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IN
THIS
I S S UE
A Note on Defense
S p e n d in g ................... 3
1966 Patterns in
Fourth District Banking
.
7
Growth of Deposit-Type
Financial Institutions in the
Fourth District, 1947-65 . 14
FEDERAL
RESERVE
BANK
OF
CLEVELAND
Additional copies of the E C O N O M IC REV IEW m ay
be obtained from the Research Department, Federal
Reserve Bank of Cleveland, P.O. Box 63 87 , Cleveland,
O hio 44101. Permission is granted to reproduce any
material in this publication.
MARCH 1967
A NOTE ON DEFENSE SPENDING
The acceleration of the U. S. military effort
in Vietnam has been reflected in a sharp stepup in the Federal Government's purchases of
defense goods to support that effort. It is wide
ly recognized that the liming and impact of
such spending have posed serious problems
of economic evaluation, particularly regard
ing the impact on the economy. This note
considers some of the emerging patterns
of defense spending that seem to be taking
shape for the calendar year 1967.
From the second quarter of 1965 to the
fourth quarter of 1966, defense spending as
recorded in the national income accounts in
creased by $16.4 billion (from $49.1 billion to
$65.5 billion). Within that six-quarter period,
defense spending increased by $8.0 billion
during the four quarters from the second
quarter of 1965 to the second quarter of 1966,
and by $8.4 billion (at an annual rate) during
the last two quarters of 1966. The substantial
expansion of defense purchases in the second
half of 1966 implied that Federal spending
associated with the war effort in Vietnam was
increasing at a more rapid rate.
It may, therefore, be useful to consider the
timing of defense spending, a s well a s its
impact on the economy. The latter is particu
larly important because the impact of defense
spending on economic activity is widely rec
ognized to occur when the production of
defense goods takes place, for example, when
workers are hired; there may also be an antic
ipatory effect prior to the time defense orders
are placed, for example, when announcement
of a military buildup is made.
Defense purchases in the national income
accounts are recorded not when goods are
ordered or produced, but when goods are
delivered to the Federal Government—which
may be far removed in time from the original
order stage. The GNP figures on defense
spending consequently tend to lag the actual
impact on the economy of a step-up in mili
tary orders, particularly when a significant
proportion of the orders is for hard goods
requiring lengthy production time. From this
point of view, the series on defense purchases
in the national income accounts may (1) in
itially understate the impact of a step-up in
defense orders, and (2) subsequently over
state that impact. It could be, a s some have
maintained, that the impact of the military
buildup associated with Vietnam has already
reached a peak even though defense spend
ing may continue to rise in the future. The
data in the tables and the accompanying dis
cussion are used to indicate the reasons the
stimulus from defense spending largely may
now be dissipated.
3
E C O N O M IC R E V IEW
Table I presents data on changes in new
obligalional authority (NOA) and changes in
payments for major military functions. It can
be seen from the data that in three categories
— military personnel, operation and main
tenance, and research and development —
there is a reasonably close correspondence
between changes in NOA and changes in
paym ents.1 These are the budget categories
with the shortest lime lag between incurring
1 Defense paym ents also reflect commitments arising
from previously authorized, but unobligated balances,
which have been carried forward to the current fiscal
year. Unobligated balances a s of the end of the fiscal
year for Department of Defense total military funds are
projected to decline slightly in fiscal y ears 1967 and 1968,
indicating that obligations incurred will exceed new
obligational authority in those years. The following fig
ures also suggest that this will be the case:
Departm ent of Defense— M ilitary
(m illio n s of dollars)
Fiscal Years
1966
1967
New Obligational A u th o rity*
O bligations Incurred
1968
$63,892
$72,034
$74,674
61,836
73,493
74,846
• In clu ding supplem ental appropriations.
In terms of fiscal year changes, NOA increased by $8.1
billion in fiscal 1967 while obligations incurred increased
by $11.7 billion (reflecting the fact that not all NOA in
fiscal y ear 1966 — or previous years — resulted in obli
gations being incurred). For fiscal 1968, however, NOA
for total military will increase by $2.6 billion while obli
gations incurred will increase by only $1.4 billion. This
su ggests that the draw ing down of unobligated balances
will not be a major source of obligations incurred or
expenditures in fiscal year 1968.
More detailed d ata on obligations incurred, with re
spect to the breakdow n in Table I, do indicate that
changes in obligations incurred have tended to approxi
mate changes in new obligational authority. Unfortu
nately, projections of obligations incurred by military
function are not published for fiscal y ears 1967 and 1968.
For additional information, see Executive Office of the
President, Bureau of the Budget, The Budget of the United
States Government — 1968 (Washington: U. S. Govern
ment Printing Office, 1967), pp. 45, 50-51, 170-173.
4
an obligation and payment of that obligation.
The behavior of the procurement category
contrasts markedly to that of the above three
categories. New obligational authority for
procurement increased by $6.2 billion in fiscal
year 1966 and by $2.9 billion in fiscal year
1967. Virtually no increase is projected for
fiscal year 1968. Procurement payments,
however, tend to show a lagged response.
The increase in payments for procurement
was $2.5 billion in fiscal year 1966, followed
by $4.1 billion in fiscal year 1967, with $3.2
billion budgeted for fiscal year 1968. Fiscal
year 1968 is of special interest since NOA
for procurement does not show any change,
while procurement payments, on the other
hand, show a jump of more than $3 billion.
This, of course, reflects the time lag involved
in producing procurement goods (for exam
ple, aircraft, missiles, ships, vehicles, ammu
nition, etc.); it also represents the backlog of
procurement orders due to delays in convert
ing productive facilities and in handling rap
idly expanding new orders (see footnote 1).
The fact that NOA shows no change for
fiscal year 1968 suggests that there will be
no net additional stimulus to private industry
due to hard goods procurement in that fiscal
year even though payments will continue to
increase. What stimulus there is will be due
to other than hard goods procurement. Con
sequently, only a portion of the rise in de
fense spending in fiscal year 1968 should be
interpreted a s stimulative, and will come
primarily from spending on military person
nel. Specifically, almost 60 percent (or $3.2
billion) of the $5.4 billion increase in defense
spending (administrative budget) in fiscal
year 1968 will reflect past stimulus.
