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(S(2)N]©0Mfl m EW Federal Reserve Bank of Atlanta July/August 1 9 7 7 Multibank Holding Companies: Convenience and Needs Cost -of-Living Co mparisons: Oasis or Mirage? deral R e se rve B a n k of A tlan ta deral R e se rve S tatio n anta, G e o rg ia 30303 Bulk Rate U.S. Postage d ress C o rre c tio n R e q u e ste d Atlanta, Ga. Permit 292 PAID FEATURES: Economic Review, a bimonthly publication, replaces the Federal Reserve Bank of Atlanta's Monthly Review. Sub scribers will receive six issues per year. Now available: update A monthly publication that features District Business Conditions, Sixth District Statistics, and Debits to Demand Accounts. Regional Impacts of Monetary and Fiscal Policies in the Postwar Period: Some Initial Tests by William D.Toal This is the latest in a series of Federal Reserve Bank of Atlanta Working Papers. Interested parties may have their names placed on a subscription list for future studies in the series. For further information, copies of or subscriptions to any of the publications mentioned above, write to the Research Depart ment, Federal Reserve Bank of Atlanta, Atlanta, Georgia 30303. Please include a com plete address with ZIP code to ensure delivery. Multibank Holding Companies: Convenience and Needs ........................... 83 How well do bank holding companies follow through with the improvements in bank services to the commu nity mentioned in support of their applications to acquire banks? This original study compares planned changes in services with those actually accomplished after acquisi tion. Cost-of-Living Comparisons: Oasis or M ir a g e ? ..................92 Comparing the cost of liv ing from city to city can be tricky. Part I of this two-part analysis explains why the Consumer Price Index should not be used for that purpose but "family budget" esti mates can be of help. The liv ing cost advantages of south eastern cities are explored in Part II. Director of Research: Harry Brandt Editing: Patricia Faulkinberry Production and Graphics: Susan F. Pope, Eddie W. Lee, Jr. Economic Review, V o l. LXII, No. 6. Free s u b scrip tio n and a d d itio n a l co pies a v a ila b le u pon request to the Research Departm ent, Federal Reserve Bank o f A tla n ta , A tla n ta , C e o rg ia 30303. M a te ria l herein m ay be reprinted or abstracted, p rovid ed this Review , the Bank and the author are credited. Please p rovide this B an k's R esearch D e p a rt m ent w ith a co p y o f any p u b lic a tio n in w h ic h such m a teria l is reprinted. MULTIBAIMK HOLDING COMPANIES: CONVENIENCE AND NEEDS by Joseph E. Rossman* and B. Frank King Bank holding companies have expanded significantly since World War II. Their growth has caused concern on the part of Federal and state legislatures and resulted in several acts designed to control holding company expansion. On the Federal level, the Bank Holding Company Act of 1956 and its amendments provide the principal basis for such control. The Congress named the Board of Governors of the Federal Reserve System the prime enforcer of the Act and gave the Board sets of criteria for regulating various methods of holding company expansion. One of the most important means of expansion is the acquisition of additional banks. The Bank Holding Company Act requires the Board to evaluate all bank acquisitions. The Board's decisions to approve or deny an acquisition are to be the result of weighing the effects of several aspects of the acquisition on the public interest. Among these aspects is the effect of the acquisition on the conve nience and needs of the community of the acquired bank —the focus of this study. The Board is directed in Section 3 of the Act not to approve any bank acquisition ...whose effect in any section of the country may be substantially to lessen competition, or to tend to create a monopoly, or which in any other manner would be in restraint of trade, unless it finds that the anticompetitive effects of the proposed transaction are clearly outweighed by probable effects of the transaction in meet ing the convenience and needs of the community to be served. (emphasis supplied)1 In this statement, the Board is given a balancing test in which adverse effects of an acquisition on competition may be outweighed by the beneficial effects of the acquisition in meeting the convenience *Dr Rossman is now Associate Professor of Economics, Texas A&l University, Kingsville, Texas. ’ U S C , title 12, section 1843 As amended by Acts of July 1, 1966 (80 Stat 238) and December 31,1970(84 Stat 1763) and needs of the community. There is no reference to other factors; however, the Act continues with the instruction: In every case>, the Board shall take into consideration the finan cial and managerial resources and future prospects of the com pany or companies and the banks concerned and the conve nience and needs of the commun ity to be served. (emphasis supplied)2 This section adds financial and managerial effects to the factors to be considered and reiterates the instruction to consider con venience and needs, this time in every case. Research on the Board's orders ap proving or denying holding company applications to acquire banks indicates that the convenience and needs of the community have seldom been pivotal factors in decisions. In a study of the Board's early orders, Jules Bachman concluded that except in cases involving acquisition of newly chartered banks, the Board did not appear to find convenience and needs factors decisive or compelling.3 More recently, Michael Jessee and Stephen Seelig, after studying the Board's con sideration of convenience and needs factors in post-1970 acquisitions, found that the Board mentioned but seldom dwelt on convenience and needs factors where there were no adverse effects on competitive, managerial, or financial factors. They also concluded that "...the Board's treatment of public benefits suggests only a narrow range within which [convenience and needs factors] would sway the Board when important adverse factors are present in a proposal."4 Nevertheless, the Board considers convenience and needs factors in con nection with every bank acquisition and includes in each approval or denial order a statement about the weight of these factors in its decision. Further, in each application to acquire a bank, the Board requires holding companies to submit an analysis of the banking needs of the bank's community and a statement of how those needs will be better met as a result of the acquisition. Although other studies have analyzed the Board's weighing of convenience and needs factors, there has been little systematic analysis of what applying companies present to the Board as their intended contributions to communities of banks to be acquired or how much the companies follow up their stated in tentions. Do the companies present benefits that are within their capacity? Do they intend to make changes or offer services that the banks being acquired could not provide on their own? Do their plans relate specifically to the needs of the community of the bank to be ac quired? Are their intentions stated firm ly or ambiguously? After acquisition, do holding companies carry out their stated intentions? Do they do more than they promise? If so, in what areas? When in tentions are not realized, can one account for this on the basis of characteristics of the company, the bank, or its market? An effort to answer these questions is worthwhile for two reasons. Holding company perceptions of their benefits to the public and their actual record in pro viding benefits give evidence of possible strengths, weaknesses, and overall social benefits of the holding company type of organization. Further, evidence about how often holding companies realize their intentions could help explain why studies comparing performance of banks acquired by multibank holding companies with that of independent banks have found few significant operating differences.5 In order to answer some parts of these questions about holding companies and convenience and needs, we analyzed bank acquisition applications filed by multibank companies in the Sixth Federal Reserve District. We recorded stated intentions from each application and conducted a mail survey asking acquiring companies which intentions had been realized. Anal yses of applications and survey results 2 Ib id . 