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CONFIDENTIAL (FR)

SUPPLEMENT
CURRENT ECONOMIC AND FINANCIAL CONDITIONS

Prepared for the
Federal Open Market Committee

By the Staff
Board of Governors
of the Federal Reserve System

December 13, 1974

SUPPLEMENTAL NOTES
The Domestic Nonfinancial Economy
Industrial production declined further by an estimated 2.3
per cent in November.

At 122.0 per cent of the 1967 base, the total

index was 4.3 per cent below a year earlier.

Reductions in output

were widespread among consumer goods, business equipment, and industrial
materials.
Auto assemblies declined 16 per cent in November to an
annual rate of 7.0 million units.

As sales of new domestic cars

continued well below production, further output cutbacks are being
made in December.

Production of consumer household goods was reduced

sharply further in November and output of nondurable consumer goods
eased off further.

Production of business equipment declined 1.0 per

cent as weaknesses in some equipment industries became apparent.

Out-

put of construction products continued to drop.
Production of steel declined in November, in part because
of the coal strike, and there were reductions in output of other
durable and nondurable industrial materials.

- 2INDUSTRIAL PRODUCTION
(Seasonally adjusted)

_

Indexes 1967=100
1974
Sept. Oct. Nov.
(r) (P) (e)

Month
ago

Per cent changes
Annual Rate
Year
QIII
QII
QI
ago

125.6 124,9 122.0

-2.3

-4.3

- 6.6

1.9

- .3

123.7 123,0 121.4

-1.3

-3.1

- 5.8

2.6

.6

Final products
Consumer goods
Durable goods
Nondurable goods
Business equipment

122.8
129.4
128.6
129.6
132,3

120.9
126.
120.4
129.0
131.0

-1,4
-1.6
-5.0
- .2
-1.1

-2.2
-5.2
-13.1
-1.9
2.5

3.0
- 6.5
-11.5
2.5
-26.6 14.7
- 5.2 -2.2
.6 7.2

Intermediate products
Construction products

126.9 124.4 122.7
127.5 123.7 120.2

-1.4
-2.8

-6.4
-10.1

- 4.6
- 5.1

1.2
-2.7

-4.3
-7.7

128.8 128.0 122.9

-4.0

-6.5

- 6.4

- .3

-1.6

Total
Products, total

Materials
r/
p/
e/

122,6
128.6
126.8
129.3
132.4

2.3
- .6
-5.1
3.1
4.0

Revised.
Preliminary.
Estimated.
The Wholesale price index for November rose 1.2 per cent,
seasonally adjusted (not at an annual rate), to a level 23.5 per cent
above a year earlier.

The increase was propelled largely by higher

sugar prices and a further large, but decelerating, increase in
industrial commodities.
The index of farm and food products increased 2.5 per cent
seasonally adjusted, chiefly as a result of increases for sugar, milk,
fresh fruits and vegetables, and meats.

-3The index of industrial commodities rose 0.9 per cent,
seasonally adjusted, paced by increases for machinery and equipment
and chemicals.

Also higher were prices for furniture and household

durables, nonmetallic minerals, metals and metal products, and paper
products.
month.

Lumber and wood products declined for the seventh consecutive

Textile products and hides and skins also declined, and the

fuels and power group was unchanged.
WHOLESALE PRICES
(Per cent changes at seasonally adjusted
compound annual rates)¹
Nov '73 Dec.'72 June '73 Dec.'73 June '74 Sept.'74 Oct.'74
to
to
to
to
to
to
to
Nov.'74 June'73 Dec. '73 June'74 Sept.'74 Oct. '74 Nov.'74
All commodities

23.5

20.2

10.9

18.2

35.2

29.4r

14.6

Farm and food products

15.0

45.8

10.4

-11.5

59.2

61.5r

29.9

Industrial commodities
Crude materials
Intermediate materials
Finished goods
Producer
Consumer, excl.food
Nondurable, excl.
foods
Durable

27.4
31.3
30.7
21.7
22.6
21.3

10.6
23.0
12.2
6.3
5.4
6.7

10.9
40.4
11.7
7.1
5.3
8.1

34.0
44.3
38.0
24.5
20.0
26.8

28.3
29.1
32.2
22.7
31.8
18.5

13.4
-5.2
12.6
23.5
29.1
20.8

10.3
-3.1
9.0
8.8
16.6
4.9

25.6
14.4

8.5
4.5

11.3
2.8

35.6
13.2

19.1
15.6

15.6
37.0

6.2
2.7

42.1
51.Or
29.4
-1.1
18.5
27.0
15.4
Consumer finished foods
Note: Farm and food products include farm products and processed foods and feeds.
1/ Not compounded for one-month changes.

-4The surge in sugar prices was a major factor in the sharp
rise in the farm and food index and in the increase in the overall WPI
last month.

For example, if the sugar and confectionery group were

excluded from the farm and food products index, the index would have
declined 0.4 per cent, unadjusted, and would have been about unchanged,
seasonally adjusted.

If the sugar and confectionery group were

excluded from the total WPI, the increase would have been 0.3 per cent,
unadjusted, and an estimated 0.5 per cent, seasonally adjusted.
WHOLESALE PRICES
(Percentage changes)
October to November, 1974
Seasonally adjusted
Not seasonally adjusted
Including sugar* Excluding sugar* Including sugar* Excluding sugar*
WPI
Farm and food
products

1.0

0.3

1.2

0.5e

2.1

-0.4

2.5

O.Oe

Processed foods
and feeds
3.4
-0.9
3.5
*Sugar and confectionery group in processed foods and feeds.