MARCH 1967
TABLE I
C h a n g e s in N e w O b lig a tio n a l Authority (N O A )
a n d Expenditures for M ilita ry Functions
F iscal Y e a rs 1965-68
(in b illio n s o f d o lla r s )
Military
Personnel
Fiscal
Year
NOA
Expen
ditures
Operation
and Maintenance
NOA
Expen
ditures
Research
and Development
Procurement
NOA
Expen
ditures
NOA
Expen
ditures
$— 0.8
Other
Total Military
NOA
Expen
ditures
NOA
Expen
ditures
$0.1
$— 0.3
$— 0.6
$— 3.6
2.9
1.4
14.5
8.2
1965
$0.8
$0.6
$0.9
$0.4
$— 1.8
$— 3.5
$— 0.5
1966
2.4
2.0
2.7
2.4
6.2
2.5
0.3
0 .0 *
1967
3.4
3.4
3.9
3.9
2.9
4.1
0.4
0.4
— 2.5
0.6
8.1
12.5
1968
1.6
1.6
— 0.1
0.4
0 .0 *
3.2
0.1
0.5
1.0
— 0.4
2.6
5.4
*Less than $5 0 million.
Source: Executive Office of the President, Bureau of the Budget, The Budget of the United States G o vernm ent— 1968
(W ashington: U. S. Government Printing Office, 1967), pp. 456 and 462
Tables II and III tend to substantiate this
point. The data in Table II indicate that NOA
due to Vietnam will decline by nearly $1.4
billion in fiscal year 1968 even though ex
penditures will continue to rise.
Table III presents data on various types of
obligations and orders for defense products.
The obligations series reached a peak in the
second guarter of 1966, and since that lime
have declined for two successive quarters;
the orders series reached a peak in the third
quarter of 1966, and receded in the fourth
quarter.
TABLE II
Estim ated N e w O b lig a tio n a l Authority and
Expenditures for Special Support of
V ietnam O pe ratio ns
Fiscal Y ears 1965-68
(in m illio n s o f d o lla r s )
New
O bligational
Authority
Fiscal
Year
1965
.....................
1966
.....................
$
700
14,946
Expenditures
$
103
5,812
1967
.....................
21,969
19,419
1968
.....................
20,600
21,900
Source: Executive Office of the President, Bureau of the Budget,
The Budget of the United States Governm ent— 1968
(W ashington: U. S. Government Printing Office, 1967),
p. 77
TABLE III
N e w O rders for Defense Products, D epartm ent of Defense O b lig atio n s,
an d M ilita ry Prime Contract A w ard s, 1965-66
S e a so n ally Adjusted A n n u a l Rates
(in b illio n s o f d o lla r s )
Department of Defense
Obligations
Quarter
1965
1966
Total
Procurement
Military Prime
Contract Aw ards to
U. S. Business Firms
New Orders
for Defense
Products
29.1
1..........................................
. . . .
51.0
12.2
21.3
II ...........................
. . . .
55.0
16.4
29.6
33.1
Ill..............................................
. . . .
59.0
18.4
31.7
35.5
IV .............................................
. . . .
62.1
19.3
32.7
33.5
39.3
1...........................................
. . . .
64.6
21.1
32.9
...........................
. . . .
75.9
24.6
38.8
39.6
Ill..............................................
. . . .
75.2
23.5
41.1
45.3
IV ..............................................
. . . .
72.1
22.4
39.1
37.4
II
Source: U. S. Department of Commerce, Business Cycle Developments, February 1967
5
TABLE IV
Defense Production, Unfilled O rd e rs for Defense Products, an d the
Ratios of Unfilled O rders to Shipm ents an d of N e w O rders to Shipm ents, 1965-66
Percent Change in
Defense Production e
1965 J a n u a r y ............................
F e b ru a ry ............................
..............
Ratio of
Unfilled Orders
for Defense
Products
(millions)
Unfilled
O rders to
Shipments
New Orders
to Shipments
$19,964
9.09
1.08
20,260
9.12
1.10
20,502
8.99
1.08
1 .8 %
M a r c h ................................
A p r i l ................................
21,361
9.46
1.43
21,457
9.41
1.08
...............................
21,743
9.46
1.12
J u l y ...................................
22,036
9.48
1.13
22,503
9.61
1.20
23,532
9.72
1.42
M a y ................................
June
A u g u st................................
..............
..............
3.5
4.8
S e p t e m b e r .........................
O c t o b e r ............................
N o v e m b e r .........................
..............
6.3
D e c e m b e r .........................
1966 J a n u a r y ............................
24,407
9.16
1.36
24,587
9.31
1.08
24,587
9.71
1.00
25,383
9.64
1.32
25,841
9.03
1.18
M a r c h ................................
26,578
10.01
1.28
A p r i l ................................
27,239
10.25
1.24
27,316
9.65
1.03
28,269
10.35
1.35
F e b ru a ry ............................
M a y ................................
June
..............
..............
8.4
5.0
...............................
28,879
9.98
1.21
29,184
10.24
1.11
S e p t e m b e r ........................
31,033
11.00
1.66
O c t o b e r ............................
31,453
10.89
1.15
31,316
10.93
0.95
31 ,691p
10.85
1.13
J u ly ...................................
A u g u st................................
N o v e m b e r ........................
..............
..............
6.0
2.7
D e c e m b e r .........................
e Estimated by Federal Reserve Bank of Cleveland
p
P r e lim in a r y
Sources: U. S. Department of Commerce and Federal Reserve Bank of Cleveland
Table IV presenls measures on the production side of defense — defense output, order
backlogs, and ihe ratios of unfilled orders
to shipments and of new orders to shipments.
It can be seen that the rate of increase in
estimated defense production slowed substantially in the fourth quarter of 1966. The
slowing down in the rale of growth does not
appear to reflect capacity limitations. The
ratio of new orders to shipments declined
below 1.00 in November, ihe first monih-iomonth decline in the backlog of unfilled
orders for defense products during the time
period covered by ihe data in the table. While
new orders exceeded shipments in December,
thereby pushing up the backlog of unfilled
orders again, ihe growth of unfilled orders
does appear to have slackened.
6
In view of ihe data, several comments seem
pertinent. For one thing, a s calendar 1967
progresses, defense spending is likely to in
crease less than during 1966. For another,
much of the increase in spending will repre
sent deliveries of previously ordered hardware and will not reflect an additional siimulus to productive activity. Moreover, new
orders and commitments for those military
products that require extensive productive
capacity are not expected to increase, but
will remain level or possibly even show a
slight decline; in fact, they have remained
virtually level since the second quarter of
1966. Thus, the data suggest that the economy may not receive much additional siimulus from defense spending in calendar 1967—
at least a s things stand now.
