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Revleur FEDERAL RESERVE B A N K OF S A N F R A N C ISC O J U L Y 1944 Review of Business Conditions— Twelfth District u tp u t of war supplies in the Twelfth District ap O peared to be slightly behind schedule in June and July. Production in the older established basic industries has shown little change in recent months. Optimism as to a speedy ending of the war in conjunction with apprehen sion over anticipated cutbacks and the desire for postwar job security have prompted thousands of workers to leave District war industries. Outmigration from Pacific Coast war production centers has become substantial in recent months. Steadily increasing efficiency at District war plants has reduced the total number of workers needed to maintain a given level of output, but it is much more diffi cult to recruit the comparatively few additional workers to meet present schedules than it was a year ago. Current manpower difficulties will be aggravated as the canning season reaches its peak in August and September. In the aircraft industry, plant conversion and retooling necessary for the production of heavier models have, with shortages of workers in certain specialized categories, con tributed to some decline in output during recent months. On a daily average basis, the weight of planes completed was lower in July than in any month since last fall. Indi cations are, however, that the production of planes in most immediate need by the armed forces, whose combat re quirements change frequently, was about on schedule. Reflecting a number of factors, including labor shortages and operating problems incidental to the shift to heavier and more complex types, ship deliveries to the Maritime Commission dropped sharply in July to the lowest level since mid-1942. The July total of 34 deliveries included the last three Liberty ships contracted for by Pacific Coast yards. As yards have completed their Liberty ship con tracts, they have shifted to the construction of heavier merchant vessels and special types for the armed forces. In July, the Maritime Commission awarded contracts to Pacific Coast yards for the construction of 156 additional long-range cargo ships to be delivered by mid-1945. National attention is being directed to the problems which may be expected to arise when war developments justify significant reductions in the production of mili tary supplies and an increased flow of goods to consum ers. One of these problems is the effect of war contract terminations upon industrial output and industrial em ployment. Essential differences in types of facilities and output mean, of course, that the operations of all plants ★ producing supplies used, directly or indirectly, by the armed forces will not be affected in the same way by war contract terminations. Plants converted to the production of war supplies, for example, will likely be reconverted to produce civilian goods. Many special-purpose war plants or plants representing excess capacity relative to any conceivable level of civilian demand for their prod ucts will be shut down or dismantled unless they can be converted to entirely new products, which in many cases seems unlikely. In still other plants, the only fundamental change in operations will be a rechannelling of output from military to civilian consumers. The incidence of these three general classifications of plants varies greatly from region to region. As is well known, newly constructed and in many cases, special pur pose, war plants are of major importance in the Twelfth District. Aircraft and ships, which account for 90 percent of the value of all war supply contracts (excluding food stuffs) awarded in the Twelfth District, are fabricated largely in plants which did not exist before the war. By way of contrast, aircraft and ships account for only 44 percent of war contracts awarded elsewhere in the United States where plant conversion was more prevalent. To a considerable degree, the subcontracting of parts has been in converted plants, but in terms of the number employed it is apparent that major cutbacks in the Twelfth District, when they occur, will have their most serious repercus sions in the airframe plants and shipyards themselves. Resumption of C h ilia n Production To the extent that manpower permits, it is essential that preparations be made for the ultimate replacement of war production by the production of civilian goods. The two primary objectives of such preparations are re lated : to make available at the earliest possible moment sorely needed civilian articles long removed from the market, and to maintain employment levels when sub stantial cutbacks in war production occur. Those seg ments of present day industry having postwar uses should be prepared to take up as much as possible of the slack in employment which must inevitably follow close upon such cutbacks. In view of the current manpower situation and the necessity of maintaining the output of military supplies on schedule, however, a material increase in the produc fyosi Victasuf. ★ ßutf, Wafi ßottdU ★ 30 FEDERAL RESERVE BANK OF SAN FRANCISCO tion of civilian goods until after the defeat of Germany is unlikely. This is particularly true of the Twelfth District where only a comparatively minor proportion of the war industries was converted from peacetime activities and where there is no slackening as yet in the demand for aircraft and ships and ship repairs. Nevertheless, to the extent that less essential civilian production becomes pos sible, it should be prepared for, especially since the op portunities for postwar employment in Twelfth District plants now producing war materiel, particularly airplanes and ships, hardly loom large in comparison with the numbers of men and women who may be expected to lose their war jobs. Basic District industries of dominant im portance before the expansion in aircraft and shipbuilding did not convert to any marked degree to the production of more direct war materials, although a large proportion of their output was shifted from civilian to military use. Military needs have required the lumber, petroleum, and food processing industries to continue to operate at as high levels as possible. With a slackening in military de mand for goods produced by these industries, more will be channelled to civilians. W P B Orders to Facilitate Conversion On July 11, the W ar Production Board announced that four orders designed to pave the way for future lim ited reconversion would be issued in July and August. The first order, issued July 15, lifted some of the current restrictions on the use of aluminum and magnesium. Pro duction of these metals had exceeded the needs of military and essential civilian users, and substantial cutbacks in output were ordered in June and July. The second order, issued July 23, authorized manu facturers to fabricate models of products for postwar manufacture and sale. Such models are to be for strictly experimental purposes and can be made only by man power and facilities not engaged in or diverted from war work. The third order, issued July 29, outlines procedures to be followed by manufacturers who wish to prepare for the resumption or expansion of civilian production, and who need machine tools, manufacturing machinery, and similar equipment for that purpose. When the manufac turers’ orders cannot be filled from existing excess stocks, July 1944 unrated orders for new equipment will be permitted by the W PB only when the filling of such orders does not interfere, however indirectly, with war production. The fourth order, to be issued on August 15, will indi cate to manufacturers how authorization for the produc tion of civilian articles not now permitted, or for increases in the production of civilian articles now allowed under quotas, may be obtained. Such civilian production can be carried out only by manufacturers who have manpower and facilities not needed for the war effort, and where materials are available, and authorization will be subject to the approval of the W ar Manpower Commission. Until such time as substantial reductions from present levels of war production are made, however, manpower shortages alone will probably prevent wide-scale prepara tions for civilian production by Twelfth District manu facturers now engaged in war work. Employees of sub contractors and other manufacturers who fail to obtain renewed or new contracts for war supplies have no diffi culty in obtaining jobs elsewhere and whenever possible are referred by the United States Employment Service to other essential work. W ar plants in the District areas of acute labor shortage currently have an immediate need for thousands of workers over and above the many re quired each month to replace workers who quit or other wise leave their jobs. Production and Employment— Index numbers, 1935*39 daily average=100 With seasonal adjustment ------A 1943 June M ay A pr. June ^ i----------1944- Industrial production1 L u m b e r ............................. — Refined oils2 ................... 119 Cement2 ............................. W heat flour2 ................. . — Petroleum2 ...................... Electric power2 ............ .____ 413 Factory employment and payrolls3 Employment Twelfth D is t r ic t ............ .. California .............. ____ 334 Pacific Northwest Oregon .............. W ashington . . Intermountain . . Payrolls California ............ . . . . 690 143 — 116 153 — 437 456 138 — 145 130 — 385 288 342 223 190 244 120 291 347 224 189 246 125 309 365 243 230 256 164 695 708 708 132 — 120 150 — Without seasonal adjustment-1 9 4 4 - -------\ 1943 June M ay Apr. June 141 136 156 136 225 216 194 228 122 135 126 165 134 115 135 132 128 126 126 118 448 444 450 413 334 693 287 342 222 191 241 121 290 347 223 190 243 122 309 365 242 224 252 168 698 703 712 1 Daily average. 2 1923-25 average = 100. 