Agency jointly imposed restrictions on real estate credit, which were "designed to help reduce the currently high inflationary pressures by restricting the flow of funds into the mortgage market. . The HHFA established minimum down payments and maximum maturities on mortgage loans insured by the Federal Housing Administration or guaranteed by the Veterans’ Administration. (Under the terms of the Defense Produc tion Act, preferential terms were established for veterans obtaining V A loans.) Regulation X , issued by the Federal Reserve System, applied only to ’ conventional” mortgages (those not Government-insured or guaranteed) on homes started after August 3, 1950. Terms of conventional loans on old houses were not regulated. Fa c t o r s I n f l u e n c i n g the V olum e of N ew H o u s in g In the first half of 1951, the volume of new mortgage loans made on one to four-family homes was around 7.9 billion dol lars, exceeded only by the record-breaking second half of 1950. The net increase in mortgage loans outstanding during the first six months of this year was 3.4 billion dollars, a smaller gain than in the preceding half year when mortgage debt rose 4.3 billion dollars, and about the same as in the first half of 1950. As indicated above, the reduction in housing activity and in the flow of mortgage credit has not been as great as the goals originally set by the regulating authorities. It would not, however, be proper to judge the effectiveness of credit regu lations and other measures by the high level of housing activity so far in 1951. When real estate credit controls were announced last October, it was decided that financing commitments obtained prior to that time would be exempt from the regula tions. A considerable volume of such commitments was out standing, many of them obtained at the last moment, when the possibility of just such a development became evident. These "exempt” commitments have been the basis for a large share of this year’s homebuilding activity in many sections of the country. In the New York City metropolitan area, a survey by the U. S. Bureau of Labor Statistics revealed that close to 60 per cent of all single-family homes built for sale during the first half of 1951 were exempt from credit regula 141 FEDERAL RESERVE BANK OF NEW YORK tions. Though the volume of these pre-regulation commit ments is being reduced, it is still important; approximately 45 per cent of such homes scheduled to be started in the New York City area in the third quarter of 1951 were expected to be financed under “exempt” commitments. While there has been a considerable reduction this year in the volume of home construction, the number of starts in recent months has been running at an annual rate above the goals set when controls were imposed. To a considerable extent, the continued high rate of activity stems from the long period of preparation ordinarily required before a housing project is started. With large projects, it usually takes several months to obtain and develop land, draw up plans, obtain financing, and line up materials. The "exempt” projects for which ground was broken in the third quarter had been in preparation for nearly a year, at least to the extent of having obtained financing commitments. Thus, it takes considerable time for the number of new homes started to reflect whatever curtailment of new plans for housing projects may have occurred as a result of credit regulations. Another factor, at least as important as real estate credit controls in reducing the preparation of plans for new projects, has been the tightening of the mortgage credit supply. Early this spring, many institutional lenders had large commitments to extend credit or take over the permanent mortgage financ ing of projects during 1951. They expected to raise any extra funds needed to meet these commitments by selling Govern ment securities. After the accord between the Treasury and the Federal Reserve System in March, however, prices of long term Government securities dropped below par, and the insti tutional lenders became understandably reluctant to incur a capital loss by selling such issues. Nor was the secondary mar ket for Government-insured or guaranteed mortgages pro vided by the Federal National Mortgage Association (famil iarly known as "Fanny May” ) as readily available as it was in 1950, owing to the expiration of authority to make advance commitments and to the tightening of requirements on mort gage purchases. Consequently, institutions met their commit ments as far as possible through the use of funds currently becoming available from such sources as savings, amortiza tions, and maturities. W ith readily available funds largely committed, investors were highly selective in making new commitments. Speculative builders and those starting large developments encountered the greatest difficulty in obtaining financing, but established builders putting up a few homes on contract generally had less trouble getting commitments. As the exceptionally large backlog of commitments is worked off, the supply of mortgage money may become easier, particularly for conventional mortgages. Such funds are not likely, however, to become as plentiful in the near future as they were last year. Instead of shifting from other investments into mortgages, investors are more likely to gear their mortgage acquisitions to the flow of savings and repayments. In particu lar, some large investors, such as insurance companies, have just about completed a postwar program of expanding the proportion of mortgages in their portfolio, which means that they are not likely to be seeking mortgages as aggressively as previously. At the same time, much of the attractiveness of investing in 4 per cent VA-guaranteed or 4*4 per cent FHAinsured mortgages disappeared with the recent rise in interest rates. After taking into account the acquisition costs, servicing fees, and bookkeeping expenses, the net yield on such mort gages now compares much less favorably with yields on good corporate securities than was the case a year ago. As a result, many large investors have ceased to pay premiums to mortgage brokers for Government-aided loans, and in some areas it has become very difficult to place 4 per cent mortgages. W ith the rates on FHA and V A loans remaining unchanged, con ventional mortgages, on which interest rates have tended to increase somewhat, are increasing in popularity with investing institutions. The rate of construction activity and plans for additional projects have also been greatly influenced by the materials situation. In late 1950 and early 1951, large quantities of ma terials were needed for the exceptionally large number of homes under construction. At the same time, many builders were stockpiling materials to meet future needs, often at the insistence of their financing institutions. It became difficult to obtain prompt delivery of many items at that time, and some projects were delayed. By late spring, fears of shortages had eased and the level of housing activity had tapered off somewhat, with the result that most materials were once again in adequate if not abundant supply. Government restrictions on the use of critical materials have not so far seriously hampNew Private Nonfarm Dwelling Units Number started and dollar value of construction avtivity, quarterly, 1949-51 * Third quarter 1951 based on averages for July and August. Source: U . Commerce. S. Bureau of Labor Statistics and U. S. Department of MONTHLY REVIEW, OCTOBER 1951 142 ered the building of single-family homes, although some sub stitutions have been necessary. Apartment builders have been concerned primarily with obtaining sufficient structural steel. In the months ahead, recent orders limiting the quantities of steel, copper, and aluminum which may be used without Gov ernment approval are expected to reduce the volume and type of housing being built and planned. Finally, some decline in the demand for new homes might logically have been expected during 1951 in any case. The preceding five years had all been characterized by a high level of homebuilding activity, and presumably a substantial part of the backlog accumulated during the war had been met. Changes in the V olum e of R e s id e n t ia l C o n s t r u c t i o n As noted above, the high level of homebuilding employment and activity maintained during the first half of 1951 repre sented, to a considerable extent, work being done on homes started late in 1950. Until April of this year, residential con struction activity was consistently maintained above the cor responding month of the preceding year, although the number of dwelling units started had shown a year-to-year decline as early as October 1950. The tendency of the volume of work done to lag behind the number of starts, both on the upswing and on the downswing, is illustrated in the accompanying chart. This lag reflects mainly the length of time needed to N ew Perm anent N on farm D w elling U n its Started, 1 9 5 0 -5 1 Location and type Per cent Thousands of change in first Per cent of dwelling units half of 1951 total units started, first from first half started during half of 1951 of 1950 1950 New York City Privately financed.............................. Single-family hom es..................... Multi-family dwellings................ 7 .8 - 54 46 68 Total private..................... Publicly financed................................ 