MARCH 1967
1966 PATTERNS IN
FOURTH DISTRICT BANKING
During 1966, loictl loans and inveslmenis ai
weekly reporting banks in ihe Fourth District
advanced $388 million or about 2.8 percent.1
Ai least two major developments are signif
icant. First, ihe rate of expansion of bank
credit was considerably less than that of
recent years. Second, during 1966 bank man
agement had to cope with heavy demands
for funds ai a time when credit was becoming
less available.
1 The statistical series on the Condition of Weekly Report
ing Member Banks w as revised during 1966, beginning
with the report for July 6. Two major revisions involved
the addition of banks (including nonmembers of the Fed
eral Reserve System) to the reporting series and the
inclusion of only those banks with deposits of $100 million
or more. To reflect these changes, the series title h as been
changed to Weekly Condition Report of Large Commercial
Banks. Presently, 31 banks within the Fourth District re
port weekly to the Federal Reserve Bank of Cleveland.
D ata used in this article for the period prior to July 6,1966,
have been revised to be com parable to the more recent
data.
Since the weekly reports of participating banks are
compiled a s of W ednesdays only, the 52-week period
used in this article does not coincide precisely with the
calendar year. The period covered is from December 29,
1965, to December 28, 1966.
With reference to ihe second development,
member bank borrowings from the Federal
Reserve System exceeded excess reserves
throughout the year, indicating the need to
use borrowed funds to meet reserve requiremenis. Banks generally were under pressure
to maintain deposit levels, in part because
attractive yields on investment securities
tended to lure depositors' money. Freguently,
banks were forced to liquidate portions of
their investment holdings to raise funds to
accommodate loan demand. The situation
differed somewhat in the Fourth District, since
excess reserves generally exceeded borrow
ings. It is not clear whether District banks
were in a more favorable position than banks
in the nation or whether they were more pre
pared to take other steps (such as liquidation
of investments or curtailment of lending ac
tivity) to meet reserve requirements. In any
event, Fourth District banks still had to oper
ate in a general environment of reduced
credit availability. Against this background,
ihe present article describes ihe banking situ
ation that unfolded in the Fourth District dur
ing 1966.
7
E C O N O M IC R E V IEW
BANK CREDIT
C h a r t 1.
BANK CREDIT
The swings in total credit at District banks
in 1966 are apparent in Chart 1, which shows
total bank credit, loans, and investments at
weekly reporting banks. The dip in bank
credit in the first quarter and the increase in
the second quarter were not unlike the pat
terns of previous years, but the decline dur
ing the late spring and summer months was
unusual. In the period from May through the
middle of September, bank credit declined
by $511 million, or 9.9 percent at an annual
rate. On balance, loan demand held up fairly
well during that period. Lending, however,
was restrained by the difficulty banks had in
acquiring and holding new deposits, which
reflected the restrictive credit policy of the
Federal Reserve System. Federal Reserve
credit policy also was reflected in the steady
decline in total investments through most of
1966.
During the fourth quarter, bank credit in
creased at Fourth District weekly reporting
banks, but at a slower rate than in recent
years. While loans receded in the fourth
quarter, total investment holdings rose to the
level that existed at midyear. On balance,
the volume of total bank credit at District
reporting banks at yearend was still slightly
below the peak level reached in the spring
of 1966.
F o u r t h D i s t r i c t — W e e k l y R e p o r t in g B a n k s
B i ll io n s of d o l l a r s
INVESTMENTS
1966
NOTE:
R e d lin e is b a s e d on a v e r a g e e n d - o f - q u a r t e r to
e n d - o f - q u a r t e r p a t t e r n d u r in g 1 9 6 1 -6 5 , a n d re p r e s e n t s
h o w th e a c tu a l s e r ie s w o u ld h o v e p e rfo rm e d in 1 9 6 6
if it h a d c o n fo rm e d
S o u r c e o f d a ta :
to 1 9 6 1 -6 5 e x p e rie n c e .
Fe d e ra l R e se rve B a n k
8
o f C le v e la n d
Total investments receded at District week
ly reporting banks in 1966, with the net de
cline just under 5 percent for the year as a
whole. During the year, the pattern was one
of total investments declining by 16 percent
MARCH 1967
(annual rale) through Ihe first three quarters,
and then regaining some of the loss during
the fourth quarter (see Chart 1).
During ihe first half of the year, holdings
of U. S. Government securities at District re
porting banks were reduced substantially,
while holdings of other securities increased
fractionally (see Chart 2). Although holdings
of Governments declined somewhat further
in July and August, the pattern of investment
in these and other securities was reversed
during most of the second half of the year.
That is, holdings of U. S. Treasury issues were
accumulated (particularly in ihe fourth quar
ter) while holdings of other securities were
liquidated. As shown in Chari 2, most of ihe
fluctuation in total investments during ihe
year was centered in holdings of short-ierm
U. S. Treasury issues, those due to mature
within one year. The changes in holdings of
intermediate-term and long-term Treasury
issues were relatively small in magnitude
and partly off-setting, so that adjustments in
these maturity areas had little effect on the
behavior of total investments.
LOANS
Total loans (the major component of bank
credit) experienced a relatively consistent
pattern of rapid expansion at District report
ing banks through ihe first three quarters of
1966. Customarily, the largest amount of loan
expansion at District reporting banks a s a
whole (in fact, at commercial banks gener
ally) takes place during ihe Iasi half of ihe
calendar year, when business and consumer
borrowing increases seasonally, bui this was
noi ihe case in 1966. From ihe end of June io
the end of ihe year, loans ai Disirici report
ing banks increased by only $67 million, or
C h a r t 2.
BANK INVESTMENTS
F o u r t h D i s t r i c t — W e e k l y R e p o r t in g B a n k s
U.S. GOVT. SECURITIES
B illio n s o f d o lla rs
OTHER
SECURITIES
B i l l io n s o f d o l l a r s
1966
So u rce
o f data:
Fe d e ra l
R e s e r v e B a n k o f C le v e la n d
9
E C O N O M IC R E V IE W
Chart 3.