3Bachm an,)., "The Bank Holding Company Act,'' The Bulletin of the C . ). Devine Institute of Finance, Bulletin 24-25 (April )une 1963), pp 45-47 4Jessee, M A and S A Seelig, "Analysis of the Public Benefits Test of the Bank Holding Company Act, Monthly Review, Federal Reserve Bank of New York, New York, Vol 56 ()une 1974), pp 161-162. 5A recent summary of this evidence is in "M H BC's: Evidence After Two Decades of Regulation, Business Conditions, Federal Reserve Bank of Chicago, Chicago (December 1976), pp 3-15. TABLE 1 CHARACTERISTICS OF SURVEYED INSTITUTIONS A. Location Number of Banks State 12 Alabama in SM SA not in SM S A Florida in SM SA not in SM SA Tennessee in SM SA not in SM SA Total B. C. 4 4 88 77 11 9 5 4 109 14 3 21 Bank Size, Assets at Nearest Semiannual Call Date Prior to Acquisition (Million $) State Mean Largest Sm allest Alabama Florida Tennessee 32.2 31.6 31.0 77.2 173.0 78.3 6.1 2.8 18.1 H o ld in g Com pany, A ss e ts at Nearest Semiannual Call Date Prior to Acquisition (Million $) State Alabama Florida Tennessee D. Holding Com panies Mean Largest 746.9 688.9 690.8 1,080.9 2,361.6 1,062.7 Sm allest 616.5 111.6 370.5 Lead Bank, Assets at Nearest Semiannual Call Date Prior to Acquisition (Million $) State Alabama Florida Tennessee Mean Largest 522.6 385.0 708.7 938.3 1,246.1 948.6 Sm allest 302.4 45.9 297.8 V provide the basic data for the following analysis. The Study Methods. In all, our survey covered 109 applications by 21 multibank holding companies. These applications were filed by multibank companies be tween June 1970 and December 1973. The survey covered only acquisitions that had been approved and consummated; it omitted newly chartered banks and a few corporate reorganizations. About fourfifths of the banks involved were in Florida; the rest were about equally di vided between Alabama and Tennessee.6 The banks ranged in asset size (at time of consummation) from $3 million to $173 6The survey does not cover banks and companies in Georgia, Louisiana, and Mississippi because these states did not allow bank acquisitions by multibank companies during the study period million; the average size was $32 million. The acquiring companies ranged in aver age asset size from $112 million to $2.4 billion. One company had 16 applications covered in the survey; only three com panies had one. We first recorded a list of holding company intentions from the convenience and needs section of each application. Language used in the applications was usually ambiguous and timeless; firm commitments were few and far between. We gave up attempts to judge the relative strength of commitments and assumed that if a company had not intended to do something, it would not have talked about it. Therefore, we treated all matters that companies discussed as intentions. After reading the applications, we developed a master questionnaire covering all areas of company intentions recorded in the survey of applications. Questions related to specific intentions for each bank were taken from this questionnaire. This selection process resulted in a specific questionnaire for each bank. Each com pany was sent its packet of questionnaires in July 1976. The Applicants' Intentions. The bank holding companies' plans concentrated on services that are more often and more extensively provided by the larger lead banks of the companies than by the smaller banks that were acquired. Plans most often included trust services, loan participations, data processing, investment assistance, improved business and real estate loan operations, and management and personnel assistance. In general, companies intended to provide more serv ices to the acquired bank than directly to its customers but classed bank services as public benefits because they would in crease the bank's efficiency or respon siveness or reduce the bank's risk. Convenience and needs discussions in most applications were couched in terms that are subject to a variety of interpre tations. We found few firm commitments, and even these were usually vague as to when and for how long the improvements would be implemented. Only about half of the applications discussed specific needs of the bank to be acquired. In such cases, companies described courses of action TABLE 2 INTENTIONS DISCUSSED, BY COMPANY AND BANK Holding Companies Discussing the Service A. 21 14 7 6 5 1 100 67 33 29 24 5 21 18 18 16 17 6 100 86 86 76 81 29 96 69 69 57 49 14 88 63 63 52 45 13 20 21 19 95 100 90 85 86 80 78 79 73 6 6 6 3 29 29 29 14 9 7 6 6 8 6 6 6 87 37 13 12 10 2 80 34 12 11 9 2 Hours and Facilities Build, Remodel, or Expand Bank Building Provide Drive-in Windows Provide Parking Extend Hours Expand Expand-lmprove Percent Number E. Percent of Total Number Management and Personnel Management Recruitment Training D. Percent of Total Services to Bank Loan Participations Data Processing Investment Assistance Marketing/Advertising Auditing/Accounting Credit Information C. Number Direct Customer Services Trust International Credit Card Leasing Industrial Development Factoring B. Applications Discussing the Service of Total Expand Percent Number of Total Expand-lmprove Percent Number of Total Percent Number of Total Loan Portfolio Changes Total Business Real Estate Consumer Agricultural 19 19 14 12 4 90 10 67 57 19 with more detail and certainty. For purposes of analysis, we divided the companies' intentions into five major categories: direct customer services, services to the bank, loan portfolio changes, management and personnel assistance, and changes in facilities and hours. These categories overlap, but we attempted to categorize intentions consistently. In most of the applications reviewed for this study, companies discussed providing 21 14 12 4 100 67 57 19 71 57 42 34 6 65 52 39 31 6 100 44 34 6 91 40 31 6 services directly to customers of the ac quired bank; however, the number of these services was usually quite small —about one and one-half per application on average. Most often, discussions of direct customer services alluded to introduction or improvement of trust and international services. Four-fifths of the applications covered trust services. Each company mentioned them at least once. When applicants went on to discuss methods of providing trust services, about half indicated plans to establish new departments; the other half planned to offer trust services through another subsidiary of the company. About one-third of the applications included international services. In most of these cases, the applicant indicated that international services would be making their first appearance at the acquired bank. The companies generally spoke of making these services available through an existing company subsidiary rather than a new department. Letters of credit were the most frequently mentioned specific in ternational service. Applicants discussed other direct cus tomer services in only a few cases. Except for credit cards, these other services are usually provided by larger banking organizations than those acquired. They include leasing, industrial development assistance, and factoring. Holding companies planned to offer services to the bank more than twice as often per application as direct customer services. The bank services that companies concentrated on were those that one would expect to be offered by a larger bank: furnishing a buyer of loan partici pations from the bank, providing data processing, investment assistance, aid in marketing, advertising, auditing, ac counting, and credit information. Expanding lending limits of the acquired bank by introducing or improving proce