8 Excludes fish, fruit, and vegetable canning. Ownership of Demand Deposits in the Twelfth District semi-annual survey of the ownership of demand deposits of individuals, partnerships, and corporations in the Twelfth District as of the end of February indicates that although total business deposits increased somewhat between July 1943, the date of the earlier survey1, and February 1944, the greater part of the dollar increase went into personal deposits, an apparent reversal of the movement in the previous year and a half. In each owner ship category, at least larger deposits, and probably all deposits, in major cities declined or rose less rapidly than in the remainder of the District2. Although business accounts did not increase as rapidly as personal accounts, they were considerably larger in the h e T aggregate, accounting for an estimated 61 percent of the District total. Personal accounts included 36 percent of all deposits and the remaining 3 percent were accounts of non-profit associations. That the February survey of deposit ownership was made at the end of the Fourth W ar Loan Drive, while the July 1943 survey occurred more than midway between the Second and Third W ar Loan Drives, limited the in crease in total deposits and probably affected the com1 The July 1943 survey was discussed in the November 1943 issue of this Review. 2 Since accounts below $10,000 in larger banking officesand below $3,000 in smaller offices were not classified, estimates of the distribution of all ac counts by ownership were confined to the District as a whole. July 1944 31 MONTHLY REVIEW parative changes in total deposits of the various owner ship groups, insofar as accounts in one classification may have been drawn upon more heavily than accounts in an other. Personal accounts throughout the District, and accounts, regardless of ownership, outside of the major cities may have been less affected by the loan drive than were other accounts, although changes in deposit volume were by no means associated solely with Government security purchases. It is quite likely that, apart from the effects of the imme diacy of the loan drive upon the February figures, per sonal accounts have been and are increasing more rapidly than those of business establishments. The expansion in business activity had slowed down by mid-1943, and the need of business for additional working cash balances has probably largely disappeared. Short term Governments offer a ready means for disposal of otherwise idle funds. Individuals, on the other hand, appear to have a some what stronger preference for idle cash than do business concerns, partly because the sums involved in most in stances are not large enough to make it worth while for them to purchase short-term bills or certificates with low yields. The flow of funds into repayment of consumer debt has diminished as loans have been paid off. It is possible, also, that individuals who have moved to or within the District in the last two or three years and who did not use banking facilities in their new location have tended more recently to open bank accounts. Although savings bonds may be readily converted into cash, individuals are probably more likely to spend cash balances than to redeem securities to obtain funds. If during the past year individuals have been holding and should continue to hold the greater part of the increase in the money supply, the control of inflation becomes perhaps even more necessary. Comparison of Twelfth District and United States the District, compared with 28 percent of the total in the United States. Trade accounts, however, were more im portant in the District, and financial accounts made up almost the same proportion of the total in both areas. The relative increase between July 1943 and February 1944 in total deposits was considerably greater in the Dis trict than in the country as a whole, a relationship that has continued throughout the entire period of the war. Treas ury disbursements in the District, largely associated with the war program, have been consistently larger than E s t im a t e d D is t r ib u t io n of and C hanges r a t io n s , b y U n it e d and S tates (amounts in millions of dollars) Percentage 12th distribution !— District—^ r-F eb . 1944-> 12th July Feb. 1944 District U . S. 1943 Manufacturing- and mining. 1190 20 28 1190 Public utilities, transp. and com m ......................................... 270 310 5 6 Retail and wholesale trade. 1010 18 14 1032 Other nonfinancial business 470 520 6 9 Total nonfinancial business 2930 Twelfth District ............ 210 Southern California . . . Northern California . . . Portland ............................. W estern W ashington. . . Eastern W ashington and Northern I d a h o .......... Phoenix ............................. Carloadings (number) Total .................................... 117 Merchandise and misc. 135 95 Other ............................. 216 201 119 114 138 rl28 96 96 200 107 123 85 1 Seasonally adjusted indexes in process of revision. ” 1923-25 daily average = 100. r Revised. 193 199 178 198 223 202 206 184 206 241 192 202 174 184 221 184 183 165 194 227 183 202 185 225 177 233 177 200 126 143 106 120 rllO 129 rl2 0 108 98 115 131 95 + 15 + 2 + 6 + + 2 2 0 52 54 + 4 9 10 + 3 — 4 Total domestic business . . . 