BANK LOANS
F o u r t h D i s t r i c t — W e e k l y R e p o r t in g B a n k s
B i l l io n s o f d o l l a r s
4 4 ‘ c & l LOANS
4.2
-
1961-65 A v e r a g e
REAL ESTATE LOANS
2 .4
-
NO N BA N K F IN A N C IA L LOANS
SECURITY LOANS
1961-65
ALL OTHER LOANS
2 .6
-
2 .4
-
J
F
M
A
M
J
J
A
S
O
N
D
1966
*
S e e F o o tn o te 2 in text
NOTE:
R e d lin e is b a s e d o n a v e r a g e e n d - o f - q u a r t e r to
e n d - o f - q u a r t e r p a t t e r n d u r in g 1 9 6 1 -6 5 ,
h o w th e a c t u a l s e r ie s w o u ld
and
re p re se n ts
h a v e p e r fo r m e d in 1 9 6 6
if it h a d c o n fo rm e d to 1 9 6 1 -6 5 e x p e rie n c e .
S o u rce o f data:
F e d e r a l R e s e r v e B a n k o f C le v e la n d
10
less ihan 1V2 percent at an annual rate (see
Chart 1). Developments during the last quar
ter deviated sharply from the usual pattern,
and total loans actually declined at an an
nual rate of 4 percent. As a result, for the
year a s a whole the gain in total loans was
the smallest annual increase in four years.
During the first half of 1966, the commercial
and industrial loan component of total loans
at District reporting banks rose sharply at
an annual rate of 30 percent, in a spillover
of the rapid expansion that had occurred in
1965. (See Chari 3.) The District experience
reflected an even more accelerated rate of
business loan expansion than in the nation,
where the rate of advance was 20 percent at
an annual rate. In fact, the increase in busi
ness lending at commercial banks in general
w as so large that the Federal Reserve System
found it necessary to issue a letter on Septem
ber 1, 1966, that specifically asked banks to
curb loans to business and industry and not
to sell securities in order to prevent severe
pressures from developing in credit and cap
ital markets. In the District, the pace of busi
ness loan expansion had actually slowed
noticeably at midyear, to an annual rate of
about 8 percent during the summer. This, in
part, reflected credit-restraining actions by
the Federal Reserve System, referred to ear
lier, as well a s the first indications of slacken
ing demand for business loans.
R eal e state lo an s increased modestly
throughout the first quarter of 1966 in con
trast to the sharp climb in total loans. (See
Chart 3.) However, from April through Octo
ber, real estate loans advanced at an annual
rate of approximately 13 percent, which in
part reflects patterns established in recent
MARCH 1967
years. During much of this period, banks in
the Dislrici were more successful in obtaining
and holding savings funds than were other
types of financial institutions that specialize
in granting mortgage loans. Real estate loans
were virtually unchanged at District report
ing banks during November and December.
Loans to nonbank financial institutions
(such as finance companies and savings and
loan associations), loans to securities dealers
for the purpose of carrying securities, and
all other loans2 showed little net change
over ihe year and thus did not have a notice
able net effect on ihe behavior of total loans
ai District weekly reporting banks. (See
Chart 3.) The fact that loans to nonbank
financial institutions by District reporting
banks declined during the fourth quarter is
perhaps significant because in recent years
such loans usually have increased during
that quarter. With resources scarce, District
banks apparently took advantage of other
lending opportunities that were available.
Chart 4.
BANK DEPOSITS
F o u r t h D i s t r i c t — W e e k l y R e p o r t in g B o n k s
B illio n s of d o lla rs
TOTAL TIM E DEPO SITS
BANK LIQUIDITY
Familiar measures of bank liquidity reflect
the pressures on District reporting banks in
1966, a s they attempted to acquire and hold
deposits, while being forced to liquidate por
tions of investment holdings in ihe face of
heavy loan demands. The loan-to-deposit
NEGOTIABLE CDs
2 For the purpose of this article, all other loans include
the following categories from the weekly report of condi
tion: agricultural loans, consumer instalment loans, and
other loans. In June 1966, a sharp decline in all other
loans resulted from a decision by the Federal Reserve
System to disregard certain time deposits ("hypothecated
deposits") set up by banks in some states to reflect rep ay
ments on consumer loans. The decision resulted in corre
sponding declines in total time deposits and all other loans.
1966
*
S e e Fo o tn o te 2 in text
NOTE:
R e d lin e is b a s e d o n a v e r a g e e n d - o f - q u a r t e r to
e n d -o f-q u a rte r p a tte rn
d u r i n g 1 9 6 1 -6 5 , a n d r e p r e s e n t s
h o w th e a c t u a l s e rie s w o u ld h a v e p e r f o r m e d in 1 9 6 6
if it h a d c o n fo r m e d to 1 9 6 1 -6 5
S o u rc e of data:
e x p e rie n c e .
F e d e r a l R e s e r v e B a n k o f C le v e la n d
11
E C O N O M IC R E V IEW
ratio for Fourth District weekly reporting
banks at the beginning of 1966 was at 59.6
percent; by August, the ratio reached a recent
record level of 65.4 percent; it then receded
and closed the year at 62.0 percent. The ratio
of risk a sse ts3 to total assets moved some
what more narrowly, increasing from 76.3
percent at the beginning of the year to a
peak level of 79.6 percent in both June and
October with the higher level being main
tained during the summer and fall. By year
end, however, the ratio had declined to 77.0
percent. It should be pointed out that both
the loan-deposit and the risk-asset ratio have
been in a gradual secular uptrend over the
past four years, and at yearend 1966 both
were almost 10 percentage points higher
than in 1962 for Fourth District weekly report
ing banks.
BANK DEPOSITS
As mentioned earlier, District reporting
banks — a s well a s those across the nation —
experienced a great deal of difficulty in main
taining deposit levels in 1966. In fact, if it
were not for seasonal increases in deposits
at District banks during the last two weeks
of December, total deposits probably would
have finished the year at a lower level than
at the beginning of the year.
Customarily, total deposits at District re
porting banks decline in the first quarter of
the year. The usual deposit pattern was fol
lowed in the first three months of 1966, but
the decline was greater than in recent years.
In addition, the second quarter brought a
smaller increase than usual in total deposits,
3 Risk a sse ts equal total a sse ls less cash and U. S. Gov
ernment securities.
12
as time deposits lost some of their attractive
ness in view of rising interest rates on money
market instruments. The third quarter added
to the problems of District banks, with total
deposits declining sharply in July and Au
gust. Usually, tolal deposits show a strong
increase in the third quarter, but the sevenweek period from July 6 to August 24, 1966,
saw a sharp decline at an annual rate of
about 40 percent (a rate of decline smaller
than that experienced by all weekly report
ing banks in the nation, however). Total de
posits declined again, during the fourth quar
ter, until the recovery just before yearend.