-0.8e

CORRECTIONS
Part I: Table I-8, line 4 from bottom of the table, Housing
starts, private, QIII 1974, the figure should be 81.0 (not 16.0) per cent
compound annual rate.
Part II: Page 4, line 3 from the bottom, the figure
should be 3.4 per cent (not 3.2).
Part II: Page 6, line 7 of full paragraph, the figure
should be 14 per cent (not 15).

-5INTEREST RATES

Highs

Lows

12

Nov. 18

Dec.

9.34(11/20)

8 .06(12/il)

Short-Term Rates
Federal funds (wkly. avg.)
3-month
Treasury bills (bid)
Comm. paper (90-119 day)
Bankers' acceptances
Euro-dollars
CD's (NYC) 90-119 day
Most often quoted new
6-month
Treasury bills (bid)
Comm. paper (4-6 mo.)
Federal agencies
CD's (NYC) 180-269 day
Most often quoted new

1-year
Treasury bills (bid)
Federal agencies
CD's (NYC)
Most often quoted new
Prime municipals

13.55(7/3)

8.81(2/27)

7.38
9.00
9.00
10.25

9.74<8/23) 6.93(2/6)
12.25(7/17) 7.75(2/22)
12.50(8/15) 7.75(2/26)
14.38(7/16) 8.25(2/18)

7.52
8.88
8.85
9.88

12.00( 9/4) 7.88(2/20)

8.50(11/20)

8.75(12/11)

9.86(8/23) 6.80(2/19)
12.13(7/10) 7.50(2/22)
10.63(8/28) 7.16(2/19)

7.52
8.63
8.08

7.18
8.75
7.61

11.90(8/21) 7.50(2/27)

8.25(11/20)

8.00(12/11)

9.65(8/23) 6.37(2/15)
10.18(8/26) 7.01(2/19)

7.23
8.05

'6.75
7.65

9.75(7/17) 7.00(2/27)
6.50(7/12) 3.70(2/15)

8.00(11/20)
4.40(11/22)

8.00(12/11)
4.60<12/13)

8.79(8/23) 6.72(2/14)
8.72(8/26) 7.40( 1/4)

7.61
7.94

7.26
7.83

9.40(10/8) 7.73( 1/2) 8.85
10.53(12/2) 8.54( 1/2) 10.50

8.85
10.50

Intermediate and Long-Term
Treasury coupon issues
5-years
20-years
Corporate
Seasoned Aaa
Baa
New Issue Aaa Utility
Municipal
Bond Buyer Index
Mortgage--average yield
in FNMA auction

10.61(10/2) 8.05(2/13)

9.17(11/21)

9.60(12/12)

7.15(12/12)5.16( 2/6)

6.53(11/21)

7.15(12/12)

10.59( 9/9) 8.43(2/25)

9.81(11/18)

9.61(12/2)

SUPPLEMENTAL APPENDIX A
DEMAND DEPOSIT OWNERSHIP SURVEY *

Revised data for the demand deposit ownership survey for
the third quarter of 1974 indicated slower growth in gross IPC demand
deposits (not seasonally adjusted) at all commercial banks.

This slow-

down continues the weakness reflected in the second quarter data, and
is also consistent with changes in M1 over the two quarters (Table 1).
Although the data are not seasonally adjusted, comparison with third
quarter data for earlier survey years, and with the mean change in
deposits calculated over the third quarters for the years 1970-74,
indicates that changes in demand deposits in each ownership category
were weaker than historical experience would have suggested (with the
exception of foreign IPC deposits).

Although the third quarter weak-

ness was spread across ownership categories, Table 2 indicates that
IPC demand deposit growth of nonfinancial businesses and households
were especially weak at non-weekly reporting banks.

1/ Prepared by Steven M. Roberts, Economist,
Division of Research and Statistics.

Banking Section,

Table 1

CHANGE IN LEVEL OF GROSS IPC DEPOSITS BY OWNERSHIP
CATEGORY, ALL COMMERCIAL BANKS ¹
(Billions of dollars, not seasonally adjusted)

Financial business
QII
QIII
QIV

Nonfinancial business
QI
QII
QIII
QIV

Househlds

Year

QI

1970
1971
1972

n.a.
1.0
1.7

n.a.
-.2
-2.3

--.2
--

.3
.6
.9

n.a.
-6.4
-5.8

n.a.
3.3
5.0

2.7
1.9
4.0

4.6
6.9
8.4

n.a.
.8
-3.9

1973
1974

-. 2
-. 2

-. 1
-. 6

.2
-. 3

.2

-7.1
-7.7

3.8
3.7

1.7
2.1

7.8

.6

-.8

-.1

-6.8

4.0

2.5

QIII--Mean
70-74

Foreign
QIII

Year

QI

QII

1970
1971
1972
1973
1974

n.a.

n.a.
-. 1

QIII--Mean
70-74

QIV

QI

-. 2

-.1

n.a.

-. 1

.1

--

--

.1

.3
1.6

.1
-. 1

.3

-. 5

-. 2

.3
-. 1

0

0

-. 1

All other
QIII
QI

.1
.2

-1.4
0

n. a.

QI

QIV

n.a.
1.8
5.7

2.4
1.2
2.6

2.2
1.2
2.4

-. 3
.6

2.2
.8

1.8
.7

.9

-.7

QIV

QIII

2.6

1.7

QI

QII

Total
QIII

n. a.

n.a.