dures for selling loan participations led the list of planned bank services. In contrast, applications seldom mentioned providing an outlet for the bank's excess funds by facilitating the bank's purchase of par ticipations. In all, almost 90 percent of applications discussed loan participations. Business loans received the most attention; they were followed closely by real estate loans. Companies intended to provide data processing and investment assistance —two other standard correspondent banking services —in almost two-thirds of the appli cations and to provide assistance in marketing and advertising and in auditing and accounting in about half. Upwards of 10 percent of the applications discussed improving credit information through centralized analysis and use of special expertise. Each company discussed plans that would be expected to influence loan portfolio distribution and quality. Par ticipations were an important element of these intentions, but companies also looked to specific changes in lending em phasis and to the availability of company or lead bank specialists. In a few cases in which the loan-deposit ratio of the bank was very low, companies specifically committed to increase total loans. We inferred from almost two-thirds of the applications that total loans would be increased. Applicants discussed improve ment or expansion of business loans in upwards of 90 percent of the applications surveyed, real estate loans in four-fifths, consumer loans in one-third, and agricul tural loans in only six applications. Four-fifths of the applications covered intentions to provide general management assistance and recruitment, and threefourths covered training. Each company stated intentions to provide management and personnel assistance in at least one application. Specific statements of the type of management and personnel assistance to be provided were found only in a few cases in which obvious manage ment succession problems loomed. Companies seldom discussed changing physical facilities and banking hours. Most intentions to provide facilities seemed to stem from currently perceived needs; they were specifically and firm ly stated. Few applications discussed extending banking hours. No application discussed changing service charges, interest rates charged, or deposit interest rates paid. A rather firm commitment by one company to introduce passbook savings accounts in a small rural bank was the nearest any company came to this type of plan. Categorizing intentions by bank and company characteristics uncovered general differences only among individual com panies and states. Companies varied in several ways: in how closely they related their plans to the needs of the bank to be acquired, in the number of contributions included in their discussions, in the types of services or changes they discussed, and in the apparent strength of their com mitments. Company specialties in leasing, industrial development assistance, and mortgage lending appear to have in fluenced plans for these types of con templated action. Companies in Alabama stated their intentions more specifically and intended more changes than companies in Florida or Tennessee. Most Alabama applications related intentions to the needs of the bank to be acquired. These features might have stemmed from the greater competitive problems inherent in several Alabama ap plications and the companies' attempts to outweigh adverse competitive effects with benefits to the public. The Acquiring Companies' Actions. How often did acquiring companies follow through on intentions stated in their ap plications? Responses to our survey indi cate that each holding company acted to realize most of its intentions in all banks acquired. Companies that discussed direct customer services generally reported providing them. Within this class of ser vices, companies realized their intentions to provide trust and industrial develop ment services less often than they fol lowed through on other services. Yet even in the trust category, 83 percent of banks for which services were intended actually offered them as of the survey date. In only two-fifths of these banks did companies report that trust services were provided by an on-site department. Most banks for which trust services were not provided were smaller than average and outside of metropolitan areas, indicating that companies had occasionally overestimated the potential for trust business. Only one acquired bank had an inter national department when the survey was made in July 1976, but twenty-five others offered various international services through another subsidiary of their holding company. Six more banks offered in ternational services through referral to a bank not associated with the acquiring company. Thus, most banks offered the in tended international services in one way or another. The companies carried out their plans to provide leasing, credit cards, and factoring in almost every case. On the other hand, they took action on intended industrial de velopment assistance in only six of the ten banks for which it was planned. Holding companies seem to have been even more effective in following through on services provided to the acquired bank than on direct consumer services. They seldom failed to follow up plans, except those for data processing. Loan participations, the most popular intention, were acted upon in nearly all cases. Companies reported introducing or expanding participations in 98 percent of cases and improving procedures in 96 per cent. Average participation sales per bank rose by 225 percent from acquisition date to December 31, 1975; average purchases by 333 percent. The number of banks engaging in participations doubled. Ap plicants most often mentioned companywide procedural uniformity, central credit files and analysis, central administration, and documentation review as ways in which participation procedures had been improved. Intended data processing services were not provided in so large a proportion of banks as were other bank services, but companies followed up their plans to aid in managing investment portfolios in every case. The acquiring organizations most frequently named accounting for deposits, instalment loans, payrolls, commercial loans, general ledger accounting, and investment analysis as the additional data processing applications instituted. The types of investment assistance most often mentioned were advice on credits and portfolio composition, projections of available funds, consolidating of orders and central trading, and safekeeping. The holding companies made changes in auditing or accounting in every case and changes in marketing and advertising in all but one case. Auditing changes seemed to have been provided more as protection to the company than as a service to the bank, but the companies felt both parties had benefited. Audits by the company were introduced in about three-fourths and other formal procedures of one sort or another in a majority. The surveyed companies produced a spotty record of realizing intentions to increase total loans or specific loan cate gories. A majority of banks in which companies planned to expand loans reported increases. However, in the consumer loan category, the majority was TABLE 3 COMPARISON OF INTENTIONS AND ACTIONS Number of Cases Intentions Percent of Cases Action Taken Action Taken Direct Custom er Services Trust International Credit Card Leasing Industrial Development Factoring 87 37 13 2 72 32 12 12 6 2 96 69 69 57 49 14 94 53 69 56 49 12 98 77 100 98 100 86 85 86 80 85 71 77 100 83 96 9 7 9 100 6 86 5 3 83 50 12 10 83 86 92 100 60 100 Services to Bank Loan Participations Data Processing Investment Assistance Marketing/Advertising Auditing/Accounting Credit Information Management and Personnel Management Recruitment Training Hours and Facilities Build, Remodel, or Expand Bank Building Provide Drive-in'«/indows Provide Parking Extend Hours 6 6 Expand Loans Number of Cases Percent of Cases Expand Loans