Demand deposits at Fourth District report
ing banks moved lower during the first two
quarters of 1966 in seasonal fashion, with
most of the decline occurring in the first
quarter (see Chart 4). Gains in the second
half were not enough to recover the earlier
loss, a s in other recent years. As a result,
demand deposits closed fractionally lower in
1966 than at yearend 1965. As the chart
shows, the largest changes in demand de
posits occurred in months in which business
and personal income tax liabilities were sub
stantial: April, June, September, October and
December.
Weekly reporting banks in the Fourth Dis
trict were able to increase time deposits
throughout most of the first half of 1966, as
funds continued to flow into other time de
posits, and passbook savings deposits re
mained relatively steady. After midyear,
however, passbook savings a s well as nego
tiable CDs began to run off, causing total
time deposits to show a gain of only 3V2
percent for 1966 a s a whole. This contrasts
sharply to the 10 to 25 percent gains in total
MARCH 1967
time deposits in the preceding five years.
This was the case despite the fact that re
porting banks raised interest rates offered
on the various time deposits to or near the
maximum levels permitted. In view of mone
tary restraint during much of 1966, as well as
large advances in yields on money market
instruments, the behavior of time deposits at
District reporting banks is not surprising.
The total dollar volume of negotiable CDs
in denominations of $100,000 or more issued
by Fourth District weekly reporting banks
turned downward during the first week in
July, as illustrated in Chart 4. There was a
temporary halt in the outflow of funds held
in the form of large CDs during September,
but subsequently the reporting banks again
began to lose deposits and at an accelerated
pace. During November, with interest rate
relationships changing, banks in the Fourth
District were able to halt the decline in large
CDs; by yearend, banks had regained a por
tion of the lost CD volume.
CONCLUDING COMMENTS
Generally, 1966 provided many challenges
for Fourth District weekly reporting banks.
as well as for other banks in the nation.
Commercial banks continued to refute their
popular reputation a s institutions that resist
change by adapting, often quickly, to rapidly
changing monetary and financial conditions.
During most of the year, loan demand at
District reporting banks remained strong,
but total resources (deposits) did not expand
enough for banks to accommodate loan de
mand. To have allowed banks to do so would
have been inappropriate monetary policy
in view of the economic situation then pre
vailing. Banks were forced to sell some in
vestments, frequently at losses, to raise funds
to accommodate loan requests of valued
customers. While this was clearly the situa
tion during the first half, it was less so during
the rest of the year and not the case at all
as the year came to a close, reflecting the
shift in monetary policy toward less restraint.
The increase in the volume of time deposits
at District reporting banks in 1966 was well
below that of other recent years, even though
interest rates paid by reporting banks moved
to or approached the legal maximum. But
this was not an atypical experience, a s it oc
curred widely at banks throughout the nation.
13
E C O N O M IC R E V IEW
GROWTH OF DEPOSIT-TYPE FINANCIAL
INSTITUTIONS IN THE FOURTH DISTRICT,
1947-65
Total assets of deposit-type financial insti
tutions1 located within the Fourth Federal
Reserve District exceeded $41 billion at the
end of 1965. At this level, total assets were
185 percent greater than at the end of 1947,
when they amounted to $14.5 billion. This
increase in total assets during ihe 1947-65
period was not distributed evenly among the
NOTE: The cooperation of the Federal Home Loan Banks
of Cincinnati and Pittsburgh, the Credit Union L eagu es of
Ohio, Pennsylvania, Kentucky, and West Virginia, and
the banking and building and loan departments in the
Fourth District states in providing historical d ata is grate
fully acknowledged.
1 A deposit-type financial institution derives its primary
resources from deposits by the public. The most familiar
types of deposit-type financial institutions are commercial
banks, savin gs and loan associations, mutual savin gs
banks, and credit unions. Although there are a number of
sale s and consumer finance companies in the Fourth Dis
trict that accept deposits, they are excluded from this
study since statistics are not av ailab le on either their
number or activities.
14
various subareas within the District (the en
tire State of Ohio, western Pennsylvania,
eastern Kentucky, and six counties in West
Virginia). Total assets of deposit-type finan
cial institutions in Ohio more than tripled
during the period under review, while assets
of institutions in Pennsylvania, Kentucky, and
West Virginia expanded about two-and-onehalf times (see Table I).
The vast growth in total assets of deposittype financial institutions in the Fourth Dis
trict was accompanied by large-scale expan
sion of physical facilities. Not only were a
large number of new financial institutions
formed, but there was an even more rapid
increase in the number of branches, particu
larly of commercial banks and savings and
loan associations in Ohio and Pennsylvania.
At the end of 1965, there were 5,481 offices
of deposit-type financial institutions in the
Fourth District, a 69 percent increase from
TABLE I
A sse ts an d Facilities
Deposit-Type Financial Institutions
Fourth Federal Reserve District
December 31, 1947 and December 31, 1965
State or Portion
in Fourth District
ASSETS
Decem ber 31, 19 4 7
(millions o f dollars)
Total
Offices
Branches
O h i o .......................................
$ 9,367
2,064
1,863
201
P e n n sylvan ia............................
4,328
870
818
52
K e n t u c k y ................................
667
268
262
6
W e st V i r g i n i a .........................
170
41
41
-0 —
T O T A L ...................................
$14,532
3,243
2,984
259
FACILITIES
^ain
Decem ber 31, 1965
O h i o .......................................
$28,214
3,651
2,386
1,265
P e n n sylvan ia ............................
11,001
1,405
875
530
K e n t u c k y ................................
1,727
362
280
82
W e st V i r g i n i a .........................
412
63
63
-0 -
T O T A L ...................................
$41,354
5,481
3,604
1,877
O h i o .......................................
+201%
+77%
+28%
Pe n n sylvan ia ............................
+154
+61
+ 7
Percent Change, 1 9 47-6 5
Kentucky
................................
+159
+35
+
+142
+54
+54
T O T A L ...................................
+185%
+69%
+21%
Federal
Home
Loan
Bank
of
Cincinnati;
Federal
529%
+ 9 1 9
W e st V i r g i n i a .........................