QII

4.9

.1

-4.2
-6.3
-8.0
-8.9

7.1
6.3
3.8

5.3
2.1
7.0
4.0
2.2

-. 3

-6.8

5.5

4.1

-1.3

Changes are based on daily averages of last-month-in-quarter to last-month-in-quarter, not
annualized. Data are before deduction for cash items in process of collection.
Figures may not add to totals due to rounding.
1/

QIV
7.3
9.7
12.6
9.7

Table 2
THIRD QUARTER CHANGE IN LEVEL OF GROSS IPC DEMAND DEPOSITS
BY OWNERSHIP CATEGORY, AT WEEKLY REPORTING BANKS VS. NON-WEEKLY REPORTING BANKS ¹
(Billions of dollars, not seasonally adjusted)

Financial business

Households

Nonfinancial business

Year

WRB

Non-WRB

TOTAL

WRB

Non-WRB

TOTAL

WRB

Non-WRB

TOTAL

1970
1971
1972
1973
1974

-. 1
-. 3
-. 4
.3
-. 2

.1
.1
.4
-. 1
-. 1

0
-. 2
0
.2
-. 3

.9
.4
1.8
-. 1
1.1

1.8
1.5
2.2
1.8
1.0

2.7
1.9
4.0
1.7
2.1

.9
.2
.5
.1
.3

1.6
1.1
2.1
1.7
.4

2.4
1.2
2.6
1.8
.7

Year

WRB

Foreign
Non-WRB

TOTAL

WRB

All other
Non-WRB

TOTAL

WRB

Total
Non-WRB

TOTAL

1970
1971

-. 2
-. 1

0
0

-. 2
-. 1

.2
-. 5

.2
-. 3

.4
-. 8

1.7
-. 2

3.7
2.4

5.3
2.1

1972

0

0

6

.2

.2

.4

2.0

5.0

7.0

1973
1974

.1
0

0
-.1

.1
-.1

.3
0

-. 1
-.1

.2
-.1

.7
1.2

3.3
1.1

4.0
2.3

Changes are based on daily averages of last-month-in-quarter to last-month-in-quarter, not
annualized. Data are before deduction for cash items in process of collection. Only data
for total and weekly reporting banks are reported; thus figures for non-weekly reporting
banks are residuals.
Figures may not add to totals due to rounding.
/

SUPPLEMENTAL APPENDIX B
LENDING PRACTICES SURVEY, NOVEMBER 15,

1974

Loan demand was reported to be weaker or unchanged from three
months earlier at the large majority of respondents to the Quarterly
Survey of Changes in Bank Lending Practices taken November 15. Only 8
of the 124 responding banks predicted that loan demand would be stronger
in the coming three months, while 53 banks were predicting moderation in
loan demand. The weakening in demand that was being experienced and is
expected for the coming quarter contrasts with the two previous surveys
in which most banks had reported that credit demands from business
customers were stronger and expected to intensify. The strengthening
of loan demand anticipated in the May survey was borne out by subsequent
loan growth, but following the August survey, growth of business loans
has slackened sharply relative to the pace earlier in the year.
The moderation in the intense pressure for credit led to some
easing in their practices relating to interest rates charged at onethird of the respondents. Much of the easing occurred at the smaller
banks (under $1 billion in deposits) on the panel, with 40 per cent of
such banks reporting easing of rates. Three-quarters of the large banks
on the panel indicated firmer or unchanged interest rate policies.
Since the prime rate at major banks fell well over 100 basis points
between the survey taken in September and the most recent survey, the
unchanged or firmer policies reported must be interpreted relative to
other short-term rates, particularly the commercial paper rate, which
fell much more than the prime rate in the interval between surveys.
Apparently, the banks reporting firmer interest rate policies--25
in all--are not lowering their rates as rapidly as market rates have
dropped.
In the nonprice terms of business lending, there was essentially
no easing, and in some indicators of nonprice terms, further tightening
had occurred at many of the respondents. Such tightening was reported by
over 30 per cent of the respondents on compensating balance requirements,
over 40 per cent on standards of credit worthiness in the evaluation of
loan applications, and more than half on policies regarding use of the
proceeds of the loan, particularly with respect to loans for speculative
and "non-productive" uses. The tightening of the terms of lending follow
severe tightening indicated in the May and August surveys.
Nonprice terms of lending to financial businesses also have
become more firm in the last three months. The tightening was most
obvious in policies concerning new or larger commitments, with more than
40 per cent of the respondents reporting firmer policies in this area.

- B2 There was virtually no easing in the restrictive policies toward
mortgages adopted earlier in the year, and a substantial minority
of the banks became more restrictive in limiting mortgages in their
portfolios.

*

Prepared by Paul W. Boltz, Economist, Banking Section, Division of
Research and Statistics.

NOT FOR QUOTATION OR PUBLICATION

TABLE 1

QUARTERLY SURVEY OF CHANGES IN BANK LENDING PRACTICES
AT SELECTED LARGE BANKS IN THE U.S.¹
COMPARED TO THREE MONTHS
NOVEMBER 15, 1974
(STATUS OF POLICY ON
(NUMBER OF BANKS & PERCENT OF TOTAL BANKS REPORTING)
MUCH

TOTAL
BANKS

STRONGER
PCT

BANKS

PCT

EARLIER)

MODERATELY
STRONGER

ESSENTIALLY
UNCHANGED

MODERATELY
WEAKER

BANKS

BANKS

BANKS

PCT

PCT

PCT

MUCH
WEAKER
BANKS

PCT

STRENGTH OF DEMAND FOR COMMERCIAL AND
INDUSTRIAL LOANS (AFTER ALLOWANCE FOR
BANK'S USUAL SEASONAL VARIATION)
COMPARED TO THREE MONTHS AGO