and/or Improve Service Number of Percent of Cases Cases Intentions Action Taken Action Taken Intentions Action Taken Action Taken 71 57 42 34 6 55 38 35 19 6 78 67 84 56 100 100 44 34 6 100 43 31 6 100 98 91 100 Loan Portfolio Changes Total Business Real Estate Consumer Agricultural slight. Despite a large increase in partici pations purchased, banks increased business loans in only two-thirds of the intended cases. The companies succeeded in expanding real estate and total loans in about four-fifths of the banks for which such growth was planned, and they ex panded agricultural loans in each of the few banks where growth was planned.7 When asked to tell what loan changes they had made, the companies that had discussed increasing or improving services 7We checked action on loan expansion with Call Report data Success in increasing loans was judged by the change in loans as a percentage of bank assets between the last Call date prior to consummation and the Call date two years after on business and real estate loans named larger loan limits as the principal im provement, with addition of specialized expertise a close second. In the consumer category, companies most often pointed to offering new types of loans as the way they had improved service. Acquiring companies claimed to have provided management assistance to each bank for which it was intended. These banks got regular economic reports, and most received regular analyses of at least some of their internal operations. Nearly all also received some sort of special anal yses of certain areas of operations, and most received personnel-related assistance, such as studies of staffing and of salaries and EEO compliance audits. Between the acquisition and mail survey dates, holding companies followed through on plans to aid recruiting less often than on plans to assist management. In all but one bank where recruitment aid was given, companies assisted in hiring management; they provided aid in recruiting technical, professional, and clerical personnel much less often. The surveyed companies provided training in almost all banks for which it was planned. Their programs involved management, technical, and operating per sonnel in most cases. Companies usually used formal programs prepared by company or lead bank staff. Generally, in banks for which provision of facilities or changes in hours were planned, holding companies took action. Companies reported action in each case in which new or remodeled banking facilities were intended and in all but one case in which there were plans for new drive-in windows and for parking facilities. In con trast, companies acted in only three of six cases in which they had planned to lengthen banking hours. To see if companies did more than they intended, we asked them to name actions taken but not discussed in their applica tions. We had hoped from this to get information both on company response to specific bank problems and on company development; however, the casual re sponses of several companies make com parisons among companies and banks difficult to interpret. Even so, these questions provide a few interesting in sights. Two services that were never dis cussed but often later provided —single-fee consumer packages and IRA and Keogh plans —became widespread in banking only after most applications were filed. Audit improvements were often made when no intention had been stated; so, to a lesser extent, was provision of data pro cessing and legal services. Companies listed few additional changes in loans but often added companywide employee bene fit and salary administration programs. When Intentions Were Not Realized. Although they generally followed up their plans, the applicants' records were not per fect. Each company and a large minority of acquired banks had some plans that did not bear fruit. These situations bring up several questions: Did the applying companies overestimate their capacity? Did they fail to monitor their intentions carefully? Did they discuss actions that they had no intention of taking? Were the companies inaccurate in estimating the feasibility of certain actions at the time of application? Did market supply or demand changes make some actions infeasible between application and consummation? Our resuits shed some light on those questions. Judging from the profile of company intentions that we developed from the analysis of applications, com panies seldom discussed actions that moderately sized lead banks cannot perform; therefore, most inaction seems unlikely to have resulted from company incapacity. Companies also fulfilled in tentions in most cases, leading us to discount the idea that companies might generally have stated plans they had no intention of carrying out. This study lends some support to the hypothesis that some companies do not closely monitor convenience and needs intentions or their fulfillm ent. However, this does not seem to be a serious prob lem. Several companies presented standard packages of intentions, whatever the characteristics of acquired banks. This may be taken as evidence of inattention to special problems of banks to be acquired. Further, several companies sent their sur vey questionnaires to individual banks rather than answering them at a central location —not a likely move for a company with a monitoring system. Even so, com parison of intentions and actions for companies with standard benefits pack ages and without apparent monitoring systems revealed that these companies had no worse records in acting on intentions than others. The study also yields some evidence that inaction may often be associated with inaccurate estimation of market conditions by the applying companies. The major categories with lowest action rates were, with two exceptions, those in which market conditions are difficu lt to project and are important determinants of feasibil ity. The lowest action rates were recorded in services that were offered directly to customers —trust and industrial develop ment services and several categories of loans. (Data processing and recruitment categories were exceptions to this pattern.) Most failures to carry out plans for trust services were in small rural banks where demand for new or improved trust services may not have been great. In addition, a disproportionately large number of failures to achieve intentions to expand loans occurred in Florida —an area in which the economy and bank lending deteriorated sharply during the study period. Company realization of the possibility of poor market evaluation may also have played a part in the generally ambiguous nature of their convenience and needs discussions. An Overview of the Results. Before summing up our results, we should point out that the method of study used in our survey has at least three basic limitations. First, in the study itself, we performed no analysis of whether the intended actions would actually benefit the public. In addition, except in limited cases where cross-checks were convenient, we took the companies' word about what they had done. Finally, no control group of inde pendent banks was used to see if changes might have been made even in the absence of holding company acquisition. Subject to these limitations, our study indicates that companies proposed con venience and needs benefits that paral leled services of large banks. The dominant service offered directly to con sumers was trust service. Companies dis cussed services to the acquired bank more often than direct customer services. High on the list of the bank services were loan participations, data processing, and assistance with investments, marketing, and auditing. The companies' most pop ular categories for loan expansion and im provement were business and real estate loans —both closely related by the appli cants to loan participations. Companies also planned special management, recruit ing, and training assistance quite often. For the most part, one would expect the holding company lead banks to be able to handle