9 .4 4 .0 - 47 +538 83 17 T o ta l..................................... 1 3.4 New York City metropolitan area outside New York C ity#............. Privately financed.............................. Single-family homes................ Multi-family dwellings........... 1.6 - 27 15 100 2 4 .2 3 .0 - 30 61 83 15 Total private..................... Publicly financed................................ 2 7 .2 - 36 * 98 T o ta l..................................... 2 9 .4 - 31 100 Rest of the United States Privately financed.............................. Single-family hom es..................... Multi-family dwellings................ 4 3 4 .6 5 5 .1 - 21 38 84 13 Total private..................... Publicly financed................................ 48 9 .7 5 5 .0 - 2 ’* +542 97 3 2.2 2 T o ta l..................................... 5 44.7 - 16 100 Total United States Privately financed.............................. Single-family homes..................... Multi-family dwellings................ 4 6 0 .4 6 5 .9 - 21 41 83 14 Total private..................... Publicly financed................................ 5 2 6 .3 6 1 .2 - 24 +565 97 3 T o ta l..................................... 5 8 7 .5 - 17 100 * No publicly financed units started in first half of 1950. # Includes Nassau, Suffolk, Westchester, and Rockland Counties in New York and Bergen, Essex, Hudson, Middlesex, Morris, Passaic, Somerset and Union Counties in New Jersey. Source: Computed and partly estimated by the Federal Reserve Bank of New York from data of the U. S. Bureau of Labor Statistics. complete the construction process, but, since activity is meas ured in terms of the value of labor performed and materials put into place during a given period, it is also affected by changes in the cost of those items. For instance, in the first quarter of 1951 the value of new private residential building activity was 17 per cent greater than a year earlier, but after adjustment for increased construction costs the increase in physical volume was apparently only 4 per cent. That com pares with a year-to-year decrease of 10 per cent in the number of new privately financed dwellings started. In the second quarter of this year, there was a year-to-year decline of 14 per cent in the value of homebuilding activity, and approximately 21 per cent in physical volume, compared with a drop of 35 per cent in the number of new private homes started. Pre liminary data for the third quarter indicate still greater yearto-year declines, but the changes in activity and new starts are more nearly equal in magnitude. H o m e b u il d i n g in the Se c o n d D is t r ic t In the Second Federal Reserve District, the decline in new homes started appears to be somewhat greater than in the rest of the country, as indicated in the accompanying table. The 42,800 new dwelling units started in the New York City metropolitan area during the first half of 1951 were approxi mately 30 per cent less than in the first half of 1950 and 36 per cent less than in the record-breaking second half of 1950. In the United States as a whole, the corresponding declines were 17 per cent and 15 per cent, respectively. In the Second Dis trict outside the New York City metropolitan area, detailed data on dwellings started are not available, but the number of homes for which building permits were issued in urban areas during the first six months of 1951 was about one-third lower than a year earlier, a slightly greater decline than in the country as a whole. The greater decline in this region may be attributed pri marily to the importance in the metropolitan area of apart ment houses and of large, moderately priced housing projects. Because of the concentration of population in New York City, apartment house construction has been far more important in this area than in other major metropolitan areas. In 1950, approximately 85 per cent of all dwelling units started in New York City were in apartment houses and only 15 per cent were single-family homes, while in the rest of the country the pro portions were almost exactly reversed. A large volume of apartment construction since World War II was financed under the very liberal provisions of Section 608 of the National Housing Act. Although this section expired on March 1, 1950, the large volume of unprocessed applications in the hands of the FHA on the expiration date sustained activity throughout most of the remainder of 1950. Relatively few unused com mitments remained by the spring of 1951, however, and, in addition, multi-family dwellings became subject to mortgage credit controls in January 1951. The number of new dwelling FEDERAL RESERVE BANK OF NEW YORK units provided by privately financed apartment house projects in New York City during the first six months of 1951 dropped to half of the year-earlier level. In fact, the smaller number of privately financed apartments more than accounted for the year-to-year decline in all types of dwelling units in New York City during the first half of 1951 and for nearly two thirds of the decline in the metropolitan area. Currently, some stimulus to apartment building is being felt from cooperative housing projects organized under Section 213 of the National Housing Act. The New York City metropolitan area has also relied to an exceptionally large extent on the activities of the ‘ operative” builders, who build large projects or developments, as opposed to "custom” builders who start relatively few houses each year, ordinarily by contract with individual customers. The U. S. Bureau of Labor Statistics estimates that approximately three quarters of the single-family homes started in this area during 1949 were built by operative builders, with the remainder evenly divided between general contractors and owner-builders. (In the country as a whole, 46 per cent of the single-family homes were started by operative builders.) The large projects which these builders put up were financed to a very great extent by FHA and VA mortgages. Prior to July 1950, the low down payments and extended maturities of these Govern ment-aided mortgages (there was often no down payment at all for veterans) greatly broadened the market for housing, and allowed many to buy homes who otherwise could not have afforded them or would have had to defer purchases for some time until a backlog of savings had been built up. The mortgage credit regulations, with their higher down payments and shorter maturities, tended to reduce the market for homes by squeezing out most of these marginal buyers. Some opera tive builders have curtailed their plans, both because of uncer tainties created by the narrower market for the moderately priced homes in which they specialize, and because of difficul ties in obtaining commitments for FHA or VA loans. Others have deferred their plans, preferring not to compete against the more liberal terms still being offered by holders of "exempt” commitments. An offset to the declining number of privately financed dwellings started has been the increased volume of publicly financed housing. In New York City, where a public housing program has been in operation for many years, 4,019 new units of public housing were started in the first half of 1951, com pared with the unusually low total of 630 in the first half of 1950. This year’s figure is, however, well below the 5,950 units started in the last half of 1950 or the record total of 14,270 units in the first half of 1949. The New York City Housing Authority has announced plans to start approximately 5,000 more units during the remainder of 1951 and the first half of 1952. In the rest of the District, as elsewhere in the nation, public housing activity received a stimulus from the Housing Act of 1949. Communities around New York City started nearly 2,200 units of public housing in the first half 143 of 1951, but a year earlier had had no starts in this category. In the rest of the United States, the totals were augmented by the inclusion of over 42,000 units of public housing on which orders to proceed were issued in June 1951, just prior to the end of the Federal fiscal year. In terms of actual building activity, these projects will influence the data for many months, particularly the large developments where work on the last section or apartment building may not actually commence for a long time to come. R e c e n t D e v e l o p m e n t s A f f e c t in g H o u s in g During the past few weeks, there have been several impor tant developments in the field of residential construction which may largely counterbalance one another. In the Defense Hous ing and Community Facilities and Services Act of 1951, Con gress limited the down payments and maturities which the Federal Reserve System and the Housing and Home Finance Agency might require for mortgages on new homes selling for $12,000 or less. (In localities certified as "critical defense v housing areas”, credit regulations have been lifted completely for programmed defense and military housing selling for less than $12,000 or renting for less than $85 per month.) The Board of Governors and the HHFA promptly revised the real estate credit regulations in accordance with the new law. Minimum down payments are now considerably lower than they were under the old regulations, but are still not as liberal as they were a little more than a year ago. For instance, a vet eran buying a $10,000 house would now have to pay $600 down; under the original regulation he was required to pay $1,300 down. In the early summer of 1950, however, he would have stood a good chance of getting a house bearing the same price tag'with no down payment at all. Similarly, for