124

100.0

12.9

66

53.2

41

33.1

ANTICIPATED

124

100.0

6.5

63

50.8

53

42.7

DEMAND IN

NEXT 3 MONTHS

ANSWERING
QUESTION
BANKS
LENDING
TERMS

PCT

MUCH
FIRMER
POLICY
BANKS

PCT

MODERATELY
FIRMER
POLICY

ESSENTIALLY
UNCHANGED
POLICY

MODERATELY
EASIER
POLICY

BANKS

BANKS

BANKS

PCT

PCT

PCT

TO NONFINANCIAL BUSINESSES

AND CONDITIONS:

INTEREST RATES CHARGED

100.0

3.2

16.9

46.0

COMPENSATING OR SUPPORTING BALANCES

100.0

5.6

26.6

67.8

0.0

STANDARDS

100.0

15.3

28.2

56.5

0.0

100.0

7.3

21.0

70.9

0.8

100.0

1.6

24.2

70.2

NEW CUSTOMERS

106.0

25.0

23.4

44.3

LOCAL

100.0

2.4

18.7

74.0

100.0

19.5

25.2

51.2

OF CREDIT WORTHINESS

MATURITY OF

TERM LOANS

REVIEWING CREDIT LINES OR
ESTABLISHED

33.9

LOAN APPLICATIONS

CUSTOMERS

SERVICE AREA CUSTOMERS

NONLOCAL SERVICE AREA. CUSTOMERS

1/ SURVEY OF LENDING PRACTICES
AS OF
NOVEMBER 15, 1974.

AT 125 LARGE BANKS REPORTING

IN THE FEDERAL

RESERVE QUARTERLY INTEREST RATE SURVEY

MUCH
EASIER
POLICY
BANKS

PCT

NOT FOR

QUOTATION OR PUBLICATION

1

TABLE

ANSWERING
QUESTION
BANKS

PCT

(CONTINUED)

MUCH
FIRMER
POLICY
BANKS

PCT

MODERATELY
FIRMER
POLICY

ESSENTIALLY
UNCHANGED
POLICY

MODERATELY
EASIER
POLICY

BANKS

BANKS

BANKS

PCT

PCT

PCT

MUCH
EASIER
POLICY
BANKS

PCT

FACTORS RELATING TO APPLICANT ²
VALUE AS DEPOSITOR OR
SOURCE OF COLLATERAL BUSINESS

124

100.0

15

12.1

28

22.6

65.3

INTENDED USE OF THE LOAN

124

100.0

24

19.4

37

29.8

49.2

LENDING TO

"NONCAPTIVE" FINANCE

COMPANIES

TERMS AND CONDITIONS:
INTEREST RATES

100.0

COMPENSATING OR

SUPPORTING BALANCES

2

1.6

12.9

68.6

16.9

100.0

CHARGED

6

4.8

12.9

82.3

0.0

ENFORCEMENT OF BALANCE REQUIREMENTS

100.0

13

10.5

16.9

72.6

0.0

ESTABLISHING NEW OR LARGER CREDIT LINES

100.0

26

21.0

22.6

54.0

2.4

ANSWERING
QUESTION
BANKS
WILLINGNESS TO MAKE

PCT

CONSIDERABLY
LESS
WILLING
BANKS

PCT

MODERATELY
LESS
WILLING

ESSENTIALLY
UNCHANGED

MODERATELY
MORE
WILLING

BANKS

PCT

BANKS

BANKS

21

16.9

69.4

PCT

OTHER TYPES OF LOANS

100.0

TERM LOANS TO BUSINESSES

12.1

100.0

4.1

20

16.3

75.5

SINGLE FAMILY MORTGAGE LOANS

100.0

15.7

20

16.5

66.1

MULTI-FAMILY MORTGAGE LOANS

100.0

21.7

20

16.7

61.6

ALL OTHER MORTGAGE LOANS

100.0

18.9

26

21.3

59.8

CONSUMER

INSTALMENT LOANS

PARTICIPATION LOANS WITH
CORRESPONDENT BANKS

123

100.0

8.1

14

11.4

90

73.2

LOANS TO BROKERS

123

100.0

8.1

16

13.0

95

77.3

2/ FOR THESE FACTORS, FIRMER MEANS THE FACTORS WERE CONSIDERED MORE IMPORTANT
CREDIT REQUESTS, AND EASIER MEANS THEY WERE LESS IMPORTANT.

IN MAKING DECISIONS FOR APPROVING

PCT

CONSIDERABLY
MORE
WILLING
BANKS

PCT

SUPPLEMENTARY APPENDIX C
MONTHLY LOAN COMMITMENT SURVEY
OCTOBER 31, 1974 *

The most recent Monthly Loan Commitment Survey taken at 137
large banks at the end of October indicates that total unused commitments increased substantially during October, but not enough to compensate for the decline in September; in October unused commitments remained below the year's peak reached in August. However, it is
apparent from the twelve months of data now available in the monthly
commitments survey that unused commitments, while large, have not
been growing as rapidly as loans made under commitments.
Total unused commitments to commercial and industrial firms,
nonbank financial institutions, and for mortgages grew at a not seasonally adjusted annual rate of 3.7 per cent between November 1973 and
October 1974, while loans made under commitments in such categories
Commitments to nonbank financial institutions
grew 20.5 per cent.
at the 137 responding banks were essentially unchanged in the period,
and commitments for mortgages fell at almost a 30 per cent annual
rate.
Thus, the 8.2 per cent growth of C&I unused commitments accounted
for all the growth in unused commitments. With the relatively slow
growth of unused commitments, the utilization ratios (the proportion
of loans outstanding under commitment to total commitments) have
risen steadily in nearly all categories of loans reported on the survey.
However, with a current ratio of 50 per cent, the potential for takedowns at these banks is substantial.
Though not keeping pace with loans made under commitments,
the stock of unused commitments at major banks continues to be very
large--despite the evidence from the Lending Practices Surveys and
discussions with bankers that commitments policies became extremely
In the present atmosphere
restrictive in the spring and remain so.
in financial markets, corporate borrowers place a high value on formal
commitments for credit from major banks, and the banks are reported to
be raising fees for commitments in response to the demand. However,
the data thus far available do not provide an adequate basis for
The weakening in
evaluating the effectiveness of these policies.
economic activity that is expected to continue for some time will
likely act as a brake on the pace of takedowns in the short-term,
but as economic activity picks up, the stock of unused commitments
will likely again place a heavy burden on banks to meet the credit