intended actions. Banks of the size generally acquired do not often offer these services as extensively as the generally larger lead banks of the com panies surveyed. Applications contained few firm state ments of intentions. Discussions were usually hedged at best and nebulous at worst. They approached only the most ob vious needs with relatively specific and firm commitments. Companies varied widely in the extent, firmness, and specificness of their in tentions. The only other bank or company characteristic that seemed to be related to intentions was the state where the bank was located. Alabama companies' in tentions were more extensive, firmer, and more specifically related to the bank than those of Florida or Tennessee companies. This may have been because more of the Alabama companies' applications raised competitive problems. Most significantly, companies took action in the vast majority of cases in which it was intended. Lowest rates of realization of intentions were in extending hours and providing industrial develop ment assistance —two plans that were seldom presented. In categories of plans most often discussed, trust and data pro cessing services, recruitment, and loan ex pansion received action in a somewhat smaller proportion of cases than did other changes. The study did not uncover any appli cation in which no action was taken. Indeed, in all acquired banks studied, most matters on which action was intended were reportedly given attention. We found no evidence that holding companies dis cussed plans that they did not intend to carry out or that they lacked capacity to carry out. On the other hand, there was some evidence that some companies were less than careful in choosing intentions and monitoring follow-up, but these did not seem to be serious problems. Failure of markets to support company actions appears to have played a part when com panies did not follow through, but the evi dence is not sufficient to support con clusive statements. ■ COST-OF-LIVING COMPARISONS OASIS OR M IRAGE? Congratulations! You've just been of fered a promotion and a big raise. But the new job will involve a transfer to another city, rumored to be an expensive place to live, and you are concerned that the extra money in your paycheck might not cover the higher bills you would be paying. A prudent decision in your situation and in many other personal, business, and public affairs necessitates a comparison of living costs between cities or regions. But what information can be used for such a comparison? The idea that first comes to mind is to look at Consumer Price Indexes (CPIs). Though CPIs give sound measurements of inflation within areas, they are not de signed to permit comparison of living costs between areas. Publications of the Bureau of Labor Statistics clearly warn against such applications of the CPI. For example, "The Consumer Price Index: A Short Description" (1971) contains this explicit N o te ; Condensed for pu blicatio n by P a tr ic ia F a ulk in be rr y from a s t a ff study w r it te n by James T. Fergus. warning: "The Consumer Price Index (C P I). . . measures changes in prices, which are the most important cause of changes in the cost of living, but it does not in dicate how much families actually spend to defray their living expenses." Part I of this analysis describes the characteristics that a cost-of-living measure must possess to be adequate for geographical comparisons and points out the shortcomings of using the CPI in that role. A more suitable alternative measure, the Bureau of Labor Statistics "fam ily bud get" data, is then examined. Part II utilizes the budget data to compare living costs in southeastern cities with those in urban areas in other parts of the United States. PART I: MEASURING GEOGRAPHICAL DIFFERENCES IN THE COST OF LIVING Criteria For An Adequate Cost-of-Living Measure. W hat is the "cost of living?" When we seek to compare the cost of living in different locations, we are looking for estimates of the income required to maintain equal states of satisfaction, comfort, and well-being in each location. To provide a basis for meaningful geo graphical comparisons, a cost-of-living measure should reflect not only dif ferences in prices of goods and services but also differences in the amounts and kinds of goods and services required to sustain a given standard of living. Thus,our requirements of an adequate cost-of-living measure are two: It must include geo graphically determined (location-specific) influences on living expenses while ex cluding all demographically determined (consumer-specific) variations. A measurement of the cost of living is the product of two components —the amount of goods and services purchased and the prices paid for them. And, if we want to monitor living cost differences over time, changes in quantities and prices become significant. To help us evaluate the thoroughness with which available cost-of-living measures detect geograph ically determined variations, we can clas sify the numerous sources of living cost differences according to whether they affect the price level, price change, quan tity mix, or quantity change components of living expenses. Examples of price variations abound. Locally produced commodities usually carry lower price tags than goods which must be transported over long distances and undergo extensive handling. The ef ficiency and adequacy of various means of transport into an area affect price levels in a similar way. Differences in local regula tions, such as building codes, zoning or dinances, and licensing practices, may create variations in the costs of regulated goods and services. State and local prop erty, income, and sales taxes represent the cost of public services provided to resi dents and vary according to the quantity and quality of services offered at each location. The most obvious influence on quantity levels or consumption mix that we do want a living cost measure to reflect is climate. Larger expenditures for heating, home insu lation, and clothing are required to main tain a particular comfort level in colder areas; air conditioning outlays are greater in warmer climates. Water treatment costs vary with local environmental conditions. A living cost measure must also detect any changes that occur in the prices and quantities required to sustain a given stan dard of living if geographical comparisons are to be realistic. Prolonged discrepancies in the rate of inflation for various goods and services foster substitution of cheaper products for more expensive items, altering budget composition. If substitutions are not uniform among regions, distortions creep into geographical comparisons. Evaluating Available Measures of the Cost of Living. How well do available measures of the cost of living meet the tests of adequacy we have established? Here we will consider two: the Consumer Price Index, frequently referred to as the "cost-of-living index," and a less wellknown measure, fam ily budget estimates.1 Both measures are produced by the U. S. Department of Labor's Bureau of Labor Statistics. CPIs are calculated quarterly for 23 urban areas; fam ily budget estimates are published annually for 44 areas, in cluding 40 standard metropolitan statis tical areas. Price information that goes into an area's CPI is standardized for "urban wage earners and clerical workers," weighted according to a preselected "m arket basket" of consumer items, and converted to an index based on the aver age price of the identical basket in 1967. (So, 1967 = 100.) Dollar estimates of fam ily budgets are prepared for three distinct standards of living —lower, intermediate, and higher; the fam ily is specified as a 38year-old husband working full time, his nonworking wife, a boy of 13, and a girl of 8. The intermediate-level fam ily budget is the basis for all comparisons made in this article. Are there any major differences in results if one uses the CPI rather than budget estimates to calculate relative living costs