Sources:
+
7
+ 1 ,2 6 7
-0 +
625%
Home Loan Bank of Pittsburgh; Division of Building and Loan
Associations, The State of Ohio; Department of Banking and Securities, The Comm onwealth of Kentucky; Department
of Banking, The Commonwealth of Pennsylvania; Departm ent of Banking, The State of W est
V irgin ia; Pennsylvania
Credit Union League; O hio Credit Union League; Kentucky Credit Union League; W est V irgin ia Credit Union League;
Federal Reserve Bank of Cleveland
E C O N O M IC R E V IEW
TABLE II
Assets and Facilities
Com m ercial Banks
Fourth Federal Reserve District
December 31, 1947 and December 31, 1965
TOTAL ASSETS
tate or Portion
i Fourth District
(millions of dollars)
1 2 -3 1 -4 7 1 2 -3 1 -6 5
TOTAL M A IN OFFICES
Percent
Change
M ain
M ain
Offices
Offices
1 2 -3 1 -4 7 1 2 -3 1 -6 5
TOTAL BR A N CH ES
Percent
Change
Branches
1 2 -3 1 -4 7
186
945
+
408%
+74%
52
455
+
775
+72
$ 7,416
$17,506
+ 136%
668
542
— 19%
3,977
8,275
+ 108
286
128
— 55
Kentucky
588
1,286
+ 119
167
149
— 11
W est Virginia
152
269
26
24
$12,133
$27,336
1,147
843
Ohio
Pennsylvania
TOTAL
+
77
+ 125%
TOTAL
B A N K IN G
OFFICES
—
8
— 27%
Branches
1 2 -3 1 -6 5
6
74
-0 -
-0 -
244
1,474
Percent
Change
+ 1,133
-0 +
504%
Percent
Change
+ 29
—
8
+67%
Source: Federal Reserve Bank of Cleveland
the number in operation in 1947. The growth
in facilities was concentrated in the estab
lishment of branch offices, with the number
of branches increasing 625 percent. Alterna
tively stated, the expansion of branch offices
accounted for 72 percent of the total increase
in the number of deposit-type facilities in the
District. Like the expansion in total assets,
expansion in number of total facilities was
not uniformly distributed among the subareas of the District. Moreover, rates of
growth of the individual types of financial
institutions, in terms of both assets and facili
ties, varied from area to area within the
District.
percent during the period 1947-65, or from
$12.1 billion to $27.3 billion. That increase
($15.2 billion) represented more than half
(57 percent) of the gain in total assets of all
deposit-type financial institutions in the
Fourth District during 1947-65. The number of
commercial banking offices rose by 67 per
cent, all of which resulted from the establish
ment of branches, as the number of commer
cial banks fell by 27 percent (see Table II).2
Despite posting the largest absolute in
creases in total assets and total facilities, the
share of total assets of all deposit-type finan
cial institutions accounted for by District
commercial banks fell during the 1947-65
GROWTH OF DEPOSIT-TYPE FINANCIAL
2 For a discussion of the changes in ihe structure of com
INSTITUTIONS - BY TYPE AN D AREA
mercial banking in the Fourth Federal Reserve District,
Total assets of Fourth
District commercial banks expanded 125
see "The Anatomy of Fourth District Banking, 1954-65,"
Economic Review, Federal Reserve Bank of Cleveland,
Cleveland, Ohio, May 1966.
Com m ercial Banks.
16
MARCH 1967
period. Whereas commercial banks held 83
percent of total assets and operated 43 per
cent of total facilities in 1947, the proportions
fell to 66 percent and 42 percent, respectively,
by the end of 1965.
The rates of growth of commercial banks
in the subareas of the Fourth District varied
during the 1947-65 period. Commercial banks
in Ohio led the way with an increase in total
assets of 136 percent. Total assets of banks
in the District's portions of Kentucky and
Pennsylvania increased by 119 percent and
108 percent, respectively, while those of
banks in the six-county portion of West Vir
ginia grew by 77 percent. In the case of facili
ties, the number of banking offices in Ohio,
Pennsylvania, and Kentucky increased in a
range of from 29 to 74 percent; in West Vir
ginia, the only unit banking state in the
Fourth District, the number of banking offices
fell by 8 percent. Although the number of
total banking offices increased in three of
the four District areas, the number of com
mercial banks fell in all four; the largest
decline was experienced in Pennsylvania,
where the number of commercial banks de
clined by 55 percent. The number of branches
of commercial banks in the District rose in
all states, except for West Virginia, with the
largest increase (1,133 percent) taking place
in Kentucky (see Table II).
S a v in g s an d Loan A sso ciation s an d M u tu al
S a v in g s Banks. The combined total assets of
savings and loan associations and mutual
savings banks operating in the Fourth District
spurted from $2.3 billion in 1947 to over $13.2
billion at the end of 1965, a 464 percent in
crease.3 All of the growth was centered in
the expansion of the savings and loan asso
ciations. There were three mutual savings
banks in the Fourth District in 1947 with com
bined assets of $317 million; at the end of
1965, there were two mutual savings banks
with combined assets of $309 million.4
In 1947, the savings and loan associations
of the Fourth District held only 16 percent of
the total assets of all deposit-type financial
institutions in the District; at the end of 1965,
the percentage share amounted to 32 percent.
In contrast to commercial banks, the savings
and loan associations expanded primarily
through internal expansion (not through
merger or consolidation), although there were
a few consolidations of small, uninsured a s
sociations, especially in Ohio, and to a lesser
degree, in Pennsylvania. The number of main
offices declined 10 percent during the 1947-65
period; the number of branch offices sky
rocketed, however, increasing by 2,587 per
cent (see Table III). The net result w as that
total offices of savings and loan associations
rose approximately 31 percent during the
period under review. During 1947-65, the
savings and loan associations gained a siz
able share of total assets of financial institu
tions within the Fourth District, even though
they experienced a loss in the percent
3 Mutual savin gs banks are relatively unimportant in the
Fourth District, and have been combined with the savin gs
and loan associations, the deposit-type institution the
former most closely resem bles in terms of structure and
operation.
4 The largest mutual savin gs bank in 1947 w as converted
to a national bank in 1958.
17
E C O N O M IC R E V IEW
TABLE III
A ssets a n d Facilities
S a v in g s an d Loan A sso ciation s a n d M u tu a l S a v in g s Ban ks
Fourth Federal Reserve District
December 31, 1947 and December 31, 1965
TOTAL ASSETS
State or Portion
in Fourth District
Ohio
(millions o f dollars)
1 2 -3 1 -4 7
1 2 -3 1 -6 5
Percent
Change
TOTAL BRAN CHES
Main
Offices
1 2 -3 1 -6 5
Percent
Change
Branches!