needs of their business customers.

*

Prepared by Paul W. Boltz, Economist, Banking Section, Division
of Research and Statistics.

NOT FOR
QUOTATION OR
PUBLICATION

MONTHLY SURVEY OF BANK LOAN COMMITMENTS
AT SELECTED LARGE U.S. BANKS ¹
(AS OF OCT. 31, 1974)
TABLE 1 - UNUSED

COMMITMENTS

(DOLLAR AMOUNTS IN BILLIONS)

I
I
I

(1)
FIRMS
TOTAL

CHG
I

NOVEMBER 30

83.81

DECEMBER 31

83.21 -( ).71

1

0.01
I
1

FEBRUARY 28

85.21

2.51
0.91

I
MARCH 31

I
85.41

MAY 31

I1
86.81
I1

JUNE 30

86.71
88.31

I

1.61

3.71

I

5.31 -4.61
4.91

5.51

4.51

10.31

I
AUGUST 31

90.81

2.91

6.71

OCTOBER

31

88.61

90.71

- 2.51

2.41

OCT 74

86.71

0.71

I

6.41 -4.51

I
I
5.71-10.41

I
NOV 73 -

54.71

1
18.21 -1.31

I

23.51

18.51

24.01

I
0.01

I
4.51

I
0.01

I

I1
56.91

1.31.

2.11

-0.51

4.51 -1.71
4.81

7.11

4.91

4.11

18.41 -0.41

24.21

1
1.71

25.01

3.41

1

-1.6

0.71

(8)

5.01

2.51

I
27.81

I

I
27.11 -2.71
I
I1
28.11
3.91
I
28.41 1.11
I
28.11 -1.31

I

8.91

0.41

-2.41 122.01

18.61
18.81

1.11

25.11

I
19.21
20.31

26.11

6.21
4.11
I1

21.21
I1
2.01
21.61
I
23.31 7.81

0.21
I
3.91

27.91

2.41
I
4.51

28.01

0.41

26.71

3.61
1
29.01

19.61

1.91

55.41 -1.31

5.01 -0.21

27.01 -3.91

I

1.11

25.61

1.71

56.91 2.71
I
56.21 -1.31
I
56.91
1.21
58.31

57.41

56.41
56.41

4.81 -4.11

27.01
I1

4.51 -6.41

0.31

0.31 120.71 -0.8

8.21 -1.21

122.01

8.11 -1.91

120.91 -0.9

I1
4.71
4.71

5.71

26.41

0.81
1

4.71 -0.81
4.51 -4.11

27.11

2.81
I
26.51 -2.31

122.51
1
7.21 -8.31 125.11
7.91 -2.61

6.81 -5.6

I
2.31
I
I

4.31 -4.31
.7

27.41

0.41

4.71 -0.41

27.21

3.41

6.51

-4.81
-2.8

1
-0.11

8.01

-2.81

LOAN COMMITMENT SURVEY ARE SELECTED WEEKLY REPORTING BANKS WITH TOTAL DEPOSITS
NOTE:

1.0

I1

26.11 -3.31

I

2.41
I
56.11 -3.71

8.31

I1

NUMBER OF BANKS

**

119.11 -1.0

2.4
1
-0.81 123.01
0.8
I
I
8.61
8.31 -3.71 121.71 -1.0
8.31
8.71

AVERAGE

1/ BANKS PARTICIPATING IN THE MONTHLY
OF $100 MILLION OR MORE.

(9)

TOTAL
I
REAL
ESTATE
I COMMITMENTS
MORTGAGES I
AMT
CHG
% CHG AMT
AMT It CHG AMT % % CHG
I
I
I
0.0
0.01 120.4
0.0O
8.91

I

I

I. 0
6.01 0.91

57.11

I1

I
5.91

I
SEPTEMBER 30

-1.01

I
-8.21

6.31

24.01

I

I
1.81

55.01

I
-2.31

6.91

I

0.01

I
10.61

6.31

I

24.3)

I

5.81
6.41

I

18.91 0.01
I
18.51 -2.31

(61
I
(7)
I
C
I
I NON-BANK
I
OTHER
I FINANCIAL
INSTITUTIONS
COMMITMENTS
AMT
% CHG AMT
% CHG
I

I

I
-( 0.11

(3)
(5)
I
(4)
I
C
C
I
I
I
C
I
I
REVOLVING TERM LOANS &
CONFIRMED
CREDITS
REV. CREDITS
LINES
AMT
I% CHG
AMT
% CHG AMT
% CHG
% CHG
% CHG AMT
AMT