in U. S. cities? Chart 1 answers this question with a resounding "yes." To compare the CPI (in index form) with the budget estimates (in dollars), living cost estimates have been ranked from highest *A third measure, the "Inter-City Cost-of-Living Index, is produced quarterly by the American Chamber of Commerce Researchers Association Its advantage of coverage of a large number of cities (varying from 160 to 180) is offset by the small number of items sampled (43), the informality of its data collection methods (the data are collected by personnel of participating Chambers of Commerce), and the relatively high income level for which the budget is defined (a middle-management executive fam ily of four with an annual income of $18,000 to $20,000) CHART 1 Ranking of Cost of Living In Late 1975, of Urban Areas Based On CPI and Family Budget Data RANKING BASED ON INTER MED. to lowest for the 23 urban areas for which both measures were available for autumn 1975. Living cost rank according to the budget data forms the vertical axis of the chart; the horizontal axis indicates rank according to CPIs, with 1 representing the highest cost of living on both scales. Each point represents a city; its rank according to each measure can thus be easily read. A close correspondence between the rankings would produce a cluster of points around the dashed line. The wide scatter of points illustrates the divergence of the two measures. This is not surprising because the CPI measures price changes while the budgets track living cost levels. Note that the city which ranked highest in living costs according to fam ily budgets fell lowest in the CPI ranking. Since the data show virtually no association of the two measures, we must conclude that despite its frequent use, the CPI is not a reliable indicator of the relative costs of living in U. S. cities. Lack of agreement between the mea sures raises the question of where the strengths and weaknesses of each lie. The CPI and budget measures are evaluated as cost-of-living measures in the next two parts of this discussion. An Appraisal of the Consumer Price Index as a Cost-of-Living Measure. The Consumer Price Index is the most fam iliar measure of price trends. Despite its com mon designation as the “ cost-of-living index," it is not designed and was not intended for geographical comparisons of the cost of living as we have defined it. Its primary function is to measure price change within particular geographical areas; the following evaluation of the CPI against the criteria we have established suggests that it has many shortcomings when used for comparing living costs in one area with those in another. The greatest drawback in comparing CPIs from city to city is that they give no indication of differences in price levels. Since each area's price index is based on the 1967 price level, equal index values for different cities tell us only that prices have risen at equal percentage rates since 1967, not that price levels are identical. If prices in two cities rose by 25 percent between 1967 and 1975, the 1975 CPI for both of them would be 125. This would be true even though the price level in one city were substantially greater. There are weaknesses in CPI coverage of quantity factors as well. Though the mar ket basket of items whose prices are in cluded in the CPI includes an exhaustive array of products and services,2 it omits income and personal property taxes. And, since the aim of the CPI is to measure price changes, the market basket of goods and services in each area is purposely held constant over several years. Thus, it is only when infrequent revisions of market basket contents and price weights occur3 that changes in consumption patterns are de tected. In the meantime, substitutions of other products for increasingly expensive goods can undermine the reliability of the market basket quantities. CPI market baskets are not identical for all U. S. cities. Each city's basket is based on the actual consumption patterns of wage earners and clerical workers in the 2The following number of items is priced: 105 food items. 81 housing items, 77 apparel and upkeep items, 34 transportation items, 99 health and recreation items, and 3 other goods and services items 3Such a revision is now under way and is scheduled for implementation in late 1977 The revised expenditure weights and market basket will be based on a consumer expenditure survey conducted in 1972-73. The present set of weight was implemented in 1966, based on a 1960-61 expenditure survey area. To that extent, CPIs do detect geo graphically determined differences in the quantity mix of goods and services pur chased. But this approach to establishing expenditure weights allows the demo graphic characteristics of each area to affect the composition of its market basket. Factors such as the average age or income of the population are reflected in the life styles and consumption patterns of the area. Thus, because these demographic influences are not held constant, con sumer-specific influences are transmitted to CPI market baskets. The CPIs of dif ferent cities, therefore, may reflect demo graphic differences in addition to whatever geographic differences exist in costs of living. Thus, the CPI adequately meets only one of the four requirements for geographical comparisons of the cost of living, the of living expenses for a standardized fam ily unit minimizes the influence of variations in the demographic charac teristics of cities. But, the lack of adequate measurement of changes in the quantity mix over time plagues the fam ily budget data as well as the CPIs. The most recent revision of fam ily budget “ shopping lists" occurred in the mid-1960s; plans for another update of expenditure weights await completion of a full review of the procedure for budget estimation. Examining the "scoreboard" for the fam ily budgets, note that they provide an adequate basis for geographical com parisons of living costs for three out of four influences. Comparing the family budget score with that of the CPI suggests that the budgets offer a conceptually su perior means of measuring living cost differentials. CONSUMER PRICE INDEX FAMILY BUDGET ESTIMATES LEVEL CHANGE LEVEL CHANGE PRICE — + PRICE + + Q U A N TITY — — Q U AN TITY + — + indicates adequate representation —indicates inadequate representation monitoring of price changes. Its "scorecard" summarizes its performance. Urban Family Budgets: A Better Tool for Living Cost Comparisons. Family budget estimates are designed to reveal "how much it costs, at current price levels, to purchase the specified lists of goods and services drawn up to represent different levels of livin g."4 This definition itself tells us that budget estimates incorporate both price levels and price changes. The prices that are collected for the CPI and some supplementary data provide the raw material for the estimates. The quantities of goods and services needed to satisfy a given standard of living are represented more fu lly in fam ily bud get data than in the CPIs. The measurement 4U. S. Bureau of Labor Statistics, "Three Budgets for an Urban Family of Four Persons, 1969-70 ' (Supplement to Bulletin 1570-5, 1972), p 1. + indicates adequate representation —indicates inadequate representation Guideposts for Users of Cost-of-Living Data. Despite their conceptual superiority, potential users of fam ily budget estimates should be aware of several considerations which limit the applicability of the data and cause some distortions in geographic comparisons. Perhaps chief among these is the specific definition of the character istics of the fam ily unit whose budget is calculated. The Bureau of Labor Statistics has developed equivalence factors that may be used to adjust the data so that they pertain to users whose fam ily size and characteristics differ from the stan dard four persons described earlier, but the resulting alterations sometimes appear unreasonable. Even a fam ily whose characteristics closely