a non veteran the down payment on a $10,000 home has been cut from $2,300 to $1,500, but it is still higher than the $1,250 he might have had to pay early last year. Thus, the potential market for low and medium-priced homes has once again been considerably broadened, and some builders may be encouraged to expand their activities. If land and plans have not already been prepared, however, there may be a considerable lag before this expansion is reflected in housing statistics. This Act renewed the power of the Veterans’ Administra tion to extend direct loans to veterans if they cannot get credit elsewhere, and set up a revolving fund of 150 million dollars. Congress also restored the FNMA’s power to make advance commitments to buy up to 200 million dollars’ worth of Government-insured mortgages on homes in defense and dis aster areas. The FHA was granted an additional 1.5 billion dollars in home-insuring authority. The National Housing Act was amended to provide, under a new Title IX, more liberal credit for programmed housing in defense areas. At about the same time, the RFC announced that it will consider making loans for large defense and military housing develop ments in officially designated critical defense areas when pri vate investors are reluctant to make commitments. These MONTHLY REVIEW, OCTOBER 1951 144 measures will help to ease the supply of mortgage credit. Defense areas, which in some cases have had difficulty in attracting private capital for housing because of their isolation, high construction costs, regulated rentals, or lack of permanent employment opportunities, will be particularly benefited by these programs. On the other hand, the National Production Authority announced in August that any construction requiring delivery of more than specified quantities of strategic materials could not be started after September 30 without authorization by the NPA and an allotment of controlled materials. This move has been part of the effort to bring all users of steel, copper, and aluminum— whether in defense, defense-supporting, or consumers’ goods industries— under the Controlled Materials Plan during the fourth quarter. For instance, starting October 1, a single-family home with a copper water-piping system which requires delivery of more than 1,450 pounds of carbon steel or 160 pounds of copper or any aluminum or structural steel in a single calendar quarter will have to receive authoriza tion from the NPA before it can be started. This replaces previous restrictions on allowable square footage of buildings and total costs of construction. So far as residential building is concerned, the new regulations are expected to have their greatest effect on the construction of apartment houses and large, luxury-type homes. The net effect of these recent changes may well be to con centrate a greater proportion of home construction in single family houses selling for less than $12,000 since they are favored by the new credit terms and are less likely to be affected by materials restrictions. In the months immediately ahead, some further decline in the total volume of new resi dential construction seems likely, both as a deferred result of the credit regulations, materials uncertainties, and mortgagefinancing difficulties encountered earlier this year, and because of the more stringent controls over use of critical materials in construction. THE INDEX OF BASIC COMMODITY PRICES One of the economic indicators which has undergone very wide fluctuations since the start of the Korean war is the index of basic commodity prices, prepared by the Bureau of Labor Statistics. This is one of the two indexes measuring changes in prices in primary commodity markets that are published in the table of Business Indicators each month in this Review. Prices included in this series are for a selected group of foods, fibers, metals, and other raw materials. B u sin ess Indicators Percentage change 1951 195 0 Item August Unit July June August Latest month Latest month from previous from year month earlier U N IT E D ST AT ES Production and trade Industrial production*............................................................................. Electric power o u tp u t*.. ........................................................................ Ton-miles of railway freight*............................................................... Manufacturers’ sales*............................................................................... Manufacturers’ inventories*................................................................. Manufacturers’ new orders, total........................................................ Manufacturers’ new orders, durable good s.................................. Residential construction contracts*................................................... Nonresidential construction contracts*............................................ Prices , wages, and employment Consumers’ pricest.................................................................................... Personal income* (annual rate) ....... .. .................................................. Composite index of wages and salaries*........................................... Nonagricultural emploj'-ment*...................................... .............................. Manufacturing employment*............................. .. ................................ Average hours worked per week, m anufacturingf .......................... Banking and finance Total investments of all commercial banks..................................... Total loans of all commercial banks.................................................. Currency outside the Treasury and Federal Reserve B an ks*.. Bank debits* (U. S. outside New York C ity )----- ............. ........... Velocity of demand deposits* (U. S. outside New Y ork C ity ). . Consumer instalment credit outstanding!....................................... United States Government finance (other than borrowing) National defense expenditures.............................................................. 1 9 3 5 - 3 9 = 100 1 9 3 5 - 3 9 = 100 1 9 3 5 - 3 9 = 100 billions billions billions billions billions of of of of of $ $ S $ S 1 9 2 3 - 2 5 = 100 1 9 2 3 - 2 5 = 100 Aug. 1 93 9 = 100 1 9 2 6 = 100 1 9 3 5 - 3 9 = 100 billions of $ 1 9 3 9 = 100 21S p — — — — — — 12. Ip 290 p 290p 3 2 5 .0 1 7 8 . Op 1 8 5 .5 — — 4 6 ,5 5 4 p 1 5 ,9 0 9 p 4 0 .4p 1 ,5 7 8 thousands thousands hours thousands millions of $ millions of $ millions of $ millions of $ billions of $ 1935 -39 = 100 millions of $ — — — 2 8 ,0 9 1 8 6 .3 101.4 — 213 324 192p 2 1 .6p 4 0 .4p 2 0 .7 p 1 0 . Op 1 1 .8 298 306 221r 325 196 2 2 .8 4 0 .0 2 3 .2 1 2 .0 1 1 .9 289 443 209 297 191r 2 3 .0 2 9 .9 2 7 .3 1 3 .9 1 2 .7 362 3 11 3 3 0 .8 1 7 9 .5 1 8 5 .5 2 5 1 .6p 226p 4 6 ,6 0 4 1 6 ,0 4 0 4 0 .3 1 ,8 5 6 3 5 1 .2 1 8 1 .7 r 1 8 5 .2 2 5 1 .0 22 5 4 6 ,6 1 8 r 1 6 ,0 9 1 r 4 0 .8 1 ,9 8 0 3 1 1 .7 1 6 6 .4 1 7 3 .4 2 2 7 .7 210 4 4 ,9 1 4 1 5 ,3 3 3 4 1 .2 2 ,5 0 0 7 1 ,3 5 0 p 5 4 ,590p 9 0 ,800p 2 7 ,9 1 5 7 1 , 1 90 p 5 5 ,0 4 0 p 8 9 , 500p 2 7 ,6 8 6 7 6 ,0 3 0 4 7 ,2 7 0 8 7 ,4 0 0 2 7 ,1 4 5 8 2 .8 9 9 .5 8 5 .7 102.8 8 0 .6 100. 9r + 2 - 2 — 5 + 1 -1 1 — 17 + 2 3 — 5 _ - + 2 1 # # 1 - 1 # -1 5 ji + + + + 1 1 1 4 + 4 + 13 + 3 + 6 +36 7 6 -2 0 7 + 4 + 7 + 7 + 13 + 8 + 4 + 4 — 2 -3 7 _ 7 + 19 + 5 + + 2 3 7 # 1 2 ,898p 1 2 ,9 5 5 1 3 ,0 0 9 millions of $ millions of S millions of $ 4 ,5 9 3 p 5 ,5 6 2 p 2 ,8 5 4 4 ,8 4 3 7 ,3 6 7 5 ,2 2 3 3 ,5 2 4 +61 3,1 5 8 2 ,8 0 3 3 ,009 1,237 +30 3 ,3 7 4 +15 + 7 +85 +173 1935-39 1 9 23 -25 = 1923 -25 = 1935 -39 = thousands thousands billions of billions of 1 935 -39 = — — 180.9 — 2 ,6 4 3 . Ip 4 6 .5 3 .8 225 145p 188p 18 1 .2 7 ,3 3 6 .6 p 2 ,6 7 9 .6 4 4 .1 3 .7 1 13.4 219 167 204 1 69.7 7 ,1 0 6 .8 2 ,5 4 3 .8 5 6 .3 3 .5 1 3 8 .6r - + S E C O N D F E D E R A L R E S E R V E D IS T R IC T Electric power output* (New York and New Jersey)..................... Residential construction contracts*........................................................ Nonresidential construction contracts*................................................. Nonagricultural employment*................................................................... Manufacturing employment*..................................................................... Bank debits* (New York C ity )................................................................ Bank debits* (Second District excluding N . Y . C. and Albany) .. Velocity of demand deposits* (New York C it y )............................ 100 100 100 100 $ $ 100 110.8 227 165 220 18 0 .5 7 ,3 1 2 .5 2 ,6 7 2 .6 4 5 .0 3 .7 119.5 1 -1 2 -1 4 # # - 1 + 5 + 2 _ o p Preliminary. r Revised. . * Adjusted for seasonal variation. t Seasonal variations believed to be minor; no adjustment made. # Change of less than 0.5 per cent. . Source: A description of these series and their sources is available from the Domestic Research Division Federal Reserve Bank of New York, on request. + 6 -2 2 + 1 + + + -1 + 7 4 4 7 8 -2 0 FEDERAL RESERVE BANK OF NEW YORK Group Indexes and Spot P rim ary M ark et Prices for 2 8 B asic Com m odities (B a se fo r index n u m b e rs: A u g u s t 1 9 3 9 = 1 0 0 per cent) Indexes September 25, 1951 I III ^cxcs General Index..................... (a) Im ports.................. (b) Domestic commodities.................. (c) Domestic agricultural commodities..................... (d) Foodstuffs............. (e) Raw industrial commodities 3 2 7 .7 3 3 8 .8 3 2 0 .7 3 4 5 .6 3 6 8 .0 3 1 0 .4 Per cent change since June 23, 1950 +24 +27 +22 + 6 +12 +30 Spot Prices Group in dexes in which in cluded Commodities Unit B arley.................................... Burlap................................... B utter.................................... Cocoa beans........................ Coffee..................................... Copper................................... Corn....................................... C otton................................... Cottonseed oil.................... Flaxseed................................ H ides..................................... H ogs....................................... Lard........................................ Lead....................................... Print cloth........................... R osin..................................... Rubber.................................. Shellac................................... Silk.......................................... Steel scrap, Chicago........ Steel scrap, Philadelphia. Steers..................................... Sugar..................................... Tallow ................................... T in .......................................... W h e a t.................................... Kansas C it y ................... Minneapolis.................... W ool top s............................ Zin c........................................ bushel yard pound pound pound pound bushel pound pound bushel pound 100 pounds pound pound yard 100 pounds pound pound pound ton ton 100 pounds 100 pounds pound pound bushel b, c, d a, e b ,d a, d a, d b, e b, c, d b, c, e b ,d a, e a, e b, c, d b, d b, e b, e b, e a, e a, e a, e b, e b, e b, c, d a, d b a, e b, c, d pound pound a, c, e b, e September 25, 1951 $ 1 .450 .255 .681 .325 .545 .244 1.780 .362 .170 3 .9 2 0 .345 2 1 .0 7 5 .181 .170 .150 8 .8 0 0 .520 .525 4 .6 5 0 4 2 .5 0 0 4 3 .5 0 0 3 6 .5 0 0 5 .8 8 0 .095 1 .030 2 .3 6 0 2 .2 9 0 1 .9 6 5 .183 Per cent change since June 23, 1950 -1 3 +55 + 14 0 +12 + 9 + 18 + 7 + 10 - 1 +34 + 4 +66 +48 - 1 +78 +84 +50 +72 + 13 +26 +25 + 1 +98 +35 +12 + 1 - 2 +17 Source: U. S. Bureau of Labor Statistics. A list of the commodities which the index comprises appears in the accompanying table. Most of the items are traded on organized exchanges. The quotations are all spot prices, that is, for current rather than future delivery. Twenty-nine prices for 27 commodities are quoted. In the computation of the index, steel scrap appears twice as a commodity: once as the brokers’ price at Philadelphia and again as the consuming in dustries’ price at Chicago. On the other hand, although separate prices are shown for winter wheat at Kansas City and spring wheat at Minneapolis, they are averaged together as one commodity in order to avoid giving undue emphasis to farm products. Hence, the series is often referred to as the index of 28 basic commodity prices. Eighteen of the com modities have been chosen because of their importance in world trade, either as imports or exports. Each day, Monday through Friday, the Bureau of Labor Statistics collects price data for the specified grade of each commodity. Prices are collected from a single market for each commodity except in the case of cotton for which an average of quotations in 10 markets is used. The ratio of each price to the average of daily prices for that commodity in August 1939 is then computed. The daily index is the unweighted geometric mean of the individual price ratios (that is, the 28th root of the product obtained by multiplying the 28 ratios). This method gives equal proportionate weight to changes in prices 145 of different commodities, irrespective of the absolute magni tude of each price change. The monthly index which appears in the table of Business Indicators is computed from the monthly average of daily prices for each commodity. The Bureau of Labor Statistics also publishes five group in dexes based on these price quotations: imports, domestic commodities, domestic agricultural commodities, foodstuffs, and raw industrial commodities. The subgroups in which each commodity is included are noted in the accompanying table, and the foodstuffs and raw industrial subgroups are shown in Chart I, along with the index for all commodities. The indexes for a given day are available late the following morning from the Bureau of Labor Statistics in Washington. Each week the Bureau publishes the indexes for each trading day in the preceding week, as well as the actual prices of the commodities included; when the monthly indexes become available they also appear in the weekly release. The daily indexes for the entire year are published in an annual bulletin of the Bureau of Labor Statistics, Wholesale Prices. Monthly figures from 1935 on are also available from the Bureau. Basic commodity prices respond quickly and sometimes violently to demand and supply conditions and to changes in business expectations. Increased demand, fears of severe short ages, and greater speculative activity led to an increase of 48 per cent in the index of 28 commodity prices from the out break of the Korean war to mid-February of this year. In the following months, partly because price controls restrained cer tain prices and lessened the fear of a general rise in prices, partly because defense requirements did not expand as rapidly or as greatly as had been anticipated, and partly because of improved supply prospects for some commodities, the index dropped 17 per cent to 322.8 in August. However, by SepChart I Basic Commodity Prices M onthly indexes*, August 1939=100 per cent Per cent Per cent * September 1951 estimated from data through the 25’th of the month. Source: U . S. Bureau of Labor Statistics. 146 MONTHLY REVIEW, OCTOBER 1951 tember 25, the index had risen slightly and was 327.7 per cent Chart II Dow Jones Indexes of Commodity Prices— Spot and Futures June 1950-September 1951* of the August 1939 average. The basic commodity price index is more sensitive than such Copyright 1951, D ow Jones & Co., Inc. other price series as the wholesale price index, which is also computed by the Bureau of Labor Statistics and published in the table of Business Indicators. The wholesale price index has much wider coverage than the basic commodity price index and includes many fabricated and semifabricated goods, prices of which generally fluctuate less frequently and within nar rower ranges than basic commodities. The sensitivity and prompt availability of the basic com modity indexes make them useful business indicators; on the other hand, day-to-day fluctuations of these basic commodities do not always indicate the general trend in prices. The National Bureau of Economic Research has found that prior to World War II basic commodity prices usually reached a turning point about three months in advance of the general business cycle. As previously noted, all the commodity prices in the basic commodity index are spot prices, i. e., they represent the prices at which specific goods changed hands. ( When no transaction takes place, a nominal price based on prices bid and asked is used, or in the absence of quotations the price at which the last transaction was made is carried forward.) For many com modities information is available on prices in the futures market as well as in the spot market. ‘'Futures” refer to con tracts made under the rules of a commodity exchange for the sale of a stipulated amount of a specified grade of a commodity at a fixed price at a future date. Except for the quantity, price, and month of delivery, the terms of contract are usually stand * These indexes cover movements of 12 selected commodities. The index of futures prices is designed to reflect the current price of contracts for deliveryfive months in the future. Source: Dow Jones & Co., I n c .; weekly averages and ratios computed by the Federal Reserve Bank of New York. substantially in future months may cause the relationship of spot and futures prices to vary from the ‘ normal” one. Since the end of World War II, futures prices have more often than not been below spot prices. This has reflected primarily the existence of an active spot market together with market expec tations that supplies would ease in the future. ard for all transactions in a given commodity. On most ex Trading in futures is usually engaged in either for specula changes, all contracts are made in terms of a single "basis” tion or for purposes of hedging; that is, for protection from grade established by the exchange. For some commodities, losses resulting from future price changes. For example, a such as cotton and erains, most futures contracts are made for flour miller who makes a contract in June to supply a quantity delivery in specified months of the year only. Relatively small of flour in December at a price which will allow a small profit quantities of commodities actually change hands in the settle on the basis of June prices may want to be sure that he does ment of futures contracts. However, if actual delivery is to not incur a large loss if the price of wheat has risen when he be made, the seller may substitute another standard grade ap is ready to buy. To avoid this, he can purchase a December proved by the exchange, with price differentials among grades futures contract in June, and, in November, when he buys fixed by the exchange; the seller, not the buyer, determines the wheat in the spot market to process for the fulfillment of his grade delivered. flour contract, he will sell his December futures contract. If Futures