I

5.51

I

I

JULY 31

I

I
0.11

I
I
I
I

0.01

I

85.41 -( 0.71

APRIL 30

I
5.31

I

I
86.01

TERM
LOANS
CHG
AMT %

I

I

JANUARY 31

(2)
C &I

MINOR INCONSISTENCIES MAY OCCUR DUE TO ROUNDING. **

121.81
124.51

1.2
2.1
-2.6
2.2

1
122.01

0.3

NOT FOR
QUOTATION OR
PUBLICATION

MONTHLY SURVEY OF BANK LOAN COMMITMENTS
AT SELECTED LARGE U.S. BANKS ¹
(AS OF OCT. 31, 1974)
TABLE 2 - LOANS UNDER COMMITMENTS ²

(DOLLAR AMOUNTS IN BILLIONS)

NOVEMBEk 30
DECEMBER 31
JANUARY 31
FEBRUARY 28
MARCH 31
APRIL 30

(1)
I
(21
I
(3)
I
(4)
(5)
I
(6)
I
(7)
I
(8)
I
(9)
c
I
I
C
I
I
C
I
CC I
I
C & I
C S
NON-BANK
I
REAL
TOTAL
I
FIRMS
I
TERM
I REVOLVING ITERM LOANS IE CON FIRMED I
OTHER
IFINANCIAL
ESTATE
I COMMITMENTS
TOTAL
I
LOANS
I
CREDITS
IREV. CREDITSI
LINES
ICOMMITMENTS IINSTITUTIONSI MORTGAGES I
ANT
12 CHtr ANT
il CNCi AMT I
r c I AMT
It runr. . AMT 1I
~W"V
ii
Ma l
CHGI AMT
IZ CHGI AMT
I1 CHG AMT AMTCHGI AMT .11 CMH
IZ CHGI
12
I
I
195
I
I
I
I
I
I
I
I
70.31
0.01 18.51 0.01
0.01 38.01 0.01 25.81 0.01
I 6.51 0.01 18.11 0.01 18.01 0.01 106.41 0.0
19.51
1
1
I
I
I1
I
71.91 2.31
19.01 2.81 19.51
-0.11
38.51 1.31 26.61 3.41
6.71
3.01 19.81 9.71 18.21 1.31 109.91 3.3
I
I
-7.11
I
I
70.81 -1.41
18.91 -0.51 19.61 0.51
38.41 -0.31 25.51 -4.21
6.81
1.41
18.41
18.21 0.01 107.51 -2.2
I
1
1
I1
I
I
1
10.2
72.31 2.11
19.11 1.21 20.11
2.51 39.21 2.11
26.51 3.71
6.61 -2.81
18.31 -0.41
18.31
1.3
0.21 108.9)
I
I1
I
I
1
77.01
6.51
19.41 1.31 21.01 4.71 40.41 3.01 29.81 12.51
6.81
3.51
19.31
5.61
5.3
18.41 0.61 114.81
I1
1
I1
I
79.21
2.81 20.51 5.61 21.31 1.01 41.71 3.21 30.91
6.61 -3.11
18.41 -0.21 118.21
20.61
6.51
2.9
I1

MAY 31
JUNE 30
JULY 31

79.81
82.11
I
83.71

0.81 20.61
I1
I
2.91 20.91

1
1.91

21.51

0.91

21.61

1.81

42.31

I

1.01

22.11

84.61

SEPTEMBER 30

86.91

2.71

OCTOBER 31

85.01 -2.11

23.31

1.81

24.61

21.5I
22.41
1
1
-4.01

24.81

NOV 73 - OCT 74
AVERAGE

79I
79.41

1.8

1.41

21.91

I
22.01

20.51

7.91

20.51 -0.61

18.41

0.01 118.71

0.4

43.01

1.71

32.11

5.51

7.11 -1.31

22.21

8.71

3.71

44.51

3.41

32.21
32.21

0.41

22.41

0.81

0.01

7.01 -0.31
7.11
7.01 0.71

1

I1

1.51

45.31

1.81

32.21

5.41

47.01

3.71

0.91

46.31 -1.41

32.91 2.21
I
31.61 -3.71

I1

2.21

1

42.41

1.68

30.01

2.01

0.91
1

22.11 -1.81

18.31 -0.21 122.71
3.4
I
1
19.51
6.21 125.61
2.3
I
19.01 -2.51 125.61
0.0
I
19.11
0.61 128.41
2.2
1
19.31 1.11 126.41 -1.5

6.91

23.01

2.21

1.11

7.21

2.31

I1

AUGUST 31

30.41 -1.51

I1
I1

3.11

I1

I

1.41
1.41

6.91

0.81

20.71

18.6
18.61

I

22.01 -1.9|

I

7.11 -1.01

1

22.51

2.11

I1

2.01

.
0.71 118.81

NUMBER OF BANKS

1/ BANKS PARTICIPATING IN THE MONTHLY LOAN COMMITMENT SURVEY ARE SELECTED WEEKLY REPORTING BANKS WITH TOTAL DEPOSITS
OF $100 MILLION OR MORE.
2/ LOANS UNDER COMMITMENTS ARE DEFINED AS ALL LOANS UNDER COMMITMENTS CURRENTLY OR PREVIOUSLY IN FORCE, LESS REPAYMENTS OF THE
PRINCIPAL. THE REPORTED DATA ARE DISTORTED BY TAKEDOWNS OF LOAN COMMITMENTS BY OVERSEAS BRANCHES OF US BANKS AND LOAN SALES.