1 2 -3 1 -4 7
Branches
1 2 -3 1 -6 5
Percent
Change
+ 2 ,0 3 3 %
$1,916*
$10,15 0 f
+430%
624
557
— 11%
15
320
33 9 *
2,544f
+650
215
186
— 13
—0 —
75
-0 -
77
423
+449
71
67
—
6
-0 -
8
-0 -
17
136
+700
12
17
+42
—0 —
-0 -
-0 -
$2,349
$13,253
922
827
15
403
+ 2 ,5 8 7 %
Pennsylvania
Kentucky
W est Virginia
TOTAL
TOTAL M A IN OFFICES
M ain
Offices
1 2 -3 1 - 4 7
+464%
— 10%
* Includes two mutual savings banks in O h io with assets of $227 million and one in Pennsylvania with assets of $90 million.
+ Includes one mutual savings bank in O h io with assets of $3 million and one in Pennsylvania with assets of $306 million.
Estimated.
Sources: Federal Home Loan Bank of Cincinnati; Federal Home Loan Bank of Pittsburgh; Division of Building and Loan A ssocia
tions, The State of Ohio; Department of Banking and Securities, The Commonwealth of Kentucky; Department of Bank
ing, The Commonwealth of Pennsylvania; Department of Banking, The State of W est V irgin ia
share of facilities. In 1947, offices of savings
and loan associations accounted for 29 per
cent of the facilities of all deposit-type finan
cial institutions; in 1965, the share had de
clined to 22 percent even though the absolute
number of savings and loan facilities had
grown appreciably.
Within the District, savings and loan asso
ciations in Ohio showed the greatest amount
of expansion. There are more uninsured sav
ings and loan associations in Ohio than in any
other state; the percent of total assets held by
the uninsured associations was 30 percent in
1947, and amounted to about 10 percent at
the end of 1965.
In 1947, savings and loan associations in
Ohio held assets amounting to $1.9 billion;
18
by 1965, assets had grown to nearly $10.2
billion, a more than fivefold increase, which
accounted for 76 percent of the growth of all
savings and loan associations in the District
during 1947-65. At the sam e time, Ohio expe
rienced the largest absolute decline in the
number of associations and the sharpest
increase in the number of branches.
The Commonwealth of Pennsylvania also
experienced a sharp increase in the total
assets held by savings and loan associations,
with a percent increase of 650 percent
surpassing that in Ohio. While the number
of savings and loan associations in Pennsyl
vania also declined, the number of branches
increased markedly. Both Kentucky and
West Virginia experienced slight gains in
MARCH 1967
TABLE IV
A ssets a n d Facilities
Credit Unions
Fourth Federal Reserve District
December 31, 1947 and December 31, 1965
TOTAL ASSETS
(millions of dollars)
State or Portion
in Fourth District
1 2 -3 1 -4 7
1 2 -3 1 -6 5
TOTAL M A IN OFFICES
M ain
Offices
1 2 -3 1 -4 7
M ain
Offices
1 2 -3 1 -6 5
+ 1 ,4 9 4 %
571
1,287
+ 1,417
317
561
24
64
+ 167
3
22
+ 633
915
1,934
Percent
Change
O h i o ............................
..............
$35
$558
Pennsylvania..................
..............
12
182
K e n t u c k y .....................
..............
2
18
+
800
W e st V i r g i n i a ..............
........
1
7
+
600
T O T A L .........................
..............
$50
$765
+ 1 ,4 3 0 %
Percent
Change
+ 125%
+
77
+ 111%
Sources: Kentucky Credit Union League; O h io Credit Union League; Pennsylvania Credit Union League; W est V irgin ia Credit
Union League
the amount of assets held by savings and
loan associations as well as in ihe number
of facilities. Interestingly, West Virginia was
the only Fourth District state in which the
number of savings and loan associations
increased during 1947-65, reflecting in part
the state law prohibiting expansion through
branching.
Credit Unions. Total assets of credit unions
in the Fourth District rose from $50 million
in 1947 to $765 million at the end of 1965
(see Table IV). That increase (1,430 percent)
was the largest relative gain of any deposittype financial institution in ihe District, al
though ihe absolute volume of toial assets
held by credit unions represents less than
2 percent of the toial assets held by Fourth
District financial institutions. The credit union
share of toial assets w as even smaller in
1947 — less than one-third of one percent.
The number of facilities operated by credit
unions in the Fourth District more than
doubled during the period under review, re
flecting increasing acceptance by employers
and employees of ihe credit union a s both a
depository and source of credit. Credit union
offices accounted for 35 percent of toial facili
ties operated by financial institutions in the
Fourth District in 1965, in comparison with
28 percent in 1947.
As Table IV shows, increases in assets of
credit unions in ihe individual areas of ihe
District ranged from 600 percent in West
Virginia to nearly 1,500 percent in Ohio. The
19
E C O N O M IC R E V IEW
larger magnitude of credit union operations
in Ohio meant that asset growth in that
State represented more than 70 percent of
ihe total asset growth of all credit unions in
the District during 1947-65. More new credit
unions (716) were established in Ohio during
1947-65 than in ihe rest of ihe Disirict, alihough all areas did experience an increase
in the number of facilities available.
MAJOR ASSETS A N D LIABILITIES
Assets and liabilities of deposii-type finan
cial institutions in the Fourth District, a s else
where in the nation, underwent fundamental
shifts during 1947-65. Tables V-VIII summarize
these changes. The major change ihat per
vaded all balance sheets was ihe marked
increase in ihe proportion of loans to total
assets. This was especially true in ihe case
of commercial banks in ihe Fourth District
(see Table V). In 1947, more than 52 percent
of the assets of banks in ihe Disirict were in
investments; by the end of 1965, ihe propor
tion had fallen to 32 percent. Correspon
dingly, loans climbed from 24 percent of total
assets in 1947 io 52 percent in 1965. On the
liability side of ihe balance sheet, ihe 18-year
period witnessed a sizable shift in ihe dis
tribution of deposits between time and de
mand. In 1947, demand deposits accounted
for iwo-ihirds of all deposits; by ihe end of
1965, demand deposits accounted for nearly
half of total deposits. Commercial banks also
appreciably increased capital accounts dur
ing the 18-year period.