prices have usually been above the spot price in the the spot price has risen, the futures price generally will also past because the futures price includes all carrying charges for have increased by about the same amount, so that the miller the commodity, such as insurance, storage, and interest, al will come out about even on the transaction. Of course, the though, because of variations in the terms of the contracts, chance of making a windfall gain in the event of a favorable spot and futures prices are not always strictly comparable even price change is sacrificed. If the spot and futures prices move after allowance has been made for carrying charges. In addi in different directions or the spread between them changes tion, movements of the two series may be subject to different substantially, the hedge may not operate successfully. The market influences. Any condition which leads traders to be relationship of spot and futures prices since the start of the lieve that the supply and demand situation is likely to change Korean war is shown in Chart II. FEDERAL RESERVE BANK OF NEW YORK 147 MARKETING OF TREASURY BILLS The Treasury bill was first introduced in the United States as an instrument of Government finance in 1929. Designed to attract short-term funds, through a weekly market auction as contrasted with the customary procedure of subscription and allotment for instruments bearing fixed coupon yields, the Treasury bill filled an important need in the money market. By the end of 1934, it had completely replaced the Treasury certificate of indebtedness, which had formerly been the prin cipal means of shorter-term Treasury financing. It was not until 1942, when wartime needs impelled an unprecedented growth in the public debt and made necessary the use of a fully diversified variety of debt instruments, that the certificate of indebtedness was reintroduced. At the present time, Treasury bills, certificates, and other Government securities nearing their maturity dates constitute a dominant proportion of the money market instruments in use in the United States. The growth in these instruments has been paralleled by a shrinkage in the importance, for money market purposes, of the call loan, bankers’ bill and trade acceptance. Because the Treasury bill is sold at auction, on a discount basis, it is uniquely suited to the needs of a highly competitive money market. During the war years, when most market rates of interest were stabilized through System action, and com petition could not be allowed to operate in unrestricted form, most of the growing volume of Treasury bills moved into the portfolio of the Federal Reserve System. By early 1947, the System held about 90 per cent of the 17 billion dollars of bills then outstanding. W ith the gradual return of a competitive climate, both in the money market and the Government securities market, bills have left the System portfolio to find a key place in the secondary reserves of the commercial banks and among the liquid assets of a growing number of industrial corporations. By September 1951, with roughly 15 billion dollars in bills outstanding, the Systems holdings had declined to around 600 million dollars. The commercial banks held about 4 billion dollars, and nonbank investors the remainder. The present article will briefly describe the methods through which Treasury bills are initially sold, the existing market for trading in outstanding bills, and the principal sources of demand, with particular reference to the role of the Federal Reserve Banks in the Treasury bill market. Sa l e s of N ew I ssu es New issues of Treasury bills are obtained only by tender to the Treasury through the Federal Reserve Banks and their branches. Each week, the Secretary of the Treasury follows the practice of inviting competitive and noncompetitive tenders for a specified amount of Treasury bills. Public announcement of offerings of Treasury bills is usually made on Thursday. Tenders are received up to 2 p.m. (Eastern time) on the fol lowing Monday, and bills are usually dated and issued on Thursday of that week. If bidders prefer to wait until the last tender day, and if distance prevents physical delivery of the tender to a Federal Reserve Bank or branch prior to the closing time, the bid or bids may be tendered by telegram, but only through a bank. Confirmation by mail, of course, is necessary. Tenders are received without deposit from incor porated banks and trust companies, and froiji responsible and recognized dealers in investment securities. Tenders from others must be accompanied by payment of 2 per cent of the face amount of bills applied for, unless the tenders are sub mitted with an express guaranty of payment by an incorporated bank or trust company. Whereas other Treasury marketable issues are sold at par to yield a specified rate of interest, bills are sold on a discount basis at prices set by the market. Noncompetitive tenders for up to $200,000 from any one bidder are accepted in full at the average price of accepted competitive bids. Competitive bids, however, cover the bulk of the new weekly issues, although noncompetitive bidding has increased notably in recent years. Tenders are made in even multiples of $1,000, on a maturity value basis, and the prices are stated on the basis of 100 (and to the third decimal place— for example, the issue dated Sep tember 27 sold at an average price of 99.584, which is equal to an annual discount rate of about 1.647 per cent). Some bidders submit competitive tenders at more than one price and often make a noncompetitive bid as well. Non competitive bidding was introduced in 1943, primarily to help widen the market for Treasury bills among small banks. Begin ning at that time an investor could bid for not more than $100,000 of a new issue on a noncompetitive basis, and the price of these bids was set at the Reserve posted buying rate of 99.905 (equivalent to Ys per cent discount). Late in 1944, the maximum on noncompetitive bids was raised to $200,000, and in 1947 after the posted rate was eliminated, the noncom petitive bids were accepted at the average price of the accepted competitive bids. In recent years, as industrial corporations and the smaller banks began to buy bills, noncompetitive bidding increased somewhat in importance, and by 1951 the noncom petitive bids represented more than 10 per cent of the weekly offerings, whereas in 1947 they averaged less than 2 per cent of the offerings. Upon expiration of the time set for placing bids, all tenders received at each Federal Reserve Bank are opened, the bids arranged in descending order of price named, and the details communicated by wire to the office of the Secretary of the Treasury. Starting with the highest price, the Treasury awards bids in full until it has obtained the approximate amount of funds stated in the offering circular. Where more than one bid is made at the same price and only a part of the tenders at such price can be accepted, the amount accepted is prorated in accordance with the respective amounts for which bids have been made. The Secretary of the Treasury makes a public announcement of the results of each weekly sale of Treasury bills late on Monday after the allotments have been determined. (This announcement generally appears in the newspapers on 148 MONTHLY REVIEW, OCTOBER 1951 Tuesday morning.) The Reserve Banks then advise those who have submitted tenders of the acceptance or rejection of their bids. Settlement for accepted tenders must be made or completed at the Federal Reserve Banks by the issue date, in cash or other immediately available funds (that is, deposits at the Reserve Banks) or, since May 1947, in a like face amount of Treasury bills maturing on that date. The Treasury, however, may pro vide that qualified special depositaries may make payment for accepted tenders (on behalf of themselves or their customers) by credit to a Treasury account on their own books, but this privilege has not been granted in recent years. In the past, the Treasury on several occasions sold bills on a book-credit basis to lessen the strain on the money market. The last occasion was late in 1941 and early in 1942, when it was done to facili tate the marketing of increased offerings at a time when mem ber bank reserves were being subjected to severe pressures. Currently, only a small percentage of bills are sold on an exchange basis, whereas in fiscal 1948, the first full year when exchanges were permitted, nearly 70 per cent of the new issues were sold in exchange for maturing bills. At that time, the Federal Reserve Banks held the major portion of outstanding bill issues. Commercial banks and other investors have not adopted, to any extent, the practice of using maturing issues to pay for the new bills they may be awarded. They prefer, prob ably for accounting reasons, to redeem the maturing bills and pay cash for the new issue. To some extent, however, the current low proportion of exchanges may reflect a shifting of ownership among private investors; some investors redeem bills while others subscribe for and receive a larger allotment of the new issue than they hold of the maturing issue. The new bills are delivered on the issue date according to instructions from the purchasers. The securities awarded are generally picked up by dealers and banks. The banks pick up the bills purchased for their customers’ accounts as well as their own. In other cases, the investors specify how they want the new issues delivered. By means of the so-called ’ allotment transfers”, an investor in one Federal Reserve District can enter his subscription to new issues with his local Federal Reserve Bank and have the securities delivered to his custodian or other representative in another Federal Reserve District. While only three-month bills have been issued since World War II, Treasury bills were often used in the prewar years to anticipate quarterly tax payments. Special tax bills, running from two to five months, were issued, in addition to the regu lar three-month issues, and these special bills were dated to mature when tax collections were flowing into the Treasury. For a period in 1941, maturities of 82, 76, and 71 days were used, in order to time bills to mature with tax collections. Also in 1934 and 1935, bill maturities were stepped up to 6 and 9 months but this practice was abandoned when it was found that in the circumstances then prevailing the longer maturities were less attractive to the market than three-month bills, even though the Treasury was not issuing certificates of indebt edness at that time. T he V olum e of B il l O f f e r in g s In recent years, the weekly bill offerings have not exceeded 1.3 billion dollars and at times have been as low as 800 million. Since the bills usually mature in 91 days, there is a 13-week cycle of issues.1 Currently, the weekly maturities vary from 1.1 billion to 1.3 billion dollars. At the end of the war, there were 17 billion dollars of bills in weekly issues of 1.3 billion dollars each. The first reduction in Treasury bills was made with the issue of April 17, 1947. At various times thereafter, through April 7, 1949, as funds became available principally through cash-operating surpluses, the Treasury reduced weekly new bill issues by amounts of either 200 or 100 million dollars. In these two years there was a net redemption of 5.4 billion dollars of bills, reducing the outstanding total to 11.6 billion dollars. The cash retirement of bills was concentrated on Fed eral Reserve holdings. Thus the Treasury, by drawing funds into its balances at the Reserve Banks and then turning them over to the Reserve Banks in payment for maturing bills, made it possible for the System to extinguish reserves. After the middle of 1949, increases in the amount of suc cessive weekly issues were made on several occasions. The latest were increases of 200 million weekly, beginning with the July 5 issue this year and continuing through August 16, and after a brief interruption resuming again with the issues of September 13, 20, and 27. The total of outstanding bills at the end of September was 15.6 billion dollars. T ransfers of O u t s t a n d in g T r e a s u r y B ills the M arket in Secondary purchases of Treasury bills are made currently in most cases in the over-the-counter market through dealers and dealer banks. These dealers make a market by establishing bid and offering prices at which they are willing to buy and sell reasonable amounts of Government securities as a princi pal; no commissions are charged. That is, they make outright purchases and acquire ownership of the securities and alterna tively sell securities outright from their portfolios. Dealers obtain their reimbursement through the difference, or "spread”, between their bid and offering prices. Brokers have a negligible role in this market. Aside from exchanges on tender and redemptions for cash, any changes in the Federal Reserve bill portfolios are effected in the market through dealers, except for the bills acquired by the individual Federal Reserve Banks under the sale and repurchase agreements (at the option of holders) which were in effect during the war. However, ’ sales contracts” may be entered into by the Reserve Banks with dealers when it is desirable temporarily to lessen a strain on the money market. These contracts provide for sales to the Reserve Banks, subject to repurchase within 15 days at the option of either party; the Reserve Banks make an interest charge for the period the securities are held by them. Such l If there is a holiday on the normal date of issue or date of matur ity, Treasury bills of 90 or 92 days’ maturity are issued. If a holiday falls on the normal day for closing of bids (M onday), the closing is advanced to the preceding Friday. FEDERAL RESERVE BANK OF NEW YORK transactions are made on the initiative of the Reserve Banks. The market for bills and other Treasury issues has been broadened, and deliveries and payments have been materially aided, by the use of the “telegraphic transfer” facilities which the Federal Reserve Banks provide as fiscal agents of the United States. These transactions are commonly referred to as "C.P.D. transactions” (C.P.D. being the abbreviation for Commissioner of the Public Debt by whose authority such transactions are handled), but they may be made only when the delivery of the securities is necessary to complete a sale transaction. In the case of Treasury bills, there is no charge for this service. By use of these facilities, a sale to a dealer in New York may be com pleted by an investor in San Francisco, for example, without making physical shipment of the securities. Instead, in a typi cal case, the securities are delivered to the Federal Reserve Bank of San Francisco which then cancels them and wires the Federal Reserve Bank of New York to deliver from its unis sued stock a like par amount against payment. When the delivery is completed, the New York Federal Reserve Bank wires the proceeds back to the San Francisco Reserve Bank and the funds are passed on to the seller. T h e Sources o f D e m a n d A substantial proportion of the new issues of Treasury bills is sold in the. New York area. Bids in this District account for more than 70 per cent of those submitted so far this year, and approximately two thirds of the actual sales of new bills were awarded on tenders made in New York. In most cases, nonbank investors ( other than dealers) submit tenders through the large New York City banks. New York City banks also submit tenders for their own account. Small banks are not active bidders, but a growing number have been buying through the arrangement for noncompetitive bids which has been described above. Dealers constitute the other important group of private bidders. Dealers generally purchase Treasury bills for resale to nonbank investors and small banks (and also to large banks when the latter are unsuccessful in their bidding or acquire additional funds which they wish to invest). The large banks, on the other hand, may or may not find it neces sary to sell their bills before maturity, depending on money market developments, but usually their bill portfolios change rather sharply from week to week. Nonbank investors gener ally buy bills as a short-term investment for the life of the issue. Because of the difficulty at times of setting a price on bids ( for amounts greater than provided for through noncom petitive bids), some nonbank investors prefer to wait until new bills have been issued and then to purchase them in the open market from dealers and dealer banks. Secondary purchases and sales of other outstanding issues, of course, are also made by these investors as well as by banks to obtain maturities better suited to their requirements. Nonbank investors have turned to Treasury bills as an invest ment medium for several reasons. Rising yields over the past several years have provided more income. At the same time there has been a substantial increase in the demand for short- 149 Federal Reserve Holdings of Treasury Bills and Other Sources of Federal Reserve Credit (January 1946-August 1951; figures are for end of month) term investment outlets in which to place growing tax reserves, and temporary accumulations of funds for dividends, capital expansion, and other uses. As long as the yields on Treasury bills continue to be competitively attractive and tax rates and profits remain at high levels, there should be a continuing demand for these securities from nonbank investors. A large proportion of the 2 billion dollars of new bill issues during the third quarter of this year has been taken by nonbank investors on original tender. The growing concentration of corporate tax payments in the first half of the following calendar year under the Mills plan should tend to emphasize the desirability of short-term investments. Whereas in past years corporation taxes were due in even quarterly payments, by 1955, 50 per cent will be due in each of the first two quarters. This sug gests that there will be an increasing seasonal variation in pur chases and liquidations, with many nonbank investors purchas ing more heavily in the latter half of the year and redeeming or selling rather substantial amounts around the tax payment dates in the first half. The Federal Reserve Banks, since their holdings of bills have declined, harve not been in a position to make large exchange tenders. The System does not submit tenders for more than the amount of maturing bills in its portfolio; consequently, an increase in the holdings of the Federal Open Market Account results only from a purchase of bills in the market. The Reserve System did not tender bids for Treasury bills until early in 1947 when the Treasury permitted maturing bills to be submitted in payment for new bills. Previously, cash pay ments had generally been required, and, since the Treasury customarily does not borrow directly from the Reserve Banks (except through special certificates to smooth out very tempor ary money market fluctuations, particularly