1.6
1.6

MONTHLY SURVEY OF BANK LOAN COMMITMENTS
AT SELECTED LARGE U.S. BANKS ¹
(AS OF OCT. 31, 1974)

NOT FOR
QUOTATION OR
PUBLICATION

TABLE 3 - UTILIZATION RATIO ²

(PERCENTAGES)

I

(1)
I

I

FIRMS
TOTAL

I

C

I

(2)
C c I
TERM
LOANS

(3)
I
C
REVOLVING
CREDITS

(71
(6)
I
1
(5)
I
(4)
I NON-BANK
C c I
I
I
C c
I
CCI
OTHER
I FINANCIAL
ITERM + REV.I CONFIRMED I
INSTS.
ICOMMITMENTSI
I
LINES
I

(8)
REAL

I

I

I

I

ESTATE
MORTGAGES

I

I
I

(9)
TOTAL

I

110)
SHORT
-TERM
TOTAL3/

.

I
47.0

39.7

67.2
67°2

48.0

41.0

39.6

67.7

46.8

39.4

39.2

68.0

47.0

39.6

57.9

40.8

68.9

48.5

41.7

35.8

57.2

43.3

68.8

49.5

42.8

62.8

34.8

S 60.1

43.1

69.0

49.3

42.5

53.6

62.3

36.3

61.3

46.0

69.4

50.4

44.1

77.3

53.0

62.5

36.1

59.9

46.0

71.2

50.6

43.9

48.2

76.6

52.4

61.9

35.6

60.3

44.8

72.5

50.1

43.2

SEPTEMBER 30

49.5

77.8

53.2

62.7

37.0

S 61.0

45.9

73.7

51.3

44.5

OCTOBER 31

48.4

79.0

51.6

61.5

35.5

62.3

44.7

74.9

50.4

43.3

47.5

77.2

52.5

62.1

34.4

69.9

49.1

42.1

30

45.6

77.6

50.8

61.0

31.9

59.0

DECEMBER 31

46.4

77.4

51.4

61.6

32.8

JANUARY 31

45.4

78.2

51.8

61.9

FEBRUARY

45.7

77.6

52.1

MARCH 31

47.4

77.0

APRIL 30

48.1

MAY 31

I

39.4

67.7

60.1

42.3

31.0

58.8

62.0

31.7

57.7

53.3

62.6

34.6

76.2

53.3

62.5

47.9

76.8

53.5

JUNE 30

48.6

75.2

JULY 31

48.7

AUGUST 31

NOVEMBER

28

I

I

I

I
NOV 73 - OCT
AVERAGE

74

596

I

42.9

I

59.6

I

42.9

I

NUMBER OF BANKS

1/
2/
3/

BANKS PARTICIPATING IN THE MONTHLY LOAN COMMITMENT SURVEY ARE SELECTED WEEKLY REPORTING BANKS WITH TOTAL DEPOSITS
OF $106 MILLION OR MORE.
THE UTILIZATION RATIO IS THE RATIO, EXPRESSED AS A PERCENTAGE, OF LOANS UNDER COMMITMENTS TO THE SUM OF UNUSED COMMITMENTS
AND LOANS UNDER COMMITMENTS
EXCLUDES REAL ESTATE LOANS AND TERM LOANS.

NOT FOR
QUOTATION OR
PUBLICATION

MONTHLY SURVEY OF BANK LOAN COMMITMENTS
AT SELECTED LARGE U.S. BANKS ¹
(AS OF OCT. 31, 1974)
TABLE 4

- NEW COMMITMENTS

(DOLLAR AMOUNTS IN BILLIONS)

(8)
(9)
(7)
I
I
(5)
I
(6)
I
(4)
1
(3)
(1)
I
(2)
1
TOTAL
NON-BANK
I
REAL
I
CCI
I
C
C
I
I
C
I
I
C
I
C e
I
I
I
ESTATE
I COMMITMENTS
FINANCIAL I
OTHER
FIRMS
TERM
I REVOLVING ITERM LOANS SI CONFIRMED I
MORTGAGES I
TOTAL
I
LINES
ICOMMITMENTS INSTITUTIONS!
LOANS
I
IREV. CREDITSI
CREDITS
It
CG
AMT
I r CGI
AMT
It CHGI AMT
IZ CHGL AMT
12 CHGI AMLT
AMT
It CHGI AMT
CLHG!. AMT 12 CtE
I1 CHGt AMT

I

I

I

I

0.01

I

0.01

1.21

I

1.11

0.01

I

5.01

1.11

1.31

22.61

I

I

I

JANUARY 31

4.81 -3.01

0.81-39.61

FEBRUARY 28

I
I
4.51 -6.41
I
I

0.81

MARCH 31

6.21

1.31

59.71

I

38.11

6.91 11.01

MAY 31

I
JUNE 30
JULY 31
AUGUST 31
SEPTEMBER 30
OCTOBER 31
NOV 73 -

OCT 74

I

2.41

I

1.21 -8.81
I
I
1.31
6.21

I

I

6.21 -5.81
I
I
7.21 15.81
I
I
6.61 -9.11
I
I
6.31 -4.51
I
I
6.11 -2.71
6.0 2.
I
I
6.01
2.71

I

1.21

-5.71

I

2.31

0.01

1.81

0.01

I
1.11 -5.81
I
I
0.91-21.91
I
I
0.91
5.91
I
I

I

APRIL 30

I

I

I

DECEMBER 31

I

I

4.91

I
NOVEMBER 30

2.41

8.01

1.71-31.71
I
I
1.71
3.91
I
I

0.01

I

1.81 -0.91
2.11

0.81

22.11

1.11 22.11

0.81

I
1
0.91-11.11
I
I

22.61

2.11 -3.01

0.61-30.21

2.61 50.41

2.71 31.21

0.61 10.61

1.61 28.51

I
2.81

3.01

8.41

0.61 -0.51

I

I

1.51 -5.91
I
1
5.51
1.61

I

1.21

0.81

2.6) 58.11

I

I

1.01-15.81

I
I
2.41 -5.31

1.01 -5.71

I
I
2.31 -5.01

I
0.81-13.4|

2.21

I
1
I
I
I
1.11 0.21

1.61

I
1.61

I
-5.91

.