approximate the budget family's features will probably deviate from the average expenditure pattern in at least some respects. Unique fam ily needs and tastes require that particular attention be paid to relative costs of items demanded in greater- or lower-than-average quantities if the living cost comparison is to be useful. Value judgments have crept into the budget specifications so that measure ments are based on desirable rather than actual consumption patterns. The ex clusion of all tobacco products from the list of items priced is one example; another is that the cost of medical insurance premiums is included at all budget levels, when, in fact, many low-income families spend very little for medical care or take advantage of clinic treatments provided at public expense. The Department of Agriculture's specifications for a "nutritional diet" are used as the definition of the amounts and kinds of food items included in the fam ily budgets. The sampling of rents and home prices excludes dwellings that do not meet stan dards for adequate housing. Of course, acceptance of the food and housing standards is based on the budgetcompiler's judgment. Similarly, income ranges that delimit the lower, intermediate, and higher level living standards have been somewhat arbitrarily chosen and cover only a limited segment of the wide spec trum of possible living conditions. Other problems arise from revisions of budget data. Users making long-term comparisons of living cost estimates should be aware that occasional changes in living standard definitions have inter rupted the continuity of the data series and impaired its comparability over time. Infrequent revisions of the quantities of goods and services specified by the bud gets have caused the living cost estimates to lose touch with basic changes in consumption patterns (such as increased patronage of fast-food restaurants and changes in energy usage). As a result, living costs tend to be overstated because the substitution effects caused by sustained differences in inflation rates for various items go undetected. Some of the assumptions made to simplify data collection and calculations also undermine the realism of budget estimates. The cost of housing as defined for the budgets includes home mortgage payments in total. It can be argued that only the interest expense should be counted, as the equity investment is even tually returned to the owner when the house is sold. The tax bill included in budget estimates is calculated using the standard deduction; it is probably over stated in areas where the percentage of homeownership is relatively high and more families reduce their taxes by itemizing deductions. PART II: COST-OF-LIVING COM PARISONS: SOUTHEASTERN VS. OTHER METROPOLITAN AREAS How do living costs in cities of the Southeast5 compare with those in urban areas of other parts of the nation? Have expenses risen more or less rapidly in the Southeast in recent years? If there are differences, what kinds of expenditures help explain them? The urban fam ily bud get estimates described and appraised in Part I can be put to work in answering such questions. Southeastern Living Costs Are Low but Gaining. The cost of living in southeastern cities has been and remains low compared to the majority of urban areas in other sec tions of the U. S. The four southeastern cities of Atlanta, Nashville, Baton Rouge, and Orlando ranked in the bottom quarter of the 44 areas included in the intermedi ate level fam ily budget surveys of 1970 and 1975 despite greater increases in living costs relative to other areas in the first two during that time period (see Chart 2). Table 1 compares regional average in flation rates to those experienced by the southeastern cities. The four-city average rate slightly exceeded rates of broader regions, including the South; Atlanta's 7.5percent advance in the cost of living was outpaced only by Boston's 7.7 percent. Recent rapid price increases have not been sharp or prolonged enough to erase the living cost advantages enjoyed by south eastern city dwellers, however. Sources of Differences in the Cost of Living. To isolate the expenditure cate gories that account for the relatively low cost of an intermediate standard of living in the Southeast, Table 2 presents each 5The Southeast here refers to those states entirely or partially within the Sixth Federal Reserve District-Alabam a, Florida, Ceorgia, Louisiana, Mississippi, and Tennessee TABLE 1 ANNUAL RATE OF CHANGE IN THE COST OF AN INTERMEDIATE STANDARD OF LIVING SPRING 1970 TO AUTUMN 1975 (Percent Change at an Annual Rate) Geographic Area United States Northeast North Central West South Southeast Atlanta, Georgia Baton Rouge, Louisiana Nashville, Tennessee Orlando, Florida Source: Percent Increase 6^8 6.9 6.6 6.8 6.9 7.0 7.5 6.6 7.0 6.9 Computed from data contained in U. S. Bureau of Labor Statistics, “ 3 Budgets for an Urban Family of Four Persons, 1969-70" (1972), and “ B LS Revises Estim ates for Urban Family Budgets and Comparative Indexes for Selected Urban Areas, Autumn 1975” (May 5,1976). 1Regional percent changes are sim ple averages of urban metropolitan area percent changes. type of living expense in the southeastern cities as a percentage of average expenses in urban areas of the entire country. Examination of these percentages reveals that personal income taxes and outlays for housing expenses were much lower in all four southeastern cities in the fall of 1975. Families in at least one of the southeastern cities spent less than the norm in every expense category. Personal income taxes show the most striking differences. Since tax liabilities are based on total budget requirements, which are lower in southeastern cities, smaller tax bills result from applying lower tax rates to lower income levels. The absence or relatively low rate of state and local in come taxation also holds down tax outlays in southeastern budgets. Moreover, the estimates of income tax payments in cluded in southeastern budgets are prob ably overstated. A relatively large share of families in the South own homes and prob ably benefit from itemized deductions, which are not reflected in budget tax estimates. The lower grocery bills indicated by budget estimates for southeastern cities are suspect on conceptual grounds. The list of food items priced in calculating fam ily budgets of various areas has been TABLE 2 COST OF INTERMEDIATE BUDGET ITEMS IN SOUTHEASTERN CITIES AS A PERCENTAGE OF URBAN U. S. AVERAGE, AUTUMN 1975 Urban U. S. Average Atlanta, Georgia Nashville, Tennessee Orlando, Florida 89^3 92.4 89.1 89.3 Baton Rouge, Louisiana Total Consumption Food Housing Transportation Clothing and Personal Care Medical Care Other Consumption 100.00 100.00 100.00 100.00 100.00 92^5 9 T A 93.6 94.5 97.9 93.2 82.9 90.1 97.0 100.0 89^9 92.2 99.2 79.1 99.1 101.0 100.00 100.00 100.00 98.8 102.2 96.7 101.7 87.3 102.0 103.4 101.9 101.2 82.7 99.0 Other C o sts1 100.00 96.3 96.9 95.6 95.4 Social Security and Disability Personal Income Taxes 100.00 100.00 98.9 98.2 82.4 69.4 96.0 66.7 96.8 72.3 90.5 Source: Computed from data contained in U. S. Bureau of Labor Statistics, "B L S Revises Estim ates for Urban Family Budgets and Comparative Indexes for Selected Urban Areas, Autumn 1975" (May 5,1976). 