3410 3570 61 64 1 2080 180 20 36 3 — 32 3 1 4- S + 12 + 20 0 — Personal .................................... 1860 Nonprofit associations, e tc.. 150 Foreign ....................................... 20 Total deposits ........................ 5840 100 100 5440 + 7 0 + 11 + 6 — 6 -f* 3 N o t e : Figures will not necessarily add to totals because of rounding. Treasury receipts from taxes and security sales in the District, and have been the primary source of additional deposits shifted from other parts of the country. Business deposits increased in the District even though they de clined slightly for the entire country. The greater increase in personal deposits in comparison with the change in business deposits, however, occurred both in the Twelfth District and in the nation. Banking and Credit— Department store sales (value)1 July — Feb. 1943 1944 12th District U .S . 0 — 2 520 480 Distribution and Trade— daily average=100 Percentage /------change— 3050 Financial b u s in e s s ................. Deposits in and Outside of Major Cities Without seasonal -adjustment --------, -19441943 June M ay Apr. June D em and O w n e r s h i p — T w e l f t h D is t r ic t Business accounts are somewhat more important and personal accounts less important in the nation than in this District. Despite the marked increase in District indus trial activity in recent years which has increased their relative importance, manufacturing and mining accounts are estimated to have been about 20 percent of the total in W ith seasonal - adjustment -1944~1943 June M ay Apr. June in D e p o s it s o f I n d iv id u a l s , P a r t n e r s h i p s , a n d C o r p o Within the District, deposits of banks reporting in July 1943 and February 1944 were separated into those in ten major cities and those in the remainder of the District. There was an estimated increase of well over 10 percent in deposits of $10,000 and over in every owner- Averages of Wednesday figures (millions of dollars) Condition items of weekly reporting member banks Total lo a n s ................................................... Com ’l., ind., & agric. loans............... Loans to finance transactions in : U . S. Government securities. . . . Other securities................................ Real estate loans.................................. All other lo a n s ....................................... Total investments .................................... U . S. Government securities............ A ll other secu rities............................. Adjusted demand d e p o s its................... Time deposits.............................................. United States Government deposits. Coin and currency in circulation Total (changes o n ly )............................... Fed. Res. notes of F . R. B. of S. F . . Member bank reserves.................................. June -Change from ----- 1 9 4 4 1943 May April June 958 467 + — 13 7 — — 4 15 + + 56 41 297 98 4,114 3,781 334 2,790 1,465 557 + + + + + + + + + + 10 7 1 3 96 87 10 33 27 24 — + 2 ) io f 0 41 — + 9 + 3 + 7 + 98 + 51 — 210 + + + + + + 2 242 + + 84 82 + 168 + 162 1,515 + 59 + + + + _ + 87 + — 27 29 53 41 13 914 886 29 412 275 86 752 740 217 32 July 1944 FEDERAL RESERVE BANK OF SAN FRANCISCO ship category except trade and in total deposits outside of the ten cities. Within those cities, deposits of $10,000 and over held by business concerns declined slightly with most E s t im a t e d D is t r ib u t io n $10.000 and of of and C h a n g e s in M a jo r C it ie s — T w e l f t h D is t r ic t Percentage < -----distribution— February 1944 Ten Remainder of District $10,000 and over cities* Business .............................................. 59 Personal .............................................. 7 1 Nonprofit associations, etc............ 3 30 10 ..................................................... 69 41 Lender $10,000 ....................................... 31 59 Total Total deposits D e p o s it s of O v e r , b y O w n e r s h i p , i n a n d O u t s id e .................................. 100 Percentage f--------- change----------N July 1 943 -F eb . 1944 Ten Remainder cities1 of District — 3 + 17 + 11 + 23 + 32 + 27 0 + 19 + 17 + 14 + 4 + 16 1 San Francisco, Oakland, Los Angeles, San Diego, Portland, Seattle, T a coma, Spokane, Salt Lake City, and Ogden. of the decline occurring in manufacturing accounts, those held by individuals increased but by a much smaller pro portion than similar deposits in the rest of the District, and total deposits increased by 4 percent compared with an increase of 16 percent elsewhere. Changes in deposits in individual cities varied widely, but in no city was there an increase in either business or personal accounts above $10,000 or in total deposits which was larger than the corresponding percentage increase outside of those cities. In 1942 and 1943, total deposits increased relatively much less in major metropolitan areas than elsewhere. This was true throughout the District, and now appears to have been occurring in all types of accounts as well. This is probably a result of two factors: the high level of farm incomes in recent years and the establishment of industrial and military facilities in areas where the accom D is t r ib u t io n by of D e m a n d a n d T im e S tates and Disfribufion of Deposits by Counties A compilation of deposits by counties, made by the Treasury Department as of the year end, also indicates a greater increase in District deposits outside of metro politan areas. This occurred in both 1942 and 1943 and in time as well as demand deposits of individuals, partner ships, and corporations. Although the dollar gain in de mand deposits was about as large in 1943 as in 1942, the relative increase was considerably less in 1943. Time de posits, however, rose much more rapidly in 1943 than in 1942, so that total deposits of individuals, partnerships, and corporations in the District increased by about 30 percent in each year. The lesser rate of gain in demand deposits and the greater rate of gain in time deposits in 1943 were general throughout the District, but California banks received a larger share of the District increase in both demand and time deposits last year than thev did in 1942. 1 Only banks with total demand deposits of individuals, partnerships, and corporations of less than $5,000,000 classified accounts down to $3,000 and were asked to separate accounts of farmers and other personal accounts. D e p o s it s o f I n d iv id u a l s , P a r t n e r s h i p s , a n d S e l e c t e d M e t r o p o l i t a n C o u n t i e s 1941-43— T w e l f t h (as of December 3Î, amounts in millions of dollars) r State and county1 panying increase in deposits has been very large in relative terms, although not necessarily in amount. Personal accounts of $3,000 &nd over in smaller bank ing offices outside the ten cities increased substantially, but there was no appreciable difference between the rela tive increase in farmers’ accounts and that in other per sonal balances.1 Both groups increased by about 30 per cent, compared with an increase of 6 percent in business accounts above $3,OCX) and an increase of 13 percent in total demand deposits of individuals, partnerships, and corporations in those banks. 1941 —Demand— -----------1942 1943 r 1941 ---------- T ime------1942 ------^ 1943 C o r p o r a t io n s D is t r ic t -Percentage increase— r ------- Time1941-42 1942-43 1942-43 (------Dem iand----- 1941-42 Arizona2 .................................. 42 77 97 17 20 27 85 California Los A n g e l e s ...................... San Francisco-Alameda San D i e g o ........................... Remainder ........................ 872 699 60 422 1,260 '975 154 716 1,716 1,260 180 1,093 679 922 55 548 741 969 67 622 935 1,107 88 810 44 39 157 70 26 19 32 36 17 53 9 5 22 14 26 14 31 30 23 29 2,053 3,105 4,249 2,204 2,399 2.940 51 37 9 Idaho ............................. 68 118 166 33 36 47 74 41 9 %2 Nevada ........................ 26 46 54 18 22 26 73 18 22 20 Oregon M u ltn o m a h ............ Remainder ............ 132 107 214 184 266 254 89 51 106 60 141 80 62 72 24 38 19 18 33 33 T o ta l.................... 239 398 520 140 166 221 67 31 19 33 Utah Salt L a k e -W e b e r Remainder ............ 66 19 106 41 135 53 47 19 o4 23 66 32 61 116 27 29 15 21 22 39 T otal.................... 85 147 188 66 77 98 73 28 18 27 W ashington K i n g - P i e r c e .......... Spokane ................. Remainder ............ 247 42 124 406 67 222 487 S8 335 178 22 71 213 25 86 275 30 117 64 60 79 20 31 51 20 14 21 29 20 36 T otal.................... 413 695 910 271 324 422 68 31 19 30 Twelfth District Ten co u n tie s.......... Remainder ............ 2.118 809 3.182 1,404 4,132 2,052 1,992 757 2,175 869 2.642 1,139 50 74 30 46 9 15 21 31 2,926 4,584 6,184 2,749 3,044 3,781 57 35 11 24 37,595 47,641 59,078 25,917 26,550 30,501 27 24 2 15 he preceding table are located. al Reserve District. N o te : Figures will not necessarily add to totals because of rounding. Source : Treasury Deparment. 32A FEDERAL RESERVE BANK OF SAN FRANCISCO July 1944 INDUSTRIAL PRODUCTION Summary of National Business Conditions Released July 26, 1944— Board of Governors of the Federal Reserve System production at factories continued to decline slightly in June; output E of minerals and was maintained in record volume. Retail trade and commodity prices m p lo y m e n t showed little change in June and the first part of July. I n d u s t r i a l P r o d u c t io n Federal Reserve indexes. Groups are expressed in terms of points in the total index. Monthly fig ures, latest shown are for June 1944. The Board’s seasonally adjusted index of industrial production was 235 percent of the 1935-39 average in June as compared with 237 in May and 243 in the first quarter. Steel production declined 4 percent from the rate in May, reflecting partly manpower shortages. Output of nonferrous metals dropped 8 percent largely owing to the continued planned curtailment of aluminum and magnesium production. The lifting on July 15 of some of the restrictions on use of these metals was the initial step in a program to pre pare for limited reconversion