I
8.11

I
I
2.81 -0.41

I

I
0.71

9.71

0.31
I
33.51
1
-8.51
I
-5.21
I
-8.11

2.61 -5.91

0.61 -8.31

.7

4.1

2.71

4.71

0.71-24.31
I
I
0.91 27.71
I
I
1.11 18.71

I

2.81 -5.41

I

2.81
I
3.81
f
3.51
I
3.31
I
3.01

I
0.01
I

0.71-13.31

1.31 41.31

I
9.11

I
0.91
I

I

I

2.71

0.91

0.61 -2.71

1.11 -6.31

2.41 -9.41

0.51-13.91

1.21

0.61 11.51

I
I
0.81 -34.2'1
I
I

2.41 -1.51
2.41 -0.91

I

1.41 27.41
I
I
1.21-12.21

0.71

I

19.91

1.11 29.71

I
I

2.41

3.21

0.71

0.51

9.11

1.0L

I
I

4.21

I

I

0.81

0.01

I

I

1.01 34.31
I
I
0.91-13.21

I

I

0.81 -8.21
I
I
0.91 11.41
I
I
0.91
1.71
I
I

0.91 -1.71
I
I
0.91 -4.11

I
I
0.71-22.01
I
I
4.81
0.71
I
I

0.51-24.11
0.51 -6.41

I

8.11 33.2
1
8.91 10.7
8.91 -0.2
8.31 -6.6
9.01
8.6
I
8.51 -5.6
7.71

-9.4

7.71

0.5

7.81

2.2

I

0.81 -2.51

NUMBER OF BANKS

1/ BANKS PARTICIPATING IN THE MONTHLY LOAN COMMITMENT SURVEY ARE SELECTED WEEKLY REPORTING BANKS WITH TOTAL DEPOSITS
OF $100 MILLION OR MORE.
MINOR INCONSISTENCIES MAY OCCUR DUE TO ROUNDING. **

7.11
7.7
I
6.71 -5.6
1
6.11 -9.1

-2.51

AVERAGE

** NOTE:

0.0

I

I
0.8

6.61

SUPPLEMENTAL APPENDIX D
GERMmAN POLICY ANNOUNCEMENT OF DECEMBER 12,

1974*

Following two days of Cabinet deliberations, on December 12 the
German government announced measures to restimulate the faltering domestic
economy. In a joint press conference of the Ministers of Economics,
Finance and Labor the government presented a package which includes
substantial investment incentives, increased assistance to the unemployed,
and use of part of the countercyclical funds held on deposit with the
Bundesbank. As described by the Ministers, the main features of the new
program are summarized below:
1) Investment Incentives. A bonus of 7.5 per cent will be paid
to enterprises ordering investment goods or commencing projects for the
seven months between December 1, 1974 and June 30, 1975. In order to
assure swift impact on the economy, goods so ordered must be delivered by
July 1, 1976, and qualifying construction projects must be completed by
July 1, 1977. An exception will apply to delivery of goods on major
energy projects, where delivery will be permitted as late as July 1, 1978.
The investment bonus method is reported to have been chosen in preference
to tax credits, since the latter might have little incentive effect for
enterprises currently losing money and having little if any tax liability.

This measure will require special legislation.
2) Government Investment.

The Federal Government, using a

portion of the countercyclical funds to be drawn from special deposits
held with the Bundesbank, will spend DM 1.13 billion in priority sectors
such as construction and energy. Projects will be chosen for their
immediate impact and low followup costs. This portion of the program will
supplement the DM 950 million in sectoral assistance, primarily to construction, announced in September.
3) Labor Assistance. A further DM 600 million will be spent
by the Federal Labor Office to combat rapidly rising unemployment, which
in November reached almost 800,000 out of a labor force of 23 million.
Seasonally adjusted, the German unemployment rate has climbed steadily
this year, from 1.6 per cent in January to a level of 3.8 per cent in
November; and the number of workers on short-time reached 461,000 in the
same month. Under the new program, employers who hire the unemployed

prior to

May 1, 1975, will receive special incentive payments over a six

month period. In addition, the Federal Labor Office will provide relocation incentives to unemployed workers and make available supplementary

benefits to workers on short-time for a period of two years, as against
the one year period presently in effect.

*

Prepared by John F. Wilson, Economist, World Payments and Economic Activity
Section, Division of International Finance.

D -2

The estimated cost during 1975 of the programs outlined above

is DM 1.73 billion, which will be met by the government's drawing DM 3.5
billion of the countercyclical funds raised through the now-expired
temporary stability surcharges on investment expenditures and on personal
income taxes. The drawing represents about one-third of the DM 10 billion
in such funds. The difference between the drawing and cost of the
December 12 program will reportedly be applied to the budget deficit for
1975, which for the Federal and State Governments is now estimated to
total some DM 50 billion.
With the measures announced on December 12, overall German
policy has clearly shifted toward combating the recessionary influences
which have deepened throughout 1974. The stimulus provided by the
package is meant to take effect quickly, and will supplement previously
announced tax reform measures going into effect in January, 1975, and
the recent easing of monetary policy, as described in the December 11

Greenbook. In early December the Bundesbank Central Council also announced,
for the first time, a target of 8 per cent growth for the monetary base
during 1975.