1“ Other C o sts” include allowances for gifts, contributions, life insurance premiums, and occupational expenses. standardized for nutrition content, but some variations have been retained to allow for regional differences in food preferences. The Agriculture Department Food Consumption Survey that has been used to establish regional tastes found that consumption of certain low-cost food products was relatively high in the South. If the greater quantities of these foods on the grocery lists for southern cities reflect the lower income levels rather than the tastes of the region, fam ily food budget estimates do not pertain to comparable standards of living in all regions. Other measurements of food costs cast further suspicion on the low food budget estimates for southern cities. When a uni form market basket of food products was priced in each region of the U. S. in 1966, the South's food prices exactly equaled the national average; family budget data for 1966 estimated food costs in the South at 5 percent below the national average.6 This sketchy evidence, viewed in light of the dubious allowance for taste dif ferences, suggests that variations in the 6) Peter Mattila, "Metropolitan Living Costs, Labor Costs, and Regional Variation: Comment," Southern Economic Journal, Vol 42, No 4 (April 1976), pp. 744-746 composition of the food basket rather than price differences account for southern cities' relative advantage in food costs, limiting the usefulness of the data in regional comparisons. The differences from the national norm shown by Nashville and Orlando food budgets, how ever, are too great to be explained away entirely by compositional differences. Substantial advantages for southeastern cities exist in other areas, notably housing expenditures, which range from 10 to 20 percent below the national average. The milder climate, which reduces shelter con struction costs and heating expenses, probably explains most of the differences. Low clothing expenses in Orlando also result from the warm weather and perhaps from a more casual mode of dress. An ex tensive system of mass transit now benefits Atlanta area residents with low trans portation costs but is not fully reflected in the budget quantities based on the 1960-61 Consumer Expenditure Survey. Families in Baton Rouge and Nashville spend notably less than the average for medical care. The cumulative result of differences in living expenses is that the cost of living in the four southeastern cities ranged from 7.5 to TA BLE3 TA BLE4 PROPORTION OF METROPOLITAN AREAS EXHIBITING RATES OF COST INCREASE GREATER THAN THE U.S. URBAN AVERAGE, 1970-1975, BY BUDGET CATEGORY AND REGION RANKING OF PERCENTAGE CHANGE IN LIVING EXPENSES, 1970-1975, FOR AN INTERMEDIATE BUDGET, BY BUDGET CATEGORY, FOR FOUR SOUTHEASTERN METROPOLITAN AREAS Region Budget Category1 Food Housing Transportation Clothing and Personal Care Medical Care Other Family Consumption Other Costs Personal Income Taxes Metropolitan Areas Northeast North Central South West 3/8 3/8 2/8 6/14 2/14 6/14 6/10 8/10 6/10 3/8 5/8 4/8 5/8 2/8 6/14 5/14 5/10 5/10 4/8 2/8 6/8 3/8 7/14 2/14 5/10 6/10 3/8 4/8 6/8 6/14 4/10 4/8 ’ Social Security and disability payments have been excluded because the percentage change varied so little between metropolitan areas to be inconsequential. Budget Category Food Housing Transportation Clothing and Personal Care Medical Care Other Family Consumption Other Items Personal Income Taxes Atlanta Baton Rouge Nashville Orlando 1 5* 17* 11* 30* 31* 7* 12* 13* 23* 7 1 14* 3* 8* 38* 3* 20* 25* 6 19* 3* 17* 21* 19* 8* 13* 8* 11* 31* 34 35* ‘ One or more additional U. S. urban areas experienced an identical increase and has the same ranking (e.g., the identical ranking of Nashville and Orlando for “ Other Items"). Note: O f the 40 urban areas ranked, the most rapid increase in living expenses is ranked first; the next most rapid is ranked second, etc. 10.7 percent below the national average. Sources of Cost-of-Living Increases. We now know which types of expenses explain the Southeast's relatively low cost of liv ing. Pinpointing the costs which have risen the most rapidly in recent years will tell us if those relative advantages are broadening or dwindling and if new advantages are developing. As we saw in Table 1, annual rates of change in total budgets varied little from region to region between 1970 and 1975 because there were offsetting changes in individual components. Analysis of changes in the budget compo nents tells a more interesting tale. The ratios in Table 3 give a rough overview of regional inflation of living costs by expenditure categories. Each frac tion indicates the proportion of the region's cities which experienced greaterthan-average increases in that particular type of living expense between 1970 and 1975. The upper number (numerator) shows how many metropolitan areas in a par ticular region have cost increases of a specific type greater than the U. S. urban average. This number is divided by the total number of metropolitan areas within each region for which budget data are available: 8 in the Northeast, 14 in the North Central, 10 in the South, and 8 in the W est.7 The more rapid overall inflation of living costs in the South stands out. Only in the tax category did less than half of southern cities experience above-average inflation. In four expenditure classes, including the key food, housing, and transportation cate gories, greater-than-average cost gains appeared in over half of the southern cities sampled. The prevalence of above-average in creases in southern living costs contrasts sharply with the experience of the North Central states. For that region, in every expenditure category, half or more of the metropolitan areas had below-average cost increases. Cost increases in the north eastern region also are below average; and the larger gains are concentrated in ex penditure categories of secondary im portance. The West has experienced cost 7The proportions shown in Table 3 assign an equal weight to each city regardless of population Furthermore, they show only whether price increases in an area fall above or below the U S. urban average without reference to the magnitude or the statistical significance of the divergence from this level increases at approximately the average rate for the nation. Table 4 extends the examination of relative rates of change in various living costs to the four southeastern cities. Each number denotes where that city fell in a ranking of the rate of increase in fam ily budgets in metropolitan areas for each type of living expense, 1970-75. The city which ranked first had the most rapid cost advances of any of the 40 cities ranked, as did Atlanta in the food category and Orlando in transportation costs. One immediately notices the relative rapidity of Atlanta's price changes in all categories; Baton Rouge appears to have experienced unusual stability of living costs. In general, price increases have been chipping away the cost advantages of southeastern cities in food and housing; the relatively slow climb in personal income tax payments has maintained or improved the Southeast's advantage in tax outlays. Geographic comparisons of fam ily budget data thus bear out the common belief that the cost of living in south eastern cities is significantly lower than in the metropolitan areas of other regions. Relative living cost advantages have per sisted despite comparatively large in creases in living expenses, particularly in food and housing expenditures, which have been major sources of the Southeast's benefits. The area's cities are holding on to their edge in personal income tax outlays. One southeastern c ity —Atlanta —has experienced unusually rapid inflation of living costs. ■ 4 I References Used in Preparation of This Analysis k Sherwood, Mark K., "The Measure of Poverty" (BLS Family Budgets Program, Technical Paper IV, January 1977). U. S. Bureau of Labor Statistics, "B LS Handbook of Methods for Surveys and Studies' (Bulletin 1910, 1976). U. S. Bureau of Labor Statistics, "Retired Couple's Budget for a Moderate Living Standard, Autumn 1966" (Bulletin 1570-4, 1968). U. S. Bureau of Labor Statistics, "Revised Equivalence Scale for Estimating Equivalent Incomes or Budget Costs by Fam ily Type" (Bulletin 1570-2, November 1968) U. S. Bureau of Labor Statistics, "The Consumer Price Index: A Short Description," 1971. U. S. Bureau of Labor Statistics, "The Consumer Price Index: History and Techniques" (Bulletin 1517, 1966). U. S. Bureau of Labor Statistics, "Three Standards of Living for an Urban Family of Four Persons, Spring 1967" (Bulletin 1570-5, 1969). v______ ________J
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