Tables VI and VII show ihe balance sheei
items for savings and loan associations and
mutual savings banks in ihe Fourth District,
20
TABLE V
Balance Sheet Items
Com m ercial Banks
Fourth Federal Reserve District
December 31, 1947 and December 31, 1965
ASSETS
Loans
Investments
Other Assets
TOTAL
December 3 1 ,1 9 4 7
December 3 1 ,1 9 6 5
Percent
of Total
Millions
Percent
of Dollars of Total
Millions
o f Dollars
$ 2,887
6,348
2,898
$12,133
2 3 .8 %
52.3
23.9
1 0 0 .0 %
$14,216
8,763
4,357
$27,336
5 2 .0 %
32.1
15.9
1 0 0 .0 %
LIABILITIES
Deposits:
Demand
Time
9 2 .0 %
66.3 *
$12,122
4 9 .8 *
3,765
3 3 .7 *
12,216
5 0.2*
Other Liabilities
and Capital Accounts
TOTAL
8 9 .0 %
$ 7,401
967
$12,133
8.0
1 0 0 .0 %
2,998
$27,336
11.0
1 0 0 .0 %
* Percent of total deposits.
Source: Federal Reserve Bank of Cleveland
and the increased proportion of loans in the
portfolios of these institutions. On ihe other
hand, there was little change in ihe relation
ship of total deposits to total liabilities over
the 18-year period. Interestingly, ihe growth
experienced by the various types of savings
and loan associations was not uniform, a s
illustrated by ihe data in Table VII. The
total assets of all savings and loan associa
tions in ihe District increased by 537 percent
during 1947-65. However, most of ihai gain
was recorded by ihe insured associations,
MARCH 1967
TABLE VI
Balance Sheet Items
Sa v in g s and Loan Associations and M utu al Sa vin gs Banks
December 31, 1947 and December 31, 1965
(millions of dollars)
December 31, 1965
December 31, 1947
Savings and
Loan
Associations
Mutual
Savings Banks
Total
Loans
$1,467
$ 50
$1,517
Other
565
267
832
$2,032
$3 17
$2,349
$1,735
$292
$2,027
297
25
322
$2,032
$3 17
$2,349
ASSETS
TOTAL ASSETS
Percent
of Total
Savings and
Loan
Mutual
Associations Savings Banks
Total
Percent
o f Total
8 4 .4 %
$10,959
$222
$1 1,181
1,985
87
2,072
10 0 .0 %
$12,944
$ 3 09
$13,253
1 0 0 .0 %
8 6 .3 %
$11,233
$285
$11,518
8 6 .9 %
1,711
24
1,735
$12,944
$3 09
$13,253
6 4 .6 %
35.4
15.6
LIABILITIES
Savings Accounts
Other
TOTAL LIABILITIES
13.7
1 0 0 .0 %
13.1
1 0 0 .0 %
Sources: Federal Home Loan Bank of Cincinnati; Federal Home Loan Bank of Pittsburgh; Division of Building and Loan A ssocia
tions, The State of Ohio; Department of Banking and Securities, The Commonwealth of Kentucky; Department of Bank
ing, The Commonwealth of Pennsylvania; Department of Banking, The State of W est V irgin ia
TABLE V II
Grow th in Sa v in g s and Loan Associations
Fourth Federal Reserve District
December 31, 1947 and December 31, 1965
TOTAL A SSETS
TOTAL L O A N S
(millions of dollars)____________________________ (millions of dollars)
Percent
1 2 -3 1 -4 7
1 2 -3 1 - 6 5
1 2 -3 1 -4 7
1 2 -3 1 -6 5
Change
F e d e r a l............................
State Insured
.................
$ 5,905
. . . .
688
5,657
State U n i n s u r e d ..............
1,382
T O T A L ............................
$12,944
+694%
+722
+ 130
+ 537%
$
547
$ 4,963
462
4,766
458
1,230
$1,467
$10,959
Percent
Change
+807%
+932
+ 169
+ 647%
Sources: Federal Home Loan Bank of Cincinnati; Federal Home Loan Bank of Pittsburgh; Division of Building and Loan A ssocia
tions, The State of Ohio; Department of Banking and Securities, The Commonwealth of Kentucky; Department of Bank
ing, The Commonwealth of Pennsylvania; Department of Banking, The State of W est V irgin ia
21
E C O N O M IC R E V IEW
TABLE V III
Balance Sheet Items
Credit Unions
Fourth Federal Reserve District
December 31, 1947 and December 31, 1965
ASSETS
Loans
Other Assets
December 31, 1947
December 3 1 ,1 9 6 5
Millions
o f Dollars
Percent
of Total
Percent
Millions
of Dollars of Total
$23
4 6 .0 %
27
TOTAL
$537
54.0
228
7 0 .2 %
29.8
$50
1 0 0 .0 %
$765
1 0 0 .0 %
$46
9 2 .0 %
$675
8 8 .2 %
LIABILITIES
Shares
Other Liabilities
4
TOTAL
$50
8.0
10 0 .0 %
90
$765
11.8
1 0 0 .0 %
Sources: Kentucky Credit Union League; O h io Credit Union
League;
Pennsylvania
Credit Union
League; W est
V irgin ia Credit Union League
either federal or sfafe-chartered, which ex
panded 694 percent and 722 percent, respec
tively. Uninsured savings and loan associa
tions, which are especially numerous in Ohio,
did not experience the same rapid increase
in total assets, due primarily to the relatively
22
small increase in the number of associations.
Furthermore, many former uninsured asso
ciations switched to coverage by the Federal
Savings and Loan Insurance Corporation,
which further reduced the growth potential
of uninsured associations. The pattern of
behavior in the growth of loans at the various
types of savings and loan associations varied
according to whether the associations were
insured or uninsured.
Comparative credit union statistics for 1947
and 1965 show clearly the major shift in the
asset mix of the credit unions, especially into
instalment loans. At the end of World War
II, like the case of commercial banks and
savings and loan associations, many credit
unions held funds idle or had invested them
in U. S. Government securities. In fact, at the
end of 1947, more than 50 percent of the total
assets of the credit unions were in other than
loan categories (see Table VIII). By the end
of 1965, loans accounted for 70 percent of
total assets. On the other side of the balance
sheet, the percentage of liabilities repre
sented by deposits was appreciably reduced,
due primarily to increases in equity as credit
unions multiplied in size.
Fourth Federal Reserve District
@FedFRASER