during tax pay ment periods), the System acquired bills solely by purchases from others. The System Account, therefore, could only replace MONTHLY REVIEW, OCTOBER 1951 150 its maturities through market purchases, that is, from the dealers in Treasury securities. This procedure proved circuitous, and the adoption of the exchange privilege facilitated the System’s operations in replacing maturing bills. Tenders for bills are submitted for the System Account in accordance with the current policies of the Federal Open Market Committee. The Systems tenders, like those of any other investor, must be submitted before the closing hour for the acceptance of tenders, and without knowledge of other bids submitted. The System thus must compete on an equal basis with bids from all other subscribers. If it is deemed desirable to tighten the money market, bids may be placed comparatively low in an effort to redeem all, or some part, of maturing hold ings. In this case, a larger amount of the bids submitted by others is likely to be accepted by the Treasury and a corre sponding portion of the maturing bills held by the Reserve System redeemed for cash. Whenever the System reduces its holding in this way, a direct withdrawal of money market funds occurs, since the additional allotment of bills to private investors must be paid in cash or immediately available funds at the Reserve Banks (that is, some member bank reserves at the Reserve Banks must be transferred to the Treasury). The Treasury uses the funds to redeem the unexchanged bills of the Federal Reserve Banks. The decline in System bill holdings over the past four years provided an important means of implementing credit policy. At times, by redeeming or selling bills the System was able to bring about a reduction in the over-all amount of Federal Reserve credit outstanding. At other times, when the System found it necessary to purchase other Government securities (even though credit conditions did not call for the increase in Federal Reserve credit resulting from such purchases), System sales or redemptions of bills helped to reabsorb some of the Federal Reserve credit released by these other security purchases. The relative importance of Treasury bills as a source of outstanding Federal Reserve credit since 1946 is illustrated in the accompanying chart. During the war years, of course, System acquisition of bills served as a principal source of Federal Reserve credit. In the prewar years, however, the System’s bill holdings were relatively small, and there were few changes in the System’s bill portfolio that affected the banks’ reserve positions materially. In roughly two decades, since their first introduction as an instrument of Treasury finance, Treasury bills have become firmly established in a broad market among financial and non financial institutions. They not only serve as an ideal money market investment, but also provide a flexibility well suited to the short-term needs of the Treasury. DEPARTMENT STORE TRADE For the third consecutive month, the dollar volume of department store sales in the Second District fell short of the corresponding year-earlier volume. Preliminary data indicate that during September consumer expenditures in this District’s department stores were about 5 per cent less than they were in September 1950, after adjustment for seasonal variation, and 5 per cent below the level of August 1951. By the end of August, there was clear evidence that a more cautious inventory policy was being pursued by some depart ment store executives in this District. The value of department store stocks on August 31 was 24 per cent greater than on the same date last year; this represented the smallest year-to-year increase since January of this year. Moreover, the dollar volume of commitments for additional merchandise outstand ing on August 31 showed the first July-to-August decrease since 1948, and was approximately 45 per cent below the large volume of a year ago. Furthermore, the bulk of these commitments probably consisted of re-orders for seasonal merchandise, particularly women’s apparel, which, in view of the encouraging consumer demand for these goods in the early part of September, are not likely to present the stores with an additional inventory problem at the end of the fall season. T h e A verage V a l u e pe r t r a n s a c t i o n a t C it y D e p a r t m e n t and N ew Y ork A p p a r e l Sto r e s The comparative lull which has pervaded department store trade in New York City in recent months has been reflected in a relative decline in the average value per transaction during July and August. Since the average value per transaction is determined by dividing total net sales by the number of gross transactions (the stores are unable to report net transactions), the values plotted on the accompanying chart are somewhat understated. However, this imperfection in the data is not likely to affect the year-to-year comparisons tabulated below or the general movements of the values described in the chart. It should also be noted that the number of transactions, or sales checks, does not necessarily indicate the quantity of physical units sold by the stores, since some transactions may represent multiple-item purchases which have been included on one sales check. Con sequently, fluctuations in the number of transactions are not always indicative of similar movements in the physical volume of sales. This is particularly so with regard to department stores in which thousands of different items, ranging in price Estimated Average Value per Transaction of New York City Department and Apparel Stores (August 1949-August 1951) Dollars Dollars FEDERAL RESERVE BANK OF NEW YORK G ross Transaction s, N et D ollar Sales, and A v era g e V a lu e per Transaction N ew Y o rk C ity D epartm en t and Apparel Stores, J a n u a ry -A u g u st 1951 (P ercentage change from preceding year) Apparel stores Department stores Month January... February.. March April....... . May.......... June........ . July.......... August— Gross trans actions + + + 8 1 8 5 5 0 1 3 Net dollar +28 +18 + 6 + 3 + 4 + 15 - 5 - 7 Average value per Con trans sumers’ action prices* + 19 +20 + 9 + 12 + 9 + 9 - 5 + 9 + 12 + 12 + 12 + 13 + 13 + 12 +11 Gross trans actions Net dollar + 4 - 5 + 1 + 19 +16 -1 7 - 7 - 9 - 7 - 5 + 5 - 5 + 1 - 3 5 -1 0 Average value per Con sumers’ trans prices* action + 15 +21 + 3 + 15 + 9 + 7 + 2 - 5 + 7 +10 +10 +10 +11 +11 +10 +10 * Computed from U. S. Bureau of Labor Statistics indexes of consumers’ prices in New York City. For department stores, the apparel price index was given a weight of 2 and the homefurnishings index a weight of 1; for apparel stores, only changes in the apparel price index are shown. from a few cents to hundreds of dollars, are sold each day. Moreover, there is a marked seasonal movement in the size of the average sales check as well as in both the number of transactions and the total dollar volume of sales. As the chart shows, there is a more pronounced seasonal variation in the average size of apparel store sales. This, of course, reflects their greater emphasis on seasonal merchandise, notably womens apparel, since women tend to concentrate their purchases of the major apparel and accessory lines in the early spring and early fall. While this situation is also true of apparel sales in department stores, offsetting sales patterns of other types of goods produce a more nearly even seasonal movement. The smaller magnitude of the average department store transaction is also indicative of the large number of purchases of low-priced items which offsets, to a great extent, the size of the higher-priced apparel and durable goods sales. As indicated in the table, the values of the average sales checks in both department and apparel stores during January and February were well ahead of year-earlier levels, owing largely to the tremendous volume of anticipatory buying which occurred at that time. The military reverses suffered by the United Nations forces early this year were generally expected by consumers to bring about additional price increases as well as shortages of household durables when the rearmament pro gram was further intensified. Thus, extensive buying in most of the high-priced durable and nondurable lines raised the average value per transaction substantially above what it had been a year earlier. By the end of February, however, the wave of anticipatory buying had greatly subsided and in subsequent months (except during April when the spring apparel lines sold well) the year-to-year increases in the average value of department and apparel store sales were less than the corre sponding increases in the retail prices of department and apparel store merchandise. The smaller gain in the size of the average sales check reflected the shift of consumer preference away from the "big-ticket” items, largely as an aftermath of the anticipatory buying of January and February. During June, the "price war” involving several New York City department stores was a major factor in raising the num ber of transactions 5 per cent above that of June 1950. H ow ever, since most of the items directly affected by the "price war” were relatively inexpensive, the year-to-year increase in the size of the average sale was not much greater than it had 151 been a month before. In July, the average value per trans action at New York City department stores dropped below the year-earlier level for the first time this year. This year-to-year decline in the