to peacetime output. Activity in the machinery and trans portation equipment industries in June was maintained at the level of the preceding month. Increasing emphasis was reported on output of heavy artillery and artillery shells and of tanks. Lumber production continued to decline and was approximately 10 percent below June 1943. Production of nondurable goods was maintained in June. Meat-packing activity de clined further from the exceptionally high level in the first quarter, but output of most other food products continued to rise seasonally. Refinery output of gasoline advanced further and reached the earlier record level of December 1941. Activity in cotton textile mills and in the chemical and rubber industries showed little change in June. Mine production of metals and coal was maintained in large volume and crude petroleum production continued to rise to new record levels. D is t r ib u t io n 1937 »3 6 1939 1940 1941 1942 1943 1944 Federal Reserve indexes. Monthly figures, latest shown, are for June 1944. Department store sales declined more than seasonally in June, following a consider able increase in May, and the Board’s index was 175 percent of the 1935-39 average as compared with 183 in May and an average of 177 in the first four months of this year. Value of sales in the first half of 1944 was 7 percent greater than in the first half of 1943. In the early part of July sales were 9 percent larger than a year ago. Railroad freight carloadings showed little change in June and the first three weeks of July after allowance for seasonal movements. C o m m o d i t y P r ic e s MEMBER BANKS IN LEADING CITIES ■ix>omo»pou.a*8_____________________________________________________ tnucm* of pcllam - y \ Legislation extending Federal price controls for one year was enacted June 30; certain restrictive provisions were relaxed, especially those relating to prices of cotton products. Prices of most commodities in wholesale and retail markets have recently shown little change. A g r ic u l t u r e DEPOSITS J. u10JK4TI0) - W ell over a billion bushels of wheat and almost 3 billion bushels of corn were in prospect on July 1. This is an improvement over June 1 prospects and aggregate crop production in 1944 may be about the same as in 1943 and larger than any year prior to 1942. The number of chickens raised this year was 19 percent smaller than last year; the spring pig crop was 24 percent smaller and the fall crop may be a third smaller than in 1943. Marketings of cattle, however, have been normal in relationship to the numbers and un less marketings are increased during the rest of this year no material reduction of the large numbers of cattle on farms will occur. U.S.00V*T IECURITIES y l\rfvf AJ - a U S. GOV'T DEPOSITS j 1939 1940 1941 1942 1943 1944 Demand deposits (adjusted) exclude U . S. G o v ernment and interbank deposits and collection items. Government securities include direct and guaranteed issues. Wednesday figures, latest shown, are for July 12, 1944. MEMBER BANK RESERVES tILLIOMOf oeu IONI Of BOLLA*« y 'A - -, total..... . kJL i . A - T N r A itquintu ntsfen Ni. EXCESS Rl■SERVES 1939 1940 1941 1942 Breakdown between required and excess reserves partly estimated. Wednesday figures, latest shown, are for July 19, 1944. B a n k C r e d it As payments for securities purchased during the fifth drive transferred funds from private deposits to reserve-exempt Government accounts, the average level of required reserves at all member banks declined by close to 1*4 billion dollars. Reserve balances were reduced by about 800 million dollars and excess reserves rose by around 400 million. Reserve funds were absorbed through declines in Reserve Bank holdings of Government securities, by a moderate increase in currency, and by temporary increases in Treasury deposits at the Reserve Banks. Over the four weeks ending July 12, money in circulation rose by 230 million dollars, which is a smaller rate of growth than prevailed in recent months, reflecting the influence of the war loan drive. During the fifth drive, between June 14 and July 12, Government security holdings at reporting member banks in 101 leading cities increased by 4.7 billion dollars. Additions to bank holdings resulted from purchases of securities from investors who were adjust ing their positions prior to subscriptions during the drive, from increased purchases of Treasury bills, and from subscriptions to new securities in limited amounts. Loans for purchasing and carrying Government securities increased by 1.8 billion dol lars over the fifth war loan, an increase larger than that of any other drive. O f the total amount advanced by banks in 101 cities, loans to brokers and dealers accounted for 500 million and loans to others for 1.3 billion. Accompanying purchases of securities during the fifth drive, adjusted demand deposits declined by 4.7 billion dollars at banks in 101 cities. Government deposits at these same banks increased bv 10.5 billion dollars. The difference reflected the effect of the increase in bank loans and investments.