average sales check is partly explained by the heavy concentration of sales of major household durables which followed the start of the Korean war in the summer of 1950. It may also indicate, in view of the fact that the number of transactions was equal to that of a year ago, that consumers were not only not buying expensive durables in quantities comparable to those of July 1950, but also that, where choices were available, they were buying cheaper grades of merchan dise. There was evidence of a continuation of this "trading down” by consumers during August. The number of trans actions at New York City department stores was 1 per cent higher than in August 1950, whereas the size of the average transaction was 9 per cent less than the year-earlier value. The number of transactions in New York City apparel stores, unlike that of the department stores, has been consist ently below year-ago levels since March, although it was not until August that the average value per transaction was lower than the corresponding 1950 figure. Thus, it does not appear that the slackened demand for consumer durables has had much beneficial effect on apparel store trade. It may be that consumers are deferring some expenditures in anticipation of a further weakening of retail prices or, on the other hand, the current lull may be merely the prelude to another surge of retail activity later this year. D epartm ent and Apparel Store Sales and S tock s, Second Federal R eserve D istrict, P ercentage Change from the Preceding Year Net sales Locality August 1951 Department stores, Second D istrict... New York C ity .................................... Nassau C ou n ty.................................... Northern New Jersey......................... Newark.............................................. Westchester C ounty............................ Fairfield C ou n ty.................................. B ridgeport........................................ Lower Hudson River V alley............. Poughkeepsie.................................... Upper Hudson River V alley............. A lb a n y............................................... Schenectady...................................... Central New York S tate................... Mohawk River V alley................... U tica.............................................. Syracuse............................................ Northern New York State................ Southern New Y ork State................. Binghamton...................................... Elm ira................................................ Western New Y ork State.................. B uffalo............................................... Niagara Falls.................................... R ochester.......................................... + - 7 3 4 - 9 9 + - 6 6 2 1 Stocks on Jan. through hand August 1951 Aug. 31, 1951 + 8 + 8 +24 +24 +25 +27 +30 +29 +18 + 9 + 9 + 16 + 10 + 8 9 1 + 1 +10 + 11 + 8 +10 + 21 +21 + - + 1 + 1 + 2 0 5 4 + 2 0 + 1 1 + 2 + 1 + 1 +10 + 1 +18 +32 0 + + + 7 4 4 + + + 8 + 8 + 7 + 8 4 9 +29 +26 +32 +31 +26 +15 + 9 +24 +25 +23 +17 +29 + 3 +14 + 8 + 6 + 6 Apparel stores (chiefly New York City) Indexes of D epartm en t Store Sales and Stocks Second Federal R eserve D istrict ( 1 9 3 5 -3 9 a v e r a g e = 1 0 0 per cent) 1951 1950 Item August July June August Sales (average daily), unadjusted................... Sales (average daily), seasonally adjusted.. 194 265 179 256 254 267 203r 279r Stocks, unadjusted................................................ Stocks, seasonally adjusted............................... 279 279 262 294 274 290 226 226 r Revised. N A T IO N A L SU M M ARY OF BUSINESS CONDITIONS (Summarized by the Board of Governors of the Federal Reserve System, October 1, 1951) Industrial production continued somewhat below first-half levels in August and September, reflecting mainly reduced output in consumer goods industries. Consumer buying has been at somewhat higher levels than in early summer and distributors’ inventories apparently have been reduced fur ther. Prices generally showed little change after mid-August. Bank loans to business, mainly for defense and agricultural and other seasonal purposes, expanded over this period. I n d u s t r ia l P r o d u c t io n The Board’s index of industrial production in August was 218 per cent of the 1935-39 average, as compared with 213 in July and an average of 222 for the first half of the year. Preliminary indications point to little change in September. Durable goods production increased in August but re mained below the June rate. Activity in munitions and pro ducers’ equipment industries generally expanded, despite work stoppages in an important machinery industry. Output of consumer durables showed little change from the reduced July rates. In the latter part of September steel mill operations were scheduled at 102 per cent of capacity, as compared with a rate of 98.5 per cent in July and August. Output of copper and some other nonferrous metals was considerably reduced as a result of a labor dispute in late August and early Sep tember, and in mid-September aluminum production was cur tailed somewhat owing to power shortages. Passenger car assembly for the third quarter was close to the authorized level of 1.2 million units. Output of textiles, leather products, and paperboard in August showed smaller increases than usual for this season. Chemicals production rose further and output of most other nondurable goods continued in large volume. INDUSTRIAL Federal Reserve indexes. PRODUCTION Monthly figures; latest shown are for August. Bituminous coal mining expanded in August and early September. Peak levels of output of crude petroleum and iron ore continued. C o n s t r u c t io n Value of construction contracts awarded declined somewhat in August, reflecting decreases for most types of public con struction. Private awards showed little change. The number of housing units started in August was 85,000, about the same as in July but almost two-fifths below August 1950. Value of work put in place on industrial construction projects con tinued to rise in August and was double year-ago levels. Em p l o y m e n t The labor market showed little change during August. Employment in nonagricultural establishments, after adjust ment for seasonal factors, continued at the earlier high level of 46.6 million persons. The average work week in manufac turing industries remained at the moderately reduced July level and average hourly earnings were maintained at peak rates. Unemployment declined somewhat in August to slightly less than 1.6 million persons, the lowest since October 1945. D is t r ib u t io n Seasonally adjusted value of sales at department stores rose about 3 per cent in August to a level of 319 per cent of the 1935-39 average, but during the first three weeks of September sales showed a less than seasonal rise. Sales at most other retail outlets also increased slightly in August and in early September automobile sales were stimulated by prospects of price advances. Value of department store stocks, seasonally CONSTRUCTION CONTRACTS AWARDED F. W . Dodge Corporation data for 37 Eastern States. latest shown are for August. Monthly figures; adjusted, declined in August to a point 10 per cent below the spring peak. C o m m o d it y P rices Wholesale commodity prices have generally shown little change since mid-August. Prices of textile materials have declined further, but during the past 10 days raw cotton prices have advanced as producers have restricted marketings at present prices. Among finished goods, prices of shoes, carpets, and sheets have been further reduced, while wholesale prices of new passenger cars were raised about 5 per cent in midSeptember, following revision in Federal ceilings. The consumers’ price index in August was unchanged from July. Slight declines in prices of foods and housefurnishings were offset by increases in rents and in prices of apparel and miscellaneous goods and services. B a n k C r ed it Bank credit rose moderately during August and the first half of September, reflecting some seasonal borrowing by busi 1926*100 Se c u r it y M a r k e t s Common stock prices in the second week of September reached the highest levels since April 1930 and then declined somewhat in the third week. Yields on U. S. Government securities and high-grade corporate bonds showed little change. Holders of the 3 per cent Treasury bonds called for payment September 15 and the 1*4 per cent notes which mature October 1 were offered an exchange into an 11-month VA per cent certificate of indebtedness. LOANS AND INVESTMENTS AT MEMBER BANKS IN LEADING CITIES W H O LESALE COMMODITY PRICES PER CENT nesses. Loans to food manufacturers and commodity dealers to finance the distribution and processing of crops began in the August-early September period and loans to finance direct defense contracts and defense-supporting activities, particu larly loans to metal manufacturers, expanded further. Deposits and currency held by businesses and individuals increased considerably in August and early September. This reflected both expansion in bank loans and a continuing shift of deposits from Government to private accounts prior to the receipt of mid-September income tax payments. PER CENT 1948 Bureau of Labor Statistics indexes. week ended September 18. W eekly figures; latest shown are for 1949 1950 1951 1948 1949 Commercial loans include commercial, industrial, and W ednesday figures; latest shown are for September 19 1950 1951 agricultural loans.
@FedFRASER